Document of The World Bank FOR OFFICIAL USE ONLY Report No: 136005 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT PAPER ON A PROPOSED ADDITIONAL GRANT IN THE AMOUNT OF US$ 2.93 MILLION TO THE REPUBLIC OF TOGO FOR REDD+ READINESS PREPARATION SUPPORT FROM THE FOREST CARBON PARTNERSHIP FACILITY January 28, 2019 Environment and Natural Resources Global Practice Africa Region Vice President: Hafez M.H. Ghanem Country Director: Pierre Frank Laporte Senior Global Practice Director: Karin Erika Kemper Practice Manager: Maria Sarraf Task Team Leader: Mirko Serkovic 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. ABBREVIATIONS AND ACRONYMS AF Additional Funding National Agency for Environment Management (Agence Nationale de ANGE Gestion de l'Environnement) Prefectural Commissions for Sustainable Development (Commissions CPDD Préfectorales de Développement Durable) CPF Country Partnership Framework ESMF Environmental and Social Management Framework FAP Forest Action Plan (of the World Bank) FCPF Forest Carbon Partnership Facility FGRM Feedback Grievance Redress Mechanism FREL Forest Reference Emission Level GRS Grievance Redress Service (of the World Bank) IDA International Development Association IDLMP Integrated Disaster and Land Management Project M&E Monitoring and Evaluation MERF Ministry of Environment and Forest Resources MTR Mid-Term Report (of the FCPF) MRV Measurement, Reporting, and Verification NC REDD+ National Coordination NFMS National Forest Monitoring System NFI National Forest Inventory PND National Development Plan (Plan national de développement) National Program for Agricultural Investment and Food and Nutritional PNIASAN Safety (Programme agricole de sécurité alimentaire et nutritionnelle) Readiness and Rehabilitation of Forests in Togo REDD+ support ProREDD program Program for the Promotion of Solar Energy (Programme de valorisation PROVES de l'énergie solaire) REDD+ Reduced Emissions from Deforestation and Forest Degradation R-PP Readiness Preparation Proposal Accelerated Growth and Employment Promotion Strategy (Stratégie de SCAPE croissance accélérée et de promotion de l’emploi) SESA Strategic Environmental and Social Assessment UNFCCC United Nations Framework Convention on Climate Change WB World Bank 2 REPUBLIC OF TOGO REDD+ READINESS PREPARATION SUPPORT CONTENTS ADDITIONAL FUNDING DATA SHEET ............................................................................................... 4 I. Introduction ......................................................................................................................................... 6 II. Background and Rationale for Additional Funding (US$2.93 M) .................................................. 7 III. Proposed Changes ............................................................................................................................ 9 A. Proposed Development Objective (unchanged) ........................................................................... 9 B. Key Results .................................................................................................................................. 9 C. Project Beneficiaries .................................................................................................................. 11 D. Costs by component ................................................................................................................... 11 E. Description of Additional Funding Components ....................................................................... 13 F. Overall Risk Rating (see SORT in annex 2) .................................................................................. 15 IV. Appraisal Summary ....................................................................................................................... 15 A. Technical Assessment ................................................................................................................ 15 B. Financial management................................................................................................................ 16 C. Procurement ............................................................................................................................... 17 D. Social and Environmental, including Consultations and Safeguards ......................................... 18 V. World Bank Grievance Redress ..................................................................................................... 18 Annex 1. Results Framework and Monitoring ..................................................................................... 20 Annex 2: Systematic Operations Risk-Rating Tool (SORT) ................................................................ 26 Annex 3: Financial Management, Disbursements and Procurement ................................................... 27 Annex 4: FCPF Resolution Approving Togo’s Request for Additional Funding ................................ 35 3 REPUBLIC OF TOGO REDD+ READINESS PREPARATION SUPPORT ADDITIONAL FUNDING DATA SHEET Basic Information - Additional Funding (AF) Country Director: Pierre Frank Laporte Sectors: Forestry Practice Manager/ Senior GP Director: Themes: Climate Change Benoit Bosquet / Karin Kemper Environmental category: B Team Leader: Mirko Serkovic Expected Closing Date: June 30, 2020 Project ID: 149942 Expected Effectiveness Date: March 1, 2019 Lending Instrument: Carbon Offset Additional Financing Type: Grant Basic Information - Original Project Project ID: 149942 Environmental category: B Project Name: REDD+ Readiness Expected Closing Date: October 31, 2019 Preparation – Togo Joint Level: Fragility or Capacity Constraints [ ] Lending Instrument: Carbon offset Financial Intermediary [ ] Series of Projects [ ] AF Project Financing Data [ ] Loan [ ] Credit [X] Grant [ ] Guarantee [ ] Other: Proposed terms: AF Financing Plan (US$m) Source Total Amount (US $m) Total Project Cost: US$2.93 Cofinancing: N/A Borrower: N/A Total Bank Financing: US$2.93 IBRD IDA New Recommitted Client Information Recipient: Republic of Togo Responsible Agency: Ministry of Environment and Forest Resources Contact Person: GBADOE Edjidomélé; General Director, Forest Development Office Telephone No.: +228 22 51 42 17; +228 90 05 40 62 Email: redjidomele@yahoo.fr; odefdirection@gmail.com AF Estimated Disbursements (Bank FY/US$m) FY FY19 FY20 Annual $1.35 M $1.58 M Cumulative $1.35 M $2.93 M Project Development Objective and Description 4 Original project development objective: To reinforce the Republic of Togo’s capacity to design a socially and environmentally sound national strategy to reduce emissions from deforestation and forest degradation. Project description: The Additional Funding (AF) activities will continue supporting the Republic of Togo’s capacity to design a socially and environmentally sound national strategy to reduce emissions from deforestation and forest degradation and prepare Togo to access available national and international funding to implement REDD+ investments as defined in this strategy. The AF activities will enable Togo to complete the REDD+ Readiness process as identified in its Readiness Preparation Proposal (R-PP)1, including the funding of activities that had not received funding and additional needs that were identified during Togo’s self-assessment of progress at mid-term in July 20172. Safeguard and Exception to Policies Safeguard policies triggered: Environmental Assessment (OP/BP 4.01) [X]Yes [ ] No Natural Habitats (OP/BP 4.04) [X]Yes [ ] No Forests (OP/BP 4.36) [X]Yes [ ] No Pest Management (OP 4.09) [X]Yes [ ] No Physical Cultural Resources (OP/BP 4.11) [X]Yes [ ] No Indigenous Peoples (OP/BP 4.10) [ ]Yes [X] No Involuntary Resettlement (OP/BP 4.12) [X]Yes [ ] No Safety of Dams (OP/BP 4.37) [ ]Yes [X] No Projects on International Waterways (OP/BP 7.50) [ ]Yes [X] No Projects in Disputed Areas (OP/BP 7.60) [ ]Yes [X] No Is approval of any policy waiver sought from the Board (or MD if [ ]Yes [X] N/A RETF operation is RVP approved)? Has this been endorsed by Bank Management? (Only applies to [ ]Yes [X] N/A Board approved operations) Does the project require any exception to Bank policy? [ ]Yes [X] No Has this been approved by Bank Management? [ ]Yes [ ] No Conditions and Legal Covenants: Financing Agreement Reference Description of Date Due Condition/Covenant 1 A framework document which sets out a clear plan, budget and schedule for a country to achieve REDD+ Readiness. Togo’s R-PP can be found at: https://www.forestcarbonpartnership.org/sites/fcp/files/2014/August/RPP- REDD%20TOGO%20June%2026%202014.pdf 2 As presented by Togo to the Participants Committee of the FCPF in July 2017 through its Mid-Term Report: https://www.forestcarbonpartnership.org/sites/fcp/files/2017/July/RMP-Final-12Juillet_version_rev30Aout_EN.pdf 5 I. INTRODUCTION 1. This Project Paper seeks approval of the Country Director to provide an Additional Funding (AF) grant in an amount of US$2.93 million from the Forest Carbon Partnership Facility (FCPF) to the Republic of Togo REDD+3 Readiness Preparation Project (P149942)4. The source of the AF grant is the FCPF Readiness Fund. This grant is processed through FCPF specific procedures agreed with OPCS. 2. The AF will complement the US$3.8 million Readiness Preparation grant signed on January 2015 (original grant), currently under implementation by the Ministry of Environment and Forest Resources (MERF). The proposed AF grant builds on the results achieved so far and would support next steps for Togo to: (i) finalize a socially and environmentally sound national strategy to reduce emissions from deforestation and forest degradation; (ii) complete the REDD+ Readiness process as initially planned in its R-PP and in line with the evaluation criteria of the FCPF REDD+ Readiness Assessment Framework5; (iii) access investment funding from REDD+ mechanisms and prepare for the future implementation of REDD+ activities in line with the national strategy. 