Zambia's Energy-Debt Nexus: A Model for Emerging Markets?

Today we’re diving into a critical experiment in sovereign restructuring. In an era of global financial volatility, Zambia’s debt-for-energy model raises a defining question: can infrastructure become the foundation of long-term fiscal recovery? We analyze the structural innovation behind this deal and its potential implications for the rest of the African continent.

Timestamps:

@0:00 - Episode Introduction
@0:19 - Episode Overview
@0:52 - Guest Introduction: Luipa Mondoka
@2:22 - The Sovereign Paradigm: Shifting Debt Management
@4:32 - Regional Scalability: Blueprint for African Economies?
@9:15 - Risk-Adjusted Allocation: Benchmarking Market Access
@12:09 - Load Shedding: A Bottleneck of Economic Growth
@14:46 - Political Risk Pricing: Capital Allocation Reframing and Insulation
@17:18 - Zambia's Historical Institutional Continuity and Broader African Dictatorial Rulings
@21:00 - Industrial Constraints: Energy as a Growth Driver
@26:17 - Guest's Last Words
@28:27 - Episode Conclusion

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Learn more about today's guest:

Luipa Mondoka is an operator-turned-investor whose career bridges entrepreneurship, multilateral policy, and global finance. With extensive experience at the World Bank, UNCTAD, and Greylock Capital Management, Luipa brings deep, firsthand insight into the practical realities of building businesses in emerging markets.

Luipa's LinkedIn: Luipa Mondoka | LinkedIn

Learn more about our co-hosts:

Joshua Charles: CEO & Founder, Frontier Dominion
Company Website: frontierdominion.com
LinkedIn: Joshua Charles | LinkedIn
Purchase Joshua's book on investing in Africa: Strategies for Success in Africa: A Practical Guide for Entrepreneurs and Investors

About Benjamin Njila Fields: CEO & Founder, Maison Jila
Company Website: https://maisonjila.com/
LinkedIn: Benjamin Fields, M.A. | LinkedIn

Recorded on July 17th, 2026
The views expressed by the co-hosts and their guests are personal opinions and do not constitute financial, medical, or legal advice.

Transcript

SPEAKER_01 0:00

Welcome to the Global Signal. I'm Benjamin Angela Fields.

SPEAKER_00 0:03

And I'm Joshua Charles. Together, we need to cover the world's moving parts from markets and policy to global power.

SPEAKER_01 0:11

In this episode, we cut through the noise to understand the signals that matter, namely the patterns behind the headlines and the forces driving tomorrow's decisions.

SPEAKER_00 0:18

Let's begin. Today, we're looking at Zambia, a country at the center of an important experiment in sovereign restructuring. In an era of global financial volatility, Zambia's debt for energy model raises a critical question. Can infrastructure become the foundation of fiscal recovery?

SPEAKER_01 0:38

After Zambia's 38-month IMF extended credit facility concluded, we'll explore why energy is the backbone of economic transformation, what this means for investors, and whether Zambia's approach could become a blueprint for emerging markets across Africa.

SPEAKER_00 0:52

LUIPO Mondoka is an operator-turing investor whose career bridges the worlds of entrepreneurship, multilateral policy, and global finance. He has founded and scaled ventures across Africa's fintech and consumer sectors, giving him firsthand insight into the practical realities of building businesses and emerging markets. LUIPA has worked at the intersection of development and capital markets through engagement with the World Bank, where he coordinated stakeholder engagement and designed analytical frameworks tracking over 42 million in project outcomes. And with UNCTAD, where he led market analysis and policy consultations for the United Nations. His experience in higher finance includes a director of operations role at Greylock Capital Management, formally supporting sovereign and high-yield credit investment strategies with exposure exceeding $350 million in trade activity annually. Luipa holds a Master of Business Administration from Cornell University. He earned a Master of Science in International Business from the Manchester Metropolitan University and a Bachelor of Business Administration from Zambia Catholic University. Lupa, welcome to the Global Signal.

SPEAKER_02 2:20

Thank you very much, Rosha and Benjamin.

