Completed Mixed AidData Chinese Aid

China Eximbank provides $127.5 million preferential buyer's credit for Phase I of Lusaka-Kafue Bulk Water Supply Project (Linked to Record ID#98552)

$127.5M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Zambia
Country	Zambia
Start Date	May 01, 2016
End Date	Nov 02, 2029
Duration	4,933 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`53038`

Grant Description

China Eximbank provides $127.5 million preferential buyer's credit for Phase I of Lusaka-Kafue Bulk Water Supply Project In May 2016, China Eximbank and the Government of Zambia signed a $127.5 million preferential buyer's credit (PBC) agreement for the Phase I of Lusaka-Kafue Bulk Water Supply Project.

The borrowing terms of the PBC are unknown.

However, it is known that the borrower was expected to use the proceeds from the PBC to finance 85% of a $150 million commercial contract between Lusaka Water and Sewerage Company (LWSC) and China Civil Engineering Construction Corporation (CCECC) Zambia Limited, which was signed in January 2013. The Government of Zambia agreed to directly finance the remaining 15% ($22.5 million) of the commercial contract cost.

The project involved the construction of a new raw water abstraction station on the Kafue River, a water treatment plant, a 66 km treated water pipeline from Kafue to Lusaka, and a booster station in Chilanga and transmission lines to deliver a total of 50,000m3/day of water into the existing Stuart Park storage facilities in Lusaka.

The ultimate objective of the project was to improve water supply to Lusaka and surrounding areas. Upon completion, the project was expected to benefit 480,000 people in Lusaka and surrounding areas.

China Civil Engineering Construction Corporation (CCECC) Zambia Limited was the EPC contractor responsible for project implementation. Its work was overseen by Lusaka Water and Sewerage Company (LWSC). A formal groundbreaking ceremony took place on July 20, 2016. However, construction did not begin until September 5, 2016.

It was originally anticipated that the project would be completed by November 2018. However, this did not occur due to delays in the delivery of water distribution pipelines.

The scope of the project was also revised during implementation to include additional works involving the construction of the Iolanda intake structure (at the Iolanda water treatment plant) and the installation of the Chilanga Booster Pump to meet the power requirements of the project.

On September 17, 2020, the President of Zambia visited the project site and affirmed the construction quality and progress of the project. As of December 2020, the project had achieved a 96% completion rate. On July 29, 2022, a project completion ceremony took place.

At the ceremony, Zambian president Hakainde Hichilema said that the completion of the project would ensure that about 500,000 people in the Zambian capital have access to clean and safe water as well as proper sanitation.

Eric Ding, the general manager of the CCECC Zambia, thanked the Zambian government and the local people for their support during the construction period.

He, however, said more financing will be required to undertake the second phase of the project to increase the water supply to the Zambian capital due to the increased population which requires more water. 1,000 local residents were reportedly employed and trained at the peak of the construction phase of the project.

China Eximbank and Zambia’s Ministry of Water Development, Sanitation, and Environmental Protection also signed a $79,982,494.00 term loan facility agreement for the Kafue Bulk Water Supply Power Substations Project circa 2019 (see linked ProjectID #98552).

📋 Loan / Grant Terms

💰 Loan Amountare unknown

The purpose of the project is to construct electricity substations (transformers) and additional works to support the newly constructed facilities at the Kafue Bulk Water Supply Project. The electricity substations were originally scheduled for installation by February 2020. However, they were not delivered on time for unspecified reasons.

