Zambia's government said on Wednesday it had received near-unanimous backing from bondholders for an innovative $1.36-billion debt buyback deal that commits the government to upgrading its power network.

The country is using a $600-million loan from the African Development Bank, plus some of its own resources, to buy back a soon-to-be-high-interest 2053 sovereign bond as part of its ongoing efforts to improve its finances.

In return, the government will spend up to $275-million over 15 years strengthening and modernising its electricity grid, in what it says will be the world's first "debt-for-development swap" focused on a country's energy sector.

Last week, it offered bondholders an extra $65-million to agree to the deal. In Wednesday's statement it said those holding a combined 97.85% of the bond's outstanding principal amount had now "validly tendered" their notes.

Zambia, which defaulted on its debt in the wake of the Covid-19 pandemic, said it had been working on the new debt swap for more than two years.

According to the latest statistics agency data, almost half of the country's 22-million population still lacks access to electricity.