Zambia - Urban Restructuring and Water Supply Project

Document of The World Bank FOR OFICIL USE ONLY CtZIZS-279-Z Report No. P-6530-ZA MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO IdE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT IN THE AMOUNT EQUIVALENT TO SDR 21.3 MILLION TO ZAMRIA FOR AN URBAN RESTRUCTURING AND WATER SUPPLY PROJECT APRIL 17, 1995 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENT (as of January 31, 1995) Currency Unit = Zambian Kwacha (K) US$1.00 = K 660 FISCAL YEAR January 1 to December 31 WEIGHTS AND MEASURES I metric ton (tonne) = 1000 kg or 2,205 pounds I meter (m) = 3.2808 feet I kilometer (km) 0.6214 miles GLOSSARY OF ABBREVIATIONS D3SS - Department of Infrastructure and Support Services GDP - Gross Domestic Product GRZ - Government of the Republic of Zambia IDA - International Development Agency LGA - Local Govemment Act MEWD Ministry of Energy and Water Development MLGH - Ministry of Local Government and Housing NGO - Non-Governmental Organization NORAD - Norwegian Directorate for Development Aid NWASCO - National Water and Sanitation Council PTI - Program of Targeted Interventions SDR - Special Drawing Rights  FOR OFFICIAL USE ONLY ZAMBIA URBAN RESTRUCTURING AND WATER SUPPLY PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Zambia Beneficiary: Ministry of Local Govemment and Housing; City Councils of Lusaka, Kitwe and Ndola; Municipal Councils of Chingola, Kalulushi, Livingstone, Luanshya and Mufulira; and District Councils of Kafue and Mazabuka Poverty: Programn of targeted interventions Amount: SDR 21.3 million (US$33.0 million equivalent) Terms: Standard IDA terms with 40 years maturity Commitment Fee: 0.50 percent on undisbursed balances, beginning 60 days after signing, less any waiver Financing Plan: See Schedule A Economic Rate of Return: Not applicable. To be calculated as part of project design consultancies Staff Appraisal Report: 13853-ZA Map: IBRD No. 26587 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF ZAMBIA FOR AN URBAN RESTRUCTURING AND WATER SUPPLY PROJECT I I submit for your approval the following memorandum and recommendation on a proposed development credit to the Republic of Zambia for SDR 21.3 million, the er 'valent of US$33.0 million, on standard IDA terms, with a maturity of 40 years, including 10 years of grace, to help finance an urban restructuring and water supply project. About US$25 million of the credit will be made available as grants to local governments and local communities. NORAD will provide approximately $11.2 million toward project costs, for training and technical assistance related to the water and sanitation rehabilitation component. 2. Country/Sector Background. At Independence in 1964, Zambia was one of the most prosperous countries in Africa. Since then, however, deteriorating copper prices combined with inappropriate government policies and actions, have resulted in deteriorating economic conditions, as evidenced by GDP growth which fell from 3.7 percent per annum in the early 1970s to an average of only 1.1 percent during the 1974-90 period. To address this decline, the Govemment of the Republic of Zambia (GRZ), which came to office in 1991, has vigorously pursued an ambitious national program of economic reform over the past four years under which it has dismantled nearly all price and exchange rate controls, eliminated import and export licensing, decontrolled interest rates, lowered and compressed tariff rates and brought inflation down to manageable levels. Comprehensive programs of parastatal privatization and civil service reform have been initiated. However, while reform efforts are proceeding in all sectors of the Zambian economy, several common constraints impede these efforts: the accumulation, over more than two decades, of extensive, inappropriate policies and regulations; deteriorating capacity of existing investments to support economic activities; and limited human and financial resources. 3. The production and export of copper led to the expansion of the urban economy and corresponding high levels of rural-urban migration during the 1960s and 1970s. Outmigration has not occurred as the urban economy has declined since then, although urban growth rates, now a function of natural growth, have slowed from 5.8 percent per annum between 1969 and 1990 to 3.7 percent per annum for the period between 1980 and 1990. The 1990 census recorded 42 percent of the total population, 3.27 million, as living in urban areas, which makes Zamnbia the third most urbanized country in Sub-Saharan Africa. Over 60 percent live along the line of rail which connects Livingstone in the South with Ndola in the northern Copperbelt region. By the year 2000, there will be more than five million Zambians living in urban areas. 