REPUBLIC OF ZAMBIA INTEGRATED SMALL TOWNS WATER … · Overview: The Integrated Small Towns Water...
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AFRICAN DEVELOPMENT BANK GROUP REPUBLIC OF ZAMBIA INTEGRATED SMALL TOWNS WATER SUPPLY AND SANITATION PROGRAM APPRAISAL REPORT OWAS/SARC DEPARTMENTS November 2016 Public Disclosure Authorized Public Disclosure Authorized
Transcript of REPUBLIC OF ZAMBIA INTEGRATED SMALL TOWNS WATER … · Overview: The Integrated Small Towns Water...
AFRICAN DEVELOPMENT BANK GROUP
REPUBLIC OF ZAMBIA
INTEGRATED SMALL TOWNS WATER SUPPLY AND
SANITATION PROGRAM
APPRAISAL REPORT
OWAS/SARC DEPARTMENTS
November 2016
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TABLE OF CONTENTS
Currency Equivalents .................................................................................................................. i
Fiscal Year .................................................................................................................................. i
Weights and Measures ................................................................................................................ i
PROGRAM SUMMARY .......................................................................................................... v
I STRATEGIC THRUST AND RATIONALE ............................................................ 1
1.1 Program linkages with country strategy and objectives ............................................. 1
1.2 Rationale for Bank’s involvement .............................................................................. 1
1.3 Donor Coordination .................................................................................................... 3
II PROGRAM DESCRIPTION ...................................................................................... 4
2.1 Program Components ................................................................................................. 4
2.2 Technical solution retained and other alternatives explored ...................................... 5
2.3 Program Type ............................................................................................................. 6
2.4 Program Cost and Financing Arrangements ............................................................... 6
2.5 Program’s target area and population ......................................................................... 8
2.6 Participatory process for program identification, design and implementation ........... 8
2.7 Bank Group experience and lessons reflected in program design .............................. 9
2.8 Program’s performance indicators ............................................................................ 10
III PROGRAM FEASIBILITY ..................................................................................... 10
3.1 Economic performance ............................................................................................. 10
3.2 Environmental and Social Impacts ........................................................................... 11
IV. IMPLEMENTATION ............................................................................................... 14
4.1 Implementation Arrangements ................................................................................. 14
4.2 Monitoring ................................................................................................................ 16
4.3 Governance ............................................................................................................... 16
4.4 Sustainability ............................................................................................................ 17
4.5 Risk management ...................................................................................................... 19
4.6 Knowledge building .................................................................................................. 19
V. LEGAL INSTRUMENTS AND AUTHORITY ...................................................... 19
5.1 Legal instrument ....................................................................................................... 19
5.2 Conditions associated with Bank’s intervention ....................................................... 19
5.3. Compliance with Bank Policies ................................................................................ 20
VI RECOMMENDATION ............................................................................................ 20
i
Currency Equivalents As of June 2016
Currency Unit = US Dollars
1 UA = USD 1.4023
1 USD = ZMW 9.701
1 UA = ZMW 13.609
Fiscal Year January 1st – December 31st
Weights and Measures
1 metric tonne (t) = 2,205 lbs.
1 kilogramme (kg) = 2.205 lbs.
1 metre (m) = 3.281 ft.
1 kilometre (km) = 0.621 mile
1 square kilometre (km2) = 0.386 square mile
1 hectare (ha) = 0.01 km2 = 2.471 acres
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ACRONYMS AND ABBREVIATIONS
AfDB African Development Bank Group MGCD Ministry of Gender and Child Development
ADB African Development Bank NCB National Competitive Bidding
ARAP
Abridged Resettlement Action Plan
NUWSS
P
National Urban Water Supply and
Sanitation Program
BPM Bank Procurement Method
CCA Climate Change Adaptation NWASC
O
National Water and Sanitation Council
ChWSC Chambeshi Water and Sewerage
Company O&M Operation and Maintenance
CP Cooperating Partner PID Program Implementing Department
CUs Commercial Utilities RBCSP Result Based Country Strategy Paper
DFID Department For International
Development R-SNDP Revised Sixth National Development Plan
DHID Department of Housing and Infrastructure
Development SA Sustainability Agreement
EIB European Investment Bank SAG Sector Advisory Group
EIRR Economic Internal Rate of Return SESA Strategic Environmental Assessment
ESIA Environmental Social Impact Assessment SESA Strategic Environmental and Social
Assessment
ESMP Environmental and Social Management
Plan SDGs
Sustainable Development Goals
GIZ German Agency for Technical
Cooperation TA Technical Assistance
GOZ Government of Republic of Zambia UA Unit of Account
HDI Human Development Index UNICEF United Nations Children's Fund
HH House Hold USAID United States Agency for International
Development
ICB
International Competitive Bidding USD
US Dollar
IPR Implementation Progress Results WASHE Water, Sanitation and Hygiene Education
IQPR Interim Quarterly Progress Report WB World Bank
IWRM Integrated Water Resources Management WWSC Western Water and Sewerage Company
JASZ Joint Assistance Strategy for Zambia WSS Water Supply and Sanitation
JICA Japan International Cooperation Agency WSCPG Water Sector Cooperating Partners Group
JWSR Joint Water Sector Review ZEMA Zambia Environmental Management
Agency
LA Local Authorities ZNGP Zambia National Gender Policy
LpWSC Luapula Water and Sewerage Company
MCC Millennium Challenge Corporation
MCDMCH Ministry of Community Development,
Mother and Child Health
MDGs Millennium Development Goals
M&E Monitoring and Evaluation
MLGH Ministry of Local Government and
Housing
MMEWD Ministry of Mines, Energy and Water
Development
MOE
Ministry of Education
MOF Ministry of Finance
MOH Ministry of Health
MOU Memorandum of Understanding
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Loan and Grant Information Client’s Information
BORROWER: Republic of Zambia
EXECUTING AGENCY: Ministry of Local Government and Housing
Financing plan
Source Amount (USD) Amount (UA) Instrument
ADB 108.91 million 77.64 million Loan
ADF 9.92 million 7.07 million Loan
AGTF 15.00 million 10.69 million Loan
MIC TAF 1.68 million 1.2 million Grant
GOZ/ utilities 15.06 million 10.73 million Counterpart Contribution
TOTAL COST 150.57 million 107.33 million
ADB’s and AGTF’s key financing information
Loan Currency USD
Loan Type Fully Flexible Loan
Tenor 25 years inclusive of grace period
Grace period 8 years
Repayments Consecutive semi-annual payments after grace
period
Interest Rate Base Rate +Funding Cost Margin+ Lending
Margin + Maturity Premium if applicable
Base Rate Floating Base Rate (6-month USD LIBOR reset
each 1st February and 1st August). A free option
to fix the Base Rate is available.
Funding Cost Margin The Bank funding cost margin as determined
each 1st January and 1st July and applied to the
Base Rate each 1st February and 1st August
Lending Margin 80 basis points (0.8%)
Front-end fees 0.25% of the loan amount payable at latest at
signature of the loan agreement
Commitment fees 0.25% of the undisbursed amount. Commitment
fees start accruing 60 days after signature of the
loan agreement and are payable on Payment
dates
Option to convert the
Base Rate*
In addition to the free option to fix the floating
Base Rate, the borrower may reconvert the fix
rate to floating or refix it on part or full
disbursed amount. Transaction fees are payable.
Option to cap or collar
the Base Rate*
The borrower may cap or set both cap and floor
on the Base Rate to be applied on part or full
disbursed amount. Transaction fees are
payable.
Option to convert loan1
currency
The borrower may convert the loan currency for
both undisbursed or disbursed amounts in full or
part to another approved lending currency of the
Bank. Transaction fees are payable.
* Conversion options and transaction fees are subject to the Bank Conversion Guidelines available:
http://www.afdb.org/fr/documents/document/guidelines-for-conversion-of-loan-terms-july-2014-87643/
1 Only applicable to ADB but not to AGTF
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ADF loan key financing information
Currency Unit of Account
Interest rate spread 1%
Commitment fee 0.5% per annum on the undisbursed loan amount
Service charge 0.75% per annum on amount disbursed and outstanding
Duration 30 years
Grace period 5 years
MIC TAF Grant key financing information
Currency Unit of Account
Interest rate spread N/A
Commitment fee NA
Service charge NA
Timeframe - Main Milestones (expected)
Program approval November 2016
Effectiveness March 2017
Mid Term Review January 2019
Completion December 2020
Last Disbursement Deadline December 2021
Last repayment December 2041
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PROGRAM SUMMARY
1. Overview: The Integrated Small Towns Water Supply and Sanitation Program aims to increase
access, quality and sustainability of water supply and sanitation services in twelve (12) towns located
in four Provinces served by Western, Luapula and Chambeshi Water & Sewerage Companies as well
as ensure effective management and operation of the water supply and sewerage facilities on
commercial principles.
2. The main program outcomes include (i) increase in proportion of residents accessing improved
water supply and sanitation, (ii) increased hours of water supply, (iii) increased revenue collection
efficiency and (iv) reduction in Non-Revenue Water (NRW). At output level, activities encompass
rehabilitation and expansion of climate resilient water and sewerage infrastructure, training of utility
staff (>50% of female staff), training of national/municipal staff, training of women and youth in artisan
skills and training of women to operate and maintain water kiosks. The program is to be implemented
over 48 months beginning in January 2017 at a cost of USD 150.57 million.
3. At completion in 2020, the program will benefit 639,927 people directly and an additional 287,212
beneficiaries indirectly, who live around the targeted towns. Residents will gain better health from
increased access to safe drinking water and improved sanitation, women and school going children will
benefit particularly from utilisation of time earlier spent on collecting water for income generating
activities as well as improved school enrolment and retention of girls. There will also be benefits from
employment/livelihood opportunities generated by the program, training of artisans (30% women) and
empowerment of women and youth groups for possible business along the water and sanitation value
chain and catchment management. This will contribute towards meeting High Five (Hi5) #5: improving
the quality of lives of the beneficiary population.
4. Needs Assessment: There are high poverty levels in the four provinces in which the water utilities
operate (Luapula 81.1%, Western 82.2%, Northern 79.7% and Muchinga 69.3% of the population live
on less than USD 1 a day). The small towns are experiencing inadequate water and sanitation services
and as a result are badly affected with annual outbreaks of cholera, typhoid and dysentery. The current
coverage levels are an average of 51% for water supply and 22% for sanitation. The basic determinants
of better health are still in a critical state; having broken down and deteriorated over the years as
Government has not been able to adequately invest into rehabilitation or extension of the systems, hence
huge investments are required to restore the facilities to original operating capacity and also to extend
services to meet demand necessitated by population and economic growth.
5. The Banks’ added value: The Bank is among the largest Cooperating Partners providing sector
leadership and has extensive experience in delivery of large water and sanitation infrastructure. This
program will further strengthen and consolidate gains achieved from previous and currently active
interventions in Zambia. In addition to physical infrastructure, the Bank will support policy, institutional
and regulatory reforms to promote private participation, enhance efficiency and sustainability of
investments. The program contributes to the Bank’s 2013-23 TYS and its operational priorities, with
special emphasis on the Hi5 priorities; specifically to improve the quality of lives of the population in
the four provinces by providing safe clean water and improved sanitation thereby improving public
health outcomes, in particular, the incidence of water borne diseases and environmental enteropathy, all
of which have a strong impact on children under five stunting levels and mortality.
