TDB Group, an African trade and development lender, is con
sidering claiming insurance on debt it’s owed by Zambia that has
become entangled in a complex restructuring process.The southern African nation, which defaulted in 2020 and later sought to rework around $13 billion of ex
ternal loans, has said it’s including about $500 million it owes to TDB in that process. The government mu
st seek similar relief to what other creditors provided, requiring TBD to agree to losses.
That could lead TDB to call in insurance it has with a Lloyd’s of London syndicate for a portion of the debt, Admassu Tadesse, the lender’s managing director,
said in an Aug. 2 interview in Rwanda’s capital, Kigali. He cautioned, though, that doing so may have “systemic” ramifications for trade finance on the continent.
“The reason they would come in and share a risk with us is because th
ey didn’t expect trade finance credits to be pulled into restructuring,” he said. “If mistakes are made and important rules are broken, then I think trade finance will dry up.”
TDB — together with the African Export Import Bank — has found itself at the center of an increasingly contentio
us debate about including the lenders’ facilities in sovereign-debt restructuring on the continent. While Afreximbank is a
damant it won’t participate, TDB is discussing further debt relief with Zambia, which may lead to losses and, in turn, prompt the insurance claim.
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“It’s part of the picture and we’re definitely looking at that very closely
,” Tadesse said of the insurance claim. “It may very well be triggered in the final analysis.”
Lloyd’s declined to comment.
The risk of being included in sovereign debt workouts has already had a negative credit-rating impact for Afreximbank and TDB, with bond yields rising.
TDB has a total country exposure to Zambia of $872 million, of which it has insurance for about $348 million, according to the group’s 2024 annual report, which doesn’t break down how much is sovereign and private.