AFDB-Lusaka Sanitation Program - Climate Resilient Sustainable Infrastructure Project

Public Disclosure Authorized
AFRICAN DEVELOPMENT BANK
ZAMBIA
LUSAKA SANITATION PROGRAM - CLIMATE RESILIENT SUSTAINABLE
INFRASTRUCTURE PROJECT
Public Disclosure Authorized
APPRAISAL REPORT
OWAS DEPARTMENT
June 2015
TABLE OF CONTENTS
Currency Equivalents .................................................................................................................. i
Fiscal Year .................................................................................................................................. i
Weights and Measures ................................................................................................................ i
Program Summary .................................................................................................................... iv
I STRATEGIC THRUST AND RATIONALE ...................................................................... 1
1.1
Program linkages with country strategy and objectives ............................................. 1
1.2
Rationale for Banks involvement .............................................................................. 1
1.3
Donor Coordination .................................................................................................... 2
II PROJECT DESCRIPTION ................................................................................................. 3
2.1
Project Objective......................................................................................................... 3
2.2
Technical solution retained and other alternatives explored ...................................... 4
2.3
Project Type ................................................................................................................ 5
2.4
Project Cost and Financing Arrangements ................................................................. 5
2.5
Projects target area and population............................................................................ 7
2.6
Participatory process for project identification, design and implementation ............. 7
2.7
Bank Group experience and lessons reflected in program design .............................. 8
2.8
Programs performance indicators .............................................................................. 8
III PROGRAM FEASIBILITY .............................................................................................. 9
3.1
Economic and financial performance ......................................................................... 9
3.2
Environmental and Social Impacts ............................................................................. 9
IV IMPLEMENTATION ..................................................................................................... 13
4.1
Implementation Arrangements ................................................................................. 13
4.2
Procurement Arrangements ...................................................................................... 13
4.3
Financial Management and Disbursement Arrangements ........................................ 13
4.5
Governance ............................................................................................................... 15
4.6
Sustainability ............................................................................................................ 15
4.7
Risk management ...................................................................................................... 16
4.8
Knowledge building .................................................................................................. 16
V LEGAL INSTRUMENTS AND AUTHORITY .............................................................. 17
5.1
Legal instrument ....................................................................................................... 17
5.2
Conditions associated with Banks intervention ....................................................... 17
5.3
Compliance with Bank Policies ................................................................................ 18
VI RECOMMENDATION ................................................................................................... 18
Currency Equivalents
As of April 2015
Currency Unit
US Dollars
1 UA
USD 1.40
1 USD
ZMW 7.40
1 UA
ZMW 9.70
Fiscal Year
January 1st December 31st
Weights and Measures

1 metric tonne (t)
1 kilogramme (kg)
1 metre (m)
1 kilometre (km)
1 square kilometre (km2)
1 hectare (ha) = 0.01 km2
=
=
=
=
=
=
2,205 lbs.
2.205 lbs.
3.281 ft.
0.621 mile
0.386 square mile
2.471 acres
AfDB
ADB
ARAP
CCA
CLTS
CP
DFID
ACRONYMS AND ABBREVIATIONS

African Development Bank Group
MGCD
Ministry of Gender and Child Development
African Development Bank
NCB
National Competitive Bidding
Abridged Resettlement Action Plan
National Urban Water Supply and
NUWSSP
Sanitation Program
Climate Change
O&M
Operation and Maintenance
Community Led Total Sanitation
PID
Project Implementing Department
Cooperating Partner
Department For International
Development
Department of Housing and
Infrastructure Development
European Investment Bank
Environmental and Social Management
Plan
German Agency for Technical
Cooperation
RBCSP
Result Based Country Strategy Paper
R-SNDP
Revised Sixth National Development Plan
SA
Sustainability Agreement
SAG
Sector Advisory Group
SEA
Strategic Environmental Assessment
GRZ
Government of Republic of Zambia
SOMAP
HH
House Hold
German Government through the
German Bank for Development
TA
Strategic Environmental and Social

Assessment
Sustainable Operation and Maintenance
Program
Technical Assistance
UA
Unit of Account
International Competitive Bidding
UNICEF
United Nations Children's Fund
IMS
Information Management System
USAID
IPR
IWRM
Implementation Progress Results

USD
Integrated Water Resources Management WASHE
JASZ
Joint Assistance Strategy for Zambia
WB
JICA
Japan International Cooperation Agency
WSS
LCC
Lusaka City Council
Water Sector Cooperating Partner Group
LWSC
Lusaka Water and Sewerage Company
Zambia Environmental Management

Agency
MCC
Millennium Challenge Corporation

Ministry of Community Development,
Mother and Child Health
Millennium Development Goals
Monitoring and Evaluation
Ministry of Local Government and
Housing
Ministry of Mines, Energy and Water
Development
DHID
EIB
ESMP
GIZ
KfW
ICB
MCDMCH
MDGs
M&E
MLGH
MMEWD
MOE
MOF
MOH
MOU
SESA
WSCPG
ZEMA
Ministry of Education
Ministry of Finance
Ministry of Health
Memorandum of Understanding
ii
United States Agency for International

Development
US dollar
Water, Sanitation and Hygiene Education
World Bank
Water Supply and Sanitation
Loan and Grant Information

Clients Information
BORROWER:
Republic of Zambia
EXECUTING AGENCY:
Lusaka Water and Sewerage Company
Financing plan
Source
Amount (UA)
Amount (USD)
Instrument
ADB
WB
GRZ/ LWSC
35.53 million
46.18 million
9.12 million
50 million
65 million
12.83 million
Loan
Loan
Counterpart
Contribution
TOTAL COST
90.83 million
127.83 million
ADBs key financing information

LOAN
Loan currency
USD
Interest type
Enhanced Variable Rate Spread Loan
Interest rate spread
Floating Base Rate + Funding Margin + Lending

Spread
Funding Cost Margin

Lending Spread
Commitment fee
Repayment
None
Semi-Annual
Tenor
20 years
Grace period
5 years
EIRR (base case)
17.01%
60 basis points (0.60%)
Timeframe - Main Milestones (expected)

Project approval
June 2015
Effectiveness
Completion
Last Disbursement Deadline
Last repayment
November 2015
December 2019
December 2020
December 2040
The six-month adjusted average of the difference between: (i) the refinancing rate of the Bank as to the borrowings
linked to 6-month LIBOR and allocated to all its floating interest loans denominated in USD; and (ii) 6-month LIBOR
ending on 30 June and on 31 December. This spread shall apply to 6-month LIBOR which resets on 1 February and on 1
August. The Funding Cost Margin shall be determined twice per year on 1 January for the semester ending on 31 December
and on 1 July for the semester ending on 30 June.
iii
Program Summary
1. Overview: The Lusaka Sanitation Program aims to increase access to sustainable sanitation
services to Lusakas residents especially the urban poor and strengthen Lusaka Water and Sewerage
Companys (LWSC) capacity to manage sanitation services. The program aims to address one of
Zambias most binding constraints to economic growth through infrastructure investment in Lusaka,
the rapidly urbanizing capital.
2. The program cost is estimated at US$ 127.83 (equivalent UA 90.83 million), of which AfDB is
financing US$ 50 million (equivalent UA 35.53 million) or 39%, the World Bank 51%, and the
Government of the Republic of Zambia/ LWSC 10%. The program is expected to start in 2015 with a
duration of five years.
3. The program invests in (i) rehabilitated and newly constructed climate resilient sewerage
infrastructure, (ii) decentralized sanitation and hygiene promotion, (iii) support to Lusaka Water and
Sewerage Company, Lusaka City Council (LCC) and the regulator NWASCO for Institutional
Strengthening and Capacity Building including development of faecal sludge management guidelines
and a water and sanitation emergency preparedness disaster risk management plan. The program also
supports the Government of Zambias ongoing water sector reform efforts by strengthening sector
institutions. The main beneficiaries in Lusaka are the approximately 600, 000 residents in the project
area who will gain better health from improved environmental and sanitary conditions; especially
those in peri urban areas were most of the urban poor are residing. The beneficiaries will be involved
in the program through customer mobilization and sensitization campaigns and capacity building
initiatives. Indirectly, urban residents in the whole of Lusaka city will benefit from improved
performance of Lusaka Water and Sewerage Company in delivering water and sanitation services.
4. Needs Assessment: The program interventions aim to address a crisis in sanitation that is costing
Zambia 1.3% of GDP per year. Lusaka is worst affected by poor sanitation with annual outbreaks of
cholera, typhoid and dysentery. Rapid urbanization in Lusaka will lead to a doubling of the population
over the next 20 years (from 2.2 million to 4.9 million) exacerbating the problem. 70% of the citys
population live in peri-urban areas and 90% rely on pit latrines, most of which are poorly constructed.
In addition, 60% of Lusakas water supply is from groundwater abstracted within the city, which is
vulnerable to pollution from leaking pit latrines. It is also estimated that at least 75% of the faecal
waste generated in the city is not adequately collected, treated and disposed of and ends up polluting
the environment and water supply sources. Addressing these various faecal waste flows will be the
primary focus of the program.
5. The Banks added value in supporting the program is built on its continued focus on (i) poverty
focused components (such as decentralised sanitation in high-density areas); (ii) improved public
health through hardware (investments) and highly cost effective software methodologies (sanitation,
environmental health and hygiene promotion), and (iii) collaborative partnerships and leveraging other
Cooperating Partner funds to increase investments in sanitation.
6. Knowledge management: The Bank will support the development of a monitoring system to
assist LWSC better understand sanitation management and also develop faecal sludge management
guidelines for better management of sludge. These knowledge products will contribute to the
countrys urban sanitation sub-sector in improving its performance as well as help the Bank to
replicate the good practice in other regional member countries. In relation to climate change, with
mounting international concern at the rising frequency and severity of natural hazards and disasters, in
part due to factors related to climate change, a Water and Sanitation Sector Emergency Preparedness
and Disaster Risk Management Plan will be developed to strengthen institutions, mechanisms and
capacities at all levels, in particular at the community level that can systematically contribute to
building resilience to hazards and disasters.
iv
Results Based Logical Framework

Country and Project Name: Republic of Zambia: Lusaka Sanitation Program
Project Purpose: To increase access to sustainable sanitation services to Lusakas residents especially the urban poor.
OUTPUTS
OUTCOMES
IMPACT
RESULTS CHAIN
PERFORMANCE INDICATORS
Indicator (including CSI)
Baseline (2014) Target
MEANS OF
VERIFICATION
RISKS/MITIGATION MEASURES
Impact: Improved health and poverty alleviation for 1. Reduced Under-five mortality rate per 1,000 live births in Zambia
the urban poor due to sustainable and equitable 2. Population below poverty line
access to improved sanitation
87 in 2013
75% in 2013
50 in 2030
20% in 2030
National Census,
living condition
survey
- Stable macroeconomic framework

continued
- Consistency in sector reforms
Outcome 1: Increased access to improved sanitation 1.1 No. of residents benefiting from improved sanitation facilities
and hygiene facilities in Lusaka Province
63%
(>50% female)
77% in 2020 (>50%

female)
Outcome 2: Improved hygienic and environmental

practices among residents of Lusaka city
2.1 Proportion of people practicing hygiene behaviour / sanitation

practices including hand washing (+50% women)
2.2 People served by adequate faecal sludge management systems
39.7%
0
67% in 2020 (>50%

female)
360,000 in 2019
National Census,
Living Conditions
Monitoring Survey
and NWASCO
Sector Reports
Outcome 3: Improved management, institutional

capacity and sustainability of WSS services
3.1 Operation and maintenance recovery by LWSC

