Japanese ODA Loan to the Republic of Zambia

March 26, 2009
Japanese

The Government of Japan has decided to provide a Japanese ODA loan of up to 5,511 million yen to the Government of the Republic of Zambia to implement the “Increased Access to Electricity Services Project.” Notes to this effect were exchanged in Lusaka on March 26 (Thu) between Mr. Toshihiko Horiuchi, Japanese Charge d’Affaires ad interim to Zambia, and Hon. Dr. Situmbeko Musokotwane, Minister of Finance and National Planning of the Republic of Zambia.
Outline of the Project

This loan is intended to broaden access to electricity services in Zambia and contribute to the betterment of the people’s living environment by improving the power distribution network and the micro-hydropower generating facilities.

Significance of the Project

In the electricity services in Zambia, the national electrification rate is only about 20.3 % (as of 2004). As the improvement of the power distribution network in Zambia has prioritized the services to county seats, the electrification rate is as low as 3.0 % in rural areas where 61% of the country’s population resides. This forms a bottleneck for the economic and social activities in the regions.
The present loan is expected to improve the power distribution network and the micro-hydropower generating facilities and to contribute to the betterment of the people’s living environment. Support for social and economic reforms in Zambia contributes to the social stability of the country and southern Africa as a whole, as well.
The present loan is the first one to Zambia in 16 years since 1992. The loan becomes the first infrastructure sector project in the context of active use of the ODA loan to Africa in cooperation with the World Bank, in “boosting economic growth” which was one of the priorities in the Yokohama Action Plan which Japan announced at the TICAD IV.

Terms and conditions of the loan

(1) Interest rate: 0.01% per annum
(2) Repayment period: 40 years (including a ten-year grace period)
(3) Procurement method: general untied

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