The World Bank Climate and Disaster Resilient Cities Project (P173025) Appraisal Environmental and Social Review Summary Appraisal Stage (ESRS Appraisal Stage) Public Disclosure Date Prepared/Updated: 02/17/2022 | Report No: ESRSA01941 Feb 17, 2022 Page 1 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) BASIC INFORMATION A. Basic Project Data Country Region Project ID Parent Project ID (if any) Turkey EUROPE AND CENTRAL ASIA P173025 Project Name Climate and Disaster Resilient Cities Project Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date Urban, Resilience and Investment Project 3/28/2022 6/16/2022 Land Financing Borrower(s) Implementing Agency(ies) Ministry of Treasury and Ministry of Environment, Finance, Ilbank Urbanization, and Climate Change, Local Authorities Proposed Development Objective Public Disclosure The Project Development Objective is to increase access to seismic and climate resilient housing, urban infrastructure and services in selected metropolitan municipalities in Turkey. Financing (in USD Million) Amount Total Project Cost 553.08 B. Is the project being prepared in a Situation of Urgent Need of Assistance or Capacity Constraints, as per Bank IPF Policy, para. 12? No C. Summary Description of Proposed Project [including overview of Country, Sectoral & Institutional Contexts and Relationship to CPF] The proposed Climate and Disaster Resilient Cities Project is aligned with the World Bank Country Partnership Framework (CPF) for Turkey for the FY18-21 period that was extended in the Program and Learning Review (March 2020) to cover the FY22-23 period. The CPF sets out the overall objective of supporting Turkey in achieving more sustainable and inclusive development by focusing on growth, inclusion, and sustainability dimensions. The project will significantly contribute to meeting CPF Objective 8 - Improved Sustainability and Resilience of Cities - under CPF Focus Area 3: Sustainability. Under this focus area, the Government of Turkey (GoT) reaffirmed its strong commitment Feb 17, 2022 Page 2 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) to strengthening the capacity of its cities to reduce the impacts of natural disasters on people and assets and to scaling up its actions to address climate change, for which it has requested WBG and international support. Achieving long-term sustainable growth in Turkey requires a reduction in the physical, social, and economic impacts associated with geophysical and climate change-induced disasters, especially in cities where about 88 percent of the country’s population live and that concentrate a large part of its GDP. Turkey has enacted important regulatory and institutional reforms to reduce the impacts of seismic and climate-related hazards in urban areas with a focus on enhancing the resilience of the built environment, including notably the Law on the Transformation of Areas under Natural Disaster Risk (Law 6306) and related by-laws and strategy guidelines. However, the government faces several challenges in the implementation of this regulatory framework, including a need for greater affordability of retrofitting or demolishing and /reconstructing risk-prone housing to meet ore resilient and energy efficiency standards, greater communication and engagement with citizens and municipalities on the benefits of urban transformation (UT) programs and available resources, and mobilizing finance for municipalities to increase greater investment in resilient urban infrastructure to reduce impacts of natural hazards and climate change. Most of the Turkish housing stock was built prior to the introduction of modern seismic building codes in 2000, is therefore highly prone to natural hazard impacts, and requires urgent strengthening. It is estimated that about 6.7 million residential buildings across the country require seismic strengthening at an estimated cost of US$465 billion. Only about 4 percent of these buildings have been transformed to date. Many homeowners, especially middle and lower-income households, cannot afford the upfront cost required for resilient retrofitting or reconstruction of their risky housing units despite the government’s existing financial assistance. MoEUCC currently provides financial Public Disclosure support to owners of risky housing in the form of either an interest rate buy-down on a mortgage loan from a commercial bank at market rate or a rental subsidy for a period of up to 18 months. Owners of risky housing cannot currently receive both types of support but must choose one of the two options. Affordability analysis shows that only households in the top income quintile can currently afford mortgage loans with the existing interest rate buy-down. Given this affordability gap and the need to choose only one subsidy, most owners have opted for the rental subsidy, which provides short-term financial support but is insufficient to meet the overall objective of obtaining resilient housing. The GoT has recognized the need of developing new financing mechanisms to increase affordability of resilient housing transformation. The government also acknowledges the importance of engaging citizens in the design and implementation of urban transformation programs and is keen to ensure a more participatory approach. Past UT initiatives did not focus specifically on social engagement and were sometimes met with resistance from residents. Learning from these experiences, the government’s new strategy emphasizes the need to actively engage all citizens, including vulnerable groups and women, in urban transformation – especially those interventions targeting retrofitting or reconstruction of housing, which typically requires families to relocate temporarily during the construction process. However, the new citizen engagement approach has not yet been rolled out. Given Turkey’s high exposure to seismic and climate hazards, the vulnerability of critical urban infrastructure needs to be reduced in addition to housing. However, municipalities have limited data and capacity to systematically incorporate climate and disaster risk considerations in urban planning and investment planning processes. They also lack access to finance for resilient infrastructure investments, which are often not commercially viable. Building on the successes of improving municipal service provision of Turkish cities under the long-standing Bank-financed Sustainable Cities Series of Projects (SCP), Ilbank is now looking to mobilize climate finance to support municipalities on green and resilient urban infrastructure investments and enhance systematically their climate and disaster resilience. Feb 17, 2022 Page 3 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) This proposed Project aims to support the government in tackling the challenges related to resilient housing and infrastructure interventions, focusing on the metropolitan municipalities of Istanbul, Izmir, Kahramanmaras, Manisa, and Tekirdag which are all highly exposed and vulnerable to the impacts of natural hazard risks and climate change (seismic, flood, landslides, extreme heat, coastal risks, wildfires, etc.). It will support the government to develop and establish an innovative approach for urban resilience that can be scaled up over time with various sources of financing. The major building blocks of this multi-pronged approach include a new financing mechanism targeting households for resilient retrofitting or reconstruction of risky housing, a methodology to mainstream climate and disaster risk considerations into prioritization and design of urban infrastructure investments, and approaches for enhanced citizen engagement in urban transformation. The Project is expected to demonstrate in the selected metropolitan municipalities how this approach can put the government’s urban transformation policies in practice comprehensively. To this end, Components 2 and 3 will benefit the five selected metropolitan municipalities, which represent different typologies of highly vulnerable cities in terms of population, socio-economic development and capacity levels, as well as geographical locations. Component 1 will provide capacity building and technical assistance to the MoEUCC, Project metropolitan municipalities, as well as other municipalities vulnerable to disaster risks based on demand. The pilot cities can provide learning environments for the national government and other cities on financing urban resilience, which could be scaled up over time. The project includes five components as described below: • Component 1- Institutional strengthening to enable conditions for urban resilience. Component 1 will provide Public Disclosure technical assistance to MoEUCC and relevant local government institutions to strengthen their capacity to develop, implement, and monitor climate and disaster-resilient UT programs. It will finance consultant and non-consulting services, training, and goods (i.e. IT systems and software) for, inter alia: (i) the preparation of municipal UT strategies for selected municipalities vulnerable to climate and disaster hazards, jointly with local government officials, including city-wide climate and disaster risk assessments to inform spatial plans and investment prioritization, definition of financing modalities, implementation plans, and citizen engagement strategies for resilient and green urban transformation; (ii) improvement of systems and procedures for managing, monitoring, and evaluating UT programs with the involvement of relevant stakeholders at national and local levels, including spatial hazard and climate risk datasets, modules for the demand-side financing mechanism for risky buildings, environmental and social aspects (e.g., sustainable demolition waste management, gender, citizen engagement), and energy efficiency tracking; and (iii) the preparation and execution of targeted capacity