3.2 Percentage of sewerage blockage complaints addressed satisfactorily
3.3 LWSC sanitation monitoring system established
110%
50%
No system
>150% by 2020
95% by 2020
Ready by 2019
NWASCO Sector
Reports, quarterly
and annual reports
Risk #1. Sewers and WWTPs are

expensive and may be unaffordable to many
customers.
Mitigation. Balance willingness to pay,
affordability and technology options.
Sustained extensive sensitization campaigns
and community participation at the design
stage to mitigate such a risk. Tariff and
affordability study undertaken
Component 1- Climate resilient Sewerage

Infrastructure Development
1.1 Construction/ Rehabilitation of climate resilient
Sewer networks
1.2 Rehabilitation of Sewage Ponds and pump
Stations
1.1.1 Length of climate resilient sewer networks rehabilitated/ newly

constructed
1.1.2 Number of new connections to sewer in project area
1.2.1 Volume Wastewater treated per year (000 M3 cumulative)
0
0
2,018
72 km by 2020
8,000 by 2020
4,789 by 2020
NWASCO sector
reports, LWSC
quarterly progress
reports
Component 2-Decentralised Sanitation and Hygiene

Promotion
2.1 WASH strengthened
2.2 Climate resilient demonstration HH sanitation
facilities
2.3 Provision of sanitation facilities in public
institutions (schools, health centres, and markets)
2.3 Construction of climate resilient Feacal Sludge
management systems
2.1.1 No. of people trained to improve hygiene behaviour or sanitation

practices under the project (cumulative) (+50% women)
2.1.2 No. of Trainer of Trainers trained for improved environmental and
sanitation practices
2.2.1 No. of climate resilient demonstration HH facilities
2.2.2 No. of gender sensitive and disabled able friendly sanitation and
hygiene facilities constructed in schools, public places & health centres
2.3.1 No. of Climate resilient Faecal sludge management facilities
constructed & used
150,000 by 2020
250 (>50% female) by

2020
Component 3- Institutional Strengthening &

Capacity Building
3.1 Strengthen LWSC Operation and maintenance of
sewers
3.2 Enhanced institutional capacity of
LWSC/LCC Authorities to manage
Sanitation services
3.3 Improved LWSC gender mainstreaming
3.4. Climate Change adaptation plans
3.5 ESMP implemented
3.1.No. of sewage blockages resolved

3.2.1 No. of LWSC/LCC staff trained and supported in sector investment
framework, sanitation and environmental health (% of female staff)
3.3.1 No. of women and youth trained and supported in sanitation related
economic opportunities within the project
3.3.2 Gender Strategy prepared
3.4.1 Guideline for Faecal Sludge Management prepared
3.4.2 Water and Sanitation Sector Emergency Preparedness and Disaster
Risk Management Plan prepared
3.5.1 ESMP implemented
990
0
0
LCC Team
Reports, LWSC
quarterly
0
0
0
0
0
0
0
0
2,000 by 2020
100 double units by
2018
2 facilities by 2020
<100 (annual) by 2018
200 (% female) by
2018
Done by 2017
Done by 2017
Done by 2017
Completed by 2020
Quarterly and
Annual Progress
Reports
Risk #2. Delay in making connections to

the rehabilitated and extended sewer
network
Mitigation. Sustained sanitation marketing
and appropriate technology Connection
works will be built into overall sewer laying
contract, and connection charges recovered
from sanitation bills. Revolving fund to be
set up
Risk #3. Poor coordination between
different institutions involved in the
implementation of some components at local
level.
Mitigation. An MOU signed among LWSC
and LCC, on the cooperation for
implementation of the hygiene and
sanitation promotion component, detailing
the roles each of the four institutions will
play during the implementation of the
Project.
Risk #4. Delayed ESMP implementation
Mitigation. Budgetary allocation for timely
implementation and
Government to include budgets for this
Risk #5: The project may be exposed to
future climate risks
Mitigation: Development of WSS
emergency preparedness and disaster risk
management plan and design of climate
resilient sewerage infrastructure
KEY ACTIVITIES
Activities
INPUTS
1. Climate resilient Sewerage Infrastructure Development: Rehabilitation/ construction new climate resilient sewer networks, rehabilitation of sewage ponds 2.
Decentralised Sanitation and Hygiene Education: Delivery of sanitation, environmental and hygiene education; Construction of climate resilient demonstration
institutional/public sanitation facilities and Promotion of Good hygiene practices, Feacal Sludge Management systems constructed, 3. Institutional Strengthening &
Capacity building: Training, development of FSM guidelines, WSS Sector Emergency Preparedness and Disaster Risk Management Plan, support to development of social
inclusion and gender framework, ESMP implementation, 4. Program Management: Program Auditing; Technical Assistance; Office Equipment; various goods,
procurement of vehicles; and Mid Term Review of the project.
Total Program Cost: USD 127.83 million (Eqv UA 90.83 mil)

ADB loan: USD 50 million (equiv. UA 35.53 mil)
World Bank: USD 65 million (equiv. UA 46.18 mil)
GRZ/LWSC: USD 12.83 million (equiv. UA 9.12 mil)
vi
Program Timeframe
ZAMBIA: LUSAKA SANITATION PROGRAM: CLIMATE RESILIENT INFRASTRUCTURE IMPLEMENTATION SCHEDULE
Activity
Board Approval
Publication of GPN
Signing
Effectiveness
Launch Mission
Institutional Support
Strategic Environmental Social Assessment
Operationalise LWSC Gender Strategy
Training and Capacity Building
HH sanitation surveys
WSS Sector Emergency Preparedness and
Disaster Risk Management Plan
Decen Sanitation & Hygiene Promotion
RfP/bidding & contract award
mobilisation, sensitization, supervison of sanitation works
Engineering Services Consultancy
RfP/bidding & contract award
Design, Tender Doc prep and Tendering
Supervison of Sewerage works
Feacal Sludge Management units
Bidding & contract award
Implementation
Sewerage Works
Bidding & contract award
Implementation
Defect Liability Period
Mid Term Review
Financial Audit (siubmission)
Program Completion
2015
6 8
10 12
2016
6 8
10 12
2017
6 8
10 12
2018
6 8
10 12
2019
6 8
10 12
2020
6 8
10
12
vii
REPORT AND RECOMMENDATION OF THE MANAGEMENT TO THE BOARD OF

DIRECTORS ON A PROPOSED LOAN TO ZAMBIA FOR THE LUSAKA SANITATION
PROGRAM
Management submits the following Report and Recommendation for a proposed loan for USD 50
million on ADB terms to the Republic of Zambia to finance the Lusaka 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 Zambias (GRZs) development agenda are articulated in the
National Vision 2030 and the Revised Sixth National Development Plan (R-SNDP: 2013-2016). The
National Sector Vision is for clean, safe water supply and sanitation for all 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, the Lusaka Sanitation Program (LSP)
supports the GRZs development plan by improving sanitation services of the poor in order to effect
improvements in public health and raise dignity.
1.1.2. In conformity with the thrust of the R-SNDP, the Banks Country Strategy Paper (CSP) for
Zambia covering the period 2011-2015 focuses on two pillars: Pillar I - Supporting Economic
Diversification through Infrastructure Development; and Pillar II - Support to Economic and Financial
Governance with Private Sector Development and Capacity Building. The LSP interventions
operationalize both pillars of Zambias CSP as the provision and improvement of key infrastructure has
a direct impact on the economic wellbeing of the population (Pillar I). This is part of the national sector
portfolio of activities aimed at improving environmental health and part of GRZ priorities to address the
required major investments for rehabilitation and expansion of the infrastructure in the fast growing
urban and peri-urban areas of the major towns through which the private sector would also be involved
(Pillar II). In this way, the LSP is also well-aligned to the Banks twin goals of green growth and
promoting inclusive growth. The LSP is also in line with Zambias Integrated Water Resources
Management (IWRM) articulated in the National Water Policy of 2010 and the Water Resources
Management Act of 2011.
1.1.3. The LSP is aligned with the Banks Ten-year Strategy (2013-2022), IWRM Policy and Urban
Development Framework and seeks to help manage urban growth and develop sustainable climate
resilient urban infrastructure systems, particularly urban water, sanitation and waste management. It is
also in line with the Banks Gender Strategy by supporting the Lusaka Water and Sewerage Company
(LWSC) to develop strategies to create economic opportunities for women combined with an operational
document on Faecal Sludge Management (FSM), taking into consideration the gender role-played by
men and women to guide implementation of sanitation and hygiene education in the high density areas
of the capital.
1.2
Rationale for Banks involvement
1.2.1 The GRZ has been undertaking water sector reforms since the early 1990s and considerable
progress has been made in improving access to improved water supply and improved sanitation.
Currently, 63% of Zambians have access to clean drinking water while 49% have access to adequate
sanitation as defined by UNICEF/WHO Joint Monitoring Program. The national long-term vision for
2030 is to reach 80% access to clean water by 2015 and 100% by 2030; 68% access to sanitation by
2015 and 90% by 2030; rehabilitation and reconstruction of sewerage 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 (in both rural and urban areas) on a slow upward trend while that for sanitation coverage is
even slower. While the national and MDG targets for water supply may be met by 2015, at the current
1
rate, the targets for sanitation will likely be missed. There have not been significant investments
especially in sanitation and capacity constraints both at local and national level have hampered growth
of the sector. This intervention specifically addresses these and hence the need for further investments in
this particular area.
1.2.2 The program interventions aim to address a crisis in sanitation that is costing Zambia 1.3% of
GDP per year according to a recent World Bank (WB) report. Lusaka is worst affected by poor
sanitation with annual outbreaks of cholera, typhoid and dysentery. Rapid urbanization in Lusaka will
lead to a doubling of the population over the next 20 years (from 2.2 million to 4.9 million) exacerbating
the problem. 70% of the citys population live in peri-urban areas and 90% rely on pit latrines, most of
which are poorly constructed. In addition, 60% of Lusakas water supply is from groundwater abstracted
within the city, which is vulnerable to pollution from leaking pit latrines. It is also estimated that at least
75% of the faecal waste generated in the city is not adequately collected, treated, disposed of and ends
up polluting the environment and water supply sources. Addressing these various faecal waste flows will
be the primary challenge of the program.
1.2.3 The Banks comparative advantage in financing the LSP is a combination of its comprehensive
experience to 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 access to clean, safe water supply and sanitation in Zambia is a major
contributing factor to poverty. The Banks support will complement on-going efforts by GRZ to improve
quality of life and livelihoods of people living in peri urban and high density areas of Lusaka where
women constitute 52% of the population. The Bank has had a long engagement with the LWSC through
the Lusaka Water Supply Rehabilitation Project (1991-2004) assisting in the formation of LWSC from a
municipality department to a private company. Although, it should be noted that at that time, the Bank
support to infrastructure only addressed water supply. GRZ has requested that the Bank this time
reorients its support towards sanitation to complement the substantial investments in urban water in
Lusaka by the Millennium Challenge Corporation (MCC) and investments by WB, European Investment
Bank (EIB) and Kreditanstalt fur Wiederaufbank (KfW). The Banks focus will be on (i) poverty
reduction focused components (such as decentralised sanitation in high-density areas); (ii) improved
public health through hardware (investments) and highly cost effective software methodologies
(sanitation and hygiene promotion), and (iii) leveraging other CPs funds to increase investments in
sanitation.
1.3
Donor Coordination
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 GRZ and Cooperating
Partners (CPs). 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
chaired by the Bank and led by 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 GRZ. It is also worth-noting, two CPs, MCC and German Development
Corporation (GDC) are supporting the gender mainstreaming in the sector which this program will build
on. This includes policy formulation and development of gender indicators for the sector and technical
support.
Table: 1.1:
Donor Support to Water (2014)

