Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD 770 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT PAPER ON A PROPOSED ADDITIONAL FINANCING CREDIT IN THE AMOUNT OF SDR 23.1 MILLION (US$35.6 MILLION EQUIVALENT) INCLUDING A CREDIT IN THE AMOUNTOF SDR 10.8 MILLION (US$19.0 MILLION EQUIVALENT) FROM THE CRISIS RESPONSE WINDOW RESOURCES AND A PROPOSED ADDITIONAL FINANCING GRANT FROM THE STRATEGIC CLIMATE FUND – PILOT PROGRAM FOR CLIMATE RESILIENCE IN THE AMOUNT OF US$5.0 MILLION TO SAINT VINCENT AND THE GRENADINES FOR THE REGIONAL DISASTER VULNERABILITY REDUCTION PROJECT April 16, 2014 Caribbean Country Management Unit Disaster Risk Management and Urban Unit Sustainable Development Department Latin America and Caribbean Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank’s policy on Access to 1   Information.   CURRENCY EQUIVALENTS Exchange Rate Effective {April 10, 2014} Currency Unit = XCD XCD 0.65 = US$1 US$1.54 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AF Additional Financing APL Adaptable Program Loan CARICOM Caribbean Community CIF Climate Investment Fund CPD Central Planning Division CQS Consultant Quality Selection CRW Crisis Response Window CWSA Central Water and Sewage Authority DRM Disaster Risk Management EC Eastern Caribbean EIRR Economic Internal Rate of Return EMF Environmental Management Framework FBS Fixed-Budget Selection FM Financial Management FY Fiscal Year GDP Gross Domestic Product GIS Geographic Information System GoSVG Government of Saint Vincent and the Grenadines ICB International Competitive Bidding IDA International Development Association IFR Interim Financial Report LCS Least-Cost Selection M&E Monitoring and Evaluation MoFEP Ministry of Finance and Economic Planning MoHILPP Ministry of Housing, Informal Human Settlements, Lands and Surveys, and Physical Planning MoTW Ministry of Transportation and Works NCB National Competitive Bidding NEMO National Emergency Management Organization NPV Net Present Value OECS Organization of Eastern Caribbean States 2     OP/BP Operational Policy/Bank Procedure ORAF Operational Risk Assessment Framework PDO Project Development Objective PMU Project Management Unit PPCR Pilot Program for Climate Resilience PSIPMU Public Sector Investment Program Management Unit QBS Quality-Based Selection QCBS Quality- and Cost-Based Selection RAP Resettlement Action Plan RDVRP Regional Disaster Vulnerability Reduction Program RPF Resettlement Policy Framework RPS Regional Partnership Strategy SA Social Assessment SBD Standard Bidding Document SCF Strategic Climate Fund STC Short-Term Consultant SVG Saint Vincent and the Grenadines TOR Terms of Reference VINLEC Saint Vincent Electricity Services Limited Vice President: Hasan A. Tuluy Country Director: Sophie Sirtaine Country Manager: Alessandro Legrottaglie Sector Manager: Anna Wellenstein Task Team Leader: Tiguist Fisseha 3       SAINT VINCENT AND THE GRENADINES REGIONAL DISASTER VULNERABILITY REDUCTION PROJECT CONTENTS Page Project Paper Data Sheet 5 Project Paper 11 I. Introduction 11 II. Background and Rationale for Additional Financing 12 III. Proposed Changes 17 IV. Appraisal Summary 23 Annex 1: Revised Results Framework and Monitoring Indicators 27 Annex 2: Operational Risk Assessment Framework (ORAF) 32 Annex 3: Detailed Description of Modified or New Project Activities 37 Annex 4: Economic and Financial Analysis 49 Annex 5: National Poverty Map 52 4       Project Paper Data Sheet ADDITIONAL FINANCING DATA SHEET Saint Vincent and the Grenadines Regional Disaster Vulnerability Reduction Project (Additional Finance) ( P146768 ) LATIN AMERICA AND CARIBBEAN LCSDU . Basic Information – Parent Parent Project ID: P117871 Original EA Category: B - Partial Assessment Current Closing Date: 12/31/2016 Current EA Category: B Basic Information – Additional Financing (AF) Additional Financing Scale Up Project ID: P146768 Type (from AUS): Cost overrun Regional Vice Hasan A. Tuluy Proposed EA Category: B - Partial Assessment President: Expected Effectiveness Country Director: Sophie Sirtaine July 9, 2014 Date: Sector Director: Ede Jorge Ijjasz-Vasquez Expected Closing Date: 12/31/2018 Sector Manager: Anna Wellenstein Report No: PAD770 Team Leader: Tiguist Fisseha Borrower Organization Name Contact Title Telephone Email Saint Vincent and the Ms. Laura Anthony- Director of 784-457-1746 cenplan@svgcpd.com Grenadines Browne Planning Project Financing Data – Parent (Regional Disaster Vulnerability Reduction APL1 - Grenada and Saint Vincent and the Grenadines-P117871 ) Key Dates Original Ln/Cr Approval Signing Effectiveness