building programs (including training, study tours, etc.) for MoEUCC and municipal staff on relevant topics such as conducting disaster and climate risk assessments, enhancing building code enforcement, integration of energy efficiency measures into resilient housing design, and use of green and nature-based solutions to mitigate climate and disaster risks in the urban environment. • Component 2 – Expanding access to resilient housing. Component 2 will provide demand-side support for resilient housing in Project municipalities by financing loans at below-market conditions for eligible homeowners to retrofit or demolish and reconstruct their risky housing units to meet resilient building code and energy efficiency standards. The loans funded by IBRD will be channeled through eligible participating commercial banks and will be paired with the government’s existing rental subsidies (which will continue to be financed by MoEUCC with their own funds) to support families to relocate temporarily during the retrofitting or reconstruction process. Eligibility and targeting: Owners of residential or workplace units in residential or mixed-use buildings located in Project metropolitan municipalities that are assessed as “risky” according to the provisions of Law 6306 will be eligible to apply for the loans financed under this component. This includes owners of units in multi-family buildings (who are Feb 17, 2022 Page 4 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) expected to be the majority) as well as owners of single-family houses. Owners of risky housing units are eligible to apply for the loans regardless of their income level, however, the financial terms will be differentiated. Middle to lower-income households (those whose household income are below a certain threshold, e.g., 4th or 3rd income quintile); those that only own one unit; and those that are female-headed or include persons with disabilities, deceased military/public servants, elderly or retirees will be eligible to more favorable loan terms. In addition, within the scope of the Regulation on Energy Performance for Buildings, more favorable loan terms will be provided for upgrading to a higher energy efficiency standard (Class A and or B Energy Performance Certificates) than required by the 2019 building code (i.e., Class C Energy Performance Certificate) to incentivize climate change mitigation and help reduce household energy bills. Loan terms: A fixed, below-market interest rate (not tied to IBRD terms), determined based on affordability criteria, will be charged for the loans. There will be further (cumulative) interest rate deductions for eligible owners falling in the categories listed above and for upgrading to higher energy efficiency standards. The interest rates, maximum loan maturity, and principal amounts will be agreed between MoEUCC and the participating commercial banks considering affordability while at the same time ensuring that payment capacity of households is adequately leveraged. All such loan terms shall be reasonable and acceptable to the Bank and will be specified in the Project Operations Manual (POM). Eligible expenditures: The loan proceeds can only be used for civil works and design services required for seismic and climate-resilient retrofitting or reconstruction of risky housing units, including energy efficiency measures. MoEUCC will continue to finance existing rental subsidies with their own funds. • Component 3 - Investments in climate and seismic resilient urban infrastructure. Component 3 will support Ilbank to on-lend loans with lower maturities and lower interest rates than the comparable domestic market to Public Disclosure Project metropolitan municipalities and their affiliated utilities (sub-borrowers) to undertake infrastructure investments that increase resilience against the impacts of climate-related and/or seismic hazards. It will finance works, goods, non-consulting and consultant services for: (i) demand-driven resilient and green municipal infrastructure investments in Project metropolitan municipalities, and (ii) technical assistance to sub-borrowers to strengthen their capacity to plan, prepare, and implement infrastructure investments that mainstream climate and disaster risk considerations. Sub-project eligibility and prioritization: Sub-projects eligible for financing under this Component include, inter alia: construction or rehabilitation of stormwater, drainage, and flood management systems, of water and wastewater systems and treatment plants, of bridges and roads to climate and disaster-resilient standards; resilient and energy- efficient rehabilitation of municipal buildings (e.g. fire stations, municipal service buildings, community centers, libraries, etc.); and creation of permeable public and/or green spaces and other nature-based solutions. Additionally, sub-projects will need to fulfill the following eligibility criteria: (a) be in areas designated as hazard risk prone in the Project metropolitan municipalities or require improvements for climate and disaster resilience as per existing risk assessment studies, (b) be aligned with existing municipal plans and policy documents (such as city development plans, climate action plans, transport master plans, disaster risk reduction plans, etc.); and (c) be complementary to other investments being financed in these metropolitan municipalities. Any investment with high environmental or social risks will not be eligible for financing. Prioritization among eligible sub-projects will consider in how far sub- projects contribute to climate change mitigation and adaptation, adopt innovative and integrated approaches to building resilience, create demonstrative impacts for increased inclusion, and have a high degree of readiness for implementation. Technical assistance to sub-borrowers: This may include (a) sub-project management and implementation, including in sub-project design, procurement, contract management, construction supervision, environmental and social management, monitoring and evaluation, outreach and citizen engagement; and (b) activities to strengthen the Feb 17, 2022 Page 5 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) institutional and technical capacity of municipal authorities to mainstream climate and disaster risk considerations in planning, feasibility, designs, supervision, and implementation of investments. • Component 4 – Project Management. Component 4 will finance consultant and non-consulting services, goods, training, and operating costs required by ILBANK and MoEUCC to implement the project per Bank policies and guidelines, including but not limited to monitoring and evaluation, reporting, procurement, financial management, and disbursement, environmental and social management, grievance redress mechanisms, communication and outreach activities for urban transformation as well as the housing component to engage with potential and ongoing beneficiaries, especially those considering applying for loans to retrofit or replace reconstruct their housing units to understand the benefits and costs. • Component 5 – Contingent Emergency Response Component, CERC. This Component is included in accordance with OP/BP 10.00 (Investment Project Financing), paragraphs 12 and 13, for contingent emergency response through the provision of immediate response to an Eligible Crisis or Emergency, as needed. It will allow the GT to request the World Bank for rapid reallocation of project funds to respond promptly and effectively to an eligible emergency or crisis, that is a natural or man-made disaster or crisis that has caused or is likely to imminently cause a major adverse economic and/or social impact. An Operations Manual (with an ESMF) will be prepared by MoEUCC; the OM will be a disbursement condition for this Component. D. Environmental and Social Overview D.1. Detailed project location(s) and salient physical characteristics relevant to the E&S assessment [geographic, environmental, social] Public Disclosure Turkey is geographically located between Asia and Europe, a cross-road of the Balkans, Caucasus, Middle East, and eastern Mediterranean with a population of 83 million. 75 percent of its population lives in urban areas and they are all divided into 81 provinces across the country. Turkey is an upper-middle income country, with the world’s 19th largest economy with a Gross Domestic Production that reached US$753.7 billion in 2019 according to the TurkStat. Since August 2018, the economy has shown some vulnerabilities due to structural challenges in output growth, unemployment in the recent years. After 2011 with the refugee crisis outbreak in Syria, Turkey has become both a transit and target country for migrants and refugees. Today, the country hosts the highest number of refugees, more than 3.6 million Syrians under temporary protection, and an estimated 400,000 asylum seekers and refugees from other nationalities. Around 95 percent of the refugee population dwell in urban areas. Turkey are highly exposed and vulnerable to natural disasters such as earthquakes and landslides, as well as climate-related risks such as floods, droughts, and other hazards. About 95 percent of Turkey’s territory, 70 percent of its population, 83 percent of its GDP, and 76 percent of industrial plants are proximal to an active fault line, according to Disaster and Emergency Management Authority, earthquakes have claimed the highest number of lives and caused the greatest economic loss in Turkey, with approximately 94,000 fatalities in several earthquakes since 1900, a total affected population of 7 million, and direct losses of USD 50 billion (Erdik 2013). Climate change is expected to result in increased temperatures of 2.5 to 4°C (with up to 5°C in inner regions) and rising sea levels, affecting the precipitation regime and generating more unstable weather