The government of Zambia has used a $600m loan from the African Development Bank (AfDB) Group, coupled with its own resources, to buy back a $1.36bn sovereign Eurobond.
This transaction was supported by a number of representatives on the global private credit insurance market, including Canopius, Chaucer, MS Amlin, Mosaic Insurance, Liberty Specialty Markets and The Texel Group.
By leveraging the capacity of the private credit insurance market, the AfDB was able to mobilise additional risk-bearing capital in support of a package that strengthens Zambia’s debt sustainability, while also unlocking investment in critical energy infrastructure.
According to a statement from Texel, for the insurance market, the transaction highlights the growing role that private risk capital can play in addressing development finance challenges. By partnering with the AfDB and providing tailored credit insurance capacity, insurers helped unlock financing that might otherwise have been constrained, demonstrating how private sector expertise and balance sheets can be mobilised.
Texel Director Shahin Samiy said, “This successful bond buyback underscores Zambia’s commitment to prudent and forward-looking debt liability management, while demonstrating the AfDB’s pivotal role in fostering market confidence and sustainable outcomes for its member countries."
Mosaic Insurance Head of Public and Development Finance, Political Risk, Ms Natalya Tyson, said, "By combining sovereign risk mitigation with purpose-driven financing, this transaction highlights the increasingly important role of insurance as a private capital mobilisation tool to enable innovative structures that strengthen sovereign balance sheets, while unlocking capital for sustainable development.”