4. The development of urban infrastructure, however, has not reflected the profile of the urban population but has stemmed from two assumptions, made by the then-planning authorities, related to the copper-based economy. At the center was that the permanent urban dwellers would be an economic elite that would both want and be able to pay for a high level of urban infrastructure services. The corresponding assumption, that most of the Zambia population  2 would remain rural, meant that legal tenure and the provision of housing or amenities for a large percentage of residents has not been a priority. The resulting urban infrastructural investments have been costly and overly sophisticated, and ainmcd exclusively at serving the formal urban sector. Currently, at least 60 percent of city dwellers occupy informal settlements in and around the country's significant urban centers, with limited or no access to sources of potable water, sanitary means of solid and human waste disposal, and basic health and educational services. 5. Since 1989 local government capital investments have decreased by almost 80 percent in real terms in the 12 municipalities for which data are available. Where investments have taken place the focus has tended to be on building new infrastructure rather than on rehabilitation and maintenance. The decline in water supply maintenance and investment since Independence has been particularly severe, to the point where many urban water and sewerage systems are on the verge of collapse. This decline in services has had an adverse impact on all sectors, including investment in the private sector. However, the impact has been most severe for the urban poor, which account for about 40 percent of the urban population. At the household level, one of the most glaring outcomes of the decay in urban infrastructure is the prevalence of waterbome diseases such as cholera, which has been recorded in 1 1 urban centers in recent years. 6. GRZ!s primary policy initiative in the urban sector has focused on devolution of responsibility and authority to local govemments. Through the 1991 Local Government Act (LGA), GRZ substantially increased the administrative and financial autonomy of the country's 22 city and municipal governments. While the Ministry of Local Government and Housing (MLGH) retains important, and possibly conflicting, regulatory functions under the LGA, the main responsibility for planning and implementing urban development now rests with Zambia's local governments. Central government transfers of domestic revenues to local governments have virtually ceased, despite concurrent expenditures by local government on providing infrastructure and services to central government. 7. Policy, regulatory and institutional rationalization has also extended to Government's approach to the water sector. In 1994, the Cabinet formally accepted a set of sector principles related to the reorganization of the sector, which include, inter alia, separation of water resource management from water supply and sanitation, devolution of authority to local authorities and the private sector, full cost recovery in the long run, and increased GRZ priority and budget spending to the sector. This statement of sectoral principles was followed in December 1994 by the passing of a Cabinet Memorandum which clarified the organizational structure and respective roles of the different public entities involved and, in particular, of the Ministry of Energy and Water Development (MEWD) and of MLGH; the passing of this memorandum was a condition for second tranche release under the Economic and Social Adjustnent Credit (Cr.2577-ZA). The National Water and Sanitation Council within MEWD (NWASCO, formerly the Project Coordination Unit) will monitor and regulate water supply and sanitation service delivery and the organizations providing tbese services. MLGH is responsible for all executive functions related to water supply and sanitation and for providing assistance to councils in their water and sanitation delivery functions through the recently established Department of Infrastructure and Support Services (DISS). GRZ also underscored support for a commercially oriented approach to the provision of water services by agreeing to feasibility studies and pilot programs for establishing commercially oriented water supply and sanitation utilities in the Copperbelt and Northwestern Province to represent urban and rural conditions, with the former to be supported under this project.  