UK development finance institution British International Investment (BII) has committed $65-million to support financing initiatives in Zambia and Zimbabwe.

In Zambia, BII is anchoring the Zambia National Commercial Bank's (Zanaco’s) $100-million Sustainability Bond Programme with a $15-million commitment to help to deliver Zambia’s first bank-issued sustainability bond and demonstrate how domestic capital markets can mobilise investment into projects with environmental and social impact.

Funds raised through this programme will support climate-resilient agriculture, renewable energy, small and medium-sized enterprises (SMEs), women-owned businesses and critical social infrastructure.

About 40% of capital is expected to come from non-development finance institution investors, thereby helping to build confidence in Zambia's sustainable finance market.

Since 2023, BII has worked with Zanaco to develop the programme by providing technical assistance and expertise to strengthen the bank’s sustainable finance framework, build its green financing pipeline and enhance environmental and social standards.

In Zimbabwe, BII is providing a combined $50-million facility to Central Africa Building Society (CABS) and NMB Bank as part of its Zimbabwe Agriculture Finance Programme, which is designed to address structural financing gaps within the country’s agriculture sector.

Agriculture is a critical driver of jobs, exports and food security in Zimbabwe, but many businesses struggle to access the long-term capital and trade finance needed to invest, grow and participate in international trade.

Through a combination of long-term lending and trade finance, the programme will help businesses access the financing required to invest in productive assets, import essential equipment and inputs, and unlock growth across the agricultural value chain.

The programme also combines a long-term loan facility with trade finance, alongside technical assistance, to strengthen environmental, social and climate risk management within Zimbabwe's banking sector.

Together, the transactions will support local financial institutions, improve access to finance and demonstrate the investment potential of frontier markets such as Zimbabwe, BII says.

“Through partnerships with local financial institutions and targeted technical assistance, we are expanding access to long-term finance, strengthening capital markets and helping businesses invest, trade and grow,” says BII Africa MD and head Chris Chijiutomi.

“By doing so, we aim to create the conditions for more private capital to follow. Our investments in Zambia and Zimbabwe demonstrate how we are putting our new strategy into action in frontier markets.”

Meanwhile, as part of its strategy launch, BII introduced Horizon Zambia, which is a country-focused programme with technical assistance to help address wider market constraints and strengthen the investment ecosystem.

Horizon Zambia will help businesses become investment-ready, support investors to identify opportunities and foster a more dynamic investment ecosystem through a combination of technical assistance, policy engagement and strategic partnerships.

The programme builds on the pilot launched last year, which provided support to 15 SMEs and helped facilitate investments worth $8-million.

Additionally, it forms part of BII's wider Horizon platform, which includes country programmes in Sierra Leone, Nepal and Ghana, alongside the Africa Resilience Investment Accelerator, which is a pipeline-building initiative operating across multiple frontier markets.

“BII shows how the UK is moving from donor to investor by using our capital and expertise to unlock opportunities that can attract even more private investment,” says UK International Development Minister Kirsty McNeill.

“BII's new investments in Zambia and Zimbabwe demonstrate its ongoing commitment to frontier markets, helping these countries to grow and prosper in the long term. This will create jobs and support climate-resilient agriculture, renewable energy and women-owned businesses, while helping to create future trade opportunities for the UK,” she says.