Size
Sector or subsector*
Water
Players -
Labour
Force
0.3%
Public Annual Expenditure (average) : 2014 Budget
GDP
Exports
2.3
Government
Donors
USD m
USD 73 m
USD 184 m
28%
72%
AfDB 20%
UNICEF
6%
DFID
2.3%
Existence of Thematic Working Groups

Existence of SWAps or Integrated Sector Approaches
ADB's Involvement in Donors Coordination
Germany
8.7%
WB 4%
USA 33%
Level of Donor Coordination

Yes
No
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
PROJECT DESCRIPTION
2.1
Project Objective
The objectives of the LSP are to increase access to sustainable sanitation services to Lusakas residents
especially the urban poor and strengthen LWSCs capacity to manage sanitation services. The project
components are described in Table 2.1 below, with details provided in Annex B2.
Table 2.1: Project Components and Outputs [cost in million USD]
3
S/No
4
1
Component
name
Climate
resilient
Sewerage
Infrastructure
Development
Decentralised
Sanitation and
Hygiene
Education
*Cost
Component description
79.86
(39.15)
Rehabilitation, upgrading and expansion of climate resilient sewer

collection
networks
(using
labour
intensive
contracts to support local employment)
22.18
(9.05)
Rehabilitation of Noxious sewage pump station and construction of

Kafue road pump station
Rehabilitation of Matero, Ngwerere and Chelstone sewage ponds and
new climate resilient trunk mains in Kafue road and upgrade of
Western, Matero, Ngwerere interceptors
Advocacy, sensitization, promotion of decentralised sanitation &
hygiene education, development of gender responsive training and
promotional material
Construction of climate resilient demonstration household sanitation
facilities
Create public awareness to promote connection to the sewer systems,
highlight health and environmental risks associated with inadequate
sanitation.
Pro-poor service provision: develop a mechanism for promoting the
construction of safe sanitation facilities for vulnerable people who are
not able to access or afford a sewerage connection.
Construct Faecal Sludge Management units in selected peri urban
areas and improve FSM, particularly emptying pit-latrines,
transportation, sludge treatment and possible reuse.
Undertake WASH Friendly school campaign (hand washing and
sanitation facilities, responsive to gender and disability)
S/No
4
Component
name
Institutional
support
and
capacity
building
*Cost
Component description
Training and capacitating women community based enterprises in

service delivery along the full service delivery chain from collection
of human waste through to its recycle, reuse or disposal. Training of
youth and provision of toolkits to masons, artisans to construct onsite
sanitation facilities to enhance employment opportunities
Training and empowerment of community based enterprises in
production of sanitation products for communities (50% women)
Operationalizing of the LWSC Gender Policy and development of
Gender Strategy (increase women economic opportunities within the
program)
Mainstreaming Gender, Environment, Climate Change, HIV/AIDs &
cross cuttings Issues
Support in development & strengthening of a sanitation monitoring
system at LWSC
Support to National Water and Sanitation Council (NWASCO) to
enhance its capacity for developing sector guidelines and establishing
and enforcing standards in sanitation; Support to Lusaka City Council
to link up with environmental health services as well as a review and
improve relevant bylaws for appropriate design, enforcement of
connections and conforming with design standards and reuse of
wastes
Support to safeguards unit in LWSC to enhance its capacity for
monitoring environmental and social issues during and beyond project
implementation
Provision of technical assistance for design, supervision and program
4
Program
13.50
implementation in accordance with good project management
Management
(3.40)
practices.
and
Prepare and submit the required reports: (i) undertake annual external
coordination
audits; (ii) submit quarterly progress and ESMP reports;
(iii) undertake project mid-term review; and (iv) prepare a program
completion report (v) Program M&E and Reporting (including
baseline and endline), (vi) prepare Program Implementation Manual
* Cost in brackets is the AfDB-funded amount
3
2.2
12.34
(4.22)
Technical solution retained and other alternatives explored
2.2.1 Technical solutions that have been explored and retained are based on options that have been
adopted on similar interventions in Zambia. (i) The performance of gravity sewers is affected by poor
water supply. Therefore, priority has been given to carry out rehabilitation and expansion only in areas
where there is adequate water supply to ensure that cleansing velocities of approximately 0.6m/s are
achieved as per international best practices. This ensures blockages are minimized in the sewer network.
(ii) In terms of climate risks, for flood prone areas of Lusaka, sewers will be designed to be climate
resilient so as to collect, convey and discharge frequently occurring, low-return-period storms to
complement existing drainages in the areas. This minimizes overall capital costs, keeps operations and
maintenance costs low and minimizes pollution. Sustainable Urban Drainage Systems (SUDS) were
considered for Lusaka as a way of managing surface water runoff to prevent sewer flooding and to
improve water quality in streams in case of heavy storms but because of lack of green space in Lusaka,
there are no places to site these. The sewers will be designed to deal with low return period storms.
2.2.2 Construction of Feacal Sludge Management (FSM) facilities coupled with good onsite sanitation
facilities (properly designed and constructed lined pit latrines) are to be adopted in peri urban areas
which were not conducive for a sewer network. The sewer networks would have required good water
supply network, multiple sewage pump stations, large collectors and interceptors to get the wastewater
to treatment plants with a huge capital outlay.
Table 2.2: Project alternatives considered and reasons for rejection

Alternative
Sewerage system in some peri
urban areas with bad terrain
Sustainable
Urban
Systems (SUDS)
Drainage
Brief Description
Sewer networks with multiple
sewage pump stations, collectors
and interceptors
Managing surface water runoff to
prevent sewer flooding
Reasons for rejection

No piped water, high capital,
operations and maintenance costs
No green space
2.2.3 For decentralized sanitation, hygiene promotion, Impact Evaluation and Sanitation Marketing
(SM) will be utilized focusing on community-based approaches (e.g. community decision to stop open
defecation; use of peer pressure to construct their own facilities; collective action to assist vulnerable
people and support public facilities) and support enforcement of bylaws on onsite sanitation The SM
promotes household-centered choice of latrine type. There is significant potential for increasing access
to climate resilient sanitation in flood prone peri-urban areas through introduction of ecological
sanitation technologies for on-site systems and lined latrines. Capacity building activities will be carried
out for ministries/national agencies, sensitization of communities in building sanitation facilities and
supporting Lusaka City Council (LCC) to enforce connections to sewerage systems and that sanitation
facilities built have appropriate design and conform with standards and reuse of wastes.
2.3
Project Type
This project is part of the National Water Supply and Sanitation Program (NUWSSP) which GRZ is
implementing with the aim of providing adequate sanitation facilities to all urban citizens of Lusaka
Province and starting with investments in Lusaka City. The program will implement investments
consistent with the Lusaka Sanitation Master Plan (2011-2030) and develop LWSCs capacity to
manage all aspects of sanitation from conventional sewerage, on-site systems and FSM. The LSP will be
implemented in two parts, with each part being prepared and implemented concurrently. Part I supported
by the EIB and KfW will focus on the rehabilitation of Manchinchi and Chunga Wastewater Treatment
Plants, plus their associated main collectors, pumping stations and sludge treatment and Part II will
develop a comprehensive approach to sanitation in Lusaka, including on-site and off-site sanitation,
health, hygiene and sanitation promotion and technical assistance supported by the WB, AfDB and EIB.
2.4
Project Cost and Financing Arrangements
2.4.1 The total cost of Part II of the LSP is estimated at USD 127.83 million (UA 90.83 million), net of
taxes and duties, of which USD 82.39 million (64.5%) is foreign costs and USD 45.4 million (35.5%) in
local costs. The cost estimates are derived from the Lusaka Sanitation Master Plan and Pre-Feasibility
Study taking into account 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 price
contingency of 3% per annum have been taken into consideration in the 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
2.4.2 The cost of Part II of the program will be financed by ADB, WB and GRZ/LWSC, as
summarized in Table 2.4 below: Financing Plan by Source of Finance. ADB will provide loan of USD
50 million (equivalent UA 35.53 million), which represents 39% of the total costs, WB will provide
USD 65 million (equivalent UA 46.18 million), which represents 51% of the total costs and GRZ/LWSC
will finance the balance of USD 12.83 million (equivalent UA 9.12 million), which represents 10% of
the total program cost. In accordance with the Policy on Expenditure for Bank Group Financing, the
GRZ has requested the Bank to consider reducing the requirement for 50% counterpart funding on the
LSP due to the fact that Zambia has only recently transitioned to blend status and is yet to transition to
full ADB only. 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. A justification is provided in Appendix
V to reduce the requirement for counterpart funding.
5
Table 2.3: Program cost estimates by component
Components
A) Sewerage Infrastructure: Rehab and Expansion
B) Decentralised Sanitation and Hygiene Promotion
C) Institutional Strengthening and Capacity Building
D) Program Management
Total Base Costs
Physical Contingencies (10%)
Price Contingencies (3%)
Total
FC
46,868
10,994
7,507
3,750
69,120
6,912
6,356
82,388
(In US$ '000)

LC
20,086
7,611
2,844
7,571
38,113
3,811
3,517
45,441
Total
66,955
18,605
10,351
11,322
107,233
10,723
9,873
127,829
FC
33,302
7,812
5,334
2,665
49,112
4,911
4,516
58,540
(in UA '000)
LC
Total
14,272
47,574
5,408
13,220
2,021
7,355
5,380
8,044
27,081
76,193
2,708
7,619
2,499
7,015
32,288
90,827
F%
70.0
59.1
72.5
33.1
64.5
64.5
64.4
64.5
%
62.4
17.4
9.7
10.6
100.0
-
* In addition to the above, EIB and KfW are to provide equivalent of USD$ 137 and USD$ 55 million, respectively to fund the
Lusaka Sanitation Program.
Table 2.4: Sources of financing

