AFRICAN DEVELOPMENT BANK

AFRICAN DEVELOPENT FUND

MULTINATIONAL ZAMBIA AND ZIMBABWE KARIBA DAM

REHABILITATION PROJECT

COUNTRY: REGIONAL (ZAMBIA AND ZIMBABWE)

PROJECT APPRAISAL REPORT

ONEC

December 2014

TABLE OF CONTENTS

Currency Equivalents i Fiscal Year ...i

Weights and Measures. i

acronyms And Abbreviations..ii

Financial Information......................................................................................................iii

Project Summary.iv

PROJECT IMPLEMENTATION SCHEDULE ........................................................................................... viii

1. STRATEGIC THRUST AND RATIONALE ............................................................................... 2

1.1 Project Linkages with Country Strategy and Objectives ........................................................ 2

1.2 Rationale for Bank Group Involvement ................................................................................. 2

1.3 Aid Coordination .................................................................................................................... 3

2. PROJECT DESCRIPTION............................................................................................................ 4

2.1 Project Objectives ................................................................................................................... 4

2.2 Technical Solutions Adopted and Alternatives Considered ................................................... 4

2.3 Project Type............................................................................................................................ 5

2.4 Project Cost and Financing Arrangements ............................................................................. 6

2.5 Project Target Area and Population ...................................................................................... 10

2.6 Participatory process for project identification, design ........................................................ 10

2.7 Bank Group Experience and Lessons Reflected in Project Design ...................................... 10

2.8 Key performance indicators.................................................................................................. 11

3. PROJECT FEASIBILITY ........................................................................................................... 11

3.1 Financial and Economic Performance .................................................................................. 11

3.2 Environmental and Social Impact......................................................................................... 13

4. IMPLEMENTATION .................................................................................................................. 16

4.1 Implementation Arrangements ............................................................................................. 16

4.2 Monitoring and Evaluation ................................................................................................... 19

4.3 Governance ........................................................................................................................... 19

4.4 Sustainability ....................................................................................................................... 20

4.5 Risk Management ................................................................................................................. 20

4.6 Knowledge Building ............................................................................................................. 21

5. LEGAL INSTRUMENTS AND AUTHORITY ......................................................................... 21

5.1 Legal instrument ................................................................................................................... 21

5.2 Compliance with the Bank Group policy ............................................................................. 23

6. RECOMMENDATIONS ............................................................................................................. 24

Appendix I: Zimbabwe Macro-Economic Indicators

Appendix II: Zambia Macro-Economic Indicators

Appendix III: Zambia Comparative Socio-Economic Indicators

Appendix IV: Zimbabwe Comparative Socio-Economic Indicator

Appendix V: Map Of Project Area

Appendix VI: Project Management Organogram

Appendix VII: Afdb Portfolio Zimbabwe

Appendix VIII: Disbursements By Financiers & Instrument

Appendix IX: Options for Funding Zimbabwe

Appendix X: Status of AfDB Portfolio Zambia

Appendix XI: Procurement Arrangements

i

CURRENCY EQUIVALENTS

AUGUST 2014

1 UA = 1.5474 US$

1 UA = 6.5 ZMK

FISCAL YEAR 1 JULY 30 JUNE

WEIGHTS AND MEASURES

1 metric tonne = 2204 pounds (lbs)

1 kilogramme (kg) = 2.200 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

m Metre KOE kilogram of oil equivalent

cm centimetre = 0.01 metre kV kilovolt = 1,000 volts

mm millimetre = 0.001 metre KVa kilovolt ampere (1,000 Va)

km kilometre = 1,000 metres KW kilowatt = 1,000 Watts

m square meter GW gigawatt (1,000,000 kW or 1,000 MW)

cm square centimetre MW megawatt (1,000,000 W or 1,000 kW

km square kilometre = 1,000,000 m KWh kilowatt hour (1,000 Wh)

