Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD2823 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT PAPER ON A PROPOSED ADDITIONAL GRANT IN THE AMOUNT OF SDR 7.2 MILLION (US$10 MILLION EQUIVALENT) TO THE UNION OF THE COMOROS FOR THE COMOROS PROJECT UNDER THE FOURTH PHASE OF THE REGIONAL COMMUNICATIONS INFRASTRUCTURE PROGRAM September 7, 2018 Digital Development Global Practice Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective July 30, 2018) Currency Unit = KMF 421 KMF = US$1 US$ 1.0 = SDR 0.71 FISCAL YEAR January 1 - December 31 Regional Vice President: Hafez M.H. Ghanem Country Director: Paul Noumba Um Global Practice Director: Boutheina Guermazi Practice Manager: Jane Treadwell Task Team Leader: Tim Kelly ABBREVIATIONS AND ACRONYMS ABGE Projet d'Appui à la Bonne Gouvernance Economique (Project for Supporting Good Economic Governance) ACTIC Association Comorienne des TIC (Comorian ICT Association) AF Additional Financing ANRTIC Autorité Nationale de Régulation Des Technologies de l’Information et de la Communication (National Authority for the Regulation of Information and Communication Technologies) CC Comores Cables ccTLD Country Code Top Level Domain CERT Cybersecurity Emergency Response Team CIDC Comoros Integrated Development and Competitiveness Project CPF Country Partnership Framework CPS Country Partnership Strategy CREF Cellule de réformes économiques et financières (Unit for follow-up of Economic and Financial Reforms) CSOs Civil Society Organizations CT Comores Telecom DA Designated Account DLFI Disbursement Letter and Financial Information DNS Domain Name System DPO Development Policy Operation E&SA East & Southern Africa EASSy Eastern and Southern Africa Submarine Cable System e-GOV E-Government EIA Environmental Impact Assessment FCC Fédération des Consommateurs Comoriennes (Federation of Comorian Consumers) FDI Foreign Direct Investment FLY-LION 3 FLY-Lower Indian Ocean Network, Phase 3 FM Financial Management FY Fiscal Year GoUC Government of the Union of the Comoros ICT Information and Communication Technologies IDA International Development Association IDI ICT Development Index IFC International Finance Corporation IFR Interim Financial Report IRU Indefeasible Rights of Use ISP Internet Service Providers ISR Implementation Status and Results Report ITU International Telecommunication Union IXP Internet Exchange Point KMF Comorian Francs M&E Monitoring and Evaluation MDA Ministries, Departments and Agencies MoF Ministry of Finance MoPTPTT Ministry of Posts and Telecommunications, Promotion of New ICTs, Transport and Tourism PAD Project Appraisal Document PCN Project Concept Note PDO Project Development Objective PFM Public Financial Management PIU Project Implementing Unit PPA Project Preparation Advance RCIP-4 Regional Communication Infrastructure Program – Fourth Phase SDG Sustainable Development Goals SDR Special Drawing Right SGG Secretary-General of Government SIDS Small Island Developing State SME Small and Medium Enterprises SPV Special Purpose Vehicle SSA Sub-Saharan Africa TA Technical Assistance TDS Total Debt Service Telco Telma Comores TOR Terms of Reference TTL Task Team Leader UIT Institut Universitaire de Technologie (University Institute of Technology) UoC Union of the Comoros US$ United States Dollar WBG World Bank Group The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) BASIC INFORMATION – PARENT (RCIP4 - Regional Communications Infrastructure Program - APL 4 (RI) - P118213) Country Product Line Team Leader(s) Africa IBRD/IDA Timothy John Charles Kelly Project ID Financing Instrument Resp CC Req CC Practice Area (Lead) P118213 Investment Project GDD11 (9386) AFRVP (209) Transport & Digital Financing Development Implementing Agency: Bureau RCIP-4 (4th Phase of the Regional Communications Infrastructure Program) ADD FIN TBL1 Is this a regionally tagged Country (ies) project? Yes Bank/IFC Collaboration No Original Environmental Approval Date Closing Date Current EA Category Assessment Category 10-Sep-2013 31-Dec-2019 Partial Assessment (B) Partial Assessment (B) Financing & Implementation Modalities Parent [ ] Multiphase Programmatic Approach [MPA] [ ] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [ ] Fragile State(s) [ ] Disbursement-Linked Indicators (DLIs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a Non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made disaster [ ] Alternate Procurement Arrangements (APA) Feb 27, 2018 Page 1 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) Development Objective(s) The development objectives of this project, in line with the overall RCIP program, are to support the Recipient’s efforts to lower prices for international capacity and extend the geographic reach of broadband networks. Ratings (from Parent ISR) RATING_DRAFT_Y ES Implementation 23-Feb-2017 25-Jul-2017 27-Jan-2018 17-Feb-2018 08-Jun-2018 Progress towards achievement of MS S S S S PDO Overall Implementation MS S S S S Progress (IP) Overall Safeguards Rating MU S Overall Risk S S S S S BASIC INFORMATION – ADDITIONAL FINANCING (Additional Financing for the Comoros program of the 4th Phase of the Regional Communications Infrastructure Program - P166737) ADDFIN_TABLE Urgent Need or Capacity Project ID Project Name Additional Financing Type Constraints P166737 Additional Financing for Restructuring, Scale Up No the Comoros program of the 4th Phase of the Regional Communications Infrastructure Program Financing instrument Product line Approval Date Investment Project IBRD/IDA 28-Sep-2018 Financing Projected Date of Full Bank/IFC Collaboration Joint Level Disbursement 30-Sep-2021 Yes Complementary or Feb 27, 2018 Page 2 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) Interdependent project requiring active coordination Is this a regionally tagged project? Country (ies) Yes Africa, Burundi, Kenya, Comoros, Madagascar, Malawi, Mozambique, Rwanda, Tanzania, Uganda Financing & Implementation Modalities Child [✓] Series of Projects (SOP) [✓] Fragile State(s) [ ] Disbursement-Linked Indicators (DLIs) [✓] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a Non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made disaster [ ] Alternate Procurement Arrangements (APA) [ ] Contingent Emergency Response Component (CERC) Disbursement Summary (from Parent ISR) Net Source of Funds Total Disbursed Remaining Balance Disbursed Commitments IBRD % IDA 22.00 19.02 1.15 94 % Grants % PROJECT FINANCING DATA – ADDITIONAL FINANCING (Additional Financing for the Comoros program of the 4th Phase of the Regional Communications Infrastructure Program - P166737) PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFi n1 SUMMARY (Total Financing) Proposed Additional Total Proposed Current Financing Financing Financing Feb 27, 2018 Page 3 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) Total Project Cost 22.00 10.00 32.00 Total Financing 22.00 10.00 32.00 of which IBRD/IDA 22.00 10.00 32.00 Financing Gap 0.00 0.00 0.00 DETAILS - Additional Financing NewFinEnh1 World Bank Group Financing International Development Association (IDA) 10.00 IDA Grant 10.00 IDA Resources (in US$, Millions) Credit Amount Grant Amount Total Amount Africa 0.00 3.00 3.00 Regional 0.00 3.00 3.00 Comoros 0.00 7.00 7.00 Regional 0.00 7.00 7.00 Total 0.00 10.00 10.00 COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [ ✔ ] No Does the project require any other Policy waiver(s)? [ ] Yes [ ✔ ] No INSTITUTIONAL DATA Feb 27, 2018 Page 4 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) Contributing Practice Areas Finance, Competitiveness and Innovation Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks Gender Tag Does the project plan to undertake any of the following? a. Analysis to identify Project-relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF Yes b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment Yes c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes PROJECT TEAM Bank Staff Name Role Specialization Unit Team Leader (ADM Timothy John Charles Kelly Task Team Leader GDD11 Responsible) Sylvain Auguste Procurement Specialist (ADM Procurement GGOPF Rambeloson Responsible) Maharavo Harimandimby Financial Management FM specialist GGOAC Ramarotahiantsoa Specialist Andrianjaka Rado Team Member Safeguards specialist GSU20 Razafimandimby Country lawyer for regional Edith Ruguru Mwenda Counsel LEGAM programs Isabella Maria Linnea Demand stimulation Team Member GDD11 Hayward component Jacqueline Beatriz Veloz Team Member Legal specialist LEGLE Lockward Environmental Safeguards Paul-Jean Feno Safeguards specialist GEN07 Specialist Feb 27, 2018 Page 5 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) Peter F. B. A. Lafere Social Safeguards Specialist Safeguards specialist GSU01 Razafimahefa Iolinjaka Team Member FM assistant AFMMG Extended Team Name Title Organization Location Feb 27, 2018 Page 6 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) AFRICA ADDITIONAL FINANCING FOR THE COMOROS PROJECT UNDER 4TH PHASE OF THE REGIONAL COMMUNICATIONS INFRASTRUCTURE PROGRAM TABLE OF CONTENTS I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ........................................ 