3. The activities under the AF would be implemented over a period of 16 months. The new closing date would be June 30, 2020. 4. Implementation under the original grant is progressing well and is expected to be completed by the current closing date of October 31, 2019. As of December 2018, over 90 percent of the original grant has been disbursed; the remaining balance is expected to be executed by the closing date. 5. Togo’s REDD+ Strategy aims to: (i) promote an efficient agriculture with reduced impact on forests; (ii) reduce pressure on biomass energy consumption; (iii) manage forests sustainably and increase the country’s forest coverage; and (iv) improve the enabling environment for sustainable forest management (land use planning, land tenure, legal framework). As such, the AF is expected to make important contributions to implementing Togo’s national development priorities as inscribed in its 2018-2022 National Development Plan (which recognizes REDD+ as a development priority), as well as the World Bank’s Country Partnership Framework (CPF) and the Forest Action Plan (FAP). 3 Reduced Emission from Deforestation and Forest Degradation. 4 As approved by the Participants Committee of the FCPF on September 27, 2017: https://www.forestcarbonpartnership.org/sites/fcp/files/2017/Sep/Final%20Resolution%209%20Togo%20Additiona l%20Funding%20Request.pdf 5 The Readiness Assessment Framework provides a common framework to measure countries’ relative progress on core readiness activities. It can be found at: https://www.forestcarbonpartnership.org/sites/fcp/files/2013/june2013/FCPF%20R- Package%20User%20Guide%20ENG%206-18-13%20web.pdf II. BACKGROUND AND RATIONALE FOR ADDITIONAL FUNDING (US$2.93 M) 6. Togo self-assessed its REDD+ Readiness Preparation process using the FCPF REDD+ Readiness Assessment Framework’s evaluation criteria and submitted the results to the 24th meeting of the FCPF Participants Committee (September 2017) through a Mid-Term Report (MTR). The MTR identified the remaining gaps and associated financial needs to complete the REDD+ Readiness Preparation process, resulting in Togo’s request for an additional US$ 2.93 million from the FCPF. The request was approved by the FCPF Participants Committee on September 27, 2017, subject to the availability of funds which were later confirmed by the FCPF Secretariat on February 13, 2018 and subject to World Bank due diligence6. 7. Since the start of operational activities in October 2015, Togo has been implementing REDD+ Readiness activities as defined in its Readiness Preparation Proposal (R-PP) with the support of three programs: (i) the ongoing REDD+ Readiness Preparation Project (P149942) funded by the FCPF (original grant), covering a period of 2015-2018; (ii) the Readiness and Rehabilitation of Forests in Togo REDD+ support program ("ProREDD") funded by the German government and implemented by GIZ, covering an initial phase for the period 2014-2016 and a second phase for the period 2017-2019; (iii) the Integrated Disaster and Land Management Project (IDLMP) funded by the World Bank (P123922), covering the period 2012-2017; as well as a contribution from the Togolese government. The total cost of Togo’s R-PP was identified as US$ 6.88 million, of which US$ 5.80 million were received from these sources. Following Togo’s self-assessment of progress at mid-term in July 2017, the updated total cost of needs to complete the REDD+ Readiness process was estimated at US$ 2.93 million.7 8. The proposed AF will help to address these gaps, namely by: (i) ensuring the operation and reinforcing the capacities of the national REDD+ management bodies8 to provide political and technical guidance to the development of the REDD+ Strategy; (ii) reinforcing the capacities and organization of the main stakeholders9 for a more effective participation in the development and implementation of the REDD+ Strategy; (iii) finalizing the REDD+ Strategy with a detailed action plan and budget for implementation; (iv) enhancing the efforts to consult, validate and disseminate the REDD+ strategy at local levels; (v) ensuring the integration of REDD+ into sectoral strategies and measures; 6 The FCPF Participants Committee encouraged Togo to consider the following as it advances its REDD+ Readiness work: (i) to finalize the National REDD+ Strategy in a participatory and inclusive manner, engaging all relevant stakeholders including vulnerable populations, indigenous people, and local communities, and appropriate, and taking into account the results of ongoing analytical studies; and (ii) to ensure that the institutional arrangements created for REDD+ are internalized into the relevant government structures in an effective and sustainable manner. 7 Detailed information on progress achieved under the original grant and the rationale for additional funds are contained in Togo’s Mid Term Progress Report (MTR) and Request for Additional Funding to the FCPF: https://www.forestcarbonpartnership.org/sites/fcp/files/2017/July/RMP-Final-12Juillet_version_rev30Aout_EN.pdf 8 The REDD+ National Committee, the REDD+ National Working Group and the REDD+ regional focal points in the country’s five regions. 9 The National Council of Civil Society Organizations for Sustainable Development (CNODD); the producer organizations represented by the Togolese Coordination of Producer Organizations (CTOP); the youth represented by the National Youth Council (CNJ); and the women represented by the Togo REDD+ Women's Consortium (CF- REDD+ Togo). 7 (vi) preparing the Government of Togo to access available funding from REDD+ mechanisms; and (vi) developing a National Forest Monitoring System (NFMS) and a Measurement, Reporting and Verification (MRV) system for REDD+ activities. By the end of the project, and tentatively in early 2020, Togo would aim to evaluate its progress on REDD+ Readiness Preparation using the FCPF REDD+ Readiness Assessment Framework’s evaluation criteria and seek endorsement from the FCPF Participants Committee on the implementation arrangements developed for REDD+ (defined by the FCPF as the submission of a ‘R-Package’). 9. Consistency with Togo’s Country Partnership Framework (FY17-FY20). The AF activities are consistent with the FY17-FY20 Country Partnership Framework (Report No. 112965-TG). The Country Partnership Framework identifies governance as a foundational and cross cutting theme, to which the project is contributing by strengthening institutions, the legal framework for sustainable forest management, and citizens engagement. In addition, the project contributes to: (i) CPF Focus Area 1 (Private Sector Performance and Job Creation) through productive activities in the forest, agriculture and energy sectors; and (ii) CPF Focus Area 3 (Environmental Sustainability and Resilience) through strengthened management of productive natural resources and resilience and adaptation to climate change. Focus Area 3 contains specific indicators to increase the forest area brought under management plans and to increase the area covered by monitoring system for land use vegetation and carbon, to which the project directly contributes to. 10. Alignment with the IDA18 overarching theme, “Towards 2030: Investing in Growth, Resilience and Opportunity�. The AF will contribute to help implement the special themes prioritized by the World Bank Group: (i) jobs and economic transformation; (ii) gender and development; (iii) climate change; (iv) fragility, conflict and violence; and (v) governance and institutions, which present specific development challenges and opportunities in the case of Togo, and its forest, agriculture and energy sectors, as the main drivers of deforestation and forest degradation. 11. Contribution to implement the World Bank Forest Action Plan (FAP). The development of the National REDD+ Strategy is expected to identify potential forest-smart interventions in agriculture, energy, landscape restoration, and other cross-cutting aspects such as land-use planning and governance. The AF will support the identification of potential financing sources for their implementation. Moreover, it will also support the mainstreaming of these interventions into implementing ministries’ sectoral policies and plans. 12. The AF grant will complement other World-Bank financed projects such as the IDLMP (P121152), which has strengthened institutional capacities to manage land degradation while promoting sustainable land management practices. The AF is also synergetic with the West Africa Coastal Areas Resilience Project (P162337), which will finance investments to protect vulnerable areas from coastal pressures, including sustainable land management practices; the West Africa Agricultural Productivity Program (P158983), of which Togo is a part of; the Agriculture Sector Support Project (P159637); and the Togo Energy Sector Support and Investment Project (P160377). 