Revised Project Status Closing /TF Date Date Date Closing Date Date IDA- 20-Sep- 31-Dec- P117871 Effective 23-Jun-2011 01-Nov-2011 31-Dec-2018 49850 2011 2016 IDA- 09-Sep- 31-Dec- P117871* Effective 23-Jun-2011 18-Oct-2011 31-Dec-2018 49860 2011 2016 5     TF- 20-Sep- 31-Dec- P117871 Effective 20-Sep-2011 01-Nov-2011 31-Dec-2018 10204 2011 2016 TF- 09-Sep- 31-Dec- P117871* Effective 09-Sep-2011 18-Oct-2011 31-Dec-2018 10206 2011 2016 TF- 20-Sep- 31-Dec- P117871 Effective 23-Jun-2011 01-Nov-2011 31-Dec-2018 11131 2011 2016 TF- 09-Sep- 31-Dec- P117871* Effective 23-Jun-2011 18-Oct-2011 31-Dec-2018 11132 2011 2016 * Saint Vincent and the Grenadines credits and grants Disbursements % Ln/Cr Undisbu Project Status Currency Original Revised Cancelled Disbursed Disburse /TF rsed d IDA- P117871 Effective USD 10.00 10.00 0.00 2.00 7.48 19.96 49850 IDA- P117871* Effective USD 10.92 10.92 0.00 1.86 8.71 17.03 49860 TF- P117871 Effective USD 8.00 8.00 0.00 1.40 6.60 17.45 10204 TF- P117871* Effective USD 7.00 7.00 0.00 0.71 6.29 10.16 10206 TF- P117871 Effective USD 8.20 8.20 0.00 1.40 6.80 17.02 11131 TF- P117871* Effective USD 3.00 3.00 0.00 0.31 2.69 10.37 11132 * Saint Vincent and the Grenadines credits and grants Project Financing Data – Additional Financing Regional Disaster Vulnerability Reduction Project (Additional Finance) ( P146768 ) [ ] Loan [X] Grant [ ] Other [X] Credit [ ] Guarantee Total Project Cost: 40.60 Total Bank Financing: 40.60 Financing Gap: 0.00 Financing Source – Additional Financing (AF) Amount BORROWER/RECIPIENT 0.00 International Development Association (IDA) 16.60 6     IDA Credit from the Crisis Response Window (CRW) 19.00 Strategic Climate Fund Grant 5.00 Total 40.60 Expected Disbursements (in USD Million) Fiscal Year 2015 2016 2017 2018 Annual 1 6 16 17.6 Cumulative 1 7 23 40.6 Policy Waivers Does the project depart from the CAS in content or in other significant No respects? Explanation Does the project require any policy waiver(s)? No Explanation Team Composition Bank Staff Name Title Specialization Unit Subhash C. Seth Consultant Road Engineer LCSDU Gerald E. Meier Consultant Hydrology LCSDU M. Mozammal Hoque Senior Financial Financial Management LCSFM Management Specialist David I Senior Financial Financial Management LCSFM Management Specialist Edith Ruguru Senior Counsel Senior Counsel LEGAM Mwenda Plamen Stoyanov Senior Procurement Procurement LCSPT Kirov Specialist Victor Ordonez Senior Finance Officer Finance Officer CTRLN M. Yaa Pokua Afriyie Senior Social Social Safeguards LCSSO Oppong Development Specialist Ali Alwahti Urban Specialist co-Team Lead LCSDU 7     Tiguist Fisseha Disaster Risk Management Team Lead LCSDU Specialist Justin Locke Disaster Risk Management Disaster Risk LCSDU Specialist Management Specialist Cynthia Linero Consultant Landslide Engineer LCSDU Molina Melanie Simone E T Consultant Disaster Risk Assessment LCSDU Kappes Specialist Michael J. Darr Consultant Environmental LCSEN Safeguards Keren Carla Charles E T Consultant Disaster Risk LCSDU Management Specialist Non-Bank Staff Name Title Office Phone City Locations Country First Location Planned Actual Comments Administrative Division SVG Kingstown SVG Georgetown SVG Arnos Vale SVG Ginger Village SVG Mt. Greenan SVG Maroon Hill SVG Spring SVG Dark View SVG Troumaca SVG Petit Bordel SVG Rose Bank SVG Belle Isle SVG Sandy Bay SVG Milton Cato Memorial Hospital 8     Institutional Data Parent ( Regional Disaster Vulnerability Reduction APL1 - Grenada and Saint Vincent and the Grenadines-P117871 ) Sector Board Urban Development Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Co- Mitigation Co- benefits % benefits % Water, sanitation and flood protection Flood protection 68 Transportation Aviation 24 Public Administration, Law, and Public administration- 8 Justice Water, sanitation and flood protection Total 100 Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Social protection and risk management Natural disaster management 65 Environment and natural resources Water resource management 35 management Total 100 Additional Financing Regional Disaster Vulnerability Reduction Project (Additional Finance) (P146768 ) Sector Board Urban Development Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Co- Mitigation Co- benefits % benefits % Agriculture, fishing, and forestry Irrigation and 40 50 9     drainage Water, sanitation and flood protection Flood protection 20 50 Transportation Urban Transport 20 Transportation Aviation 20 Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Environment and natural resources Climate change 65 management Social protection and risk management Natural disaster management 15 Urban development Other urban development 15 Environment and natural resources Land administration and management 5 management Total 100 10     I. Introduction 1. This Project Paper seeks the approval of the Executive Directors to provide Additional Financing (AF) in the amount of US$ 40.6 million equivalent to Saint Vincent and the Grenadines (SVG) to support the Regional Disaster Vulnerability Reduction Project (P117871) (RDVRP). 