IFC issues $10m bond in Zambian kwacha for local currency finance

IFC has recently launched a 234 million Zambian kwacha bond, equivalent to around $10 million, to foster the development of Zambia's domestic capital markets. This initiative seeks to enhance access to local currency finance, providing a buffer for local businesses against the impact of currency fluctuations.

The "Zambezi" bond, with a five-year amortizing structure, represents IFC's third issuance in this currency and marks the third instance of a nonresident issuer placing a bond in Zambia's domestic capital markets. Listed on the Lusaka Stock Exchange, the bond carries an 18% coupon, which is 4 percent lower than the comparable government bond. IFC had previously issued two "Zambezi" bonds, first in 2013 and more recently in August of the current year.

The bond, distributed through private placement, will channel its proceeds into supporting IFC's local currency investment program within the country. Emphasizing the significance of increasing the availability of local currency financing, Martin Habel, Head of IFC Treasury Client Solutions in Africa, Europe, the Middle East, and Central Asia, highlighted that this is a crucial priority for IFC.