8 II. DESCRIPTION OF ADDITIONAL FINANCING .................................................................... 11 III. KEY RISKS ..................................................................................................................... 16 IV. APPRAISAL SUMMARY .................................................................................................. 18 V. WORLD BANK GRIEVANCE REDRESS .............................................................................. 21 VI. SUMMARY TABLE OF CHANGES .................................................................................... 22 VII. DETAILED CHANGE(S).................................................................................................... 22 VIII. RESULTS FRAMEWORK AND MONITORING ................................................................... 27 Feb 27, 2018 Page 7 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING 1. This Project Paper seeks the approval of the Executive Directors to extend to the Union of the Comoros (GoUC) an Additional Financing (AF) grant in the amount of US$10 million, for the Comoros Project under the Fourth Phase of the Africa Regional Communications Infrastructure Program APL4 (RCIP-4) (P118213) (Grant H878-KM) An official request was received on September 27, 2017, proposing a scale-up and extension of successful activities intended to stimulate demand for connectivity services (Sub-components 2.2 and 2.3). AF is also requested to reinforce activities that support an enabling policy and regulatory environment (Component 1) and for project management (Component 3), underfunded due to a budget shortfall, owing to exchange rate losses sustained during the first phase of program implementation. The Project Paper also proposes a restructuring to (i) change components and costs; (ii) revise the results framework; (iii) revise disbursements arrangements; and (iv) extend the closing date to from December 31, 2019 to June 30, 2021. A. The Project’s original objectives, design, and scope Program objective 2. The overall project development objective (PDO) is “to support the Recipient’s efforts to lower prices for international capacity and extend the geographic reach of broadband networks”, in keeping with the aims of the wider regional program, launched in 2007. This objective is unchanged under this AF. The wider regional IDA operation aims to: (i) accelerate the roll-out of regional fiber optic infrastructure; and (ii) finance the advanced purchase of broadband capacity for use by Governments and other targeted users (schools, universities, community associations, etc.), and to finance related activities, such as implementation of e- Government (e-GOV) applications. Program design 3. In the absence of robust regional ICT infrastructure, the Union of the Comoros (UoC) has remained isolated and unconnected to regional networks and markets. Like many small islands developing states (SIDS), Comoros faces huge challenges, in terms of connectivity, due to its remote location and the small size of its economy, which means there is little scope for economies-of-scale. 4. However, until recently, it was the absence of competition and weak regulation that best explains the failure of the market to drive down prices and expand access to ICT services, relative to other islands states in the region that continue to outperform Comoros in terms of key ICT indicators).1 Until 2015, Comoros was one of only a handful of countries to have retained a state-owned monopoly in the ICT sector – a legacy which continues to hamper full market liberalization. RCIP-4 has remained committed to providing policy and regulatory support to boost competition, ensuring that new infrastructure is accessible to all service providers 1 Comoros is currently ranked 164 out of 176 countries in terms of ICT sector development, according to the International Telecommunication Union’s (ITU) ICT Development Index (IDI). In terms of pricing, Comoros is among the worst performing in the region. Despite the price reductions achieved through the project, Comoros ranks second to last, the cost of a typical basket of calls is equivalent to around 14 percent of GNI per capita. Comoros’s broadband services are also among the most expensive in Africa. Fixed internet penetration is estimated to be a mere 5.1 percent for households according to ITU (figures from June 2017). By comparison, the Seychelles and Mauritius have a broadband penetration rate of 57.9 percent and 53.2 percent, respectively. For mobile communications, the cost of a typical basket of calls is equivalent to around 14 percent of GNI per capita. Mobile broadband services are also among the most expensive in Africa, costing 14.5 percent and 18.2 percent of GNI per capita for 500MB and 1 GB, respectively. Page 8 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) on open, transparent, and non-discriminatory terms. 5. The project has sought to close the persistent connectivity gap, through a combination of supply- and demand-side interventions, in line with the design of the overarching regional framework. Supply-side investment support is being provided to finance Comoros’ membership of, and participation in, the FLY-LION 3 regional submarine cable that will run from Moroni to Mayotte, with an extension to Madagascar, to expand access to broadband. On the demand-side, a program has been developed and successfully rolled out to stimulate market demand for connectivity services among target users, including through the advanced purchase of broadband capacity. Scope: Core program components 6. The original US$22 million program, which became effective in November 2013, comprised three core components, as shown in the table below: Table 1. Existing project components under RCIP-4 Component 1: Enabling Environment (US$3.3 million): Promoting further regional market integration, sector liberalization and legal and regulatory reforms. Assisting the government with the submarine cable FLY-LION 3, including environmental studies, feasibility studies and demand analysis. Component 2: Connectivity (US$17 million): 2.1. Financing Comoros’s membership and participation in the FLY-LION 3 cable consortium; 2.2. Providing demand stimulation through the advance purchase of capacity for target beneficiaries; 2.3. Additional measures to stimulate demand: promoting the creation of new Internet Service Providers (ISPs) and establishing an Internet Exchange Point (IXP). Component 3: Project management (US$1.5 million, plus US$0.2m in contingency funds): Supporting project management, including coordination, training, equipment, procurement, financial management, audit monitoring and evaluation, etc. B. Project status 7. The World Bank Group (WBG) is currently the only development actor working to support the development of the domestic ICT sector – a sector that has been identified as instrumental to wider private sector growth and poverty reduction efforts. RCIP-4 is also the largest WBG project being implemented in the UoC and, despite some initial delays, the project is now rated as “satisfactory” – exceeding all but one of its targets, with disbursement at 94 percent (as of August 2018). In fact, disbursement in FY17/18 was a record for Comoros, reaching over US$12 million. The project is currently in compliance with all legal covenants and financial reporting requirements, and rated as “satisfactory” in terms of safeguards. 8. The project has a solid track record of facilitating market and policy reform, successfully supporting the progressive liberalization of the local telecom market, and unlocking sector development (see the ‘economic analysis’ section). Notable successes include the passage of the 2014 Communications Act, the licensing of a second operator in 2015 (Telma Comores), and the partial liberalization of the ISP market. With the introduction of competition, the penetration of mobile users has more than doubled (compared with figures recorded at the start of the project), with the new entrant gaining a quarter of the market share within its first year of operation. In an economy otherwise dominated by state-owned enterprises and a legacy of little to no competition, the telecoms sector is now experiencing rapid, private sector-led growth for the first time, with improved prospects for foreign direct investment (FDI). The Comoros project, under RCIP-4, has been a textbook example of Page 9 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) maximizing finance for development. To date, a commitment of US$22 million from IDA has leveraged over US$90 million in license fees and private-sector led infrastructure investment. 