SPEAKER_01 2:22

For the first theme of questions on structural innovation and macrofinancials, we'll address the sovereign paradigm first. Zambia's debt for energy model links restructuring directly to infrastructure. Structurally, how does this nexus between debt relief and generation capacity shift the paradigm of sovereign debt management compared to traditional debt for nature models?

SPEAKER_02 2:42

Yeah, that's a pretty that's a really interesting question, right? And I think, you know, when I was looking at this question, I thought to myself, well, I think debt for nature and debt for energy swaps seem to have a pretty similar, if not the same, kind of financial DNA, right? I think the baseline here is really refinancing expensive debt with much more affordable um money, if you like, right? And so, you know, as long as you have um, you know, a policy goal that you're trying to achieve. Uh, and so what we see happening here in the case of Zambia was that the Zambian government reached out to the Africa Development Bank, uh, contracted a $600 million uh concessional loan to refinance their 1.3, I think about 1.36 or 1.4, if you like, billion dollar debt uh to the international creditor community. And, you know, they were able to mobilize, I think, around 760 million to kind of make up for the difference uh from within their own local uh pool of resources, right? And so the whole essence was, you know, for the Zambian government, let's pay back our debt now so that we can use whatever savings we can we can have uh to channel those funds towards our policy goal. And the particular policy goal here was to finance or to use the savings from uh this swap to finance what's been called as a greed resilience program, whereby uh there's now the savings from you know uh uh from refinancing the loan today. That goes towards building or expanding and modernizing uh the electricity um uh infrastructure in Zambia, which is really important because uh electricity or power is a crucial piece of what's driving Zambia's economy today, right? So I think this is you know, to a very large extent, it's a commendable move. It's a uh it's a you know a very sensible way of managing uh sovereign liability from the Zambian government.

SPEAKER_00 4:31

And so from your perspective, Luipa, is this something that's scalable to other countries and uh other member states that are a part of the Southern African development community or more broadly, other regions and the African continents?

SPEAKER_02 4:48

I think that the structure of uh of the swap is does provide some sort of a blueprint of what could be done, of what's possible, right? But I think that the preconditions, it's not exactly a copy, you know, it's not a plug-and-play type of model, right? I think that what really is crucial in kind of understanding how this could be applied to other African countries are the preconditions around how this was structured, right? I think there's three crucial issues. One, which is having private sector participation, right? So in this case, we have Africa Green Coal, that were part of you know, driving this strategy forward. And then we also saw, you know, like this is a transaction or this is a deal or a program that's being anchored by a development finance institution in the name of the Africa Development Finance, right? Uh and then also I think that all of this has been happening or kind of necessitated by the fact that Zambia has experienced a corporal price tailwind over the last um, you know, five, et cetera, years, right? And I think that that provides a strong enough macroeconomic base for uh or the preconditions necessary to execute on such a program. So I think that the structure of the program is replicable, right? But I think that the preconditions uh around how the program itself is executed in different countries will be very dependent, will be very unique to each and every other country. Give them their macroeconomic conditions.

SPEAKER_00 6:08

That's a very fair assessment, Luipa. I think that's so much about so much about the macroeconomic situations of emerging markets, specifically if we look at those that have a relatively high amount of debt service to GDP ratios. In cases where that proportion is higher, I think there has to be some strategic engineering that has to take place to ensure that the solution provided is customized and thus not something that is not fully sustainable to uh these different national governments to abide by because this is a lot of pressure. I think this is good pressure for Zambia, and now it's time to deliver and and and take action, uh which is why naturally I would hope that you know there are some Zambian government officials listening to this podcast right now.