📋 Staff Comments

This project is also known as the Kafue Bulk Water Supply Project Phase I. The Chinese project title was 赞比亚卡夫河供水项目 or 的卡夫河供水项目 or 赞比亚卡夫拉夫塔供水项目 or 卡富埃河供水项目.
According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 4.3254-years in 2016. AidData estimates the grace period of the China Eximbank loan that supported Phase I of the Lusaka-Kafue Bulk Water Supply Project by using this figure. See https://www.dropbox.com/scl/fi/uyz6w7q31x2o8i6rna7ug/DRS-May-2024-Extraction-Official-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=n0a6270w91pdmmfyaoqva419r&dl=0 3. According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 16.0126-years in 2016. AidData estimates the maturity of the China Eximbank loan that supported Phase I of the Lusaka-Kafue Bulk Water Supply Project by using this figure. See https://www.dropbox.com/scl/fi/uyz6w7q31x2o8i6rna7ug/DRS-May-2024-Extraction-Official-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=n0a6270w91pdmmfyaoqva419r&dl=0 4. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 3.4612% in 2016. AidData estimates the interest rate of the China Eximbank loan that supported Phase I of the Lusaka-Kafue Bulk Water Supply Project by using this figure. See https://www.dropbox.com/scl/fi/uyz6w7q31x2o8i6rna7ug/DRS-May-2024-Extraction-Official-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=n0a6270w91pdmmfyaoqva419r&dl=0

📚 Sources & References

Mid-Year Economic Review
Ambassador Yang Youming's Article 'The Outcomes of the Johannesburg Summit of the Forum on China-Africa Cooperation (FOCAC) Briskly and Comprehensively Implemented in Zambia' Published by Zambian Mainstream Media
Kafue Bulk Water Supply Project Phase I (US$150 Million)
ANNUAL ECONOMIC REPORT 2016
赞比亚卡夫河供水项目
REPORT OF THE COMMITTEE ON ENERGY
WATER DEVELOPMENT AND TOURISM FOR THE SECOND SESSION OF THE TWELFTH NATIONAL ASSEMBLY APPOINTED ON WEDNESDAY, 20TH SEPTEMBER, 2017
中土喜签赞EPC供水项目
驻赞比亚大使杨优明在赞主流媒体发表署名文章《中非合作论坛约翰内斯堡峰会成果在赞快速全面落实》
中土集团卡夫河供水项目举行动工仪式《中国铁道建筑报》电子版
Kafue Bulk Water Supply Project Phase I (US$150 million)
Kafue Bulk Water Supply Project
Zambia selects China Civil Engineering Construction for water supply project
PRESIDENT LUNGU LAUNCHES THE KAFUE BULK WATER SUPPLY PROJECT
HE WHO PAYS THE PIPER: ZAMBIA’S GROWING CHINA DEBT CRISIS
Kafue Bulk Water Supply Project to produce 50 million litres, 2018 ANNUAL PROGRESS REPORT SEVENTH NATIONAL DEVELOPMENT PLAN (7NDP: 2017-2021)
REPORT OF THE COMMITTEE ON ENERGY
WATER DEVELOPMENT AND TOURISM FOR THE SECOND SESSION OF THE TWELFTH NATIONAL ASSEMBLY APPOINTED ON WEDNESDAY, 20TH SEPTEMBER, 2017
赞比亚总统视察中国土木承建项目
中国对外承包工程国别（地区）市场报告2019-2020.pdf
Funding not engineering design to blame for Iolanda water project mess
China Civil Engineering - KAFUE BULK WATER SUPPLY
HH TO COMMISSION KAFUE BULK WATER PROJECT
Zambia commissions China-financed project to improve water supply in Zambian capital
President Hichilema to commission Kafue water Bulk, https://www.youtube.com/watch?v=hQXgn2O3388
Project Financing
REPORT OF THE COMMITTEE ON GOVERNMENT ASSURANCES FOR THE FOURTH SESSION OF THE TWELFTH NATIONAL ASSEMBLY
BULK WATER CONTRACTOR URGED TO COMPLETE PROJECT BY JUNE
REPORT OF THE COMMITTEE ON GOVERNMENT ASSURANCES FOR THE FIFTH SESSION OF THE TWELFTH NATIONAL ASSEMBLY
OPERATIONALISE KAFUE BULK WATER
KAFUE BULK WATER PROJECT TRANSFORMERS IN Lusaka Water Supply and Sanitation Company has received transformers to power the soon to be launched Kafue Bulk Water Project., $150 MILLION KAFUE BULK WATER PROJECT 100% COMPLETE
Water shortage resolved next month
PART OF KAFUE BULK EQUIPMENT IN Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.

All Grantees

Government of Zambia

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