The proposed operation will focus on interventions through a water and sanitation programme that will aim at reconstruction of and improved climate resilient infrastructures. Interventions will be based on a pipeline of interventions to be defined by the counterpart.

Executive Summary

The proposed operation is a water and wastewater sector Framework Loan financing a climate-change resilience initiative that will support the reconstruction of infrastructure damaged by cyclones Idai and Kenneth in 2019. The main objectives of the Project are to restore water, wastewater and drainage infrastructure, reduce vulnerability and increase resilience to disaster risks of the affected areas and in particular the large municipalities. The Framework Loan operation is embedded in the Disaster Recovery Framework (DRF) which was prepared under the leadership of Mozambique’s Cabinet for Post-Idai and Post-Kenneth.

This post-disaster operation consists of a loan to the Republic of Mozambique for an amount of up to EUR 100m. In addition to this loan the EU provides EUR 10m in grant to add Technical Assistance to the operation. The operation has a tenor of 20 years with up to 5 years of grace period.

Estimates in areas affected by Cyclone Idai suggest that about 60% of the affected were poor, meaning levels of poverty and vulnerability are likely to increase in affected areas due to the cyclones. The Project is critical to improving the livelihoods and reducing vulnerability of people living in the affected areas. The investments and the associated TA are expected to contribute to
reinstating and/or improving pre-disaster economic conditions and citizens’ livelihoods. It will increase access to essential services such as water and sanitation and have a positive impact on aggregate demand. It will also lead to an increase in the overall productivity of the affected areas’ economy in the medium term, based on the sustainable restoration and upgrading of economic and social infrastructure damaged by the cyclones and subsequent floods.