6. Knowledge management: The program shall enhance Bank’s knowledge in the sector through
capture of vital knowledge in utility management particularly on cost recovery, NRW and financial
viability. This will be done through (i) strengthening of the Water Regulator’s Aquatis Management
Information System to provide up-to-date data for overall sector planning, track investment programs,
monitor sustainability and continuity of services in water utilities, and (ii) systematic documentation of
the implementation progress and results.
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Results Based Logical Framework
Country and Program Name: Republic of Zambia: Sustainable Small Towns Water Supply and Sanitation Program
Program Purpose: To increase access, quality and sustainability of water supply and sanitation services in selected small towns
RESULTS CHAIN
PERFORMANCE INDICATORS MEANS OF
VERIFICATION RISKS/MITIGATION MEASURES
Indicator (including CSI) Baseline
(2015) Target
IMP
AC
T
Impact: Improved health and livelihoods of the urban population
1. Population below poverty line 61% 20% in 2030 National Census, living condition survey
2. Under-five mortality rate per 1,000 live births in Zambia 64 50 in 2030
OU
TC
OM
ES
Outcome 1: Increased access to improved Water Supply among residents in the program towns
1.1 Proportion of residents accessing Improved Water Supply (+50% women)
51% 95% (2020) NWASCO Sector Reports, Utility progress reports
Risk #1: Failure to meet the cost recovery
expectations
Mitigation: A tariff and affordability study
will be carried out and a program of tariff
adjustments for WSS services will be implemented in order to ensure
sustainability of service provision. These
should also take into account the social nature of services and the needs of the poor.
Outcome 2: Increased access to improved sanitation among residents of program towns
2.1 Proportion of people accessing Improved Sanitation (+50% women) 22% 40% (2020)
Outcome 3: Improved utility management, efficiency and sustainability of WSS services
3.1 Increased revenue collection efficiency (%) 3.2 Reduced Non-Revenue Water (NRW) 3.3 Increased average daily hours of supply (hrs.) at connections
60% 53% 9
>90% (2020) <35% (2020) >22 (2020)
NWASCO Sector Reports, quarterly and annual reports
OU
TP
UT
S
Component 1- Water Supply Infrastructure Development 1.1 Construction/ Rehabilitation of water Infrastructure
1.1.1 Water networks rehabilitated, augmented and extended (KMs) 1.1.2 No. of water treatment facilities rehabilitated/ expanded 1.1.3 Quantity of water produced and distributed (m3/day)
500 0 65,953
1,954 (2020) 10 (2020) 188,592 (2020)
Utility Quarterly and Annual Progress Reports
Risk #2: Limited technical capacity to
operate and maintain infrastructure Mitigation: Utility personnel will take part in implementation of the activities in order to allow for skills transfer. Incorporate on the job training and capacity building of utility personnel to operate and maintain the facilities. Risk #3: Coordination of activities
Mitigation: Each utility will second personnel to the PIT to be the focal point for activities pertaining to the utility and allow for skills transfer. PIT will to have sub-office in Western Province in addition to main office in Kasama, Northern Province. Risk #4. Program is of high value and
technically complex
Mitigation. MLGH/Utilities to enhance appropriate procurement, technical, contract management /dispute resolution capacity and skills to complement their capability to successfully manage the program
Component 2- Sewerage Infrastructure development, sanitation and Hygiene promotion 2.1 Construction/ Rehabilitation of Sewerage Infrastructure 2.2 WASH strengthened
2.1.1 Sewer networks rehabilitated, augmented and extended (KMs) 2.1.2 No. of Sewage treatment plants rehabilitated/ constructed 2.2.1 Community members trained in sanitation and hygiene (>50% women) 2.2.2 No. of promotional sanitation facilities
60 0 0 0
272 (2020) 8 (2020) 10,000 (2020) 60 (2018)
Utility Quarterly and Annual Progress Reports
Component 3- Institutional Strengthening 3.1 Strengthened utility operations 3.2 Enhanced institutional capacity of National/ Municipal Authorities/ Utilities to manage Water and Sanitation services 3.3 Empower for women & youth 3.4 Climate Change activities 3.5 Feasibility studies & designs
3.1.1 No. of utility staff trained (>50% of female staff) 3.1.2 No. of Performance Enhancement Contracts signed 3.2.1 No. of national/ municipal staff trained and supported in sector investment framework, sanitation and environmental health (% of female staff) 3.3.1 Training of women and youth in artisan skills ((% female) 3.3.2 No. women operating and managing water kiosks 3.4.1 Water sources catchments protected 3.5.1 Feasibility studies and detailed designs for two other water utilities completed
0 0 0 0 0 0 0
150 (2018) 3 (2018) 80 (2018) 150 (2019) 50 (2019) 12 (2020) 2 (2019)
Utility Quarterly and Annual Progress Reports
KE
Y A
CT
IVIT
IES
Activities INPUTS
1. Water Supply Infrastructure Development: Rehabilitation/ construction of new production facilities, reservoirs, networks water networks
2. Sewerage Infrastructure Development: Rehabilitation/ construction new climate resilient sewer networks, rehabilitation of sewage ponds; Delivery of sanitation, environmental and hygiene education; Construction of climate resilient demonstration institutional/public sanitation facilities 3. Institutional Strengthening: Training, development of social inclusion and gender framework, ESMP implementation, climate change mitigation and adaptation plans 4. Program Management: Program Auditing; Technical Assistance; Office Equipment; various goods, procurement of vehicles; Feasibility Studies and Mid Term Review of the program.
Total Program Cost: USD 150.57 million ADB loan: USD 108.91, ADF UA 7.07 Million and AGTF USD 15 million MIC TAF Grant: UA 1.2 Million GOZ/Utilities: USD 15.06 million
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Program Timeframe
Finalisation of detailed designs ◊
Board Approval
Publication of GPN
Signing
Effectiveness
Launch Mission
Engineering Services Consultancy
Bank approval EOI&RFP
RfP/bidding & contract award
Design review and Tendering
Works Supervison
Civil Works - Water and Sewerage
Bidding & contract award
Commencement of main works
Taking over works
Defect Liability Period
Institutional Strengthening
Operationalise Utility Gender Strategies
Training and Capacity Building activities ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊ ◊
Sanitation & Hygiene Promotion
Demo HH and public sanitation facilities
Mid Term Review ◊
Financial Audit (submission) ◊ ◊ ◊ ◊
Program Completion ○
Full time engagement of ESC Partime engagement
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ZAMBIA: INTEGRATED SMALL TOWNS WATER SUPPLY AND SANITATION PROGRAM IMPLEMENTATION SCHEDULE
Activity2016 2017 2018 2019 2020
2 4 6 8 10 12 2 4 68 10 12 2 4 6 8 10 12 2 4 8 10 128 10 12 2 4 6
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REPORT AND RECOMMENDATION OF THE MANAGEMENT TO THE BOARD
OF DIRECTORS ON A PROPOSED LOAN TO ZAMBIA FOR THE INTEGRATED
SMALL TOWNS WATER SUPPLY AND SANITATION PROGRAM
Management submits the following Report and Recommendation for a proposed loan for USD
108.91 million on ADB terms, UA 1.2 million MIC TAF grant and UA 7.07 million on ADF
terms to the Republic of Zambia to finance the Integrated Small Towns Water Supply and
Sanitation Program.
I STRATEGIC THRUST AND RATIONALE
1.1 Program linkages with country strategy and objectives
1.1.1. The Government of the Republic of Zambia’s (GOZ’s) development agenda are
articulated in the National Vision 2030 and Revised Sixth National Development Plan (R-
SNDP: 2013-2016) which have prioritised water among the key growth sectors of the economy.
The National Sector Vision is “A Zambia where all users have access to water and sanitation
services and utilise them in an efficient and sustainable manner for wealth creation and
improved livelihood by 2030”. The R-SNDP has the goal of increasing “accessibility to reliable
safe water by all sectors of the economy” in order to enhance economic growth and improve the
quality of life. Thus, this program supports the GOZ’s water sector development by providing
effective solutions for unreliable and unsafe water supply which has many negative impacts on
public health, and which limits economic development in densely populated and low-income areas
of small towns. Zambia’s water sector is also underpinned through sound policy, legal and
strategic framework which includes the National Urban and Rural Water Supply and Sanitation
Programs, Zambia’s Integrated Water Resources Management (IWRM) articulated in the National
Water Policy of 2010, Water Supply and Sanitation Act (2008) and the Water Resources
Management Act (2011). The Government has now started developing the Seventh National
Development Plan (2017-2021) and the water sector still remains a priority.
1.1.2 The Bank’s Country Strategy Paper (CSP: 2016-2020) for Zambia focuses on: i)
support to infrastructure development to enhance productivity and trade competitiveness, and
ii) support to private sector development and its regulatory environment to diversify the
economy. The program is therefore in line with pillar one by supporting investments that
develop Zambia’s productive sectors and enhance economic development through provision of
improved infrastructure and addresses the required major investments for rehabilitation and
expansion of the infrastructure in the fast growing small towns supporting numerous businesses
and creating a favorable environment for business growth and industries.
1.2 Rationale for Bank’s involvement
1.2.1 The GoZ has been undertaking water sector reforms since the early 1990’s which
prioritized improving domestic water supply and sanitation accessibility due to its impact on
the population’s health. Considerable progress has been made in improving access to improved
water supply and sanitation. Currently, 65% of Zambians have access to clean drinking water
supply, while 49% have access to adequate sanitation. The national long-term vision for 2030
is to reach 80% access to clean water supply by 2015 and 100% by 2030; 68% access to
sanitation by 2015 and 90% by 2030; rehabilitation and reconstruction of sewage facilities in
all major towns and cities; and 80% of waste collected and treated by 2030. Recent studies
show the trend of national water coverage on a slow upward trend while that for sanitation
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coverage is even slower. Zambia made limited progress on sanitation during the MDG period
and did not meet the target of 70% (while for drinking water, moderate progress was made
although the target of 75% was also not met). Hence, the need for further investments in the
water sector.
1.2.2 In addition, there is disparity among the different provinces in terms of their access to
water supply and sanitation services as some provincial towns remained with very low access.
These included towns in the Northern, Luapula, Muchinga and Western provinces which have
access on average at 47% and 25% for water and sanitation respectively, hence the need to
urgently address the water supply and sanitation challenges in these towns lagging behind the
national average urban access of 86% and 56% for water and sanitation access respectively.
The proposed program interventions will focus on improving the livelihoods of the underserved
in these remote small towns. In the context of broad-based and pro-poor growth, the program
will promote inclusive growth with equitable allocation of resources to geographical areas
which long had not received support to improve water supply and sanitation.
1.2.3 The total population in the four target provinces is 3,712,382 people. There are high
poverty levels in the four provinces (Luapula 81.1%, Western 82.2%, Northern 79.7% and
Muchinga 69.3%). The small towns in the provinces are badly affected by poor water supply
and sanitation with annual outbreaks of cholera, typhoid and dysentery. The small towns are
experiencing high levels of inadequate water and sanitation services. Services in Luapula
Province are provided by Luapula Water and Sewerage, in Northern/ Muchinga Provinces by
Chambeshi Water and Sewerage Company and Western Water and Sewerage Company in
Western Province. The three utilities under consideration have had a little investment since
they were formed, are small and struggling to keep pace with the rapid population growth due
to dilapidated infrastructure. In the three utilities, average hours of supply are 9 hours a day,
average operations/maintenance cost coverage is 68% and Non-Revenue Water is at 53%. The
current water supply coverage levels are 30%, 50% and 73% respectively for the urban
population in Luapula, Western and Northern/ Muchinga Provinces and that for sanitation is
14%, 30% and 21% respectively.
