AFRICAN DEVELOPMENT FUND

PROJECT: CHIANSI SMALLHOLDER OUTGROWER SUPPORT

PROJECT (COSP)

COUNTRY: ZAMBIA

PROJECT APPRAISAL REPORT

Date: August 2021

Task Manager: Yappy Silungwe, Senior Irrigation Engineer, RDGS.2

Task Team Co-Task Manager: Lewis Bangwe, Senior Agriculture Specialist, COZM
Team Members: Hebert Chinokoro, Senior Water and Sanitation Engineer,
AHWS.2.
Ernest Sakala, Senior Private Sector Investment Officer, COZM
Godfrey Kaijage, Principal Financial Mgt Specialist, RDGS.4
Hazel Mando, Senior Procurement Officer, COZM
Oley Cole, Consultant Gender, AHGC.1.
Edith Kahubire, Principal Social Safeguards Officer, RDGS.0
Tisungeni Zimpita, Senior Nutrition and Social Protection
Officer, AHHD.2
Fredrick Wamalwa, Senior Education Analyst, AHHD.1
Kalaluka Munyinda, Disbursement Assistant, COZM
Grace Obeda, Principal Youth Employment Officer, AHHD.0
Constant Adeniyi, Consultant (Climate Change), PECG.2
Sector Managers: Mr. Neeraj Vij, RDGS.2
Mr Osward Chanda, AHWS.2
Tapera Muzira, Jobs for Youth in Africa, AHHD.0
Ms. Hendrina Doroba, AHHD.1
Mr. Babatunde Omilola, AHHD.2
Country Manager: Ms. Mary Monyau, COZM
Sector Directors: Mr. Martin Fregene, AHAI
Mr. Osward Chanda, AHWS (Acting)
Ms. Martha Phiri, AHHD
Director General: Ms. Leila Mokadem, RDGS

Ms. Janinah Gasanah, Gender Specialist (Consultant), AHGC.1.

Mr. Vinda Kisyombe, Senior Agricultural Economist, AHAI_S.
Peer Reviewers Mr. Lazarus Phiri, Senior Water and Sanitation Engineer, AHWS.2.
Mr. John Ng’ambi, Social Development Officer, AHHD.2.
Mr. Walter Odhiambo, Chief Agricultural Economist, RDGS.2
 AFRICAN DEVELOPMENT FUND
Public Disclosure Authorized

PROJECT: CHIANSI SMALLHOLDER OUTGROWER SUPPORT

PROJECT (COSP)

COUNTRY: ZAMBIA

PROJECT APPRAISAL REPORT

Public Disclosure Authorized

RDGS/AHHD/AHAI/AHWS

November 2021
 TABLE OF CONTENTS
Page
Currency Equivalents, Fiscal Year, Weights and Measures, Acronyms i
Loan Information ii
Project Summary iii
Project Results Matrix v
Project Time Frame/General Implementation Schedule vii
I. STRATEGIC THRUST AND RATIONALE 1
1.1 Project Linkages with Country Strategy and Objectives 1
1.2 Rationale for Bank’s Involvement 1
1.3 Donor Coordination 3
II. PROJECT DESCRIPTION 3
2.1 Project Objectives and Components 3
2.2 Technical Solutions Retained and Other Alternatives Explored 6
2.3 Project Type 7
2.4 Project Cost and Financing Arrangements 7
2.5 Project Target Area and Population 9
2.6 Participatory Process for Project Identification, Design and Implementation 9
2.7 Bank Group Experience and Lessons Reflected in Project Design 10
2.8 Project Performance Indicators 10
III. PROJECT FEASIBILITY 10
3.1 Economic and Financial Performance 10
3.2 Environmental and Social Impacts 11
IV. IMPLEMENTATION 16
4.1 Implementation Arrangements 16
4.2 Monitoring 18
4.3 Governance 18
4.4 Sustainability 19
4.5 Risk Management 20
4.6 Knowledge Building 20
V. LEGAL INSTRUMENTS AND AUTHORITY 21
5.1 Legal Instruments 21
5.2 Conditions Associated with Fund’s Intervention 21
5.3 Undertakings 21
5.4 Compliance with Bank Group Policies 22
VI. RECOMMENDATION 22

APPENDICES
Appendix 1: Zambia - Comparative Socio-economic Indicators I
Appendix 2: Bank’s Active Portfolio in Zambia (as at June 2021) II
Appendix 3: Government Request for this Project IV
Appendix 4: On-going Projects Financed by the Bank and Other Development
VI
Partners
Appendix 5: Proposed Infrastructure and State of Readiness VII
Appendix 6: ADF Loan Amount by Categories of Expenditure (LA and DL) VIII
Appendix 7: Map of Zambia Showing Project Area (Kafue District) IX
Appendix 8: Environmental and Social Compliance Note (ESCON) X
 Currency Equivalents
(June 2021)

1 UA = 1.4447 USD
1 UA = 32.5370 ZMW
1 USD = 22.5221 ZMW

Fiscal Year

1st January to 31st December

Weights and Measures

1 metric tonne (t) = 2,204 pounds (lbs)
1 metre (m) = 3.28 feet (ft)
1 millimetre (mm) = 0.03937 inch
1 kilometre (km) = 0.62 mile
1 hectare (ha) = 2.471 acres

Acronyms and Abbreviations

7NDP … Seventh National Development Plan Mt … Metric tonne
ADF … African Development Fund MTR … Mid-Term Review
AfDB … African Development Bank NAIP … National Agriculture Investment Plan
APMEP … Agriculture Productivity and Market NDC … Nationally Determined Contributions
Enhancement Project
ASIP … Agriculture Sector Investment No/Nr … Number
Programme
COZM … Zambia Country Office PC … Project Coordinator
CP … Cooperating Partner PCN … Project Concept Note
CPPR … Country Portfolio Performance Review PCU … Project Coordination Unit
CSP … Country Strategy Paper PSC … Project Steering Committee
CSO … Central Statistical Office RDGS … Southern Africa Regional Development
and Business Delivery Office
EA … Executing Agency SNAP … Second National Agricultural Policy
ESMP … Environmental and Social Management TAAT … Technologies for African Agriculture
Plan Transformation
GoZ/GRZ … Government of Zambia TYS … Ten Year Strategy (AfDB)
Ha … Hectare UA … Unit of Account
HH … Household USD … United States Dollars
IA … Implementing Agency ZMW … Zambia Kwacha
Kg … Kilogramme % … Percentage
Km … Kilometres
M&E … Monitoring and Evaluation
MoA … Ministry of Agriculture
Loan Information

Client’s Information

BORROWER: Republic of Zambia

EXECUTING AGENCY: Ministry of Agriculture (MoA)

Financing Plan

Amount
Source %age Instrument
(UA million)
ADF 7.09 88.6% ADF Loan
Government 0.85 10.7% Counterpart funding
Beneficiaries 0.06 0.7% Counterpart funding
Total Cost 8.00 100.0%

Important Financial Information

Loan Currency UA
Interest Rate 1% per annum
Commitment Charge 0.5% per annum
Service Charge 0.75% per annum
Tenor 30 years
Grace Period 5 years
FIRR, NPV (base case) 26.4%, NPV (28%): USD 35.48 million
EIRR (base case) 29.9%%, NPV (28%): USD 23.20 million

Timeframe - Main Milestones (expected)

Concept Note Approval (Regional Director) June 2021
Board Approval November 2021
Effectiveness January 2022
Physical Completion November 2025
Last Disbursement June 2026
Last Repayment January 2051

Project ID/SAP Code: P-ZM-AA0-039

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 PROJECT SUMMARY

1.1 Project Overview: The Agriculture Sector, in Zambia, is recognised as the fourth
largest contributor to GDP (8.7 per cent) and the largest contributor to employment. The
sector is critical for achieving diversification, economic growth and poverty reduction in
Zambia. The Project development objective is to increase agricultural income and improve
livelihoods of smallholder farmers by increasing agricultural productivity, and market access.
This will contribute to poverty reduction, improved household incomes, food security and
nutrition, and also build resilience to climate change and COVID-19 pandemic. The specific
objective of Chiansi Smallholder Outgrower Support Project is to enhance production,
productivity, processing and marketing of high value crops, like sugarcane. The Project aims
to transform agricultural production into sustainable commercialised and profitable venture
that contributes to income generation, and job creation. The Project will also contribute to
enhanced value addition, integration of smallholder producers and private sector, through
involvement of the existing private sector commercial operator, who is already operating in
Chiansi area. The Project consists of three components, namely: (a) Component 1
Development of Climate Resilient Infrastructure, with 3 sub-components [1.1 Infield
Irrigation Network for Outgrower/smallholder farmers, 1.2 Social infrastructure (access
roads, rural health centres, and education), and 1.3 Water and Sanitation Facilities]; (b)
Component 2 Institutional Support and Skills Development, with 2 sub-components [2.1
Social Services (Health/COVID19), Food Security and Nutrition, 2.2: Skills Development
and Jobs for Youth/women, and 2.3 Knowledge Management, Monitoring and Evaluation];
and (c) Component 3 Project Management, with 1 sub-component (3.1 Project Management).
Gender issues have been fully mainstreamed in the Project design. The total Project cost,
including physical and price contingencies, is UA 8.00 million which will be financed by (i)
ADF Loan of UA 7.09 million (88.6%), (ii) Government of Zambia (GoZ) in-kind
contribution of UA 0.85 million (10.7%), and (iii) beneficiaries in-kind contribution of UA
0.06 million (0.7%).

1.2 The Project target is to develop an irrigation scheme covering 600 ha of land (Stage
1), which will directly benefit 600 smallholder outgrower farmers. Through other planned
services and activities such as health, domestic water supply, sanitation and skills
development, the Project will directly benefit about 12,000 people (50% women and youth)
and indirectly the whole population of Chiansi (21,000), with ripple effects to other
neighbouring areas within Kafue District. The Project will directly create 200 full-time, 1,000
seasonal, and 1,000 indirect seasonal jobs (50% women and youth) along the agricultural
commodity value chains. In addition, the Project will develop skills, for employability of
2,000 youth and women.

1.3 Needs Assessment: The Project was designed based on the Government’s intention to
empower smallholder farmers to become outgrowers to an existing private sector commercial
operator. The main opportunity is the 10 km-long bulk water-supply canal that has already
been constructed, by existing private sector commercial operator, to divert water from the
Kafue river to service the target irrigation area, including Stage 1 (600 ha). The Project is in
line with Zambia’s National Vision 2030 and Seventh National Development Plan (7NDP:
2017-2021) and the Bank’s (i) Ten Year Strategy (2013-2022) on inclusive growth and
special area of emphasis on agriculture and food security, (ii) High 5’s “Feed Africa”, and
“Improve the quality of life for the people of Africa” and (iii) Zambia Country Strategy Paper
(CSP: 2017-2021) Pillar 2 (Support to Private Sector Development) which underscores
private sector areas, enterprise development and agriculture.

1.4 Bank’s Added Value: The Bank has wide experience in financing flagship agriculture,
water & sanitation, and social development projects in Zambia and other Regional Member
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Countries (RMCs). The Bank, as a result of its long-term involvement in these sectors, has
developed sound experience in satisfactory development of associated projects. The main
lessons include (i) positive role played by the Project Implementation Units (PIUs) in expediting
project execution after delay in start-up when implementation was entrusted to Government
Ministries, (ii) lack of designs/drawings at project start-up results in implementation delay, and
(iii) weak M&E system results in poor monitoring of implementation progress, which have
been considered in the Project design.

1.5 Knowledge Management: Knowledge gained through implementation of previous

agriculture-related projects has been used in designing this Project which will also be used
during implementation. This multi-sectoral Project has specifically included a sub-component
on “Knowledge Management, Monitoring and Evaluation” which will provide opportunities
for further knowledge generation and processing. Knowledge that will be generated through
implementation of this Project will be useful during design and management of future
projects related to agriculture, water & sanitation, and social development sectors including
outgrower/contract farming, skills development, gender and climate change mainstreaming.
The knowledge generated shall also be shared through the Agriculture Sector Cooperating
Partners Groups which might inform the designs of similar operations by the Cooperating
Partners and other stakeholders.

