Press Release

ZAMBIA RECEIVES US$4 MILLION OPEC FUND LOAN FOR ROAD REHABILITATION SCHEME

07/2005 January 12, 2005, Vienna, Austria

The OPEC Fund for International Development today signed a US$4 million loan agreement with the Republic of Zambia to help finance Phase II of a project to open up the country's isolated Western Province by constructing a road across the Zambezi flood plain. The road, which will run between the towns of Mongu and Kalabo, will have a significant impact on the social and economic integration of the region.

Most of the existing roads in Zambia's western regions are of unpaved earth and track that become impassable during the rainy season. Traveling from Mongu to Kalabo is particularly problematic since the only choices available entail either crossing the flood plain or taking a more circuitous 360-km route. This limited access has left many areas cut off from a number of potential benefits, particularly the small province of Kalabo.

Under Phase I of the project, which was also co-financed by the OPEC Fund, aims were to construct a 74 km road to connect the two towns, and incorporate embankments over culverts to enable cross-drainage across the Zambezi flood plain. It was determined, however, that civil works could not be fully carried out under the original financing plan, and the project was thus revised to be carried out in two phases. Funds from Phase I were used to bring the road to a usable level, while Phase II will provide the additional financing needed to upgrade the stretch to all-weather bituminous standard and carry out modifications to the original design that were deemed necessary after the rainy season in 2003 brought some of the highest flood levels recorded in the area in over four decades. Amendments will be made to the vertical alignment of some sections of the Mongu-Kalabo stretch and extra culverts will be installed to enable the road to withstand severe flooding in the future.

In addition to the towns of Mongu and Kalabo, the entire Western Province will benefit from the opening up of the Zambezi flood plain, a region with enormous agricultural potential. Access to essential social services will also improve, thereby offering these previously isolated communities the chance to enjoy a far better standard of living.

Zambia has benefited from 10 earlier loans from the OPEC Fund. Of these, one was extended under the Heavily Indebted Poor Countries Initiative, and nine others supported projects in the transportation, education, national development banks and agriculture sectors. The country has also been the recipient of a technical assistance grant in the area of education, and has benefited from the Fund's initiative against HIV/AIDS in Africa as well as from the Fund's special Food Aid Grant Account.

Today's agreement was signed in Vienna by Mr. Lennard Nkhata, Permanent Secretary, Financial Management and Administration Division, Ministry of Finance and National Planning of the Republic of Zambia , and by H.E. Mr. Jamal Nasser Lootah, Chairman of the Governing Board of the OPEC Fund.

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