1.2.4 These basic determinants of better health, are still in a critical state having broken down
and deteriorated over the years as Government has not been able to adequately invest into
rehabilitation or extension of the systems, hence huge investments are required to restore the
facilities to original operating capacity and also to extend services to meet demand necessitated
by population and economic growth. Continuity of water supply is a major challenge and in all
the small towns, water is a limiting factor for development and therefore the Bank seeks to
support GOZ to grow these areas. The highest priority will be given to investment measures
aimed at ensuring that each utility meets the basic service and public health obligations by
getting the most out of the existing. These are measures that will ensure stabilization of the
service quality and reliability, by reducing Non-Revenue Water to make more water available
to the customers and densifying the network to shorten the service lines where most of the
water and energy losses occur. The second priority will be given to measures that will help the
water utilities respond to the increasing demand for services due to population and economic
growth.
1.2.5 The Bank’s comparative advantage in financing the program is a combination of its
comprehensive experience in developing infrastructure for sustainable service provision in
Zambia and the region. The Bank has continued to focus on supporting the unserved population
to increase access to equitable, sustainable water supply and improved sanitation, as inadequate
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access to clean, safe water supply and sanitation in Zambia is a major contributing factor to
poverty. The Bank’s support will compliment on-going efforts by GOZ to improve quality of
livelihoods of people living in peri urban and far flung small towns. The Bank has had a long
engagement with the GOZ having supported both urban and rural water and sanitation sectors
since the early 1980’s. In the urban sector, the Bank has supported the formation of Lusaka
Water and Sewerage Company, Lukanga Water and Sewerage Company and Nkana Water
Supply and Sewerage Company and facilitated sector development activities with other
partners. In this regard the Bank would use its leverage and position to further coordinate and
collaborate closely with the other partners actively involved in the sector.
1.2.6 The program is well-aligned to the Bank’s 2013-23 TYS, Integrated Water Resources
Management Policy (2000) and the Urban Development Strategy (2011); and seeks to help
manage urban growth and develop sustainable climate resilient urban infrastructure systems.
The program’s objective is also in line with the Bank’s Gender Policy (2001) and Gender
Strategy (2014-2018), in that it will support Government develop strategies to create economic
opportunities for women and youth. Equally important, the Program will support continued water
and sanitation institutional and policy reform, and build much needed capacity, to enable sector
institutions to scale-up service delivery. The program is aligned to the Bank’s TYS operational
priorities by responding to the need to improve the quality of growth in the targeted provinces
by addressing infrastructure development requirements through provision of climate resilient
sustainable infrastructure; enhancing skills and technology through training and employment
opportunities for women and youth; use of appropriate water and sanitation technologies; and
strengthening sector institutions to enhance governance and accountability in the water sector.
The program also contributes to the Bank’s TYS, with special emphasis on the High Five
(Hi5) priorities specifically to improve the quality of lives of the population in the four
provinces by providing safe clean water and improved sanitation thereby improving public
health outcomes in the target provinces, in particular, the incidence of water borne diseases and
environmental enteropathy, all of which have a strong impact on children under five stunting
levels and mortality. The program is also in line with the Sustainable Development Goals
(SDGs) specifically SDG 6 as by improving water, sanitation and hygiene which are essential
for health, welfare and livelihoods, it will lead to disease prevention, improved education
outcomes and improved economic productivity. In addition, the program will contribute to the
achievement of the other SDGs related to poverty, health, industry/ resilient infrastructure,
quality education, sustainable cities & communities, climate action and gender equality.
1.3 Donor Coordination
1.3.1 There is a comprehensive donor coordination framework that operates at national and
sector level. At national level, the coordination process is articulated in the Joint Assistance
Strategy for Zambia which involves a Memorandum of Understanding (MOU) that was signed
by the GOZ and Cooperating Partners (CPs) to domesticate the principles of the Paris
Declaration and as a response by CPs to the national development plans. The MOU provides
the platform for developing in practice, harmonization of cooperation by CPs and alignment to
Government procedures and processes. A Water Sector CP Group of which the Bank is part of
a Troika (AfDB, WB and Germany) has been responsible for enhancing cooperation,
coordination of policies, strategies and approaches in support of WSS development and
effective communication with GOZ. It meets monthly to (i) discuss key sector issues for the
attention of government, (ii) updates on key developments within CPs programs and projects
(iii) discuss support to implementation of sector activities including the National Urban Water
Supply and Sanitation Program (NUWSSP). The financing required for the NUWSSP to
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achieve the 2020 water and sanitation targets is estimated at more than USD 197 million per
year (UA 141.1 million). The total financing commitment by the Bank Group and other CPs
for the period 2015 to 2020 is approximately UA 117 million per year.
1.3.2 The Bank consulted with the wider water sector CP group in designing the program in
particular with CPs financing the NUWSSP: Germany, World Bank, Japan and the Millennium
Challenge Corporation and will seek to harmonize support especially towards sector
development targeting institutional strengthening and capacity building activities.
Table: 1.1: Donor Support to Water
Sector or subsector*
Size
GDP Exports Labour Force
Water 2.3 - 0.3%
Players -
Water Supply and Sanitation Resource mobilisation in million US (2013-2015)**
Government
Donors AfDB 19% UNICEF
6% WB 14%
USD
m USD 73 m
USD 819 m
% 28%
72% MCC
43%
Germany
10%
Japan 4%
USA 2%
Level of Donor Coordination
Existence of Thematic Working Groups Yes
Existence of SWAps or Integrated Sector Approaches No
ADB's Involvement in Donors Coordination Lead
* The estimate is based on the national budget, past budget performance and donor portfolio information.
* Other donors are not included with contributions less than 1%
II. PROGRAM DESCRIPTION
2.1 Program Components
2.1.1 The Program Development Objective is to increase access, quality and sustainability of
water supply and sanitation services in the four Provinces served by Western Water &
Sewerage Company, Luapula Water & Sewerage Company and Chambeshi Water & Sewerage
Company as well as ensure effective management and operation of the water supply and
sewerage facilities on commercial principles. The program components are described in Table
2.1 below, with details provided in Annex B.2.
Table 2.1: Program Components and Outputs [cost in million USD]
S/No Component name Base
Cost Component description
1 Water Infrastructure
Development
100.07 Renewal and rehabilitation of 300 km major climate resilient
water supply bulk and transmission facilities, Expansion of
climate resilient 1,154 km of water distribution systems,
Development and expansion of 10 No. water production facilities,
Rehabilitation and construction of 60 No. water storage facilities,
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S/No Component name Base
Cost Component description
2 Sanitation Services
Improvements
14.58
Rehabilitation, upgrading and expansion of 212 km climate
resilient sewer collection networks (using labour intensive
contracts to support local employment), Rehabilitation of 8 No.
various sewage ponds; new climate resilient trunk mains and
upgrade of sewer interceptors, Feacal Management incorporating
emptying teams in some unsewered areas, Advocacy,
sensitization, promotion of decentralised sanitation & hygiene
education by training 10,000 community members , development
of gender responsive training and promotional material and
Construction of 60 No. climate resilient demonstration household
sanitation facilities.
3
Institutional Capacity
Building and Program
Management
16.61
Improve performance of the three utilities, tariff assessment and
development of procedures; strengthening of billing, collection,
and financial management processes; trainings/seminars to 3 No.
company boards, 180 No. utility staff, 100 No. water vendors,
water forums, microenterprises and provision of basic equipment
for improving utility efficiency such as leak detection and
introduce performance reporting, Yearly apprenticeships for fresh
graduates in utilities
Development and operationalizing of Gender strategy/policies
(increase women economic opportunities within the program)
Catchment management for production wells through tree
planting, tree nurseries established, river bank management for the
river intakes.
Enhance MLGH capacity to coordinate the sector and National
Water and Sanitation Council (NWASCO) to enhance its capacity
for developing sector guidelines and performance monitoring
including a component to benchmark all indicators.
Provision of technical assistance for program management,
Program operation costs coverage, program financial,
procurement and technical audits, ESMP reports; program
completion report and program M&E
2.2 Technical solution retained and other alternatives explored
2.2.1 The retained technical solutions are based on experiences in previous and ongoing
interventions and in line with the sector strategies outlined in the NUWSSP. In almost all the
small towns utilizing ground water sources, there is a significant number of boreholes that have
either collapsed (Mongu, Senanga) or the water quality is not palatable (high iron content, high
fine sand content and salinity). For Mongu, boreholes which are currently being used have been
silting at a fast rate and collapsing due to the sandy nature of the soils in Mongu. Therefore,
surface water supply from the little Zambezi River will be used to guarantee reliability and
sustainability of supply. For the sewerage system, it was proposed to have a full waterborne
sewerage but this has very high capital cost and would have taken up a substantial proportion
of the investment without a corresponding increase in water supply. As most of the households
are on decentralised on site sanitation systems comprising septic tanks and on site sanitation
facilities, the priority will be in the short to medium term to continue to support resuscitation
of the old defunct sewerage systems and rehabilitate the sewer networks and rehabilitate the
sewage treatment ponds and carry out limited expansion of the network while focusing on
utilizing hygiene promotion, Sanitation Marketing (SM) and support enforcement of bylaws
on onsite sanitation. The SM promotes household-centered choice of latrine type.
6
Table 2.2: Alternatives considered and reasons for rejection
Alternative Brief Description Reasons for rejection
Groundwater Supply
from boreholes in
Mongu, Senanga and
Mwense
Wellfields to supply water to small
towns
high treatment costs due to high iron,
salinity, collapsing boreholes due to
Kalahari sand formations, encroachments
polluting sources
Full sewerage system in
all target towns
Provision of a full water borne
sewerage system in small towns
Unit costs are considerable high for a
sewerage system to cover all areas and
issue of affordability arises.
2.2.2 Based on sanitation survey findings and house-to-house visits, the program will
support, public water borne toilets in the small towns for public institutions like markets, Bus
stops and Schools. There is significant potential for increasing access to climate resilient
sanitation through introduction of ecological sanitation technologies for decentralised
sanitation systems, on-site systems and lined latrines in peri urban areas which will not have
waterborne sewer systems. Capacity building activities will be carried out for
ministries/national agencies, sensitization of communities in building sanitation facilities and
supporting Local Authorities in the program areas for enforcement of sanitation bylaws.
2.3 Program Type
2.3.1 This program is part of the NUWSSP which GoZ is implementing aimed at improving
service provision in all urban settlements. The program will be implemented as a stand alone
public investment operation. The program contributes to the achievement of the NUWSSP
objectives and its implementation will be aligned to its processes.