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 PROJECT RESULTS MATRIX

A PROJECT INFORMATION
❚ PROJECT NAME AND SAP CODE: Chiansi Smallholder Outgrower Support Project. P-ZM-AA0-039 ❚ COUNTRY/REGION: Zambia/RDGS
❚ PROJECT DEVELOPMENT OBJECTIVE: To increase agricultural income and improve livelihoods of the small-scale farmers by increasing agricultural productivity, and market access.
❚ ALIGNMENT INDICATOR (S): (i) Average household income (USD per year); and (ii) Average months per year of household food security (No).
B RESULTS MATRIX
RMF UNIT OF MEANS OF
RESULTS CHAIN AND INDICATOR DESCRIPTION BASELINE (2021) TARGET AT COMPLETION (2025)
INDICATOR MEASUREMENT VERIFICATION
OUTCOME STATEMENT 1: Increased crop production and productivity
Average crop yield (i) Sugarcane (0); (ii) Banana (5); (iii) (i) Sugarcane (110), (ii) Banana (40); (iii)
OUTCOME INDICATOR 1.1: Improve in Crop productivity mt/ha Crop forecasting survey
increased Orange (2); and (iv) Cabbage (5). Orange (25); and (iv) Cabbage (20).
OUTCOME STATEMENT 2: Improved social, health conditions and life skills
OUTCOME INDICATOR 2.1: Improve in access to water and Percentage of people % Access to safe drinking water (73). Access to safe drinking water (90).
DHS
sanitation facilities with access to water Access to sanitation (68). Access to sanitation (80).
and sanitation facilities
OUTCOME INDICATOR 2.2: Improve in knowledge and skills People with improved Number (No) (i) Skilled beneficiaries/farmers (0); and (i) Skilled beneficiaries/farmers (1,500); Project Progress Report
development skills (50% female) (ii) Employed entrepreneurs (0). and (ii) Employed entrepreneurs (300).
OUTCOME INDICATOR 2.3: Create (i) Full time jobs, and (ii) (i) full-time (200); and (ii) total seasonal
Number of jobs created No (i) full-time (0); and (ii) total seasonal (0) Project Progress Report
part-time/seasonal jobs, along agro-value chains (2,000) (50% women/youth)
Component 1: Development of Climate Resilient Infrastructure
OUTCOME STATEMENT: Increased crop production and productivity
❚ OUTPUT STATEMENT 1.1: Infield Irrigation Network developed
OUTPUT INDICATOR 1.1.1: (i) Infield irrigation scheme work; Area under irrigation, (i) ha; and (ii) No (i) scheme area (0); and (ii) scheme office (i) scheme area (600); and (ii) scheme Project Progress Report
and (ii) Scheme office complex developed, with ZESCO power with scheme office complex (0) office complex (1)
(national grid) connection
Agriculture inputs No (i) seed-cane/sugarcane (0 mt); (ii) (i) seed-cane (6,600 mt); (ii) Banana Project Progress Report
OUTPUT INDICATOR 1.1.2: Improved input packs supplied to
provided Banana (0 suckers); (iii) Oranges (0 (13,000 suckers); (iii) Oranges (4,000
scheme beneficiaries
seedlings) (iv) Cabbage (0 kg). seedlings) (iv) Cabbage (18kg).
OUTCOME STATEMENT: Improved social, health conditions and life skills facilities
OUTPUT STATEMENT 1.2: Social Infrastructure Improved
OUTPUT INDICATOR 1.2.1: Rehabilitate rural access feeder Length of access roads Km 0 10 Project Progress Report
roads connecting main roads rehabilitated
OUTPUT INDICATOR 1.2.2: Renovate and equip (i) health Number of health, and No (i) Health center (0); and (ii) Youth (i) Health center (1); and (ii) Youth Project Progress Report
centers, and (ii) Chikoka Youth Training Centre. training centers training center (0) training center (1)
OUTPUT STATEMENT 1.3: Water and Sanitation Facilities
OUTPUT INDICATOR 1.3.1: Rehabilitate water supply Number of water No (i) local markets (0); (ii) schools (0); (iii) (i) local markets (2); (ii) schools (2); (iii) Project Progress Report
infrastructure (solar powered water schemes), including livestock supply infrastructure rural health center (0); (iv) rural health rural health center (2); (iv) rural health
watering points constructed post (0); (v) community development post (2); (v) community development
center (0); and (vi) communities (0). center (1); and (vi) communities (4).
OUTPUT INDICATOR 1.3.2: Construct public sanitation Number of sanitation No (i) local markets (0); (ii) schools (0); (iii) (i) local markets (4); (ii) schools (4); (iii) Project Progress Report
facilities facilities constructed rural health centres (0); and (iv) rural health centres (4); and (iv)
community development center (0) community development center (2)

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 Component 2: Institutional Support and Skills Development
OUTPUT STATEMENT 2.1 Support to improve social services (Health/COVID19), skills development and Food Security/Nutrition interventions
OUTPUT INDICATOR 2.1.1 Scale up effective integration of Number of
No 0 2,000 (50% women) Project Progress Report
COVID-19 infection prevention and control (IPC). beneficiaries
OUTPUT INDICATOR 2.1.2 Undertake Water, Sanitation Number of
No 0 1,200 (50% women) Project Progress Report
Hygiene and Health (WASH+H) training activities beneficiaries
OUTPUT INDICATOR 2.1.3: Improve in access to health Percentage of people % Access to (i) health and nutrition services Access to (i) health and nutrition services DHS
services with access (65); and (ii) exclusive breastfeeding (70). (80); and (ii) exclusive breastfeeding (90).
OUTPUT INDICATOR 2.1.4: Undertake nutrition education and Households trained
No 0 600 (50% women/female-headed) Project Progress Report
promotion focusing on COVID-19 pandemic & behavioural change.
No of (i) primary (i) primary schools (0); and (ii) drip (i) primary schools (5); and (ii) drip
OUTPUT INDICATOR 2.1.5: Scale up of home-grown school schools, and (ii) drip No irrigation systems, with solar powered irrigation systems, with solar powered pumps
feeding programmes (primary schools) and mini-scale (drip) irrigation systems pumps (0) (5) Project Progress Report
irrigation systems, for nutrition-sensitive agricultural production.
Area under irrigation Ha 0 10
OUTPUT STATEMENT 2.2 Skills Development and Jobs for Youth and Smallholder farmers
OUTPUT INDICATOR 2.2.1: Review curricula and enhance Number of (i) trainers No (i) trainers (50), and (ii) courses/trades (i) trainers (50, 50% women), and (ii) Project Progress Report
technical capacity of trainers at Chikoka Youth Training Centre trained, and (ii) (10) courses/trades (10)
courses/trades reviewed
OUTPUT INDICATOR 2.2.2: Provide skills for employability Number of youths No (i) TVET/Youth Center (0); and (ii) (i) TVET/Youth Center (1,500); and (ii) Project Progress Report
trainings to the youth (TVET and Entrepreneurship) trained Entrepreneurship (0) Entrepreneurship (1,000), 50% women
OUTPUT INDICATOR 2.2.3: Incubate/support growth of youth Number of youths No 0 100 (50% women) Project Progress Report
entrepreneurship innovations in agribusiness value chains supported
OUTPUT INDICATOR 2.2.4: Train staff and farmers in Number of people No (i) staff (0); and (ii) farmers (0) (i) staff (10); and (ii) farmers (600, 50% Project Progress Report
agricultural technologies, including business skills. trained women)
OUTPUT STATEMENT 2.3 Technical Support, Knowledge Management, Monitoring and Evaluation
OUTPUT INDICATOR 2.3.1: Provide Technical Assistance Number of TA No (i) advisory services to farmer (0); and (ii) (i) advisory services to farmer (1); and (ii) Project Progress Report
(TA), for (i) advisory services to farmer, and (ii) private sector. recruited private sector (0). private sector (1).
OUTPUT INDICATOR 2.3.2: Sensitise/mobilise beneficiaries to Number of direct No 0 12,600 (50% women) Project Progress Report
participate in Project activities. beneficiaries mobilised
OUTPUT INDICATOR 2.3.3: Form/strengthen farmer No of organisations No (i) existing farmer cooperative (0); and (i) existing farmer cooperative (1); and (ii) Project Progress Report
organisations/cooperatives. strengthened (ii) associations/clubs (0) associations/clubs (3)
OUTPUT INDICATOR 2.3.4: Establish participatory gender M&E system No 0 1 Project Progress Report
sensitive M&E system. established/operational
OUTPUT INDICATOR 2.3.5: Prepare Programme PIM developed and No 0 1 Project Progress Report
Implementation Manual (PIM). operational
OUTPUT INDICATOR 2.3.6: Conduct baseline survey, Number of surveys No (i) baseline survey (0); (ii) beneficiary (i) baseline survey (1); (ii) beneficiary Project Progress Report
beneficiary impact assessment (BIA), MTR and PCR. conducted impact assessment/BIA (0); (iii) MTR (0) impact assessment/BIA (1); (iii) MTR (1)
and (iv) PCR (0). and (iv) PCR (1).
Component 3: Project Management
OUTPUT STATEMENT 2.4: Project Management
OUTPUT INDICATOR 2.4.1: Conduct financial audits and Number of audits No (i) Financial Audits (0); and (ii) (i) Financial Audits (4); and (ii) Project Progress Report
procurement audits. conducted Procurement Audits (0) Procurement Audits (4)

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 PROJECT TIME FRAME/GENERAL IMPLEMENTATION SCHEDULE1

1 This is a general Project implementation schedule. Consequently, the detailed annual work schedule will be developed before the beginning of each Project year.
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 REPORT AND RECOMMENDATION OF THE MANAGEMENT TO THE BOARD OF
DIRECTORS ON PROPOSED LOAN FOR THE ZAMBIA CHIANSI SMALLHOLDER
OUTGROWER SUPPORT PROJECT

Management submits the following Report and Recommendation of an ADF Loan proposal of UA
7.09 million from the Bank resources to finance the Chiansi Smallholder Outgrower Support
Project in Zambia.

I – STRATEGIC THRUST AND RATIONALE

1.1 Project Linkages with Country Strategy and Objectives

1.1.1. The National Vision 2030 articulates the Government of Zambia’s medium to long-term
development agenda with the desire to become a prosperous middle-income country by the year
2030. The Seventh National Development Plan (7NDP: 2017-2021) operationalises the Vision
2030 and aims to create a diversified and resilient economy for sustained growth and socio-
economic transformation driven among others, by agriculture, under the theme of “Accelerating
development efforts towards the Vision 2030 without leaving anyone behind”. The (7NDP: 2017-
2021) is sub-divided into 6 Development Outcomes (DO) and DO number 1 is “a Diversified and
Export-Oriented Agriculture Sector”. The Government developed the Second National
Agricultural Policy (SNAP, 2016) which provides framework and guidelines for the development
of agriculture. The SNAP (2016) vision is “an efficient, competitive and sustainable agricultural
sector, which assures food and nutrition security, increased employment opportunities and
incomes”. SNAP (2016) provides scope for attaining sustainable food security and nutrition
particularly at national level and contributing significantly to profitability of agricultural
enterprises, job creation, enhanced income generation, poverty reduction, as well as increased
contribution of the sector to Gross Domestic Product.

1.1.2. The Government is in the process of revising the National Agriculture Investment Plan
(NAIP) within the context of the Comprehensive Africa Agriculture Development Programme
(CAADP) which is supposed to accelerate growth and eliminate poverty and hunger. The Zambia
CAADP Compact (ZCC) is meant to strengthen, support and facilitate effective implementation of
the SNAP (2016). The National Agricultural Extension and Advisory Services Strategy (NAESS:
2017-2020) provides guidelines in provision of pluralistic extension and advisory services in order
to accelerate agricultural transformation and contribute to poverty reduction. The objective of
NAESS (2017-2020) is to transform small-scale farming into sustainable, commercialised and
profitable agriculture that contributes to poverty reduction through improved household food
security, nutrition, and incomes. The NAESS (2017-2020) recognises the role of private sector and
non-state actors as providers of extension services. Zambia’s Nationally Determined Contribution
(NDC) to the Paris Agreement identifies the importance of Agricultural Sector in reducing
vulnerability to climate change, including measures to increase yields and to strengthen research,
knowledge, extension services and agricultural infrastructures to target climate actions. The
Project’s objectives and focus are well aligned to the country policies and strategies and helps to
attain their outcomes.

1.2 Rationale for Bank’s Involvement

1.2.1. The Zambia Country Strategy Paper (CSP: 2017-2021) has two pillars, namely (i) Pillar 1
(Support to Infrastructure Development) which supports water and sanitation, energy and transport
and is aligned to the Bank’s Ten-Year Strategy (TYS: 2013-2022) priority area of infrastructure
development, and (ii) Pillar 2 (Support to Private Sector Development) underscores key private
sector areas, enterprise development, and agriculture. The CSP (2017-2021) Pillar 2 is aligned to

1
TYS (2013-2022) priority areas of agriculture and food security, and scaling up High 5’s “Feed
Africa”, “Industrialise Africa”, and “Improve the quality of life for the people of Africa”. The
Project is aligned to: (a) High 5 - “Feed Africa”, “Industrialise Africa”, and “Improve the quality of
life for the people of Africa” including Feed Africa Strategy for Agriculture Transformation in
Africa (2016-2025), specifically to feed the population in and beyond the Project area and provide
water for productive use through construction of climate resilient irrigation and social development
infrastructure; (b) Pillar 2 of CSP (2017-2021) which underscores private sector participation,
enterprise development and agriculture; (c) TYS (2013-2022) special area of emphasis on
agriculture and food security where focus is on strengthening agriculture and food security through
an integrated value chain approach to improve the livelihoods of Africans who live in rural areas;
and (d) the Gender Strategy (2021–2025), Jobs for Youth in Africa Strategy (2016–2025), and
Climate Change Action Plan. This will mitigate the impact of climate change and build resilience
for rural communities. The Project is also in line with Sustainable Development Goals (SDGs)
specifically SDG 2 (2.1 to 2.5), which recognizes interlinkages among supporting sustainable
agriculture, empowering smallholder farmers, providing social services, promoting gender
equality, ending rural poverty and tackling climate change. The Project is aligned to the ADF-15’s
overarching pillar to developing sustainable growth and transformation, decent jobs and resilience.

1.2.2. The Zambia comparative socio-economic indicators are reflected in Appendix 1. As of May
2021, the country's portfolio had 21 operations worth UA 660.85 million comprising 19 sovereign
operations (UA 579.65 million) and 3 multinational operations (UA 81.20 million). The Bank’s
operations (UA 660.85 million) are spread across 7 key sectors, namely transport (31.61%), water
supply and sanitation (21.56%), agriculture (18.09%), energy (12.07 %), social (7.35%), finance
(5.61%), and environment (3.71%). Under transport sector, the Bank has also supported the
rehabilitation of 72-km of road section between Mazabuka and Kafue Districts, under the
Kazungula Bridge Project on the North – South Corridor, which will be utilised by this Project in
terms of transportation of agro-inputs and outputs, including other services. This Project shall also
provide synergy with the on-going “Strengthening Climate Resilience in the Kafue Basin Project”.
Alignment with the High-5s shows that Integrate Africa accounts for 32.6%, Improve the quality of
life for the People of Africa (29%), Feed Africa (18.8%), Light up and power Africa (12.2%) and
Industrialize Africa (7.4%). According to 2020 Country Portfolio Performance Review (CPPR),
overall performance rating was satisfactory with an average implementation progress rating (IPR)
of 3.15 on a scale of 1 to 4 and a disbursement rate of 54.61%. The project performance ratings,
based on Implementation Progress Reports (IPR) on 18 active operations, shows an average of 3.24
(satisfactory) for implementation progress (IP) and 3.15 (satisfactory) for achievement of results.
The average time elapsed between approval and first disbursement is about 4 months, as a result of
intense portfolio follow up. There was no problematic project in 2020 and first half of 2021. For
Agriculture and Water Sectors, there is no PCR backlog for closed projects. The portfolio
improvement plan was developed in order to improve Bank-portfolio with continued focus on
structured dialogue between Government and the Bank, fiduciary clinics, targeted training,
portfolio monitoring, and technical support by Task Managers. In addition, Zambia Country Office
(COZM) intensified procurement and financial management clinics for Project staff, as part of
capacity building. Most Bank-funded projects are task managed from COZM and Regional
Resource Centre (RDGS) which has benefitted overall portfolio performance. The portfolio
implementation experiences and useful lessons from Livestock Infrastructure Support Project
(LISP), Agriculture Sector Investment Programme (ASIP), Agriculture Productivity and Market
Enhancement Project (APMEP), and Small-scale Irrigation Project (SIP) have been mainstreamed
in design of this Project. Appendix 2 presents Bank’s active portfolio in Zambia. This Project was
not included in the Zambia CSP (2017-2021), but it is of high priority to the country. The
Government’s official request for this Project is reproduced in Appendix 3.