SPEAKER_02 7:06

I'm sure they are, and I hope they are. You know, I think that it's um uh, you know, it's it is it is good pressure for the Zambian government, and I think that I say it's commendable because it really is important for emerging market countries, you know, for African countries especially, to figure out how to raise um uh the right capital, right? And by right capital I mean uh capital that's uh priced correctly, right? I think that Joshua, you and I constantly speak about uh the cost of capital, you know, when African governments have gone uh to the international creditor community to borrow money, right, through the issuance of bonds, right? They're repeatedly, African governments are repeatedly complaining about how expensive it is for them to borrow because of this whole idea of an African, you know, African risk premium, right? So I think that if we can show, if the you know, if our governments in Africa can show the impetus to find alternative ways of raising capital by having uh, you know, programs such as the Greed Resilience Program, right, which is really what's driving uh the debt for energy swap. I think that it does open doors for other financiers to throw money at these markets, especially if we can deliver, right? So it's a ride pressure, especially if we can deliver. And I want to say that, you know, it's uh the program itself really speaks to, you know, it seems to speak very loudly to the need to kind of uh eliminate the botanics within the already existing infrastructure. It doesn't seem to necessarily address uh, you know, and I hope that it does at some point, it doesn't necessarily seem to address the need for more of additional megawatt electricity or power supply to the Zambian market. Because I think that really, really is important, right? Yes, let's fix the bottlenecks, let's fix whatever the technical difficulties they are, but I think let's also begin to think about how do we add more power, how do we add more power to the supply lines so that we can feed the domestic economy, right? The retail market, we can also feed uh the commercial entities so that nobody's complaining about uh load shedding and all of that sort of stuff. So, yeah, I agree with you.

SPEAKER_01 9:12

All right, thank you so much for the answer. We want to shift a little bit and take advantage of your particular expertise. And so we've crafted some questions that will do that. Um, we want to think about things from a perspective of investor sentiment and market access. And so, from the perspective of an institutional risk committee, what specific quantitative benchmarks and fiscal performance have to be achieved to justify a shift from these speculative to strategic allocations in Zambia's fixed income and public equity markets?

SPEAKER_02 9:40

Yeah. The uh I think that one of the things that we, you know, one of the benchmarks we certainly have to look at now is that to me it almost seems like, you know, like this this debt for energy swap could possibly be the final act in, you know, that the closing act, if you like, that removes the hurdle of you know the technical default kind of uh flag that Zambia had, right? And I think that's one benchmark that everybody must be looking at, right? We're moving forward, right? Zambia is moving forward. And then secondly, I think that on the part of the Zambian government, I think there must be sustained, uh, there must be a sustained primary physical surplus, right? Uh and a credible kind of debt to GDP ratio, right? I think previously uh the debt to GDP ratio was north of 100%, right? And so kind of having, you know, managing our physical uh surplus is crucial. Uh and also in addition to that, I want to say that um, you know, we also need to be able to build back our reserves, right? And I think that the current government is doing a wonderful job of doing that. Obviously, it comes at the pain to the local economy, but I think that we've got to show that we have the impetus to build back our foreign exchange reserves. Because, you know, and uh possibly to comfortable months of import cover, right? I think that in the case of Zambia, people talk about it being at least two months, a minimum of two months of import cover, right? So if we can do that, if we can keep doing that, I think that those will be the positive signals that we want the market, the international market to have. Um, and then also I think more importantly, you know, is keeping the inflation rate uh within the targeted band, right? Because that's also important for foreign exchange, controlling the foreign exchange rate and all of that sort of stuff. So I think those to me are like some of the key benchmarks that we must, you know, the Zambian government must, I'm sure they have in mind at the back of their heads as they uh uh think about this program and executing on it.

SPEAKER_00 11:28

It is certainly something that requires fiscal discipline, strong fiscal governance, and really the willingness to see something mature over time and recognize that this is something that can bear fruit in terms of human capital developments. But in Zambia, we've all, you know, Louipa, you're you're from Zambia, Ben and I, we've been to Zambia several times, and I cannot personally tell you how frustrating it is to, you know, conduct work on my laptop, and for many reasons uh attributed to load shedding, there is no power for 12 hours. And so how is it possible for an economy to even move along, push forward, and grow uh statistically with these bottlenecks?

