Hichilema Unveils $300M SME Finance Platform

Backed by UK, Sweden, and NAPSA, GIP Zambia promises patient capital and lasting economic impact.

By Francis Maingaila | Lusaka, July 15, 2025

President Hakainde Hichilema has officially launched Growth Investment Partners Zambia (GIP Zambia)—a strategic investment platform designed to unlock affordable local currency financing and expand private sector participation in support of Zambia’s small and medium enterprises (SMEs).

The initiative is backed by the United Kingdom through British International Investment (BII), in partnership with Sweden’s development finance agency Swedfund and Zambia’s own National Pension Scheme Authority (NAPSA). 

Its mission: to create a more inclusive financial landscape for SMEs, which remain the lifeblood of Zambia’s economic fabric.

Speaking at the launch in Lusaka, President Hichilema described SMEs as foundational to Zambia’s economic transformation and urged both public and private actors to position their development at the center of national policy.

“We are working to grow our economy, and we cannot ignore SMEs. They are the foundation of growth and jobs,” he emphasized.

With an initial capital injection of over $70 million, GIP Zambia aims to deliver affordable, long-term financing while promoting technology transfer, joint ventures, and value addition—particularly in sectors such as agriculture and manufacturing.

President Hichilema also encouraged government ministries to allocate portions of public resources through GIP Zambia to improve efficiency and enhance financial delivery mechanisms.

He highlighted the formation of the Ministry of Small and Medium Enterprise Development—Zambia’s first—as a tangible demonstration of his administration’s commitment to the SME sector. 

Since its inception, the ministry has spearheaded industrial yards, facilitated economic zones, and strengthened SME access to public procurement systems.

The President also underscored the importance of skills development, pointing to community-based vocational training in plumbing, carpentry, and welding as essential components of the country’s broader development agenda. 

These efforts, he said, are being supported through the expanded Constituency Development Fund (CDF), which has grown from K1.6 million to over K36 million per constituency.

Outlining his vision for GIP Zambia, President Hichilema identified four strategic pillars: affordable capital, access to technology, facilitation of joint ventures with foreign investors, and support for value-added local production. 

He also urged stakeholders to study successful international models while avoiding ineffective practices.

The President cited macroeconomic improvements—such as lower inflation and a more stable kwacha—as the result of deliberate structural reforms, including the reopening of mining operations and the attraction of new investments.

“This is not magic. It is the result of deliberate work,” he said.

He further urged Zambians to embrace a mindset of savings and long-term investment rather than consumption, stating, “Save, invest, and help grow the country.”

President Hichilema reaffirmed his administration’s commitment to cutting bureaucratic red tape, removing regulatory hurdles, and improving the business climate—especially for SMEs.

“We are committed to improving the operating environment and making Zambia a better place to do business.”

UK Endorsement: A Vote of Confidence in Zambia’s Economy

British High Commissioner to Zambia Rebecca Terzeon welcomed the launch as a testament to the UK’s confidence in Zambia’s economic potential and its commitment to inclusive development.

“SMEs are key to job creation and economic development, but many struggle to access the right financing. This partnership aims to address that gap through sustainable and locally driven investment,” she said.

GIP Zambia is a flagship initiative under the UK-Zambia Green Growth Compact, which targets £2.5 billion in UK private investment across Zambia’s mining, renewable energy, and minerals sectors. It also aims to unlock £500 million in UK-backed development finance and £150 million in private SME investments.

Terzeon noted that BII—formerly CDC—has a long-standing presence in Zambia, with its first investment dating back 75 years. The launch of GIP Zambia, she added, reflects a modern evolution of that legacy.

She was joined by UK Trade Envoy for Southern Africa Calvin Bailey MP, who spoke about the UK’s new Modern Industrial and Trade Strategies aimed at deepening trade ties with regional partners like Zambia.

She also commended BII, Swedfund, NAPSA, and their Zambian partners for translating a bold vision into reality and expressed optimism about the platform’s long-term impact.