2. The proposed AF would scale up project activities and cover a cost overrun in the SVG Regional Disaster Vulnerability Reduction Project (RDVRP). Specifically, the AF would: (i) support emergency recovery and construction activities; (ii) enhance development impact; (iii) increase the number of beneficiaries, including women; (iv) meet an unanticipated financing gap in Component 1- prevention and adaptation investments and Component 2 - regional platforms for hazard and risk evaluation, and applications for improved decision making; (v) replenish Component 3 – natural disaster response component; and (vi) allocate additional funds to Component 4 - project management and implementation support. This project falls in the category “Projects in Situations of Urgent Need of Assistance or Capacity Constraints described in OP/BP 10.00, para. 11, as about 50 percent of project proceeds would be used to support the Government of SVG’s (GoSVG’s) emergency recovery efforts. In particular, the project would have special procurement procedures (and accelerated business standard for Board submission). 3. Funding arrangements. The proposed AF would be comprised of US$19.0 million equivalent from the Crisis Response Window (CRW), US$16.6 million equivalent from the SVG’s remaining IDA-16 (International Development Association) allocation and US$5.0 million grant from the Strategic Climate Fund (SCF) through the Climate Investment Fund’s (CIF’s) Pilot Program for Climate Resilience (PPCR) for a combined AF of US$40.6 million equivalent . The CRW funds would address the urgent recovery and reconstruction needs following the December 2013 flood event in SVG. The CIF PPCR funds aim to integrate climate risk and resilience into core development planning and implementation in SVG through the provisions of technical assistance and investments. II. Background and Rationale for Additional Financing 4. Vulnerability Context. SVG is exposed to high levels of risk to meteorological and geophysical hazards,1 which have significant negative impacts on SVG’s economic and fiscal stability. These natural hazards are being exacerbated by the adverse impacts of climate change, which are putting increased stress on water availability, coastal investments, national infrastructure and livelihoods, especially of the poor and vulnerable groups in SVG. The combined long-term impacts of sea level rise and 1 in 100 year storm surge in SVG include2: (i) over 50 percent of major tourism resorts at risk to damage, and (ii) potentially severe flooding risk at the SVG national airport. In the past decade, damage from major natural disasters in SVG were approximately US$41 million, which was more than the accumulative sum of damage from                                                              1 Meteorological: High wind/excess rainfall/hurricanes and drought. Geophysical: Seismic/volcanic/tsunami. 2 SPCR SVG (Narrative document). http://www.climateinvestmentfunds.org/cif/sites/climateinvestmentfunds.org/files/SPCR%20SVG%20Narrative%2025march- 1.pdf 11     1961 – 2000.3 The GoSVG’s gross debt relative to GDP was 70 percent in 20124 - giving the country limited capacity to manage the fiscal impacts of exogenous shocks. 5. Overview of Disaster Event and Impacts. On December 24, 2013, a tropical weather trough passed over SVG producing extraordinarily intense rainfall at a time well outside of the traditional hurricane season. Over a 3-hour period, SVG received 278 millimeters of rain, which expert analysis strongly suggest was in excess of a 1 in 100 year event. The ensuing flash floods and landslides resulted in severe damages and 9 confirmed deaths with 2 persons still missing and presumed dead. The GoSVG declared a National Level 2 Disaster5 on December 26, 2013 and formally requested assistance and resources from the World Bank on December 31, 2013. A rapid Damage and Loss Assessment (DaLA) carried out by a World Bank team from January 6 – 15, 2014, estimated that the combined physical damage and economic losses were approximately US$108.4 million (15 percent of GDP). Given the size of the disaster the Government will require significant support to manage the reconstruction and to enhance the country's overall resilience to such disasters going forward. In view of this, US$19.0 million is being sought from the IDA Crisis Response Window (CRW) to support the country’s reconstruction and recovery needs6. 