3 8. Project Objectives. The objectives of the project are to: (i) provide immediate solutions to the most scvere water and sewerage infrastructure deficiencies in nine key urban areas; (ii) test out community-generated and managed water and sanitation demonstration projects which meet articulated needs at an affordable price; (iii) strengthen urban councils' capacities to support community-based initiatives in Lusaka and the participating Copperbelt councils; and (iv) based on lessons learmed, initiate broader institutional and financial reforms required for providing organizational incentives for investing in, operating and maintaining infrastructure based on residents' perceived needs and willingness to pay. The project wiil use water supply as an entry point for developing future investment programs, initially concentrating on rehabilitation, in formal settlement areas and developing new and innovative institutional options in peri-urban, unserviced areas. Both activities focus on a demand-based approach, and as such, seek to break the persistent cycle of non-payment and inadequate service provision. 9. Project Description. The project includes three components: (i) water supply and sanitation system rehabilitation in nine city, municipal and district councils (US$28.3 million or 67 percent of project base cost); (ii) community-based water and sanitation demonstration projects in the peri-urban areas of Lusaka and the Copperbelt (US$5.6 million or 13 percent of project base cost); and (iii) sectoral and local government reform and capacity building (US$8.2 million or 20 percent of project base cost). The latter addresses water supply and sanitation issues as well as overall municipal management. With respect to water supply and sanitation, the component includes the study of water system management options, which will result in proposals for commercially-oriented water supply and sanitation utilities (para 7), and water sector policy studies designed to integrate urban water management with national and regional strategies. With respect to municipal management, the component provides immediate local government capacity strengthening with particular emphasis on financial management, and strengthening of municipal planning, management and capital programming in the medium term. 10. The local government reform and capacity building will be carried out ir. all 10 project cities, municipalities and districts, including the Copperbelt councils of Ndola, Luanshya, Kitwe, Kalulushi. Mufulira and Chingola and the councils of Lusaka, Kafue, Mazabuka, and Livingstone in the south. Lusaka will not be included in the rehabilitation component of the project due to significant investment committed by other donors. Only the Copperbelt councils and Lusaka will initially participate in the demonstration component; expansion of this component will be considered in the course of the mid-term review, based on lessons learned in the initial subprojects. Together, the 10 councils proposed for participation in the project serve more than 3.5 million people comprising more than 80 percent of Zambia's current urban population. A summary of project costs and financing plan is provided in Schedule A. Procurement arrangements and the disbursements schedule are summarized in Schedule B. A timetable of key processing steps and the status of Bank group operations in Zambia are provided in Schedules C and D respectively. Staff appraisal report No. 13853-ZA and Map IBRD No. 26587 are attached. 11. Project Implementation. The design of the project ensures that project implementation will be carried out at the level of government closest to the ultimate beneficiary. Accordingly, local governments will be responsible for implementing the rehabilitation component and local communities will be responsible for developing subprojects and implementing them in collaboration with the councils. At the national level, DISS within MLGH will have overall responsibility for managing the project and channeling project funds to local authorities. (In addition, DISS will be responsible for implementation of the feeder roads component of the  4 ongoing IDA Transport Engineering and Technical Assistance Project (Cr. 2515-ZA)). As it is recognized that all the levels of agencies involved in project implementation require strengthening in technical, financial and management capabilities, programs of training and technical assistance have been included. Irn dddition, a small technical assistance allocation has been included for short-term consultancy support in procurement, accounting and auditing related to management of the project. 