9. Nevertheless, challenges remain vis-à-vis fostering an enabling environment (Component 1), which hamper further investment. The incumbent (Comores Telecoms (CT)), has lost market share, and is operating with unsustainable levels of both staff and debt. Privatization of CT was envisioned under the original program, but was postponed ahead of the 2016 elections, due to feared job losses. However, following a change in top- level management, in February 2018, CT now appears to be more open to the idea of restructuring, and launched a new 4.5G mobile service in July 2018. Capitalizing on this window of opportunity for restructuring should be a top-priority for the Government. Other pending market issues, which need to be resolved, include: (a) providing options for the restructuring of Comores Cables – the Special Purpose Vehicle (SPV) created to commercialize connectivity from the new FLY-LION 3 cable (see ‘Appraisal Summary’); (b) achieving full interconnectivity amongst operators, including the introduction of guidelines for infrastructure-sharing; (c) establishing efficient and equitable licensing fees (e.g. in relation to spectrum) and sectoral tax policy; and (d) supporting the authorization of additional ISPs and closed-user group networks, and stimulating the creation of new ISPs (Sub- component 2.3). To date, three ISP licenses have been awarded – one short of the target set by the project. Unfortunately, this incomplete market reform agenda deters investors, which include the International Finance Corporation (IFC), which is planning a US$16 million investment in Telma Comores. 10. Construction work for the northern portion of the new FLY-LION 3 cable, from Moroni to Mayotte, is due to be completed in 2018. Once completed, the cable should greatly increase internet capacity for the islands, as well as provide redundancy of routing. Construction of a new FLY-LION3 landing station, in Moroni, is also about to commence, and will also house a new Internet Exchange Point (IXP), funded through the project. 11. In FY17/18 the project successfully rolled-out of the Demand Stimulation Program (under Sub- components 2.2 and 2.3). ICT equipment, computers, as well as connectivity has been supplied to schools, university campuses, local government offices (mairies) and community associations, based on an indefeasible right of use (IRU) arrangement, to create a sustainable and growing customer base. This initiative has helped increase access to ICT in schools by over 10 percent, nationwide, and spurred actions by education authorities to integrate more digital tools in education. New Community Information Centers (CICs), hosted by local government offices and community associations, have also created spaces where local communities can acquire foundational digital skills, allowing them to begin reaping the benefits of the wider digital economy. C. Rationale for Additional Financing 12. Part of the total additional US$10 million requested, is intended to cover exchange rate losses encountered since the grant was approved in 2013, due to the devaluation of the Special Drawing Right (SDR) against the US Dollar (US$). In December 2017, exchange rate losses amounted to over US$2 million, so certain items were cancelled from the budget for 2018, including the co-working space and purchase of additional internet capacity. This funding will thus be channeled towards these activities outlined as part of the original program, including targeting outstanding market and regulatory issues, detailed above. Resolving pending market issues will be important not only for sectoral development, but also in terms of setting a positive precedent for private sector development, competition and foreign direct investment (FDI) in Comoros, more broadly. Page 10 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) 13. The original Project Appraisal Document (PAD) envisioned a possible second phase of demand-side programming, including the digitization of public administration and government services. This also features as a critical demand-stimulation intervention under the regional RCIP-framework, aimed at bringing the public online. Given the success of the present Demand Stimulation Program, a scale-up of related activities is merited to expand assistance to central government ministries, department and agencies (MDAs). Government MDAs sorely lack access to connectivity services and are yet to benefit from the Program. 14. By both expanding government connectivity and introducing primary technical solutions as well as basic ICT infrastructure, that lay the foundation for the initial digitization of public administration, the AF requested will help set the UoC on the path towards digital transformation. All new activities proposed below stem from the request made by the Government and are aligned with the nation’s digital development aspirations, detailed in the Comores Numérique Strategy, 2018-2028. This strategy recognizes the transformational impact of digital technology in terms of boosting productivity, innovation, as well as supporting economic diversification and growth of strategic sectors, such as tourism – highlighting the expansion of digital government applications, as well as support for cybersecurity, digital entrepreneurship and digital skills as critical priority areas. 15. The activities proposed are consistent with the current World Bank Group’s Country Partnership Strategy (CPS) FY14-FY17 (Report #82054-KM), discussed by the Board in April 2014, that supports stronger governance, public-sector capacity, ICT innovation and entrepreneurship. Capacity injection (under Component 1), initial digitization of the Government (under Sub-component 2.2) and planned support for ICT entrepreneurship (under Sub-component 2.3) are all pertinent. II. DESCRIPTION OF ADDITIONAL FINANCING A. Change in Components and Costs 16. The main components remain unchanged under the AF, however, individual activities will be scaled up and new activities added using AF: (a) Component 1: Enabling Environment – originally US$3.3 million. An additional US$0.7 million is requested, which will support the provision of technical assistance (TA), training and capacity building (under Sub- components 1.1 to 1.2) geared towards: (i) resolving pending market issues, detailed above; and (ii) supporting new activities, related to expanding Government connectivity and digitization, detailed further below. The latter will, inter alia, include regional benchmarking and study visits, which allow the GoUC to leverage regional best practice in government digitization. Tailored TA will also help the GoUC to create an enabling environment for initial government digitization, including developing relevant regulation, policy guidelines and governance frameworks, in areas such as cybersecurity, supporting interoperability and streamlining of business processes in line with best practice. The project will also seek to convene key stakeholders through workshops – allowing Government to agree on a joint approach or ‘roadmap’ for the future deployment of more advanced e-service applications (such as identity management). Efforts will be made to crowd in ideas from users, including the private sector, the public and diaspora. Targeted training will be provided to staff, who are set to manage new applications, to bridge existing knowledge gaps. While the agenda under Component 1 is ambitious, the AF requested should be sufficient, as some funding from the original program is still available. (b) Component 2: Connectivity – originally US$17 million. An additional US$8.5 million is requested, which will be used to fund scale-up of demand-side interventions (under existing Sub-components 2.2 and 2.3), Page 11 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) particularly within Central Government and the private sector: (i) Component 2.2: Demand stimulation for targeted beneficiary institutions x Bandwidth for central government from regional cables (US$1.4 million). Advance purchase of international internet bandwidth will be expanded to cover an additional target user group - central government MDAs - acquiring an indefeasible right of use (IRU) for internet connectivity for a minimum of five years. In the short-term, this subsidy will provide an anchor tenant, encouraging private sector investment in the expansion of connectivity services offered. It will also support the introduction of new digital government applications, detailed below, which will sustain broader long-term demand. x Governance of the .km country code top-level domain (ccTLD) (US$0.2 million). TA will be provided, allowing the