Swedfund: Unlocking Impact Capital for Zambia’s Future

Swedfund, Sweden’s Development Finance Institution, has committed $15 million to GIP Zambia. This funding will support long-term, flexible, and context-sensitive financing for SMEs.

Speaking at the event, Swedfund’s Chief Investment Officer Marie Aglert said the initiative aligns with Zambia’s trajectory toward sustainable development and inclusive job creation.

“This platform will provide capital in local currency, tailored to the realities of Zambian businesses that are often underserved by traditional finance,” Aglert said.

She cited Zambia’s growing population, sound economic reforms, and access to regional markets through SADC, COMESA, and AfCFTA as key advantages for impact-driven investment.

Swedfund currently holds 12 active investments in Zambia, spanning agriculture, renewable energy, and financial inclusion. Notable examples include AgDevCo, which supports agribusinesses, and Mirova SunFunder, which finances off-grid energy solutions.

Swedfund’s dual-track strategy combines private-sector capital mobilization with public-sector support. For instance, its Project Accelerator provides technical assistance and feasibility support for infrastructure initiatives such as the Malawi-Zambia Transmission Interconnector and renewable energy collaboration with ZESCO.

“This dual-track approach—mobilising private capital while supporting public infrastructure—is how we help drive long-term development,” Aglert explained.

Swedfund’s mission focuses on reducing poverty through investments aligned with five key Sustainable Development Goals: poverty eradication, gender equality, decent work, reduced inequalities, and climate action.

BII: A 15-Year Vision to Transform Zambia’s SME Landscape

British International Investment CEO Leslie Maasdorp said GIP Zambia is designed to tackle long-standing obstacles facing SMEs—such as high interest rates, lack of long-term financing, collateral constraints, and currency mismatches.

“SMEs are the backbone of Zambia’s economy, accounting for 90% of businesses, 70% of GDP, and 88% of employment,” Maasdorp said. “With GIP Zambia, we are responding to Zambia’s development priorities and creating a credible alternative for institutional investors.”

The platform draws from the successful Growth Investment Partners Ghana model and is carefully tailored to Zambia’s regulatory and financial environment. It is co-financed by the European Union and Germany’s GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit).

Over its 15-year duration, GIP Zambia is expected to support at least 150 SMEs, driving industrialisation and job creation in line with Zambia’s Vision 2030, the Eighth National Development Plan, and the Capital Markets Master Plan.

BII’s investment history in Zambia includes stakes in Chilanga Cement, Zambeef, and Zanaco. To date, it has committed over $200 million to 25 businesses, supporting more than 10,000 jobs across key sectors.

“Zambia has the right conditions—an underserved SME base, growing domestic capital, and professional talent—to scale this platform and make a real impact,” Maasdorp concluded.

NAPSA and Labour Ministry: Pension Capital With Purpose

Labour and Social Security Minister Brenda Mwika Tambatamba hailed the platform as a critical tool for unlocking Zambia’s SME potential and broadening social security coverage.

“Pension contributions secure retirement welfare while also supporting national development,” she said, tying the launch to Pensions Awareness Week.

Tambatamba praised NAPSA’s proactive role and emphasized the platform’s alignment with ILO Recommendation 204, which advocates formalizing the informal economy—a national development imperative.

NAPSA Board Chairperson Mr. Shipango Muteto confirmed that GIP Zambia reflects the authority’s dual mandate: safeguarding pension savings while investing in sustainable national development.

Although the investment currently represents less than 1% of NAPSA’s portfolio, it is projected to yield an average annual return of 16.7% over 15 years and create more than 21,000 direct and indirect jobs. Dividends are expected to commence by year six.

“SMEs are the backbone of resilient economies globally. With the right support, Zambia’s SMEs can drive industrial growth and innovation,” Muteto stated.

He also reaffirmed NAPSA’s commitment to transparency, good governance, and strategic alignment with national goals.

“This is pension capital with purpose—investing not only for financial returns but for transformational impact,” he concluded.