2.4 Program Cost and Financing Arrangements
2.4.1 The total cost of the NUWSSP, covering the period 2016 to 2020 is estimated at US$
985 million, of which the Bank supported operation is estimated to cost USD 150.57 million
(equivalent to UA 107.33 million), net of taxes and duties. These cost estimates are based on
information in the feasibility studies and other studies on the program with details of estimated
unit rates derived from suppliers and contractors, as well as from experience with similar
ongoing operations in the country and in the region. A physical contingency of 10% and a price
contingency of 3% per annum have been taken into consideration in these estimates. A
summary of the program cost estimates by components and expenditure accounts is shown in
Tables 2.3 and 2.4 below, while details are provided in the Annex B.2
Table 2.3: Program cost estimates by component
2.4.2 The program will be financed by AfDB Group (including MIC TAF Grant, ADF, and
ADB), AGTF and GOZ/ Utilities as shown in the Financing Plan in Table 2.4 below. The AfDB
Group contribution is a loan of UA 96.59 million (to include UA 77.64 million ADB loan, UA
10.69 million AGTF loan, UA 7.07 million ADF loan and UA 1.2 million MIC TAF grant).
Component FC LC Total FC LC Total %
1) Water Supply Improvement 75,005 25,002 100,007 53,465 17,822 71,287 76%
2) Sanitation Services Improvement 8,746 5,830 14,576 6,234 4,156 10,390 11%
3) Institutional Capacity Building and PM 8,541 8,068 16,608 6,088 5,751 11,839 13%
Total Base Cost 92,292 38,900 131,191 65,787 27,728 93,516 100%
Physical Contingency (10%) 9,229 3,890 13,119 6,579 2,773 9,352
Price Contingency (3% annually) 4,405 1,857 6,262 3,140 1,324 4,464
Total 105,926 44,646 150,573 75,506 31,825 107,331
US$ '000 UA '000
7
GOZ/CUs will finance the balance of UA 10.73 million, which represents 10% of the total
program cost. GOZ/CUs contribution shall also include contributions in kind. In accordance
with the “Policy on Expenditure for Bank Group Financing”, the GOZ has requested the Bank
to consider reducing the requirement for 50% counterpart funding on the program due to the
fact that Zambia has only recently transitioned to blend status and is yet to transition to full
ADB only and also continues to dedicate substantial provisions for infrastructure development
through the national budget. Zambia is also at the lower end of middle income status and will
require substantially more time to fully transition to a 50% counterpart funding level. The
minimized counterpart funding requirement for the program is supported on the basis of the
foregoing, to enable Zambia forge ahead with infrastructure development with the ADB
resources and the leveraged AGTF funds.
Table 2.4: Sources of financing2
Table 2.5 (a): Program cost by category of expenditure [‘000 USD]
Table 2.5 (b): Expenditure schedule by component [‘000 USD]
2 In addition to the above, GoZ has approached EIB to provide equivalent of USD 30 million to fund the program remaining
towns in Muchinga Province
MIC TAF to fund feasibility studies and detailed designs for Southern & Northwestern Water and Sewerage Companies
Source of Finance US$ '000 UA '000 %
MIC TAF Grant 1,683 1,200 1.1%
ADF 9,918 7,070 6.6%
ADB 108,913 77,636 72.3%
AGTF 15,000 10,692 10.0%
GoZ/Utilities 15,057 10,733 10.0%
Total 150,573 107,331 100.0%
Project Cost Estimates by Category of Expenditure (in *US$ '000)
Category of Expenditure FC LC Total %
1 Works 84,347 31,727 116,073 88.5%
2 Goods 1,515 75 1,590 1.2%
3 Services 6,058 1,576 7,633 5.8%
4 Operating Costs - 4,564 4,564 3.5%
5 Miscellaneous 372 958 1,330 1.0%
Total Base Cost 92,292 38,900 131,191 100.0%
Physical Contingency 9,229 3,890 13,119
Price Contingency 4,405 1,857 6,262
Total Cost 105,926 44,646 150,573
Component 2017 2018 2019 2020 Total
1) Water Supply Improvement 20,001 30,002 30,002 20,001 100,007
2) Sanitation Services Improvement 2,915 5,830 5,830 - 14,576
3) Institutional Capacity Building and PM 6,262 4,502 3,012 2,832 16,608
Total Base Cost 29,179 40,335 38,844 22,833 131,191
Physical Contingency (10%) 2,918 4,033 3,884 2,283 13,119
Price Contingency (3% annually) - 1,331 2,602 2,329 6,262
Total 32,097 45,699 45,331 27,446 150,573
8
2.4.3 Table 2.5 (c) below shows the disbursement plan during the program implementation
period.
Table 2.5 (c): Expenditure schedule by category of expenditure [‘000 USD]
2.5 Program’s target area and population
2.5.1 The program will be implemented in Northern, Muchinga, Western and Luapula
Provinces. The program is designed to be implemented in twelve (12) towns benefiting 639,927
(>50% women) direct beneficiaries and an additional 287,212 beneficiaries indirectly, who live
around the targeted towns. These towns are Mongu, Sesheke, Senanga, and Kaoma in Western
Province, Kasama and Mbala in Northern Province, Nakonde and Mpika in Muchinga
Province, Mansa, Samfya, Mwense and Kawambwa in Luapula Province. Residents will gain
better health from increased access to safe drinking water and improved sanitation. Women
and school going children, who bear the majority of the burden due to inadequate water supply
through queuing for long hours and transporting water over long distances, will benefit
particularly from utilisation of time earlier spent on collecting water for other income
generating activities as well as improved school enrolment and retention for the girls. The small
town populations will also benefit indirectly from; a) employment/livelihood opportunities to
be generated by increased investments; and b) improved social services (health, education) all
of which will be made possible by the improved service coverage. Government institutions,
private businesses, Schools, Markets and health centres in the targeted small towns will also
benefit from the program as direct beneficiaries through improved service provision. The
program will train artisans (30% women) and empower women and youth groups for possible
business along the water and sanitation value chain and catchment management. Skilled and
unskilled employment will be generated during the construction and operations of the
infrastructure once completed. The program will provide yearly apprenticeship to fresh
graduates to be attached in the three CUs for the duration of the program for possible future
absorption in the CUs or enriching for the job market. All these benefits will contribute towards
meeting Hi5 #5: improving the quality of lives of the beneficiary population.
2.6 Participatory process for program identification, design and implementation
2.6.1 The program has benefited from a wholly participatory approach at the various stages;
identification, program design, preparation and appraisal. It is intended that the participatory
approach shall be adopted through the program implementation.
2.6.2 The program was conceived, at a strategic level, from the NUWSSP with a view to
improve drinking water supply and sanitation services in the four provinces served by the three
utilities. GoZ financed the pre-feasibility, feasibility and detailed designs for the three utilities.
The program development process entailed extensive consultations with relevant stakeholders
including the line ministry (MLGH), Ministry of Finance, provincial administration, district
administration, Local authorities, the three water utilities, CSOs and beneficiaries with diverse
Category of Expenditure 2017 2018 2019 2020 Total
1 Works 23,662 36,578 35,832 20,001 116,073
2 Goods 1,590 - - - 1,590
3 Services 2,431 2,261 1,471 1,471 7,633
4 Operating Costs 1,141 1,141 1,141 1,141 4,564
5 Miscellaneous 355 355 400 220 1,330
Total Base Cost 29,179 40,335 38,844 22,833 131,191
Physical Contingency 2,918 4,033 3,884 2,283 13,119
Price Contingency - 1,331 2,602 2,329 6,262
Total Cost 32,097 45,699 45,331 27,446 150,573
9
social backgrounds. Systematic consultations were conducted as part of the studies, with
persons directly affected by the program from a cross section of the communities and other key
stakeholders. Stakeholder workshops were held in the provincial headquarters towns.
Discussions with communities were voluntary, gender inclusive, touched on challenges with
current service, current applicable technologies, current rates of access, level’s of disease
burden, relevant interventions, roles, capacities and gaps of the various stakeholders. The
community meetings highlighted concerns on the benefits and possible impacts of the proposed
program, utilisation of funds and community involvement in program activities. It was noted
that the selection of sites and infrastructure was in agreement with the desires of the
beneficiaries who also indicated their willingness to fully participate in all program activities
during implementation. Beneficiaries, in project areas expressed their preference for surface
water supply to borehole water supply as they had suffered over the last decades with poor
quality water and frequent breakdown of the systems due to silting and collapse. All
stakeholders acknowledged that inadequate water supply and sanitation is affecting the social
wellbeing, posing serious risks to public health and livelihoods of the people in the small towns.
These issues have been appropriately addressed in the program design.
2.6.3 Ideas were also solicited on the relevance and implementation arrangements of the
various program components, target groups and geographical locations. Efforts were made to
ensure gender and social inclusiveness, women and youth empowerment and sustainability
mechanisms in these consultations. The feedback from the consultations has been used to
formulate the capacity development aspect of component three of the program. Consultations
with users will be an on-going part of the program and will continue throughout implementation
of the program. The existing water watch groups in the small towns will be used to facilitate
the process and ensure inclusiveness. Participation of national stakeholders and representatives
of beneficiary groups in the ISTWSSP will be through the existing National Urban Water
Supply and Sanitation steering committee which will have oversight responsibility, oversee
program compliance with sub-sector national policies and strategies and guide implementation.
2.7 Bank Group experience and lessons reflected in program design
2.7.1 The Bank’s on-going portfolio in Zambia comprises of 19 operations (17 national and
2 multi-national programs) with a total commitment of UA 632.5 million, including two
operations in the sector; National Rural Water Supply and Sanitation Program II (USD 15.5
million loan, Euro 3.5 million grant) was approved in September 2014, with the Lusaka
Sanitation Program (LSP) (UA 37 million) approved in June 2015. The current IPR ratings are
3 for both the NRWSSP II and the LSP. The 2015 Country Portfolio Performance Review
assessed the overall portfolio as satisfactory and continues to improve. The combined rating
from Implementation Progress and Resource Reporting (IPR) and SAP was 2.93 while
combined implementation objectives and development outcomes scored 2.79 and 2.88
respectively. The number of programs at risk reduced from 7% in 2013 to 6% in 2015. The
average CPI rating is 3.63 for 2015 (3rd Quintile). Overall portfolio disbursement ratio is 15%
as at 30 June 2016 with an average portfolio age of 2.32 years. There is no Project Completion
Report (PCR) backlogs and all conditions precedent to first disbursements for previously
approved loan/grant agreements of the Bank in the sector have been satisfied by the Borrower.
2.7.2 Lessons learned from the Bank’s past and current projects are described in Annex B1.
The main lessons applied to the ISTWSSP are: (i) there is need to critically address the issue
of cost recovery as it is fundamental to financial sustainability. The program will therefore
undertake a tariff and affordability study; implement a program of tariff adjustments for water
10
supply and sanitation services in order to ensure sustainability of service provision including
investment, taking into account social equity (pro-poor tariffs) and ability of beneficiary
communities to pay for the services (ii) There is need for a solid results framework that provides
a means to systematically assess implementation progress and measure outcomes in projects/
programs. Progress on the program will be monitored by the water regulator based on the
indicators in the NWASCO sector report and those in the program result based logical
framework, (iii) in order to optimize benefits from water supply and sanitation interventions,
the interventions will concurrently address water supply, sanitation and hygiene and (v) the
program will increase sustainable demand and commitment for improved WSS through
consistent targeted hygiene behaviour change.