domain to be formally transferred to the Regulator, ANRTIC. Until the arrival of competition, CT was the de facto manager for the .km domain. Greater use of the .km ccTLD, together with the development of a local IXP, will allow the country to manage more traffic locally, reducing the costs of expensive transit of traffic through Europe, and making connectivity more affordable for local consumers. The .km domain is not currently in wide use, but with the activation of a .km government email server, and the launch of more commercial ISPs and .km registrars, it should grow significantly. x Government network, back-up data center and eMail service (US$1.5 million). A dedicated government network, email server and back-up data center will be introduced, as a first step, to digitize internal and external official government communication, using the .km domain. This basic digital infrastructure will form part of an interoperable and secure foundational e-platform, that leverages pre-requisite technology such as an enterprise service Bus (ESB) and web services (APIs). Introducing an official email will reduce the risk of fraud and corruption, as well as data loss, associated with the current use of personal webmail. A new data center will safeguard government data storage, by providing a back-up facility. A recent fire, destroying the Union Treasury and the government central data center, illustrates the urgency of securing governmental data through digitization. x Cybersecurity (US$0.2 million). Foundational cybersecurity tools and processes will be introduced, such as establishing a regional Cybersecurity Emergency Readiness Team (CERT), supported by awareness-raising and cybersecurity training for government staff under Component 1. This will protect newly digitized government services and data, safeguarding nascent digital government infrastructure introduced, from cybercrime and fraud etc. It will also help boost trust in digital service, such as e-commerce, which can contribute to the growth of the digital economy. Initiatives implemented will be underpinned by regional information-sharing and informed by regional best practice. x E-Visa (US$1.2 million in AF). TA, as well as software and hardware, will be provided to introduce a basic e-Visa system that supports online visa applications, digitized records and processing. Business process simplification will be supported to facilitate automation. To date, no governmental e-services have been introduced in the UoC, contributing to a large knowledge gap. This activity is thus proposed as one of the ‘showcase projects’, encouraging wider application and uptake of digital tools within government, informing strategic thinking and application of best practice. This pilot project features in the Comores Numérique strategy and is viewed as supporting a critical sector (i.e. tourism). Moreover, the activity is in keeping with the regional nature of the overall programmatic framework, by facilitating regional travel, trade and connectivity. x Additional activities to promote eGovernment (US$3.5 million in AF). These activities are aligned with “Orientation 10” in the Comores Numerique strategy, and could include a platform for online registration of businesses, an eCommerce register, an eProcurement platform, a website to allow Page 12 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) citizens to file taxes online, a government interoperability platform, and a coordinating agency for eGovernment initiatives. (ii) Component 2.3: Promotion of Internet Service Providers and an Internet Exchange Point x ICT innovation and entrepreneurship: Co-working space (US$0.5 million). A dedicated co-working space will be created that provides a conducive environment for ICT business innovation and training. Early planning and scoping for this activity was carried out under the original program. Premises were identified, but implementation was thwarted by a lack of funding. The main co-working space would be located in Moroni, with subsidiary activities (e.g. website development competitions and mentoring schemes) rolled out in Anjouan and Moheli. Related activities will be closely coordinated with the private sector development program (CIDC) - an investment lending program currently at the concept stage - which will provide much broader support for entrepreneurship and innovation. While the team recognizes the need for more sustained support, including start-up incubation and access to financing etc., the co-working space proposed is seen as a critical first step in addressing the existing skills gap – seen as a pre-requisite for innovation. (c) Component 3: Project Management – originally US$1.5 million, with US$0.2 million in contingency funding: Current funding for project management (PM) was fully utilized by the original closing date (June 30, 2018). US$0.8 million is therefore requested, which will be channeled towards supporting the project management of activities implemented using the AF, including additional training. This AF will replenish the contingency that was used up due to devaluation of the SDR. Efforts will also be made to downsize the current staff of the Project Implementation Unit (PIU), and/or to share positions with other IDA- funded programs, to reduce overhead costs. For example, a reduction in the number of focal points for the Demand Stimulation Program is proposed, as well as the elimination of two other positions. A new position for a technical specialist on government applications is proposed, who would liaise closely with government MDAs. 17. Implementation arrangements: No changes are proposed to the fiduciary, management, procurement or institutional arrangements in place, which have generally been working well. The Unit for follow-up of Economic and Financial Reforms (CREF), within the Ministry of Finance (MoF), will remain the responsible agency, supported by the PIU (now solely the PIU for RCIP-4, since the completion and closure of the ABGE program (P102376), in 2016). Synergies are, however, being sought with other PIUs working on World Bank financed projects. It is also possible that the RCIP-4 PIU will take on additional operational responsibilities under the new IDA window, allowing it to expand. The CREF will continue to work closely with the Ministry of Posts and Telecommunications, Promotion of New ICTs, and Transport and Tourism (MoPTPTT) and the Regulator (ANRTIC) – key project beneficiaries. However, given the pan-governmental nature of new activities, such as e- Visas, the GoUC has expanded the membership of the project steering committee to include additional line ministries, including the Ministry of Interior (MoI) and a representative of the Secretary-General of Government. 18. Financing: As the original RCIP-4 program is a regional one - with US$21 million in Regional IDA, complementing US$1 million in National IDA – the AF requested is also considered eligible for Regional IDA. It is proposed that the AF will draw upon US$7.0 million in National IDA, plus US$3.0 million in Regional IDA. Some new activities would utilize only national IDA, while others would leverage regional IDA in the ratio of 1:2.2 (see detailed breakdown and rationale in Table 2). 2 IDA contribution being over 20 percent of the total IDA. For that reason, a ratio of 1:2 is used. Page 13 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) Table 2. Project cost and Financing Current Component Name Current Cost Proposed AF (US$m) of which of Rationale (US$m) Cost (US$m) National which IDA* Regiona l IDA* 1. Enabling Environment 3.3 (of which) 4.0 (of which) +0.7 (of which) 1.1 Technical Assistance for 1.0 1.6 +0.6 +0.2 +0.4 Continuation of the legal and regulatory existing regional project reform, including ISP (+ use of existing funds) authorizations and CT reform 1.2 Strengthening of 1.0 1.1 +0.1 +0.03 +0.07 Continuation of the capacity of the regulator, existing regional project the Ministry and other (+ use of existing funds) institutions 1.3-1.6 Completed TAs 1.3 1.3 - - - Completed 2. Connectivity 17.0 (of which) 25.5 (of +8.5 (of which) which) 2.1 Comoros membership 12.0 12.0 - - - Completed and participation in the FLY-LION3 2.2 Demand stimulation 4.5 (of which) 12.5 (of +8.0 (of which) for targeted beneficiary which) institutions and ISPs (i) Bandwidth for target 4.5 5.9 +1.4 +0.47 +0.93 Bandwidth supplied user groups (lease) – through regional cables schools, government (EASSy and FLY-LION3). etc. (ii) Domain Name System - 0.2 +0.2 +0.07 +0.13 New activity – regional (iii) GovNet and e-Mail - 1.5 +1.5 +1.5 - Purely national project service (iv) Cybersecurity - 0.5 +0.2 +0.06 +0.16 New activity – regional (v) E-Visa - 1.4 +1.2 +0.4 +0.8 New activity – regional (vi) eGovernment - 3.0 +3.5 +3.5 - Purely national project 2.3 Additional measures 0.5 (of which) 1.0 (of which) +0.5 (of which) to stimulate demand: (i) Establishing an IXP 0.5 0.5 - (To be completed with and promotion of existing funds) ISPs (ii) ICT innovation and - 0.5 +0.5 +0.5 - Purely national project entrepreneurship 3. Project Management 1.5 2.3 +0.8 +0.27 +0.53 Continuation of the Contingency 0.2 existing regional project Total: 22 (21.8) 32.0 +10.0 +7.0 +3.0 (70.0%) (30.0%) *Figures have been rounded to the nearest decimal B. Change in Results Framework 19. Two results indicators are marked for deletion as they are considered technologically outdated. These are: (a) Fixed-line internet subscriptions; and (b) Fixed mainline subscriptions – including related intermediary Page 14 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) indicators that reflect usage of the same technology. 