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1.3 Donor Coordination

1.3.1. In Zambia, the Joint Assistance Strategy (2011-2015, under review) still remains the main
aid coordination instrument for Cooperating Partner (CPs) activities. The Strategy sets out the CPs
support to the National Development Plans (NDPs), provides the medium-term framework to
realize the aid principles, and aligns development to the National Aid Policy and Strategy. High
level aid architecture is well structured and institutionalized through the Cooperating Partner
Group (CPG) which holds monthly meetings with the Secretary to the Treasury, and Permanent
Secretary of Planning. CP’s Joint Sector Working Groups hold regular meetings that provide a
platform for policy dialogue. The Bank is active in CPGs and has chaired the following working
groups: transport (since 2014), agriculture (2013), water and sanitation (2012, 2015, 2018 and
2021) and monitoring and statistics (2014 and 2015). The Bank is a member of the Public Finance
Management (PFM) CPG.

1.3.2. The Bank has experience in agricultural and livelihood improvement in Zambia. The Bank
engages with Government, particularly the Ministry of Finance, Ministry of Planning, and the Bank of
Zambia. The Agriculture Sector-CP Group is currently chaired by Germany and consists of AfDB,
EU, FAO, Finland, JICA, World Bank, WFP, IFAD, USAID, Sweden and Norway. CP Group
ensures coordinated and effective communication with Government on Agriculture Sector policy
and strategy. The contribution of donors to Agriculture Sector budget was about 15.9% in the
2020, with active portfolio totalling UA 40 million as summarised in Table 1.1 and associated
projects are indicated in Appendix 4.

Table: 1.1: Donor Support to Agriculture Sector

Size
Sector or subsector* Labour Force
GDP Exports
Agriculture 10.8 20 67
Players - Public Annual Expenditure (average): 2019 Budget

Government Donors AfDB 33.4% FAO 1.1% Finland 0.6%

UA m UA 211.1 m UA 40.0 m WB 36.3% JICA 3.4% USAID 1.9%

% 84.1% 15.9% EU 4.7% WFP 5.3% Norway 0.5%

DFID 1.1% IFAD 13.4%
Level of Donor Coordination
Existence of Thematic Working Groups (this sector/sub-sector) [Y]
Existence of SWAps or Integrated Sector Approaches [N]
AfDB's Involvement in Donors Coordination [M]
Key: L: Leader. M: Member but not leader. N: No involvement. Y: Yes. N: No.

II – PROJECT DESCRIPTION

2.1 Project Objectives and Components

2.1.1 The Project development objective is to increase agricultural income and improve
livelihoods of the smallholder farmers by increasing agricultural productivity, and market access.
This will contribute to poverty reduction, improved household incomes, food security and
nutrition, and also build resilience to climate variability/change. The specific Project objective is to
enhance production, productivity, processing and marketing of high value crops. The Project aims
to transform agricultural production into sustainable commercialised and profitable venture that
contributes to income generation, and job creation. The Project will also contribute to enhanced
value addition, and improved integration of smallholder farmers/entrepreneurs and private sector,

3
through involvement of the existing commercial operator. The Project consists of three (3)
components, namely: (a) Component 1 Development of Climate Resilient Infrastructure, with 3
sub-components [1.1 Infield Irrigation Network for Outgrower/smallholder farmers, 1.2 Social
infrastructure (access roads, rural health centres, and education), and 1.3 Water and Sanitation
Facilities]; (b) Component 2 Social Services, and Skills Development, with 2 sub-components [2.1
Social Services (Health/COVID19), Food Security and Nutrition, 2.2 Skills Development and Jobs
for Youth/women, and 2.3 Knowledge Management, Monitoring and Evaluation]; and (c)
Component 3 Project Management, with 1 sub-component (3.1 Project Management). Gender
mainstreaming have been incorporated in the Project design. The summary of Project components,
sub-components and associated activities are indicated in Table 2.1, below. Readiness of civil
works (infrastructure), for tendering purpose, is presented in Appendix 5. Description of the
components, sub-components and activities are presented in the Project Appraisal Report (Volume
II Technical Annex C).

2.1.2 The Government has prioritized investments in land and water resources development,
irrigation and mechanization as a means of strengthening the adaptive capacity of farmers and the
rural poor to climate change. As such, the Project is designed as an integrated and multisectoral
intervention tapping on all the dimensions of the key ministries to ensure sustainable livelihoods in
Chiansi area. The main sectors covered under the Project include (i) Agriculture, (ii) Water, and
(iii) Social. The MoA will work with the Ministries responsible for Water, Sanitation and
Environmental Protection, Health and Education to address the socio-economic needs.
Table 2.1: Description of Project Components and Sub-components (Summary)

Component Cost (UA Sub-Component and Associated Activities

Name million)
Component 1: 5.06 Sub-component 1.1: Infield Irrigation Network for
Development of (63.2%) Outgrower/smallholder Farmers:
Climate Resilient • Develop irrigation system (center pivot) sugarcane (550ha) - land
Infrastructure preparation, on-farm irrigation system, intake-works and pumping stations,
including provision of start-up agricultural inputs.
• Develop mini-irrigation systems (drip) for horticultural crop production (50
ha), including land preparation and start-up agricultural inputs.
• Construct 1 scheme's office complex with 4 rooms,1 meeting/training room
and separate 3 low-cost houses, for 1 Guard and 2 Camp Officers.
• Construct 1 storage shed with 2 low-cost houses (for Guard and Worker).
• Connect the smallholder irrigation system and office complex to ZESCO’s
national power grid.
Sub-component 1.2: Social Infrastructure (access roads, rural health
centres, and education)
• Rehabilitate rural access feeder roads (max 10 km), including connection to
main roads in the community.
• Renovate/rehabilitate and equip 1 rural health center.
• Renovate rehabilitate and equip Chikoka Youth Training Centre (1no).
• Complete Kafue District Agriculture Office (95% complete).
• Establish & equip incubation laboratory at Chikoka Youth Training Centre.
Sub-component 1.3: Water and Sanitation Facilities:
• Rehabilitate water supply infrastructure and develop 13 solar powered water
schemes to service 4 communities, 1 local market, 1 health center/post, four
schools, 1 community development center/office and 1 rural health post.
• Construct 14 public sanitation facilities at the said local market, schools,
rural health center/posts and community development center/office.
Component 2: 2.08 Sub-component 2.1: Social Services (Health/COVID19), Food Security
Institutional (26.0%) and Nutrition:
Support and Skills • Collaborate with Ministry of Health, Ministry of Community Development
Development and Ministry of Education to scale up effective integration of COVID-19

4
Component Cost (UA Sub-Component and Associated Activities
Name million)
infection prevention and control (IPC). Provide appropriate PPEs.
• Support Water, Sanitation Hygiene and Health (WASH+H) activities.
• Develop gender responsive training and promotional material on
environmental health and hygiene.
• Support nutrition-sensitive agricultural production: total 10 ha under mini-
scale drip irrigation system (2 ha per school), 5 solar powered boreholes,
and start-up inputs package (1 goods contract, supply and install), for
Home-grown School Feeding under the Poverty and Vulnerability
Reduction Pillar. Schools to be considered include: (i) Chikupi Primary
School, (ii) Chikoka Primary School, (iii) Magoba Primary School, (iv)
Chanyanya Primary School, and (v) St Anna Community School.
• Undertake nutrition activities and campaigns with emphasis on COVID-19,
behavioural change, and home-grown school feeding programmes.
• Recruit Nutrition Consultant (Short-term) to support women and youth.
• Train women/youth in nutrition-sensitive agricultural production, processing
and consumption.
Sub-component 2.2: Skills Development and Jobs for Youth/Women
Vocational skills development for employability:
• Provide technical support to Chikoka Youth Training Centre in the form of
reviewing its curricula and enhancing the capacity of its trainers.
• Train 1,500 (50% female) youth in wide range of skills for employability
including technical, workforce readiness, soft and entrepreneurship skills, at
Chikoka Youth Training Centre.
Value chain and youth agripreneurship development (job creation).
• Provide technical business training to 100 youth-led businesses in areas of
input supply, agro dealing, service provision, production, aggregation,
processing, distribution, marketing and retailing, strengthened by cross
cutting technical, business & financial literacy and digital skills.
• Recruit Business Development Service Provider to support Government in
delivery of this training and also for knowledge transfer.
• Train 1,000 (50% female) youth, with interest in entrepreneurship, to build
their entrepreneurial capacity to start up their business.
• Build the capacity of 600 smallholder farmers (50% women) in agricultural
production best practices and farming as a business.
• Train lead women/youths in Governance, Gender and Group Dynamics.
Sub-component 2.3: Knowledge Management, Monitoring and Evaluation
• Provide Technical Assistance (TA), for advisory services to beneficiaries.
• Provide Technical Assistance (TA), for business skills development.
• Recruit short-term consultants, including M&E Expert, Environmentalist,
Socio-economist, Business Development Expert and Gender Specialist.
• Mobilise communities/beneficiaries to participate in Project activities.
• Form/strengthen 1 existing farmer cooperative, and 3 associations/clubs.
• Conduct national study tours.
• Support implementation of ESMP activities, through ESMP Task Team.
• Build capacity of local data systems for resilience tracking.
• Support gender mainstreaming activities.
• Establish and operationalize a participatory gender sensitive Monitoring
and Evaluation (M&E) system.
• Facilitate supervision and monitoring visits to Project sites.
• Prepare and operationalize Programme Implementation Manual (PIM).
• Promote knowledge management, programme visibility and IEC
(information, education and communication).
• Compile and submit 16 Quarterly Progress Reports (QPRs).
• Compile and submit 16 Quarterly Environmental Reports (QERs).
• Conduct 1 baseline survey, 1 beneficiary impact assessment (BIA), 1
MTR, and 1 PCR.

5
 Component Cost (UA Sub-Component and Associated Activities
Name million)
Component 3: 0.86 Sub-component 3.1: Project Management
Project (10.8%) • Establish and support lean Project Coordination Unit (PCU – Project
Management Coordinator, Accountant, M&E Specialist, Procurement Specialist, and
Environmental & Social Safeguards Specialist).
• Carry out Project coordination activities.
• Procure vehicles, and equipment.
• Support activities of Stakeholder Steering Committee (SSC).
• Facilitate 4 financial audits and 4 procurement audits.
Total 8.00

2.1.3 Private Sector Involvement: The existing main project has a private sector commercial
operator who has already developed the bulk water supply system up to the private entity known as
Chiansi Farming Company. Based on an agreement, for Stage 1, smallholder outgrower farmers,
through existing cooperatives, will utilise the water in the existing canal, for irrigation. The
commercial operator plans to build a sugarcane processing mill which will be used by both the
commercial operator and smallholder farmers. The sugar mill will offer offtake guarantee to
farmers and a ready market. In addition, the commercial operator will provide, to the smallholder
farmers, the seed-cane, farm machinery, training, and agronomy services to ensure that right crop
yields are achieved. The private sector commercial operator plans to submit appropriate documents
to improve bankability of sugar-mill project in order to access non-sovereign resources from
Bank’s Private Sector window.

2.2 Technical Solutions Retained and Other Alternative Explored

During Project appraisal, few design options were explored with respect to scope,
technologies, and implementation modalities. Based on lessons learned during development of
similar irrigation interventions, the Project focuses on development of infield irrigation systems for
sustainable use of water resources to support smallholder outgrower farmers to increase
agricultural productivity, promote value addition of commodities, improve market access and
linkages. The Project will abstract irrigation water from the existing bulk water pipeline (whose
source is Kafue River) to supply about 600 ha of infield irrigation network using centre pivot
irrigation technology. The smallholder farmers will rely on outgrower partnership with an existing
private sector commercial operator who will provide processing facilities, market guarantee, and
technical support, for viability and sustainability of investments. The other Project design
alternatives, to this technical solution, which were explored are indicated in Table 2.2.

Table 2.2: Other Alternatives Considered and Reason for Rejection

Alternative name Brief description Reasons for rejection
Continue with current land use The Government is currently • System is vulnerable to climate change as it does
systems based on rainfed systems supporting farmers in the whole not include irrigation and mechanisation.
and scale-up support through the country with agriculture inputs • FISP is not linked to commercial outgrower
Farmer Input Support Programme through the FISP to intensify and companies for market guarantee.
(FISP). diversify agriculture production.
Apply furrow or drip irrigation Instead of centre pivots, use canal Centre pivots are cheaper to install and easier to
technology, for 600 ha and/or furrow or drip irrigation operate, as they do not require laser land levelling.
(Stage 1). technology for infield irrigation Drip systems are not very compatible with heavy
system. machinery mechanical operations and can be damage.
Focus on long term infrastructure The resources available would be Even though this would be a more sustainable
and institutional development to focused on investments that improve alternative, the impact of climate change and COVID-
improve crop productivity and agriculture infrastructure such as 19 would require more mitigation measures to stem
value chain development. irrigation, markets and access roads. food insecurity and malnutrition of affected
populations.

6
2.3 Project Type

This is a stand-alone investment Project aimed at enhancing agricultural productivity and

value addition of agricultural produce.

