WASHINGTON, December 18, 2024 – The World Bank Board of Executive Directors has approved the first Climate and Economic Resilience Development Policy Financing (DPF) with a Catastrophe Drawdown Option (Cat-DDO) grant for the Republic of Zambia. The DPF will support Zambia in increasing climate and economic resilience to natural disasters and other future shocks, while the Cat-DDO will provide immediate liquidity in the aftermath of a natural disaster.
The two-part financing package consists of $25 million to be disbursed as a regular DPF and $75 million as a Cat-DDO that is contingent funding in the case of a national disaster, for a total of $100 million. This new support is part of the World Bank’s continuous broad-based support to help Zambia emerge from the debt crisis and shift to a more resilient, sustainable, and inclusive economic growth path.
“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,” said Achim Fock, World Bank Country Manager for Zambia.
Zambia has experienced a devastating drought, the driest in decades, impacting livelihoods and economic output and affecting 9.8 million people, with 6.6 million facing severe food insecurity. Poverty increased from 57% in 2010 to 60% in 2022 (national poverty line) and the drought is expected to have worsened this number.
“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,” said Albert Pijuan, Senior Country Economist for Zambia. “The DPF also supports Zambia in its efforts to obtain debt restructuring under the Common Framework.”
The DPF fully aligns with the World Bank Group’s new five-year (2024 – 2029) Country Partnership Framework (CPF), supporting Zambia in achieving sustainable private sector-led economic growth, enhancing climate resilience, and improving the well-being of its people and in alignment with Zambia’s 8th National Development Plan and Vision 2030.
Through this DPF, the World Bank will also support Zambia to increase private sector investments in growth-enabling sectors, including through public-private partnerships, and enhance resilience to shocks, supporting job creation and economic transformation.