8 13. Contribution to implement national development priorities. The project is expected to contribute to Togo’s political ambition to increase the country’s forest cover to 30% by 2050. This is inscribed in the 2018-2022 National Development Plan (Plan national de développement, PND) – which also recognizes REDD+ as a national development priority. It will also support the implementation of the forest code and the national forest policy, while encouraging multi-sectoral coordination for a more sustainable management of forests and improved governance of the forest sector. In addition, REDD+ is synergetic with the National Program for Agricultural Investment and Food and Nutritional Safety (Programme agricole de sécurité alimentaire et nutritionnelle, PNIASAN) and the Program for the Promotion of Solar Energy (Programme de valorisation de l'énergie solaire, PROVES). REDD+ is also a critical component of Togo's Nationally Determined Contribution (NDC) to the UNFCCC’s Paris Accord. Finally, REDD+ activities have the potential to contribute to poverty alleviation, job creation, economic growth and the creation of public revenues. III. PROPOSED CHANGES A. PROPOSED DEVELOPMENT OBJECTIVE (UNCHANGED) 14. The Project Development Objective will remain unchanged, and reads to reinforce the Republic of Togo’s capacity to design a socially and environmentally sound national strategy to reduce emissions from deforestation and forest degradation. B. KEY RESULTS 15. Key Achievements under the original grant and AF contribution. Progress towards achieving grant objectives and implementation of activities are both rated Moderately Satisfactory. This AF will contribute to fulfilling the outset objectives of the initial grant and to enhance the impacts as follows: a) National Readiness Management Arrangements: The REDD+ management bodies have been established and are operating, including the REDD+ National Committee, the REDD+ National Working Group and the REDD+ regional focal points in the country’s five regions. The Prefectural Commissions for Sustainable Development (Commissions Préfectorales de Développement Durable, CPDDs) have been set up and made operational in 35 prefectures to enable consultations and engagement at local levels. Civil society platforms10 have been established and/or strengthened to contribute to the REDD+ process and carry out activities at the 10 The National Council of Civil Society Organizations for Sustainable Development (CNODD); the Togo REDD+ Women's Consortium (CF-REDD+); the National Youth Council (CNJ); the Togolese Coordination of Producer Organizations (CTOP); the Togolese Federation of Associations of Handicapped Persons (FETAPH); the National Organization for the Accessibility, Work and Employment of Handicapped Persons of Togo (ONATEPH); and the platform for private and community forest owners. 9 grassroot level11. The AF will continue supporting and strengthening the capacity of these structures to enhance the participation and consultations around the development of the REDD+ Strategy and to prepare them for the future implementation of REDD+. The Feedback and Grievance Redress Mechanism (FGRM) is currently being designed and the AF will fund its operationalization, ensuring that stakeholders are properly informed about its function. b) Preparation of the National REDD+ Strategy: All the key technical studies necessary for the development of the National REDD+ Strategy have been completed and validated at national and regional levels12. Sectoral thematic groups engaging the ministries13 relevant to REDD+ have also been established to ensure multi-sectoral collaboration and participation in the development of the REDD+ Strategy. A first draft of the REDD+ strategy (defining the potential REDD+ strategic options) has been developed, consulted and validated by stakeholders at national and regional levels. There is a clear workplan for the finalization of the REDD+ strategy by June 2019, which includes the integration of environmental and social considerations arising from the Strategic Environmental and Social Assessment (SESA). The SESA is currently ongoing, upon which the safeguards instruments (an Environmental and Social Management Framework, a Pest Management Plan and a Resettlement Process Framework) will be developed. The AF will support the finalization of the REDD+ Strategy and support efforts to consult, validate and disseminate the REDD+ strategy widely, including at the local level. c) Direct project beneficiaries. Through the activities implemented as described above (namely, information and awareness campaigns, consultations, as well as other activities implemented at local level) the project has reached 4,600 beneficiaries (of which 20% are women). 16. The results of the original grant remain valid for the AF, these are: a. Institutions strengthened at national, regional, and districts levels effectively coordinating and implementing REDD+ readiness with a grievance and redress mechanism operational. b. A National REDD+ Strategy incorporating SESA outcomes and recommendations is prepared in consultative manner and validated by national stakeholders. An 11 Recent activities have included, among others: (i) an inventory of projects and financing received by NGOs in the forest sector (implemented by the CNODD); (ii) campaigns on the use of solar ovens and dryers, and more efficient methods to produce charcoal (implemented by CF-REDD+); (iii) on the ground training-of-trainers on agro-ecological and climate-resilient agricultural practices (implemented by the CTOP). 12 Including, among others: (i) the historical and spatial analysis of deforestation and forest degradation; (ii) the analysis of the dynamics of wood energy use; (iii) the analysis of vegetation fire management mechanisms and systems; (iv) the contribution of the forestry sector to the national economy; (v) the integration of forest sector issues in related sectors in Togo; (vi) the establishment and sustainable management of forest and agroforestry plantations in private lands; (vii) the analysis of the legal framework and preparation of texts implementing legislation in the context of REDD+. 13 Agriculture and livestock, mines and energy, urban planning and housing, land planning and management, finance and the economy, environment and forest resources, social action and the advancement of women. 10 Environmental and Social Management Framework (ESMF) for managing potential social and environmental risks of agreed REDD+ strategy options is prepared and validated including a benefit sharing options. 17. The following are results indicators specific to the AF and will be reflected in the results framework: a. Interventions for the National REDD+ Strategy are defined, including approaches to mobilize resources for their implementation; b. A national Forest Reference Emissions Level (FREL) is established: i. the Second National Forest Inventory is conducted; ii. a historical analysis and quantification of past deforestation is conducted. c. Monitoring systems for forests and safeguards are established: i. a Measurement, Reporting, and Verification (MRV) system for REDD+ is designed; ii. a National Forest Monitoring System (NFMS) is designed; iii. an Information System for Safeguards, Governance and Multiple Benefits is designed. 18. The achievement of AF objectives will be monitored using the project’s existing monitoring and evaluation framework. C. PROJECT BENEFICIARIES 19. REDD+ is a multi-stakeholder process, with a strong emphasis on consultations and on the creation of participatory mechanisms to ensure multi-stakeholder engagement. The direct beneficiary of the grant is the Republic of Togo, specifically the Ministry of Environment and Forest Resources (MERF) and its REDD+ government-partner institutions, as well as the members of local communities and organizations who participate in the REDD+ process with support from AF activities. D. COSTS BY COMPONENT 20. The structure and implementation arrangements of the AF activities will remain as under the original grant. Table 1. Updated Budget with the AF Original AF Revised Cost Project Activities (‘000 US$) (‘000 US$) (‘000 US$) 1. Support to the national readiness 1,700 651 2,351 management arrangements 11 1.1 Coordination of the REDD+ Readiness 1,100 529 1,629 Process 1.2 Support for consultation and 600 122 722 participation process 2. Support to the preparation of a national 2,100 331 2,431 REDD+ Strategy 2.1 Assessment of land use, land-use change 270 131 401 drivers, forest law, policy, and governance 2.2. REDD+ Strategy Options 300 65 365 2.3 Feedback and grievance redress 200 15 215 mechanism 2.4 Benefit sharing analysis options 130 0 130 2.5 Social and environmental impacts of the REDD+ preparation procedure & its 600 120 720 implementation (SESA) 3. Support to the establishment of a Forest 0 1,618 1,618 Reference Emissions Level (FREL) 3.1 Preparing and conducting the 2nd NFI 0 888 888 3.2 Updating other baseline data and 0 570 570 developing the FREL report 3.3 Technical assistance 0 160 160 4. Support to the development of Monitoring Systems for Forests and 0 330 330 Safeguards 4.1 National Forest Monitoring System 0 270 270 4.2 Information System for Safeguards, 0 60 60 Governance and Multiple Benefits Total Costs 3,800 2,930 6,730 12 E. DESCRIPTION OF ADDITIONAL FUNDING COMPONENTS Component 1. Support to the national readiness management arrangements (US$ 651,000): 21. The objective of this component is to support national and regional coordination and monitoring of the REDD+ process, including the project management costs, as well as the consultation and participation processes. The AF will specifically support: (i) the operational costs of the National REDD+ Coordination; (ii) the functioning and capacity strengthening of the REDD+ National Committee, the REDD+ National Working Group14, and the CPDDs; (iii) the strengthening of civil society platforms15 to contribute to the REDD+ process and carry out activities at the grassroot level; and (iv) various communication activities aimed at enhancing the consultation and participation around the development of the REDD+ strategy. The AF will also fund the operationalization of the FGRM, ensuring that stakeholders are properly informed about its function. Component 2. Support to REDD+ Strategy Preparation (US$ 331,000): 22. The objective of this component is to finalize the National REDD+ Strategy, including the associated background studies and the SESA and safeguards instruments. The draft REDD+ Strategy supported by the original grant is organized around four main axes, responding to the identified drivers of deforestation and forest degradation: (i) promoting efficient agriculture with reduced impact on forests; (ii) reducing pressure on biomass energy consumption; (iii) managing forests sustainably and increasing the country’s forest coverage; and (iv) improving the enabling environment for sustainable forest management (promoting land use planning, strengthening land tenure security – building on the recently approved land code – and improving access to natural resources, particularly by vulnerable groups, and strengthening the legal and regulatory framework for improved governance). The AF will specifically support: (i) the integration of additional aspects into the REDD+ strategy (natural protected areas, dynamics of degradation and options for restoration, as well as strengthening gender considerations through a study analyzing the gender dynamics influencing the management of natural resources, given that women play an essential role in the informal economy and in the management of natural resources and biodiversity); (ii) support the work of the ministries’ sectoral thematic groups to ensure 14 The institutional arrangements for REDD+ have been established through a Presidential Decree and a Ministerial Decision. The budget for their operation is also specified in these texts, stating that they shall originate from: “(i) projects funded within the REDD+ framework; (ii) the allocation included in the national budget; (iii) the national environmental fund; (iv) the national forest development fund; (v) support from technical and financial partners; (vi) donations and other lawful resources.� Thus far, however, the operation of these bodies has relied on funding from the REDD+ Readiness project. To ensure the operation of the se bodies beyond the project’s lifetime, other funds would need to be mobilized, either from government resources or from any future REDD+ projects. 15 The National Council of Civil Society Organizations for Sustainable Development (CNODD); the Togo REDD+ Women's Consortium (CF-REDD+); the National Youth Council (CNJ); the Togolese Coordination of Producer Organizations (CTOP); the Togolese Federation of Associations of Handicapped Persons (FETAPH); the National Organization for the Accessibility, Work and Employment of Handicapped Persons of Togo (ONATEPH); and the platform for private and community forest owners. 13 multi-sectoral coordination and to define the REDD+ interventions as appropriate to their sector; and (iii) and the development of judicial and regulatory texts to integrate REDD+ in relevant sectors. With regards to the SESA, the AF will specifically strengthen the capacity of the National Environmental Management Agency (Agence Nationale de Gestion de l'Environnement, ANGE) to guide and participate in the SESA process. The AF will also support efforts to consult, validate and disseminate the REDD+ strategy widely, including at local level. 23. The AF will also support the following two additional components relative to the original project, in line with Togo’s R-PP: Component 3. Support to the establishment of a Forest Reference Emissions Level – FREL (US$ 1.618 M): 24. The objective of this component is to establish a FREL, which would enable the monitoring of deforestation and forest degradation over time against a set baseline. The FREL will also be submitted to the UNFCCC to enable Togo to access future funding from international REDD+ mechanisms. This component will build on the work supported by ProREDD/GIZ, namely the completion of the country’s first National Forest Inventory (NFI) and a historical analysis and quantification of past deforestation through satellite images and aerial photos. The AF will specifically support the second NFI, the updating of satellite imagery, the development of baselines for the different REDD+ strategic options, as well as various technical and capacity strengthening activities necessary to develop the FREL. The FREL is proposed to be of national coverage and include all REDD+ activities (the reduction of deforestation and degradation, the sustainable management of forest and agroforestry, the conservation and increase of carbon stocks). Component 4. Support to the development of monitoring systems for forests and safeguards (US$ 330,000): 25. The objective of this component is to develop a National Forest Monitoring System (NFMS) and the Measurement, Reporting, and Verification (MRV) for REDD+, along with an Information System for Safeguards, Governance and Multiple Benefits. This component will build on the work supported by ProREDD/GIZ and the World Bank’s IDLMP, namely the development of a land use and forest cover map, an analysis of the legal and operational framework for REDD+ MRV in Togo, and the establishment of two database management structures that would constitute the basis for REDD+ MRV (the unit managing the database of forest resources and the results from the forest inventory, and the unit managing the cartographic database). The forest inventories, the historical analysis of deforestation through satellite images and aerial photos and the land use and forest cover map would be the basis of the NFMS. The AF will specifically support remaining analytical tasks; namely, operationalizing the NFMS by developing a manual of procedures and defining the methodological approach for forest monitoring, transferring forest inventory and cartographic data to the regions, defining roles and responsibilities and formalizing the the NFMS through legal texts, among others). 14 F. OVERALL RISK RATING (see SORT in annex 2) 26. The overall risk rating for the project is Substantial. Key risks are linked to: a. Political and Governance (High): REDD+ counts with political commitment at the highest levels: the REDD+ process is supported by the Office of the President and all relevant ministries (eleven) participate and have already demonstrated high-level of ownership of the process. Government decrees and related reforms provide a legal and institutional framework for the implementation of REDD+. However, defining the interventions of the REDD+ strategy could imply potential trade-offs between the involved sectors where vested interests could come into play. The country is also in a fragile state of political uncertainty which could potentially affect activities going forward. The AF will provide resources for governance bodies, coordination, dialogue platforms, policy studies, and stakeholder engagement processes to address issues of transparency and governance. b. Sector Strategies and Policies (High): The innovative nature of REDD+ means that strong multi-sectoral coordination is necessary to address the trade-offs between sectoral developments and REDD+. There is a risk that there will be insufficient inter- ministerial and inter-agency coordination for REDD+. In addition, the forest sector suffers from various shortcomings: insufficient law enforcement and protected area enforcement, conflicts over land use allocation, land tenure and use rights, corruption, among others. Even through there are key policy and legal instruments in place, implementation remains weak. The AF will support mechanisms for inter-sectoral dialogue and coordination. c. Fiduciary (High): The fiduciary risk is assessed as High due to the nature of activities financed by the Project (consultation and validation workshops), as well as the findings from a World Bank in-depth fiduciary review concluded in October 2018 which identified internal control deficiencies, particularly with respect to project management, accounting and financial management and procurement. To mitigate these risks, the PIU will implement the recommendations from the World Bank’s review and the World Bank will ensure close monitoring of the fiduciary management of the Project on a quarterly basis. IV. APPRAISAL SUMMARY A. TECHNICAL ASSESSMENT 27. The activities to be financed by the AF were first identified through Togo’s self-assessment of its progress on REDD+ Readiness, presented to the FCPF Participants Committee in September 2017 through a Mid-Term Report (MTR). The MTR identified remaining financial needs to complete the REDD+ Readiness process as defined in Togo’s R-PP, resulting in Togo’s request for additional FCPF funds of US$ 2.93 million. Activities were later confirmed after technical discussions with the National REDD+ Coordination. They follow guidelines, standards, and technical criteria established by the FCPF. 15 28. The activities identified are also achievable by the institutional arrangements in place. The proposed AF grant will continue to be implemented by the National REDD+ Coordination, with the same institutional arrangements of the original grant. B. FINANCIAL MANAGEMENT 29. In accordance with the Financial Management Manual for World Bank-Financed Investment Operations that became effective on March 1, 2010 and re-issued on February 10, 2017, the proposed financial management systems of the Additional Financing have been assessed to determine whether it is acceptable to the Bank. To this end, the financial management aspects of the World Bank-financed REDD+ Readiness preparation - Togo (P149942), have been reviewed. 