6. Strategic Context. With support from the World Bank and the PPCR, the GoSVG is responding to the December 2013 disaster, increasing gender-informed climate resilience, and reducing physical and fiscal vulnerability derived from natural disasters. The proposed AF would support the implementation of GoSVG’s endorsed Strategic Program for Climate Resilience (SPCR) dated April 18, 2014 – more specifically, Component 1: Climate Vulnerability, Risk Assessments and Risk Reduction and Component 4: Design and Implementation of a Public Education and Capacity Building Program of the SPCR. By increasing the financing available under the RDVRP, the GoSVG can further reduce its vulnerability to climate and disaster risk; and in turn, improve its physical and fiscal resilience to the economic impacts of disaster events in the short and long term. Reducing vulnerability to risk from natural hazards and climate change is also a core element of the Organization of Eastern Caribbean States (OECS) Regional Partnership Strategy (RPS) FY10-FY14. Finally, SVG will continue to benefit from the knowledge sharing and capacity building through the PPCR. 7. Links to Poverty Reduction and Poverty Reduction. Agriculture is the primary income generating activity for a majority of the population – in particular, the poor. Some of the roads selected for slope stabilization are feeder roads for the small farmers in SVG’s major agricultural basin. Without the access from these roads, farmers have to increase transportation costs to get their produce to the major markets located in Kingstown. In addition, the impact of the December 2013 disaster was concentrated in zones with the highest levels of poverty such as                                                              3 EM-DAT: The OFDA/CRED International Disaster Database – www.emdat.be – Université catholique de Louvain – Brussels – Belgium. 4 IMF, World Economic Outlook Database, October 2013. 5 A Level Two (2) Disaster is declared when the damage is severe and for which local resources and response capacity is overwhelmed and specialized external assistance is requested, in accordance with the National Emergency and Disaster Management Act, 2006. 6 A Note presented to the WB Board on March 20 2014 informed the Executive Directors of Management’s intention to allocate an indicative amount of US$19.0 million equivalent to support SVG’S reconstruction efforts in the aftermath of the December 2013 Floods. 12     Georgetown and Sandy Bay (55.6 percent poverty headcount7), where the focus of economic activity is on agriculture, fishing and services. An estimated 44 percent of the people affected are classified as living in poverty. Low-income families, whose agricultural production is primarily for personal consumption and local sales (i.e. farmers markets), would disproportionately feel the impact of the disaster on agriculture. Preliminary observations indicate that vulnerable families, dependent on agricultural production, may be at risk of falling below poverty line due to the disaster. By supporting SVG in its disaster response and by improving road conditions, the AF will contribute to improving the economic activity and livelihoods of poor farmers and thereby contributing to poverty reduction and shared prosperity. Status of Original Project 8. Project Financing. The RDVRP was approved in June 23, 2011 and became effective in October 2011. The lending instrument was an Adaptable Program Loan (APL) in the Parent Project and is being implemented in the Organization of Eastern Caribbean States (OECS); however, the term APL has been retired and subsequent Projects in the series fall under the new Investment Project Financing (IPF) guidelines. Projects in SVG and Grenada form IPF1 with total financing of US$47.1 million, broken downs as follows: (Grenada: US$10.0 million in IDA credits, US$8.0 million in PPCR grants and US$6.2 million in PPCR concessional loans; SVG: US$10.9 million in IDA credits, US$7.0 million in PPCR grants and US$3.0 million in PPCR concessional loans). Saint Lucia and Dominica will comprise IPF2 and IPF3, respectively. Both the Dominica Disaster Vulnerability Reduction Project (P129992) and the Saint Lucia Disaster Vulnerability Reduction Project (P127226) are scheduled to be approved by the Board in fiscal year 2014. 