(US$ 000)
65,000
50,000
12,829
127,829
Source of Funds
World Bank
AfDB
GRZ/LWSC
Total
2.4.3
(UA 000)
46,185
35,527
9,115
90,827
%
51%
39%
10%
100%
The summary of the AfDB financed components is provided in Table 2.5(a), while a
summary of the same by category of expenditure is provided in Table 2.5 (b) below.
Table 2.5 (a): Project cost estimates by component
Components
Total Base Costs
Total
FC
22,793
4,550
2,640
1,823
31,806
3,181
2,928
37,915
(In US$ '000)

LC
9,768
3,150
1,000
3,681
17,600
1,760
1,620
20,980
Total
32,561
7,700
3,640
5,505
49,406
4,941
4,549
58,895
FC
16,195
3,233
1,876
1,296
22,599
2,260
2,081
26,940
(in UA '000)
LC
6,941
2,238
711
2,616
12,505
1,251
1,151
14,907
Total
23,136
5,471
2,586
3,911
35,105
3,510
3,232
41,847
F%
70%
59%
73%
33%
64%
64%
64%
64%
%
66%
16%
7%
11%
100%
Table 2.5 (b): Project cost by category of expenditure

(In US$ '000)
FC
LC
Total
25,793
11,968
37,761
2,240
2,240
3,523
2,481
6,005
1,900
1,900
250
1,250
1,500
31,806
17,600
49,406
3,181
1,760
4,941
2,928
1,620
4,549
37,915
20,980
58,895
64%
36%
100%
Category of Expenediture
1) Works
2) Goods
3) Services
4) Operating Costs
5) Miscellaneous
Total Base Cost
Physical Contingency
Price Contingency
Total Cost
(in UA '000)
FC
LC
18,320
8,501
1,591
2,503
1,762
1,349
178
888
22,591
12,500
2,259
1,250
2,080
1,151
26,930
14,901
64%
36%
Total
%
26,820
76%
1,591
5%
4,265
12%
1,349
4%
1,065
3%
35,091
100%
3,509
3,231
41,831
100%
Table 2.6: Expenditure schedule by component [000USD]

Components
2016
2017
2018
2019
Total
9,768
13,024
9,768
32,561
2,440
2,440
1,410
1,410
7,700
1,625
1,185
755
75
3,640
Total Base Cost
Total Costs
1,943
1,454
1,054
1,054
5,505
6,008
601
198
6,807
14,847
1,485
995
17,326
16,243
1,624
1,657
19,524
12,307
1,231
1,699
15,237
49,406
4,941
4,549
58,895
2.5
Projects target area and population
2.5.1 Project Area: The LSP will be implemented in Chunga/ Matero/ Chelstone/ Kaunda Square
sewersheds where the sewerage infrastructure was constructed in the 1960s. The priority sub-projects
were identified with the aim of covering the peri-urban and low cost areas which are most densely
populated areas in these sewersheds. The main criteria for the selection of interventions included: (i)
aged and dilapidated sewer networks (20% of the 50km network is functional in these areas), (ii)
waterborne disease prevalence, (iii) susceptibility to flooding, (iv) sewage overflows and blockages (994
complaints in 2014) and (v) low access rates of waterborne sewerage. The citys current population is
expected to double over the next 20 years (from 2.2 million to 4.9 million) exacerbating the problem of
poor sanitation if not addressed.
2.5.2 Project Beneficiaries: The intervention will have direct and indirect benefits to Lusaka Citys
population with improved sanitation to about 600,000 indirect beneficiaries and 473, 000 direct
beneficiaries (52% women). Unlike the sewerage services, onsite sanitation for Lusakas urban poor
often depends on landlords and tenants who have few incentives to invest in quality services within
informal settlements, including sanitation facilities. Most of the households in the project areas are
sharing a few on-site latrines or relying on communally managed pay-and-use ablution blocks. Women
and children suffer more when having such arrangements. LCC and LWSC will be supported to engage
with Landlords and plots owners for enforcement of applicable laws bearing in mind balancing between
the need to improve the properties and the ability of the tenants to be able to pay higher rent.
2.5.3 Residents will gain better health from improved environmental and sanitary conditions;
especially those in peri urban areas where most of the urban poor are residing. Special focus will be
given to vulnerable households within the project area. The LSP will target and capacitate women
community based enterprises in service delivery along the full service delivery chain of FSM from
collection of human waste through to its recycle, reuse or disposal. About 615 youths and women, who
presently lack employment opportunities, will be targeted by the program through training in FSM,
business start-up and as masons, artisans and will participate in construction of decentralised sanitation
facilities. The LSP is expected to create at least 250 full-time skilled/semi-skilled and 600 part-time
unskilled jobs in masonry, pipe laying, steel fixing and construction which will benefit both men and
women. This in turn will contribute to reducing poverty and improving the quality of lives of people
from incomes gained. Schools, Markets and health centres lacking adequate sanitation facilities in the
targeted peri urban areas will also benefit from the program. The expected impact of these interventions
are reduction of water related diseases and associate health care cost, reduction of school-dropout rates,
particularly among girls and reduction in environmental pollution. Additional information is provided in
Annex B.8.
2.6
Participatory process for project identification, design and implementation
2.6.1 The program activities were selected through an extensive participatory process which was
initiated during the Banks preparation mission, continued throughout appraisal, the environmental and
social impact assessment of the project area which included focused group discussions, workshops and
field visits to understand current applicable technologies, current rates of access and levels of disease
burden.
2.6.2 Extensive consultations were held in a workshop in June 2014 in Lusaka with various
stakeholders including Ministry of Local Government and Housing (MLGH), MoF, MoH, LCC, WB,
other CPs, NGOs such as Water Supply for the Urban Poor and potential beneficiaries. As part of the
ESMF/ESMP preparation, a cross section of affected communities: women, men, youth, local leaders
and people with special needs were consulted in March 2015 in Matero and George peri-urban areas and
their views integrated into the program design. The issues that came out as affecting sanitation included:
(i) fragmented legal and policy framework; (ii) unclear definition of roles, responsibilities and poor
7
institutional arrangements; (iii) lack of enforcement; (iv) inadequate financial resources for
implementing agencies and households to effectively tackle sanitation (vii) lack of sanitary facilities and
poor environmental sanitation; and (ix) concerns on whether works shall affect peoples assets and
associated compensation. All stakeholders acknowledged that poor sanitation is affecting the social
wellbeing and posing serious risks to groundwater contamination and public health.
2.6.3 The LSP will therefore incorporate in its design: (i) development of a comprehensive new WSS
policy; (ii) LCC to review/adapt enforcement bylaws and standards for onsite sanitation; (iii) assist
vulnerable households with a subsidy to construct sanitation facilities; (iv) formal agreements between
LWSC and LCC on roles and responsibilities for decentralised sanitation systems and (v) extensive
sensitization, mobilisation campaigns and community participation during implementation.
2.6.4 Participation of national stakeholders and representatives of beneficiary groups in the LSP will
be through a steering committee that will be established to oversee and guide implementation. In
addition, seconded staff from MLGH, MoH and LCC will also be involved in the Program
Implementation Team. Additional information is provided in Annex B.3.
2.7
Bank Group experience and lessons reflected in program design
2.7.1 The overall performance of the portfolio is satisfactory2; with implementation progress (IP) and
Development Outcomes (DO) of 2.79 and 2.90 respectively in 2014. Ageing operations, as a percentage
of the entire portfolio reduced from 13% since the last CPPR in 2013 to 7% in 2014. The number of
projects at risk has reduced from 17% in 2010 to 7% in 2014. Overall disbursement ratio is 27% for
2014.
2.7.2 The Bank is among the largest and active CPs in the sector financing a total of 12 operations to
date. Recently completed projects include the Central Province Rural Water Supply and Sanitation
Project (Loan of UA 12.41 million) completed in 2009 and the Central Province Eight Centres Water
Supply and Sanitation Project (a blend of Grant and Loan of UA 24.62 million), completed in 2012.
There is no Project Completion Report (PCR) backlog on the two completed projects. The 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 Nkana Water Supply and Sanitation Project NWSSP (UA 35
million) and the NRWSSP Phase I (UA 15 million) having closed on a on 31 March 2015. The current
supervision ratings are 2.41 and 2.35 for NWSSP and NRWSSP respectively.
2.7.3 Lessons learned from the Banks past and current projects are described in Annex B1. The main
lessons applied to the LSP are: (i) Implementing an integrated approach ensuring that sewerage system
are provided where there is adequate water supply to ensure adequate collection, treatment and disposal
(ii) effective community participation by involving the beneficiaries in project design, project
implementation using existing institutional arrangements for decentralized sanitation facilities, and the
need to strengthen sector institutions at the national and local levels including the LWSC and LCC, (iii)
as happened in Kitwe town on the NWSSP, addressing on-site sanitation through improved facilities and
improved FSM will have a greater impact on environmental pollution and public health than only
improvements to the sewerage system and (v) increasing sustainable demand and commitment for
improved WSS through consistent targeted hygiene behaviour change.
2.8
Programs 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. The
program progress will be tracked through the following outcome indicators : (i) Increase in number of
2
Zambia Combined 2011-2015 Country Strategy Paper Mid Term Review and Country Portfolio Performance Review
residents benefiting from improved sanitation facilities , (ii) increase in proportion of people practicing
improved hygiene behaviour/ sanitation practices (+50% women), (iii) percent of sewage blockage
complains addressed satisfactorily. The key output indicators will include: (i) number of people trained
in hygiene behaviours and sanitation practices (ii) climate resilient sewer networks rehabilitated and
extended (kms), (iii) number of new connections to sewer, (iv) number of sewage pump stations and
ponds rehabilitated/ constructed, (v) number of climate resilient FSM facilities constructed, (vi) FSM
guidelines prepared, (vii) preparation of Water and Sanitation Sector Emergency Preparedness and
Disaster Risk Management Plan, (viii) preparation of gender strategy.
2.8.2 Progress towards achieving program outcomes and outputs will be measured and monitored
through bi-annual Bank supervision missions, quarterly progress reports, annual technical and financial
audit reports. 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 LCC, NWASCO and NGOs/CBOs. Internal monitoring systems of the LCC and LWSC will
be strengthened to facilitate post-program implementation monitoring.
III
PROGRAM FEASIBILITY
3.1
Economic and financial performance
Table C.1: key economic figures