2.4 Project Cost and Financing Arrangements

2.4.1 The total Project cost, including physical and price contingencies, is UA 8.00 million which
will be financed by (i) ADF Loan of UA 7.09 million (88.6%) covering all major Project activities,
(ii) Government of Zambia (GoZ) in-kind contribution of UA 0.85 million (10.7%) through
salaries for staff, office space, and utilities/services, and (iii) beneficiaries in-kind contribution of
UA 0.06 million (0.7%) through value of land, maintenance of community infrastructure,
equipment, and bicycles. The price contingencies were based on actual and projected local and
foreign inflation rates of about 2% per project-implementation year. The physical contingencies
ranged from 0% (salaries) to 5% (works, center pivots installation, land levelling) based on
common technical practices. Summary of the Project costs by components, sources of financing,
expenditure categories and schedule by component are presented in Tables 2.3 to 2.6. The Detailed
Cost Tables, including contingencies, are in Appraisal Report Volume II (Technical Annex B.2). It
should be noted that GoZ contribution of UA 0.85 million shows its commitment to the Project.
The amount is considered adequate given number of on-going development projects which it is
undertaking and has already provided counterpart funding. In addition to the above sources of
financing, the Bank and MoA have already started exploring other co-financing sources, which
shall cover Stage 2 (900 ha, being the remaining part of Chiansi agricultural potential area),
eventually resulting in total area of 1,500 ha which shall be developed for irrigation.

2.4.2 Summary of the Project costs by components, sources of financing, expenditure categories,
and schedule by component are presented in Tables 2.3 to 2.6. The ADF Loan amount by
Categories of Expenditure (for Loan Agreement and Disbursement Letter) is indicated in Appendix
6 of this report. The Detailed Cost Tables are in PAR Volume II Technical Annex B.2.

Table 2.3: Project Cost Estimates by Components (ZMW ‘000 and UA ‘000)
%
ZMW (‘000) UA (‘000)
Component Name Foreign
Local Foreign Total Local Foreign Total Cost
1. Development of Climate
29,008.5 128,074.3 157,082.8 891.6 3,936.3 4,827.9 82
Resilient Infrastructure
2. Institutional Support, and
42,193.7 21,740.0 63,933.7 1,296.8 668.2 1,965.0 34
Skills Development
3. Project Management 23,658.6 3,141.4 26,800.0 727.1 96.5 823.6 12
Total Baseline Cost 94,860.8 152,955.7 247,816.5 2,915.5 4,701.0 7,616.5 62
Physical Contingencies 1,137.9 4,538.1 5,676.0 35.0 139.5 174.5 80
Price Contingencies 3,209.8 3,525.7 6,735.5 98.6 108.3 206.9 52
Total Project Cost 99,208.6 161,019.5 260,228.0 3,049.1 4,948.8 7,997.9 62

7
 Table 2.4: Sources of Financing (Amount in UA ‘000)
Total Amount (UA ‘000) and Percentage Contribution (%)
Source of
Foreign Local Total
Financing
UA ‘000 % UA ‘000 % UA ‘000 %
ADF Loan 4,948.8 100.0 2,141.2 70.2 7,090.0 88.6
Government - - 852.4 28.0 852.4 10.7
Beneficiaries - - 55.5 1.8 55.5 0.7
Total 4,948.8 61.9 3,049.1 38.1 7,997.9 100.0

Table 2.5: Project Cost by Categories of Expenditure (UA ‘000)

Amount (UA ‘000) % Foreign
Expenditure Category
Foreign Local Total Cost
A. Investment Costs
1. GOODS
Vehicles 127.4 - 127.4 100
Equipment and Agricultural Inputs 12.8 42.4 55.2 23
Subtotal 140.2 42.4 182.6 77
2. WORKS
Agricultural Infrastructure Development 2,642.0 - 2,642.0 100
Water Infrastructure Development 684.7 - 684.7 100
Social Infrastructure Development 586.7 - 586.7 100
Subtotal 3,913.4 - 3,913.4 100
3. SERVICES
Training - 162.3 162.3 -
Knowledge Management, Monitoring and Evaluation - 530.0 530.0 -
Financial Audit 7.3 - 7.3 100
Procurement Audit 7.3 - 7.3 100
Consultancy Services 632.8 5.2 638.0 99
Youth and Women Empowerment - 65.2 65.2 -
Social Services and Skills Development - 285.1 285.1 -
ZESCO Service Provider - 700.8 700.8 -
Consultancy – Personnel PCU Staff - 549.5 549.5 -
Subtotal 647.4 2,298.1 2,945.5 22
Total Investment Costs 4,701.0 2,340.5 7,041.5 67
B. Recurrent Costs
4. OPERATING COST
Personnel_Govt Staff/NBF - 110.2 110.2 -
Operating Cost - 199.0 199.0 -
DSA and Meal Allowance - 265.8 265.8 -
Subtotal - 575.0 575.0 -
Total Recurrent Costs - 575.0 575.0 -
Total Baseline Cost 4,701.0 2,915.5 7,616.5 62
Physical Contingencies 139.5 35.0 174.5 80
Price Contingencies 108.3 98.6 206.9 52
Total Project Cost 4,948.8 3,049.1 7,997.9 62

Table 2.6: Expenditure Schedule by Components (UA ‘000)

Amount (UA ‘000)
Component Description
PY1 PY2 PY3 PY4 Total
1. Development of Climate Resilient Infrastructure 2,494.0 2,233.9 51.5 48.4 4,827.8
2. Institutional Support, and Skills Development 621.0 500.8 372.4 470.7 1,964.9
3. Project Management 279.3 197.5 173.5 173.5 823.8
Total Baseline Costs 3,394.3 2,932.2 597.4 692.6 7,616.5
Physical Contingencies 74.8 78.8 9.5 11.4 174.5
Price Contingencies 34.7 90.9 30.8 50.5 206.9
Total Project Costs 3,503.8 3,101.9 637.7 754.5 7,997.9

8
2.5 Project Target Area and Population

2.5.1. Project Area: The Project is located in Chiansi area in Chikupi ward of Kafue District (refer
to Appendix 7), within Senior Chieftainess Nkomeshya’ chiefdom. Chiansi area covers four
communities, namely Chanyanya, Chikupi, Demu North, and Demu South, located along the
expansive Kafue river Flats which is about 50 km south-west of Lusaka Central Business District
and 30 km from Kafue Town.

2.5.2. Project Beneficiaries: According to 2010 Zambia Census of Population and Housing, Kafue
District had a total human population of 242,754 of which 59% were females, with growth rate of
4.9. The total number of households (HH), in Kafue District, is 46,124 with 18,600 female-headed
HH. The Project/Chiansi area has about 21,000 people. Project targets to develop an irrigation
scheme covering 600 ha of land (Stage 1), which will directly benefit 600 smallholder outgrower
farmers. Through other social services and activities such as health, domestic water supply,
sanitation and skills development, the Project will directly benefit additional 12,000 people (30%
women and youth). In addition, the Project will indirectly benefit the whole population of Chiansi
(21,000) with ripple effects to other neighbouring areas within Kafue District, and also about 9,000
service providers along the commodity value chain. The Project will provide (i) business
development services to 100 youth-led business and also develop entrepreneurship (50% women),
and (ii) employability skills for 2,000 youth (50% women). The Project will directly create 200
full-time, 1,000 seasonal, and 1,000 indirect seasonal jobs (50% women) along the agricultural
commodity value chains.

2.6 Participatory Process for Project Identification, Design and Implementation

The Project Brief on the need to integrate smallholder farmers into the irrigation scheme
was developed by GoZ prior to August 2020 after detailed stakeholder consultations in Chiansi
area, Kafue and Lusaka which highlighted the need to improve the socio-economic impact of the
irrigation canal and commercial farming operations on the surrounding communities. Consultations
were also conducted during the feasibility study, environmental study, as well as the emerging
need to reduce vulnerabilities to climate change and COVID-19 pandemic in the communities. The
Project Brief was submitted to the Bank, by the Ministry of Finance, in August 2020 which
followed by the Government Official request dated 4th May 2021. Based on the official request, the
Bank, the Government and other key stakeholders held consultative meetings to consider various
project options. The Bank fielded a virtual Project Preparation Mission in May 2021 which
conducted further consultations with key stakeholders including existing private sector commercial
investors. During the Project preparation mission, the Task Team focussed on the Project design
including key components, sub-components, major activities, implementation and sustainability
arrangements. The Bank internally reviewed and cleared the Project Concept Note (PCN) during
the Zambia Country Team (CT) meeting on 4th June 2021. Based on CT clearance, the Bank
fielded a virtual Project Appraisal Mission in July 2021 in order to refine the project design and
produce the Project Appraisal Report (PAR), for Board consideration. Project implementation will
be carried out, in a participatory manner, through Government’s existing structures. The
beneficiaries (men and women) will be fully involved in implementation and supervision of
planned activities. The farmers will manage the operation through their cooperatives and farmer
associations. The private sector commercial operator has indicated his willingness to sign an
offtake agreement with the smallholder farmers and to provide more technical and operational
support. The Project is designed as an integrated and multisectoral intervention tapping on all the
economic, livelihoods, and social dimensions whose activities will be implemented by responsible
Ministries (Agriculture, Water, Sanitation, Environmental Protection, Health and Education).

9
2.7 Bank Group Experience and Lessons Reflected in Project Design

The Bank has gained infrastructure development experience during design and
implementation of Agriculture, Water & Sanitation and Social Development projects, in Zambia
and other Regional Member Countries, whose lessons are tabulated below:

No Lessons Learnt Actions incorporated in the Project design

1. Lack of construction drawings at project Center Pivots are designed by suppliers and are easy to install.
start-up resulted in delay in implementation. Construction drawings for other standard structures are available
with Government.
2. Role played by PCU in expediting project Project implementation capacity will be enhanced through
execution after a delay in start-up. establishment of lean Project Coordination Unit.
3. Weak M&E system results in poor M&E activities with adequate financial allocation have been
assessment of implementation progress included in Project design.
Progress review meetings have been included.
4. Inadequate involvement of private sector in Project has been designed based on the activities of the existing
infrastructure development and management private sector commercial operator who was previously assisted
compromises sustainability. by the Government and other DPs. Smallholder farmers will be
outgrowers.

2.8 Project Performance Indicators

The Project results matrix has provided the outcome and output indicators which will be
measured using the M&E system. The rate of physical implementation of planned activities,
including infrastructure, will measure the trend towards achievement of Project’s objective. The
main outcome indicators are (i) “Improve in Crop productivity (mt/ha)”, (ii) “Improve in access to
health facilities (%)”, and (iii) “Improve in knowledge and skills development (%)”.

III – PROJECT FEASIBILITY

3.1 Economic and Financial Performance

3.1.1. The main assumptions for financial and economic analysis are as follows: (i) financial price
is the constant market price at the farm-gate as in May 2021, (ii) fertilizer price is not subsidised
for all crops, (iii) average crop harvests per year is one, (iv) increase in production for all
enterprises is projected for 10 years from 2022 to 2034, (v) it is assumed that incremental costs and
benefits summed for all enterprises is induced by the project interventions, (vi) the data used for
the analysis was provided by MoA, (vii) only the four major enterprises to be used by farmers have
been included in the analysis, namely sugarcane (500 ha), banana (10 ha), citrus (20 ha), and
cabbage (30 ha) with minor enterprises such as other assorted vegetables which have not been
included even though they may have been influenced, and (viii) interest rate used in the
computation is 28% being the market rate.
3.1.2. The Project will tap water from the existing bulk water pipeline and establish infield
irrigation network based on centre pivot irrigation technology to plant over 550 ha of sugarcane, 10
ha to bananas, 10 ha to citrus fruit trees, and 30 ha to cabbage or any assorted horticultural crops.
The project investments will stimulate the flow of incremental net benefit streams. The proposed
activities, gains in crop diversification and intensification will be safeguarded through climate
smart agriculture practices using improved seed and production technology. The farming system is
mixed cropping with one cycle per year. It is assumed that the farmers would adopt the proposed
new cropping pattern by the end of the project. The scheme will draw water from the main canal
through pumping units that will feed the centre pivots. The farmers would be entitled to an average
of 5.0 ha each (600 ha for 600 smallholder outgrower farmers) and would earn a net income of
between USD 5,990 per annum compared to the baseline level of USD 500. This should justify

10
high cost of infrastructure and crop establishment, operation and maintenance costs that result in
average unit costs of USD 43,000 per farmer or USD 11,300 per hectare. On the basis of the
analysis undertaken for the scheme, at full development, incremental crop production will be
60,500 mt of sugar cane (110 tonnes/ha yield), 400 tonnes of bananas, 250 mt of citrus and 600 mt
of cabbage. Financial analysis shows that the Financial Internal Rate of Return (FIRR) is 26.4%
and the Net Present Value (NPV) of USD 35.48 million shall be generated at a capital opportunity
cost of 28%. The sensitivity analysis was carried out which showed that FIRR was sensitive to
decreases in revenue and increases in operational cost.
3.1.3. Economic analysis was also undertaken in order to assess the economic viability of the
project by calculating the Economic Internal Rate of Return (EIRR). The main assumptions of the
computation of the economic internal rate of return (EIRR) are that (i) Zambia is a net exporter of
sugar and importer of banana and citrus fruits and vegetables. It also imports key basic inputs such
as fertilizer, chemicals and machinery, (ii) import parity prices have been used for sugar and
citrus fruits, but domestic prices for cabbages have been applied in the computation, (iii) discount
rate used in the computation is 28 percent being the market rate, (iv) no shadow pricing for the
local currency has been applied because it is freely trading on the financial market, (vi) hired
labour as a production input was negligible, and (vii) the economic life of the project is retained at
10 years from 2022 to 2034. The estimated EIRR is 29.9% and NPV was USD 23.2 million at a
capital opportunity cost of 28%. Import subsidies on agricultural machinery by the Government
explains the difference between the FIRR and the EIRR. The EIRR and FIRR summary are
presented below, and details are in PAR Volume II, Technical Annex B7.
FIRR, NPV (base case) 26.4%, NPV (28%): USD 35.48 million
EIRR, NPV (base case) 29.9%%, NPV (28%): USD 23.20 million
NB: detailed calculations are available in PAR Volume II Technical Annex B.7.