conditions. Already observed and expected impacts include more frequent and intense flooding, prolonged arid seasons and droughts, and extreme heat days. At concept stage, Tekirdag, Kahramanmaras and Manisa are the 3 main cities determined for the urgent urban resilience infrastructure investments. These cities are geographically dispersed across Turkey. Tekirdag is located in the West Marmara region of the country and has a total area of 6,339 km2 and a population of over 1.029 million. Tekirdağ is ranked 30th out of 81 cities in Turkey in terms of overall well-being. Tekirdağ Gross-Domestic Product Feb 17, 2022 Page 6 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) (GDP) is above the Turkish average with a GDP of ₺33,300, compared to ₺26,500 for Turkey as a whole. Kahramanmaras is located in the Mediterranean region, with a total area of 14,327 km2 and a population of 1.145 million. Kahramanmaraş is ranked 48th out of 81 cities in Turkey in terms of overall well-being and 63rd in terms of income and wealth, placing it within the bottom quartile of Turkish cities. Kahramanmaraş GDP is significantly below that of the Turkish average with a GDP of ₺15,800. Located in the Aegean region, Manisa has an area of 13,810 km2 and 1.423 million people. Manisa’s GDP per capita is 8 percent below the national average. Tekirdag city contains no known protected areas or Key Biodiversity Areas (KBAs). Both Manisa and Kahramanmaraş are located near KBAs in the southwestern corner and south central of their provinces, respectively. All three municipalities are exposed to a range of natural hazards, with high exposure to earthquakes and river floods. A flashflood in Tekirdag in 2009 left over 30 people dead and many buildings and infrastructures damaged. Similar incidents occurred in Kahramanmaras and Manisa in 2018. Within Kahramanmaraş, there were 356 flooding incidents in 2018 that required some level of intervention. All three cities have migrant/refugee populations and different levels of socio-economic development and capacity. Some (i.e., Tekirdag) are also tagged with different vulnerable groups such as Roma people and non- Turkish speaking communities. D. 2. Borrower’s Institutional Capacity The project will be implemented by the Ministry of Environment, Urbanization and Climate Change (MoEUCC) through its General Directorate of Infrastructure and Urban Transformation Services (GDIUTS) as well as ILBANK and sub-borrowing metropolitan municipalities and associated utilities, under two separate Loan Agreements. GDIUTS will assume the overall responsibility for the management of Components 1 (Institutional Strengthening for Urban Resilience), Component 2 (Expanding Access to Resilient Housing), Component 4a (Project Management), and Public Disclosure Component 5 (Contingent Emergency Response). GDIUTS will carry out project management in close coordination with the Ministry of Treasury and Finance (MoTF) and Strategy and the Budget Presidency (SBP), participating commercial banks, and the project metropolitan municipalities (İstanbul, İzmir, Kahramanmaras, Manisa and Tekirdag). For the implementation of Component 2, GDIUTS/MoEUCC will sign protocols with selected commercial banks to serve as loan servicing agencies on behalf of MoEUCC with roles and responsibilities as agreed with the World Bank. Based on this agreement, the role of participating commercial banks will be that of fiduciary agents administering the funds for loans on behalf of the Ministry and the credit risk for these funds will be held by the government. Hence, the banks will not be Financial Intermediaries in this project. MoEUCC will be responsible for ensuring the preparation and implementation of the E&S documents for Component 2. During implementation, individual E&S consultants will also be hired for MoEUCC’s provincial directorates to monitor the project. For housing construction/rehabilitation activities, the MoEUCC’s General Directorate of Vocational, has a registry of contractors and developers that are classified into different types of construction activities, and are eligible to carry out housing works based on their technical proficiency and financial soundness. The MoEUCC will be responsible for ensuring that the developers eligible for participating in urbant transformation projects meet the quality standards and the E&S requirements during the construction process. The same will apply to supervision consultants and firms. The MoEUCC has some experience in implementing projects financed by the World Bank including the Seismic Resilience and Energy Efficiency in Public Buildings Project (P175894) and the Energy Efficiency Public Building Project (P162762), and other projects by International Financial Institutions (IFIs). However, GDUITS’ has no previous working experience with World Bank or other IFIs and will hence establish an adequately staffed Project Management Unit (PMU) to implement this project. The PMU will be headed by a Project Director and will be comprised of technical Feb 17, 2022 Page 7 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) staff assigned by GDIUTS and specialists with prior experience with WB-financed projects hired or assigned by the MoEUCC. The hired/ assigned specialists will at a minimum include: a financial management specialist, a procurement specialist, an environmental specialist, an occupational health and safety specialist, a social specialist, a stakeholder/community engagement specialist and a monitoring and evaluation (M&E) specialist. They will be supported by consultants, as and when required. ILBANK will be the implementing Financial Intermediary (FI) for Components 3 (Climate and Seismic Resilient Urban Infrastructure) and Component 4b (Project Management). ILBANK is a development and investment State-owned bank that on-lends IFIs loans for municipal investments. The existing PMU under ILBANK’s International Relations Department will be responsible for coordinating and supervising the implementation of above-mentioned components. This PMU is organized according to functions and is grouped into four units: Technical Management Unit, Contract Management Unit, Financial Management Unit, and Business Development Unit. The PMU is supported by several specialized and administrative departments within ILBANK. The institution also has 18 regional directorates that can monitor subproject implementation. ILBANK is committed to constantly seeking ways to expand and enhance its institutional capacity in line with its growing portfolio. It has recently hired 20 new technical staff, including environmental and social specialists. The PMU will be further strengthened by hiring individual consultants, including an environmental specialist, a social specialist, and occupational health and safety specialist, to support existing E&S specialists. ILBANK has implemented several projects financed by the World Bank including the Municipal Services Improvement Project (MSIP) 1 and 2, and Sustainable Cities Series of Project (SCP) 1 and 2 and AF. They were implemented under Public Disclosure the World Bank’s safeguards Operational Policies (OPs). ILBANK has recently prepared an emergency operation (Earthquake, Floods and Wildfires (P176608)) under the ESF. ILBANK does not currently have an approved Environmental and Social Management System (ESMS) to manage its portfolio but has committed to having it in place by the Loan Effective date. Sub-borrowing metropolitan municipalities/utilities will be responsible for sub-project investment implementation in accordance with their sub-loan agreements with ILBANK, and will set up municipal project implementation units (PIUs) at local level to ensure effective sub-project implementation. The PIUs will be staffed by municipal employees but may be supplemented by individual consultants as necessary. ILBANK will provide project implementation support to sub-borrowers through guidance and capacity building for sub-project preparation and implementation of the sub-loan agreements. In coordination with the ILBANK PMU, participating sub-borrowers will conduct the selection of consultants for their respective sub-projects, including those to be hired for preparing the ESF instruments and conducting supervision activities. Sub-borrowers will be responsible for the procurement of civil works and goods per their sub-loan agreements. The metropolitan municipalities of Istanbul, Izmir, Kahramanmaras, Manisa, and Tekirdag were confirmed as participating municipalities under Components 2 and 3 of the Project. ILBANK’s PMU staff has participated in several training sessions related to the ESF implementation and is familiar with both the Bank’s previous safeguard operational procedures and the ESF. Implementation of environmental and social measures has been generally satisfactory, though they recently strengthened their capacity to monitor and manage OHS issues. The sub-borrowing municipalities and utilities do not have any experience in implementing the ESF requirements. Therefore, ILBANK will provide needed ESF training and capacity building for all participating municipalities' PIUs throughout subpprojects preparation and implementation, with support from the Bank's ESF team as needed. The focus of these activities will be on the following issues: conducting ESIA of subprojects and Feb 17, 2022 Page 8 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) preparing site-specific ESMPs; labor safety and working conditions; resource efficiency, pollution prevention and management; climate resilience and community health and safety issues; and establishing and implementing a grievance mechanism. II. SUMMARY OF ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) High Environmental Risk Rating Substantial The environmental risk rating of the project is Substantial. The project’s environmental risk rating is mainly