$50 million credit line provided to Zambia National Commercial Bank in a boost for small businesses and climate-related projects in Zambia
British International Investment, the UK’s development finance institution and impact investor, has provided a $50 million loan to one of Zambia’s leading banks in a move designed to boost climate finance and entrepreneurship in the country.
The funds will be used by Zambia National Commercial Bank (Zanaco) as a directed lending line to provide finance for micro-SMEs and climate-related projects in Zambia. Zanaco, founded in 1969, is a leading indigenous bank in Zambia and ranks as one of the largest and oldest banks in the country.
BII is 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.
Zanaco is interested in climate lending and is developing the necessary processes, capabilities, and sustainability strategies to grow its climate book, mainly in the renewable energy space.
Nicholas Woolley, British High Commissioner to Zambia, said: “The UK remains committed to acting on the ambitions set out in our Green Growth Compact partnership with Zambia. 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 the Zambian economy.”
Nick O’Donohoe, Chief Executive of BII, said: “Zambia’s climate finance capacity is 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.”
Zanaco is 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.
“It is a privilege for Zanaco to be the first institution to sign such a facility with BII and 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”, said Zanaco Chief Executive Officer Mukwandi Chibesakunda. “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.