Summary of Sensitivity Analysis is indicated below:

FIRR At Appraisal (%) NPV (USD)

FIRR 10% Decrease in Revenue 24.2 32,707,252.00
FIRR 10% Increase in Costs 28.6 22,569,435.47
EIRR
EIRR 20% Decrease in Production (USD) 25.9 11,453,454.00
EIRR 20% Increase in Operating Costs (USD) 23.6 20,411,219.00

3.2 Environmental and Social impacts

3.2.1. Environmental Issues: Categorization: The proposed investment (Stage 1 for 600 ha)
works, financed by the Bank will, only involve land levelling and installation of infield irrigation
facilities. Based on this, an environmental Category of 2 was validated on 14th June 2021, as per
the Bank’s environmental and social safeguards classification system, requiring preparation of an
Environmental and Social Management Plan (ESMP).
3.2.2. Document Requirements and Disclosure: An Environmental and Social Impact
Assessment (ESIA) and Resettlement Action Plan (RAP) were completed and approved by the
Zambia Environmental Management Authority in 2013, for the overall Chiansi irrigation project,
which covered the development works of the bulk water infrastructure and infield networks on the
commercial farm operation. In case of this Project, clearance of the Government’s Environmental
Project Brief (EPB, similar to ESMP), for this Category II Project, was done by Zambia
Environmental Management Agency (ZEMA) on 30th August 2021. Refer to PAR Volume II
Annex B.8.1. The safeguard document2 was disclosed on 6th September 2021.

2
https://www.afdb.org/en/documents/zambia-chiansi-small-holder-outgrower-support-project-chanyanya-and-chikupi-wards-kafue-district-p-zm-
aa0-039-environmental-project-brief-epb-executive-summary

11
3.2.3. Public and Stakeholder Consultations have been conducted by the Ministry and InfraCo
Africa given that the Ministry has been working with the target 4 communities for close to 10
years. During the consultations, there were fears of loss of land by some community members.
Other issues were more to do with failure to understand project objectives and over the years the
project has carried out sensitization including exposure visits to other irrigation projects
implemented by the Ministry. All concerns have been integrated in the design of the project. The
design of the project strongly relies on the social capital between the project beneficiaries and will
require constant engagement to ensure that trust and confidence is strengthened. The provincial
government will facilitate this process and a stakeholder engagement plan and resources annual
costs of 10,000 USD have been allocated for this activity.

3.2.4. Expected Environmental and Social Impacts: The Stage 1 (600 ha) project is expected to
have a multitude of positive environment and social impacts resulting from improved farming
practices, improved incomes and nutrition. The negative impacts relate to water quality risks
associated with construction are rated minor with expectation of pollution risk from oil and other
contaminant spills, increased in turbidity in the Chiansi Lagoon. Risk of proliferation of aquatic
plants. risk of hazardous substances spills and potential creation of stagnant water which can serve
as breeding sites for vector borne disease. In relation to air quality during construction, impacts are
rated minor due to increased dust levels as well as during the operation phase where increased dust
levels are expected and minor combustion emissions. Noise and vibrations during construction are
expected to be due to construction machinery, while during the operation, the main triggers are
expected from pumps, agricultural machinery and traffic. Risks related to traffic and transport are
rated minor including increased heavy goods and other construction traffic that could impact on
pedestrians, cyclists, and other road users. During operation the improved roads are expected to
increase road traffic for transportation of crops. Impact on soil during construction relate to effects
of exaction and earth movements while during the operation phase impact on soil fertility is
expected though minor.

3.2.5. Costs and Budget: The expected project impacts will largely be managed through an
Environmental and Social Management Plan and about UA 168,400 has been allocated from the
ADF loan resources to cover implementation of ESMP activities, in addition to the amounts which
will be indicated in civil works contracts’ bills of quantities. These will cover activities relating to
surface water quality monitoring, water usage data to be tracked to ensure sustainable water use,
installation of basic weather station (rainfall, temperatures), gender and human and impact
monitoring rights as well as stakeholder and community engagement initiatives and grievance
management, public health monitoring, audit on alien invasive species control and the monitoring
of the effect on management of green belts.

3.2.6. Implementation Arrangements: In terms of implementation of the ESMP, an institutional

arrangement included ZEMA, PIU for project and Ministry is proposed with requirement for
quarterly basis reporting. The Project will have a E&S staff who will be coordinating the
implementation of the Environmental and Social Considerations and periodic reporting and
auditing. Prior to construction, a contractors environmental and social management plan will be
prepared as well as a local recruitment plan. The Project will also benefit from greater decision
making from the cooperative members, a capacity building plan has been prepared to enhance
more decision making. Consultation with stakeholders will be facilitated by the provincial
leadership through the Community Development and Liaison Officer with coordination from
Project E&S staff. ZEMA will periodically undertake monitoring and inspections and produce
reports based as per their mandate.

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3.2.7. Involuntary Resettlement: In relation to this Project, there will be no involuntary
resettlement. Above that, there will be increased access to land by youth and women.

3.2.8. Climate Change and Green Growth: The operation is a category 2 project due to its nature
using the Bank Climate Change Safeguards Systems (CSS). Indeed, the farming system in the rural
Chiansi area is characterized by small-scale subsistence farmers and under-utilization of resources
such as land and water. Under the current variability of rainfall and temperature patterns, the
production is dominated by the use of low input productivity and low climate resilience
technologies (R. Chikowo, 2016). Future climate projection towards 2030 under RCP2.6 and
RCP8.5 across Zambia including the Chiansi rural areas very likely indicated a mean annual
temperature increase to increase from +1.0 to +1.8°C; the duration of a heatwave to increase from
+3 to +17 days; the duration of cold spells to decrease from -8 to -2 days; mean annual rainfall to
changes by -5% to +6%; the duration of dry spells to increase from -3 to +19 days; heavy rain to
increase by -1% to +13%; and change in water balance from -62mm/year to +74 mm/year
(GERICS, 2016). These are very likely to results in an increase in the frequency of extremes such
as droughts, flooding, significant changes in maize; wheat, and sugarcane suitability in agro-
ecological zone 2A, and an increase in pre-post-harvest loss. To ensure the long-term sustainability
of the operation and its climate resilience, the hydraulic design of the irrigation schemes to be
climate-proof, promote and build capacities on Climate Smart Agricultural practices such as the
use of climate-resilient seeds; the adoption of intercropping; the use of manure; adoption of no-
tillage; water efficiency, and water pricing identified to effectively enhance farming productive
adaptative capacities under future climate extremes (Hunter, R. Crespo, 2020).

3.2.9. On the other hand, while the operation through the irrigation schemes; feeder road
associated land-use change, and grid electricity consumption will generate an estimated net
emission of 16349.71 tonnes of CO2 eq/year while the use of solar-powered water pumping system
for communities WASH to mitigate the project carbon footprint (See Technical Annex B.8.2). In
addition, the construction of the road to integrate the use of local material and selective tree cutting
and adoption of energy-efficient irrigation practices such as drip irrigation align with Zambia
updated Nationally Determined Contributions (NDC, 2020). Measures to reduce GHG emissions
and enhance adaptation have been integrated into the ESMP, as appropriate, to facilitate
monitoring. The Project will contribute to economic growth and human development by
maximising resources-use efficiency, minimising waste, pollution and post-harvest losses. The
Project will also enhance resilience to climate change and environment-related shocks. In the
context of pro-poor growth, the Project will (i) promote equitable allocation of resources, (ii)
develop skills, and (iii) create jobs for rural men, women and youths in order to enhance their
household incomes and reduce poverty. The Project is also aligned with the Zambia Climate
Change Policy (2016), the Bank Climate Change Action Plan (CCAP), and, overall, 100% of the
budget account for climate finance, likely adaptation finance (95%).

3.2.10. Land Tenure and Access to Land: Land is a very important factor of agricultural
production. Zambia consists of state and customary land. Customary laws have jurisdiction over
94% of the land. The Land Act (1996) guarantees women the possibility of being landowners.
Customary tenure does not bring about the registration of ownership rights, but rather only the
protection of use and occupancy rights. The land in the target communities is a combination of
state-controlled land under 14 to 99-year leasehold in Chanyanya community. In the other three
communities Chikupi, Demu North and Demu South, land is owned and controlled under a
combination of traditional and state controlled (titled) land. For Stage 1 (600 ha) infield irrigation
development, there is need to amalgamate and create contiguous plots, which shall either be 2 or 3
blocks of 300 or 200ha, respectively, to facilitate the initial works. The community that would
release this land shall be prioritized under Stage 1. The Government has already negotiated with

13
the community to make available 600 ha, without resettlement, which shall be concluded through a
formal agreement. Communities’ signed Forms are in PAR Volume II Annex B.8.1.

3.2.11. Gender: Gender mainstreaming activities are aligned to the 7NDP (2017-2021), which
entrenches gender as one of the crosscutting issues in sustainable development. Women and youths
will comprise at least 50% of project beneficiaries in order to improve their economic status. The
Project will contribute to increased household incomes for women, men and youths. The Project has
been classified under Categorised II according to the Bank’s Gender Marker System (GMS) since
its results will contribute to reducing gender gaps in agriculture, as well as increasing women’s
economic empowerment. NAIP has indicated that 70% of Zambia’s population rely on agriculture
for their livelihood and that 78% of women are engaged in agriculture compared to men at 69%.
Women are involved in crop production and their farming activities do not produce any tangible
income. Women are generally unable to gain the same productive conditions as men due
difficulties in accessing land, finance and production equipment and materials. Data shows that one
in five households in Zambia is a female-headed household and their production volume is only
two-thirds of male-headed households’. Women in Zambia are also more vulnerable to the effects
of climate change than men. Support to women in the production of the right crops, and effective
training on climate smart production methods will build their resilience to climate changes.
Furthermore, reports indicate that in households experiencing food insecurity, women and children
have high risk of malnutrition compared to men. This is often because of several factors. In Zambia
small-scale rural farmers lack diversity in on-farm food basket, with maize (starch) being the
predominant crop. Secondly, small-scale farming systems, in which women are the majority, are
overwhelmingly dominated by a single crop due to fear of failure, which presents a nutrition
challenge. The availability of irrigation water will contribute to reducing gender gaps through
improving women’s access to enhanced agricultural skills and knowledge, the creation of part-time
and full-time green jobs, access to the required production, crop yields. The complementary
activities such as sensitizations, separated public sanitations in markets and schools, trainings in
agripreneurship will also help reduce gender disparities in entrepreneurship, health, safety, and
nutrition. A gender action and a budget has been presented in PAR Volume II (Technical Annex
B.8.4) which provided more details on gender analysis of agriculture, in Zambia, as well as the
planned activities. Although women and youth will participate and benefit from all planned Project
activities, aggregate funds allocated to their main specific activities are about UA 630,000 (8.9%)
of ADF Loan.

3.2.12. Social and Education: Social challenges, in the target communities, include high poverty,
unemployment, limited access to agricultural infrastructure, low entrepreneurship capacity and
employable skills. The Project is set up in an area/region where access to post-secondary education
is still relatively low. The Project catchment area is estimated to have about 2,000 youth, with
majority holding secondary level certificates. Like the case of Zambia as a whole, where only
around 6% of secondary school leavers are absorbed by the TVET and higher education systems,
majority of the youth in the catchment area do not have post-secondary education. Youth
unemployment stands at 26.2% including the rural youth unemployment rate of 6.4% which is
compounded by high underemployment. These youth are therefore likely to be excluded from
being fully integrated into the potential value chains resulting from the project, due to lack of
meaningful skills. As per the Kafue Integrated Development Plan (KIDP: 2020–2030), a key
constraint to skills development in the catchment area, and in Kafue District as a whole, is the
general lack of technical and vocational institutions. The Government commenced the construction
of Chikoka Youth Training Center (2 boarding facilities, 8 staff houses, offices, training rooms and
ablution blocks), about 15 km from the Project area, but was abandoned at 95% completion due to
lack of funds. The said center shall offer trades such as brick making, carpentry, and horticulture.
In order to alleviate this problem faced by youth and complete the center’s works, the Project shall
has provided funds for the completion of the remaining civil works (5%), including appropriate

14
furniture. In addition, the Project shall provide technical support to the facility in the form of
reviewing its curricula and enhancing the capacity of its trainers so as to enable it to offer all the
planned skills development activities. The Project shall also finance the establishment of an
incubation center within the facility.

3.2.13. Young Zambians can play a crucial role in the modernization of the agricultural sector and
the Project shall provide a good opportunity for the youth to improve employment situation. The
Project shall support targeted agripreneurship development using two categories of youth, namely,
(i) those already doing businesses along the commodity value chains in different areas such as:
input supply, service provision, production, aggregation, processing, distribution, marketing and
retail this will be strengthened by cross cutting technical, business & financial literacy and digital
skills to grow and scale up. Through the services of a seasoned Business Development Service
Provider, young agripreneurs will be competitively selected to undergo start-up training and
coaching to scale up their business, and (ii) those who have interest to venture into business will
also be trained to build their entrepreneurial capacity to start up their business in modules such as:
general introduction to entrepreneurship, skills, business planning, basic record keeping, financial
management financial mobilization, marketing products and services. The Project will build the
capacity of smallholder farmers (50% women and youth) in agricultural production best practices,
to increase productivity and embrace farming as a business, this will boost jobs, incomes and
improve livelihoods. Based on this, the social impact of the Project is expected to be positive since
it will enhance household incomes and improve livelihoods for rural men, women and youths
through agricultural production, processing and marketing. Other positive effects will include (i)
improvement in household food security and nutrition, (ii) enhancement of skills development and
creation of jobs for men, women and youths in Chiansi area, (iii) empowerment of rural women
and youth, and (iv) enhanced economic value of marginal community land.

3.2.14. Food Security, Nutrition and Health Issues: The 2018 Zambia Demographic Health Survey
(ZDHS) registers 35% of children in Zambia under age 5 suffer from chronic malnutrition or
stunting, 4% suffer from acute malnutrition or wasting, and 12% are underweight. This nutrition
scenario is likely to be worsened by COVID-19 pandemic. Increase in agricultural productivity,
WASH interventions and rehabilitation of Chanyanya health center are impact pathways that
address immediate, underlying and basic causes for malnutrition. The Project will respond to these
malnutrition situations through (a) food-based approach, and (b) nutrition education and
promotion. Integration of nutrition promotion and education in the project upon an expected
income growth because of agricultural productivity, will be facilitated to improve dietary diversity
among households. The WASH activities have positive impacts on nutrition and mitigate COVID-
19 pandemic impacts, activities will mainly involve women to protect their decision making and
overall empowerment through hygiene promotion and education to enhance safe food hygiene
practices. With an estimated outreach of 12,000 people, Chanyanya Health Center is the main
access of health care services to villages in Chiansi area. Consequently, renovation of this health
center will improve access to nutrition services such as antenatal care for the promotion of
exclusive breastfeeding practices which are critical for the first 1000 days and grey matter
infrastructure. Nutrition interventions will target women of reproductive age (including adolescent
girls) and children under the age of 2 years. About 3,500 women between 12-49 years and 1,500
children under 2 years will be reached by the Project’s nutrition interventions. Overall learning
capacity and better eating habits will be enhanced through 4 primary schools and 1 community
school in Chikupi zone, where home-grown school feeding programmes will be supported. The
Project will also help build capacity of 5 primary schools to undertake school feeding and nutrition
related school production units by installing drip irrigation system with solar powered boreholes,
covering a total of 10 ha (2 ha per school).