SPEAKER_02 12:19

It's uh it poses a huge challenge, right? And I, you know, we have, you know, I think that uh if my statistics are correct, uh, you know, uh we have at least 1,635 uh megawatts deficit in power supply, right? And that's that's a lot, right? Um, you know, and as you say, as you rightly point out, Joshua, right, uh you don't want to, you know, as a retail consumer of electricity, you're sitting there doing your work and suddenly there's a blackout, you're not sure when the power is going to be back. Think about the small retail businesses, you know, the uh the mom and pop shops. Uh think about the commercial entities, right? Perhaps, you know, some commercial entities may have a buffer of their own, but still that comes at an additional cost, right? And so the power deficit does affect everybody, right? It does affect the retail consumer, it does affect the big businesses, even with their buffers, right? So I think it really is important for the Zambian government to really execute on this mandate, right? To really execute on this program, because this is really what will speak truth to our commitment to national growth, right? It's that, well, listen, we've got a 275 million to 73 million uh savings from refinancing our 1.3 billion of debt in 2026. And in the next five years, it's a 15 year, the grid resilience program is a 15-year program. And so in the next five years, in the next 10, 15 years, we want to see some improvement, improvements made in terms of, you know, there's fewer hours of load shedding for the retail market. Uh big businesses can also save because they're no longer having to say, you know, spend money on generators and diesel and all of that sort of stuff, right? Or thinking about where they're going to import power from to kind of do their business, right? So if we can, if the Zambian government can really, and I believe uh we are in a place where we can do that, right? Um, if they can really deliver on this program, I think that it certainly will speak a lot of truth to how we are committed to um our development agenda, the Zambian development agenda.

SPEAKER_00 14:29

It's quite promising, Louispa. I would say even something that can have a substantial implication on the success of this program is the upcoming Zambian election taking place in the next few months. And so, with that said, we're going to lean in a bit more into political risk pricing, which is valuable for investor sentiment and considering market access opportunities. So, Luipo, from your perspective, how should capital allocators reframe the political risk premium in the context of the structural stability promoted by this debt for energy swap? And does the long-term nature of these infrastructure investments offer genuine insulation against short-term election cycle volatility?

SPEAKER_02 15:21

Yeah. So, you know, I think that the structure of the program does provide um, does indeed compress structure and institutional risk, right? And I think that, you know, so if you think about the way that the program itself has been uh designed, right, you have the participation of uh private sector players, right? So Africa Green Coal, I think the company is called. You have, like I mentioned earlier, it's a program that's anchored by um uh by DFI, by the Africa Development Finance, um, uh development finance. And then, you know, it's I think that combining the contracts, right, it's it's it's contractual. There are commitments that are being made by the Zambian government that will outlast any single uh kind of uh tenure of a politician. So it's much less about, you know, like any insulation for any type of uh for this type of pro uh program will really come from the contracts and the agreements that are in place, right? Given the way that the program has been structured, private sector participation anchored by development finance uh institution. And I think at the heart of it all, I want to believe, is commitment by the existing regime in the Zambian government that's forming the Zambian government today, to ensure that this is a program that they can deliver on, right? So I think that uh institutional continuity that will certainly outlast, right? And what I mean by institutional continuity is really the commitment to the contracts that will outlast any single um uh kind of politician. So it's not a question of uh, you know, do we assume that politics, I mean, yes, we have to price in politics, but I think that uh it's focusing on how we structure such type of programs. I'm thinking about, you know, the fact that, well, this will outlast a single politician and there will be another person in the next five to ten years.

SPEAKER_01 17:15

I appreciate your response on institutional continuity. Um, one thing that comes to mind is, or a question that comes to mind is historically has Zambia been pretty good with institutional continuity? And do you think that this reputation of African president or African administrations not having institutional continuity is tainted by a few kind of dictatorial leaders?

