It is estimated that well over 60% of the urban population in Zambia live in low-cost or peri-urban areas. At the same time these are the areas with the highest population growth and with the lowest service coverage with respect to water and sanitation. Thus the need to extend water supply services is also highest in these areas. However, the Commercial Utilities lack the financial means to extend their services to the areas where mostly underprivileged and poor people live. Even where funds are available, inappropriate design and operation is often the reason that the intended benefits cannot be fully enjoyed by the urban poor.

In order to respond effectively to this unacceptable and ever increasing problem, The Government of the Republic of Zambia (GRZ), through the provisions of the Water Act No. 28 of 1997, issued Statutory Instrument (SI) No. 50 of 2001 to establish the Devolution Trust Fund through NWASCO. The DTF is a basket financing instrument with the aim to assist the commercial water supply and sewerage utilities (CUs) to extend their services to the urban poor. The DTF mainly promotes the extension of public water distribution systems and onsite sanitation in low-income areas. In comparison to the rehabilitation and construction of entire water systems with networks and household connections for water and sewerage the measures to be funded by the DTF need relatively small amounts of funds but have a tremendous impact on the living conditions of the urban poor.

The DTF became operational in September 2003 and receives funding from GRZ as well as from Cooperating Partners. The Fund’s activities include the sourcing of funds and the allocation of these funds to projects that will lead to universal access to satisfactory water and sanitation facilities by all of the urban poor. It promotes primarily technology, which offers the best ratio of quality service to costs, is commercially viable and is able to service a high number of poor people. The DTF is non-profit making. All the resources are to be used for improving water supply and sanitation services to the urban poor.

The DTF has been supporting CUs with both financial and technical assistance on project implementation and management through two financing windows namely General Fund (GF) and Performance Enhancement Fund (PEF). The GF projects are aimed at increasing access to safe and adequate water supply and appropriate sanitation for the low income urban residents while the objective of the PEF projects is to contribute to the operational efficiency and viability of the CUs.

To date seventy-seven (77) water supply improvement four (4) Sanitation and thirteen (13) Performance Enhancement Fund projects have been financed at a value of K 63,318,872, K15, 590, 986 and K 21,204,115 respectively. This brought the cumulative total outputs to date to 468 water Kiosks, 39,625 domestic customer meters, 276.54kms of water supply network and 708m³ of reservoir capacity.

The water projects have provided access to a total number of 949,789 persons in Zambia’s low income urban areas. A further 15,500 people benefitted from improvement of sanitation out of the four sanitation projects.