Climate-related projects, SMEs to enjoy support, as Zanaco seals $50m loan deal with British Investment Agency

A credit line worth US$50 million has been provided to Zanaco by the British International Investment for climate finance and entrepreneurship in Zambia.

The resources would be used by Zanaco as a directed leading line to provide finance for micro Small and Medium Entrepreneurs (SMEs) and climate related projects in Zambia.

This, the funds, will be provided to Zanaco by the British International Investment, United Kingdom (UK)’s development institution and impact investor.

Zanaco was interested in climate leading and is developing the necessary processes, capabilities and sustainability strategies to grow its climate book, mainly in renewable energy space.

According to a statement issued in Zambia’s capital Lusaka today, BII was in talks with Zanaco to provide a technical assistance package aimed at building climate and gender investment capacity within the bank.

The investment qualifies under the 2X Challenge – an initiative launched by the development finance institutions (DFIs) of the G7 to mobilise capital to support increased economic empowerment for women in emerging economies.

British High Commissioner to Zambia Nicholas Woolley said UK remained committed to acting on the ambitious set out in the Green Growth Compact partnership with Zambia.

“The British International Investment’s funding to Zanaco plays a key role in delivering on this agreement by helping boost SME growth and drive sustainable green transformation for Zambian economy,” Woolley said.

BII chief executive Nick O’Donohoe said Zambia’s climate finance capacity was very limited.

“We expect this deal to demonstrate the potential within the sector in Zambia and provide proof of concept for other investors to follow our lead. BII is committed to providing the capital that African economies need to face the acute economic challenges of the climate emergency,” O’Donohoe said.

And Zanaco chief executive officer Mukwandi Chibesakunda said it was a privilege for Zanaco to be the first institution to sign a facility with BII.

Zanaco Chief Executive Officer Mukwandi Chibesakunda and BII Chief Executive Officer Nick O’Donohoe

“We believe this will set the right conditions for the growth of the Zambian economy. We are proud to be the institution that will deliver this facility to women led MSMEs and MSMEs with a climate agenda because that is where the future lies,” Chibesakunda said.

“We remain focused on advancing gender smart investments and driving inclusivity in our business, leadership and are excited about our qualification to the 2X Challenge”, she said.

Zanaco was committed to providing gender finance for women entrepreneurs. The bank recently launched a product called Zee Women’s Banking, which is tailored to the financial needs of women-led SMEs.