attributed to the type and scale of the project activities (demolition and construction of residential or workplace units in residential or mixed-use buildings located in Project, construction/ rehabilitation of municipal infrastructure; wastewater systems and Wastewater treatement plants, storms and flood management system), and their wide geographic coverage (five cities/ provinces). The risk rating also takes into account the GDIUTS PMU’s and the municipal PIUs’ lack of prior experience in applying ESSs set forth in the World Bank's ESF. The long term environmental impacts of the project are expected to be positive. These include enhanced disaster/climate risk resilience of residental and public buidings and infrastructure at the municipal level, reduced carbon footprint through introducing energy efficiency measures and using clean and renewable energy, water conservation through the use of water-saving devices as well as rainwater harvesting and grey water reuse, among others. However, the project activities are expected to have some environmental risks and adverse impacts. These risks and impacts are mainly associated with civil works to be conducted under Component 2 (Expanding access to resilient housing), and Public Disclosure Component 3 on municipal infrastructure (construction or rehabilitation of stormwater and flood management systems, construction or retrofitting of disaster-resilient water and wastewater systems and treatment plants, construction or rehabilitation of bridges and roads). The potential risks and impacts associated with the above activities include: (i) generation of noise, dust, wastewater, and solid waste (ii) bio-aerosols emissions, odors, and vehicle exhaust emissions, and vibration, (iii) contaminated runoff, leachate generation, landfill gas emissions, water contamination, (iv) fire and explosion risks due to landfill gas, (v) occupational health and safety issues due to working at height, manual handling, vibration, exposure to asbestos, chemicals, noise, vibration, pathogens and vectors, (vi) discharge of improperly treated wastewater onto watercourses, (vii) sludge management, (vii) emissions of hydrogen sulfide, methane, ozone, gaseous or volatile chemicals associated with wastewater treatment, and (viii) hydrological/aquatic ecosystem impacts that could be associated with certain stormwater and flood management activities in upstream and downstream locations (e.g. stream bed changes, inundation or denudation of farmlands, groundwater table level changes, pollution, etc.) . In addition, the construction and operation activities under components 2 and 3 could also result in inefficient use of resources such as raw materials, water and energy, if not properly managed. Although the above risks and impacts could be significant, they are predictable, site-specific, and manageable. They can be prevented, minimized, or mitigated by proper assessment and application of adequate mitigation measures in line with national regulations, the Environmental, Health, and Safety general and specific Guidelines (EHSGs), and the Good International Industry Practice (GIIP). Any investment with high environmental risks will be excluded from financing under the project. Social Risk Rating High The social risk rating at concept stage is High. The project has notable positive impacts, such as developing frameworks for affordable housing options for low-income families as well as reconstructing and/or retrofitting Feb 17, 2022 Page 9 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) houses of vulnerable groups (mainly those low income groups in different segments of the society) and providing rental subsidies for the poor populations. However, there are also significant social risks, the most challenging of which is the temporary relocation of household and business owners while structures are being retrofitted or newly constructed (which MoEUCC is implementing under Component 2). In addition to the temporarily displaced project- affected people (PAPs), many of the tenants will leave their current residences/workplaces permanently. Finally, a number of the PAPs will be affected not only by physical displacement, but economic displacement due to local disruptions caused by the civil works (Components 2 and 3). At present, the estimated number of displaced persons is between 24,000 and 40,000 total individuals in the five cities. In addition to the challenges of displacing people while project activities are being carried out, there is a legacy of past urban transformation practices that led to unfavorable outcomes for certain groups of the society – and may cause social resistance against the project. Tekirdag is marked with a high Roma population of around 100 thousand, almost 10 percent of its population. Kahramanmaras hosts around 92 thousand refugees (Syrians under temporary protection (SUTP)), around 8 percent of its population. These two groups are known to live in poor housing conditions in Turkish cities and towns. Literature indicates that Roma people face residential segregation due to the non-inclusive practices on the demand side of the housing market and the limited resources of the households. The project is expected to have influence across a large geographical area, as well as impacting a considerable number of people who are living in disaster and climate risk-prone areas. Non-land induced loss of livelihoods or change in livelihood patterns due to UT practices, and potential exclusion aspects of vulnerable groups (mostly tenants) who will not be able to benefit from or engage in affordable financing schemes, are also social risks for this project. Findings of TA activities may lead to downstream impacts regarding resettlement and other social issues which will be addressed through the integration of the relevant ESSs and mitigation measures in the relevant ToRs of the TA activities. Labor risks are significant due Public Disclosure to major civil works, which are mostly expected to be on brown fields and of labor intensive nature. Community health and safety (CHS) risks due to civil works and urban upgrading activities, and stakeholder and social resistance risks are also critical due to past negative experiences of urban transformation practices of the country that led to gentrification and widening inequality gaps between different social strata. Sexual Exploitation and Abuse/Sexual Harassment (SEA/SH) risks are low. The national law and legislation on SEA/SH is in place and it includes robust measures for addressing SEA/SH risks, including Codes of Conduct for employees and contractors. ILBANK’s implementation of Component 3 could also result in temporary economic and physical displacement, as urban infrastructure is upgraded, rehabilitated, or retrofitted. In addition to broader concerns about urban transformation, there is a potential for community conflict about the location and prioritization of civil works, as well as disruptions to transportation, commerce, livelihoods, etc. B. Environment and Social Standards (ESSs) that Apply to the Activities Being Considered B.1. General Assessment ESS1 Assessment and Management of Environmental and Social Risks and Impacts Overview of the relevance of the Standard for the Project: The environmental risk of the project is Substantial and the social risk is High. The environmental risks are mainly associated with the retrofitting/demolition/reconstruction works under Component 2 and the construction and operation activities of municipal infrastructure under Component 3. The environmental risks associated with the above activities include dust, bio-aerosols, odors, vehicle exhaust and noise emissions, hazardous and non-hazardous Feb 17, 2022 Page 10 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) waste generation, and disposal, wastewater, sludge, rodents infestation, ecological impacts due to improperly treated wastewater discharge, inefficient utilization of natural resources, and occupational health & safety (OHS). Potential hydrological/aquatic ecosystem impacts that could be associated with certain stormwater and flood management activities in upstream and downstream locations (e.g. stream bed changes, inundation or denudation of farmlands, groundwater table level changes, pollution, etc.) are also expected. Although the above risks and impacts could be signficant, they are predictable, site-specific and manageble. These risks and adverse impacts will be assessed in detail through the site-specific Environmental and Social Assessment (ESA) and the implementation of adequate mitigation measures based on the ESMFs guidance to ensure the elimination or reduction of associated impcts. The project will not finance investments that could result in high environmental risks. Additionally, any stormwater/flood management activities or other activities that could impact rivers/streams classified as international waters will be excluded from financing by applying the exclusion criteria set out in the ESMFs. Main social impacts under the project include (i) potential involuntary resettlement that may result in temporary or permanent economic and/or physical displacement and hence, loss of livelihoods; (ii) restrictions of land use; (iii) non-land induced loss of livelihoods or change in livelihood patterns due to UT; (iv) potential exclusion aspects of vulnerable groups who will not be able to engage in affordable financing schemes, (v) labor risks related to OHS and CHS risks due to civil works under the building retrofitting/reconstruction and construction of critical public infrastructure, and (vi) concerns of different stakeholders during the design and decision making processes of the UT practices. Public Disclosure During project preparation, the Bank has conducted its due diligence on the existing housing subsidy schemes to understand whether the program has