EIRR 17.01% and NPV ZMK 156.50 million (at 10% base case)
NB: detailed calculations are available in Annex B6
3.1.1 The underlying assumptions for the calculation of the EIRR are provided in Annex B6. The main
assumptions are: health benefits from improved sanitation services comprising improved sewerage and
faecal sludge management systems, incremental sanitation revenue, as well as economic value of sludge
produced from the improved facilities. On the cost side, these include investment costs, replacement
costs, and other items as part of operation and maintenance costs comprising of staff costs, energy,
chemicals and repairs and other overhead costs have been taken into account. The incremental O&M
costs are estimated at 3% of investment costs. The economic life of the investment is estimated as 25
years, all the costs and benefits considered are net of duties and taxes. The LSPs economic rate of
return is estimated at 17.01 %. The value is higher than the opportunity cost of capital of 12% and thus
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 14.64% assuming that investment
cost increases by 20%, and changes to 13.63% assuming that the benefits of the project are decreased by
20%. The analysis shows that the project is economically viable and socially beneficial for Zambia.
3.2
Environmental and Social Impacts
3.2.1 The LSP was classified as Category 2 on 28 November 2014 in line with the Banks
Environmental and Social Assessment Procedures (ESAP); mainly because most impacts are site specific
and have no significant and irreversible detrimental effect. Detailed Feasibility studies for the sewer
networks and trunk lines under Component 1 are yet to be completed and the sites for establishment of
FSSM and systems will be identified and selected by LWSC. For these reasons, the type of
Environmental Assessment tool for at this stage is the development of the Environmental and Social
Management Framework (ESMF). The categorization is in alignment with the national environmental
law of Zambia. The ESMF Summary has been prepared, validated by the Bank and disclosed on the
Banks website on 20 May 2015.
3.2.2 Potential adverse impacts are anticipated during construction. Direct impacts such as noise, dust,
public safety, disruption of surface water drainage, interruption of utilities, pollution, disposal of waste,
and social impacts will be mitigated and generally eliminated. Excavations to remove old sewer
9
networks and installation of new piping are likely to cause safety hazards to the communities if the
excavations are not protected. The excavation of trenches may also lead to temporary disruption of
businesses that are located along the wayleaves. The environmental impacts resulting from
implementation of civil works are expected to be minor and short-term since the rehabilitation and
expansion works are principally for the laying of buried pipelines.
3.2.3 Construction related impacts will be mitigated by (i) development of a construction ESMP
compliant with the AfDB Integrated Safeguards System; (ii) the contractors work practices, especially
those related to maintenance of access, methods of trench excavation, the storage of construction
materials and cleanliness of the work sites; (iii) cooperation by LCC with the contractor in terms of
traffic management and use of public space and utilities; (iv) project managements strict enforcement of
the correct construction practices and standards; (v) the incorporation of mitigation measures identified
into the bid documents and specifications; (vi) public awareness including liaison at ward level in
advance of work in each work location; and (vii) close monitoring of the contractors implementation of
the required mitigation measures. The ESMF implementation and monitoring budget is estimated at
USD 240,000
3.2.4 Potential positive impacts from the program shall include; employment opportunities, for which
the enhancement measures require works contractors to have active employment policy favouring local
workers and women. This will be a requirement of works contracts. After construction, the impacts will
be positive through improved sanitation, reduced pollution incidents on surface and ground water in the
project area, improved health and hygiene among beneficiary communities.
3.2.5 Climate Change: According to the Banks Climate Safeguards System, the LSP 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. Some
of the adaptation measures considered include (i) development of a Water and Sanitation Sector
Emergency Preparedness and Disaster Risk Management Plan to deal with extreme flooding and drought
scenarios that may affect the infrastructure; (ii) desludging of sewage ponds, strengthening of the
embankments of the ponds and building a wall fence around the facilities to be able to cope with larger
surges of rainfall without impacting the surrounding communities; (iii) improve operational risk
management to ensure preventive and routine maintenance is effectively carried out to reduce blockages
and spillages. For example, sewer manholes to be designed to align to the roads and with properly
designed manhole covers to prevent damage by traffic and stop heavy ingress of storm water to
minimize sewage blockages. as a result of adverse weather, (iv) modify existing sewerage system assets
to increase climate resilience by expanding the capacity of sewerage systems; (v) increasing access to
climate resilient sanitation in flood prone peri-urban centres through promotion of ecological sanitation
technologies for on-site systems and lined latrines; (vi) promotion of clean and hygienic environment,
including handling and disposal of solid wastes, FSM and integrating reuse of wastes to avoid polluting
groundwater sources and (vii) provide information to LWSC, national and municipal institutions and
carry out climate change awareness raising activities. Annex IV provides the adaptation summary.
3.2.6 Gender: The quality of water and especially sanitation services is highly gender sensitive,
therefore, women and men were consulted on their roles, responsibilities, challenges, and opportunities
within the scope of the programs objectives. Furthermore, consultations with the two CPs supporting
gender mainstreaming of LWSC; MCC and GDC; was conducted. Discussions with LWSC, LCC,
Ministry of Health (MoH), Ministry of Community Development, Mother and Child Health
(MCDMCH) and Ministry of Gender and Child Development (MGCD) to determine the proper
interventions and costing took place. The outcome of these discussions materialized in adopting two
approaches, (i) mainstreaming of gender in program interventions, and (ii) gender focused activities with
total costing of USD 200,000, investing in womens skill development and economic opportunities
within the sanitation sub-sector.
10
3.2.7 The gender negative impact of the current situation stated by women and men during the
stakeholders consultations were: (i) women workload increase with the rise of water borne diseases as
result of inadequate sanitation facilities and bad hygiene practice by member of the family, (ii)
moreover, women and girls have no sense of privacy because many families sharing one latrine
especially during menstruation. Sometime, women and girls opt to walk a quite a distance to access
other sanitation (communal) seeking privacy; risking their safety In addition, women expressed the need
to be consulted and engaged throughout the project cycle to enable them to share their views and
concerns, (iii) increasing of economic opportunities will help in household improvement.
3.2.8 These pose serious challenges in terms of health, security, and privacy for women and girls.
Vulnerability of household members feature in the way each individual ability tries to address these
challenges. The ability of households to have a decent sanitation facility and practice of good hygiene
is determined by the following: knowledge and attitude, financial ability and the facilitating
environment. To address beneficiaries concerns taking into account the needs of women and vulnerable
households, the LSP aims to support LWSC to address the three determinant factors mentioned above.
3.2.9 In terms of knowledge and attitudes, support will be provided to create demand among the
population on sanitation and good hygiene practice taking into account the gender and social
perspective. Regarding the financial ability of households to connect to the sewer line or to have an
improved on site sanitation facility, the LSP will develop a variety of financial models / support to
facilitate the process. This could be in form of recovering the connection fees through the water bills
over a period of time or through exploring other means of funding (revolving funds) such as use of the
sanitation surcharge which LWSC currently and manages.
3.2.10 While increasing the capacity of the local market to address the envisaged demand on
sanitation, the LSP aims to create an enabling environment for the employment of youth and women.
This will be carried out through training of artisans and masons (women and youth), training of women
and youth in sludge management including biogas in one of the vocational centres in Lusaka, and by
supporting a female engineer internship program, and creating practical attachment opportunities for
Zambia Women in Construction. Women will be trained in start-up business and how to manage public
sanitation and water kiosks. This includes financial literacy and book keeping.
3.2.11 Opportunities: In 2014, LWSC within its Strategic Business Plan (2014 2018) has approved
its Gender Policy, which was also guided by the Zambia National Gender Policy. Following that, a
Gender Strategy with detailed activities, costing, and indicators for monitoring was developed. In
addition, LWSC has designated a Gender Focal Point who is situated in the Monitoring and Evaluation
(M&E) Department. A committee to oversee the implementation on gender activities in the utility is
under formation. CPs including the Bank have been heading the gender mainstreaming of the water
and sanitation national program including mainstreaming of gender for utilities.
3.2.12 Social: Lusaka has a population of about 2.2 million people (336,000 rural and 1,854,000 urban)
showing a high level of urbanization. Lusaka City itself is in size the smallest district in the province and
yet carries a population of 1.7 million meaning it has a high density (4853/ Km) and is very congested.3
This is the result of many informal settlements in peri-urban areas (27 informal settlements) with a high
level of poverty (75% of the peri-urban population live on less than US$ 1 a day).4 Lusaka is badly
affected by poor sanitation with annual outbreaks of cholera, typhoid and dysentery. Only about 10 15
% of the population in Lusaka benefit from access to sewer networks. The remaining population
especially in the peri-urban areas is primarily dependent on pit latrines, which are located within the
household boundaries. The countrys urban system is dominated by Lusaka, which is a host to 32 % of
the total urban population in the country.
3
4
2010 Living Conditions Monitoring Survey Report

