The International Monetary Fund (IMF) said on Wednesday its executive board had completed a third review of Zambia's Extended Credit Facility and approved an immediate disbursement of some $569.6 million.

The Fund's board also approved a request to increase its financial support from $1.3 billion to $1.7 billion to help the southern African country respond to a severe drought, which has caused crop losses and affected power generation.

In a statement, IMF official Antoinette Sayeh said Zambian authorities had made progress on economic and structural reforms while addressing humanitarian challenges due to the drought.

"Going ahead, coordinated macroeconomic policies, continued efforts to restore fiscal and debt sustainability, and consistent reform implementation would be key to addressing the impact of the drought, preserving macroeconomic stability, and bolstering growth," said Sayeh, the Fund's deputy managing director.

Copper-rich Zambia dragged itself out of default this month after a debt-restructuring process that took more than three-and-a-half years and was a cautionary tale for the G20's Common Framework mechanism designed to help low-income countries tackle unsustainable debt burdens.

The protracted debt rework has deterred investment, constrained economic growth and weighed on local financial markets.

Zambia's finance minister asked parliament last week to approve additional spending of 41.9 billion kwacha ($1.65 billion) to help repay external debt and address the drought.