INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 02/05/2014 Report No.: 84669 1. Basic Project Data Original Project ID: P104566 Original Project Name: Water Services and Institutional Support Project Country: Mozambique Project ID: P146938 Project Name: Additional Financing - Water Services and Institutional Support (WASIS) Project Task Team Leader: Luiz Claudio Martins Tavares Estimated Appraisal Date: February 13, Estimated Board Date: 03/20/2014 2014 Managing Unit: AFTU1 Lending Instrument: Investment Project Financing Sector: Water supply (100%) Theme: Access to urban services and housing (100%) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 0.00 AUSTRALIA: Australian Agency for International Development AUD3.80 3.80 Environmental Category: B - Partial Assessment Simplified Processing Simple [X] Repeater [X] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] or OP 8.00 (Rapid Response to Crises and Emergencies) 2. Project Objectives The Project Development Objective (PDO) is to: (i) increase water service coverage in the cities of Beira, Nampula, Quelimane, Pemba, Dondo, Tete, Chimoio, Gondola, Angoche, Moatize, Ilha de Moçambique, Mocimba da Praia and Nacala under the delegated management framework; and (ii) establish an institutional and regulatory framework for water supply in smaller cities and towns. The second Additional Financing does not change the PDOs. 3. Project Description The original project includes three components: (i) Component A includes investments and continuing support to expand the water supply network in the four cities under the responsibility of FIPAG; (ii) Component B provides capacity building and institutional support to the Administração de Infra-estrutura de Abastecimento de Água e Saneamento (AIAS); and, (iii) Component C provides capacity building and institutional support to the Water Regulatory Council (Conselho de Regulação do Abastecimento de Água- CRA) with respect to expanding regulatory responsibility for smaller towns and cities. The first Additional Financing (P120546), approved by the Executive Directors on September 30, 2010, continued with the original activities, but allowed for scale-up of the investments in infrastructure in additional cities, and to strengthen the organizational and operational capability of the local operators for each system, including the establishment of a revenue stream leading gradually toward financial sustainability. The revised project components for the first Additional Financing were as follows: Component A: Investments and continuing support in 11 Cities under the responsibility of FIPAG. Under the original project, the cities of Pemba, Nampula, Quelimane, and Beira are supported with improvements of water supply access. With the previous AF, the revised Component A continued to support the above four cities and scaled-up the investments to continue the expansion of services in an additional seven of the largest cities consisting of Tete, Dondo, Chimoio, Gondola, Angoche, Moatize, and Nacala. Component B: Capacity building, institutional and operational support to the National Directorate for Water Affairs (Direcção Nacional de Águas-DNA)/AIAS. Component B of the original project established and is operationalizing the Asset Management Unit for smaller cities and towns, designated in the law as the AIAS, and the Provincial Water Boards. This Component intends to: (a) adapt the proven sustainable institutional and regulatory modalities for secondary cities under the AIAS based on the experience with the delegated management model from Water Supply Investment Fund (Fundo de Investimento e Património do Abastecimento de Água – FIPAG) cities; (b) ensure that the appropriate regulatory, policy, and institutional framework would be developed and tested as the delegated management model is scaled up via pilot projects; (c) build the capacity of the sector players, including DNA, district and local governments, municipalities, public and private sector, and small scale providers; (d) promote small scale private sector participation in service delivery; and (e) provide operational subsidies during the transition period to support O&M. The previous AF provided by Australia Agency for International Development (AusAid) created a new sub-component B (d) to support the pilot works in the small cities of Ilha de Moçambique and Mocimboa da Praia and thereby test the Delegated Management Framework (DMF) at this level. The objective of the works in these two pilot locations is to support the institutional aspects of the WASIS and to strengthen the organizational and operational capability of the local operators for each system, including the establishment of a revenue stream, leading gradually toward financial sustainability. Component C: Capacity, Institutional and operational support to CRA There was no change to this Component which, under the original project, supports the development of regulatory frameworks to cover the smaller towns and cities as the AIAS becomes operational expanded via the Provincial Water Boards (PWBs). The proposed second Additional Financing is required to: (1) address unanticipated issues which have arisen during the implementation of the infrastructure investment projects in Ilha de Moçambique and Mocímboa da Praia; (2) meet higher costs than allocated for consultancy services, and (3) close a financing gap created by the significant devaluation of the Australian dollar. It is important to note that the project development objective remains relevant and unchanged from the parent project and the previous additional financing, along with the key activities to be carried out under each component. 