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.

• British International Investment is the UK’s development finance institution and impact investor.

• British International Investment is a trusted investment partner to businesses in Africa, Asia and the Caribbean.

• It will invest over the next five years in support of the UK Government’s Clean Green Initiative and to create productive, sustainable and inclusive economies in eligible countries in Africa, Asia and the Caribbean.

• Over the next five years, at least 30 per cent of BII’s total new commitments by value will be in climate finance. This will make it one of the world’s largest climate investors in Africa.
• British International Investment plays a key role in the UK Government’s wider plans to mobilise up to £8 billion a year of public and private sector investment in international projects by 2025.

• BII is also a founding member of the 2X Challenge which has raised US $10 billion to empower women’s economic development.

• The company has investments in over 1,300 businesses in emerging economies and total assets of £7.7 billion.
• British International Investment held its first global launch event in Lusaka in April 2022 and is a key stakeholder to the UK-Zambia Green Growth Compact, the economic partnership to boost trade, investment and SMEs signed by UK and Zambian Ministers in London in November 2021.

Zanaco was established in 1969 to serve and respond to the financial needs of the Zambian people.  Popularly once known as the people’s bank, Zanaco has evolved into a leading bank nationwide.

The Bank boasts of a widespread network consisting of a combined total of 62 branches and Agencies and over 21,000 thousand Zanaco Xpress Agents across the Country.

Zanaco is the largest onshore lender in Zambia and has a balance sheet with total assets of over $1.5 billion.

Zanaco operates on an ethos of partnership and maintains a focus on being a partner for growth by solutioning for key sectors such as agriculture, SMEs, mining, manufacturing, and energy.

The Bank is the first financial service provider in Zambia to partner with British International Investment on a facility for onward lending to SMEs and the first commercial Bank to be accredited to the Green Climate Fund (GCF).

The bank has been recognized for its contributions to the growth of the financial services industry in Zambia. Zanaco was named the Best Bank in Zambia 2022, by the awarding bodies, Euromoney Awards for Excellence and Global Finance.