A COUNTRY WATER RESOURCES ASSISTANCE STRATEGY FOR ZAMBIA Zambia Public Disclosure Authorized Managing Water THE WORLD BANK 1818 H St. NW Washington, D.C. 20433 for Sustainable Growth and Poverty Reduction Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized THE WORLD BANK Zambia Managing Water for Sustainable Growth and Poverty Reduction A Country Water Resources Assistance Strategy for Zambia August 2009 THE WORLD BANK Water REsOuRcEs Management AfRicA REgion © 2009 The International Bank for Reconstruction and Development/The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Executive Directors of the International Bank for Reconstruction and Development/The World Bank or the governments they represent. 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Cover photos: Marcus Wishart, Peter Sheppard, and Iris Dueker ii Contents AbbreviAtions And Acronyms....................................................................................................................v Acknowledgements................................................................................................................................... vii executive summAry.....................................................................................................................................ix 1. introduction............................................................................................................................................1 Zambia’s Development Objectives .............................................................................................................. 1 World Bank Country Water Resources Assistance Strategy ..................................................................... 2 2. ZAmbiA’s wAter resources: AbundAnce And vulnerAbility.............................................................5 Surface Water Resources ................................................................................................................................ 5 Climatic and Hydrological Variability ......................................................................................................... 7 Groundwater ................................................................................................................................................... 9 Water Quality ................................................................................................................................................ 10 3. wAter And the ZAmbiAn economy: risk And opportunity..............................................................13 Water Resources and Key Economic Sectors ............................................................................................ 13 Irrigation ............................................................................................................................................. 13 Hydropower ...................................................................................................................................... 17 Water Supply and Sanitation ........................................................................................................... 20 Environment and Nature Based Tourism ...................................................................................... 23 Fisheries .............................................................................................................................................. 25 Economic Impacts of Hydrological Variability ........................................................................................ 26 Rainfall Variability Impact on GDP ................................................................................................ 27 Rainfall Variability and Agricultural Growth ............................................................................... 28 Rainfall Variability and Poverty ...................................................................................................... 29 Impact of Severe Droughts and Floods .......................................................................................... 29 4. cApitAliZing on opportunities And overcoming constrAints: priority responses...................33 Addressing Zambia’s Water Scarcity: Underlying Principles ................................................................ 33 Priority Areas for Water Investments in Zambia ..................................................................................... 35 Building Legal, Policy and Institutional Frameworks ................................................................. 35 Small Scale Water Development for Reducing Rural Poverty ................................................... 38 Ensuring Economically Efficient Water Allocation: The Case of the Kafue River Basin ........ 39 Addressing Environmental Sustainability in the Copperbelt .................................................... 41 International Water Management ................................................................................................... 41 Developing the Knowledge Base in the Water Sector.................................................................. 44 iii Zambia: Managing Water for Sustainable Growth and Poverty Reduction 5. the bAnk And ZAmbiA’s wAter resources sector: priority interventions.................................47 Past Bank Involvement and Lessons Learnt ............................................................................................. 47 Principles for Bank Involvement ................................................................................................................ 48 Proposed Areas of Interventions ................................................................................................................ 50 A. Multi-purpose Small Scale Water Resources Development................................................... 51 B. Protecting and Developing Water Supplies .............................................................................. 52 C. Itezhi Tezhi Dam Safety and Capacity ...................................................................................... 52 D. Water Resources Planning and Development ......................................................................... 53 E. Water Resources Assessment and Scientific Services .............................................................. 54 F. Transboundary Water Resources Management ........................................................................ 54 Success Factors and Risks ............................................................................................................................ 55 Annex A. Fndp wAter And sAnitAtion progrAm................................................................................57 Annex b. options For wAter resources development in the kAFue bAsin......................................61 Annex c. groundwAter As A source oF wAter For copperbelt towns.............................................67 Annex d. technicAl notes on modeling economy-wide impActs oF rAinfall vAriAbility in ZAmbiA................................................................................................................................69 Annex e. rApid resource Assessment oF the kAFue river bAsin.......................................................73 iv Abbreviations and Acronyms AfDB African Development Bank AWC Available Water Capacity CAADP Comprehensive African Agricultural Development Program CAS Country Assistance Strategy CBA Cost Benefit Analysis CEP Copperbelt Environment Project CGE Computable General Equilibrium CU Commercial Utility CV Coefficient Variation CWRAS Country Water Resources Assistance Strategy DANIDA Danish International Development Agency DCGE Dynamic Computable General Equilibrium DED Deutschen Entwicklungsdienstes DRC Democratic Republic of Congo DWA Department of Water Affairs ECZ Environmental Council of Zambia EIRR Economic Internal Rate of Return ET Evapotranspiration EU European Union FAO Food and Agriculture Organization FNDP Fifth National Development Plan GDP Gross Domestic Product GTZ Deutsche Gesellschaft für Technische