30. The proposed AF will build on the existing institutional and fiduciary arrangements of the Project Coordination Unit of REDD+ under oversight of the Forest Development Office of the Ministry of Environment and Forest Resources. The PIU is familiar with the Bank FM requirements and is currently managing the Bank-financed REDD+ Readiness preparation - Togo (P149942). The audit for the year ended December 31, 2017 for the REDD+ Readiness preparation - Togo (P149942) was submitted on time, and was unqualified. The interim un-audited financial reports (IFR) are prepared every quarter and regularly submitted to the Bank on time. 31. However, the fiduciary in-depth review concluded by the World Bank in October 2018 identified shortcomings in financial management and ineligible expenditures incurred during the period of the original grant. The in-depth review identified internal control deficiencies, particularly with respect to project management and accounting and financial management. The expenses declared ineligible were due to expenses that were either unauthorized, insufficiently justified, not properly documented or non-compliant with the fiduciary management procedures applicable to the Project. Based on this in-depth review findings, the project fiduciary management was rated Unsatisfactory and the fiduciary risk assessed as High due to the nature of activities financed by the project, as well as the shortcomings identified by the review. As recommended, the project’s internal control has been strengthened by assigning the responsibility of the project’s internal audit until its closing date to the General Inspection of Finance of the Ministry of Economy and Finance, which has already produced its first internal audit report. 32. Going forward, the PIU will need to reinforce fiduciary arrangements to avoid any other irregularity over the remaining duration of the Project, including: (i) the replacement of concerned PIU’s staff, specifically the Project Coordinator and the Financial Management Specialist; (ii) better management of the budget; (iii) re-parameterization of the accounting software and its configuration to reflect the AF; (iv) the recruitment of a project treasurer; (v) the refocusing of the project financial and administrative manager and project accountant to their financial management and accounting tasks; (vi) the establishment of a system to enable the systematic filing of accounting transactions based on adequate supporting documents; and (vii) the updating of the project’s administrative and financial procedures’ manual to take into account the recommendations of the review. In addition, 16 the World Bank will ensure close monitoring of the fiduciary management of the Project on a quarterly basis. From these recommendations, the appointment of a new Project Coordinator and a new Financial Management Specialist will be established as conditions for the effectiveness of this grant. 33. The overall FM risk rating for the REDD Readiness preparation in Togo Additional Financing is assessed as High taking into account the outcomes of the October 2018 in- depth review, the country context, the multiplicity of actors and beneficiaries who are located in remote and dispersed areas around the country combined with the nature of activities supported by the project and the Bank’s minimum requirements under Bank Policy and Directive – IPF which describes the overall FM Bank policies and procedures. The proposed risks mitigation measures proposed (see FM Action Plan in Annex 3) will strengthen the internal control environment and maintain the continuous timely and reliability of information produced by the PIU and an adequate segregation of duties. These mitigation measures have been incorporated into the design of the project FM arrangements. The proposed financial management arrangements including the mitigation measures for this additional financing are considered adequate to meet the Bank’s minimum financial management requirements under Bank Policy and Directive – IPF. Detailed FM arrangements are provided in Annex 3. C. PROCUREMENT 34. The recipient will carry out procurement under the proposed project in accordance with the World Bank’s ‘Procurement Regulations for IPF borrowers’ (Procurement Regulations) dated July 2016, and revised in November 2017 under the ‘New Procurement Framework’ and the ‘Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants’, dated July 1, 2016, and other provisions stipulated in the Financing Agreement. 35. The fiduciary in-depeth review conducted by the World Bank identified shortocomings in procurement, including the acquisitions of goods and services non compliant with the procurement procedures applicable to the Project, and sometimes at not reasonnable pricese. Going forward, the PIU will update the project’s administrative, accounting and financial procedures’ manual to take into account these issues with a focus on the procurement institutional arrangement by involving more often the procurement unit of the project and by creating an internal project procurement committee (“Comité d’achat� in French), which will be in charge of the management of small contracts whose estimated amounts are lower than the procurement commission’s thresholds. 36. As part of the preparation of the project, the recipient (with the technical assistance from the World Bank) has prepared a Project Procurement Strategy for Development (PPSD), which describes how procurement activities will support project operations for the achievement of the PDO and deliver value for money. The procurement strategy is linked to the project implementation strategy ensuring proper sequencing of the activities. It also considers institutional arrangements for procurement, roles and responsibilities, thresholds, procurement methods, prior review, and the requirements for carrying out procurement. 17 The PPSD also includes a detailed assessment and description of the government’s capacity for carrying out procurement and managing contract implementation, within an acceptable governance structure and accountability framework. 37. The residual procurement risk for this project is rated Substantial, after the implementation of the institutional arrangement described in Annex 3. D. SOCIAL AND ENVIRONMENTAL, INCLUDING CONSULTATIONS AND SAFEGUARDS 38. There are no new safeguards policies triggered, and the Environmental Assessment Category remains “B� (Partial Assessment). Safeguards Performance so far is rated as Satisfactory. 39. The institutional arrangements for the implementation of the additional grant will continue relative to the ongoing project. The Recipient has an acceptable legal and regulatory environmental and social framework as well as several years of experience in applying Bank’s policies and implementing World Bank funded projects. However, the capacity of the REDD+ National Coordination (NC) should be strengthened by the recruitment of a social development and gender specialist. In addition, sustained training and support needs to be provided to the NC to become sufficiently proficient in managing key safeguard issues. 40. The Strategic Environmental and Social Assessment (SESA) for the national REDD+ Readiness process is being led by the REDD+ National Coordination and carried out through inclusive consultations, and in close coordination with other analytical studies / processes. The exercise is directly supervised by the National Agency for Environment Management (Agence Nationale de Gestion de l'Environnement, ANGE) The SESA will enable the integration of key environmental and social considerations into the REDD+ Strategy and the development of the relevant safeguards instruments (an Environmental and Social Management Framework, a Resettlement Policy Framework, a Process Framework, a Physical Cultural Resources Management Framework and a Pests Management Plan). These would provide the framework for guiding the implementation of the REDD+ Strategy. 41. The SESA exercise itself will assess the national capacity needs required for the country to be capable of monitoring and implementing the safeguards related to implementing REDD+ and will make recommendations for institutional strengthening. 42. It is expected that the AF will strengthen the consultations of the SESA by bringing them to the prefectural and cantonal level and reinforce the participation and contribution of ANGE in guiding the SESA process. It is recommended that the AF ensures the effectiveness of these expanded local consultations. V. WORLD BANK GRIEVANCE REDRESS 18 43. 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/GRS. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. 44. Feedback and Grievance Redress Mechanism (FGRM) for REDD+ in Togo: Analytical work to develop a Feedback and Grievance Redress Mechanism (FGRM) is currently ongoing, and the AF will support the operationalization of this mechanism and ensure stakeholders are properly informed about its function. 19 ANNEX 1. RESULTS FRAMEWORK AND MONITORING Togo P149942: REDD+ Readiness Preparation Support Revisions to the Results Framework Revisions to the Results Framework Comments/ Rationale for Change PDO Current Proposed To reinforce the Republic Continued of Togo’s capacity to design a socially and environmentally sound national strategy to reduce emissions from deforestation and forest degradation. PDO indicators Current Proposed change Indicator One: Continued Institutional framework conducive to REDD+ process in place Indicator Two: Continued REDD+ strategy validated in broad consultation process New Added to reflect that funding under the AF will support the Indicator Three: establishment of a forest reference emission level. A national Forest Reference Emission Level is established New Added to reflect that funding under the AF will support the Indicator Four: establishment of monitoring Monitoring systems for forests and systems for forests and safeguards are established safeguards. Indicator Five: Direct Continued Project Beneficiaries Revisions to the Results Framework Comments/ Rationale for Change Intermediate Results indicators Current Proposed change Component 1: support to the national readiness management arrangements Intermediate Result Continued Indicator One: REDD+ National Committee established Intermediate Result Continued Indicator Two: National civil society network established Intermediate Result Continued indicator Three: National awareness campaign conducted Component 2: support to the preparation of a national REDD+ Strategy