ZANACO: Zambia’s Flagship Bank Leads with a $100M Sustainability Bond

ZANACO (Zambia National Commercial Bank) – founded in 1969 and still majority Zambian-owned – is widely regarded as a trusted national institution, serving nearly one million customers with a staff of over. A trailblazer in the industry, Zanaco has introduced innovations like Zambia’s first ATMs and mobile banking. As the country’s largest lender by assets and customers, Zanaco’s strategic initiatives shape Zambia’s financial. Under CEO Mukwandi Chibesakunda (the first woman to hold this post), Zanaco has also won numerous awards for growth and sustainability (including a 2022 Sustainability Award).

Leadership: CEO Mukwandi Chibesakunda and Team

Since October 2020, Mukwandi Chibesakunda has led Zanaco, bringing extensive banking experience (including as president of the Zambian Institute of Banking) and a track record of turning around big. Chibesakunda has emphasized employee empowerment and innovation as keys to. At the bond announcement, she underscored Zanaco’s mission: the sustainability bond “is a promise to channel resources into projects that matter – projects that safeguard our environment, uplift our communities and strengthen our economy”. (The bank’s board and regulatory officials – including Zambia Securities Commission director Nonde Sichilima and Lusaka Stock Exchange CEO Nicholas Kabaso – attended the bond launch, highlighting its market.) Other senior executives and sustainability officers at Zanaco – supported by an engaged board – will oversee the bond issuance and ensure proceeds flow to qualified projects in line with Zanaco’s policies and international green bond standards.

Structure and Purpose of the $100M Sustainability Bond

Zanaco plans to raise USD 100 million via this inaugural sustainability bond in two. The first USD 50 million will be sold privately (to select institutional investors) within six months, followed by a USD 50 million public offering. This two-tranche approach balances speed and access: a private placement jump-starts funding, while a subsequent public offering widens investor participation.

Use of proceeds is tightly defined: all funds will be allocated to environmentally and socially beneficial. In particular, Zanaco will finance initiatives in:

• Renewable energy (solar, wind, hydro projects to reduce carbon emissions),

• Sustainable agriculture (climate-smart farming, agroforestry, bioenergy), and

• Climate-resilient infrastructure (flood defences, water systems, green transport).

These categories align with Zambia’s national priorities – they directly support goals outlined in the government’s Green Growth and climate legislation (for example, by building resilience and reducing the emissions intensity of key sectors). Through the bond, Zanaco is essentially pledging that every dollar raised will “safeguard the environment” and “uplift communities” per its CEO’s. Internally, Zanaco will report on project selection and impact, ensuring transparency to bondholders and the market.

Alignment with Zambia’s Climate Strategy

The bond is explicitly linked to Zambia’s recent Green Growth Strategy (2024–2030) and Climate Change. In April 2024 the Zambian government launched a National Green Growth Strategy 2024–2030, a comprehensive framework for a “low-carbon, resource-efficient, resilient and socially inclusive”. This strategy – shaped by international partners – emphasizes climate-compatible growth, efficient resource use, natural capital protection, and inclusive. Zanaco’s bond proceeds (in renewable energy, climate-adapted agriculture, and resilient infrastructure) directly serve these pillars.

Likewise, in December 2024 Zambia enacted the Green Economy and Climate Change Act (No. 18 of 2024), establishing a legal framework for climate action and sustainable. The Act (assented by President Hichilema) aims to mainstream sustainable development across sectors and even sets up a Green Economy and Climate Change Fund to finance adaptation/mitigation.

By channeling bond capital to green projects, Zanaco’s issuance dovetails with this law’s intent. In short, the bank’s first sustainability bond is not only a financial innovation but a practical step in Zambia’s climate policy agenda: it mobilizes private finance to implement the country’s own strategy and fulfill obligations (like its Paris Agreement commitments).

Zambia in the African and Global Green Bond Landscape

Zambia’s move breaks new ground for Southern Africa. Until now, the African green bond market has been nascent. Globally, green bonds have raised roughly $2.2 trillion by 2025, but Africa’s share is below 1%. For example, recent research by the Africa Policy Research Institute highlights that African issuance remains minimal compared to global. FSD Africa reports that cumulative African green bond issuance is only about USD 9.6 billion – roughly 0.5% of the global total – and is concentrated in a few countries (mainly South Africa, Nigeria, Morocco, and Egypt). Zambia had not issued any dedicated green or sustainability bonds until now, so Zanaco’s offering is a clear milestone.

Nevertheless, interest is growing. By the end of 2020 the global green bond market exceeded $1, and African issuances (though small) were rising – having crossed $2 billion by Challenges remain (like policy gaps and investor education), but institutions are mobilizing: in 2024 for example, Nigeria announced a $250m sovereign green bond, and multilateral banks (AfDB, World Bank) keep funding African renewables. Zambia’s $100m bond adds momentum to this trend, signaling to global investors that Southern Africa seeks “green” capital flows.

Yet the climate finance gap is enormous. United Nations reports warn Africa will need on the order of $2.8 trillion by 2030 for climate action (mitigation and adaptation). Even with the new bond, Africa (and Zambia) rely heavily on loans and aid; green bonds are still a tiny portion of what’s needed. As one UN economist notes, Africa attracts only about 2% of global clean energy investment despite requiring. The Zanaco bond thus represents a symbolic and practical effort to help fill that gap by tapping capital markets for sustainability. Over time, if such bonds succeed, they can draw more private funds – though they must be complemented by other financing (grants, concessional loans, policy reforms) to reach the continent’s goals.

Integration with Verī Platform and MPS

While the Zanaco bond is a specific issuance, it reflects a broader trend toward digital and transparent finance. Conceptually, fintech platforms like Verī – which offer structured products (MPS) and marketplace functions – could support sustainability bonds by increasing access. By facilitating issuance and secondary trading of green bonds in a transparent manner, such platforms aim to broaden the investor base and improve the efficiency of sustainable finance without endorsing any specific bond or strategy (emphasizing that these are informational concepts, not financial advice).

Conclusion and Disclaimer

Zanaco’s announcement of a $100 million sustainability bond marks a key milestone for Zambia’s capital markets and climate agenda. It underscores how national policy (the Green Growth Strategy and Climate Change Act) and private-sector leadership can converge to mobilize funding for a low-carbon, resilient future. Zambia’s entry into the green bond market also resonates regionally, as African countries seek innovative finance to fund their Paris Agreement pledges. The bond’s two-part structure (private + public tranches) and targeted uses of proceeds illustrate how a major bank can align its lending with national sustainability goals.

Disclaimer: Verī provides this information purely as an educational resource and not as investment advice. Verī is not promoting the bond or endorsing any investment; we are merely describing the new issuance and its context. Investors should conduct their own analysis and consult professionals before making any financial decisions.

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