Ibid
11
3.2.13 Lusaka is experiencing typical urban development problems associated with population growth,
high levels of urbanization and unemployment, inadequate services and inadequate waste management.
The basic determinants of better health, such as access to water, and sanitation, are still in a critical state
in Lusaka. Limited access to WSS facilities accompanied by poor hygiene is associated with skin
diseases, Acute Respiratory Infections (ARIs), and diarrheal diseases, the leading preventable diseases.
ARI and diarrheal diseases are among the leading causes of child deaths in Zambia 5. HIV prevalence
rate for Lusaka district stands at 20.8 per cent, making it the highest district compared to others, in 2013.
The program will continue building on the efforts made by the GRZ on sensitization and awareness
raising. Awareness raising is one of the activities programmed under the gender strategy of the LWSC.
3.2.14 From field visits and discussions with potential beneficiaries, the major findings were as follows:
(i) the state of sanitation in Lusaka has affected the population differently according to their economic
background, gender and their social status. (ii) The effect of the health situation as a result of poor
sanitation facilities is different from high cost areas with sewerage systems to poor-urban areas with
mainly on site sanitation facilities such as pit latrines. While the sewerage system is in a state of
disrepair and experiencing frequent blockages and spillages presenting a very high public health risk for
the population, the majority of residents in the peri-urban areas live in plots shared by a number of
families with one shared sanitation facility, and in some cases also with neighbours.
3.2.15 The stakeholders and the host community were positive and there was broad support for the
program as it anticipated that the rehabilitation of the sewer networks and the provision of adequate
sanitation systems and facilities that will result in an improvement in health and hygiene for the
beneficiary population. Most of the respondents in the project area have a positive outlook towards the
Lusaka Sanitation Plan. The youth in particular, are looking forward to employment opportunities during
the construction phase and hence have a positive mind set about the development. There is no negative
impact envisaged.
3.2.16 The LSP therefore will address these issues highlighted above by having proper climate resilient
sewer infrastructure (to reduce spillages and blockages), improved sanitation facilities in public places
(markets, health centers, and the most disadvantage schools in the project peri-urban areas) will reduce
vulnerability to water borne diseases, increase education attainment, and improve health centers
infrastructure. Community Led Total Sanitation (CLTS) and Participatory Hygiene and Sanitation
Transformation (PHAST) will be used to increase awareness among residents with the objective to
create demand for better sanitation. The LSP will also focus on skills development, helping women and
youth to engage in business opportunities to contribute to increasing income for poor households.
Moreover, the LSP will help in sludge management by providing technical knowledge, protection, and
innovative emptying techniques that do not necessarily require manual handling. Annex B.8 provides
more details on the gender and social analysis.
3.2.17 Involuntary resettlement: There will be no involuntary resettlement. Trunk sewer lines and
laterals will be laid along road reserves and existing way leaves to reduce incidences and scale of
compensation. FSM 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 in such a way that
results in land acquisition, the Banks Integrated Safeguards Policy, specifically the Operational Safeguards 2
on Involuntary Resettlement will be followed and implemented accordingly.
MoH, 2012a.
12
IV.
4.1
IMPLEMENTATION
Implementation Arrangements
4.1.1 The LSP shall be implemented using existing structures of LWSC incorporating lessons and
experience gained from similar operations. The program is expected to start in 2015 with a duration of
five years. The GRZ is the borrower of the ADB loan, while LWSC, under the MLGH, will be the
Executing Agency (EA). LWSC has constituted within its Project Implementation Department (PID), a
Program Implementation Team (PIT), comprising a Program Coordinator, Wastewater Expert,
Environmental Expert, Social/Community Mobilization Expert, Procurement Expert, Onsite Sanitation
Expert, Monitoring & Evaluation Expert, Program Accountant, and seconded staff from MLGH, MoH
and LCC to be in charge of implementation. Gender mainstreaming and gender related activities would
be implementing in consultation with the TA on gender and social equity provided by MCC and the
LWSC Gender Focal Point. The PIT jointly with LCC will be responsible for implementation of
component 2 using NGOs and CBOs within Lusakas and especially in the peri-urban areas. The LWSC
shall be responsible for overall coordination of the Program and reporting obligations to the financiers
and GRZ. Technical Assistance to the PIT will be provided by an experienced Engineering Services
consultant for design review, supervision and implementation support for sewerage infrastructure
rehabilitation and development. A program steering committee shall be stablished chaired by MLGH
which will oversee the program implementation. The Bank, WB, EIB and KFW will share the use of the
PIT. See Annex B.3 for implementation details.
4.2
Procurement Arrangements
4.2.1 All procurement of goods and works and acquisition of consulting services financed by the Bank
will be in accordance with the Bank's Rules and Procedures for Procurement of Goods and Works,
dated May 2008, revised July 2012; and Rules and Procedures for the Use of Consultants, dated May
2008, revised July 2012,, using the relevant Bank Standard Bidding Documents. However, all
procurements within the thresholds for National Competitive Bidding (NCB) and Shopping for goods
and works will be procured using the National Procurement Procedures (NPP) as set forth in the Public
Procurement Act, No.12 of 2008, as amended by the Public Procurement (Amendment) Act, 2011
applying the appropriate national standard bidding documents and in conformity with the provisions of
the Financing Agreement. The LWSC as the EA will be responsible for the procurement of goods, works
and service contracts.
4.2.2 Major civil works involving rehabilitation and expansion of sewer networks will be undertaken
through ICB with prequalification, while other sanitation options will be procured under NPP. The
nature, scope and monetary value of the goods, works and consultancy services has determined the
methods of procurement as detailed in the procurement Annex B.5.
4.2.3 The capacity and risk assessment of the EA was done in collaboration with the WB and is rated
as substantial. This rating takes into account that the program is of high value and technically complex
and therefore there is need for high level technical and procurement skills to compliment LWSC
capabilities. A detailed risk assessment with migration measures is in Annex B.5 and the rating is
expected to improve to moderate once most of the recommended measures are undertaken.
4.3
Financial Management and Disbursement Arrangements
4.3.1 Financial Reporting and External Audit: The Bank conducted in collaboration with the WB an
assessment for the LWSCs Finance Division financial management arrangements for the
implementation of the LSP (that included a review of the budgeting, accounting, internal controls, flow
of funds, financial reporting and auditing arrangements).
13
The assessment indicates that these arrangements meet the Banks minimum requirements to ensure that
funds made available for program financing are used economically and efficiently and for the purpose
intended. The overall FM risk rating is Moderate.
4.3.2 The program FM will be handled within the existing structures of the LWSCs Finance Division.
The program accounting system will be based on an automated accounting package being used by the
LWSC. The EA will produce a single quarterly progress reports, including all sources of financing and
program. The program financial statements (that will include all co-financiers funds and program
expenditures) will be audited annually by the qualified and independent private audit firm, with
involvement of the Office of Auditor General, in accordance with a Bank approved audit ToR. The audit
report together with management letter shall be submitted to Bank within six months after the end of
each fiscal year.
4.3.3 Disbursement Arrangements: Disbursement of the ADB resources will be done in accordance
with Banks procedures and the Disbursement Letter will document the disbursement procedures and
methods to be applied for the Loan. The LSP will have access to (i) Direct Payment, (ii) Special Account
(SA) and (iii) Reimbursement as prescribed in the Banks Disbursement Handbook. Two separate
Special Account denominated in USD and Kwacha sub-account will be opened at a Commercial Bank
acceptable to the Bank. Disbursement to contractors, suppliers and consultants will be by direct payment
or reimbursement guarantee. Small contracts of values up to UA 20,000, including community
mobilization, sanitation and hygiene, as well as related operational costs may be paid from the Special
Account. Detailed financial management, disbursement and auditing arrangements are included in
Annex B.4.
4.4
Monitoring and Evaluation
4.4.1 M&E of the program will be carried out as a regular management function by LWSC based on
the indicators defined in the result based logical framework. Support will be provided towards
developing a sanitation monitoring system which will capture existing sewer infrastructure, onsite
sanitation areas, operating information on incidences of sewer flooding and relevant public health
information. The M&E Expert PID will be fully responsible for collecting and analyzing data for
reporting.
4.4.2 Joint Bank and co-financiers supervision missions will be undertaken twice per year and the
Bank will undertake desk supervision quarterly, providing feedback and following up on progress
reports. A Mid-Term Review will be undertaken during the third year of implementation. LWSC will
prepare single quarterly Progress Reports, annual technical and financial audits including all activities by
the co-financiers for submission. Upon completion, LWSC will prepare and submit to the Bank a PCR.
Table 4.1: Key Milestones
Timeframe
June 2015
November 2015
February 2016
February 2017
Milestone
ADB Board of Directors
Loan Effectiveness
TA consultant engaged
Construction works start
January 2016
Hygiene and sanitation

NGOs/consultants engaged
Mid-Term Review
Program completion
Program completion report
June 2018
December 2019
December 2020
Monitoring process/feedback loop

Loan approval
Launching mission; Loan conditions approved by the Bank
Procurement & contract documents; Banks No objection
Bidding & contract documents; Banks No objection;
Monthly construction supervision reports; Banks comments
on the annual and quarterly reports; Supervision missions
Procurement & contract documents; Banks No objection
Assessment of progress/performance, restructuring if needed
Commissioning of works
Project completion mission
14
4.5
Governance
4.5.1 Successful implementation of the program requires good governance at National, Local and
Executing Agency level. The overall governance rating of Zambia is above Africas continental average
in many fronts and measures. Zambia ranks 13th out of 52 countries in the 2014 Ibrahim Index of
African Governance and 83rd out of 174 in Transparency Internationals 2013 Corruption Perception
Index (a relative improvement from 88 compared to 2012). It ranked amongst the top 10 countries
performing reasonably in safety and rule of law. In terms of National Security it stands 6 th on the
Ibrahim Index of African Governance.
4.5.2 The governance of the WSS system goes beyond LWSC. GRZ has shown commitment to reform
the sector for better transparency and accountability. Revision of the WSS policy is ongoing to provide
clear guidance, as planning and implementation of WSS related projects has many socio-economic
aspects. In addition, the LSP is of high value, technically complex and therefore there is need for high
level technical and procurement skills to compliment LWSC capabilities. To mitigate against this, an
Engineering Services consultant will assist LWSC enhance appropriate procurement, technical, contract
management/dispute resolution skills to complement their capability to successfully manage the LSP. To
counter corruption and fraud, tenders shall be evaluated by an appointed evaluation committee whose
recommendations shall be submitted to the LWSC 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 at the LWSC have been 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.
4.5.3 LWSC 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 LCC, Chongwe, Luangwa
and Kafue District Councils and consists of members from both Government and private sector. The
Bank will support governance enhancement in LWSC through the institutional strengthening and
capacity building component which includes supporting the Sustainability Agreement (SA) entered into
between LWSC and GRZ.
4.6
Sustainability
4.6.1 GRZs commitment has been shown by the ongoing water sector reforms since the 1990s which
culminated in the formation of 11 utilities to provide WSS to the urban town and cities. The LSP is an
integral part of the NUWSSP which Government launched in 2011, a holistic and integrated approach
which aims at improved livelihoods and public health of Zambias urban population. Currently, LWSC
has a SA with GRZ, to ensure that the utility moves towards technical, environmental, and financial
sustainability including improved operational performance, financial and corporate governance. In this
regard, renewal of rollover of the SA covering the period 2018-2020 has been made a condition of the
loan.
4.6.2 The tariff for sewerage services is not yet fully reflective of economic cost of service provision.
The current tariff policy is to recover at least 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, LWSC is to finalise
the ongoing 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. This is one of the
conditions of the ADB loan.
15
4.6.3 LWSC has capable staff and is already operating its WSS systems in Lusaka. In addition, the
LSP incorporates training and capacity building of LWSC personnel to operate and maintain the
sanitation facilities. As part of the LSP and with the expanding sewerage infrastructure, LWSC is
undertaking institutional assessment study to raise the profile of sanitation services, empower and
strengthen the Sewerage and Peri Urban Departments within LWSC. In this regard, LWSC will
complete the ongoing sanitation institutional assessment study and implement its recommendations by
2016.
4.6.4 Currently, LWSC collects revenue for sanitation services to cover the O&M costs of the existing
sewerage facilities. The refurbishment of dilapidated sewerage infrastructure will reduce the need for
and frequency of repairs, and hence allow for significant savings on O&M costs. At full capacity, the
incremental revenue (more than ZMK 15 million) generated from the LSP will more than offset the
incremental recurrent costs (ZMK 12 million). The incremental revenues as well as cost savings
generated from the program will more than offset the incremental recurrent costs. Consequently, there
will not be any need for budgetary support or subsidies from GRZ to the O&M of the sanitation system
in the project area.
4.7
Risk management
The following risks shall be monitored and mitigated to the extent possible.
RISKS
MITIGATION MEASURES (rating)
1. Sewers are expensive and

customers might be unwilling
to pay for services and may
hinder connections to the
sewers and construction of
onsite systems
2. Poor coordination between
different institutions involved
in the implementation of some
components at local level.
3. Unauthorized
program
expenditures
4. Program may be exposed to
future climate risks
Carefully balance willingness to pay, affordability and technology options.

