EU signs €65 million grant with Zambia to improve access to energy

This programme is expected to provide access to reliable, clean and affordable electricity services to at least 63,000 households, or about 300,000 people, to social and public infrastructure and to eligible Micro Small Enterprises (MSEs). It will be done through the rehabilitation and expansion of the low voltage distribution network in selected low income areas of Lusaka City with high population density.

The financing agreement for a grant of €65 million was signed today in Brussels by Commissioner for International Development and Cooperation Neven Mimica i and the Minister of Finance of the Republic of Zambia Felix Mutati, have signed a Financing Agreement. This took place in the framework of a meeting where Commissioner Mimica and Minister Mutati exchanged views on the very good bilateral relations between the European Union and Zambia.

Speaking on this occasion, Commissioner Neven Mimica said: "This €65 million programme demonstrates the continued commitment of the European Union in collaboration with European Financial Institutions (EFIs) to provide the much needed capital investment for basic infrastructure development, in order to improve the livelihood and social status of poor communities in Zambia. The rehabilitation of the low voltage distribution network and the new connections will allow for the provision of reliable and affordable energy services and economic empowerment. The programme will support the implementation of the European External Investment Plan which prioritises socio-economic development through infrastructure and energy in particular."

The project is co-financed with the European Investment Bank (EIB), which provides additional loans amounting to €15 Million. It is also part of a larger Lusaka Transmission and Distribution Rehabilitation plan, co-financed by the European Investment Bank i, the World Bank i and ZESCO Limited.

Currently Lusaka faces challenges, because its electricity network infrastructure results in significant energy losses. This is coupled with an increasing population in high density low-income areas, which is unable to access electricity services due to high connection costs. Lack of access to electricity services seriously deprives the affected population, in terms of quality of life and exposure to various hazards that go with it (in-door pollution, unsafe cooking, poor social services, low self-esteem etc..), worsening the social inequality gap between the low density and high density urban areas.

In addition to the rehabilitation and expansion of the low voltage distribution network, the programme, the action includes a connection-fee subsidy scheme to encourage new household connections as well as measures to promote productive uses of electricity by women and Micro and Small Enterprises. These will include facilitated access to micro credit lines and training in business management and entrepreneurship.

IP/17/98