2.8 Program’s performance indicators
2.8.1 Achievement of the expected program results will be demonstrated by the key
performance indicators described in the results-based logical framework and process indicators
in annex B9. They include increase in proportion of residents accessing improved water supply
and sanitation, increased hours of water supply, increased revenue collection efficiency and
reduced non-revenue water. The rate of physical and financial implementation of planned
activities, including development of infrastructure, will measure the trend towards the
achievement of Program’s objective. The key output indicators include: (i) length of climate
resilient water and sewer networks constructed, rehabilitated, (ii) water production and
treatment facilities constructed and rehabilitated, (iii) training of women and youth in artisan
skills, (iv) sewage treatment plants rehabilitated/ constructed, (v) community members trained
in sanitation and hygiene, (vi) women operating water kiosks.
2.8.2 Progress towards achieving program outcomes and outputs will be measured and
monitored through bi-annual Bank supervision missions, IPRR, annual technical and financial
audit reports. The program outputs will feed into the annual NWASCO sector report which
then aggregates all the data for national reporting on water sector outcomes. The M&E
Specialist in the PIT will be responsible for the M&E framework and data collection, including
baseline, impact and other relevant studies to be carried out as required to inform the program
progress. The M&E framework will be implemented in collaboration with stakeholders,
especially Utilities, NWASCO and NGOs/CBOs. Internal monitoring systems of the MLGH
and utilities will be strengthened to facilitate post-program implementation monitoring.
III. PROGRAM FEASIBILITY
3.1 Economic performance
Table 3.1: Key Economic Figures
EIRR 28.5 and NPV ZMK 2306 million (at 12% base case)
NB: detailed calculations are available in Annex B6
3.1.1 The economic analysis of the program has been undertaken by comparing “with” and
“without program” of the various costs and benefits that will accrue to the beneficiaries of
improved water supply and sanitation services for the residents in the twelve provincial towns
and surrounding areas, managed by the three CUs. In addition, the program will provide
institutional capacity building to improve operational efficiency of the three water utilities
managing the water supply and sanitation services in their respective provincial towns for
sustainable improved service delivery.
11
3.1.2 It will improve access to reliable and clean water supply and sanitation services which
will promote good environmental health. These will result in reduced water borne diseases for
the populations living in urban and peri-urban areas of the twelve beneficiary towns. These will
also enhance the quality of livelihoods and well-being of the beneficiary population, and boost
economic activities. The economic returns are measured in terms of benefits which accrue to
residents in the form of clean, regular and adequate drinking water supply, improved sanitation
services, improved health and living conditions of the beneficiary population.
3.1.3 The main assumptions are: Improved water system management including installation
of meters and demand management systems, improved commercial and operational
management of water utilities, which in turn will enhance operating efficiency in the delivery
of services. This would contribute to generate incremental water and sanitation revenues.
Another major benefit is health benefit which accounts for the reduction in water borne diseases
of populations living in urban and peri-urban areas of the beneficiary towns, which results in
savings in health expenditure. The costs side includes capital investments, periodic replacement
costs, and incremental operating and maintenance costs. All costs and benefits are considered
net of duties and taxes. In addition, the economic life of the investment is estimated at 25 years.
The program’s economic rate of return is estimated at 28.5%. The value is higher than the
opportunity cost of capital of 12% and thus the program is considered economically viable.
Sensitivity analysis to test the robustness of the EIRR was carried out to determine the impact
of adverse variations. The EIRR changes to 25.2% assuming that investment cost increases by
20%, and changes to 23.3% when the benefits of the program are decreased by 20%. The
analysis shows that the program is economically viable and socially beneficial for Zambia.
Annex B.6 shows the assumptions and the calculations of the EIRR.
3.2 Environmental and Social Impacts
3.2.1 The ISTWSSP was validated as Category 2 on 11 April 2016 by ORQR.3. This
classification is justified considering the impact from the level of infrastructure and other
interventions which will be introduced within the participating towns are mainly likely to
induce detrimental but site-specific environmental and/or social impacts. Detailed designs are
underway for water and sewerage infrastructure development and the individual projects’ sites are
located in different provinces; due to being far apart, they have different baseline conditions
in terms of physical, ecological and social attributes. For these reasons, the type of
Environmental Assessment tool was the development of the Strategic Environmental and
Social Assessment (SESA) report and Environmental and Social Management Framework
(ESMF). The categorization is in alignment with the national environmental law of Zambia.
The ESMF summary was published on the Bank’s website on 14 October 2016.
3.2.2 Major positive impacts identified (associated with Hi5 #5) include (i) Increased and
sustainable access to water supply and sanitation (ii) socio-economic development of the
towns, (iii) improved environmental health, (iv) improved health and livelihoods of residents
(v) improved technical and financial viability of the utilities for sustainable service delivery
and (vi) time savings to engage in other productive activities (women and youth). On
employment opportunities, works contractors will be required to have active employment
policy favoring local workers and women. The negative environmental impacts anticipated
from the proposed program include (i) Environmental pollution from liquid and solid waste
generation from construction camps and work sites; (ii) Sedimentation of watercourses during
water production and sewage treatment plant construction; (iii) Loss of vegetation due to
12
diversions and material sourcing; (iv) Soil erosion from exposed areas during earthworks; and
vii) Temporary social disruption including physical and economic displacement of persons
living within the wayleave and road reserve. Environmental impacts resulting from
implementation of civil works are expected to be localized, minor and short-term since the
rehabilitation and expansion works are principally for the works in existing wayleaves. Where
the infrastructure pass through private land, the owners will be compensated for any damage
to property, trees and crops, etc., by GoZ in line with the provisions of the Environmental and
Social Management Act of 2011.
3.2.3 Provision has been made for appropriate mitigation measures. These include (i)
development of construction methodologies compliant with the AfDB Integrated Safeguards
System; (ii) adherence to contractors’ work practices; (iii) program management’s strict
enforcement of the correct construction practices and standards; (v) incorporation of mitigation
measures identified in the ESMP into the Tender documents and specifications into contracts;
(vi) public awareness including liaison at ward level in advance of work in each work location;
and (vii) undertaking sensitization campaigns on HIV/AIDs in the program areas during
construction. The ESMP implementation and monitoring budget which is part of all works
contracts is estimated to be USD 1.5 million.
3.2.4 Climate Change: According to the Bank’s Climate Safeguards System, the program is
classified as Category II, requiring the implementation of adaptation measures to increase the
resilience of communities and the infrastructure to be rehabilitated to withstand the impacts of
climate change. The program will ensure that infrastructure is climate resilient to account for
programed climatic conditions and prolong the longevity of the infrastructure. The program
will access funds from the ACTFCN to support the further development of climate change
activities of the program. This specific Consultancy Service in support of the program will
focus on (i) water resources vulnerability to climate change, (ii) the updating of infrastructure
design standards, and (iii) climate change adaptation technologies for sustainable water
resources development. It will complement the environmental and social impact assessment
component of the program and facilitate the integration of climate change adaptation
technologies into the other components of the program. Annex B.7 provides the adaptation
summary.
3.2.5 Gender: The quality of water and sanitation services is highly gender sensitive and thus
requires the wholesome engagement of women and men on their roles, responsibilities,
challenges and opportunities within the scope of the program. Women constitute 51% of
Zambia’s population but at the same time face severe difficulties in fully participating in
various local and national development processes and programs. Socio-economic studies
undertaken in the participating towns indicate that, women and children, particularly girls, are
the facing the challenges of inadequate water supply and sanitation services. As in most
communities, women and girls are the main accessors, couriers and transporters of water in
terms of walking distances, waiting time and security at water points. It increases the burden
on them as they have to search for the commodity which takes away their precious time for
school and for them to engage in other meaningful income generating activities. The multiple
roles of women play often subject them to crushing workloads leaving them with no time for
other activities, worse is their exclusion from decision-making in the development of water and
sanitation resources of their own communities. Women in some communities visited already
engage in some form of small businesses but because of the water shortages; their businesses
are negatively affected; they have to spend less time in business and more time looking for
water for domestic uses and also for their businesses (hair salon, bakeries etc.). As the main
13
users of water, women have a greater incentive to take part in affairs to do with water and
sanitation; thus justifying the need to involve the active participation of women in planning,
management and decision making of programs designed to deliver water and sanitation
services in their communities. Thus, the program is expected to have a major positive impact
in terms of time and health gains for women. The program will also ensure adequate
representation of women in water watch groups, currently proposed to be at least 30% of
committee members.
3.2.6 The NUWSSP recognizes the gender inequality and is responding to it. MLGH has
begun reviewing and updating the Zambia National Gender Policy for the water and sanitation
sector (2000) to incorporate current thinking, needs and opportunities. Although Gender
mainstreaming is quite new in the three utilities, they have commenced Gender Mainstreaming
by recently incorporating Gender policies within their Strategic Business Plans. The CUs have
each appointed Gender focal persons and Gender committees for the company employees to
oversee implementation of the policies have also been formed and work plans are in place for
the 2015-2016 period. The program will support the gender aspects within the utilities and
fully operationalize the gender policies. In addition, the program will assist with further
elaboration of Gender strategies with detailed activities, costing and indicators going forward.
See Annex B.8, Table 8.8.1c for activities and budget.
3.2.7 Social: Zambia’s 2014 Human Development Index (HDI), (that measures a long and
healthy life, access to knowledge and a decent standard of living) value is 0.586; this places it
in the medium human development range, as specified by the UNDP at 139 out of 188
countries. 74.3% of Zambia’ population live on or below US$ 1.25 a day. There are high
poverty levels in the four provinces (with Luapula 81.1%, Western 82.2%, Northern 79.7% and
Muchinga 69.3%). Zambia’s under five mortality rate is 64 per 100,000 births, with water borne
diseases being among the top five diseases in the targeted small towns. In small towns,
businesses, social services, schools and health centres lack access to water and improved
sanitation facilities greatly contributing to the health deterioration in the four provinces and the
quality of education attainment.
3.2.8 The program will thus have a positive impact on the population, contribute to the SDGs
and the Bank’s Hi5 agenda. Benefits will include sharp decline in diarrhoea and other water
borne diseases (by about 30%) and associated health care costs, improvement of maternal
health, reduction in absenteeism and school-dropout rates especially among girls. The program
will target and capacitate community based enterprises specially those of women to get
involved in program activities through training in sanitation and hygiene, running of water
kiosks and provision of sanitation products to facilitate onsite sanitation facilities construction.
The program will seek to train youths and women, who presently lack employment
opportunities through training in business start-up, as masons and artisans to enable them
participate in construction activities during and beyond the program. It is expected that this will
offer unemployed youths (current national average 16.7%) the opportunity to earn income. The
program will thus contribute to reducing poverty and improving the quality of livelihoods of
the populations in small towns.
3.2.9 Involuntary resettlement: There will be no involuntary resettlement. Trunk water, sewer
lines, distribution networks and laterals will be laid along road reserves and existing way leaves
to reduce incidences and scale of compensation. Water production/ treatment / storage and
wastewater treatment units will be on existing parcels of land requiring minor adjustment
within the defined reserve area to the extent possible. Should the scope of the activities change
14
in such a way that results in land acquisition, the Bank’s Integrated Safeguards Policy,
specifically the Operational Safeguards 2 on Involuntary Resettlement will be followed and
implemented accordingly.