9. Project Objectives and Description. The project development objective (PDO) is to measurably reduce vulnerability to natural hazards and climate change impacts in SVG and in the Eastern Caribbean sub-region. Project components include: Component 1 - prevention and adaptation investments; Component 2 - regional platform for hazard and risk evaluation, and applications for improved decision making; Component 3 - natural disaster response investments; and Component 4 - project management and implementation support. Cross-cutting themes, such as gender, knowledge management and monitoring and evaluation (M&E), are addressed in detail in the original project (RDVRP). 10. Implementation Status. Project implementation is currently rated as moderately satisfactory8 and the achievement of the PDO is rated satisfactory. Disbursement is US$2.9 million (14 percent) which is within expected forecasts and US$5 million (approx. 25 percent) of original project proceeds will be committed by the second quarter of 2014. It is anticipated that the construction phase of the original project would commence by the end of 2014 for a majority of the civil works sub-projects. The RDVRP was designed to front-load technical assistance and capacity building activities in order to improve the knowledge base on climate change (CC) and disaster risk management (DRM). As a result of this effort, 6 out of the 10 intermediate indicator targets, which measure capacity development in the parent project results framework were met or                                                              7 SVG Country Poverty Assessment, 2008 8 The project implementation is rated as moderately satisfactory due to delays experienced in the early stages of implementation. The PSIPMU is now fully staffed and it is expected that the IP rating would improve to satisfactory in the next ISR. 13     exceeded within the first two years of the original project. Finally, the project is fully compliant with all conditions and legal covenants. The Additional Financing 11. Project Activities to be supported by the Proposed Additional Financing. The AF would finance emergency recovery and reconstruction activities (US$20.7 million), project scale-up activities (US$16.9 million) and cost overruns (US$3.0 million). a. Emergency recovery and reconstruction activities, scale up of ongoing activities for disaster response (Total: US$20.7 million, of which CRW US$19.0 million, IDA US$1.7 million). These activities include river training, bridge rehabilitation and reconstruction, road realignment, coastal defenses and replenishment of the emergency contingency component. The activities would rehabilitate and reconstruct the infrastructure that were damaged in the floods in December 2013 to be more disaster resilient. b. Project scale up (Total: US$16.9 million, of which IDA US$11.9 million and PPCR US$5.0 million). Proposed AF activities include additional slope stabilization works, expansion of river defense works as well as the construction of additional satellite warehouses to support community disaster preparedness. The AF would augment institutional strengthening activities to address disaster preparedness and climate change impacts. Finally, the AF would support increased monitoring and evaluation (M&E) consistent with the increase in project scope. c. Cost Overruns (Total: US$3.0 million; all IDA financed). Cost overruns identified under the current project are due to inflation experienced during project execution, increases in the scope of civil works activities due to damage from heavy rain events since 2011 and increases in costs associated with sub-project development – more specifically, an increase in the scope of the pre-engineering studies required to inform detailed designs. The US$3.0 million would also finance: (i) consulting services to develop detailed designs for the new National Hospital and (ii) the construction of the Georgetown Coastal Defense. d. The detailed project description of new and modified activities can be found in Annex 3. 