Intermediate Result Continued indicator One: Key studies including validation workshops conducted Intermediate Result Continued indicator Two: REDD+ Strategy options developed New Added to reflect that funding under the AF will support the Intermediate Result indicator Three: definition of approaches to Interventions for the National REDD+ mobilize resources for the Strategy are defined, including implementation of the National approaches to mobilize resources for REDD+ Strategy interventions. their implementation Intermediate Result Continued indicator Four: Feedback and grievance redress mechanism established for REDD+ Intermediate Result Continued Indicator Five: Strategic Environmental and Social 21 Revisions to the Results Framework Comments/ Rationale for Change Assessment mechanism established Component 3: support to the establishment of a Forest Reference Emissions Level (FREL) New Added to reflect that funding under the AF will support the Intermediate Result indicator One: second National Forest Second National Forest Inventory Inventory. conducted New Added to reflect that funding under the AF will support the Intermediate Result indicator Two: historical analysis and Historical analysis and quantification quantification of past of past deforestation conducted deforestation. Component 4: support to the development of Monitoring Systems for Forests and Safeguards New Added to reflect that funding under the AF will support the Intermediate Result indicator One: development of a National National Forest Monitoring System Forest Monitoring System. designed. New Added to reflect that funding under the AF will support the Intermediate Result indicator Two: development of an Information Information System for Safeguards, System for Safeguards, Governance and Multiple Benefits Governance and Multiple designed. Benefits. New Added to reflect that funding under the AF will support the Intermediate Result indicator Three: development of a Measurement, Measurement, Reporting, and Reporting, and Verification Verification system for REDD+ system for REDD+. designed. 22 Revised Results Framework Project Development Objective (PDO): to reinforce the Republic of Togo’s capacity to design a socially and environmentally sound national strategy to reduce emiss ions from deforestation and forest degradation. Baseline Progress Target Values17 Responsibility Description (indicator Core PDO Level Results Unit of Data Source/ definition etc.) (2015) to date Frequency for Data Indicators Measure 2018 2019 2020 Methodology (2018)16 Collection Indicator One: Yes/No No Yes Yes Yes Yes Annual Review of institutional MERF Review is a functional Institutional framework review including also legal framework conducive aspects to REDD+ process in place Indicator Two: Yes/No No No No Yes Yes Annual Review of REDD+ REDD+ REDD+ strategy strategy document and National validated in broad reports of consultation committee consultation process process including direct observation Indicator Three: a Yes/No No No No Yes Yes Annual Review of Forest NC18 The report will describe national Forest Reference Emission how the Reference Reference Emission Level report Emission Level was Level is established established Indicator Four: Yes/No No No No Yes Yes Annual Review of monitoring NC Indicates an outcome of the Monitoring systems systems for forests and development of monitoring for forests and safeguards systems for forests and safeguards are safeguards, including a established Measurement, Reporting, and Verification system for REDD+, a National Forest Monitoring System and an Information System for Safeguards, Governance and Multiple Benefits. Indicator Three: Yes/No No Yes Yes Yes Yes Annual Review of REDD+ ANGE19/MER Review of M&E system REDD+ M&E system M&E system F includes assessment of data functional according to quality defined criteria 16 For new indicators introduced as part of the additional funding, the progress to date column is used to reflect the baseline value. 17 Target values are cumulative. 18 REDD+ National Coordination 19 ANGE: Agence Nationale de Gestion de l’Environnement Indicator Four: Number 0 4,600 4,830 5,892 7,074 Annual Count based on project NC Direct project (%) (20%) (20%) (25%) (31%) records beneficiaries (of which female) INTERMEDIATE RESULTS Intermediate Result (Component One): support to the national readiness management arrangements Intermediate Result Yes/No No Yes Yes Yes Yes Annual Review of document MERF indicator One: establishing the REDD+ National National Committee Committee established Intermediate Result Yes/No No Yes Yes Yes Yes Annual Review of document NC indicator Two: establishing the civil National civil society society network network established Intermediate Result Yes/No No Annual Review of reports of NGOs/NC indicator Three: Yes Yes Yes Yes national awareness National awareness campaign campaign conducted Intermediate Result (Component Two): support to the preparation of a national REDD+ Strategy Intermediate Result Number 0 10 10 15 15 Annual Review and count of NC Technical studies informing indicator One: Key study reports and various aspects of the studies including development of the REDD+ validation workshops Strategy, along with conducted accompanying validation workshops Intermediate Result Yes/No No No Yes Yes Yes Annual Review of reports The corresponding activity indicator Two: from inter-ministerial is a series of inter- REDD+ Strategy workshops ministerial workshops options developed Intermediate Result Yes/No No No No Yes Yes Annual Availability of report NC Indicates an outcome of the indicator Three: approaches defined to Interventions for the mobilize resources for the National REDD+ implementation of the Strategy are defined, National REDD+ Strategy including approaches interventions to mobilize resources for their implementation 24 Intermediate Result Yes/No No No No Yes Yes Annual Review of Feedback NC The report will describe indicator Four: and grievance redress the process undertaken to Feedback and mechanism report develop the Feedback and grievance redress grievance redress mechanism established mechanism and how this for REDD+ was established Intermediate Result Yes/No No No No Yes Yes Annual Review of SESA NC SESA report will describe indicator Five: report the SESA process Strategic undertaken to develop the Environmental and relevant safeguards Social Assessment instruments mechanism established Intermediate Result (Component Three): support to the establishment of a Forest Reference Emissions Level (FREL) Intermediate Result Yes/No No No No Yes Yes Annual Review of NFI report NC The report will describe the indicator One: Second methodology and results of National Forest the National Forest Inventory conducted Inventory. Intermediate Result Yes/No No No No Yes Yes Annual Review of historical NC The report will describe the indicator Two: analysis and methodology and results for Historical analysis and quantification of past the analysis of past quantification of past deforestation report deforestation. deforestation conducted Intermediate Result (Component Four): support to the development of Monitoring Systems for Forests and Safeguards Intermediate Result Yes/No No No No Yes Yes Annual Review of National NC The report will describe the indicator One: Forest Monitoring components of a National National Forest System report Forest Monitoring System Monitoring System designed Intermediate Result Yes/No No No No Yes Yes Annual Review of Information NC The report will describe the indicator Two: System for components of a System for Information System Safeguards, Safeguards, Governance for Safeguards, Governance and and Multiple Benefits Governance and Multiple Benefits Multiple Benefits report designed Intermediate Result Yes/No No No No Yes Yes Annual Review of NC The report will describe the indicator Three: Measurement, components of a Measurement, Reporting, and Measurement, Reporting, Reporting, and Verification system for and Verification system for Verification system for REDD+ report REDD+ REDD+ designed 25 ANNEX 2: SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk category Rating 1. Political and Governance H 2. Macroeconomic M 3. Sector Strategies and Policies H 4. Technical Design of Project or Program L 5. Institutional Capacity for Implementation and Sustainability M 6. Fiduciary H 7. Environment and Social M 8. Stakeholders M OVERALL S 26 ANNEX 3: FINANCIAL MANAGEMENT, DISBURSEMENTS AND PROCUREMENT Financial management 1. A FM assessment of the implementing unit (PIU) of REDD+ Togo designated to manage the Additional Financing was carried out in December 2018. The objective of the assessment was to determine whether this implementing entity has acceptable FM arrangements (system of planning and budgeting, accounting, internal controls, funds flow, financial reporting, and auditing) in place that satisfy the World Bank’s Policy and Directive – IPF which describes the overall FM Bank policies and procedures. The implementing entities’ arrangements are acceptable if they are considered capable of recording correctly all budgets, transactions and balances, supporting the preparation of regular and reliable financial statements, safeguarding the entities’ assets, and are subject to auditing arrangements acceptable to the Bank. The FM assessment was carried out in accordance with the FM Manual for World Bank Investment Project Financing Operations that became effective on March 1, 2010 and re- issued on February 10, 2017. 