The World Bank's Board of Executive Directors has sanctioned a new financial initiative aimed at bolstering Zambia's resilience against natural disasters. The financing, termed the Climate and Economic Resilience Development Policy Financing (DPF) with a Catastrophe Drawdown Option (Cat-DDO), is structured to support Zambia in enhancing its climate and economic resilience.
This financial package comprises two components: a $25 million regular DPF and a $75 million Cat-DDO, which acts as contingent funding for national disasters, summing up to $100 million. This initiative forms part of the World Bank's ongoing efforts to aid Zambia in overcoming its debt crisis while fostering resilient, sustainable, and inclusive economic growth.
"This DPF supports critical reforms in Zambia to increase climate and economic resilience to shocks, as well as provides financing to address ongoing fiscal pressures caused by the current devastating drought and any future disaster," stated Achim Fock, World Bank Country Manager for Zambia.
Zambia is currently grappling with one of its worst droughts in decades, affecting 9.8 million people and causing severe food insecurity for 6.6 million individuals. The country's poverty rate has increased from 57% in 2010 to 60% in 2022 due to these adverse conditions.
Albert Pijuan, Senior Country Economist for Zambia, emphasized the importance of strengthening disaster risk management and social protection systems alongside promoting climate adaptation actions. "Strengthening the country's disaster risk management and social protection system, as well as promoting climate adaptation actions, including in the water sector, will reduce Zambia's climate vulnerabilities and protect the livelihoods of all Zambians," he said.
The DPF aligns with the World Bank Group’s new five-year Country Partnership Framework (CPF) from 2024 to 2029. It supports sustainable private sector-led economic growth while enhancing climate resilience according to Zambia’s National Development Plan and Vision 2030.
Additionally, this DPF will assist Zambia in increasing private sector investments through public-private partnerships that aim at job creation and economic transformation while enhancing resilience against shocks.