12. Given the fundamental requirement for building management capacity within participating councils and MLGH, adequate consultation must take place consistently throughout the implementation period. A project launch workshop will be held within two months of effectiveness, during which implementation plans will be discussed and reviewed. Structured reviews will be periodically undertaken to formalize key decisions regarding infrastructure design, planning, and policy and institutional reforms. A monitoring and evaluation system will be developed as part of the irnplementat'on plan. About one year after effectiveness, a policy seminar will be held at which agreements will be reached on key issues, including tariffs and institutional structures, proposals for which will have been developed in the course of implementing under the project the local government financial capacity strengthening technical assistance and the management options study. The mid-termn review of the project will incorporate distinct evaluation of councils' performance against established benchmarks and detailed reviews of progress will be undertaken for each project council and for other councils that may be included in future urban investment programs. On this basis, an action plan for a broader package of assistance will be established leading to. in the third year of implementation, initial preparation of appropriate new investments. 13. Project Sustainability. Sustainability in the Zambian urban sector has historically been hampered by central government subsidy policies that have undercut incentives for efficient local government management and private investment, and propagated a culture of nonpayment. A key factor in sustainability of rehabilitation investments will be the development and implementation of user fees that reflect the costs of providing water services. Changes to the user fee structure will be accompanied by consumer education campaigns which set out the actual costs of service provision and the relationship of these costs to fees charged. In addition, commercialization of water and sewerage operations will be encouraged; already, all of the project cities are exploring opportunities for commercialization and this project will provide the means for local governments to assess options and receive required technical assistance and training to establish successful commercial operations. At the level of the community, previous experience and the difficult economic conditions that are expected to prevail among the urban poor during the project implementation period, indicate that sustainability of demonstration project investments will derive mainly from community-based managernent of installed improvements. Creation of management capacity at the community level will require coordination with NGOs and reorientation of local government structures and human resources to a supportive, rather than prescriptive, role. Recovery of capital costs will, in most cases, be achieved indirectly through rates. 14. A final Lcy to achieving broader sustainability will be educational efforts with local politicians and community leaders. The need to achieve sustainable operations is supported within most of the local government civil service, but the concept of cost recovery is not well established in political circles or at the community level. A significant element of technical assistance and training to be provided under the project will address this core issue.  5 15. Lessons Learned from Previous IDA Involvement. T!ic Bank's experience in Zambia's urban and water sectors has 'Jeen limited, comprising one urban project from the mid- 1970s and one rural water supply project that inclided several smaller cities in the 1980s. Neither project achieved significant sustainable rLsulls. due in part to: (i) the projects' reliance oii weak institutions at central, municipal ard community levels: (ii) adoption of non- participatory plarning processes, resulting in infrastructure and levels of service that did not reflect residents' preferences; (iii) reliance on community groups for operation and maintenance even though they had not been consulted during design and implementation; and (iv) confusion over who was responsible for what, which in turn exacerbated low cost recovery. The project, with its institution-building and consultative approach to the planning, design and maintenance of iwater supply and sanitation, has been designed to avoid the mistakes of the past. 16. Rationale for IDA