20. Based on new activities, under Sub-components 2.2 and 2.3, three new indicators and targets are added: (a) Number of E-Systems connected to an interoperable Government-administered digital platform. The baseline was 0, as of June 2018. The new target is at least 3 – including government email, cybersecurity arrangements and a new e-Visa system. (b) Number of female beneficiaries assisted by the co-working space. The baseline was 0, as of June 2018. The new target is 100. The total number of beneficiaries will be measured, along with share of whom are female. Beneficiaries are defined as unique users of the space, trainees and event attendees, as well as mentees. (c) Number of crowdsourced reports from citizens on quality of service for telecommunication services. The baseline was 0 as of June 2018. The new target is 4. A quality of service observatory has been established to monitor the performance of the telecom operators in different parts of the archipelago. It is intended that reports, based on observations from citizens, would be produced twice-yearly. 21. Given the extension of the project closing date and the addition of new financing, an increase in the target for certain indicators is merited, where existing targets have been exceeded. These include: (a) The access rate to internet services, based on subscriptions per 100 inhabitants – the original target was 7.56; actual rate was 31.8 percent, as of February 2018; and the new target is 37.7 percent by 30 June 2021; (b) The total number of internet subscriptions – the original target was 66,030; the actual number was 253,200, as of February 2018; and the new target is 300,000. To accommodate this, the subsidiary target for mobile internet subscribers is raised to 295,000; (c) The total number of mobile subscribers – the original target was 459,000; the actual number was 530,000, as of February 2018; and the new target is 582,000. Consequently, the number of direct project beneficiaries, measured as the rise in individual subscriptions to ICT services since the project began, is also raised – the original target was 215,000; the actual number was 313,562, and the new target is 365,562. Intermediate targets that are raised include: (a) total broadband internet subscriptions (from the original target of 66,030 to a new target of 300,000, or 37.7 per 100 inhabitants); (b) total mobile broadband subscriptions (from 49,500 to 297,000); and (c) broadband subscriptions as % of all internet subscriptions (from 12.3 percent to 50 percent). C. Disbursement Conditions 22. A disbursement condition is proposed for the AF Component 1 to encourage the GoUC to support further sectoral liberalization: The Government shall ensure that the target for authorization of ISPs is met, with the authorization of at least one additional ISP (four in total). This disbursement condition would be attached to the US$0.7 million that supports new activities, under Component 1. The team feels that this target is realistic. The Regulator has been assisted in identifying a potential ISP (SITA) that could be licensed and clarifying any legal ambiguity associated with establishing a new ISP licensing regime, based on the National Communications Act. In April 2018, an expert mission was funded to assist ANRTIC to make progress, and adverts were placed in local and international media in June 2018 to call for additional ISPs. D. Change in Loan Closing Date 23. The closing date was extended to December 31, 2019, earlier in 2018, and will be extended by a further Page 15 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) 18 months to accommodate implementation of the full AF requested, as well as ensure compliance with the above-mentioned disbursement condition. The initial extension was requested to accommodate the new completion timetable for FLY-LION 3 deployment and construction of the new landing station. The new closing date will be 30 June 2021. E. Change in Disbursements Arrangements 24. The disbursement profile has been updated to reflect the AF and new closing date proposed. The original program is currently 94 percent disbursed and is on track to disburse all existing funding. A revised disbursement schedule has been prepared for FY19 to FY21. III. KEY RISKS 25. No changes are proposed in relation to the overall risk rating (currently rated as “substantial”). However, the task team is cognizant of risks specific to the implementation of new activities proposed under the AF, and thus proposes to mitigate them, as indicated below. 26. Political and Governance – high: The rating is increased from Substantial to High. There were some unresolved issues over which part of the Government ought to have overall responsibility for digitizing government, prompting the postponement of a World Bank-mission in April 2018. This has now been clarified with the Secretary-General of Government asserting control. Nevertheless, successful project implementation hinges on clarity in leadership, channels for coordination, as well as roles and responsibilities (for strategy versus day-to-day maintenance and service delivery). As noted above, the project will convene stakeholders to help resolve related issues. A new institutional framework has been sketched out in the Comores Numérique strategy. The Bank is well-placed to advise the GoUC on international best practice in relation to such governance arrangements. 27. Macroeconomic impact – substantial: The country macroeconomic situation is closely related to future plans for the privatization of the historical operator, Comores Telecoms (CT). The risk that privatization may stall remains, which has a ripple effect on the functioning of Comores Cables (CC) (see ‘Appraisal Summary’ section). CT has, for instance, resisted efforts to authorize new ISPs, despite renewed commitment expressed by Government to support a more vibrant and competitive ICT sector. As noted above, new management presents a window of opportunity for reform: a request for assistance was received from CT in March 2018. If privatization is not considered viable, there are still restructuring options that could be pursued in favor of greater market liberalization – e.g. through outsourcing. Long-standing engagement by the project should sustain Government commitment to the unfinished reform agenda and minimize the risk of policy reversals. The GoUC has a track record of responding well to clearly defined targets: All three disbursement conditions under the existing project were met in April 2015. The disbursements condition proposed should thus help in this regard. Moreover, a number of policy reforms have been proposed as triggers in the DPO, including (i) full interconnectivity between CT and Telma, with signed agreement; (ii) consensus and publication on a methodology for calculating spectrum cost recovery fees; and (iii) publication by CT of an audited annual report. 28. Strategies and Policies – substantial: Close alignment with the Government’s own draft Comores Numérique strategy should help to limit any risks related to conflicting policy priorities. However, for this strategy to be operationalized, a more concrete ‘roadmap’ will need to be elaborated. Proposed workshops and TA support alignment with best practice and a holistic strategic approach to the digitization of public administration. As noted above, close co-operation between RCIP-4 and the new private sector development Page 16 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) (CIDC) project is also anticipated, which will facilitate mutually reinforcing strategies for ICT sector development, supported by the World Bank. The project Steering Committee could also be enlarged to support strategy alignment. 29. Technical Design – moderate: Technical design risks are considered moderate, as many key activities proposed are a scale-up of existing ones. The e-Visa application and the co-working space are new departures; however, the team is able to leverage experience from the implementation of similar activities in the region. Moreover, the PIU will be expanded to include a new technical specialist, boosting subject-matter expertise. 