ha hectare = 10,000 m MWh megawatt hour (1,000 KWh)

t (t) metric tonne (1,000 kg) GWh gigawatt hour (1,000,000 KWh)

ii

ACRONYMS AND ABBREVIATIONS

ADF African Development Fund

AfDB African Development Bank Group

CSP Country Strategy Paper

DFIs Development Finance Institutions

EDF European Development Fund

EU European Union

EPC Engineering, Procurement and Construction

EPP Emergency Preparedness Plan

ESAP Environmental and Social Assessment Procedures

ESIA Environmental and Social Impact Assessment

ESMP Environmental and Social Management Plan

GDP Gross Domestic Product

GRZ Government of the Republic of Zambia

GoZ Government of the Republic Of Zimbabwe

ICB International Competitive Bidding

IDA International Development Association

ICEP Improved Community Emergency Preparedness

KDRP Kariba Dam Rehabilitation Project

MEM Ministry of Energy and Mines

MEPD Ministry of Energy and Power Development

PBA Performance Based Allocation

PMU Project Management Unit

POC Project Oversight Committee

PSC Project Steering Committee

RMC Resource Mobilization Committee

SADC Southern African Development Community

SAPP Southern Africa Power Pool

TSF Transition Support Facility

TS&SC Technical Service and Supervision Consultant

UA Unit of Account

US$ United States Dollars

WB World Bank

ZESCO Zambia Electricity Supply Company

ZPC Zimbabwe Power Company

ZMFO Zambia Field Office

ZWFO Zimbabwe Field Office

ZRA Zambezi River Authority

ZVDF Zambezi Valley Development Fund

iii

FINANCIAL INFORMATION

CLIENTS INFORMATION

Countries Zambia and Zimbabwe

Recipient Republic of Zambia and the Republic of Zimbabwe

Implementing Agency Ministry of Energy and Mines Zambia; and Ministry of Energy and

Power Development Zimbabwe

Executing Agency Zambezi River Authority (ZRA)

FINANCING PLAN

Amount (UA million) Instrument

Sources Zambia Zimbabwe Total Zambia Zimbabwe

African Development Fund

Performance-Based Allocation (PBA)

Regional Operations (RO) envelop

25.20

10.34

14.86

15.51

0.00

15.51

40.71

10.34

30.37

Loan

Grant

Transition Support Facility Pillar I 0.00 7.75 7.75 N/A Grant

IDA 48.47 0.00 48.47 Loan N/A

European Development Fund 64.63 0.00 64.62 Grant N/A

Sweden 16.16 0.00 16.16 Grant N/A

Zambezi River Authority 6.21 6.21 12.43 Counterpart

financing

Counterpart

financing

Total 160.67 29.47 190.15

ADFS KEY FINANCING INFORMATION FOR ZAMBIA LOAN

Interest type N/A

Interest rate spread N/A

Commitment fee 0.5%

Service Charge 0.75%

Interest Rate 1.00%

Tenor 30 years

Grace period 5 years

KEY FINANCIAL AND ECONOMIC OUTCOMES

PROJECT

FIRR FNPV @ 1% (US$

million)

EIRR ENPV@ 10% (US$

billion)

2.8% 70.25 27.3% 1.317

TIME FRAME MAIN MILESTONES Concept note approval August 2014

Project Appraisal Report September 2014

Board approval December 2014

Loan and Grant signing January 2015

Launching May- June 2015

Effectiveness April 2015

Project Completion Report December 2025

Last disbursement June 2026

iv

PROJECT SUMMARY

Project Overview

The project involves the rehabilitation of the Kariba Dam infrastructure by reshaping the plunge pool

and rehabilitating the spillway. The Plunge Pool will be reshaped in order to dissipate energy from the

spilled water thereby reducing the energy on impact and hence bedrock erosion which could undermine

the dam foundations, leading to dam failure. The project will rehabilitate the spillway gates t