Zambia's government says it has received a 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.