15
3.2.15. HIV/AIDS Impacts: According to Zambia Demographic and Health Survey (ZDHS),
HIV/AIDS prevalence rate of is about 14.3% of the population. About 16.1% of women and 12.3%
of men are HIV-positive. MoA HIV/AIDS strategy focuses on extension and incorporation of
HIV/AIDS related information in extension messages. The Project will use MoA’s HIV/AIDS
extension tools for awareness campaigns.

IV – IMPLEMENTATION

4.1 Implementation Arrangements

4.1.1. The Ministry of Agriculture (MoA) will be the Executing Agency (EA) of the Project
which will be implemented through the Department of Agriculture, over a period of four (4) years.
Project implementation will use existing institutional arrangements incorporating lessons and
experience gained from similar operations under MoA. Apart from Ministry of Agriculture, other
Implementation Agencies (IA) will include Ministries responsible for Water, Health, Social, and
Education in order to comprehensively address the socio-economic needs. MoA will establish a
Project Coordination Unit (PCU) to coordinate, and monitor day-to-day Project implementation,
including engineering, compliance with safeguard provisions, gender action plan, financial
management, and procurement. The PCU will be based in Kafue District, whose office
accommodation will be provided by Office of the District Commissioner. The PCU staff will
include Project Coordinator, Accountant, M&E Specialist, Procurement Specialist, Environmental
and Social Safeguards Specialist, and support staff who will be competitively recruited. All
recruited PCU staff will have performance-based contracts which will be renewable on annual basis,
upon satisfactory performance. In addition, depending on field activities, the Government will
attach Infrastructure Engineer, Water Engineer, Gender Specialist, and Community Development
Officer who shall be civil servants. Short-term individual consultants (Gender Specialist, Socio-
Economist, and Business/Skills Development Expert) will also be recruited by the Project. In order
not to delay Project implementation, the Permanent Secretary (MoA) shall review and approve the
annual work plan and budget (AWP&B). An existing Stakeholder Steering Committee (SSC) is
chaired by MoA. SSC membership includes Ministry of Finance and National Planning, Ministry
of Lands and Natural Resources, Ministry of Water Development and Sanitation, Ministry of
Fisheries and Livestock, Ministry of Green Economy and Environment, Ministry of Small and
Medium Enterprises Development, Ministry responsible for Chiefs and Traditional Affairs,
Permanent Secretary (Lusaka Province), Office of Auditor General, and InfraCo. During
implementation, the SSC shall meet on semi-annual basis to review and assess overall Project
implementation, resolve policy issues, and facilitate inter-ministerial coordination where needed
and oversee project compliance with envisaged project objectives and required outcomes. The PC
shall be the Secretary of SSC. Farmer representatives from Demu North, Demu South, and Chikupi
Communities shall also be members of the SSC. At Provincial and District levels, the
responsibility for Project implementation rests with the Senior MoA Staff. The Bank’s Country
Office (COZM) and Regional Office (RDGS) will support the Project through regular supervision
missions, meetings, and processing of all fiduciary documents.

4.1.2. Procurement Arrangements: Procurement of goods (including non-consultancy services),

works and the acquisition of consulting services, financed by the Bank for the project, will be
carried out in accordance with the “Procurement Policy and Methodology for Bank Group Funded
Operations” (BPM), dated October 2015 and following the provisions stated in the Financing
Agreement. Specifically, Procurement would be carried out as follows:
• Borrower Procurement System (BPS): Specific Procurement Methods and Procedures
(PMPs) under BPS comprising its Laws and Regulations as per the current Public
Procurement Act and the respective Public Procurement Regulations, using the applicable
Standard Solicitation Documents (SSDs) or other Solicitation Documents agreed during

16
 project negotiations for various group of transactions for specified thresholds under the
project in the Procurement Annex of Volume II of the PAR.
• Bank Procurement Policy and Methodology (BPM): Bank standard PMPs, using the
relevant Bank Standard Solicitation Documents (SSDs), for contracts where the BPS shall
not apply for specific transactions or group of transactions as BPM have been found to be
the best fit for purpose.

4.1.3. Procurement Risks and Capacity Assessment (PRCA): assessment of procurement risks at
the Country, Sector, and Project levels and procurement capacity at the EA have been undertaken
for the project and the findings have informed the decisions on the procurement arrangements
being used for specific transactions or groups of similar transactions under the project. The
appropriate risk mitigation measures have been included in the project design. Procurement, soon
after Board approval, will be initiated in order to mitigate the risks associated with start-up delays
and reduce first disbursement timelines.

4.1.4. Financial Management: Due to Covid-19 situation, a virtual assessment of the Ministry of
Agriculture (MoA) Financial Management System was carried out by the Bank in order to
establish whether it has the capacity to carry out the financial management of the above-named
project. The financial management (FM) assessment was carried out in accordance with the Bank’s
FM Manual and Implementation Guidelines-2014. The results of the assessment indicate that the
Financial Management overall risk rating is Moderate before mitigating measures. The assessment
concluded that MoA has adequate FM capacity and the proposed financial management
arrangements put in place meet the Bank’s minimum requirements for project financial
management and therefore adequate to provide, with reasonable assurance, accurate and timely
information on the status of the project required by the Bank. The overall FM for the Project will
be managed within MoA financial management system. The project will use the Integrated
Financial Management Information System (IFMIS), the internal controls, accounting and
reporting procedures which include application of the International Public Sector Accounting
Standards (IPSAS) cash basis. The Internal Audit Department will audit the project financial
transactions at least once annually and the internal audit reports will be shared with the Bank
during supervision missions. However, owing to staff constraint in the Finance Department, a
Project accountant with qualification acceptable to the Bank will be recruited competitively to
handle project FM activities and be part of the lean Project Coordination Unit (PCU). The Director
of Finance and Chief Accountant donor funded projects will provide oversight. MoA has
committed to ensure separate identified codes are activated in the existing IFMIS to record project
transactions and meet the project reporting requirements. In addition, MoA will put in place
measures for proper handing-over if the Accountant’s position is left vacant and/or the Bank is
informed immediately to organize training for the new Accountant to prevent the situation that
occurred in other projects. The ongoing Bank financed projects are complying with the
disbursement and audit requirements of the Bank. The Project will prepare quarterly interim
financial reports and submit them to the Bank within 45 days after the end of each quarter. FM
details are in PAR Volume II, Technical Annex B.4.

4.1.5. Disbursement Arrangements: The Project will mainly use the Direct Method and the
Revolving funds (Special Account) methods to pay for eligible project expenditures. The other two
methods prescribed in the Disbursement Handbook, namely, Reimbursement and the
Reimbursement guarantee are also available for use when the need arises after consultation with
the Bank and obtaining prior approval. MoA will open a special account in foreign currency for
drawing funds from the ADF resources at a bank acceptable by the fund. In addition, one local
currency account (where necessary) to facilitate payment of small local eligible expenditures at a
bank acceptable by the Fund. The Bank will issue a disbursement letter during negotiations, which
will provide specific guidelines on key disbursement procedures and practices.

17
4.1.6. External Audit Arrangement: The audit of the Project annual financial statements will be
conducted by the Office of the Auditor General (OAG) and only when constrained by an
Independent Private Audit firm recruited with the involvement of the Auditor General acceptable
to the Bank in accordance with the approved terms of reference by the Bank. The audit report,
complete with a Management Letter, will be submitted to the Bank not later than six months after
the end of the financial year. The auditing expenses are part of the eligible expenditures of the
program to cater for audit fees of the private audit firm. If the audit is conducted by the OAG, no
audit fees are payable, but on exceptional circumstances, reimbursable expenses like per-diem for
staff and transportation can be paid. Detailed audit arrangements are included in PAR Volume II,
Technical Annex B.5.

4.2 Monitoring

4.2.1. The Project activities will commence with preparation of AWP&B, based on detailed cost
tables/DCTs, (PAR Volume II Technical Annex B.2), which will be submitted to the PS (MoA) for
approval, before transmission to the Bank. The Project launch workshop will be organised by MoA
with the purpose of ensuring that all key stakeholders understand the Project components,
activities, implementation modalities, and reporting needs. The Project, during PY1, will recruit a
Monitoring and Evaluation (M&E) consultant to establish the M&E system, together with the PCU
M&E Specialist. The M&E system will be linked to MoA M&E system and will enable the PCU,
MoA and key stakeholders to track implementation, using Result Matrix indicators and targets. The
PCU/MoA M&E Specialist will be responsible for management of M&E system in terms of data
collection, analysis and dissemination. The Project has provided adequate funds for knowledge
management, monitoring and evaluation in order to facilitate M&E training, data collection,
processing, knowledge building and sharing, as well as compiling lessons.

4.2.2. The Project will compile Quarterly Progress Reports (QPRs), based on the Bank’s format.
All QPRs will be reviewed and cleared by the PS (MoA), before submission to the Bank, not more
than 45 days after the end of reporting period. The Bank will monitor Project implementation
through regular supervision missions, at least twice per calendar year, in order to assess progress
and monitor key verifiable indicators. The Project has provided funds for Mid-Term Review
(MTR), Project Completion Review (PCR), Financial and Procurement Audits. The key Project
M&E milestones/reports are presented in Table 4.2.
Table 4.2: Project Key Milestones
Timeframe Key Milestones Monitoring Process
Year 1 Project Implementation Manual Beneficiaries, PCU, MoA, and Consultant
QPRs Beneficiaries, PCU and MoA
Procurement (goods, works and services) PCU and MoA
Years 1 to 4
Financial Audit Reports OAG/Audit Firm, MoA, and PCU
Procurement Audit Reports OAG/Audit Firm, MoA, and PCU
Year 3 (Q1) Mid-Term Review (MTR) Report Beneficiaries, PCU, MoA and Consultant
Beneficiary Impact Assessment (BIA)
Beneficiaries, PCU, MoA and Consultant
Year 4 (Q4) Report
Project Completion Report (PCR) Beneficiaries, PCU, MoA and Consultant

4.3 Governance

Zambia’s governance performance has slightly deteriorated but is still above Africa’s
average. The 2020 Mo Ibrahim Index of African Governance (IIAG) indicates a decline of -0.8 in
overall governance in Zambia, with a score of 52.0 in 2019 as compared to 56.2 in 2017 (ranking 21

18
out of 54 countries in Africa). Zambia scored higher than the African average (48.8), but lower than
the regional average for Southern Africa (53.3). However, performance in some of the sub-
categories monitored has been mixed (2010-2019): Under “Improved Foundations for Economic
Opportunity & Human Development”, Zambia was among the countries registering positive gains,
while there was a decline under “Security & Rule of Law & Participation, Rights and Inclusion”.
The Bank’s 2020 Country Policy and Institutional Assessment (CPIA) gave a reduced score for
Zambia under the governance cluster, from 3.8 in 2018 to 3.5 in 2020. The Government has put in
place several initiatives, policies and legislations aimed at returning the country towards fiscal
sustainability and to strengthen public financial management (PFM), including the Public Financial
Management Act and the Public Audit Act approved in 2018. However, further improvements in
the PFM system to increase transparency and strengthen fiscal management are needed. Notable
weakness include recording and tracking contingent liabilities and debt repayments of money on-
lent to SoEs, which undermines the ability to assess and quantify macro risks associated with
public debt accumulation. The EA (MoA) shall ensure good governance by promoting efficient
policies, strategies and incentives that promote private sector operations. Some of the measures to
be used when implementing this Project include (i) organising regular fiduciary clinics for FM
staff, (ii) utilization of MoA internal audit to identify pre-audit transaction challenges, and (iii)
timely submission of QPRs.

4.4 Sustainability

4.4.1. The Project has been designed in a participatory and consultative manner in order to
enhance ownership by beneficiaries thus ensuring sustainability. The participatory approach
adopted during Project planning will be extended throughout implementation. This is an important
step towards ensuring the relevance of the investments made and laying of institutional capacity at
community level. The Project will be implemented using the existing decentralized Government
structures (Provincial and District) and lean PCU, with minimal outsourced technical assistance,
which will assist to preserve the institutional memory and also build the capacity of Government
staff to ably assist smallholder farmers during operation and maintenance period. This will ensure
full community participation guided by local authorities thus enhancing sustainability. This Project
has put much emphasis on developing the capacity of beneficiaries and strengthening their
cooperatives/associations and also building skills of women and youth in order to view the Project
interventions as business rather than subsistence venture. Through the groups/cooperatives, the
outgrower farmers will be mobilised and trained to properly carry out routine maintenance of some
infield infrastructure and equipment. The planned activities will provide suitable environment for
continued commitment and sustainability after Project completion.

4.4.2. The sugarcane processing facility will be operated and maintained by the Private Sector, for
market-oriented processing, for sustainability of investments. The Project’s focus on smallholder
outgrower schemes will enhance Private Sector involvement that have good back-up service and
marketing networks. Major maintenance of irrigation system, especially machinery and equipment,
shall be carried out by the suppliers and cooperatives will pay for the services. Through the
cooperatives, the beneficiaries will be trained to properly operate and carry out routine
maintenance of other infield elements of the irrigation system. The capacity building of staff,
outgrower smallholder farmers, and other beneficiaries for social interventions will guarantee
sustainability of planned activities after Project completion, since it will equip them with necessary
knowledge and technical skills to manage agriculture and social infrastructure. The Project’s
identified localised negative impacts on the environment will be minimized through
implementation of proposed mitigation measures since adequate financial provisions have been
made. Behaviour communication and awareness campaigns for infrastructure, social, health, food
security, and nutritional interventions have been mainstreamed in the Project in order to build
resilience and sustainability of the investments.

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4.5 Risk Management

The potential risks identified as threat to smooth implementation of Project and mitigation
measures are indicated in Table 4.3.

