Zambia’s electricity crisis was not simply an act of nature. It was the product of decisions made over a decade by a state utility drowning in obligations, a government hungry for credit, and a Chinese state-owned bank that, according to newly revealed documents, pursued its claims with unusual rigor even as its borrower spiraled toward insolvency.
At the center of that story sits ZESCO, the state-owned power company that supplies almost all of Zambia’s electricity, and its largest burden: a long-term loan of nearly $285 million from the Industrial and Commercial Bank of China, signed in 2011. When the first installment came due in June 2018, a $20 million payment, ZESCO was already in deep financial trouble, saddled with debt and in arrears to power suppliers. Internal records examined by the International Consortium of Investigative Journalists show that ICBC’s own staff had flagged concerns about the utility’s health, noting that reduced rainfall had curtailed electricity revenue and that the company was struggling under a separate $1.5 billion syndicated loan with ICBC and the Export-Import Bank of China. ZESCO had just paid ICBC $15 million in management fees for that hydropower loan, a payment that, in the bank’s own words, “put some pressure on the company’s financial situation.”
Despite those documented concerns, ICBC’s headquarters pressured its London branch to transfer the $20 million from a reserve account the bank held on ZESCO’s behalf, moving before the necessary documentation was in place. The internal report recording that episode caused a stir among London staff when they “later learned that [head office] had pushed [the London branch] to make the payment.” Bradley Parks, executive director of AidData, a research center at the College of William & Mary, explained the significance: because the bank controls the escrow account itself, it need not seek permission from anyone else. “I am the escrow account bank, I can do whatever the hell I want with this money,” he said, paraphrasing the creditor’s position.
The documents form part of China Capital, an ICIJ-led investigation with 23 media partners, built on 4.8 million files including loan agreements, due diligence reports, meeting minutes and internal emails in English and Chinese. The project examines the operations of ICBC’s U.K. subsidiary and London branch and their role in advancing Chinese interests in Africa. It depicts a bank that presents itself as a commercial institution but, analysts argue, functions as a policy instrument of the Chinese state, majority-owned by Beijing and guided in its lending by strategic priorities, including the Belt and Road Initiative announced by President Xi Jinping in 2013. The Chinese Embassy in Zambia rejected claims that lending serves political ends, stating that China “never forces borrowing, presses for repayment, attaches political conditions to loan agreements, or seeks political interests,” and insisting its financing cooperation is “fully open and transparent.”
The institutional failures ran in both directions. In Zambia, the Finance Ministry was nominally responsible for overseeing borrowing, but a former ministry official told ICIJ that “a lot went on outside the Ministry of Finance,” as ministries and state companies struck financing deals directly with Chinese firms. “It was a bit of a free-for-all for a while,” the former official said. A pattern researchers call contractor-facilitated lending became institutionalized: Chinese companies such as TBEA, which arranged the ICBC financing for the very transmission-line project it had been contracted to build, both organized the loans and profited from the contracts, leaving Zambia to carry the repayment obligations and most of the financial risk. China benefited on both ends, as lender and contractor.
Oversight bodies sounded repeated warnings that went largely unheeded. A World Bank report concluded that ZESCO’s management was “swayed by political decisions on investments.” Rating agencies began downgrading Zambia’s sovereign rating as early as September 2015, when S&P Global pointed to subdued copper prices, a widening deficit and “increased external indebtedness.” An IMF report noted that large public investment projects were “often transformed into vehicles for political patronage and rent seeking opportunities” and that governance weaknesses were central to the accumulation of sovereign debt and the ensuing crisis. Zambia’s auditor general’s findings, analysts say, support the assessment that borrowing under President Edgar Lungu’s administration, which took office in 2015, mushroomed to the point where the state could not even disburse the loans it had signed, a view shared by Barbara Dutzler, an economist with Germany’s main development agency who heads its Good Financial Governance in Zambia program.
The consequences were structural. Between 2014 and 2019, the government’s debt to foreign creditors as a share of GDP more than quadrupled. In 2020, a ZESCO subsidiary defaulted on the $1.5 billion hydropower loan; the utility, which had guaranteed higher prices to independent power producers than the tariffs it charged its own customers, was insolvent. So was the country, the first in Africa to default on its sovereign debt during the COVID-19 pandemic. The government began cutting subsidies, including for fuel, and raising electricity tariffs.
The reckoning extended to the restructuring table. China had not joined the Paris Club, the informal grouping of mostly high-income creditors, and its loan agreements often contained confidentiality clauses that obscured the true scale of its claims. Researchers at the China Africa Research Initiative at Johns Hopkins University estimated Zambia’s outstanding debt to Chinese financiers at roughly $6.6 billion in August 2021, nearly double the highest figure the Zambian government had cited. Bondholders refused to proceed with renegotiation, citing insufficient information about China’s claims. Dutzler noted the Chinese position was clear: “They don’t give a haircut.”
Yet the feared worst case did not materialize. China agreed to co-chair Zambia’s official creditors’ committee alongside France, and in 2024 Zambia reached agreements in principle with Chinese commercial lenders, including ICBC. By 2026, negotiations were largely concluded, most of them under President Hakainde Hichilema, Lungu’s successor.
The accountability questions remain live. Zambia’s debt spiral was enabled, on one side, by lenders willing to extend onerous, high-risk credit cloaked in secrecy, and on the other, by Zambian officials who bypassed their own controls in the name of development. Survey data suggests citizens have drawn conclusions: Afrobarometer found positive views of China’s influence in Zambia fell from 72% in 2014 to 42% in 2022. And behind those institutional records stand ordinary businesses, including a farmer outside Lusaka whose 10-acre operation nearly collapsed under load shedding during the worst drought in four decades, and a butcher in the capital whose sales have fallen to less than half of what they once were, the human ledger of decisions made in boardrooms and ministries years before the lights went out.