Involvement and Links with Country Assistance Strategy. The objective of the Bank's country assistance strategy (last discussed in conjunction with the Economic and Social Adjustment Credit (Cr. 2577-ZA), March 1994) is to assist GRZ in its efforts to achieve sustainable economic growth and reduce poverty. Key elements of this strategy are to (a) improve the enabling environment for private sector growth through investments in infrastructure and human resources; (b) decentralize and restructure the delivery of infrastructure and services to enhance efficiency and sustainability; and (c) rem ve subsidies and encourage private sector participation in the provision of public services. T1ais project is consistent with the country assistance strategy and will help to remove constraints to economic growth and diversification by addressing issues of public service reform with particular emphasis on devolution of responsibility to local levels, adoption of demand-based approaches to infrastructure planning and implementation, creation of commercially-oriented water and sanitation utilities, improvements to revenue-generation and cost recovery for municipal services overall, and development of human resources. 17. The range and complexity of problems facing urban areas clearly point to the need for integrated and appropriate urban and water policy frameworks that will not only guide the transition from subsidized infrastructure and devolution of service delivery from the central government to local entities, but also address appropriate directions for the medium and longer terrm. Given the fragmentation of efforts to date, IDA is well placed to assist GRZ in the development of an integrated approach involving the establishment of an appropriate policy framework, rehabilitation of essential urban services, and improvements in urban efficiency as well as managerial and financial capacity. IDA's involvement in a range of related sectors (roads, health services, education, poverty alleviation) will be key in playing this integrating role. The project further builds upon and facilitates implementation of the overall policy framework for water supply and sanitation, the development of which was supported by the Economic and Social Adjustment Credit (Cr. 2577-ZA). By beginning to address the needs of urban residents who currently fall outside the forrnal structure, the project will help to improve the level and sustainability of services to the poor. 18. Agreed Actions. Conditions of Credit effectiveness include staffing of key positions for the DISS, completion of the Project Implementation Plan, completion of all conditions of effectiveness related to the effectiveness of the NORAD Grant Agreement and signing of subsidiary agreements between Government and at least two participating local councils. Before any disbursements are made to a given local government, a subsidiary agreement will have to be signed between the central and local government in question. Under this agreement, local authorities will be required to agree, as part of the subsidiary legal agreement, that they will protect dwellings and structures within community compounds and informal settlements from  6 demolition, unless this demolition is required to providc essential urban services or for reasons of health and safety. Any such demolition would bc subjcct to prior review by IDA and would be conducted in line with IDA resettlement policies. Councils must further be prepared to revise/eliminate regulations that preclude legalizing the status of many communities. 19. Poverty Category. The project meets the criteria for the program of targeted interventions (PTI), as the demonstration projects and a portion of the study components are specifically directed to helping the urban poor. These components comprise more than 25 percent of the IDA credit amount. 20. Environmental Aspects. The project has been rated category B. Environmental analyses during preparation concluded that the overall environmental impact of project investments will be positive. The urgent measures being supported by the project are designed to restore community access to clean water and adequate sanitation. Negative impacts, if any, will be mitigated and managed during project design and implementation. Environmental concerns are addressed in all three components of the project: first, while implementing the remedial measures, as an essential component of design and construction contracts; second, while implementing the demonstration component, through the consultative processes in which peri-urban communities define their local environmental priorities; and third, as an integral part of the process of participatory planning recommended under the capacity building component of the project. 