Table 4.3: Potential Risks and Mitigation Measures

No Potential Risks Rating (High, Mitigation Measures

Medium or Low)
1. Market interference and export Low Sugar trade is quite liberalised. Existing sugar
bans for sugar companies have exported to other countries.
2. Poor sustainability of in-field Low CIIC has already been established to manage infield
infrastructure infrastructure, to enhance sustainability.
3. Water supply stress due to Medium Project design has considered 20-year average flow.
drought Kafue river flow is regulated by Itezhi-tezhi dam. In
addition, the project promotes the adoption of water
efficiency measures and will build farmers'
capacities to adopt climate-smart agricultural
practices.
4. Project implementation delays. Low Regular and close follow up by MoA and Bank.
5. COVID-19 pandemic Medium Ongoing Government’s health response and
lockdown restrictions might vaccination plans shall assist to mitigate this risk. The
affect project implementation Project has included activities for procurement of
Personal Protective Clothing (PPEs) and also
effective integration of COVID-19 Infection
Prevention and Control (IPC).

4.6 Knowledge Building

4.6.1 The Project innovations in institutional management, community participation, private

sector involvement, value chain linkages and use outgrower schemes will provide useful lessons
for the sustainability of interventions. The management of irrigation and community infrastructure
by rural people, in Zambia, has not been carefully analysed before and the Project will demonstrate
that rural communities can ably manage such infrastructure, given support and mentorship from
Government and private sector commercial operators. The Project will enhance the capacity of
farmers and staff to remain fully involved in all planned activities. The direct beneficiaries will be
targeted for special Project-related training.

4.6.2 The Project is expected to generate considerable knowledge which will add value to the
overall design and management of similar future interventions. The Project will contribute to
knowledge building through (i) M&E system which will be designed to generate information on
implementation achievements, Project financing, disbursement trends, procurement, contractor
performance, beneficiary participation, Project outputs and outcomes and sustainability, (ii) lessons
learnt from supervision mission reports, MTR and PCR, and (iii) beneficiary impact assessment
which will provide feedback on key lessons and experiences. The Project will share, within the
Bank, the lessons and experiences, as these will form part of the knowledge transfer and
dissemination tools. The knowledge generated shall also be shared through the Agriculture Sector
Cooperating Partners Groups which might inform the designs of similar operations by the
Cooperating Partners and other stakeholders. Appropriate communication channels, like billboards,
radio jingles, will be used enhance Project visibility. The Project has made adequate provision for
review meetings of Government staff and beneficiaries to jointly review progress of
implementation which will provide good learning opportunity. Discussion between the Project staff
and beneficiaries will also be valuable source of knowledge to be documents and disseminated.

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 V – LEGAL INSTRUMENTS AND AUTHORITY

5.1. Legal Instruments

5.1.1 The Project will be governed by an ADF loan agreement signed between the Republic of
Zambia (the “Borrower”) and the African Development Fund (the “Fund”).

5.2. Conditions Associated with Fund’s Intervention

5.2.1 Condition Precedent to Entry into Force: The entry into force of the Loan Agreement shall
be subject to fulfilment by the Borrower, of the provisions of Section 12.01 of the General
Conditions applicable to the Fund Loan Agreements and Guarantee Agreements (Sovereign
Entities).

5.2.2 Condition Precedent to First Disbursement: The obligations of the Fund to make the first
disbursement of the Loan shall be conditional upon the entry into force of the Loan Agreement,
and the fulfilment by the Borrower, in form and substance satisfactory to the Fund, of the
following condition:

(a) Submission of evidence of the establishment of a Project Coordination Unit (PCU) and
designation of the following staff to the PCU; (i) a Project Coordinator (as head of the
PCU), (ii) a Procurement Specialist, (iii) a Monitoring and Evaluation Specialist, (iv) an
Environmental and Social Safeguards Specialist, and (v) a Project Accountant, with
qualifications and terms of reference acceptable to the Fund.

5.3. Undertakings – The Borrower shall:

a. submit to the Fund a withdrawal request with a Special Account denominated in USD,
opened at the Bank of Zambia, in the name of the Project, for deposit of the proceeds of the
Loan, and a corresponding local currency operating account at a bank acceptable to the
Fund;
b. make, and cause the Beneficiaries to make, timely provision of the resources required as in-
kind counterpart contribution to the financing of the Project to facilitate timely
implementation of the Project;
c. carry out the Project in accordance with the Environmental and Social Management Plan
(“ESMP”), the Bank Group Safeguards Policies, and the applicable national legislation in a
manner and in substance satisfactory to the Fund;
d. prepare and submit to the Fund, quarterly progress reports on the implementation of the
ESMP, including any deficiencies identified and the corrective measures undertaken;
e. refrain from taking any action which would prevent or interfere with the implementation of
the ESMP, including any amendment, suspension, waiver, and/or voidance of any provision
thereof, whether in whole or in part, without the prior written concurrence of the Fund;
f. cooperate fully with the Fund in the event that the implementation of the Project or a
change in the Project scope results in hitherto unforeseen displacement of persons, and not
commence implementation of any works on the affected area under the Project, unless all
Project Affected Persons (PAPs) in such area(s) have been compensated and/or resettled in
accordance with a RAP to be prepared; and
g. submit to the Fund, evidence in form and substance satisfactory to the Fund, confirming the
composition of the Stakeholder Steering Committee (SSC), whose membership is
mentioned in Section 4.1 above.

21
5.4 Compliance with Bank Group Policies

• This project complies with applicable Bank Group policies.

VI – RECOMMENDATION

Management recommends that the Board of Directors approve the award of an ADF Loan of Seven
Million and Ninety Thousand Units of Account (UA 7,090,000) to the Republic of Zambia, to
finance the Chiansi Smallholder Outgrower Support Project, under the terms and conditions
stipulated in this report.

22
 Zambia
Appendix 1: Zambia - Comparative
COMPARATIVE Socio-economic
SOCIO-ECONOMIC Indicators (October 2020)
INDICATORS

Develo-
Southern
Year Zambia Africa ping
Africa
Countries
Basic Indicators
GNI Per Capita US $
Area ( '000 Km²) 2019 743 6,571 30,067 94,797
Total Population (millions) 2019 17.9 208.4 1,306.3 6,384.0 2500

Urban Population (% of Total) 2019 44.8 49.5 43.3 50.3 2000

Population Density (per Km²) 2019 24.0 32.1 44.5 69.2 1500
GNI per Capita (US $) 2019 1 450 2 814 1 843 5 102 1000
Labor Force Participation *- Total (%) 2019 74.6 71.1 63.2 60.7
Labor Force Participation **- Female (%) 2019 70.4 67.2 54.6 45.8 500

Sex Ratio (per 100 female) 2019 98.1 96.7 99.8 107.1 0
2018 143 ... ... …

2000
2008
2013
2014
2015
2016
2017
2018
2019
Human Develop. Index (Rank among 189 countries)
Popul. Living Below $ 1.90 a Day (% of Population) 2007-18 57.5 45.3 35.6 11.9
Za mb ia Af r ica

Demographic Indicators
Population Growth Rate - Total (%) 2019 2.9 2.3 2.7 1.2
Population Growth Rate - Urban (%) 2019 4.3 3.3 3.6 2.3
Population Growth Rate (%)
Population < 15 years (%) 2019 44.5 39.1 40.6 27.6
Population 15-24 years (%) 2019 20.9 19.3 19.3 16.4 0.4
Population >= 65 years (%) 2019 2.1 3.5 3.5 7.2 0.3
Dependency Ratio (%) 2019 87.2 74.4 78.7 54.6 0.3
Female Population 15-49 years (% of total population) 2019 24.4 25.1 24.2 25.2 0.2
Life Expectancy at Birth - Total (years) 2019 63.9 63.4 63.5 70.8 0.2
Life Expectancy at Birth - Female (years) 2019 66.9 66.2 65.3 73.0 0.1
Crude Birth Rate (per 1,000) 2019 35.8 30.7 33.0 20.2 0.1
Crude Death Rate (per 1,000) 2019 6.3 7.9 8.0 7.3 0.0
Infant Mortality Rate (per 1,000) 2018 40.4 41.4 48.7 31.3

2000

2007

2012

2013

2014

2015

2016

2017

2018
Child Mortality Rate (per 1,000) 2018 57.8 56.8 70.2 42.0
Total Fertility Rate (per woman) 2019 4.6 3.8 4.4 2.6 Zam bi a Af r ica

Maternal Mortality Rate (per 100,000) 2017 213.0 245.8 432.3 230.0
Women Using Contraception (%) 2019 54.7 49.9 39.1 61.7

Health & Nutrition Indicators

Physicians (per 100,000 people) 2010-18 118.7 48.0 33.4 121.8 Life Expectancy at Birth
Nurses and midwives (per 100,000 people) 2010-18 133.8 102.1 107.8 240.8 (years)
Births attended by Trained Health Personnel (%) 2010-18 80.4 69.9 62.9 79.4 80
Peop. Using at least basic drinking water services (% of Pop.) 2017 60.0 69.5 66.3 87.7 70
60
Peop. Using at least basic sanitation services (% of Population) 2017 26.4 44.6 40.3 68.5 50
Percent. of Adults (aged 15-49) Living with HIV/AIDS 2018 11.3 12.2 3.4 ... 40
30
Incidence of Tuberculosis (per 100,000) 2018 346.0 389.2 202.3 154.0 20
Child Immunization Against Tuberculosis (%) 2018 91.0 84.4 81.4 84.9 10
0
Child Immunization Against Measles (%) 2018 94.0 73.6 76.1 85.2
2000

2007

2012

2013

2014

2015

2016

2017

2018
Underweight Children (% of children under 5 years) 2010-17 14.8 11.7 17.5 14.5
Prevalence of stunding 2010-17 40.0 35.1 34.0 23.6 Za mb ia Af r ica

Prevalence of undernourishment (% of pop.) 2017 46.7 25.3 18.5 12.3

Current health expenditure (% of GDP) 2017 4.5 6.6 5.6 5.4

Education Indicators
Gross Enrolment Ratio (%)
Primary School - Total 2010-19 98.7 115.7 100.1 103.6
Primary School - Female 2010-19 99.9 113.5 98.1 102.4 Infant Mortality Rate
( Per 1000 )
Secondary School - Total 2010-19 ... 62.5 52.4 71.9
Secondary School - Female 2010-19 ... 61.5 50.3 71.4 100
90
Primary School Female Teaching Staff (% of Total) 2010-18 50.5 59.4 48.6 62.9 80
Adult literacy Rate - Total (%) 2010-18 86.7 77.5 66.9 84.0 70
60
Adult literacy Rate - Male (%) 2010-18 90.6 82.7 70.8 88.2 50
Adult literacy Rate - Female (%) 2010-18 83.1 73.2 60.0 79.8 40
30
Gouvernment expenditure on Education (% of GDP) 2010-18 4.7 5.3 4.7 4.0 20
10
0
Environmental Indicators
2000

2008

2012

2013

2014

2015

2016

2017

2018

Land Use (Arable Land as % of Total Land Area) 2016 5.1 6.1 8.0 11.4
Agricultural Land (as % of land area) 2016 32.1 55.7 38.2 38.3
Forest (As % of Land Area) 2016 65.2 30.9 13.2 31.9 Za mb ia Af r ica

Per Capita CO2 Emissions (metric tons) 2014 0.3 3.1 1.2 3.5

Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update : October 2020
UNAIDS; UNSD; WHO, UNICEF, UNDP; Country Reports.
Note : n.a. : Not Applicable ; … : Data Not Available. * Labor force participation rate, total (% of total population ages 15+)
** Labor force participation rate, female (% of female population ages 15+)

I
 Appendix 2: Bank’s Portfolio in Zambia (June 2021)

No Operations Source of Funding Nature Sector Approval Age Effect. Date Actual First Completion Loan Amount Disbursement
date (since disbursement date (UA million) % rate_31
approval) date. December 2020
1 Botswana/Zambia-Kazungula Bridge Project ADF SO Transport 12/7/2011 9.1 11/16/2012 2/25/2014 12/30/2020 51,000,000.00 57.11
Multinational - Nacala Road Corridor Development ADF Transport 12/3/2013 7.1 7/27/2015 1/27/2016 12/30/2020 5,000,000.00 80.29
2 SO
Project PHA
3 Kariba Dam Rehabilitation ADF SO Power 12/15/2014 6.0 11/16/2015 10/23/2018 6/30/2026 25,200,000.00 13.6
GAFSP-Agriculture Productivity and Market GAFSP Trust Fund Agriculture 3/26/2014 6.8 10/20/2014 11/12/2014 6/30/2020 21,533,798.79 87.0
4 Enhancement Project SO

5 Lake Tanganyika Development Project ADB SO Agriculture 12/18/2014 6.0 11/5/2015 1/20/2016 6/30/2021 15,560,107.12 71.03
6 Lake Tanganyika Development Project GEF SO Agriculture 12/18/2014 6.0 2/1/2017 4/12/2017 6/29/2021 4,843,720.81 62.82
7 Cashew Infrastructure Development Project (CIDP) ADB SO Agriculture 11/4/2015 5.2 8/4/2016 8/25/2016 6/30/2022 31,138,205.19 80.35
8 Livestock Infrastructure Support Project (LISP) ADF NSO Agriculture 6/19/2013 7.5 3/25/2014 7/23/2014 12/31/2019 12,000,000.00 96.85
Sustainable Livestock Infrastructure Management ADF Agriculture 13/09/2019 1.1 7,500,000.00 0
9 Project (SLIMP) SO
10 Aquaculture Enterprise Dev. Project ADB Agriculture 11/18/2016 4.1 5/23/2017 6/7/2017 12/31/2022 31,411,854.66 53.7
GEF Climate Resilient Livestock Management GEF Agriculture 9/21/2017 3.3 11/28/2017 6/1/2018 6/30/2021 4,297,072.32 68.2
11 SO
Project
12 Strengthening Climate Resilience In The Kafue Basin SCF SO Environment 10/18/2013 7.2 7/21/2014 5/27/2016 6/29/2021 12,109,302.02 86.4
13 Strengthening Climate Resilience In The Kafue Basin SCF SO Environment 10/18/2013 7.2 7/21/2014 10/6/2014 6/29/2021 14,185,182.37 84.9
Chinsali - Nakonde Road Rehabilitation Project ADB SO Transport 7/10/2015 5.5 7/19/2016 8/16/2016 6/30/2023 133,548,302.28 27.2
14
(North-South)
Chinsali - Nakonde Road Rehabilitation Project AGTF SO Transport 7/10/2015 5.5 10/4/2016 12/20/2018 12/31/2020 34,598,005.77 8.9
15
(North-South)
16 Lusaka Sanitation Program ADB SO Water Sup/Sanit 6/24/2015 5.5 7/7/2016 9/12/2016 12/31/2020 34,598,005.77 45.5
17 Integrated Small Towns Water and Sanitation Project ADB SO Water Sup/Sanit 11/18/2016 4.1 8/22/2017 6/7/2018 12/31/2022 75,363,452.05 24.8
18 Integrated Small Towns Water and Sanitation Project ADF SO Water Sup/Sanit 11/18/2016 4.1 8/22/2017 1/9/2018 12/31/2022 7,070,000.00 50.9
19 Integrated Small Towns Water and Sanitation Project AGTF SO Water Sup/Sanit 11/18/2016 4.1 8/22/2017 6/15/2018 12/31/2022 10,379,401.73 26.4