30. Institutional capacity - moderate: The GoUC’s technical capacity to manage and maintain specific new digital applications is weak. However, these gaps will be addressed through targeted TA and training, as outlined above. The MoPTPTT and Regulator are likely to play a major role in implementation. These institutions have already benefitted from five years of capacity building. However, the task team and PIU will also need to continue to build partnerships with other departments and ministries, notably the Secretary General for Government (SGG) (for government email and other eGovernment activities) and the MoI (for the e-Visa program). This is being done notably by enlarging the steering committee to include additional ministries, departments and agencies, and in particular a representative from the office of the SGG. The rating is downgraded from Substantial to Moderate. 31. Fiduciary risk – moderate: Although fiduciary risks were previously rated as “substantial”, overall, the existing PIU has a six-year track record of sound financial management and procurement, including a near faultless record of delivering interim financial reports (IFRs) on time. This bodes well for the implementation of the AF. The rating is downgraded from Substantial to Moderate. 32. Environmental risk – substantial: Construction of the FLY-LION 3 cable and landing stations, which triggered safeguards policies (see ‘Appraisal Summary’ section), is being carried out under the original project. Expansion of digital government services, encouraged by the project, is likely to raise electricity consumption – increasing the project’s carbon footprint, when supplied through non-renewables. However, digitization of related services will also decrease consumption of physical resources (e.g. by reducing travel due to virtual communications). A climate and disaster risk screening has been completed. This concludes that – although Comoros is vulnerable to a wide range of hazards, including volcanic activity, flooding, rising sea levels, tropical cyclones and storm surge etc. – project assets procured using AF are generally not at risk from climatic shocks or future trends. Mitigation measures will also be taken – e.g. locating the new data center on higher ground. 33. Social – substantial: The Government has traditionally shied away from interventions that may reduce employment. Restructuring of CT, currently the country’s largest employer, is likely to result in redundancies. Efficiency gains in government, resulting from the digitization of public administration, is also likely to trigger job losses. It will also eliminate ghost workers. The project will retrain ICT professionals and foster ICT entrepreneurship, which will help limit unemployment, through the co-working space. Writ large, development of the ICT sector is also expected to boost job creation and access to finance (see below). 34. The Project continues to be classified as Category B due to the characteristics, magnitude and site-specific environmental and social negative impacts. Overall, environmental and social risks are rated as “substantial”. Page 17 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) IV. APPRAISAL SUMMARY A. Economic and Financial Analysis 35. ICT services remain costly for the average consumer. Poverty is widespread and Comoros continues to rank among the poorest nations in the world. Some 34 percent of the population live below the national poverty line and around 18 percent below the international poverty line (based on 2013-2014 Household Survey data). Lowering prices for ICT services could help boost access. The rationale for public financing is driven by the fact that the market has hitherto been dominated by operations managed by the state. The RCIP-4 program has promoted competitive market entry into the sector. The support provided by the project to demand stimulation has encouraged the private sector to invest. 36. More reliable and cheaper international communications should help reduce Comoros’s isolation, while the introduction of mobile money will reduce the transaction costs of sending remittances . Comoros faces challenges in terms of connectivity due to its remote location and small economy of scale. Many Comorian nationals have also migrated elsewhere in search of opportunities, due to the country’s weak socioeconomic development and turbulent political past. Data from 2012 suggests that some 108,986 Comorian nationals live overseas, mostly in France. Remittances from the sizable diaspora play a critical role in the local economy, contributing some 21 percent to national GDP. Improved communications and a more liberal telecommunications market will greatly reduce the transaction costs associated with these remittances 37. The unfinished policy agenda – privatization, competition, interconnection and effective regulation – remains critical to achieving the core PDO objective (i.e. reducing prices). A legacy of state monopoly, poor competition and weak regulation continues to drive poor sectoral performance, high costs and poor service delivery. The focus under the AF, on resolving outstanding policy issues and encouraging greater demand for ICT services, should both help bring down market prices and facilitate a more conducive environment for business. Development of the domestic ICT sector should help drive job creation, economic growth and increase government revenue. The telecoms sector tends to account for a high percentage of GDP in Small Island Economies, and telecommunication operators are often among the largest companies and thus large tax contributors – Comoros is no exception. The indirect economic impacts of ICTs are also significant. ICTs are expected to be a source of new jobs, for instance through microwork, applications development or offshore business process outsourcing (e.g. facilitated though investment in the co-working space), or the promotion of tourism (e.g. through the e-visa pilot). However, the main value added by the WBG through the AF will be in securing existing jobs, particularly in agriculture and in trade. B. Technical 38. Implementing the public private partnership (PPP) model, as described in the original PAD, has proved challenging. The creation of the SPV, Comores Cables (CC), was identified as a means of securing funding from existing and future private operators, channeling contributions to the Comoros portion of the FLY-LION 3 consortium and ensuring open access to FLY-LION 3 capacity (as well as other cable assets). Extensive TA has supported the design of detailed PPP agreements. However, following the postponement of CT privatization, the proposed design proved challenging to fully implement. The GoUC has been reluctant to allow Telma Comores to become a shareholder in CC. Further private sector divestment of both CT and CC is therefore desirable and will be facilitated, using AF, for instance by conducting a study of options for outsourcing. There is a risk that the Government may wish to reintroduce certain areas of exclusivity in the market, for instance in international voice or data communications. This can be mitigated using conditions in future Development Policy Operations. Page 18 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) 39. A majority of the interventions, proposed under the AF, leverage tried and tested tools. The task team therefore does not foresee any technical challenges as hindering implementation. With reliable and plentiful international bandwidth now secured for Comoros, the use of long-term advanced purchase contracts, targeting Government, should provide a critical anchor tenant, able to decrease bandwidth prices further and encourage further investment. Non-government users are also likely to benefit from the economies-of-scale generated by the project. 