IV. IMPLEMENTATION
4.1 Implementation Arrangements
4.1.1 The implementation of the proposed operation will use existing institutional
arrangements incorporating lessons and experience gained from similar operations in the
country. The GoZ shall be the borrower of the ADF, AfDB, AGTF loans and recipient of the
MIC TAF Grant. The implementation of the program falls within the existing framework of
the NUWSSP. The MLGH will be responsible for overall coordination of the program activities
with the Urban Water and Sanitation Unit (UWSU) within the MLGH being in charge of
overall program coordination. The MLGH will be the Executing Agency (EA) of the program,
while the three utilities, namely Chambeshi WSSC, Luapula WSSC, and Western WSSC will
be implementing agencies of program activities in their respective areas. The MLGH will
constitute a Program Implementation Team (PIT) to follow up the implementation in the
program areas. The main PIT to be in charge of overall coordination will be based in Northern
Province (Kasama) and cover overall program activities, while there will be sub-PITs in
Chambeshi, Luapula and Western Province (Mongu).
4.1.2 For program implementation, GoZ will competitively recruit national experts (this cost
will be covered by the program) who will work under the overall coordination of MLGH. The
Main PIT will comprise a Program Coordinator, Procurement Specialist, Safeguard Specialist,
Monitoring & Evaluation Specialist and Financial Management Specialist. The sub-PITs will
have a Water and Sanitation engineer (experienced in contract management and procurement)
and Accountant. SHE officers will be also part of the team to monitor activities in each of the
three utilities. Technical Assistance to the program will be provided by (two or three)
experienced Engineering Services firms for design review, supervision and implementation
support. At National Level, the existing National Water Supply and Sanitation Steering
Committee (NWSSSC) will have oversight responsibility and oversee program compliance
with sub-sector National Policies and Strategies. See Annex B.3 for implementation details.
4.1.3 Program Readiness Mechanisms. In order to reduce start-up delays and speed up the
program implementation plan, the following measures will be taken (i) advance procurement
of the PIT to have them in place before loan signature, (ii) advance procurement of the
Engineering Supervision Consultant and have them in place in February 2016 and (iii)
finalisation of all detailed designs and draft tender documents by 31 October 2016. These
arrangements are to ensure timely start-up and avoid costly program overruns.
Procurement Arrangements
4.1.4 Procurement of goods (including non-consultancy services), works and the acquisition
of consulting services, financed by the Bank for the project, will be carried out in accordance
with the “Procurement Policy and Methodology for Bank Group Funded Operations” (BPM),
dated October 2015 and following the provisions stated in the Financing Agreement.
Specifically, Procurement would be carried out as follows:
15
(i) Borrower Procurement System (BPS): Specific Procurement Methods and Procedures
(PMPs) under BPS comprising its Laws and Regulations as per the Public Procurement Act
of 2008 and the Public Procurement Regulations of 2011, using the national Standard
Solicitation Documents (SSDs) or other Solicitation Documents agreed during program
negotiations for various group of transactions for specified thresholds under the program.
(ii) Bank Procurement Policy and Methodology (BPM): Bank standard PMPs, using the
relevant Bank Standard Solicitation Documents (SSDs), for contracts where the BPS shall
not apply for specific transaction or group of transactions as BPMs have been found to be
the best fit for purpose.
(iii) Procurement Risks and Capacity Assessment (PRCA): The assessment of procurement
risks at the Country, Sector, and Project levels and of procurement capacity at the Executing
Agency (EA), were undertaken for the project and they are low, moderate, high and high
respectively. These outputs have informed the decisions on the procurement regimes being
used for specific transactions or groups of similar transactions under the project. The
appropriate risks mitigation measures have been included in the procurement PRCA action
plan proposed in Annex B.5.
Financial Management and Disbursement Arrangements
4.1.5 Financial Management: The Program’s FM will be managed within the Main PIT
under the overall responsibility of the Chief Accountant-MLGH as the head of the Ministry’s
Finance department. The Bank carried out a FM assessment of the Executing Agency (EA)
including those of the three designated implementing CUs (Chambeshi, Luapula and Western
Water and Sewage Companies). The assessment which included a comprehensive review of
the budgeting, accounting, internal controls, flow of funds, financial reporting and auditing
systems within the implementing entities, revealed the strengths and weaknesses of the various
entities and areas needing improvements. The assessment also took into consideration lessons
learnt from previous projects implemented by the EA as well as performance of ongoing
projects in Zambia. Based on the outcome from the assessment, appropriate FM actions have
been proposed to be undertaking by respective implementing agencies, and adequate mitigation
measures are also included in the proposed FM arrangements. With the implementation of all
agreed FM actions, the EAs FM capacity (including those within the three CUs) would satisfy
the Bank’s minimum requirements, to ensure funds to be made available to finance project
activities would be used economically, efficiently and for the purpose intended. The Bank’s
fiduciary team would follow up and monitor closely to ensure timely implementation of all
agreed FM actions to further strengthen the fiduciary environment in readiness for project
implementation. Detailed FM and disbursement arrangements are also included in the
Appraisal Report Volume II (Annex B.4).
4.1.6 Disbursement arrangements: Based on the assessment, the program will make use of
the Bank’s various disbursement methods including (i) Direct Payment, (ii) Special Account
(SA) and (iii) Reimbursement methods in accordance with Bank rules and procedures as laid
out in the Disbursement handbook as applicable. The Special Account method shall be used
exclusively to pay for program recurrent expenditures (including eligible local operating costs
incurred within the decentralized implementing teams, workshops and related expenses, where
applicable); whereas the direct payment method will be used for larger program expenditures
(including consultants, suppliers, contractors, where applicable etc.). The Bank will issue a
Disbursement Letter of which the content will be discussed and agreed with GoZ during
16
negotiations. As highlighted above, detailed disbursement arrangements are included as part of
Annex B.4 in the PAR technical annex.
4.1.7 Reporting and External Audit: In accordance with the Bank’s financial reporting and
audit requirements, the program will be required to prepare and submit to the Bank
Implementation Quarterly Progress Report (IQPR) not later than forty-five (45) days after the
end of each calendar quarter. Annual financial statement prepared and audited by the Office of
the Auditor General (OAG) as per their mandate (or a private audit firm recruited with OAG’s
involvement through short-lists using the Bank rules and procedures for procurement), together
with the auditor’s opinion and management letter will be submitted to the Bank not later than
six (6) months after the end of each fiscal year.
4.2 Monitoring
4.2.1 Progress on the program will be monitored by the MLGH based on the indicators in the
NWASCO sector report and those in the program result based logical framework including
ESMP implementation. It will produce regular IQPR, annual technical, procurement and
financial audits for submission. This data will be entered into an Implementation Progress
Report (IPR) in timely manner. And will provide a status of the various program activities
including financial and procurement status, asset management, environment, social and gender
safeguards, risks and mitigation measures.
4.2.2 Bank supervision missions will be undertaken twice per year, and the Bank will
undertake quarterly desk supervision, providing feedback and following up on progress reports
(including progress on the ESMP, ARAP). A Mid-Term Review will be undertaken during the
third year of implementation. Upon completion of the Program, MLGH will prepare and submit
to the Bank a Program Completion Report (PCR).
Table 4.1: Key Milestones
Timeframe Milestone Monitoring process/feedback loop
October 2016 Detailed Designs/ Tender Documents Submission
November 2016 ADB Board of Directors Loan approval
February 2017 Signing Loan signed
February 2017 Engineering Services consultancy Award of contract
March 2017 Effectiveness Loan declared effective including precedent conditions for first
disbursement by the Bank
March 2017 Launching Launching workshop done
July 2017 Construction works start Works contract signed, monthly supervision reports
December 2018 Mid-Term Review Assessment of progress/performance, restructuring if needed
December 2020 Program completion Commissioning of works
December 2021 Loan closing -
4.3 Governance
4.3.1 Successful implementation of the program requires good governance at National, Local
and Executing Agency level. Zambia has made significant progress in the area of accountability
and transparency and has relatively improved on key indicators of governance including
control of corruption, rule of law, regulatory quality and Government effectiveness. The overall
governance rating of Zambia is above Africa’s continental average in many fronts and
measures. Zambia ranks 12 out of 52 countries and 6 out of the 12 countries in Southern Africa
on the 2015 Ibrahim Index of African Governance, 76 out of 168 in Transparency
International’s 2015 Corruption Perception Index (a relative improvement from 83 compared
to 2013). It ranked amongst the top 10 countries performing reasonably in safety and rule of
law.
17
4.3.2 The governance of the water sector goes beyond the three utilities in this program. GoZ
has shown commitment to reform the sector for better transparency and accountability. In 2013,
the MLGH started the process of preparing the National Water Supply and Sanitation Policy
to capture emerging issues; further strengthening the policy, legislative and regulatory
framework to increase the commercial sustainability, efficiency and quality of water and
sanitation services. This will also provide for clear guidance on sector activities, as planning
and implementation of WSS related programs has many socio-economic aspects. The
NUWSSP has also created an enabling environment and promotes good governance in the
sector. The successful operationalization of the program will create the much needed
foundation of the urban water sector.
4.3.3 For urban areas service delivery is by water utilities whose management operates under
the overall oversight of a non-executive Board of Directors which provides guidance, monitors
executive activities and contributes to development of company strategies. All board members
are appointed by the shareholders who are the Local Authorities in the Provinces in which the
CUs operate and consists of members from both Government and private sector. The Bank will
support governance enhancement in the utilities through the institutional strengthening and
capacity building component which includes supporting the Regulation by Incentive Program
entered into between the Boards of the CUs and the Regulator. In light of the multiple
institutions involved in the delivery of services, Zambia has a formalized water governance
structure at National Level that brings key institutions (MOF, MoH, MoE, MCDMCH,
MEWD) under the NWSSSC which provides oversight responsibility and oversees program
compliance with sub-sector National Policies and Strategies. There is also the quarterly Sector
Advisory Group (SAG) meetings within government structures, and yearly Joint Water Sector
Reviews (JWSR) with development partners focusing policy and strategy. These formal
structures will be used to monitor and report on program progress.
4.3.4 To counter corruption and fraud, tenders shall be evaluated by an appointed evaluation
committee whose recommendations shall be submitted to the MLGH Tender Committee for
approval before submission to the Bank for No Objection and approval of contract award
depending on the thresholds. The internal audit arrangements of the executing agency (MLGH)
were reviewed and found acceptable. There will also be a program steering committee chaired
by MLGH which will oversee the implementation. These shall reinforce transparency and
accountability during tendering and award of contracts.
4.4 Sustainability
4.4.1 Cost Recovery and Sustainability: The tariffs are not yet fully reflective of economic
cost of water and sanitation service. There is a need for a paradigm shift to set the service
provision on a solid foundation and ensure cost recovery and financial sustainability of service
provision. The current tariff policy for the urban centers/towns is to recover at least operation
and maintenance (O&M) costs and in the long run recover full cost through user charges.
Therefore, there is need to review and update the structure to reflect efficient cost of service so
that tariffs are commensurate to the cost of these services. In this regard, the three utilities will
undertake a tariff and affordability study and implement a program of tariff adjustments for
WSS services in order to ensure sustainability of service provision including investment. These
adjustments should also take into account the social nature of services and the needs of the
poor. After completion of the program, the utilities will start applying cost reflective tariffs,
incorporating lifeline tariff, to cover at least operation and maintenance costs in line with the
policy of GOZ and reduce their dependence on Government subsidy.
