US$45m World Bank Facility to Support Economic Growth, Jobs and Climate Resilience in Zambia
The World Bank has approved approximately US$45 million in policy support for Zambia to strengthen the country’s ongoing economic reform programme and enhance resilience to climate and economic shocks.
The funding, provided through the International Development Association, forms part of the Second Zambia Climate and Economic Resilience Programmatic Development Policy Financing under the World Bank’s Development Policy Operation (DPO).
According to the Ministry of Finance and National Planning, the programme supports policy and institutional reforms aimed at improving macroeconomic management, strengthening the investment climate and enhancing resilience to environmental and economic challenges.
Unlike project-based financing that funds specific infrastructure or sector projects, Development Policy Operations provide direct budget support to governments implementing broad policy reforms. The funds are released once agreed reform measures are implemented.
The operation will support Zambia’s reform agenda through three key policy pillars.
The first pillar focuses on strengthening fiscal management and economic resilience. Reforms under this component include measures to improve transparency in mineral revenue management, including the disclosure of copper price assumptions and non-mining fiscal balances in national budget documents.
Government is also introducing a Credit Risk Assessment Framework to manage fiscal risks associated with loans and sovereign guarantees. In addition, legislation has been advanced through the State-Owned Enterprises Bill aimed at improving oversight and efficiency of public enterprises while reducing fiscal risks.
These reforms are intended to reinforce fiscal governance as the country continues efforts to stabilise the economy and restructure external debt under the G20 Common Framework for Debt Treatment.
The second pillar seeks to promote private sector investment and strengthen resilience in key sectors. Government has operationalised the Public-Private Partnership framework to support the preparation and financing of major infrastructure projects.
Authorities have also introduced the Green Economy and Climate Change (Carbon Market) Regulations of 2026, which establish institutional frameworks for Zambia’s participation in international carbon markets and are expected to attract green investment.
Further reforms include a competitive procurement framework to encourage private-sector investment in renewable energy and new electricity transmission regulations incorporating climate resilience standards within the national power system.
The third pillar focuses on disaster risk management and climate resilience. Zambia is currently amending the Disaster Risk Management Act to establish a unified national early warning system capable of monitoring multiple hazards.
Cabinet has also approved the creation of a National Social Registry, a centralised database intended to improve the targeting of social protection programmes and provide faster support to vulnerable households during climate-related emergencies.
Additional measures are being implemented to strengthen financial sustainability within the water sector and enhance the regulatory independence of the National Water Supply and Sanitation Council (NWASCO).
Government said the programme is being implemented within an improving macroeconomic environment, supported by stronger agricultural output, renewed investment in the mining sector and ongoing structural reforms.
Copper production has shown signs of recovery across major mining operations, while improved rainfall conditions have contributed to better agricultural performance.
Minister of Finance and National Planning Situmbeko Musokotwane said the approval of the facility demonstrates growing international confidence in Zambia’s economic reform programme.
“The approval of this Development Policy Operation reflects the World Bank’s continued confidence in Zambia’s reform agenda and Government’s commitment to strengthening economic governance,” he said.
Dr Musokotwane added that the reforms supported under the programme are aimed at reinforcing macroeconomic stability while creating conditions for private sector growth, increased investment and job creation.
The Development Policy Operation forms part of a broader partnership between Zambia and the World Bank aimed at supporting inclusive and sustainable economic growth while strengthening the country’s resilience to climate-related shocks.
