The loan is for three projects.
Finance Minister Alexander Chikwanda signed the MOU on behalf of government while African Development Bank Regional Representative Damoni Kitabire signed on behalf of the bank.
Mr. Chikwanda said at the signing ceremony in Lusaka today that the three loans that have been signed are concessional with an interest rate of less than two percent and maturity of twenty years.
And Mr. Kitabire has appealed to the Ministry of Finance to accelerate the process of meeting conditions for the disbursement of funds for the three loans.
He said the African Development Bank was committed to light up, integrate, feed, industrialise and improve the quality of life for the people of Africa in order to meet the vision 2030 at national level.
Out of the US$125 million, US$50 million is for the implementation of the Lusaka sanitation programme aimed at improving access to public sanitation in the city while US$45 million is for the Cashew infrastructure which will be introduced to all parts of Western Province in order to reduce poverty and improved household incomes.
The remaining US$30 million will go towards the Zambia skills development and entrepreneurship project which is aimed at supporting women and youth.