The Zambian government has announced receiving a $100 million grant from the World Bank Group to support its energy sector.
The new grant is coming barely a month after the World Bank approved a grant of $270 million under the Transport Corridors for Economic Resilience (TRACER) Project.
Finance and National Planning Minister, Dr Situmbeko Musokotwane, who disclosed this in a statement in Lusaka on Sunday, said the grant would be implemented under phase one of the Zambia National Energy Advancement and Transformation (NEAT) programme, covering the period 2023 to 2033.
Musokotwane stated that the NEAT programme was “designed to increase financial sustainability, operational reliability and resilience of the electricity sector in Zambia.”
He stressed that the programme’s total resource envelope would gulp $700 million for over a period of 10 years and the World Bank’s first energy project in Zambia since 2018.
Musokotwane explained that the NEAT programme would adopt a Multi-Phase Programmatic Approach (MPA) over the estimated 10 year period.
“Under phase one of the NEAT programme, a grant of $100 million had been approved for disbursement from the pledged total of US $700 million, scheduled for disbursement between 2024 and 2026,” the minister said.
Musokotwane also explained that the World Bank disbursement of the grant was a “clear demonstration of the confidence the Bank had on Zambia’s home-grown strategic reforms and in the country’s recently strengthened public financial governance credentials, among other factors.”
“The Government of the Republic of Zambia conveys a special appreciation to World Bank Group, President Ajay Banga, and his teams at headquarters, in the region and the country office, for the exceptional generosity,” Musokotwane said in the statement.
“The World Bank’s approval of the NEAT Programme is timely because it will deliver immediate financial boost to ZESCO and support the procurement process for non-hydropower renewables at this critical time when Zambia is experiencing an extensive drought.”
The Minister added that for the Rural Electrification Authority (REA), the grant would be “channeled towards operationalization of the Rural Electrification Fund to ensure financial sustainability of capital expenditure for social objectives while increasing energy access for the country’s outlying areas.”
He noted that the NEAT Programme would further augment the government’s efforts in enhancing reliability and climate resilience of the electricity sector by supporting implementation of the ZESCO strategy for improved customer management, reliability of supply and system resilience to climate change.
“Save for the devastating effects of the drought, which we will able handle to ensure that none of our fellow citizens starve, our reform process is on course,” Musokotwane said.