well-targeting and affordable schemes on housing subsidies for vulnerable groups. MoEUCC provides financial support to owners of risky housing units for retrofitting or reconstruction in the form of either an interest rate buy-down for a loan from a commercial bank or rental support for a period of up to 18 months. Most owners have opted for the rental subsidy, which provides short-term financial support but is insufficient to meet the overall objective of obtaining resilient housing. Lower and middle-income owners who cannot afford to participate in transformation projects would therefore be displaced with the consequential loss of livelihoods and the possibility of moving to another risky building within the city. The government’s new strategy emphasizes the need to actively engage all citizens, including women and vulnerable groups, in urban transformation - especially those interventions targeting retrofitting or reconstruction of housing, which typically requires families to relocate temporarily during the construction process. The strategy envisions that stakeholder engagement activities would be carried out regularly and at appropriate times to better inform the design of urban transformation programs, raise awareness about these programs, and to close the feedback loop with people living in areas targeted for upgrading. To mitigate the risk of possible downstream impacts, specifically on resettlement, labor, community health and safety risks etc., relevant ESSs and mitigation measures will be integrated into the ToRs of the TA studies and into screening tools for prioritizing investments and preparation of feasibility studies, taking into account the result of the Bank’s due diligence during preparation. The ToRs will require TA studies prepared under Components 1, 2 and 4 to pay particular attention to vulnerable and excluded groups and to ensure that urban resilience investments are made in a social inclusive and environmental sustainable manner. This would include supporting MoEUCC in evaluating its existing regulatory tools and methods and proposing key actions based on global good practices. A key focus will be Feb 17, 2022 Page 11 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) to ensure that specialized measures and tools are integrated in MoEUCC strategies and plans under urban transformation to ensure vulnerable groups will not lose livelihoods and also receive project benefits, including but not limited to: improved social inclusiveness through strengthened citizen engagement and participation during decision making processes in city-level urban transformation plans. Rapid social assessments of the housing subsidies and urban transformation program have been carried out and integrated into the project Environmental and Social Management Frameworks (ESMFs); additional social analysis will be incorporated into subsquent ESIAs to understand key issues on vulnerable groups’ access to the formal housing market, and identify areas for improvement to make the housing subsidy framework more socially inclusive. The vulnerable groups that are likely to be impacted in this project include some female-headed households, elderly and disabled in all the municipalities, in addition to Roma in Tekirdag and refugees and low-income groups in Kahramanmaras. Differentiated measures will be considered for such groups in the housing subsidy scheme and UT practices and during stakeholder engagement processes. Mitigation measures are included in the E&S instruments prepared by ILBANK and by MoEUCC. Based on the above discussion, the ESF standards applicable to the project are ESS1, ESS2, ESS3, ESS4, ESS5, ESS6, ESS8, ESS9, and ESS10. The project will also follow a framework approach because the specific locations of the investments are not known at this stage and will be only identified during project implementation. Accordingly, the MoEUCC and the ILBANK have each prepared, consulted on, and will be disclosed before Appraisal: (i) Environmental and Social Management Framework (ESMF); (ii) Labor Management Procedures (LMP); (iii) Resettlement Framework (RF); (iv) Stakeholder Engagement Plan (SEP); and (v) Environmental and Social Commitment Plan (ESCP). Public Disclosure The ESMFs prepared by MoEUCC and ILBANK were based on the requirements of national laws and regulation, the ESF and the (ESSs), the general and sector-specific World Bank Group Environmental Health and Safety Guidelines (WBG EHSGs), and Good International Industrial Practice (GIIP). These ESMFs specify the rules and procedures for Environmental and Social Assessment of the proposed investments, including guidelines for environmental and social screening, identifying potential impacts, and mitigation measures, along with monitoring activities for different types of potential subprojects. The ESMFs provide: (a) a general baseline analysis for the country and the participating cities; (b) potential environmental and social risks and impacts and well known generic mitigation measures for different type of potential investments, (c) the content and structure of ESIA and ESMP, and ESMP Checklist (if relevant); (d) specific sub-management plans, (e) requirements for the monitoring plan and implementing responsibilities in this regard; (e) guidance on potential impacts on CH and mitigation measures; and (f) proposed ESMF implementing arrangements, and necessary ESF capacity building activities for the PMUs and participating entities. Moreover, the ESMFs (and the LMPs) include a section specifying the necessary actions to address health and safety risks (including SEA/SH) related to COVID 19 at the project level, in line with the national guidelines and the Bank’s Note on “COVID-19 considerations in construction/civil works projects”. The ESMFs also specify that the site-specific ESIAs/ESMPs and specific sectoral plans shall be finalized and disclosed prior to the completion of respective bidding document packages for each subproject and included in the bidding documents and the contractor's contract. Furthermore, the ESMFs include criteria to exclude activities that will adversely affect the known cultural heritage sites and natural and critical habitats as referred to in ESS6 and ESS8, respectively. The ESMF prepared by MoEUCC includes a specific section on Contingency Emergency Response Component (CERC) describing the environmental and social risk management procedures and providing a positive list of activities that Feb 17, 2022 Page 12 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) can be funded under CERC. The ToRs of the relevant technical assistance activities and related outputs that the projects will support will also need to include the environmental and social requirements of the ESF. The descriptions of the SEPs, LMPs, and RFs are described below under ESS10, ESS2 and ESS5, respectively. ESS10 Stakeholder Engagement and Information Disclosure From early on in sub-project preparation, stakeholder engagement will take place as an essential precondition for having open, transparent engagement between the project proponents and affected people and all other stakeholders. ILBANK and MoEUCC have prepared project SEPs which are a framework for how the project as a whole is engaging with stakeholders in design and implementation, as well as informing the preparation of local SEPs in the municipalities. The SEPs include definitions of all stakeholders (project affected parties and other interested parties, and vulnerable groups among them), the engagement strategy and plan as well as a plan for disclosure of relevant project documents and lastly, as a key part, will include the details of project level grievance redress mechanism for affected communities. Specialized measures that are culturally appropriate to help engage the vulnerable groups (such as Roma in Tekirdag, refugees and low income groups in Kahramanmaras) will be undertaken during stakeholder engagement processes. During project preparation, principal stakeholders, including representatives from local community organizations, were consulted on the project design and objectives. They have been supportive of the project and look forward to more details on access to the program, equitable benefits and the time taken to do the project activities, including civil works. Public Disclosure The SEPs build on MoEUCC’s citizen engagement strategy and include the ESS 10 principles. By providing a stakeholder analysis, the SEP will provide a template for subproject SEPs at the municipal level on how to engage with different stakeholders, enable their views and concerns to be taken into account in subproject design and social performance. Special efforts will be undertaken to ensure that the SEP and subproject specific SEPs are inclusive of and accessible to vulnerable groups. The SEPs also set out the requirements of the grievance mechanisms, including their accessibility through various channels (email, post, in-person, etc.), procedures for handling and deciding upon complaints, and maintaining records on actions/decisions. The GRMs allow for anonymous complaints and include a channel for SEA/SH complaints, with appropriate protections to ensure they are handled sensitively and confidentially. The SEPs will be disclosed in-country on the ILBANK and MoEUCC websites and in other relevant places by Appraisal. Since details of subprojects may not be known by Appraisal, subproject-specific SEPs are expected to be prepared during project implementation. The SEPs acknowledge the challenges of broad consultations and continuous engagement across all stakeholder groups under the social distancing constraints imposed by the COVID-19 pandemic. The stakeholder engagement activities will start during the early preparation of the project and will continue parallel with the implementation of the project. Due to Covid -19 