SPEAKER_02 17:39

Um yeah, man. Yeah, I think we have. Uh yeah, it's uh, you know, I think that there has been institutional continuity, right, in Zambia. Uh, you know, I always say to, you know, this, you know, when I Joshua and I have this conversation, I always say to him that I think that it's important for um investors, for businesses to be present in this country, in these countries, right? In Zambia, in many other places. Because it's by being present that you realize, we learn what's, you know, how the politics, how the institutions within each and every one of these countries um kind of play out, right? And so there has been institutional continuity in Zambia in the sense that we do have a capital, a formally established capital market, right? And so if you're trying to do a business and you can organize, you can structure a program that anchors multilateral institutions plus a locally existing capital market, I think that that's something that kind of mitigates the risk of uh having an absent, you know, like a strong enough uh institutional background, right? So if a politician changes, or if you have a dictator in power tomorrow, uh as long as you structured your program in a way that it sits outside of the influence of the dictator, right? Which is by focusing on, you know, mobilizing or uh, you know, leveraging capital markets and the influence of multilateral institutions. I think that you can, there's stuff that can be done there, right? I'm not trying to under undermine the extent of dictatorial tendencies. They do happen, uh, they do happen globally, right? It's nothing that's unique to Africa. But I think that I'm I'm optimistic today because I believe that the sentiment that I pick from you know all of my friends from across the 55 African countries, right? Is young people like yourself and myself have a commitment, you know, we see Africa in a in a pretty similar way, right? And I think when we think Africa, we think growth. And I know sometimes people are very nervous to kind of think of Africa as a as a single uh entity. Yes, it's not a single country, but I think that the idea of economic growth uh when we think about Africa is something that every other African country is pursuing, right? And I think that the foundations of what um uh has been missing across the continent is pretty uniform, right? It's like, yes, if we think about institutions, yes, institutional integrity is important, right? And sometimes that's absent. But even within those, you know, so if you assume that some leader of some country is a dictator, well, even dictators do need to raise, they do need to have a way of mobilizing uh investments, right? Whether it's through direct financing or otherwise, to drive uh whatever their agenda for growth is, right? So there's always an agenda for growth, and there's always some institutional um underpinning that if you are present in a country, uh you can leverage to do what you have to do, to build your business and build it successfully. The Chinese are doing it.

SPEAKER_01 20:37

Thank you. That was um extremely insightful, and it gives a better sense in terms of what's going on in the ground and how people are trying to structure things to make sure they do have continuity. It does seem like a lot of the things that are done in Africa are short term or they're not done out very well, but there are things, like you said, that can be done to outline some of these strong things that can come and influence deals. And so our final question will be more about sector-specific drivers and strategy. Um, and we'll return back to some of the infrastructure things we were talking about. Um, so more specifically, how do you think that energy reliability and um acts as a primary constraint on expanding high-value commodity verticals? Um, more specifically, something like copper, rare earth element refining, and what policy framework is required to institutionalize fiscal discipline and post-restructuring.

SPEAKER_02 21:28

Yeah, the um uh you know, energy reliability really is the gating to moving up the value chain, right? Um if you think about you know value addition, you know, whether it's you know, from moving to exporting, you know, copper concentrates or any concentrate that we've been exporting in its row form, to adding value to processing those critical minerals, we need a reliable source of energy, right? This is really important, right? So for us to add any other verticals to our story, to our Economic story. For that economic diversification to take place, we do need to have a strong and reliable energy base, right? We do need to figure out a way, and I think we are. Zambia is. I say we because I still, uh, you know, I'm I'm very Zambian. You know, my boy, in my head, I'm like, I'm part of this story, right? So we are, you know, I think we have we are acting on some of the promises and commitments that uh the Zambian leadership has made in the past, right? And I think we see that through uh initiatives like the debt, you know, um debt for energy swap, right? So I think that, yes, uh energy reliability is important. We do need to figure out how to add more, right? As just opposed to kind of fixing the technical uh inefficiencies within the existing supply lines, right? We have to think about how do we add more power to the grid so that we can mitigate or we can actually bridge that, you know, that gap in terms of power supply, right? Uh because this is really what, you know, if you think about our foreign Zambia's foreign exchange earnings are primarily driven from the export of copper concentrate, right? And so if we can add more value, right, if we can begin to process more, so if we if we address the energy deficit, that 1,635 megawatts of electricity deficit supply, if we address that, it means that we now can begin to see more companies setting up base, beginning to produce copper cathodes, uh, beginning to produce copper pots, whatever it is, add value to uh what's coming out of the earth, right? Add value to any other critical mineral that's coming out of the Zambian earth. It's a natural endowment, endowment. We should be able to put it to good use, right? So I think that it is really, really important. And I understand that the Zambian government knows this really well. It's a conversation that's been going on for many years now, uh, you know, 10, 20, 30 years. I was much younger. Everybody was talking about, you know, we started Bing Lodge in Zambia 15, 20 years ago, you know. So it it really is crucial for Zambia to execute. And I and I'm very confident, you know, and I really, whoever is listening, listen. I trust that we can, you know, there's no reason why we shouldn't, because we have the money uh and we have the technical know-how to uh to deliver on this on this project. Now, what um, you know, like what do we need? What sort of uh, you know, physical discipline is a really important. I think that at the end of the day, it all boils down to how do we manage our liabilities? Are we responsible enough as a country to manage, as a leadership of a country, to manage whatever earnings we have from whatever exports that we make and put the money to good use, right? So physical discipline is important, right? We need to have rules that are prudent and transparent, right? So for every other public expenditure, it must be clear where the resources are being targeted, right? So it's we're we're putting 275, 235 million into uh cleaning up the greed and making sure that everybody gets access to good you know power supply. Yes, we're going to do that. We are no stories. We said we'll do it, and we're doing it, right? I think once that's clear, once you know there's a prudent um uh, you know, these methods are prudent, I think that it will go a long way in ensuring that uh, you know, we have a country that uh the rest of the world can look at and and uh you know hope to leave in someday.

