Africa Growing Together Fund provides $15 million loan for Integrated Small Towns Water Supply and Sanitation Program (Linked to Umbrella Project ID#36104)

On May 22, 2014, the African Development Bank (AfDB) and the People's Bank of China (PBOC) signed an agreement for the Africa Growing Together Fund (AGTF) (see Umbrella Project ID#36104). The purpose of this $2 billion loan facility was to finance large development projects in Africa between 2014 and 2024. The AGTF is sponsored by the PBOC and the administered by AfDB. Then, on December 26, 2016, AGTF signed an $15 million loan agreement (ID#5050200000001) with the Government of Zambia for the Integrated Small Towns Water Supply and Sanitation Program. On the same day, the African Development Bank’s African Development Fund (ADF) issued a $9,955,197.00 loan (ID#5050200000001) and the African Development Fund Bank a $108,913,000 loan agreement (ID#2100150036393) to the Government of Zambia for the same program. The borrowing terms of the AGTF, which entered into force on May 29, 2017, is as follows: a 25-year maturity, an 8-year grace period, an interest rate of 6-month LIBOR plus a 0.8% margin, a 0.25% commitment fee, and a 0.25% management fee. The first AfDB, ADF, and AGTF loan disbursements took place on August 22, 2017. As of February 2022, the AGTF loan had achieved a 30% disbursement rate ($4,493,319.48 out of $15,000,000). The aggregate amount outstanding under the AGTF loan for the Integrated Small Towns Water Supply and Sanitation Program (captured via Project ID#92095) and the AGTF loan for the Chinsali-Nakonde Road Rehabilitation Project (captured via Project ID#87029) was $16,954,890 as of June 30, 2021, $39,179,790 as of June 30, 2022, and $40,559,709 as of December 31, 2022. The Integrated Small Towns Water Supply and Sanitation Program aims to increase access, quality and sustainability of water supply and sanitation services in twelve towns — Mongu, Sesheke, Senanga, and Kaomain Western Province, Kasama and Mbala in Northern Province, Nakonde, and Mpika in Muchinga Province, and Mansa, Samfya, Mwense and Kawambwa in Luapula Province — 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. 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 the 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 was originally expected to be implemented over 48 months beginning in January 2017 at a cost of $150.57 million. At completion in 2020, the program was expected to benefit 639,927 people directly and an additional 287,212 beneficiaries indirectly, who live around the targeted towns. Residents were expected to gain better health from increased access to safe drinking water and improved sanitation, and women and school going children were expected to benefit particularly from utilization of time earlier spent on collecting water for income generating activities as well as improved school enrollment and retention of girls. There were also expected 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. China State Construction Engineering Corporation (CSCEC) is the contractor responsible for project implementation. A groundbreaking ceremony took place on January 22, 2021. The Covid-19 pandemic has affected the pace of program implementation. All of the major works contracts were disrupted. The pandemic slowed down procurement of key materials as well as availability of key staff. Works on project sites slowed as public health regulations had to be adhered to in keeping with having less numbers of workers due to social distancing rules. The Government of Zambia had challenges in providing its counterpart contribution to provide compensation of project-affected person and resettlement. As of February 2022, all six major works contracts were underway with progress ranging from 5% to 23%. The program’s originally expected completion date was June 29, 2021.

Additional details

1. The AfDB project identification number is P-ZM-E00-011. 2. The all-in interest rate (1.964%) was calculated by adding an 1% margin to the average 6-month LIBOR rate in December 2016 (1.306%). 3. The margin of 0.8% is calculated by adding the Funding Cost Margin (unknown) to the Lending Margin (0.8%) and the Maturity Premium (unknown). 4. This project is also known as the 343 km North & South Grids Transmission Line Project.

Number of official sources

6

Number of total sources

8