pandemic, consultations/SEP activities will be either virtual or conducted under the social distancing measures depending on the circumstances related to the COVID-19 pandemic. In addition, the project will follow the WHO’s and the World Bank’s COVID-19, which is also included in the E&S instruments and will Feb 17, 2022 Page 13 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) be a part of the contracts for civil works activities. Direct engagement with stakeholder involving public meetings or gathering of people will start as soon as policies on social distancing are lifted. B.2. Specific Risks and Impacts A brief description of the potential environmental and social risks and impacts relevant to the Project. ESS2 Labor and Working Conditions The project will comprise considerable civil works and various types of project workers. Hence, the ESS2 on Labor and Working Conditions applies. Project workers will include: Direct workers, contracted workers, primary supply workers, and civil servants. Community workers are not expected to be engaged by the project. ILBANK and MoEUCC have prepared and consulted upon LMPs, specifying the types of workers in the project. Where civil servants are involved, they will remain subject to the terms and conditions of their existing public sector employment agreement, unless they are legally transferred to the project. On the basis of the LMPs, each Contractor will develop its own Labor Management Procedure (C-LMP), which should as a minimum include: (i) working conditions; (ii) management of working/workers relationship; (iii) ToR of employment; (iv) provision of equal opportunity; (v) nondiscrimination on employment and wages policy; (vi) measures to prevent forced labor and child labor; (vii) OHS; and (viii) grievance redress mechanism for their employees. Relevant aspects of ESS2 will also be applied to participating FI(s), if any. The FI(s) will have in place and maintain appropriate LMPs, including procedures relating to working conditions and terms of employment, nondiscrimination and equal opportunity, GM, and OHS. Public Disclosure The LMPs are based on the Turkish national labor code and relevant international conventions accessed by Turkey, and also meet the requirements of ESS2. The LMPs include a Code of Conduct for laborers engaged in major civil works, including measures for addressing SEA/SH risks. They also set out the requirements of a grievance mechanism to handle labor complaints from project workers. As for OHS aspects, Turkey has undergone several reforms through adapting a set of international and regional related standards into its national requirements. Besides ILO ratification in 1932, Turkey also passed Law No. 6331 on OHS in 2012. This Law governs workplace environments and industries (both public and private) as well as all classes of employees, including part-time workers, interns, and apprentices. The legislation is comprehensive and is generally applicable across all sectors and many industries. The Ministry of Labor and Social Security (MoLSS) has a mandate to ensure the country's overall implementation of labor and occupational health and safety laws. The Labor Inspection Board, under the MoLSS, has a mandate to enforce labor and OHS laws, and monitor worksite environments to ensure workers’ health and protect them from hazards in the workplace. Several OHS risks are likely to be associated with project construction activities. These include exposure to dust, noise, injuries from exposure to chemicals, hazardous or flammable substances, and liquid, solid or gaseous wastes; accidents caused by confined spaces and excavations; working at heights, working with heavy and electrical machinery and equipment, and working in areas with unbarricaded/uncovered holes; traffic related risks, emergencies (fire, chemical spill, etc.); risks associated with COVID-19. The ESMFs assessed the potential OHS risks associated with proposed subprojects and identified appropriate risk management and generic mitigation measures, Feb 17, 2022 Page 14 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) following the applicable requirements of the national policies, ESS2, WBG’s EHS General and sector-specific Guidelines, and WB’s interim guidance on COVID-19 Considerations in Construction/Civil works. Furthermore, the ESMFs prescribe the procedure for identifying, removing, storing, and transporting hazardous materials, along with the requirements for the protection and training of on-site workers. OHS-related risks and mitigation measures will be elaborated in detail in site-specific ESIAs, ESMPs and/or ESMP Checklists consistent with the principles and procedures prescribed in the ESMFs and applicable requirements of the national legislation, ESS2, WBG’s EHS General and sector-specific (if applicable) Guidelines, and WB’s interim guidance on COVID-19 Considerations in Construction/Civil works. National Regulations and related standards on OHS in Construction Works require specific mitigation measures and standards for managing the risks related to any type of construction works, including demolition, rehabilitation and reconstruction works. Construction works related to working at height and in confined space, working with electricity, PPE, and scaffolds are some of the major subjects managed under these regulations. In case of gaps in the above regulations and standards, related international standards and best practices will be utilized. The ESMFs also require that OHS Management Plans are prepared and implemented by contractors before the commencement of works. The OHS Plans outline all the actions and procedures for ensuring OHS for all workers. ESS3 Resource Efficiency and Pollution Prevention and Management ESS3 Resource Efficiency and Pollution Prevention and Management This standard is relevant. The project civil work activities under component 2 (Expanding access to resilient housing) and Component 3 (Investments in climate and seismic resilient urban infrastructure) may result in environmental pollution and inefficient use of resources (raw materials, water, and energy). This would require adequate Public Disclosure assessment and management to ensure sustainable use of resources and minimizing related adverse impacts on environment (air, water, soil). The potential risks and impacts associated with subproject activities during construction and operation phases, may include noise, vibration, odor and dust, aerosol emissions, hazardous including ACM and non-hazardous waste, wastewater and sludge and contamination of surface and groundwater. The ESMFs prepared for the project provided a general assessment of the above risks along with detailed guidance for site-specific ESA of the subprojects, including generic mitigation measures in line with ESS3 requirements and relevant national regulations, the ESF’s mitigation hierarchy, GIIP, and EHSGs. The site-specific ESA will address site- specific risks and determine relevant mitigation measures. Specific pollution prevention plans for hazardous and non- hazardous waste management will also be prepared and implemented throughout the life of the project. The contractors will prepare site-specific sub-management plans based on the ESIAs/ESMPs. Provisional level sub- management plans may also be prepared, as needed including Waste Management Plan and Asbestos Management Plan. Such plans are particularly important to ensure adequate management of the expected large volume of waste generated from the demolition and construction of risky buildings. Some of this waste may contain hazardous materials such as asbestos and require special attention and due compliance with the national regulations (Regulation for Demolition Operations and Controlling Excavation Soil, and Construction and Demolition Waste). The ESMF presents the details of the waste management regulatory requirements and a list of pre-approved licensed regional landfills/waste facilities capable of handling project-related hazardous and non-hazardous wastes. The construction and operation of the wastewater treatment plants may impact the water quality in the nearby water bodies (lakes, rivers, etc.). To avoid this, it will be necessary to ensure that the effluent quality of treated wastewater complies with relevant Turkish legislation and standards (adopted from EU Directives) and WBG General Feb 17, 2022 Page 15 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) EHS Guidelines. Furthermore, a baseline study for the receiving water bodies will be conducted and water quality monitoring parameters will be included in the environmental assessment TORs and will be monitored during the plant’s operation. The ILBANK ESMF also provide guidance on pest management to manage pest /vector issues during the operation of the WWTPs and sludge management. This include guidance on pesticides use, storage, transportation, disposal and an integrated pest management in line with the GIIP and WBG EHS guidelines. Project investments will be designed to minimize GHG emissions through implementing energy and resource efficiency measures. Efficient energy use measures for residential and municipal public buildings will include insulation, improved lighting, modern and efficient heating and cooling systems, and green building design materials. Measures related to resilient infrastructure will include, among others, latest appropriate technologies for wastewater and sludge treatment, energy and resource-efficient equipment such as water pumps, pipes, valves, etc., and increased public green space that absorb air pollution, including GHGs. Green infrastructure will also be explored as nature-based solutions for flood mitigation. ESS4 Community Health and Safety Community health and safety impacts of the project are expected to be associated with noise and dust emissions, increased traffic and temporary congestion, presence