2. The overall fiduciary risk rating is assessed as High and mitigation measures proposed (see FM Action Plan) will maintain the continuous timely and reliability of information produced by the PIU and an adequate internal control environment. FM Action Plan: Issue Remedial action recommended Responsible Completion date entity Staffing Recruitment of (i) an experienced PIU 3 months following and qualified Financial effectiveness Management Specialist, (ii) an experienced and qualified Accountant, and (iii) a Treasurer. Accounting Re-parameterization of the PIU 3 months following software accounting software and its effectiveness configuration to reflect the AF. Administrativ Updating of the project’s PIU 3 months following e, Accounting administrative and financial effectiveness and Financial procedures’ manual to consider Manual of the recommendations of the procedures review and reflect the AF. External Appoint an external auditor PIU Six months following auditing acceptable to IDA. effectiveness (i) Staffing: the FM aspects of the AF will be handled by a team composed of: (i) a qualified and experienced FM Specialist in charge of the supervision of all project’s FM activities; (ii) a qualified and experienced Accountant; and (iii) a Treasurer. This staff will be recruited through a competitive process in compliance with the World Bank’s rules within the 3 months following effectiveness. 27 (ii) Budgeting and planning: The annual work program and budget preparation and approval procedures will follow the same arrangements currently in place; they are in compliance with the FM procedures manual (approved by the Steering Committee and submitted to IDA annually before the end of the year). (iii)Accounting software: The current accounting software has been acquired and installed and will be customized to accommodate activities of this AF. (iv) Internal controls/ FM procedures manual: The internal control system comprises the CNP (Comité National de Pilotage / National Steering Committee) which oversees the project activities, a FM procedures manual which defines control activities, and an internal audit function which carries out ex-post reviews and evaluates the performance of the overall internal control system. The current FM manual is acceptable to IDA but will be updated to reflect the AF particularities. (v) Internal audit: The internal audit function of the ongoing REDD+ Readiness preparation - Togo (P149942) is under the responsibility of the Inspection Générale des Finances (IGF). The arrangement is satisfactory and would be applicable to this AF. (vi) Interim Financial reporting: The current content and format of the IFRs are acceptable to IDA and will remain unchanged. The AF’s activities will be consolidated in the current IFR and will be prepared every quarter and submitted to the Bank (45 days after the end of each quarter) in form and substance that comply with IDA Financial Management reporting requirements. (vii) Annual financial reporting. The PIU will produce project annual financial statements, which will comply with SYSCOHADA and Bank requirements. Financial statements may comprise: • project presentation and project developments and progress during the year, to provide context to (or other explanations of) financial information reported; • statement of sources and uses of funds which recognizes all cash receipts, cash payments, and cash balances; • a statement of commitments; • accounting policies adopted and explanatory notes; • a management assertion that project funds have been expended for the intended purposes as specified in the relevant financing agreements. (viii) External Audit: The AF audit arrangements will be similar to those of the ongoing PIU- managed projects; i.e. project accounts will be audited annually, and reports submitted to IDA not later than 6 months after the end of each year. The AF is expected to become effective in the first semester of 2019; consequently, the first audit report would be due on June 30, 2020. The ToRs of the project external auditor covering all the project expenditures will be updated, considering the specificities of the AF. At the time of the preparation of the AF Project Paper, there are no overdue audit reports under the ongoing PIU-managed project. The project (AF) will comply with the Bank disclosure policy of audit reports (make publicly available, promptly, after receipt of all final financial audit reports whatever the opinion) and post the information provided on the official website within one month of the report accepted as final by the team. 28 Disbursement arrangements and flows of funds 3. Flows of Funds - Designated Account. A new Designated Account (DA) denominated in FCFA will be opened in a commercial bank acceptable to IDA. The PIU will manage that account which will receive IDA advances to pay for project expenditures eligible under the Credit financing. Interest income earned on the DA will be deposited into the project account. Additional advances to the DA will be made monthly against withdrawal applications supported by Statements of Expenditures (SOE) or records as specified in the Disbursement Letter (DL). 4. Disbursement arrangements. Disbursements under the AF will be transaction-based. In addition to making advances to the DA, other disbursement methods (reimbursement, direct payment and special commitment) will be available for use under the Project. Further instructions on the withdrawal of proceeds will be outlined in the disbursement letter and details on the operation of the DA will be provided in the Project Financial and Accounting Manual. 5. Disbursement of Funds to Service Providers and Suppliers. The PIU will make disbursements to service providers and suppliers of goods and services for specified activities under the AF in accordance with the payment modalities, as specified in the respective contracts / conventions as well as the procedures described in the project’s Administrative, Accounting and Financial Manual. In addition to these supporting documents, the Project will consider the findings of the internal audit unit while approving the payments. The PIU, with the support of its internal audit unit, will reserve the right to verify the expenditures ex-post, and refunds might be requested for non-respect of contractual clauses. Misappropriation of resources toward the funding of activities could result in the suspension of financing for a given entity. 6. Governance and accountability: As designed under the ongoing REDD+ Readiness preparation - Togo (P149942), the GoT will continue to ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines of the Bank. 7. Implementation Support Plan: Based on the outcome of the FM risk assessment, the following implementation support plan is proposed. The objective of the implementation support plan is to ensure the project maintains a satisfactory financial management system throughout the project’s life. 29 FM Activity Frequency Desk reviews Interim financial reports review Quarterly Audit report review of the project Annually Review of other relevant information such as interim internal control Continuous as they become available systems reports. On site visits Review of overall operation of the FM system Four times per year (Implementation Support Mission) Monitoring of actions taken on issues highlighted in audit reports, As needed auditors’ management letters, internal audit and other reports Transaction reviews (if needed) As needed Capacity building support FM training sessions During implementation and as needed. Procurement 1. The counterpart will carry out procurement under the proposed project in accordance with the World Bank’s ‘Procurement Regulations for IPF Borrowers’ (Procurement Regulations) dated July 2016 and revised in November 2017 under the ‘New Procurement Framework’; the ‘Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants’, dated July 1, 2016; and other provisions stipulated in the Financing Agreements. 2. All procuring entities as well as bidders and service providers, that is, suppliers, contractors, and consultants shall observe the highest standard of ethics during the procurement and execution of contracts financed under the project in accordance with paragraph 3.32 and annex IV of the Procurement Regulations. 3. The counterparts shall prepare and submit to the World Bank a General Procurement Notice (GPN) and the World Bank will arrange for publication of the GPN in United Nations Development Business (UNDB) online and on the World Bank’s external website. The counterparts may also publish it in at least one national newspaper. 4. The counterparts shall publish the Specific Procurement Notices (SPNs) for all goods, non- consulting services, and the Requests for Expressions of Interest on their free-access websites, if available, and in at least one newspaper of national circulation in the counterpart’s country and in the official gazette. For open international procurement selection of consultants using an international shortlist, the counterpart shall also publish the SPN in UNDB online and, if possible, in an international newspaper of wide circulation; and the World Bank arranges for the simultaneous publication of the SPN on its external website. 5. Procurement environment. The public procurement system is governed by Law No. 2009-013 of June 30, 2009, on public Procurement and Public Service Delegations and by Decree No. 2009-277 of November 11, 2009, containing the code of public contracts and delegations of public service. The public procurement code transposes in Togolese law the provisions of the West African 30 Economic and Monetary Union Directives of 2005 (Directive 04 on the procedure for the procurement, execution, and regulation of public procurement and public service delegations; Directive 05 on the control and regulation code of public contracts and delegations of public service). 