By Nicholas Bariyo 
 

KAMPALA, Uganda--The Zambian government said on Thursday that it had secured a $163 million loan from Sweden's Nordea Bank AB (NDA.SK) to extend the electricity network to its separatist western and north western regions.

The Zambian presidency said in a statement that the loan would fund the construction up to 840 kilometers of high voltage transmission power lines to facilitate the electrification of public facilities, such as schools, hospitals, and government institutions, as well as premises of traditional chiefs in the copper-rich but impoverished regions.

The investment is the government's latest attempt to assuage separatist sentiments in the region which have threatened the stability of Africa's second-largest copper producer in recent years.

"I am determined to see our people's living standards improve through our Government's implementation of sound and practical development policies" President Michael Sata said in a statement.

In August last year, the Zambian police arrested dozens of separatist activists from western province, in a crackdown triggered by the appointment of an independent administration by the separatist group, known as Barotseland Royal establishment.

The separatists have been pushing for independence from Zambia in recent years, accusing the central government of doing "little" to develop the region, despite a copper export boom.

Government officials say that separatist tensions will subside, once the region's economic challenges are addressed. Last year, the government started construction work at a major soccer stadium in the western province and several hospitals and water project are also underway as Mr. Sata steps up efforts to deliver on campaign promises that helped secure his election victory in 2011.

The North western province also hosts Kansanshi and Lumwana Copper Mines, which account for more than 50% of the country's total copper output. The two mines are owned by Toronto-listed First Quantum Minerals Ltd. (FM.T) and Barrick Cold Corp.(ABX) respectively.

Write to Nicholas Bariyo at nicholas.bariyo@wsj.com

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