40. The design of a new e-Visa pilot program, and additional eGovernment activities, poses a technical challenge, both in terms adequately securing the systems as well as making them multilingual and user- friendly. Fortunately, there is plenty of experience of similar projects implemented in the region to draw upon, many of which have been funded under current or past WBG programs. C. Financial Management 41. The parent project (P118213) is in compliance with financial management (FM) requirements, and the same arrangements will be utilized for the AF requested . There are no overdue financial audits or interim financial reports (IFR) - both reports were submitted on time and deemed acceptable. The external auditor’s opinion for FY2016 is without qualification. The FM risk has been rated as “moderate”, from the outset. However, the FM performance was rated “satisfactory” in the latest ISR, based on the most recent Implementation Support mission (carried out in May 2018). To accommodate the AF, the PIU will be making the following adjustments: (i) upgrading its accounting software; (ii) opening a separate designated account; (iii) adjusting the audit’s terms of reference; and (iv) enhancing asset controls at regional level, through regular inventory checks and adherence to clear procedures for safeguarding and remedying asset loss. 42. The FM arrangements of the PIU were re-assessed in March 2018 to confirm readiness for AF. This assessment considered the degree to which: (a) reasonable records have been maintained and financial reports have been produced and disseminated, in support of decision-making, management and reporting; (b) funds are available to finance the project; (c) there are reasonable controls over project funds; and (d) independent and suitable audit arrangements have been made. The financial arrangements in place are considered compliant with the ‘Financial Management Manual for World Bank-financed Investment Operations´, updated February 10, 2017. Based on the March assessment the FM team noted the following, in regard to: (a) Staffing - The existing FM staff will be maintained, with no additional recruitment required. (b) Fund flows and disbursement arrangements - Disbursements will be made in accordance with the ‘World Bank Disbursement Guidelines for Projects’, dated February 2017. The disbursement letter and financial information (DLFI) will define the applicable disbursement methods and terms applied. The PIU will open a segregated designated account (DA) denominated in KMF for AF fund management. (c) Budgeting, internal controls, accounting and reporting - The ongoing budgeting, accounting and reporting arrangements as well as the procedures manual of the project will apply to the AF. The project will extend the current accounting system license to incorporate the AF. (d) External financial audit - The external audit of the AF financial statements will be carried out as part of the parent project’s audit. The audit will comply with the International Standards on Auditing. (e) Implementation support plan - The implementation support mission plan will be aligned with the parent project’s schedule, based on the overall residual risk level. (f) Financial Covenants - The project will submit consolidated IFRs to the World Bank within 45 days of each reporting period. The consolidated financial statements will be annually audited. The report will Page 19 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) be furnished to the Association no later than six months after the end of the project fiscal year. D. Procurement 43. The Government has delegated responsibility for procurement to the RCIP-4 PIU, which now has more than six years of experience, having begun under the ABGE program. The most recent procurement supervision mission was conducted in February 2018. The PIU team has received training in the use of STEP and has begun using it, more consistently. The procurement risk rating at the outset of the Project was “moderate”. The existing project implementation manual was updated in 2017. The PIU is now beginning to use STEP, more consistently. A procurement plan has been adopted by the Steering Committee, that covers procurement until June 30, 2018, the original closing date of the project. A Procurement Project Strategy for Development (PPSD) has been adopted (July 2018) to reflect the implementation of activities under the AF. Specifically, it identifies a number of new procurements that will be undertaken under the AF. A consultant has been hired to assist with preparing terms of reference. Procurement transactions will continue to be carried out in accordance with core World Bank Standards. E. Social (including Safeguards) 44. No new social safeguard policies are triggered under the AF. Under the original program, the main implications for social safeguards arose from the development of the cable landing station in Moroni. Following a public consultation, an abbreviated Resettlement Action Plan (RAP) was submitted to the World Bank. Some squatters and a team of Chinese experts needed to be re-located and were compensated. The no objection for the revised RAP was given by the World Bank on 17 May, and it was published in June 2018. The most recent social safeguards performance tracking report, submitted on March 29, 2018, rated project implementation as “satisfactory”, and this is reflected in the latest ISR. F. Environment (including Safeguards) 45. No new environmental safeguard policies are triggered under the AF. The construction of the FLY-LION 3 cable and landing stations, accommodated by the original project, did trigger environmental safeguards. As noted above, consultants hired to develop the safeguards reports held a public consultation in October 2017 and thereafter produced an Environmental and Social Management Plan (ESMP). All the environmental and social mitigation measures required during the civil works have been included in the bidding document for the landing station and cable deployment. The team will ensure that the Borrower has adequate capacity to supervise mitigation measures during construction. 46. The overall safeguards rating is “satisfactory”. It was revised upwards, following the completion of the RAP and Environmental and Social Impact Assessment/Environmental and Social Management Plan (ESIA/ESMP), as well as the appointment of a new PIU Coordinator who was able to designate responsibility for safeguards. To date, safeguards works had been contracted out, in the absence of a dedicated safeguards officer. However, hiring a full-time safeguards expert is recommend and should be possible if the RCIP-4 PIU takes on further WBG projects in the pipeline. The safeguards policy OP/BP7.60 Projects in Disputed Areas has been dropped for the additional financing as no new construction work is planned in the Mozambique Channel. 47. As noted above, a climate and disaster risk screening has been carried out for the AF and corresponding mitigation measures will be incorporated in the project design. The team notes that key activities implemented under the AF will help expand access and uptake of ICT tools and services that can help shape digital solutions to adaption and mitigation – e.g. through digital emergency cash transfers and dissemination of public information. Page 20 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) G. Other safeguards measures 48. The overall program also has a number of citizen engagement measures, specifically: x Through a crowdsourced quality of service observatory, whereby individual users can report on their everyday experience of using telecommunication services in Comoros. x Through the co-working space. Participation in the co-working space, and the events it organizes is one of the new indicators. The co-working space is open to all. x The PIU maintains a website and published a newsletter V. WORLD BANK GRIEVANCE REDRESS 49. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance- redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org Page 21 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) VI. SUMMARY TABLE OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Safeguard Policies Triggered ✔ Implementing Agency ✔ Project's Development Objectives ✔ Cancellations Proposed ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ VII. DETAILED CHANGE(S) COMPONENTS Current Component Name Current Cost Action Proposed Component Proposed Cost (US$, (US$, millions) Name millions) Enabling Environment: 3.30 Revised Enabling Environment: 4.00 promote further regional promote further market integration, sector regional market liberalization (through the integration, sector award of a second license), liberalization (through an d legal and regulatory the award of a second Page 22 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) reforms. license), an d legal and regulatory reforms. Connectivity: finance 17.00 Revised Connectivity: finance 25.00 Comoros’s membership and Comoros’s membership participation in the FLY and participation in the cable and provide demand FLY cable and provide stimulation through demand stimulation advance purchas e of through advance capacity, promotion of ISPs purchas e of capacity, and establishing an IXP. promotion of ISPs and establishing an IXP. Project management: 1.50 Revised Project management: 3.00 support to finance project support to finance management costs including project management project coordination, costs including project procurement, financial coordination, management, m onitoring & procurement, financial evaluation, etc. management, m onitoring & evaluation, etc. TOTAL 21.80 32.00 LOAN CLOSING DATE(S) Ln/Cr/Tf Status Original Closing Current Proposed Proposed Deadline Closing(s) Closing for Withdrawal Applications IDA-H8780 Effective 30-Jun-2018 31-Dec-2019 30-Jun-2021 30-Oct-2021 REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed REALLOCATION NEW IDA-H8780-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: GD,WK,CS,TR,OP-PRT1,2.2,2.3,3 3,562,081.00 3,289,818.37 3,562,081.00 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: CONSORTIUM FEE-PRT 2.1 Page 23 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) 7,790,000.00 6,769,535.01 7,790,000.