World Bank gives Zambia US$45m budget support

World Bank gives Zambia US$45m budget support

By Charles Musonda

THE World Bank has approved US$45 million Development Policy Operation (DPO) budget support for Zambia under the Second Climate and Economic Resilience Programmatic Development Policy Financing.

The Ministry of Finance said the fund reinforced international support for Zambia’s ongoing macroeconomic reform programme and efforts to strengthen economic resilience.

The Ministry said in a statement yesterday, the DPOs were budget-support instruments provided by the World Bank to governments undertaking policy and institutional reforms that strengthened macroeconomic management, improve the investment climate and enhance resilience to economic and environmental shocks.

“The World Bank, through the International Development Association, has released these funds. Unlike project-based financing that funds specific infrastructure or sector interventions, DPOs support economy-wide policy reforms and institutional improvements, with resources disbursed to the national treasury once agreed reform measures are implemented,” the ministry said.

The ministry said the approved operation would support Zambia’s reform agenda through three interlinked policy pillars, each anchored on specific reforms already undertaken by government

The ministry said the first pillar would focus on strengthening fiscal management and economic resilience.

“Reforms under this pillar include measures to enhance transparency and management of mineral revenues through Treasury actions requiring disclosure of copper price assumptions and non-mining fiscal balances in budget documents,” the ministry said.

It said additional reforms would strengthen fiscal risk management by introducing a Credit Risk Assessment Framework governing loans and sovereign guarantees.

“These measures are aimed at reinforcing Zambia’s fiscal governance framework as the country consolidates macroeconomic stabilisation and advances external debt restructuring under the G20 Common Framework for Debt Treatment,” the ministry said.

It said the second pillar supported measures designed to promote private-sector investment and strengthen resilience in key enabling sectors.

“The government has operationalised the Public-Private Partnership Project Development Support Fund, alongside new PPP General Guidelines that establish clearer procedures for preparing and implementing PPP projects, including the integration of climate-resilience standards into infrastructure investments,” the statement said.

The ministry said the reforms would aim at mobilising non-debt financing and expanding green investment opportunities through the Green Economy and Climate Change (Carbon Market) Regulations, 2026, which established institutional arrangements and procedures for Zambia’s participation in international carbon markets.

The ministry said the fund would also support energy sector resilience and diversify electricity generation beyond hydropower.

It said the third pillar of the programme would strengthen disaster risk management and climate resilience, reflecting Zambia’s vulnerability to climate-related shocks affecting agriculture, water resources and electricity supply.