of construction workers and worker camps during the construction works. The project E&S instruments identify possible impacts during the construction and operational phases on CHS, Public Disclosure mitigation measures, monitoring and reporting requirements. The MoEUCC and ILBANK ESMFs include descriptions of CHS risks and mitigation measures. The site-specific ESIAs will include CHS Plans as relevant, and assessment of the risk and impact of the project on the health and safety of the affected communities during the project life cycle, including those who, because of their particular circumstances, may be vulnerable. The ESIAs and ESMPs will identify risks and impacts and propose mitigation measures in accordance with the mitigation hierarchy. Particular areas of attention would be: • avoiding or minimizing exposure to project related traffic and road safety risks; • assessing the likelihood of excessive noise and dust and proposing mitigation measures; • assessing potential exposure to hazardous wastes, including ACM; • identifying risks associated with the uncovered or non-barricaded or not signposted excavated sites, trenches, open holes, open electric cables, etc. and specifying CHS measures. • preparing an emergency preparedness and measures when appropiate; • designing and constructing the structural elements of the project in accordance with national legal requirements, the WBG EHS Guidelines and GIIP, taking into consideration safety risks to third parties and affected communities; • ensuring the concept of universal access will be applied to the design of construction of new buildings and structures, to ensure accessible housing options for people with disabilities within the Project; • assessing potential negative impacts of labor influx in urban areas. SEA/SH risk is considered low. However, as part of the E&S mitigation measures, the project will assess SEA/SH risks, and ensure appropriate measures are put in place, in addition to the Code of Conduct for workers, regular outreach and communication, etc.; Feb 17, 2022 Page 16 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) • in case MoEUCC and its contractors employ security personnel to safeguard their personnel and property, such arrangements shall be guided by the principles of proportionality, the ESS 4 requirements, and applicable national law, in relation to the hiring, rules of conduct, training, equipping and monitoring of security workers. Considering all these, the MoEUCC and ILBANK ESMFs, ESIAs and site specific ESMPs, when relevant, will include relevant mitigation measures to be strictly followed during the implementation of civil works, and also measures ensuring health and safety of communities residing in and around the sites of the project intervention that will be mandatory for adherence by contractors’ workers. The proposed project will likely reduce the vulnerabilities of the local communities and help building their resilience to disaster and climate-related risks. Component 1 of the Project will include a technical assistance to MoEUCC to develop methodologies and datasets for conducting multi-hazard risk assessments, which will include seismic and landslide risks as well as climate-related risks such as flooding. Such assessments will help inform the identification of areas in need of UT, identification and prioritization of the most vulnerable buildings, and improve the capacity of the MoEUCC to support municipalities’ long-term decision-making associated with critical infrastructure delivery and UT projects. City-wide climate and disaster risk assessments for the municipalities of Tekirdag and Kahrahamaras have been completed under an urban resilience technical assistance program. A similar and comprehensive multi-hazard risk assessment for Manisa is currently underway using the same methodology. Based on the results of the assessment, the project will support the integration of relevant disaster and climate-resilient measures, including the reinforcement of relevant building codes, into the retrofitting and upgrading of residential and public buildings and municipal infrastructures. Green infrastructure will also be explored as nature-based solutions for flood mitigation. Public Disclosure Also, care will be exercised so that vulnerable and excluded groups will not face disproportionality large adverse impact from urban regeneration and disaster resilience activities conducted under the Component 1 or downstream investments, and instead will benefit from such activities. By implementing public buildings climate and disasters resilience programs, it would be possible to increase their Energy Efficiency (EE) and comfort levels (i.e., more sustainable heating and comfortable temperatures, more appropriate internal humidity), while boosting local construction and manufacturing jobs. Currently, a fragmented approach led by the municipalities with insufficient budget resources have supported thermal retrofits and EE activities to only at very limited scale. The project proposes while conducting subprojects’ feasibility studies and assessing them, undertaking in each concrete case both assessment of disasters’ (mostly in terms of seismicity and other geological risks such as floods and landslides) resilience, also the buildings climate resilience, as to identify and implement most appropriate EE measures for public buildings renovation. Respectively, the project proposes to conduct (i) an assessment of the structural soundness of selected public buildings, to determine potential structural deficits and options to strengthen their seismic resilience; and (ii) assessing the potential for EE activities targeted at improving climate resilience, and appropriate measures to be proposed at design stage. The project document and the ESMF will provide these requirements, to be followed by site-specific ESIA study and ESMP documents, as relevant. ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Component 3 of the project may involve some temporary and permament land acquisition while municipal infrastructure is rehabilitated or upgraded. Feb 17, 2022 Page 17 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) With regard to Component 2, per Law 6306, urban transformation of risky residential buildings is a voluntary process initiated with risk detection assessments of individual buildings at the request of homeowners, except for cases where buildings are deemed at risk of imminent collapse. Any owner of a single-family home or of a unit in a multi- family building can request a building risk assessment, which is conducted by a licensed evaluator and includes opportunities for objection. The assessment results may recommend either retrofitting or reconstruction. Once a building is officially designated as risky in the property register, agreement of at least 2/3 of the homeowners on the reconstruction is required by law. If some of the owners are not interested or there is no agreement, MoEUCC is informed, and a property value assessment is done by a licensed appraiser. A negotiation process starts internally in the building to ensure that other owners can buy these units at a price not less than the value identified by the licensed appraiser. If there is still no agreement, then these units are put up for auction and can be bought by third parties (e.g., developers) for a fair market price which cannot be lower than value identified by the licensed appraiser. Opponents who feel they did not receive a fair price for their unit can submit complaints to MoEUCC or go to the court. The developer cannot obtain a construction permit from the municipality unless opposing owners have been bought out and there is a management plan signed by all owners of a building (including share and location of unit). A construction permit is a requirement for owners to obtain a Project-financed loan. Both physical and economic displacement are likely to take place during reconstruction of houses, public spaces and other critical urban infrastructure in municipalities, causing temporary or permanent adverse impacts on Project Affected Persons (PAPs). The PAPs include apartment owners, tenants and building superintendents. Potential physical and economic displacement – most of which will be temporary – could involve between 24,000 and 40,000 Public Disclosure PAPs, most of which would be affected by the activities in Component 2, which are being implemented by MoEUCC. Since sub-project details are not expected to become available by Appraisal, ILBANK and MoEUCC have prepared Resettlement Frameworks (RF) which clarify resettlement principles, entitlement matrix, implementing arrangements for Resettlement Plans (RPs), and design criteria to be applied to subprojects to be prepared under the project. The RFs include a gap analysis between Turkish resettlement and expropriation laws, and the Bank’ s requirements under ESS5. The RFs include measures to bridge these gaps in order to ensure that any land acquisition and resettlement under the project will be based on Turkish legal framework as well as be compliant with ESS5. The RF will include measures to assist vulnerable and informal tenants in finding new housing/workspaces, and to support PAPs with title-deed issues that could affect their livelihoods based on land (i.e. the living and workspace areas in the buildings being rehabilitated/reconstructed), but which are not covered under the national laws. Non-land induced livelihood losses will be assessed and mitigated under the ESMFs and relevant ESIAs/ESMPs. Subproject-specific RPs will be prepared as relevant, which will also include detailed livelihood restoration measures, as needed to meet the requirements of ESS5. PAPs with concerns regarding land acquisition/resettlement will be able to raise these through the project-level GRMs that are set out in the 2 SEPs and summarized in the 2 RFs (one each for ILBANK and MoEUCC). Such RPs will be extensively consulted upon, cleared by the World Bank and implemented before the acquired land related assets are taken in possession by the relevant public agency. In addition, the project will include livelihood restoration measures to assist people whose livelihoods have been disrupted as a result of the project. ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources Feb 17, 2022 Page 18 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) The standard is relevant. The project will support civil works for the demolition and reconstruction of risky residential and public buildings and rehabilitation and construction of other infrastructural facilities (e.g., stormwater and flood management systems, disaster-resilient water and wastewater systems and treatment plants, bridges, and roads) in the participating provinces. These activities are expected to be implemented in urban and peri-urban areas and include some sites with known footprints and others on new sites. The details of the subproject areas for the construction and rehabilitation of buildings and the municipal infrastructures have not yet been identified or assessed for their impact on biodiversity and supporting habitats. Potential impacts associated with the above activities may include among others soil removal, clearance of vegetation, biodiversity loss or fragmentation, soil compaction due to machinery and heavy vehicles, and impacts on aquatic and possibly critical habitats and protected areas nearby the project sites (e.g.: Bosphorus, Küçükçekmece Basin, Şile Coast, Pendik Valley In Istanbul;: Ahır Mountain, Berit Mountain in Kahramanmaras; Kizildag, Gediz Delta, Yamanlar Mountain Foça Peninsula in Izmir; and Mountainin in Manisa). Therefore, subproject sites will be screened to determine whether they could have adverse impacts on Natural Habitats and/or Critical Habitats. Subprojects affecting Critical Habitats will be dropped. If impacts on Natural Habitats are expected, then site-specific ESA will include the assessment of biodiversity and ecological significance of the potential impact on terrestrial and/or aquatic habitats coming under impact. The ESMFs provide guidance for the sub-projects site-specific screening and assessment and generic mitigation measures based on ESS6 requirements. Moreover, the ToRs for feasibility studies and E&S site-specific assessments to be prepared during project implementation will include the identification of modified, natural, and critical habitats in the project area, and assessment of any potential risks from project activities including measures to avoid or minimize related impacts. Public Disclosure Depending on the type and scale of risks and related mitigation measures, Biodiversity Management Plans might be required. The ESMFs also include criteria to exclude activities that would result in significant biodiversity risks and impacts, and hence will not be financed under the project (e.g.: construction activities in areas with endangered/protected fauna, earthworks or material supply activities within natural parks, protected areas, and habitats with conservation status, and untreated water discharge to protected riverine habitats). Only subprojects with moderate impact on Modified and Natural habitats may be financed under this project, provided that adequate mitigation measures are included in related site-specific ESMPs and/or Biodiversity Management Plans, in accordance with the mitigation hierarchy and precautionary approach. ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities This standard is considered Not Relevant as there are no people in Turkey meeting the criteria for ESS7 for IP/SSAHUTLC. ESS8 Cultural Heritage Although the project will not finance subprojects targeted at rehabilitation of Cultural Heritage (CH) sites, this standard is relevant as the proposed project activities might affect some CH. Respectively, the screening mechanism under the ESMFs will ensure that subprojects for the rehabilitation of CH or those project activities which may cause impacts on tangible or intangible cultural heritage sites will be excluded from project investments. Furthermore, the ESMFs include a section on guidance on potential impact on CH and mitigation measures. As the participating cities are well known for their CH resources, including for archaeological artifacts, the Chance Finds Procedure included in Feb 17, 2022 Page 19 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) the MoEUCC and ILBANK ESMFs will be part of the specific ESMPs for all earth-moving sub-projects. This procedure will be followed in all cases of previously unknown cultural heritage encountered during project activities and included in all contracts relating to construction in the project (i.e., excavation, demolition, movement of earth, flooding or any other changes to the physical environment). ESS9 Financial Intermediaries This ESS is relevant only to Component 3 of the project, as well as Component 4b (Project Management). As indicated above, for Component 2, the loans funded by IBRD will be channeled through participating commercial banks. These banks (public and private) will be selected by MoEUCC based on expressions of interest and according to criteria acceptable to the Bank, including adequate financial standing, and compliance with the prudential norms of the Banking Regulatory and Supervision Agency. They will not be screening, implementing or monitoring the environmental and social aspects of the project. Therefore, ESS9 does not apply to Components 1, 2, 4a and 5 of the project. These Components will be guided by the ESMF, RF, LMP and SEP prepared by MoEUCC. On the other hand, ILBANK will be functioning as a FI for Component 3, and ESS 9 applies. ILBANK will finance works, goods, and non-consulting and consultant services for: (i) demand-driven municipal infrastructure investments that increase resilience against the impacts of climate-related and/or seismic hazards in Project municipalities, and (ii) technical assistance to participating metropolitan municipalities and affiliated utilities to strengthen their capacity to plan, prepare, and implement infrastructure investments that mainstream climate and disaster risk considerations. Public Disclosure ILBANK will establish by the Effective date of the loan an Environmental and Social Management System (ESMS) as per the requirements of ESS 9. The ILBANK ESMS will be put in place to commensurately assess and manage the environmental and social risks and impacts associated with the FI subprojects/activities. Key elements of the ILBANK ESMS will comply will the requirements of ESS9, including (i) environmental and social policy; (ii) clearly defined procedures for the identification, assessment and management of the environmental and social risks and impacts of subprojects; (iii) organizational capacity and competency; (iv) monitoring and review of environmental and social risks of subprojects and the portfolio; and (v) external communications mechanism. The FI will comply with any exclusions in the legal agreement and apply relevant national law for all FI subprojects. In addition, the FI will apply the relevant requirements for the ESSs to any FI subproject that involves resettlement (unless the risks or impacts of such resettlement are minor), siginificant risks or impacts on the environment, community health and safety, and labor and working conditions. If the proposed FI subprojects are likely to have minimal or no adverse environmental or social risks or impacts as identified in the ESMF, the FI will apply national law. Otherwise, any gap between the FI’s ESMS and the requirements of ESS9 will be addressed, by strengthening the FI’s ESMS applied to the part of portfolio supported by the Bank, to ensure all the requirements of ESS9 are met. Relevant ESS2 requirements will be applied to project workers, as defined in ESS2, of the FIs commensurate with the level of risk and consistent with requirements under national law. The FI will provide adequate documented evidence of adequate labor management procedures as required by ESS2 and Turkish national labor requirements. Feb 17, 2022 Page 20 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) C. Legal Operational Policies that Apply OP 7.50 Projects on International Waterways No OP 7.60 Projects in Disputed Areas No B.3. Reliance on Borrower’s policy, legal and institutional framework, relevant to the Project risks and impacts Is this project being prepared for use of Borrower Framework? No Areas where “Use of Borrower Framework” is being considered: The project will not apply Borrower Framework. IV. CONTACT POINTS World Bank Contact: Zoe Elena Trohanis Title: Lead Disaster Risk Management Specialist Public Disclosure Telephone No: +1-202-473-2086 Email: ztrohanis@worldbank.org Contact: Ahmet Kindap Title: Senior Urban Specialist Telephone No: 5242+8356 / 90-312-4598356 Email: akindap@worldbank.org Contact: Bontje Marie Zaengerling Title: Senior Urban Specialist Telephone No: +1-202-458-8431 Email: bzangerling@worldbank.org Borrower/Client/Recipient Borrower: Ministry of Treasury and Finance Borrower: Ilbank Implementing Agency(ies) Implementing Agency: Ministry of Environment, Urbanization, and Climate Change Implementing Agency: Local Authorities V. FOR MORE INFORMATION CONTACT Feb 17, 2022 Page 21 of 22 The World Bank Climate and Disaster Resilient Cities Project (P173025) The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects VI. APPROVAL Task Team Leader(s): Zoe Elena Trohanis, Ahmet Kindap, Bontje Marie Zaengerling Practice Manager (ENR/Social) Varalakshmi Vemuru Cleared on 17-Feb-2022 at 01:45:51 GMT-05:00 Safeguards Advisor ESSA James Peter Moore (SAESSA) Concurred on 17-Feb-2022 at 09:03:21 GMT-05:00 Public Disclosure Feb 17, 2022 Page 22 of 22