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: LEASE OF CAPACITY-PRT 2.2 2,660,000.00 2,236,222.60 2,660,000.00 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: PPF REFINANCING 287,919.00 287,918.93 287,919.00 Total 14,300,000.00 12,583,494.91 14,300,000.00 DISBURSEMENT ARRANGEMENTS Change in Disbursement Arrangements Yes Expected Disbursements (in US$) DISBURSTBL Fiscal Year Annual Cumulative 2014 213,530.00 213,530.00 2015 741,800.00 955,330.00 2016 981,620.00 1,936,950.00 2017 1,381,700.00 3,318,650.00 2018 1,509,990.00 4,828,640.00 2019 1,456,300.00 6,284,940.00 2020 1,586,660.00 7,871,600.00 2021 1,583,530.00 9,455,130.00 2022 320,690.00 9,775,820.00 SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Latest ISR Rating Current Rating Political and Governance z Substantial z High Page 24 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) Macroeconomic z Substantial z Substantial Sector Strategies and Policies z Substantial z Substantial Technical Design of Project or Program z Moderate z Moderate Institutional Capacity for Implementation and z Substantial z Moderate Sustainability Fiduciary z Substantial z Moderate Environment and Social z Substantial z Substantial Stakeholders z Substantial z Substantial Other z Substantial z Substantial Overall z Substantial z Substantial Safguard_Table COMPLIANCE Change in Safeguard Policies Triggered Yes Safeguard Policies Triggered Current Proposed Environmental Assessment OP/BP Yes Yes 4.01 Performance Standards for Private No No Sector Activities OP/BP 4.03 Natural Habitats OP/BP 4.04 No No Forests OP/BP 4.36 No No Pest Management OP 4.09 No No Physical Cultural Resources OP/BP No No 4.11 Indigenous Peoples OP/BP 4.10 No No Involuntary Resettlement OP/BP 4.12 Yes Yes Safety of Dams OP/BP 4.37 No No Page 25 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) Projects on International Waterways No No OP/BP 7.50 Projects in Disputed Areas OP/BP 7.60 Yes No LEGAL COVENANTS2 LEGAL COVENANTS – Additional Financing for the Comoros program of the 4th Phase of the Regional Communications Infrastructure Program (P166737) Sections and Description OPS LEGAL CONVENANT CHILD NODATA No information available Conditions Type Description Disbursement No withdrawal shall be made under category 1 until the Recipient has, in form and substance satisfactory to the Association, implemented appropriate legal measures to meet the target for authorization of ISPs, as shall be evidenced by the authorization of at least one additional ISPs, bringing the total to a minimum of four. Page 26 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) VIII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Africa Additional Financing for the Comoros program of the 4th Phase of the Regional Communications Infrastructure Program Project Development Objective(s) The development objectives of this project, in line with the overall RCIP program, are to support the Recipient’s efforts to lower prices for international capacity and extend the geographic reach of broadband networks. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline End Target 2019 2020 Support the recipient's effort to lower prices for international connectivity (Action: This Objective is New) International Internet Bandwidth (Text) 175.00 3,611.00 Action: This indicator has been Revised International Internet Bandwidth per inhabitant (Text) 232.00 4.13 Average price of wholesale internet capacity (Amount(USD)) 5,500.00 1,000.00 Support the recipient'e efforts to extend the reach of broadband networks (Action: This Objective is New) Access to Internet Services (number of subscribers per 100 people) (Number) 0.70 37.70 Page 27 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline End Target 2019 2020 Total number of Internet subscriptions (Number) 5,416.00 300,000.00 Mobile internet subscriptions (Number) 0.00 295,000.00 Population (Number) 735,375.00 800,000.00 Fixed-line internet subscriptions (Number) 5,416.00 16,300.00 Total number of mobile subscriptions (per 100 inhabitants) 27.39 72.75 (Number) Fixed mainlines (Number) 23,600.00 18,000.00 Mobile subscriptions (Number) 216,438.00 582,000.00 Direct project beneficiaries (Number) 0.00 365,562.00 Female beneficiaries (Percentage) 50.00 50.00 PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline End Target 2019 2020 1. Enabling environment (Action: This Component is New) Number of licensed ISPs (Number) 1.00 4.00 Page 28 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline End Target 2019 2020 2. Connectivity and demand stimulation (Action: This Component is New) Broadband Internet Subscriptions (Number) 150.00 300,000.00 Fixed-line broadband subscribers (Number) 150.00 16,530.00 Mobile broadband subscribers (Number) 0.00 49,500.00 Fixed and mobile broadband subscriptions per 100 0.02 37.70 inhabitants (Number) Broadband subscribers as a percentage of total ICT subscriptions (Percentage) 0.04 50.00 Number of E-Systems connected to an interoperable 0.00 3.00 Government-administered digital platform (Number) Number of female beneficiaries of the co-working space 0.00 100.00 (Number) Number of crowdsourced reports from citizens on quality of service for telecommunication services (Number) 0.00 4.00 Action: This indicator is New IO Table SPACE Monitoring & Evaluation Plan: PDO Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection International Internet Bandwidth ANRTIC ANRTIC Annual Page 29 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) International Internet Bandwidth per ANRTIC ANRTIC Annual inhabitant Average price of wholesale internet ANRTIC ANRTIC Annual capacity ITU World Telecommunic ation/ICT Indicators Access to Internet Services (number of Database, ANRTIC Annual subscribers per 100 people) based on original information sourced from ANRTIC ITU World Telecommunic ation/ICT Total number of Internet Indicators ANRTIC Annual subscriptions Database, based on original data from ANRTIC TeleGeograph Mobile internet subscriptions ANRTIC Annual y, ITU World Bank Development Population ANRTIC Indicators, Annual sourced from UN TeleGeograph Fixed-line internet subscriptions ANRTIC Annual y, ITU, Page 30 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) ITU World Telecommunic ation/ICT Total number of mobile subscriptions (per Indicators ANRTIC Annual 100 inhabitants) Database, compiled with raw data from ANRTIC Fixed mainlines ANRTIC ITU Annual ITU, Mobile subscriptions ANRTCI Telegeograph Annual y Direct project beneficiaries ANRTIC ANRTIC Annual Female beneficiaries ME PDO Table SPACE Monitoring & Evaluation Plan: Intermediate Results Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Number of licensed ISPs ANRTIC ANRTIC Annual ITU World Telecommunic ation/ICT Broadband Internet Subscriptions ANRTIC Indicators, Annual based on data sourced from ANRTIC Page 31 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) ITU World Telecommunic ation/ICT Indicators, Fixed-line broadband subscribers ANRTIC Annual based on original data sourced from ANRTIC ITU World Telecommunic ation/ICT Indicators, Mobile broadband subscribers ANRTIC Annual based on original data sourced from ANRTIC ITU World Telecommunic ation/ICT Fixed and mobile broadband Indicators, ANRTIC Annual subscriptions per 100 inhabitants based on original data sourced from ANRTIC ITU World Telecommunic ation/ICT Broadband subscribers as a ANRTIC Indicators, Annual percentage of total ICT subscriptions based on original data sourced from Page 32 of 33 The World Bank Additional Financing for the 4th Phase of the Comoros Regional Communications Infrastructure Program (P166737) ANRTIC Number of E-Systems connected to an Annual SGG RCIP-4 interoperable Government-administered digital platform Number of female beneficiaries of the co- Annual ACTIC RCIP-4 working space This is a report on the quality of service of telecommunication Quality of services in the archipelago service Crowdsourced data Number of crowdsourced reports from of Comoros, which is Twice- observatory based on citizen ACTIC citizens on quality of service for compiled from yearly established by observations telecommunication services crowdsourced reports from ACTIC citizens. It is intended to be reported twice yearly and should show trends over time and between regions. ME IO Table SPACE Page 33 of 33