Fact Sheet www.mcc.gov

MCC and Zambia: Enhancing Water 

Security for Economic Growth

The Millennium Challenge Corporation (MCC) and the Government of Zambia have signed a five-year, 

$355 million compact to reduce poverty through economic growth. This compact aims to address one of 

Zambia’s most binding constraints to economic growth through infrastructure investment in Lusaka, the 

rapidly urbanizing capital. The compact will invest in water supply, sanitation and drainage infrastructure with the goal of decreasing the incidence and prevalence of water-related disease, productive days 

lost due to disease and time to collect water, cost of water and new sanitation, and business and residential flood losses. The compact will also support the Government of Zambia’s ongoing water sector reform 

efforts by strengthening partner institutions. More than 1 million Zambians are expected to benefit from 

the compact.

MCC’s investment builds on more than 15 years of water-sector reform, during which Zambia developed 

a healthy commercial utility, an independent regulator and a sound legal and regulatory structure. The 

compact is expected to continue the Government of Zambia’s sector reform efforts through institutional 

strengthening and improving the health and economic productivity of more than 1.2 million Zambians. 

The compact has a projected economic rate of return of approximately 13.7 percent. 

The compact’s Water Supply, Sanitation and Drainage Project has two activities: 

 Infrastructure Activity: This activity will support infrastructure managed by the Lusaka Water and 

Sewerage Company (LWSC), the utility primarily responsible for managing the city’s water and sanitation infrastructure, as well as the Lusaka City Council (LCC), the local government entity responsible 

for managing Lusaka’s drainage infrastructure. A major portion of the investment is focused on the 

rehabilitation of Lusaka’s core water supply network, including components designed specifically to 

reduce nonrevenue water. 

This activity also includes interventions designed to expand the city’s water supply network, rehabilitate and enlarge select sewer networks, improve select drainage infrastructure, and provide support for 

engineering and resettlement professional services. Each of the water supply and sanitation components was selected based on investment master plans and feasibility studies. These chart a three-phase, 

$3 billion plan that will allow Lusaka to meet the needs of its population through 2035. The drainage 

component was selected based on the results of priorities identified in a separate comprehensive urban 

development plan funded by the Japanese International Cooperation Agency (JICA). 

 Institutional Strengthening Activity: MCC will make investments to help support sector and institutional strengthening for LWSC and LCC. This activity will provide technical assistance to LWSC and 

LCC to continue ongoing government sector reform efforts and pursue new ones designed to ensure 

improved sector management and sustainability of the compact. The activity also includes support for 
MCC and Zambia: Enhancing Water Security for Economic Growth | May 7, 2012 2

better asset and environmental management by LWSC and provides technical assistance for LCC to 

improve its strategic planning and conduct better maintenance and environmental management for the 

city’s drainage network. 

Support will be provided to LWSC and LCC for mainstreaming gender policies, improving service delivery to poor and underserved populations and carrying out well-designed and coordinated information, education and communications campaigns. The activity aims to increase innovation in pro-poor 

service delivery in the water sector through grants to community-based organizations, civil society 

and/or private sector entities to enhance and support the compact’s sustainability.

Expected Results

The Water Supply, Sanitation and Drainage Project is expected to benefit 1.2 million people in the city 

of Lusaka. It aims to increase incomes in Lusaka by creating conditions for a healthier population, which 

would result in more time available for productive economic activity. 

In addressing health conditions, the investment seeks to have significant impact on reducing: 

 The incidence and prevalence of water-related diseases

 Productive days lost due to water-borne and water-related diseases

 Child and infant mortality rates

 The cost of water and sanitation

 The time to collect water

 Business and residential flood losses 

The program is designed to address these aims by: 

 Improving service provider operating efficiency

 Increasing water storage capacity

 Enhancing water delivery capacity

 Upgrading wastewater collection and treatment capacity and quality

 Modernizing and expanding primary and secondary network components 

MCC is based upon core principles of transparency and accountability. In keeping with this commitment, 

all economic rate of return analyses conducted during project development are available to the public. 

Monitoring and evaluation will be conducted throughout implementation. Third-party, independent 

researchers will conduct impact evaluations upon project completion. All results will be available to the 

public and published on mcc.gov. 

2012-002-1088-01

For More Information

Please visit www.mcc.gov/zambia.