18
4.4.2 Regulation by Incentive. The program will work with the Regulator, NWASCO to roll
out and implement the Regulation by Incentives (RBI) program which will part of the recovery
plan for the three utilities. Under RBI, the three utilities will be supported to improve their
operational efficiency by rolling out an “Operational Efficiency Service Delivery Business
Model”. The main objectives will be to increase performance of utilities targeting service
quality, efficiency and accelerate service provision to the underserved. NWASCO will work
with each utility identifying critical areas of improvements and agreeing on institutional targets.
Working from the specific indicators at corporate level, the utilities will develop their own staff
incentives to improve performance. RBIs for each utility will therefore differ as they have
different challenges, and include both qualitative and quantitative measures. In this regard,
rollover of the “Regulation by Incentive” has been made a condition of the loan. The RBI will
run for three years beginning 2017.
4.4.3 Technical support and Capacity development: The three utilities have inadequate
technical, accounting, financial management capacity and have not had sufficient experience
in implementing large infrastructure program. The utilities do not have staff with the required
skills and competence to handle such programs. Hence, the need to strengthen the utilities to
enable them cope with the increased responsibilities of the program, operating and maintaining
the expanded infrastructure. As part of the program, the three water utilities will be supported
with training, capacity building, necessary key tools and equipment assets to enhance proper
operation and maintenance of facilities for sustainable service delivery. The program will also
finance an institutional assessment study which will focus on dealing with all the people related
issues entailing; restructuring, re-staffing, re-skilling and revitalizing the leadership team for
better management. The study recommendations will be implemented by 2020. This will be
one of the conditions of the loan.
4.4.4 Performance Agreement: As part of the RBI, there will be need for Sustainability
Agreements (SA) between the GoZ and utilities to ensure that the utilities move towards
technical, environmental, financial and commercial viability including improved operational
performance, customer services and corporate governance. In this regard, adherence to the SA
is of paramount importance for the technical and financial sustainability of the utilities.
NWASCO will monitor and report on performance on behalf of MLGH. The utilities are laden
with separation/termination packages for some redundant staff. As the utilities are unable to
settle these packages, their financial statements are affected negatively. In order to address
these challenges and support the turnaround of the utilities there will be need for GoZ support
to address the issue of termination/separation packages of staff.
4.4.5 Affordability of service: This is a key consideration in the design of the program and
choice of technology such that the majority of households falling within the poor strata of the
population are not overburdened by high user charges. In this regard, water-vending kiosks,
each serving between 15 and 25 households are included for the poor peri-urban settlements.
These options are all demand driven and offer appropriate low cost solutions, bringing down
operational costs within affordable levels for the peri-urban population. In addition, a social
(lifeline) tariff will be put in place to allow for subsistence consumption up to cater for the
needs of low-income households.
19
4.5 Risk management
The following risks shall be monitored and mitigated to the extent possible.
RISKS MITIGATION MEASURES (rating)
1. Failure to meet the
cost recovery
expectations
A tariff and affordability study will be carried out and a program of tariff adjustments
will be implemented in order to ensure sustainability of service provision. Customer
orientation, introduction of pro-poor supply strategy and encouraging customers to
pay for services will be built to mitigate a potential risk of resistance to user
payments. (moderate)
2. Limited technical
capacity to operate and
maintain infrastructure
Utility personnel will take part in implementation of the activities in order to allow
for skills transfer. Incorporate on the job training and capacity building of utility
personnel to operate and maintain the facilities. (Moderate)
3. Coordination of
activities
Each utility will second personnel to the PIT to be focal points for activities
pertaining to the utility and allow for skills transfer. PIT will to have sub-offices in
Western/ Luapula Provinces in addition to main office in Kasama, Northern
Province. (Moderate)
4. Unauthorized
program expenditures
Existing internal control systems will be strengthened in the implementation of the
program (Moderate)
5. Program is of high
value and technically
complex
MLGH/Utilities to enhance appropriate procurement, technical, contract
management /dispute resolution capacity and skills to complement their capability
to successfully manage the program. Engineering services consultants to assist carry
out the design review and prepare tender documents for the civil works. (Substantial)
4.6 Knowledge building
4.6.1 The Bank will support strengthening of the Water Regulator’s Management
Information System (Aquatis Information System) to provide up-to-date data for overall sector
planning, track investment programs, and monitor the sustainability and continuity of services
in Zambia’s water utilities. In addition, NWASCO’s water sector report, the use of SAGs and
the JWSR will be key in dissemination, sharing of experience and knowledge to improve sector
implementation within government and with development partners including the Bank. The
program implementation review, quarterly progress reports, audits, procurement, sector M&E
and completion reports will also provide information on various aspects of the program will
provide wealth of information and knowledge products to assist the Bank replicate the good
practices in other member countries.
V. LEGAL INSTRUMENTS AND AUTHORITY
5.1 Legal instrument
The Bank instruments to finance this operation shall be an ADB Loan of USD 108.91 million,
ADF loan of UA 7.07 million, a Bank administered AGTF Loan of USD 15 million and a MIC
TAF grant of UA 1.2 million
5.2 Conditions associated with Bank’s intervention
5.2.1 Condition Precedent to Entry into Force of the Loan Agreement
The loan agreement shall enter into force subject to fulfilment by the Borrower of the
provisions of section 12.01 of the General Conditions Applicable to the African Development
Bank Loan Agreements and Guarantee Agreements.
20
5.2.2 Conditions Precedent to First Disbursement for the Loan
The obligation of the Bank to make the first disbursement of the Loan shall be conditional upon
entry into force of the Loan Agreement in accordance with Section 5.2.1 above and the
fulfilment, in form and substance satisfactory to the Bank, of the following conditions:
Provide evidence of opening of special accounts as follows: (i) foreign currencies
accounts for the deposit of the proceeds of the Loans and (ii) operating local currency
accounts in a Bank(s) acceptable to the Bank; and
Provide evidence to the Bank of a Subsidiary Financing Agreement between the
Government of Zambia, Chambeshi Water and Sewerage Company, Luapula Water
and Sewerage Company and Western Water and Sewerage Company and in due
consultations with the AfDB, on the transfer of the ADB and ADF loan proceeds;
5.2.3 Other Conditions
The Borrower/Recipient shall provide evidence, in form and substance satisfactory of the
following:
The Borrower shall, by January 2017, submit evidence in form and substance
satisfactory to the Bank, of having established the Program Implementation Team
whose skills and qualifications are acceptable to the Bank;
5.2.4 Undertakings
Under the ADB Loan Agreement, the Borrower/ Recipient undertakes the following:
Provide an undertaking to resolve the termination and separation of redundant staff of
utilities before 31 Dec 2017;
Provide an undertaking to implement the recommendation of the tariff study and cause
the implementation of a program of tariff adjustments for water supply and sanitation
services in order to ensure sustainability of service provision including investment; and
Provide an undertaking to complete the institutional reform and business efficiency
model before end of December 2017, and implement the recommendations by 2020.
To implement and report on the Regulation by Incentive Program between the Boards
of Chambeshi Water and Sewerage Company, Luapula Water and Sewerage Company
and Western Water and Sewerage Company and the Regulator on annual basis.
5.3. Compliance with Bank Policies
The program complies with all applicable Bank policies.
VI. RECOMMENDATION
Management recommends that the Board of Directors of the Bank approve the proposal for an
ADB loan of USD 108.91 million, ADF loan of UA 7.07, UA 1.2 million MIC TAF on ADB
and ADF terms, and an AGTF Loan to USD 15 million to the Republic of Zambia for the
purposes and subject to the conditions stipulated in this report
I
Appendix I: Country’s comparative socio-economic indicators
Year Zambia Africa
Develo-
ping
Countries
Develo-
ped
Countries
Basic Indicators
Area ( '000 Km²) 2015 753 30,067 80,386 53,939Total Population (millions) 2015 16.2 1,184.5 5,945.0 1,401.5Urban Population (% of Total) 2015 39.2 39.7 47.0 80.7Population Density (per Km²) 2015 21.8 40.3 78.5 25.4GNI per Capita (US $) 2014 1 680 2 045 4 226 38 317Labor Force Participation * - Total (%) 2015 79.2 66.3 67.7 72.0Labor Force Participation ** - Female (%) 2015 73.0 56.5 53.0 64.5Gender -Related Dev elopment Index Value 2007-2013 0.913 0.801 0.506 0.792Human Dev elop. Index (Rank among 188 countries) 2014 139 ... ... ...Popul. Liv ing Below $ 1.25 a Day (% of Population) 2008-2013 74.3 39.6 17.0 ...
Demographic Indicators
Population Grow th Rate - Total (%) 2015 3.1 2.6 1.3 0.6Population Grow th Rate - Urban (%) 2015 4.5 3.6 2.6 0.8Population < 15 y ears (%) 2015 45.9 41.0 28.3 17.3Population >= 65 y ears (%) 2015 2.9 3.5 6.2 16.0Dependency Ratio (%) 2015 95.4 80.1 54.6 50.5Sex Ratio (per 100 female) 2015 99.7 100.1 102.8 97.4Female Population 15-49 y ears (% of total population) 2015 23.0 24.0 25.8 23.0Life Ex pectancy at Birth - Total (y ears) 2015 60.8 61.2 68.9 79.1Life Ex pectancy at Birth - Female (y ears) 2015 62.9 62.6 70.8 82.1Crude Birth Rate (per 1,000) 2015 39.7 34.8 21.0 11.6Crude Death Rate (per 1,000) 2015 8.7 9.3 7.7 8.8Infant Mortality Rate (per 1,000) 2015 43.3 52.2 35.2 5.8Child Mortality Rate (per 1,000) 2015 64.0 75.5 47.3 6.8Total Fertility Rate (per w oman) 2015 5.3 4.6 2.6 1.7Maternal Mortality Rate (per 100,000) 2013 280.0 411.3 230.0 22.0Women Using Contraception (%) 2014 50.2 35.3 62.1 ...
Health & Nutrition Indicators
Phy sicians (per 100,000 people) 2004-2012 6.6 46.9 118.1 308.0Nurses (per 100,000 people)* 2004-2012 78.4 133.4 202.9 857.4Births attended by Trained Health Personnel (%) 2009-2012 46.5 50.6 67.7 ...Access to Safe Water (% of Population) 2015 65.4 71.6 89.1 99.0Healthy life ex pectancy at birth (y ears) 2012 49.0 51.3 57 69Access to Sanitation (% of Population) 2015 43.9 39.4 60.8 96.3Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2013 12.5 3.8 1.2 ...Incidence of Tuberculosis (per 100,000) 2013 410.0 245.9 149.0 22.0Child Immunization Against Tuberculosis (%) 2013 82.0 84.1 90.0 ...Child Immunization Against Measles (%) 2013 80.0 76.0 82.7 93.9Underw eight Children (% of children under 5 y ears) 2005-2013 14.9 20.8 17.0 0.9Daily Calorie Supply per Capita 2011 1 937 2 621 2 335 3 503Public Ex penditure on Health (as % of GDP) 2013 2.9 2.7 3.1 7.3
Education Indicators
Gross Enrolment Ratio (%)
Primary School - Total 2011-2014 108.4 106.4 109.4 101.3 Primary School - Female 2011-2014 107.9 102.6 107.6 101.1 Secondary School - Total 2011-2014 ... 54.6 69.0 100.2 Secondary School - Female 2011-2014 ... 51.4 67.7 99.9Primary School Female Teaching Staff (% of Total) 2012-2014 53.1 45.1 58.1 81.6Adult literacy Rate - Total (%) 2006-2012 61.4 61.8 80.4 99.2Adult literacy Rate - Male (%) 2006-2012 71.9 70.7 85.9 99.3Adult literacy Rate - Female (%) 2006-2012 51.8 53.4 75.2 99.0Percentage of GDP Spent on Education 2009-2012 5.3 4.3 5.5
Environmental Indicators
Land Use (Arable Land as % of Total Land Area) 2013 5.0 8.6 11.9 9.4Agricultural Land (as % of land area) 2013 31.9 43.2 43.4 30.0Forest (As % of Land Area) 2013 65.9 23.3 28.0 34.5Per Capita CO2 Emissions (metric tons) 2012 0.2 1.1 3.0 11.6
Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update :
UNAIDS; UNSD; WHO, UNICEF, UNDP; Country Reports.