4. Project Location and salient physical characteristics relevant to the safeguard analysis The proposed second Additional Financing investments will be in the cities of Ilha de Moçambique and Mocimba da Praia. With regards to the infrastructure works in these two cities, the project has faced some challenges during implementation that require additional resources for successful completion. A summary of the main challenges is as follows. Ilha de Moçambique: On the island it was originally planned to refurbish and use an old cistern (900 m3) located in the area of cultural heritage significance. This cistern (with an adjacent new pump station) was to be part of the water supply system, providing a significant amount of clean water storage for the island. However, during the detailed assessment during the design phase of the project it was concluded that this structure may not be suitable to withstand vibration from the pump station during operations and construction and, because of its cultural heritage significance, the decision was taken by the AIAS to instead construct a new water reservoir at another more suitable location on the Island. This construction of this new reservoir with capacity of 1000 m3 requires additional costs over that which was previously estimated for the refurbishment of the old cistern. Other less significant variations which have been issued include: (1) the change of pipe materials for the water supply pipeline which crosses the bridge to the Island; and (2) inclusion of a new commercial building for the operator which was omitted during the bidding documents. Mocímboa da Praia. In Mocimboa the source of water, the Quinhevo river, has been affected by the recent installation of a weir by another Government agency, which has limited the water abstraction capacity and impacted the water quality. Thus, to overcome this constraint a variation order has been issued to include additional infrastructures (boreholes and an additional treatment process within the new treatment facility that was already planned for construction) to improve the availability of water and to improve the treatment processes. The additional treatment structure includes a new upflow filter which will be installed in line and before the proposed rapid sand filters that were part of the original design. This additional treatment process is located within the same project footprint which has been established for the originally proposed treatment facilities. The treatment technology is based on the same physical processes (e.g., filtration) and does not involve additional chemical dosing. The boreholes will be drilled near the existing water abstraction point and if successful will be equipped and connected through independent lines which will feed into the treatment works (as a mixed design solution). Other minor variations which have been required include: (1) an increase in the size of the transmission main from 200 mm to 300 mm dia (due to lower pressure than originally designed), but the alignment will stay the same; and (2) an increase in the volume of one of the elevated storage tanks from 10m3 to 20m3, but the location has stayed as originally planned. 5. Environmental and Social Safeguards Specialists Ms Kristine Schwebach (AFTCS) Mr Harvey Van Veldhuizen (OPSOR) 6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The original project was classified as a Category B and triggered two Bank safeguard policies: Environmental Assessment (OP/BP 4.01) and Involuntary Resettlement (OP/BP 4.12). To address the requirements of these two policies, and given the nature of the investments of the original WASIS project, the Borrower prepared an Environmental and Social Management Framework (ESMF) and a Resettlement Policy Framework (RPF). Both frameworks were reviewed and approved by the Bank and disclosed in the Bank's InfoShop as well as in Mozambique through the FIPAG Offices prior to appraisal of the original project in April 2007. In addition to the safeguard policies triggered by the original project, the previous AF under AusAid also triggered the Physical Cultural Resource Policy (OP/BP4.11) because the island part of the Ilha de Moçambique Municipality is classified as a UNESCO World Heritage Site (WHS) and its architectural features are protected. To address the safeguard implications of the AF investments at this site, the Bank’s Environmental and Social Safeguards Specialists conducted field assessments of the environmental, social and physical cultural resources (PCRs) safeguard policy implications associated with the proposed AF investments. The Specialists recommended adoption of the original WASIS project safeguard policies and tools (i.e., the ESMF and RPF) as well as preparation of a Physical Cultural Resources Management Plan (PCRMP) to mitigate any adverse impacts on the PCRs at the Ilha WHS. The PCRMP is a standalone safeguard tool to be applied during WASIS-AF activities at the Ilha site alongside the Project’s ESMF and RPF. The PCRMP was developed to be internally consistent with the ESMF and RPF guidelines and processes. The PCRMP was disclosed in country and in the Banks InfoShop on June 11, 2010. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: There are no indirect or long term impacts expected from any future activities in the areas targeted for AF investments. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. The Borrower, AusAID and the Bank considered not investing in the works identified for the Ilha de Moçambique Municipality site given its UNESCO World Heritage Site classification. However, it was agreed that, with preparation of the recommended Physical Cultural Resources Management Plan and implementation of its proposed mitigation measures, any adverse impacts on the Ilha's PCRs would be appropriately mitigated in line with Bank policies and the general guidelines of Mozambique Law 10/88 on Cultural Heritage as well as Decrees 27/21006 and 28/2006. Following initial consultations with the Ilha's WHS Conservation Office (GACIM), it was agreed that the AF investments on the Ilha remained a high priority for government and that the PCR issues related to the WHS classification of the Ilha, as well as the known PCRs in the immediate vicinity of the Ilha, would be protected with the diligent application and adherence to the PCRMP. The PCRMP guidelines would be applied in tandem with the implementation of the AF ESMF and RPF tools already in place under the original WASIS project. The decision since the first AF was approved to not make use of the old cistern, and instead to build a new water storage reservoir on the Island, has received the full support of GACIM, and has been closely coordinated with them. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Based on the aforementioned safeguards field assessments conducted in October 2009 and May 2010, it was agreed with the Borrower that the original ESMF and RPF prepared for the WASIS project would be used for the AF investments as they remain valid for all of the activities and investments envisioned. As such, both frameworks will be applied for assessing and mitigating any and all potentially adverse environmental and social impacts from the physical investments in the water systems to be supported by the AF. In addition, since OP 4.11 is triggered by the AF investments under AusAid for the Ilha de Moçambique site, the Borrower prepared a Physical Cultural Resources Management Plan to mitigate any adverse impacts on the Ilha's PCRs generated by activities developed under the AF. The nature, scale and scope of the physical investments envisioned for the second WASIS-AF now in preparation are similar to the infrastructure investments under the original project, as are the environmental and social impacts. Based on safeguards field assessments and project supervision conducted in October 2009, May 2010, June 2011, and June 2013, it has been found that AIAS has been appropriately using the ESMF and RPF to manage environmental and social impacts of the project activities, which are related almost entirely to management of construction activities. The PCRMP has not yet been implemented, as works have not yet begun on the island, which comprises the cultural heritage. Based on satisfactory implementation of the existing safeguard tools in WASIS investments at the local level, the Borrower is considered to have adequate capacity to apply and supervise implementation of the AF project investments and associated safeguard tools. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Project stakeholders include the municipal authorities, community leaders and residents where the AF investments will be made. Both the ESMF and RPF were publically disclosed in country through the FIPAG Offices and at the Bank's InfoShop in April 2007 following open and transparent public consultations with key project stakeholders prior to appraisal of the original project. The PCRMP prepared to manage potential impacts at Ilha is a stand-alone safeguard tool to be applied during AF activities at the Ilha site alongside the ESMF and RPF. The PCRMP was developed to be internally consistent with the ESMF and RPF guidelines and processes. The PCRMP was disclosed in country and in the InfoShop on June 11, 2010. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 03/15/2007 Date of "in-country" disclosure 03/29/2010 Date of submission to InfoShop 03/23/2010 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 03/10/2007 Date of "in-country" disclosure 03/29/2010 Date of submission to InfoShop 03/23/2010 Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Pest Management Plan: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: The Physical Cultural Resources Management Plan (PCRMP) was disclosed in country and in the InfoShop on June 11, 2010. Note, the ESMF and RPF to be used for the AF investments were originally disclosed in Mozambique through the FIPAG Offices and the Bank's InfoShop on 04/02/2007. The disclosure dates above reflect the date the original documents were disclosed for this AF operation in Mozambique and the InfoShop. C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? Yes If yes, then did the Regional Environment Unit or Sector Manager (SM) Yes review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the Yes credit/loan? OP/BP 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural property? Yes Does the credit/loan incorporate mechanisms to mitigate the potential Yes adverse impacts on cultural property? OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process Yes framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Sector Yes Manager review the plan? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Yes Infoshop? Have relevant documents been disclosed in-country in a public place in a Yes form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities Yes been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project Yes cost? Does the Monitoring and Evaluation system of the project include the Yes monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the Yes borrower and the same been adequately reflected in the project legal documents? D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr. Luiz Claudio Martins Tavares 02/05/2014 Environmental Specialist: Mr. Harvey Van Veldhuizen 02/05/2014 Social Development Specialist Ms. Kristine Schwebach 02/05/2014 Additional Environmental and/or Social Development Specialist(s): Approved by: Acting Sector Manager: Mr. Alexander Bakalian 02/05/2014 Comments: