Zambia to overhaul capital’s sanitation infrastructure with European lnvestment Bank loan

Out-Law News | 20 Nov 2017 | 1:03 pm | 2 min. read

The European Investment Bank (EIB) has signed a major loan deal with Zambia to invest in the overhaul and expansion of sanitation infrastructure in the country’s capital.

The EIB said the €102.5 million concessional loan agreed with Zambia’s finance ministry and the Lusaka Water & Sewerage Company (LWSC) will be used to “more than double the existing sewerage network” in Lusaka.

According to the EIB, the infrastructure investments are in line with the Lusaka Sanitation Master Plan. While water supply “has improved significantly in recent years, a lot remains to be done in terms of sanitation”. The project “is one of the few internationally funded activities in Zambia that address this problem”, the EIB said.

“The project is expected to greatly contribute to economic and social development, due to the spill overs of sanitation infrastructure on health, environment, human development and virtually all other sectors of the Zambian economy,” the EIB said.

Navjeet Virk of Pinsent Masons, the law firm behind Out-Law.com, said: “This loan from the EIB in support of the Lusaka sanitation programme has been welcomed by many. Over the last two decades, population growth in sub-Saharan Africa has outpaced the development of improved sanitation facilities. Not only will the funding be beneficial in terms of socio-economic development, by giving first time access to sanitation services for many, it could also lead to further investment in similar projects across the continent.”

Two new wastewater treatment plants will be developed under the terms of the project together with the associated main collector sewers and sewage pumping stations. “Apart from this, it will also help with the expansion of the sewerage system – up to 520 kilometres – rehabilitation and upgrade of the associated wastewater treatment ponds and construction of on-site sanitation facilities across the city,” the EIB said.

LWSC acting managing director Jilly Chiyombwe said: “The population and demand for sanitation services in Lusaka has been growing exponentially without corresponding investment to adequately service the people. Funding was a huge stumbling block in addressing this challenge as servicing all of the growing population of Lusaka requires huge capital investment.”

The EU's ambassador to Zambia, Alessandro Mariani, said the investment from the EIB "is another indicator of the quality of the solid and dynamic partnership between Zambia and the EU”.

“This project is very relevant to the people living in Lusaka as it is going to improve the quality of their daily life thanks to the direct positive impact of the new sanitation infrastructure both on their health and on the environment,” Mariani said.

The EIB said it has been involved in the project from the beginning through technical assistance, which allowed the LWSC to attract grant and loan financing from other partners including the World Bank, the African Development Bank (AfDB) and German government-owned development bank KfW. A further grant of €4.5m to support implementation of the project will be provided through EU funds, the EIB said.

Earlier this year, the AfDB backed the Zambian government’s plans to invest more than $150m in an overhaul of water and sanitation infrastructure in the country – by providing 80% of funding in the form of loans and contributions in four districts under the ‘Integrated Small Towns Water Supply and Sanitation Programme’.

Since 1971, the AfDB has committed more than $1 billion to Zambia by mainly supporting public sector infrastructure projects in sectors such as agriculture, industry, water and sanitation, energy, education, health and transport.