12. Project Cost and Financing. The table below summarizes the project cost and financing by Component. Table: Project Financing by Component in US$ millions AF by financing source Parent IDA CRW IDA PPCR Activity project AF Credit Credit Grant Component 1 - Prevention and Adaptation Investments $7.30 $23.56 $7.94 $12.82 $2.80 Component 2 - Regional Platforms for Hazard and Risk Evaluation, and Applications for Improved decision making $10.80 $15.44 $10.96 $2.48 $2.00 Component 3 - Natural Disaster Response Investment $1.00 $1.00 $0.00 $1.00 $0.00 Component 4 - Project Management and Implementation $1.80 $0.60 $0.10 $0.30 $0.20 Total $20.90 $40.60 $19 .00 $16.60 $5.00 14     13. Emergency Procedures. Given the emergency nature of the proposed AF, streamlined procedures enabled under OP/BP 10.00 paragraph 11: Special Considerations would be utilized for Board processing. In addition, the implementation of Components 1, 2 and 3 of the original project (RDVRP-P117871), after approval of the AF, would also operate under special procurement procedures allowed under OP/BP 10.0 Special Considerations. In particular, the procurement thresholds would be increased for packages9. The urgency of the activities identified under these components either directly address the GoSVG’s emergency recovery needs or address activities with increased urgency as a result of the December 2013 disaster. 14. Expected Outcomes. The AF would have the same expected outcomes as the RDVRP, but at a greater scale, which include: (i) capacity built to identify and monitor climate risk at the national level; (ii) reduced vulnerability of public infrastructure and emergency communications; (iii) strengthened emergency management capacity and improved effectiveness of risk reduction investments; and (iv) established disaster risk financing mechanism. New results framework targets are presented in Annex 1: Revised Results Framework and Monitoring Indicators. 15. Consistency with PDO. Activities identified under the proposed AF are consistent with the current PDO. The AF would support the scaling of up of key project activities and close the financing gap for current project activities. Key outcomes resulting from AF activities would be a significant increase in the population, particularly in poor communities, including women, benefiting from improved infrastructure resilience, and strengthened emergency and disaster response capacity in the short and long term. 16. Project Risks. The overall implementation risk rating for the RDVRP is moderate. Given the size of the country, implementation capacity to handle a large number of contracts is limited. Interagency coordination, quality control, and information sharing among various agencies are also limited. In order to mitigate these risks, the RDVRP has supported targeted training for project staff to manage Bank supported projects – specifically as it relates to procurement, financial management and safeguards. Moreover, the RDVRP supports technical assistance to improve the capacity of relevant government institutions. To ensure quality control, the Bank supervision team carries out technical audits on a routine basis and has established critical path inspection procedures, which have been integrated into the project operations manual. 17. Improved Decision Making Capacity. The RDVRP has supported capacity building activities to improve climate resilience and DRM capacity. It is anticipated that the GoSVG’s improved understanding of climate change and DRM would enable the MoTW to derive better cost estimates of infrastructure sub-projects as they now have more experience and information required to quantify costs associated with pre-engineering studies, detailed design consultancies as well as supervision services. In addition, sub-project selection was determined taking into account gender, poverty, and climate change considerations. 18. Implementation Arrangements. The AF implementation, institutional and internal quality control arrangements would remain the same as the arrangements established under the RDVRP. The additional activities under the AF are within the current capacity of GoSVG to execute, with some additional support. Many activities of the AF would: (i) scale up existing                                                              9 The same procedures that were used under Hurricane Tomas Emergency Recovery Project (HTERP-P124939). 15     activities currently under implementation through amending ongoing contracts of the same type; and (ii) be incorporated into the scope of services required under request for proposals (RFPs) that will be launched soon. As a result, the current implementing entity, Public Sector Investment Program Management Unit (PSIPMU) within the Central Planning Division (CPD), would benefit from economies of scale and reduced transactions costs. The PSIPMU is reasonably staffed and targeted training has facilitated capacity development to manage Bank-supported projects. In addition, the proposed AF would support additional project staff – including an additional Procurement and Contract Management Specialist and Senior Quantity Surveyor in order to increase the implementation capacity of the PSIPMU. The proposed AF would also scale up technical assistance provided under the RDVRP to support improved project management capacity and financial management systems. 