SPEAKER_00 25:24

Absolutely encouraging thoughts regarding the potential of Zambia, uh country that is near and dear to me. I'm always quite fond to travel to Lusaka, have some nice Shima and some nice uh whatever is the self on the side, right? So uh it's some it's some good, you know, good food, but clearly the opportunity from a monetization standpoint, uh from a portfolio allocation standpoint, whether it be a hard asset, fixed income products or within the equity markets, there is a lot of work being done to make sure that Zambia is a more attractive uh landscape. And it takes individuals like yourself, Luita, to bring the change that's needed. As we wrap up this episode as as a nice bonus question, within 60 seconds, we'll love to know what you would like people to remember you for in terms of your contributions to your country.

SPEAKER_02 26:33

Well, I have ambitions not just to make a contribution to my country, but to Africa and to the world, right? So uh the uh the thing that I would like to be remembered for Joshua uh and Benjamin is uh you know, I'm a strong believer, you know, in Africa's growth agenda, right? I listened to Aliko Dangoti and he complains about uh you know the difficulties he's had raising capital for uh for for his second refinery, or you know, the challenges he went through with setting up his first refinery in Nigeria. I listened to presidents of countries speak about the challenges they have when it comes to mobilizing capital, uh mobilizing funds for uh development projects, right? We do have a, you know, like we do have a real challenge back on the continent where uh development is beacon, right? We have a young population, uh 70%, 60, 70 percent of whom are below the age of 30, right? That's an opportunity that's ripe for growth. We just need to empower them with the right skills, empower them with the resources. Money is an important resource. In the absence of money, you don't have many choices, right? If you don't have money, you don't have much of a choice. You don't have a choice anyway, right? So we do need to figure out I want to be remembered for being the guy that drove more money, literally, money to the African continent to help achieve the agenda for growth. Because the next billionaires, the next millionaires are going to come from the African continent. It's ripe, it's ready for growth. We must still participate.

SPEAKER_00 28:15

Absolutely fantastic thoughts, Louisipa. Uh, your story is one of a source of inspiration, and we hope that many people have some positive takeaways as they watch or listen to this episode. We've touched upon several points relating to structural innovation, macrofinancials, investor sentiment, particularly in relation to Zambia's energy debt nexus, which very much serves as a model for emerging markets. Yes, there may have to be some uh modifications done to ensure that the missing puzzle pieces relative to a country are properly addressed, but Zambia certainly serves as a proof of concept. You've heard it from us today, folks. Luipa Mondoka, thank you very much for your time today.

SPEAKER_02 29:04

Awesome. Thank you very much for having me.