Note : n.a. : Not Applicable ; … : Data Not Available. * Labor force participation rate, total (% of total population ages 15+)
** Labor force participation rate, female (% of female population ages 15+)
november 2015
0
20
40
60
80
100
120
20
00
20
05
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Infant Mortality Rate( Per 1000 )
Zambia Af rica
0
500
1000
1500
2000
2500
20
00
20
05
20
08
20
09
20
10
20
11
20
12
20
13
20
14
GNI Per Capita US $
Zambia Af rica
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
20
00
20
05
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Population Growth Rate (%)
Zambi a Af rica
01020304050607080
20
00
20
05
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Life Expectancy at Birth (years)
Zambia Af rica
II
Appendix II: Table of AFDB’s portfolio in the Zambia
Division Long name
Finance
project
Loan
Number Status
Sector
Name Company Name Curr.
Approval
date Amount
Amount
Disb Disb Ratio
AWTF
MULTIPURPOSE
SMALL DAMS
P-ZM-EAZ-
002 5600155002951 OnGo
Water
Sup/Sanit AfricaWater Facility Fund UAC 9/4/2012
763,506.02 229,051.81 30.00
AWTF
FEASIBILITY STUDY
FOR UPSCALING
SMALLHOLDER
IRRIGATION SYSTE
P-ZM-
AAC-007 5600155004601 APVD Agriculture AfricaWater Facility Fund UAC 6/20/2016
1,125,166.77 - 0.00
OFSD1
LINE OF CREDIT TO
DEVELOPMENT BANK
OF ZAMBIA
P-ZM-
HAA-001 2000200000351 APVD Finance African Development Bank UAC 9/21/2016
18,036,086.60 - 0.00
OITC2
CHINSALI - NAKONDE
ROAD
REHABILITATION
PROJECT (NORTH-
SOUTH
P-ZM-DB0-
003 2000130013830 OnGo Transport African Development Bank UAC 7/10/2015
139,238,588.57 24,073.94 0.02
OITC2
CHINSALI - NAKONDE
ROAD
REHABILITATION
PROJECT (NORTH-
SOUTH
P-ZM-DB0-
003 5050130000051 OnGo Transport AfricaGrowingTogetherFund UAC 7/10/2015
36,072,173.20 - 0.00
OITC2
BOTSWANA/ZAMBIA-
KAZUNGULA BRIDGE
PROJECT
P-Z1-DB0-
031 2100150025694 OnGo Transport African Development Fund UAC 12/7/2011
51,000,000.00 1,032,898.65 2.03
ONEC2
POWER TRANSMISSION
PROJECT
P-ZM-FA0-
003 2100150027396 OnGo Power African Development Fund UAC 6/13/2012
30,000,000.00 20,071,709.91 66.91
ONEC2
POWER TRANSMISSION
PROJECT
P-ZM-FA0-
003 2200160000989 OnGo Power Nigerian Trust Fund UAC 6/13/2012
6,400,000.00 4,295,126.53 67.11
ONEC2
KARIBA DAM
REHABILITATION
P-Z1-FA0-
075 2100150032548 OnGo Power African Development Fund UAC 12/15/2014
25,200,000.00 - 0.00
OPSD4
LINE OF CREDIT TO
FRB SUBSIDIARY,
FIRST NATIONAL
BANK OF ZAM
P-ZM-
HAB-022 2000130012980 OnGo Finance African Development Bank UAC 12/12/2012
31,720,426.23 31,720,426.23 100.00
OPSD4
ITEZHI-TEZHI
HYDROPOWER
PROJECT
P-ZM-FAB-
004 2000130008981 OnGo Power African Development Bank UAC 6/13/2012
25,250,521.24 24,959,587.97 98.85
OSAN1
MIC TAF GRANT
YOUTH IN
AGRIBUSINESS AND
AGRICULTURE
COMMODIT
P-ZM-AA0-
026 5500155010401 APVD Agriculture Middle Inc Countries Fund UAC 4/26/2016
790,000.00 - 0.00
OSAN1
MIC TAF GRANT
LUSWISHI FARM
BLOCK
P-ZM-AA0-
025 5500155010151 APVD Agriculture Middle Inc Countries Fund UAC 3/22/2016
720,000.00 - 0.00
OSAN1
LIVESTOCK
INFRASTRUCTURE
SUPPORT PROJECT
(LISP)
P-ZM-
AAE-001 2100150029293 OnGo Agriculture African Development Fund UAC 6/19/2013
12,000,000.00 2,732,831.78 22.77
OSAN1
GAFSP-AGRICULTURE
PRODUCTIVITY AND
MARKET
ENHANCEMENT
PROJEC
P-ZM-AA0-
019 5570155000501 OnGo Agriculture GAFSP Trust Fund UAC 3/26/2014
22,451,320.60 2,395,307.84 10.67
OSAN1
CASHEW
INFRASTRUCTURE
P-ZM-AA0-
024 2000130014431 OnGo Agriculture African Development Bank UAC 11/4/2015
32,464,955.88 541,226.89 1.67
III
DEVELOPMENT
PROJECT (CIDP)
Division Long name
Finance
project
Loan
Number Status
Sector
Name Company Name Curr.
Approval
date Amount
Amount
Disb Disb Ratio
OSAN3
STRENGTHENING
CLIMATE RESILIENCE
IN THE KAFUE BASIN
P-ZM-CZ0-
001 5565130000151 OnGo Environment Strategic Climate Fund UAC 10/18/2013
12,625,260.62 173,350.63 1.37
OSAN3
STRENGTHENING
CLIMATE RESILIENCE
IN THE KAFUE BASIN
P-ZM-CZ0-
001 5565155000501 OnGo Environment Strategic Climate Fund UAC 10/18/2013
14,789,591.01 2,005,366.00 13.56
OSAN3
LAKE TANGANYIKA
DEVELOPMENT PROJ
P-ZM-AA0-
021 2000130012932 OnGo Agriculture African Development Bank UAC 12/18/2014
16,223,099.18 1,117,949.98 6.89
OSAN3
LAKE TANGANYIKA
DEVELOPMENT PROJ
P-ZM-AA0-
021 5550155000501 OnGo Agriculture Global Environmental Faci UAC 12/18/2014
5,050,104.25 - 0.00
OSHD1
SKILLS DEVELOPMENT
AND
ENTREPRENEURSHIP
PROJECT - SUPPORTIN
P-ZM-IE0-
002 2000130014280 OnGo Social African Development Bank UAC 10/14/2015
21,643,303.92 72,144.35 0.33
OSHD2
SUPPORT FOR SCIENCE
AND TECHNOLOGY
EDUCATION PROJECT
(SSTEP/
P-ZM-IA0-
005 2100150030194 OnGo Social African Development Fund UAC 11/20/2013
22,220,000.00 4,555,098.44 20.50
OWAS2
TRANSFORMING
RURAL LIVELIHOODS
IN WESTERN ZAMBIA -
NATIONAL
P-ZM-E00-
028 2000130012430 OnGo
Water
Sup/Sanit African Development Bank UAC 9/10/2014
11,182,373.69 287,638.67 2.57
OWAS2
TRANSFORMING
RURAL LIVELIHOODS
IN WESTERN ZAMBIA -
NATIONAL
P-ZM-E00-
028 5800155001401 OnGo
Water
Sup/Sanit Rural Water Supply & Sani UAC 9/10/2014
2,812,916.91 657,122.31 23.36
OWAS2 LUSAKA SANITATION
PROGRAM
P-ZM-E00-
010 2000130013680 APVD
Water
Sup/Sanit African Development Bank UAC 6/24/2015
36,072,173.20 504,488.82 1.40
575,851,567.89 97,375,400.75 17%
IV
Appendix III: Key related programs financed by the Bank and other development partners in the country
Donor Agency Program Title Program Coverage Total Budget (USD) Implementation Organisation Program Status
AfDB
National Rural Water Supply and
Sanitation Program II Western Province 15,500,000
Ministry of Local Government and
Housing On-going
To develop and field test guidelines for
community driven planning, design and
implementation of multi-purpose small
dams.
Nationwide 1,235,000 Ministry of Mines, Energy and Water
Development On-going
Lusaka Sanitation Program Lusaka City 50,000,000 Lusaka Water and Sewerage
Company On going
European
Investment
Bank
Zambia water and Sanitation Program Mufulira, Chililabombwe,
Chingola, 187,000,000
Mulonga Water and Sewerage
Company On-going
UK DFID/
UNICEF
3 million Sanitation and Hygiene
Program, 44 Districts 32,000,000
Ministry of Local Government and
Housing On-going
Germany
National Rural Water Supply and
Sanitation Programme (Basket Financing
Mechanism)
6 districts in five
provinces 13,000,000
Ministry of Local Government and
Housing On-going
Urban Water Supply and Sanitation
(Basket Financing Mechanism) Nationwide 10,400,000
Ministry of Local Government and
Housing On-going
Devolution Trust Fund - Financial
Support to DTF in 4 phases Nationwide 18,300,000
Ministry of Local Government and
Housing On-going
Urban Water Supply and Sanitation
Eastern Province
Eastern Province-
Nyimba, Chadiza, Katete
and Chipata districts
21,800,000 Eastern Water and Sewerage
Company
On-going
JICA
To establish and roll-out the SOMAP
O&M model
4 Districts in Luapula
Province 6,000,000
Ministry of Local Government and
Housing
On-going
To Construct 216 boreholes with
handpumps
Mansa, Mwense, Milenge
and Nchelenge in Luapula
Province
8,700,000
Ministry of Local Government and
Housing
On-going
US MCC Lusaka Water Supply, Sanitation &
Drainage (LWSSD) Program Lusaka Province 355,000,000
Lusaka Water and Sewerage
Company On-going
US AID
To provide water supply, sanitation and
hygiene facilities in more than 600
schools in 4 districts.
Chadiza, Chipata,
Mambwe and Lundazi of
Eastern Province.
20,000,000
Ministry of Education, Science,
Technology, Vocational Training and
Early Education (MOESVTEE) and
collaborating with MLGH
On-going
UNICEF
Rural Water, Sanitation, Hygiene
Promotion
Nationawide 22,000,000
Ministry of Local Government and
Housing, Ministry of Chiefs and
Traditional Affairs and Ministry of
Education
On-going
World Bank
Water Resources Management Nationawide 50,000,000 Ministry of Mines, Energy and Water
Development On-going
Irrigation development and Support
program 3 Sites 115,000,000
M Ministry of Agriculture and
Livestock On-going
V
Appendix IV: Map of the Zambia showing Western, Luapula, Northern and Muchinga Provinces