A detailed tariff study is currently underway and will be supported by
extensive social marketing and awareness raising. Customers to be
connected as sewers are laid and connection charges recovered from
sanitation bills. Recovered charges will form a revolving fund for LWSC
(Moderate)
Before loan approval, Borrower to submit an MOU signed between LWSC
and LCC on the cooperation for implementation of the component 2,
detailing the roles each institution will play during the implementation
(Moderate)
Existing internal control systems will be strengthened in the implementation
of the program (Moderate)
Development of WSS emergency preparedness and disaster risk
management plan and design of climate resilient sewerage infrastructure
(Moderate)
LWSC to enhance appropriate procurement, technical, contract management
/dispute resolution skills to complement their capability to successfully
manage the program. Engineering services consultant to assist carry out the
design review and prepare tender documents for the civil works.
(Substantial)
5. Program is of high value

and technically complex
4.8
Knowledge building
The Bank will support development of a monitoring system to assist LWSC better understand sanitation
management and also develop guidelines for better management of sludge. The knowledge products will
contribute to improvement of Zambias urban sanitation sub-sector as well as assist the Bank replicate
the good practices in other member countries. With mounting international concern at the rising
frequency and severity of natural hazards and disasters, in part due to factors related to climate change,
there is increased impetus in Zambia and other countries to put in place legal, technical, financial and
institutional measures that will reduce the destructive effects on livelihoods of individuals and
communities. Therefore, support will be provided for development of a WSS Sector Emergency
Preparedness and Disaster Risk Management Plan, to strengthen institutions, mechanisms and capacities
at all levels, in particular in communities to systematically contribute to building resilience to hazards
and disasters.
16
V.
LEGAL INSTRUMENTS AND AUTHORITY
5.1
Legal instrument
An ADB loan will be used to finance this program.

5.2
Conditions associated with Banks 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.
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:
Evidence of having opened one (1) foreign currency denominated Special Account and one
(1) local currency denominated Special Account, at a bank acceptable to the Bank into
which the proceeds of the Loan will be deposited; and
Evidence of having signed a Subsidiary Financing Agreement between the Borrower and
the Lusaka Water and Sewage Company in form and substance acceptable to Bank.
5.2.3
Other Conditions
The Borrower/Recipient shall provide evidence, in form and substance satisfactory of the following:
The Borrower shall, by November 2015, 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;
The Borrower shall report on the sustainability agreement entered into between the Board
of LWSC and the Borrower on an annual basis; and
The Borrower shall renew or rollover the Sustainability Agreement for the period 20182020.
5.2.4
Undertakings
Under the ADB Loan Agreement, the Borrower/ Recipient undertakes the following:
The Borrower undertakes 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;
The Borrower undertakes to implement the Program in accordance with national
legislation, and the Environmental and Social Management Plan (ESMP), and report to the
Bank on a quarterly basis in a form acceptable to the Bank and;
The Borrower undertakes to complete the institutional assessment study before end of June
2016, and implement the recommendations by 2017.
17
5.3.
Compliance with Bank Policies

The project 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 50 million (equivalent UA 35.53 million) to the Republic of Zambia for the
purposes and subject to the conditions stipulated in this report
18
Appendix I. Countrys comparative socio-economic indicators
GNI Per Capita US $

1800
1600
1400
1200
1000
800
600
400
200
0
2013
2012
2012
2013
2012
2013
2011
Infant Mortality Rate

( Per 1000 )
90
80
70
60
50
40
30
20
10
0
2011
Sources: AfDB Statistics Department Databases;

last update :
United Nations Population Division, World Population Prospects: The 2012 Revision;
World Bank: World Development Indicators; UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports.
For any given interval, the value refers to the most recent year available during the period
Note : n.a. : Not Applicable ; : Data Not Available.
Zamb ia
2010
10.8
-0.2
35.0
11.6
2011
10.7
0.4
28.2
3.0
Africa
2009
7.6
0.6
23.0
1.2
2011
2000-2009
2011
2010
2010
4.6
2.4
66.3
0.2
Environmental Indicators
Land Use (Arable Land as % of Total Land Area)
Annual Rate of Deforestation (%)
Forest (As % of Land Area)
Per Capita CO2 Emissions (metric tons)
2010
100.9
100.6
100.2
99.7
84.3
99.2
99.3
99.0
5.5
Zamb ia
2008
109.4
107.6
69.1
67.8
58.0
80.3
85.9
74.9
4.3
2009
101.9
97.9
47.4
44.0
46.6
62.0
70.7
53.7
5.3
2009
113.6
113.3
20.5
15.2
53.1
...
...
...
1.3
71
61
51
41
31
21
11
1
2007
Education Indicators
Gross Enrolment Ratio (%)
Primary School
- Total
2012
Primary School
- Female
2012
Secondary School - Total
2012
Secondary School - Female
2012
Primary School Female Teaching Staff (% of Total)
2012
Adult literacy Rate - Total (%)
2012
Adult literacy Rate - Male (%)
2012
Adult literacy Rate - Female (%)
2012
Percentage of GDP Spent on Education
2008-2012
Afri ca
Life Expectancy at Birth

(years)
2008
297.8
842.7
...
99.2
100.0
96.2
...
23.0
96.1
94.3
1.4
3 285
7.5
2008
117.8
202.7
66.3
87.2
80.0
56.9
1.2
144.0
81.5
83.0
17.0
2 675
3.0
2006
47.1
132.6
52.6
68.8
65.2
39.4
3.9
223.6
83.0
74.0
19.7
2 481
2.9
Zambia
2007
6.6
78.4
46.5
63.3
90.2
42.8
12.7
427.0
83.0
83.0
14.9
1 879
3.7
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2007
Health & Nutrition Indicators

Phy sicians (per 100,000 people)
2004-2011
Nurses (per 100,000 people)*
2004-2011
Births attended by Trained Health Personnel (%)
2006-2011
Access to Safe Water (% of Population)
2012
Access to Health Serv ices (% of Population)
2004
Access to Sanitation (% of Population)
2012
Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS
2012
Incidence of Tuberculosis (per 100,000)
2012
Child Immunization Against Tuberculosis (%)
2012
Child Immunization Against Measles (%)
2012
Underw eight Children (% of children under 5 y ears) 2005-2012
Daily Calorie Supply per Capita
2009
Public Ex penditure on Health (as % of GDP)
2011-2012
Africa
Population Growth Rate (%)
2005
0.3
0.6
16.4
16.8
49.9
94.4
45.2
77.8
81.2
11.2
10.4
5.5
6.6
1.7
16.0
71.3
2006
1.3
2.5
28.3
6.1
52.4
103.3
53.1
68.4
70.3
21.2
7.6
39.8
56.3
2.6
240.0
62.6
2005
2.5
3.4
40.9
3.5
77.9
100.0
24.0
59.2
60.3
34.8
10.4
61.9
97.4
4.6
415.3
34.9
2006
3.2
4.3
46.6
2.6
99.6
99.5
22.9
58.1
60.0
42.8
10.2
64.4
99.8
5.7
440.0
47.1
2005
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2010
2013
2012
Zamb ia
Demographic Indicators
Population Grow th Rate - Total (%)
Population Grow th Rate - Urban (%)
Population < 15 y ears (%)
Population >= 65 y ears (%)
Dependency Ratio (%)
Sex Ratio (per 100 female)
Female Population 15-49 y ears (% of total population)
Life Ex pectancy at Birth - Total (y ears)
Life Ex pectancy at Birth - Female (y ears)
Crude Birth Rate (per 1,000)
Crude Death Rate (per 1,000)
Infant Mortality Rate (per 1,000)
Child Mortality Rate (per 1,000)
Total Fertility Rate (per w oman)
Maternal Mortality Rate (per 100,000)
Women Using Contraception (%)
2011
35,811
1,252.8
78.3
23.5
38 412
72.1
44.6
0.911
...
...
2010
98,458
5,909.3
47.7
70.7
3 815
67.9
38.6
0.694
...
20.6
2009
30,323
1,109.0
40.2
46.9
1 719
37.4
42.5
0.502
...
40.0
2008
753
14.5
40.0
17.7
1 350
39.2
45.6
0.473
163
74.5
2007
Basic Indicators
Area ( '000 Km)
2011
Total Population (millions)
2013
Urban Population (% of Total)
2013
Population Density (per Km)
2013
GNI per Capita (US $)
2012
Labor Force Participation - Total (%)
2012-2013
Labor Force Participation - Female (%)
2012-2013
Gender -Related Dev elopment Index Value
2007-2011
Human Dev elop. Index (Rank among 187 countries)
2012
Popul. Liv ing Below $ 1.25 a Day (% of Population) 2008-2011
Develo- Developing
ped
Countries Countries
2006
Africa
2005
Zambia
2004
Year
Africa
May 2014
Appendix II: Table of AFDBs portfolio in the Zambia

Division
OSAN1
OSAN1
OSAN1
OSAN3
OSAN3
Long name
GAFSP-AGRICULTURE
PRODUCTIVITY AND MARKET
ENHANCEMENT PROJEC
LIVESTOCK INFRASTRUCTURE
SUPPORT PROJECT (LISP)
PROJECT PREPARATION FACILITY ZAMBIA LISP
LAKE TANGANYIKA DEVELOPMENT
SUPPORT PROJ
LAKE TANGANYIKA DEVELOPMENT
SUPPORT PROJ
Status of
Project
Finance
project
Sector Name
OnGo
P-ZM-AA0019
Agriculture
OnGo
OnGo
APVD
APVD
P-ZM-AAE001
P-ZM-AAE002
P-ZM-AA0021
P-ZM-AA0021
Window
[OTHERS]
Approval
date
Entry into
force
Effective
1st disb
Planned project
completion date
Amount App.
Amount Dis.
Dis.
Ratio
3/26/2014
6/10/2014
10/20/2014
6/30/2020
22,493,675.5
463,050.9
2.1
1.1
Agriculture
[ ADF ]
6/19/2013
12/30/2013
3/25/2014
12/31/2018
12,000,000.0
916,122.5
7.6
Agriculture
[ ADF ]
3/29/2013
8/1/2013
2/26/2014
8/31/2015
300,000.0
196,935.9
65.6
Agriculture
[ ADB ]
12/18/2014
12/31/2018
16,253,704.4
0.0
0.0
12/18/2014
12/31/2018
5,059,631.4
0.0
0.0
56,107,011.2
1,576,109.3
2.8
Agriculture
[OTHERS]
Agriculture
OSAN3
OSAN3
STRENGTHENING CLIMATE
RESILIENCE IN THE KAFUE BASIN
STRENGTHENING CLIMATE
RESILIENCE IN THE KAFUE BASIN
OnGo
OnGo
P-ZM-CZ0001
P-ZM-CZ0001
Environment
Environment
[OTHERS]
[OTHERS]
10/18/2013
12/18/2013
7/21/2014
6/30/2019
12,649,078.4
0.0
0.0
10/18/2013
12/18/2013
7/21/2014
6/30/2019
14,817,491.9
608,910.7
4.1
27,466,570.3
608,910.7
2.2
31,780,267.4
0.0
0.0
Environment
OFSD1
OFSD1
LINE OF CREDIT TO FRB