6. Procurement institutional arrangement. ODEF, the implementing entity of the MERF has established a Procurement Control Commission (PCC) consisting of five members and chaired by the person nominated in charge of procurement. The procurement bidding documents to be elaborated by the Procurement Specialist of the project will be submitted to PCC, or to the decisions of the National Procurement Control Directorate (Direction Nationale de Contrôle des Marchés Publics, DNCMP) under the Ministry of Finance depending on the procurement control threshold described in the procurement code. The MERF and its implementing entity have a recent experience in the management of World Bank-financed projects especially through the initial operation, but they are not familiar with the New Procurement Framework. 7. Filing and record keeping. The Procurement Procedures Manual will set out the detailed procedures for maintaining and providing readily available access to project procurement records, in compliance with the Loan Agreement. The implementing agency will assign one person responsible for maintaining the records. The logbook of the contracts with unique numbering system shall be maintained. The signed contracts as in the logbook shall be reflected in the commitment control system of the counterpart’s accounting system or books of accounts as commitments whose payments should be updated with reference made to the payment voucher. This will put in place a complete record system, whereby, the contracts and related payments can be corroborated. 8. Project procurement strategy for development. As part of the preparation of the project, the counterpart (with support from the World Bank) has been preparing its PPSD which will describe how fit-for-purpose procurement activities will support project operations for the achievement of PDOs and deliver value for money. The procurement strategy will ensure proper sequencing of the activities. It will consider institutional arrangements for procurement, roles and responsibilities, thresholds, procurement methods, and prior review, and the requirements for carrying out procurement. It will also include a detailed assessment and description of the Government’s capacity for carrying out procurement and managing contract implementation, within an acceptable governance structure and accountability framework. Other issues taken into account will include the behaviors, trends, and capabilities of the market (that is, market analysis) to inform the Procurement Plan. The activities also require strong technical capability to prepare proper technical specifications to avert lack of, or inadequate, market response. This capability or a plan to enhance is considered in the strategy. Also, special arrangements like direct contracting, use of Statements of Expenses, United Nations’ agencies, third-party monitors, local NGOs, Force Account, or civil servants needs, results-based arrangements, need for prequalification, if any, will be considered and addressed. A first draft of the PPSD is available and is under discussion between the counterparts and the World Bank team. 9. The recruitment of civil servants as individual consultants or as part of the team of consulting firms will abide by the provisions of paragraph 3.23 (d) of the Procurement Regulations. 10. Procurement Plan. The counterpart and its Project Implementing Unit has prepared a detailed 18- month Procurement Plan which is under review and approval. The Procurement Plan will be 31 updated in agreement with the World Bank team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 11. Goods and services. The procurement includes no works, small goods mostly available on the local market, and small consultancy services to be contracted with local firm and through conventions with local universities subject to the submission of adequate direct contracting justification. The contracts of goods to be procured during the project implementation are not subject to present specific constraints or require a particular technology. 12. Training, workshops, study tours, and conferences. Training activities would comprise workshops and training, based on individual needs, as well as group requirements, on-the-job training, and hiring consultants for developing training materials and conducting training. Selection of consultants for training services follows the requirements for selection of consultants mentioned earlier. All training and workshop activities (other than consulting services) will be carried out on the basis of approved annual work plans/training plans that would identify the general framework of training activities for the year, including (a) the type of training or workshop, (b) the personnel to be trained, (c) the institutions which would conduct the training and reason for selection of this particular institution, (d) the justification for the training and how it would lead to effective performance and implementation of the project and or sector, (e) the duration of the proposed training, and (f) the cost estimate of the training. Report by the trainees, including completion certificate/diploma upon completion of training, shall be provided to the Project Coordinator and will be kept as part of the records, and will be shared with the World Bank if required. 13. A detailed training and workshops plan, providing the nature of training/workshop, number of trainees/participants, duration, staff months, timing, and estimated cost will be submitted to IDA for review and approval before initiating the process. The selection methods will derive from the activity requirement, schedule, and circumstance. After the training, the beneficiaries will be requested to submit a brief report indicating what skills have been acquired and how these skills will contribute to enhance their performance and contribute to the attainment of the project objective. 14. Operational costs. Operational costs financed by the project would be incremental expenses, including office supplies, vehicle O&M costs, maintenance of equipment, communication costs, rental expenses, utilities expenses, consumables, transport and accommodation, per diem, supervision costs, and salaries of locally contracted support staff. Such service needs will be procured using the procurement procedures specified in the PIM accepted and approved by the World Bank. 15. Procurement Manual. The manual shall be prepared by the counterpart and agreed with the World Bank not later than within three months from the project effectiveness. 16. Procurement methods. The counterparts will use the procurement methods and market approach in accordance with the Procurement Regulations. Open National Market Approach is a competitive bidding procedure normally used for public procurement in the country of the counterpart and may be used to procure goods, or nonconsultant services provided it meets the requirements of paragraphs 5.3 to 5.6 of the Procurement Regulations. The thresholds for particular market approaches and procurement methods are indicated in Table 1. The thresholds for the World Bank’s prior review requirements are also provided in Table 1. 32 Table 1. Thresholdsa, Procurement Methods, and Prior Review Contract (C) Value Contracts Subject to Expenditure No. Threshold* [equivalent Procurement Method Prior Review [equivalent Category to US$] to US$] Open Competition International C ≥ 500,000 (≥1,500,000) Market Approach and Direct Goods, IT, and non- Contracting 1 consulting services 100,000 < C < 500,000 Open Competition National None Market Approach C ≤ 100,000 Request for Quotations None C < 100,000 National shortlist for selection of None consultant firms For 2 Consulting Services International shortlist for C ≥ 100,000 ( ≥ 500,000) selection of consultant firms For None National shortlist for selection of Engineering and C < 300,000 consultant firms 3 Construction Supervision International shortlist for C ≥ 300,000 ( ≥ 500,000) selection of consultant firms 4 Individual consultants All Values All approaches (≥ 200,000) Direct contracting As agreed in the 5 All values — Procurement Plan Training, workshops, Based on approved annual work Annual work plans and 6 All values and study tours plans and budgets budgets Note: The thresholds apply to the entire project unless indicated otherwise for specific items. These thresholds are for the purposes of the initial Procurement Plan for the first 18 months. The thresholds will be revised periodically based on reassessment of risks. All contracts not subject to prior review will be post-reviewed. 17. Procurement risk rating. The project procurement risk before the mitigation measures is High. The risk can be reduced to a residual rating of ‘Substantial’ upon consideration of successful implementation of the mitigation measures. The risks and mitigation measures are provided in Table 2. Table No 2. Procurement Risk Assessment and Mitigation Action Plan Procurement Risk Mitigation Measures Responsibility and Deadline Elaborate and submit to IDA for agreement, a satisfactorily version of MERF; Update the Operational Manual the Operations Manual comprising a first draft at negotiation and section on procurement section on procurement for use by the adoption upon project effectiveness project Weak capacity of the Procurement Reinforce the capacity the Procurement Project Procurement Specialist of the Commission, the PCC, the DNCMP Commission, the PCC, the DNCMP in project before the beginning of any in the New Procurement Framework the New Procurement Framework procurement activity and as needed procedures of July 2016 and revised procedures of July 2016, and revised in during project life. in November 2017 November 2017 33 Procurement Risk Mitigation Measures Responsibility and Deadline The MEF shall comply with procurement services standard time for Long delay by the MEF for the contract approval time and shall ensure MERF/DNCMP/MEF; approval of contacts the MUHCV fills a realistic as and when needed during project life commitment in each year Government budget 34 ANNEX 4: FCPF RESOLUTION APPROVING TOGO’S REQUEST FOR ADDITIONAL FUNDING 35