We are pleased with the announcement by the World Bank that an immediate disbursement of US$100 million GRANT for phase 1 of the Zambia National Energy Advancement and Transformation (NEAT) Programme for the period 2023 to 2033, has been approved. Finance and National Planning Minister Dr. SITUMBEKO MUSOKOTWANE, MP, takes the opportunity to sensitise fellow citizens that the NEAT Programme is designed to increase financial sustainability, operational reliability, and resilience of the electricity sector in Zambia.
The programme, whose total resource envelope over a period of ten years is US$ 700 million, is the World Bank’s first energy project in Zambia since 2018. It will adopt a Multi-Phase Programmatic Approach (MPA) over a ten (10) year period from 2023 to 2033. Under phase 1 of the NEAT programme, a GRANT of US$100 million has been approved for disbursement from the pledged total of US $700 million, scheduled for disbursement between 2024 and 2026. The provision of funds under phase 1 is also a clear demonstration of the confidence that the
World Bank has in Zambia’s home-grown strategic reforms, and in the country’s recently strengthened public financial governance credentials, among other factors.
The US$100 million GRANT comes barely a month after the World Bank approved another GRANT of USS$270 million under the Transport Corridors for Economic Resilience (TRACER) Project. 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.
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. In the long-run, the NEAT programme will facilitate ZESCO’s return to financial sustainability, reduce its fiscal burden, attract private sector investment to enable new growth, and deliver more inclusive electrification and broader development, countrywide.
The NEAT programme will not only support the implementation of ZESCO’s and Rural Electrification Authority’s strategic plans, but also cater for the energy sector Integrated Resource Plan. For ZESCO, the GRANT will be channeled towards the improvement of operational and financial performance. It will also be utilised to support the implementation of the 10-year turnaround strategy and business plan that aims to return the utility to profitability
while meeting growing demand by expanding revenue generating initiatives across key operational and financial segments. For REA, the GRANT will 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.
The NEAT Programme will 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.
Issued by:
(Original Signed)
Office of The Secretary to the Treasury
MINISTRY OF FINANCE AND NATIONAL PLANNING