20 Integrated Small Towns Water and Sanitation Project MIC TAF Water Sup/Sanit 11/18/2016 4.1 4/27/2017 1/9/2018 12/31/2022 1,200,000.00 45.5
Transforming Rural Livelihoods In Western Zambia - ADB SO Water Sup/Sanit 9/10/2014 6.3 10/27/2015 12/28/2015 12/30/2021 10,725,381.79 63.5
21
National
Transforming Rural Livelihoods In Western Zambia - RWSSI SO Water Sup/Sanit 9/10/2014 6.3 9/10/2015 12/22/2015 12/30/2021 2,966,780.53 89.8
22
National
Transforming Rural Livelihoods In Western Zambia - OPEC Water Sup/Sanit 6/29/2015 5.5 6/27/2016 12/30/2021 9,687,441.62 0.00
23 SO
National
Feasibility Studies and Designs for Integrated and AWF Water Sup/Sanit 7/7/2020 0.5 10/27/2020 12/31/2022 876,105.55 0.00
24
Sustainable Urban Sanitation in Provincial Towns
25 Power Transmission Project ADF SO Power 6/13/2012 8.6 2/10/2015 5/22/2015 12/31/2020 30,000,000.00 84.9
26 Power Transmission Project NTF SO Power 6/13/2012 8.6 6/26/2015 12/8/2015 12/31/2020 6,400,000.00 68.2
27 Itezhi-Tezhi Hydropower Project ADB NSO Power 6/13/2012 8.6 5/11/2015 5/22/2015 4/14/2018 24,218,604.04 100.00
Line of Credit to FRB Subsidiary, First National Bank ADB Finance 12/12/2012 8.1 6/2/2015 6/10/2015 3/26/2016 30,424,102.35 100.00
28 NSO
of Zambia

II
No Operations Source of Funding Nature Sector Approval Age Effect. Date Actual First Completion Loan Amount Disbursement
date (since disbursement date (UA million) % rate_31
approval) date. December 2020
29 Zambia National Building Society (ZNBS) ADB NSO Finance 11/8/2017 3.1 6/7/2018 4/4/2019 3/31/2021 9,711,701.21 60.00
Support for Science and Technology Education ADF Social 11/20/2013 7.1 1/7/2015 1/26/2015 12/30/2021 22,220,000.00 78.8
30 SO
Project (SSTEP)
Education for Sustainable Development in Africa ADF Social 12/14/2016 4.0 5/23/2017 7/19/2017 12/30/2021 1,220,000.00 99.2
31 SO
(ESDA-NMRM)
32 Skills Development and Entrepreneurship Project - ADB SO Social 10/14/2015 5.2 6/29/2016 8/18/2016 12/30/2021 20,758,803.46 69.9
Capacity Enhancement for Public Finance and ADF Multi-Sector 4/30/2019 1.7 6/30/2023 8,000,000.00 0
33 SO
Economic Management
TOTAL 709,745,331.40 49.08%

III
Appendix 3: Government Request for this Project
V
 Appendix 4: On-going Projects Financed by the Bank and Other Development Partners

Total
Donor
Program Title Project Coverage Budget Implementation Organization
Agency
(USD)
GAFSP-Agriculture Productivity and Six districts in Southern, Lusaka
31.12m Ministry of Agriculture
AfDB Market Enhancement Project and Central provinces
Mpulungu, Nsama in Northern Ministry of Water, Sanitation and
Lake Tanganyika Development Project 27.00m
province Environmental Protection
Livestock Infrastructure Support Project Northern and Muchinga Provinces 18.00m Ministry of Fisheries and Livestock
Irrigation development and Support
3 Sites 115.00m Ministry of Agriculture
project
GEF Climate Resilient Livestock
Northern and Muchinga Provinces 7.00m Ministry of Fisheries and Livestock
Management Project
Southern, Northern, Luapula,
Aquaculture Enterprise Dev. Project Lusaka and North-Western 45.00m Ministry of Fisheries and Livestock
provinces
Strengthening Climate Resilience in The Southern, Central and Lusaka Ministry of National Development
38.00m
Kafue Basin provinces Planning
Norway Conservation Agricultural Program Phase
AEZ 1&2 28.00m Conservation Farming Unit (CFU)
II
Min of Community Development.
Expanded Food Security Pack AEZ 2 2.57m
Mother and Child Health
Community Markets for Conservation - Wildlife Conservation
Eastern Province 8.60m
COMACO Society/COMACO
European Agricultural Sector Performance
Nationwide 11,66m Ministry of Agriculture and Livestock
Union Enhancement Programme
Support to sustainable commercialisation Self Help Africa, GIZ, UNICEF, FAO
Nationwide EUR 92m
of Zambia’s smallholder farmers and MFL
FAO Ministry of Land, Natural Resources &
Integrated Land Use Assessment II Nationwide 3.95m Environmental Protection Forestry
Department
Ministry of Land, Natural Resources &
UN-REDD Programme – Zambia Quick
Nationwide 2.18m Environmental Protection Forestry
Start Initiative
Department
IFAD Smallholder Livestock Investment Project North-Western, Western, Southern,
46.30m Ministry of Agriculture and Livestock
(E-SLIP) Eastern and Northern
Smallholder Agribusiness Promotion
20-30 districts 24.50m Ministry of Agriculture and Livestock
Programme (E-SAPP)
Smallholder Productivity Promotion
Programme (S3P) (co-financed by Luapula and Northern Provinces 39.90m Ministry of Agriculture and Livestock
Finland)
World Livestock Development and Animal
Bank Selected provinces 64.75 m Ministry of Fisheries and Livestock
health project
Agriculture Development Support
National 37.20m Ministry of Agriculture
Program
JICA Rural Extension Service Capacity Northern, Western and Lusaka
9.00m Ministry of Agriculture
Advancement Project (RESCAP) provinces
Rural and Agriculture Development
Nationwide 1.30m Ministry of Agriculture
Advisor
Food Crop Diversification Support Project Muchinga, N/P& WP and follow
3.10m Ministry of Agriculture
Focusing on Rice (FoDiS-R) up in EP, SP, WP & Lusaka P
Technical Cooperation Project for Luapula, Northern, Muchinga,
Community based Smallholder Irrigation Copperbelt and North Western 5.80m Ministry of Agriculture and Livestock
(T-COBSI) Provinces
USAID Production, Finance & Technology
Eastern Province 24.00m ACDI/VOCA
(PROFIT +)
Michigan State University (MSU),
Food Security Research Project (FSRP),
Nationwide 12.49m Indaba Agricultural Policy Research
Phase III
Institute (IAPRI)
Expanding Impact in USAID Supported
Eastern Province 1.99m Action for Enterprise (AFE)
Value Chains
Eastern Province and Peri-urban ASNAPP, Freshmark, Freshpikt,
Horticulture Global Development Alliance 4.80m
Lusaka Stellenbosch University and CETZAM
CGIAR: IITA, CIMMYT, ICRISAT,
Zambia Agriculture Research and
Eastern province 18.00m CIP, CIAT, World Fish Center, Harvest
Development Project
Plus,
Milk for schools Nationwide 0.63m Ministry of Agriculture
Disaster Risk Management Nationwide 0.78m DMMU, FAO
Food Security for vulnerable groups Nationwide 15.48m UNHCR,
DfID Support to Musika - Making Agricultural
Nationwide 7.14m Musika
Markets Work for Zambia
Access to Finance (includes rural finance) Nationwide 21.43m Bank of Zambia and FIs
 Appendix 5: Proposed Infrastructure and State of Readiness (information provided by EA)

No Infrastructure/Structure Status of Designs/Construction Drawings Tender

Documents
1 Services – Supervising Not Applicable (N/A). There is no need to N/A
Firm engage consultant(s), since the works/activities
are simple and straight forward, in nature. The
activities will be supervised by sector ministries.
Project has provided adequate allocation for fuel
and allowances.
2 Center Pivot Irrigation Center Pivot are normally of standard designs, Yes (Standard)
System based on target area (supply and install contract).
This will be sub-contract of the land-
preparation/levelling (works) contract. The
activity will be supervised by MoA’s Technical
Services Branch (TSB), and also private sector
commercial operator (since they will be similar
to commercial operator’s system and will linked
to existing water source and same power line).
3 DACO’s office (95% DACO’s office is almost complete (95% - Yes. For
complete) construction drawings are available). This remaining works,
structure’s completion works will be supervised to be refined by
by Ministry responsible for works, and also the supervising
MoA’s TSB. Ministry
4 Chikoka Youth Training Chikoka Youth Training Center (90% complete), Yes. For
Center (90% complete) similar completion rate. Completion works will remaining works,
be supervised by Ministry responsible for works to be refined by
and also MoA’s TSB. the supervising
Ministry
5 Scheme office complex Scheme office complex and houses (Govt- Yes (Standard)
standard designs). Activities will be supervised
by Ministry responsible for works and also
MoA’s TSB.
6 Drip-irrigation kits Drip-irrigation kits are easy to install and will be Yes. Standard Kits
supervised by MoA’s TSB. (Goods)
7 Solar powered-boreholes Solar powered-boreholes and sanitation activities Yes. Standard
and sanitation activities will be supervised by Ministry responsible for (Govt)
water and sanitation.

VII
 Appendix 6: ADF Loan Amount (UA) by Categories of Expenditure
(For Loan Agreement and Disbursement Letter)

Amount (UA)
Category of Expenditure
Foreign Cost Local Cost Total Cost
A. Goods 143,600 44,500 188,100
B. Works 4,123,500 0 4,123,500
C. Services 681,700 1,689,400 2,371,100
D. Operating Costs 0 407,300 407,300
Total Cost 4,948,800 2,141,200 7,090,000

VIII
Appendix 7: Map of Zambia Showing the Project Area (Kafue District/Lusaka Province)

IX
 ENVIRONMENTAL AND SOCIAL COMPLIANCE NOTE (ESCON)
AFRICAN DEVELOPPEMENT BANK GROUP

A. Basic Information3
Project Title: Chiansi Smallholder Outgrower Support (COSP) Project ‘’SAP code’’: P-ZM-AA0-039
Country: ZAMBIA Lending Instrument4: DI FI CL BS GU RPA EF RBF
Project Sector: Agriculture Task Team Leader: Lewis Bangwe
Appraisal date: 13-15 July 2021 Estimated Approval Date: 11th November 2021
Environmental Safeguards Officer: xxxxx
Social Safeguards Officer: Edith Birungi KAHUBIRE
Environmental and Social Date of categorization: 14th June 2021 Operation type: SO NSO PBO
Category: 2
Is this project processed under rapid responses to crises and emergencies? Yes No
Is this project processed under a waiver to the Integrated Safeguards System? Yes No
B. Disclosure and Compliance Monitoring
B.1 Mandatory disclosure
Environmental Assessment/Audit/System/Others (specify: 01 ESIA)
Was/Were the document (s) disclosed prior to appraisal? Yes No NA
Date of "in-country" disclosure by the borrower/client 30th August 2021
Date of receipt, by the Bank, of the authorization to disclose 30th August 2021
Date of disclosure by the Bank 6th September 2021
Resettlement Action Plan/Framework/Others (specify: xxxxxx)
Was/Were the document (s) disclosed prior to appraisal? Yes No NA
Date of "in-country" disclosure by the borrower/client [Date]
Date of receipt, by the Bank, of the authorization to disclose [Date]
Date of disclosure by the Bank [Date]
Vulnerable Peoples Plan/Framework (specify: xxx)
Was the document disclosed prior to appraisal? Yes No NA
Date of "in-country" disclosure by the borrower/client [Date]
Date of receipt, by the Bank, of the authorization to disclose [Date]
Date of disclosure by the Bank [Date]
If in-country disclosure of any of the above documents is not expected, as per the country’s legislation, please explain why: NA.

B.2. Compliance monitoring indicators

Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the Yes No NA
implementation of measures related to safeguard policies?
Have costs related to environmental and social measures, including for the running of the grievance Yes No NA
redress mechanism, been included in the project cost?
Is the total amount for the full implementation for the Resettlement of affected people, as integrated in Yes No NA
the project costs, effectively mobilized and secured?
Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts Yes No NA
and measures related to safeguard policies?
Have satisfactory implementation arrangements been agreed with the borrower and the same been Yes No NA
adequately reflected in the project legal documents?

C. Clearance
Is the project compliant to the Bank’s environmental and social safeguards requirements, and to be submitted to the Board?
Yes No

3
Note: This ESCON shall be appended to project appraisal reports/documents before Senior Management and/or Board approvals.
4
DI=Direct Investment; FI=Financial Intermediary; CL=Corporate Loan; BS=Budget Support; GU=Guarantee; RPA=Risk Purchase Agreement; EF=Equity
Financing; RBF=Results Based Financing.
X
 Prepared by: Name Signature Date
Environmental Safeguards Officer: xxxxxx
Social Safeguards Officer: Edith Birungi KAHUBIRE 21st September 2021
Task Team Leader: Lewis Bangwe 21st September 2021
Submitted by:

Sector Director: Martin FREGENE 22/09/2021

Cleared by:

Director SNSC: Maman-Sani ISSA 07/10/2021

XI