Among the challenges are a low rate of cost recovery despite tariff increases in urban areas; limited capacity in the sector; insufficient progress in increasing access to sanitation; a high level of non-revenue water (44% as of 2010[4]) in urban areas; a high rate of non-functioning rural water systems; and insufficient investment levels despite substantial foreign aid.

[10][11][12] Concerning sanitation, 29% of the urban population are connected to sewers and 30% are served by septic tanks or improved household-level latrines.

Stabilization ponds such as in Kaunda Square in Lusaka and Livingstone City are in a deplorable state and pose a serious environmental hazard.

[15] In addition, a 5-year Lusaka Sanitation Programme funded by EIB, KfW, AfDB, WB and the Government of Zambia was initiated.

It oversees tariff adjustments, minimum service levels, financial projection and investment planning and corporate governance.

[19] NWASCO's is supported by water watch groups and part-time inspectors who monitor the quality of service on the ground.

[20] In 2010 the regulator dissolved water watch groups in Chingola, Kabwe and Lusaka "for non-performance", but all three were re-established a few months later.

[11] The Water and Sanitation Association of Zambia (WASAZA), created in 1999, provides training, promotes the exchange of experiences on good practices and aims at increasing public awareness.

[21] There are three forms of service provision in urban areas in Zambia: Commercial Utilities, Local Authorities and Private Schemes.

[22] In rural areas district councils are in charge of water supply with the assistance of provincial support teams.

Much of Zambia's drinking water infrastructure was built between independence in 1964 and the mid-1970s at a time when economic growth was strong and export earnings from copper mining were high.

Meanwhile, the infrastructure deteriorated: Handpumps in rural areas broken down, and urban systems provided water without disinfection on an intermittent basis.

The few who had access to continuous water supply received it for free and wasted it, with consumption levels of 200 liter per capita per day, higher than in most European cities.

[22] The foundation for reforms was initially laid at the local level when the city of Lusaka created the country's first Commercial Utility (CU) in 1989.

The utility charged water tariffs and was a legally and financially autonomous public entity to be operated based on commercial principles.

At this time the current sector structure, consisting of regional commercial utilities and a national regulatory agency, gradually evolved.

It created the regulatory agency (NWASCO) and a Devolution Trust Fund (DTF) as a financing vehicle for low-income, peri-urban areas.

At that time a few local authorities had begun to make money from selling water, while neglecting the maintenance of the infrastructure.

They were initially reluctant to lose this source of income, because in a commercial utility all revenues were to be used to maintain the assets, to improve service quality and extend access.

[22] When Levy Mwanawasa was elected president in 2002, the sector policies shaped under his predecessor basically remained in place.

During a second incident in January 2008, at least 13 people in Mufulira in northern Zambia were admitted to hospital after drinking water alleged to have been contaminated by the nearby Mopani Copper Mines.

Urban tariffs for unmetered domestic users are set according to the category of housing (low, medium and high costs) for purposes of cross-subsidization.

The government has established a Devolution Trust Fund (DTF) to provide financing to increase access in poor urban areas through the use of low-cost technologies.

In the Central Province the African Development Bank has been supporting the seven local authorities in institutional reforms and infrastructure rehabilitation under a project approved in 2003.

German aid has been particularly involved in expanding services to the urban poor through water kiosks, supported via the Devolution Trust Fund (DTF).

Sanitation facilities have been built at schools and health posts, and measures to promote appropriate hygiene behavior have been supported.

[11] In all three commercial utilities training is carried out covering administration, institutional development, electrical engineering and water production/distribution.

The Project is working with the Councils of Kasempa, Kabompo and Mufumbwe District to reach out to a population of about 2.5 million people beginning in 2004 through the construction of boreholes and hand-dug wells.

JICA provides grants for investments in groundwater development in Luapula Province (2008–2010), technical cooperation for the sustainable operation and maintenance of rural water supply (2007–2010) and capacity building for commercial utilities (2007–2009).

The United States, through the Millennium Challenge Corporation, provides a $355 million grant for water supply and sanitation in Lusaka approved in March 2012.