SUBSIDIARY, FIRST NATIONAL
BANK OF ZAM
AFRICA SME PROGRAM LOC CETZAM FINANCIAL SERVICES
PLC ZA
APVD
P-ZM-HAB022
Finance
OnGo
P-ZM-HB0003
Finance
[ ADB ]
12/12/2012
5/21/2022
POWER TRANSMISSION PROJECT
OnGo
ONEC2
POWER TRANSMISSION PROJECT
OnGo
OPSM3
ITEZHI-TEZHI HYDROPOWER
PROJECT
APVD
P-ZM-FA0003
P-ZM-FA0003
P-ZM-FAB004
[ ADB ]
10/21/2013
9/4/2014
10/1/2014
3/27/2020
1,084,206.7
1,084,206.7
100.0
32,864,474.2
1,084,206.7
3.3
OSHD2
OnGo
P-ZM-IA0-005
Power
[ ADF ]
6/13/2012
Power
[ NTF ]
6/13/2012
Power
[ ADB ]
6/13/2012
9/24/2013
2/10/2015
12/31/2018
30,000,000.0
0.0
0.0
12/31/2018
6,400,000.0
0.0
0.0
4/14/2014
12/31/2018
25,298,156.9
0.0
0.0
61,698,156.9
0.0
0.0
Social
[ ADF ]
11/20/2013
1/7/2015
1/7/2015
22,220,000.0
767,358.8
3.5
22,220,000.0
767,358.8
3.5
12/31/2019
OITC2
BOTSWANA/ZAMBIA-KAZUNGULA
BRIDGE PROJECT
MULTI-NACALA CORRIDOR
PROJECT-PHASE II (ZAMBIA)
OnGo
P-Z1-DB0-031
Transport
[ ADF ]
12/7/2011
9/3/2012
11/16/2012
12/31/2019
51,000,000.0
520,945.4
1.0
OnGo
P-Z1-DB0-063
Transport
[ ADF ]
9/27/2010
6/10/2011
10/24/2011
12/1/2016
69,369,000.0
18,971,132.7
27.3
120,369,000.0
19,492,078.1
16.2
Transport
AWTF
OWAS2
OWAS2
OWAS2
MULTIPURPOSE SMALL DAMS

NATIONAL RURAL WATER SUPPLY
AND SANITATION PROGRAM
TRANSFORMING RURAL
LIVELIHOODS IN WESTERN ZAMBIA
- NATIONAL
TRANSFORMING RURAL
LIVELIHOODS IN WESTERN ZAMBIA
- NATIONAL
0.4
0.4
1.2
1.6
1.6
1.6
2.0
2.9
2.9
2.9
2.9
1.5
Social
OITC2
2.1
1.5
Power
SUPPORT FOR SCIENCE AND
TECHNOLOGY EDUCATION PROJECT
(SSTEP/
1.9
2.4
Finance
ONEC2
Age
OnGo
P-ZM-EAZ002
Water Sup/Sanit
OnGo
P-ZM-E00-009
Water Sup/Sanit
APVD
P-ZM-E00-028
Water Sup/Sanit
9/4/2012
8/28/2013
1/31/2014
5/28/2016
744,683.4
223,405.0
30.0
[ ADF ]
10/31/2006
11/15/2007
1/29/2008
3/31/2015
15,000,000.0
10,954,689.4
73.0
[ ADB ]
9/10/2014
12/31/2019
11,203,469.5
0.0
0.0
[OTHERS]
1.5
3.4
4.6
4.0
2.7
8.5
0.7
APVD
P-ZM-E00-028
Water Sup/Sanit
2,743,570.3
0.0
0.0
Water Sup/Sanit
14,691,723.1
223,405.00
37.6
3.1
Grand Total
335,416,935.6
23,752,068.70
7.08
2.2
[OTHERS]
9/10/2014
1/7/2015
12/31/2019
0.7
II
Appendix III. Key related projects financed by the Bank and other development partners in the country
Donor
Agency
AfDB
European
Investment
Bank
UK DFID/
UNICEF
Germany
Program Title
National Rural Water Supply and
Sanitation Program II
To develop and field test guidelines for
community driven planning, design
and implementation of multi-purpose
small dams.
Zambia water and Sanitation Project
3 million Sanitation and Hygiene
Project,
National Rural Water Supply and
Sanitation Programme (Basket
Financing Mechanism)
Nationwide
Mufulira,
Chililabombwe,
Chingola,
Implementation Organisation
Project Status

Housing
On-going
1,235,000
Ministry of Mines, Energy and

Water Development
On-going
187,000,000
Mulonga Water and Sewerage

Company
On-going
15,500,000
32,000,000

Housing
On-going
6 districts in five
provinces
13,000,000

Housing
On-going
Urban Water Supply and Sanitation

(Basket Financing Mechanism)
Nationwide
10,400,000

Housing
On-going
Devolution Trust Fund - Financial

Support to DTF in 4 phases
Nationwide
18,300,000

Housing
On-going
21,800,000
Eastern Water and Sewerage

Company
To establish and roll-out the SOMAP

O&M model
To Construct 216 boreholes with
handpumps
US MCC
Lusaka Water Supply, Sanitation &

Drainage (LWSSD) Project
US AID
To provide water supply, sanitation

and hygiene facilities in more than 600
schools in 4 districts.
UNICEF
World Bank
Western Province
Total Budget (USD)
44 Districts
Urban Water Supply and Sanitation

Eastern Province
JICA
Project Coverage
Eastern ProvinceNyimba, Chadiza, Katete

and Chipata districts
4 Districts in Luapula
Province
Mansa, Mwense,
Milenge and Nchelenge
in Luapula Province
Lusaka Province
On-going
6,000,000
8,700,000
355,000,000
Chadiza, Chipata,
Mambwe and Lundazi of
Eastern Province.
20,000,000
Rural Water, Sanitation, Hygiene

Promotion
Nationawide
22,000,000
Water Resources Management
Nationawide
50,000,000
Irrigation development and Support

project
Livestock Development and Animal
health project
3 Sites
Selected provinces
115,000,000
50,000,000

Housing
Housing
Lusaka Water and Sewerage
Company
Ministry of Education, Science,
Technology, Vocational Training
and Early Education
(MOESVTEE) and collaborating
with MLGH
Housing, Ministry of Chiefs and
Traditional Affairs and Ministry of
Education
Ministry of Mines, Energy and
Water Development
M Ministry of Agriculture and
Livestock
MAL
On-going
On-going
On-going
On-going
On-going
On-going
On-going
On-going
III
Appendix IV. Map of Zambia showing Lusaka Water and Sewerage Company and other utilities
Disclaimer
This map was provided by the African Development Bank exclusively for the use of the readers of the report to which it is attached. The names used and the borders shown do
not imply on the part of the Bank and its members any judgment concerning the legal status of a territory nor any approval or acceptance of these borders.
IV
APPENDIX V:
CLIMATE CHANGE SCREENING
Adaptation Review Summary

Climate change is making sewage treatment plants and sewerage networks more vulnerable to
major failures and overflows due to more intense storms and increasingly heavy precipitation
events. Climate change that is already underway will lead to overwhelmed sewerage systems,
resulting in massive overflows of partially or untreated sewage into residential areas and receiving
waters such as Ngwerere and Chunga steams surrounding Lusaka; water that of the people of
Lusaka and Chongwe town rely on for food and health. The Lusaka Sanitation Program will
support the development of a Water and Sanitation Emergency Preparedness and Disaster Risk
Management plan for Lusaka which will be closely linked with preparation of Climate Change &
Climate Variability adaptation plans.
The plans will respond to climate risks by improving the design of the key sewerage
infrastructure, increase resilience to flooding of communities utilities by building new resilient
sanitation facilities, modify existing assets to be more climate resilience by increasing the
interceptor sizes from 300mm diameter to 750mm, whereas the major sewer collector lines will
be increased from 200mm diameter to 400mm to accommodate both the increase in population
and to cope with more intense rainfall and accommodate low level flooding;, improve master
planning and increase institutional capacity for responding to climate related damage. The plans
would also support increased local community knowledge of risks and responses when disaster
strikes and will contribute to increased resilience of communities.
Selected adaptation component
Suggested activities
Improve disaster risk management
by - Provide information to LWSC, National
developing a Water and Sanitation Sector
and Municipal institutions and carry out
Emergency Preparedness and Disaster Risk
awareness raising activities
Management Plan to increase LWSC/
- Train stakeholders in use of water and
National and Municipal agencies and local
sanitation facilities during climate related
community knowledge of risks and
emergencies
responses
- Climate resilient infrastructure better able
to cope with hazards such as flooding and
extreme storms.
- Improve operational risk management to
ensure
preventive
and
routine
maintenance is effectively carried out to
reduce sewage blockages and spillages as
a result of adverse weather
- Modifying existing sewerage system
assets to increase climate resilience by
expanding the capacity of sewerage
systems and ensure protection of local
environment

AFDB-Lusaka Sanitation Program - Climate Resilient Sustainable Infrastructure Project

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Public Disclosure Authorized

AFRICAN DEVELOPMENT BANK

Public Disclosure Authorized

January 1st December 31st

Weights and Measures

ACRONYMS AND ABBREVIATIONS

Result Based Country Strategy Paper

Revised Sixth National Development Plan

Sector Advisory Group

Strategic Environmental Assessment

Government of Republic of Zambia

Strategic Environmental and Social

International Competitive Bidding

United Nations Children's Fund

Information Management System

Implementation Progress Results

Joint Assistance Strategy for Zambia

Japan International Cooperation Agency

Lusaka City Council

Water Sector Cooperating Partner Group

Lusaka Water and Sewerage Company

Zambia Environmental Management

Millennium Challenge Corporation

United States Agency for International

Loan and Grant Information

Lusaka Water and Sewerage Company

ADBs key financing information

Enhanced Variable Rate Spread Loan

Interest rate spread

Floating Base Rate + Funding Margin + Lending

Funding Cost Margin

EIRR (base case)

60 basis points (0.60%)

Timeframe - Main Milestones (expected)

Results Based Logical Framework

Baseline (2014) Target

- Stable macroeconomic framework

77% in 2020 (>50%

Outcome 2: Improved hygienic and environmental

2.1 Proportion of people practicing hygiene behaviour / sanitation

67% in 2020 (>50%

Outcome 3: Improved management, institutional

3.1 Operation and maintenance recovery by LWSC

Risk #1. Sewers and WWTPs are

Component 1- Climate resilient Sewerage

1.1.1 Length of climate resilient sewer networks rehabilitated/ newly

Component 2-Decentralised Sanitation and Hygiene

2.1.1 No. of people trained to improve hygiene behaviour or sanitation

250 (>50% female) by

Component 3- Institutional Strengthening &

3.1.No. of sewage blockages resolved

Risk #2. Delay in making connections to

Total Program Cost: USD 127.83 million (Eqv UA 90.83 mil)

REPORT AND RECOMMENDATION OF THE MANAGEMENT TO THE BOARD OF

STRATEGIC THRUST AND RATIONALE

Program linkages with country strategy and objectives

Rationale for Banks involvement

Donor Support to Water (2014)

Existence of Thematic Working Groups

Level of Donor Coordination

Rehabilitation, upgrading and expansion of climate resilient sewer

Rehabilitation of Noxious sewage pump station and construction of

Training and capacitating women community based enterprises in

Technical solution retained and other alternatives explored