Zambia - Second Zambia Climate and Economic Resilience Programmatic Development Policy Financing

Overview & Synopsis

The development objective of Second Zambia Climate and Economic Resilience Programmatic Development Policy Financing for Zmabia is to: (i) enhance fiscal management and resilience, (ii) promote private-sector investment and resilience in enabling sectors, and (iii) strengthen disaster risk management and climate resilience. Zambia’s structural and disaster risk management (DRM) reforms align with Vision 2030, the 8NDP (2022–2026), and other strategic initiatives. This DPF aims to support Zambia in implementing reforms to boost resilience to economic and climate shocks, while fostering private sector-led growth in key sectors and creating more and better jobs. The DPF series contributes to achieving Zambia’s CPF objective 1 (business environment for private investment), objective 2 (connectivity and increase energy access), objective 4 (targeting and effectiveness of social protection), objective 5 (natural resources management and climate-smart agriculture), and objective 6 (climate risk management systems and financing). Moreover, it aligns with the institution's corporate priorities, including jobs, gender, climate, and enabling private capital. The program is structured around three pillars and nine prior actions, fully anchored in the GRZ priorities. Pillar A enhances fiscal management and resilience, focusing on resource revenue management, creating buffers against economic and climate shocks, and improving sovereign credit and investment conditions, including SOEs. Pillar B promotes private-sector investment and resilience in enabling sectors, bolstering private-sector participation in the transport, energy, and water sectors through PPPs, and reducing the financial impacts of future natural disasters in these sectors. Pillar C strengthens disaster risk management and climate resilience, improving the coordination and effectiveness of the GRZ in managing disasters, enhancing household resilience to climate shocks, and making water resource management more climate-resilient. Prior actions (PA) on energy (PA5), social protection (PA8), and water (PA9) are job-creating. This operation aligns with the mitigation, adaptation, and resilience goals of the Paris Agreement.