By Jeff Kapembwa
Zambia’s quest to insulate the Southern African state from climate induced shocks and actualise the Green Growth Strategy (GGS) received a fillip from the private sector with a planned issuance of a US$100 million-worth sustainability Bond to raise capital.
Zambia has over the years suffered climate induced shocks over the years as evidenced through the recurring and increasing frequency and severity of droughts and floods.
This, among other shocks, have affected the agriculture and other sectors, affecting economic growth as the citizenry get affected through floods and diseases, a shorter and more intense rainy season, and rising temperatures, all of which negatively impact agriculture, hydropower generation, and public health.
Evidenced by the 2023-24 El Nino induced drought, Zambia lost 50% of the crop yields of the projected 3.5 million tons of maize.
In Other sectors, energy lost on supply to the various consumers spurred by its 86 % reliance on hydro power after many of the water reservoirs ran dry.
The extent of the drought was amplified through food shortages which left 9 million of the 12 million population grappling without food in the country’s 116 districts in the 10 provinces.
Over 300 children were left malnourished, while various people in different localities suffered floods and food output failure because of the low to normal rains.
Zambia sought a US$23 billion food aid from cooperating partners to fill the food deficit. Many sectors remain in serious deficit of various needs.
The energy sector has fallen into load management, affecting industry and domestic consumers, with some incurring over 20 hours of power outages.
This has forced the country’s administration to resort to alternative sources of energy, now diversifying into renewable power through solar and other forms to sustain the country’s growth.
The private sector has stepped up to complement the country’s administration with Zambia National Commercial Bank-Zanaco-a quasi-financial institution and listed on the country’s capital market.
It offers to issue the first bond worth US$50 million in private and public equity in the next six months in collaboration with the Tanzania-based partner to reduce the deficit.
The other US$50 million will be generated from a public offer and both proceeds with be channeled into projects that seek to uplift communities, safeguarding the environment and bolster energy supply in the country faced with power outages
Mukwandi ChibesaKunda, the financial institution’s chief executive officer said Friday, the planned issuance of the sustainability bond, the first in Zambia would will be issued via a private placement.
The bond will be split into two tranches with the first issued through a private placement and another in a public offer to redress climate change, community concerns and redress the energy deficit.
The first tranche worth US$50 million is deemed a sustainability bond supporting green and social projects with the other provided publicly-worth the same value.
The sustainability bond, planned to be placed and listed in the next six months is deemed a bridge builder and plans to raise resources toward renewable energy generation, among others.
Other areas focused for redress will be to champion, climate-smart infrastructure, sustainable agriculture, and conserving natural capital.
It will align directly with the National Green Growth Strategy (2024–2030) and the Climate Change Act, reinforcing our shared national ambition to build a low-carbon future.
This is a ‘powerful step forward in attaining a greener, more inclusive, and climate-resilient Zambia’ as espoused under the institution’s brand promise, ‘You First’, putting its customers, communities, staff and Zambia at the centre of everything it does.
“This bond will be far more than a financing mechanism—it is a promise. A promise to channel resources into projects that matter: those that safeguard our environment, uplift our communities, and strengthen our economy.” She told Lusaka-based reporters, adding:
“It is a declaration that we stand ready to lead, to innovate, and to act with purpose for the sake of future generations.”
Recalling the numerous challenges besetting Zambia, Mukwandi supports the institution’s resolve to join hands with the Government in fulfilling what has been laid out through the launch of the country’s 2024-2030-Green Growth Strategy and reversing the effects of climate change.
This is evidenced by various effects on agriculture, among other sectors, now left vulnerable as evidenced by the effects felt two years ago-the worst in 40 years of the country’s 61-years of independence, where climate effects left trails of destruction, including displacement of people.
Zambia has to an extent lost approximately 172,000 hectares of forest each year, driven by unsustainable charcoal production, illegal logging, and agricultural expansion.
The Global Forest Watch, estimates Zambia losing a staggering 325,000 hectares of natural forest in 2024 alone—equivalent to 114 million tons of CO₂ emissions-a call to action and help insulate from further damage of the environment, people and the planet.
Zanaco, cognissant of the expected outcome and contributions to revitalizing the country’s environment, through the GGS, with the green finance landscape gaining momentum, felt obliged to be part of the economic and environmental facelift underway.
“The government’s Green Growth Strategy (2024–2030) identifies the development of green bonds and loans as key enablers of sustainable development, estimating up to US$17.2 billion is needed for climate adaptation and mitigation.” She notes.
Zanaco’s action conforms to the stock market regulators, the Securities and Exchange Commission which undertook various fundraising avenues including introducing Green Bond Guidelines.
Incentives accrued, include withholding tax exemptions. Multilateral and institutional partners are lining up to deploy capital in sustainable growth.
The Lusaka Stock Exchange, in commending Zanaco’s intention for innovation, collaboration, calls the initiative historic and a show of the capital market growth in the country’s quest for sustainable financing.
“It shows that our market is evolving, adapting, and positioning itself to respond to the global call for responsible, inclusive, and sustainable financing.” said CEO-Nicholas Kabaso.
The Sustainable bond, he envisages, will serve as a vehicle to mobilize capital for projects that advance environmental protection, social inclusion, and economic resilience—values that speak directly to Zambia’s long-term development goals and the UN Sustainable Development Goals.
Across the globe, Kabaso noted sustainability has become central to how economies grow and how investors make decisions and the Lusaka bourse supports and recognizes the paradigm shift and want to translate the benefits to Zambia for growth through sound policies and infrastructure for others to come forward using various instruments.
And SEC Director of Investment, Nonde Sichilima commended Zanaco for the inaugural sustainability bond.
He challenges other stock market regulators to take the lead in initiating sustainability bonds to pull Africa out of the recurring climate change impasse.