21. Program Objective Categories. The project supports IDA's anti-poverty strategy by financing the equitable provision of basic urban infrastructure, which in turn will improve the urban environment and well being of households. The impact on the urban poor will manifest itself in terms of access to potable water supply and improved sanitation. All civil works interventions will be assessed in terms of their impact on the environment to ensure that rehabilitation is environmentally sustainable. The reform of central/local govemment relationships and the development of a rational intergovernmental fiscal framework will have a beneficial effect on economic management in the form of reduced drain on central resources and the enhanced contribution of local revenues for operations and maintenance. 22. Participatory Approach. The project has been designed and developed with the objective of maximizing the involvement of implementors and beneficiaries at all stages; in addition, the project design recognizes the weak implementation and management capabilities of the implementors and beneficiaries and therefore provides technical assistance and training aimed at developing these capabilities. The initial rehabilitation component for water and sanitation focuses on rehabilitation of existing infrastructure which is of an emergency nature. All subsequent investment in water supply and sanitation will be based on mutual agreement and understanding between water providers and water users as to the costs of different levels of service; this will require an increased awareness of user preferences, which is being built into the technical assistance and training that will begin in the early stages of the project. The concept of the coinmunity based subprojects stemmed from discussions with potential users in several communities in Zambia, and subprojects put forward for financing will have to be generated at the community level, by members of the community who will have also committed to carry out the implementation. As noted previously, while it is important to the success of the project to ensure the involvement of beneficiaries in the design and implementation, it is essential that the beneficiaries be fully capable of performing that implementation. For that reason, project beneficiaries and implementors will participate in training and technical assistance aimed at  7 raisinLg technical, management and financial skills to the lcvcls required by the project. The project has also recognized that electcd local government officials are kcy to thlc sustainable success of the project. For this reason, their input and support has becii sought and received during project design during regional workshops on the project. 23. Project Benefits. With over 60 percent Of the courtry's urban population classified as poor or very poor, one of the fundamental objectives of this project is to ensure that constraints upon the majority population's participalion in the urban economy are removed. In the near term, emphasis will be placed on addressing basic service deficiencies whiicih sap the productivity of the poor through disease and inordinate labor investments in meeting basic needs. In the medium term, the project will support broad improvements in urban management leading to increased economic opportunities for the urban poor population. Primary among these improvements will be regularization of tenure in informal settlements providing an asset base from which low income households can invest with security. Promotion of community participation in consultative processes will help to redress imbalances in resource allocation and expedite mobilization of sustainable self-help solutions to constraints on productivity. The project will seek to maximize coordination with other projects, such as the IDA-assisted Social Recovery Project (Cr. 2273-ZA), and with NGOs that are supporting development of micro- enterprises and other economic opportunities among the urban poor. Finally, construction financed under the project will be designed to maximize labor intensity to the extent feasible. 