First Zambia Climate and Economic Resilience Programmatic DPF with Cat-DDO

The development objective for the First Zambia Climate and Economic Resilience Development Policy Financing with a Catastrophe Deferred Drawdown Option Project for Zambia is to: (i) enhance fiscal management and resilience, (ii) promote private-sector investment and resilience in enabling sectors, and (iii) strengthen disaster risk management and climate resilience. The DPF supports Zambia in carrying out reforms aimed at increasing resilience to economic and climate shocks, while promoting private sector-led growth and providing financing for immediate and potential liquidity needs following disasters. It aims to enhance the government’s capability to address the effects of climate change and economic shocks and to improve fiscal resilience. The operation strengthens Zambia’s DRM systems and enhances the resilience of households and the private sector to climate shocks, addressing critical gaps in the current institutional framework. Alongside the World Bank’s ongoing efforts to support Zambia in emerging from the current catastrophic drought, this DPF series provides readily available financing in case of a future shock. It also aligns with the international commitment to help the country restore macroeconomic stability and debt sustainability under the Common Framework. The program is structured around three pillars and eight prior actions, fully aligned with the GRZ priorities. Pillar A enhances fiscal management and resilience, creating buffers against economic and climate shocks and improving the sovereign credit risk assessment framework. Pillar B promotes private-sector investment and resilience in enabling sectors, bolstering private-sector participation in the transport, energy, and water sectors and reducing the financial impacts of future natural disasters in these sectors. Pillar C strengthens disaster risk management and climate resilience, improving the coordination and effectiveness of the GRZ in managing disasters, enhancing household resilience to...