24. Risks. The key risk to successful project implementation is the limited capacity of local govemments and communities to identify, plan, implement and sustain urban infrastructure investments. In view of this, initial investments have been kept to .Lie minimum requirement. With respect to policy, encouragement of local autonomy is essential, but the capacity to establish sustainable growth cannot simply be legislated. Required reforns are both broad and detailed, ranging from virtual creation of land markets to installation of functional budgeting procedures. While the willingness of key actors to address these fundamental challenges is both apparent and encouraging, both strengthening of capacity and a reorientation in approach are required. The project tackles these issues directly through studies and training packages that specifically address the appropriate skills ard institutional arrangements. including an enhanced role for the private sector, for the provision of infrastructure and services. Given the complexity of issues, annual reviews will be held in which key benchmarks will be reviewed and achievable targets set for the coming year. This will ensure a focused but flexible approach to the reform process. 25. Recommendation. I am satisfied that the proposedl credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve the credit. Lewis T. Preston President by Sven Sandstrom Washington D.C. April 17, 1995 Attachments  -8- SCHEDULE A Page I of 1 ZAMBIA URBAN RESTRUCTURING AND WATER SUPPLY PROJECT PROJECT COSTS AND FINANCING PLAN Estimated Project Costs (US$ millioil) LOCAL FOREIGN TOTAL A. Water Supply and Sanitation Rehabilitation Water Supply 2.8 8.7 11.5 Sanitation 2.8 2.8 5.6 TA for waler and sewer system design and management 0.9 10.3 11.2 Sub-total 6.5 21.8 28.3 B. Comnsunity-based Demonstration Projects Community-based projects 1.1 3.9 5.0 Institutional Support 0.5 0.1 0.6 Sub-total 1.6 4.0 5.6 C. Reform and Capacity-Building Water Sector Management and Policy Studies 0.4 1.6 2.0 Planning, programming and sectoral reform 0.7 4.1 4.8 Project-related TA (accounting support, audit fees, and 0.2 0.2 0.4 procurement) Sub-Total 1.3 5.9 7.2 D. PPF Rerlnancing (related to C (iii) above) 0.2 0.8 1.0 Total Base Cost 9.5 32.5 42.0 Physical Contingencies 0.6 1.3 1.9 Price Contingencies 0.6 2.0 2.6 TOTAL PROJECT COST 10.8 35.8 46.6 Taxes 0.6 - 0.6 Project Cost. net of taxes 10.2 35.8 46.0 Estimated Financing Plan US$M % IDA 33.0 71 NORAD 11.2 24 Governnent 2.4 5 TOTAL 46.6 100%  SCHEDULE B Page I of 2 ZAMBIA URBAN RESTRUCTURING AND WATER SUPPLY PROJECT Procurement Methods and Disbursements Procurement Method ______ Project Element Internatlonal National Other Not IDA fotal Competitive Bidding Competitive Bidding Financed Civil Works Water Seclor Rehah 11.8 1.3 0.9 14.0 (10.7) (1.2) (0.8) (12.7) Sanitation Rchab. 5.0 1.0 I. I 7.1 (4.5) (0.9) (1.0) (6.4) Community-bascd 2.5 2.5 5.0 Projects (2.3) (2.3) . (4.6) Consultant Services and Training: Policy Support 2.3 2.3 (2.3)(b) (2.3) Project Preparation and lImplcincntation Support 11.2(a) 11.2 Institutional Dcvclopmcnt (a) Institutional Rcform 4.6 4.6 (4.6-b) (4.6) (b) Studies 0.8 0.8 (0.8)(b) (0.8) (c) Dcmonstration 0.6 0.6 Project (0.6)(b) (0.6) PPF (Institulional 1.0(c) 1.0 Development) (1.0)(b) (1.0) Total COST 16.8 4.8 13.8 11.2 46.6 (15.2) (4.4) (13.4) (33.0) Allocation and Disbursement of IDA Credit (US S million) CATEGORY CREDIT AMOUNT % EXPENDITURE TO BE FINANCED 1. Civil Works 20.0 90y 2. Consultants. TA. Training 7.6 100% 3. PPF Refund 0.965 100% 4. Unallocatcd 4.4 TOTAL 33.0  -10- SCHEDULE B Page 2 of 2 Estimated Disbursements of IDA Credit (US$ Million) F. cal Year Ending June 30 (US$ million) Year 1995 1996 1997 1998 1999 2000 2001 Annual 3.3 6.6 8.0 6.9 5.0 3.2 Cumulative 3.3 9.9 17.9 24.8 29.8 33.0 % of Loan  -11- SCHEDULE C Page 1 of 1 ZAMBIA URBAN RESTRUCTURING AND WATER SUPPLY PROJECT TIMETABLE AND KEY PROCESSING EVENTS (a) Time taken to prepare: 12 months (b) Prepared by: Govermnent of the Republic of Zambia assisted by donors and IDA. (c) First Bank/IDA mission: January 1994 (d) Appraisal mission departure: June 1994 (e) Date of negotiations: April 1995 (f) Planned date of effectiveness: July 1995 (g) List of relevant PCRs/ICRs and PPARs: Zambia: Lusaka Squatter Upgrading and Site and Services Project (Ln. I 057-ZA) Rural Water Supply Project (Cr. 1362-ZA and SF2-ZA) This report is based on findings of Bank missions which visited Zambia in June/July and October 1994, comprising Messrs/MMmes. Imogene Jensen (Sr. Economist and Task Manager), Brian Binder (Municipal Finance Specialist), Roy Brockman (Institutional Specialist), Hilary Cottam (Urban Poverty Specialist), Dave DeGroot (Urban Development and Housing Specialist), Knut Haukland (Water Engineer), Vijay Jagannathan (Sr. Water and Sanitation Specialist), John Kalbennatten (Water and Waste Management Engineer), Catherine Seibert (Financial Analyst), John Shepherd (Water Resource Management Specialist) and Terry Sketchell (Municipal Finance Specialist). Messrs. Jaime Roman and Art Fields provided procurement advice. Mmes. Joyce Chinsen and Robin Harris provided administrative support in the preparation of the project Mr. Williamn Dillinger is the peer reviewer. Mr. Jeffiey Racki is the Division Chief, Ms. Phyllis Pomerantz is the Country Operations Manager and Ms. Katherine Marshall is the Director.  -12- SCHEDULE D Page I of 2 ZAMBIA URBAN RESTRUCTURING AND WATER SUPPLY PROJECT SUMMARY OF STATEMENT OF LOANS AND IDA CREDITS (LOA data as of 2/28195) Loan or Credit Fiscal Purpose Bank IDA Undisbursed Closing Date No. Year Credits 28 Credits closed 748.94 C17430-7M 1987 ColTeeH 20.40 17.83 06/30/99(R) C17460-ZM 1987 Agr. Rcs. & Ext. 13.00 5.49 12/31/96(R) C22690-ZM 1991 Mining Tas 21.00 11.39 06/30/97 C22730-ZM 1991 Social Recovery Proj 20.00 4.74 07/31/97 C24060-ZM 1992 PIRC Tcchnical Assis 10.00 6.64 12/31/97 C24220-ZM 1993 Mktg. & Process. 33.00 26.91 06/30/99 C24290-ZM 1993 Education Rehab. l 32.00 21.00 06/30/98 C25 I 5;-ZM 1993 Transport Engineering 8.50 9.04 06/30/97 C25230-ZM(S) 1993 PIRC 11 100.00 64.50 06/30/95 C24052-ZM(S) 1994 Privatization/Ind. R 16.84 1.85 04/26/95 C25350-ZM 1994 Financial & Legal Ma 18.00 17.44 06/30/99 C25770-ZM(S) 1994 Econ & Social Adjust 150.00 81.51 12131/95 *C26210-7-M 1994 Pdtroleum Rehab. 30.00 32.25 06130/00 C25771-ZM(S) 1995 Econ & Social Adjust 13.70 14.48 12/31/95 C26600-ZM 1995 Health Sector 56.00 57.78 12/31/00 C26980-ZM 1995 Agriculture Sector 1 60.00 60.00 12/31199 Total number of 602.44 432.84 Credits = 16 Loans 28 Loans closed 582.13 All closed for ZAMBIA TOTAL number loans = 0 TOTAL *** 582.13 1351.38 of which repaid 455.01 3.45 127.12 1347.93 TOTAL held by Bank & IDA Amount sold 28.58 of which repaid 28.58 TOTAL 441.73 undisbursed Notes: e Not yet effective * Not yet signed ***Total Approved. Repaymnents and Outstanding balance represent both aetive and inactive Loans and Credits. (R) indicates formally revised closing date. (S) indicates SAUSECAL Loans and Credits. The Net approved and Bank repayments are historical valuc, all others are market value. The Signing, Effective. and Closing dates are based upon the Loan Department official data and are not taken from the Task Budget file.  -13- SCCHEDULE D Page 2 of 2 ZAMBIA URBAN RESTRUCTURING AND WATER SUPPLY PROJECT STATEMENT OF IFC INVESTMENTS AS OF FEBRUARY 28, 1995 Gross Commiti-nenls ------USS MILLION--- OBLIGOR TYPE OF BUSINESS FISCAL LOAN EQUITY TOTAI. YEAR AEF-BIG FIVE CAR TRANSPORT & STORAGE 1994 .57 - .57 BATA SHOE ZAMBIA MFG OF FOOTWEAR ECPT 1972 .85 - 1.08 VULCANIZE 1973 1.20 - 1.20 CENTURY Pi.CKAGES MFG OF CHEMICAL PRODUCTS 1975 .77 .21 .99 NEC 1978 .10 - .10 DBZ DEVELOPMENT FINANCE 1976 - .54 .54 COMPANIES ETHANOL ZAMBIA MFG OF BASIC INDUSTRIAL 1982 3.68 .60 4.29 CHEMICAL GWEMBE AGRICULTURAL & LIVESTOCK 1987 - .80 .80 PROD 1988 3. i0 - 3.70 KAFUE TEXTILE SPINNING WEAVING & 1980 .29 - .29 FINISHING 1981 7.31 - 7.31 1985 3.14 3.14 MASSTOCK AGRICULTURAL & LIVE-STOCK 1989 8.69 - 8.69 PROD MPONGWE AGRICULTURAL & LIVE-STOCK 1984 - .29 .29 PROD 1985 1.83 - 1.83 1991 - - - ZAMBIA HOTEL RESTAURANTS& HOTELS 1984 21.01 - 21.01 1991 1.40 - 1.40 ZCCM NON-FERROUS ORE MINING 1980 28.00 - 28.00 1982 25.14 - 25.14 TOTAL GROSS COMMITMENTS 107.70 2.68 110.38 LESS CANCELLATIONS, TERMINATIONS. EXCHANGE 90.72 2.45 93.17 ADJUSTMENTS. REPAYMENTS WRITEOFFS. AND SALES TOTAL COMMITMENTS NOW HELD BY IFC 16.98 .23 17.20 TOTAL UNDISBURSED IFC .05 - .05 TOTAL OUTSTANDING IFC 16.93 .23 17.15  liRD 26557 22 24' 2,6 25e .- 32- 3'4 URBAN RESTRUCTURING AND WATER SUPPLY PROJECT ) / TANZANIA PARTICIPATING COUNCILS tola *hMboro /PARTICIPATINO COUNCILS TRUNK AND MAIN ROADS eheIengs, t ~~~~~~~~~O SELECTED CITIES RAILROADS5 f<,\ 0t) PROVINCE CAPITALS RIVERS -0 69 NATIONAL CAPITAL PROVINCE BOUNDARIES J a INTERNATIONAL BOUNDARIES KASAMA ,j / J,: '\ ~~~~~~~~~~~~~~~~~~~~~~~~~~ ~ ~~~~~~~~~N O R T , E R N tf' Z A I R DOLE *-*.- J EASTERNE 1 n A , at _t M A L A W I ^-"~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Ai | / Cukulu Koemca ' ?-'/t CENTRAL _______"___________________3,___L Q | C MON~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~GUA|CBON ' U-' WN KENYA| A Ntr G, , L A N C) R TA LUSAKA I^02lt'- *l TANZANIA |~~~~~~~~ ~ ~~~ ~ ~ ~~~~~~~~ .~ ,, .9 F' R N K I U jt^''.,-Z|M3A3WE11 :|Z xaw o DOLAs > ), ulobezi m c r*/ . NGOLA - 3 go SOUTHERN ~~~~~OWCri1be....J ZIMBABWE '~~~~~~~~ZIMSA5WTER - %\ XSC5~~~~esSe e Zimbmo KOSiter Octcwwr 0 , 0 150 20 ISOMILILOES ES AIUI / b~~~~~~~~~~~~~~~~~A _ ; _ NSTN ~Ion on ils NAM >o rb^ns,ob iOmpIO,o-