19. Expected Benefits. The proposed activities to be financed under the AF would result in a more rapid and resilient recovery to the recent disaster event and an increase in overall project benefit realized through further reduction in disaster and climate change risk over the long-term. Under the proposed AF, the GoSVG would leverage an additional US$5.0 million in grants currently available through the PPCR, which would increase the number and scale of interventions to be financed under the AF. In addition, it is important to note that the economic analysis conducted for the original project is still applicable despite recent increases in inflation. 20. Safeguards. No new safeguards policies would be triggered and safeguard implementation arrangements are expected to remain the same. Emergency recovery and rehabilitation activities would not change substantially or fundamentally from those already described in the EMF. The Environmental Management Framework was first disclosed on January 27, 2014 and re-disclosed on April 9, 2014 on the both the national and the World Bank websites. The Resettlement Policy Framework and Social Assessment Report were disclosed on February 25, 2014 on national and the World Bank websites. 21. Monitoring and Evaluation (M&E). M&E mechanisms would remain the same as the Original project. Targets in the Results Framework were revised to reflect the increase in scope of activities and a new indicator is proposed to capture results from the construction of satellite warehouses. The table below highlights the changes to the results framework. Indicator Name Prior Revised Reduced risk of SVG’s 10,500 32,156 population to failure of roads Daily users currently at risk: Daily users currently at risk: and bridges due to natural 1) Fenton – 500; and 1) Fenton – 500; 2) South River Rd Bridge - 10,000; hazards or climate change 2) South River Rd Bridge - 3) Spring – 9,800; 4) Carriere, Maroon Hill & Ginger impacts 10,000 Village - 10,200; and 5) Coulls Hill - 1,656 Reduced risk of SVG s 60 1,275 population to flooding in areas 15 households with an 425 households with an average of 3 people per with flood mitigation works average of 4 people per household (average household value based on latest financed by the Project in SVG household census estimates) Increased capacity of 0 6 communities to respond to New Fully operational satellite warehouses located within disaster events vulnerable communities 16     Summary of Proposed Changes The activities under the proposed Additional Finance (AF) include emergency response activities, additional slope stabilization works, expansion of river defense works, construction of additional satellite warehouses to support community disaster preparedness, pre-engineering studies and support for the monitoring and evaluation (M&E) capacity development in SVG. AF proceeds would also be allocated to meet sub-project specific shortfalls and to hire additional project management staff. Collectively, these activities would aim to increase national resilience to the impact of natural disasters and improve the capacity of government ministries to identify and manage the impacts associated with climate change. Change in Implementing Agency Yes [ ] No [ X ] Change in Project's Development Objectives Yes [ ] No [ X ] Change in Results Framework Yes [ X ] No [ ] Change in Safeguard Policies Triggered Yes [ ] No [ X ] Change of EA category Yes [ ] No [ X ] Other Changes to Safeguards Yes [ ] No [ X ] Change in Legal Covenants Yes [ ] No [ X ] Change in Loan Closing Date(s) Yes [ X ] No [ ] Cancellations Proposed Yes [ ] No [ X ] Change in Disbursement Arrangements Yes [ X ] No [ ] Reallocation between Disbursement Categories Yes [ ] No [ X ] Change in Disbursement Estimates Yes [ X ] No [ ] Change to Components and Cost Yes [ X ] No [ ] Change in Institutional Arrangements Yes [ ] No [ X ] Change in Financial Management Yes [ ] No [ X ] Change in Procurement Yes [ X ] No [ ] Change in Implementation Schedule Yes [ X ] No [ ] Other Change(s) Yes [ ] No [ X ] Development Objective/Results PHHHDO Project’s Development Objectives Original PDO The Program aims at measurably reducing vulnerability to natural hazards and climate change impacts in the Eastern Caribbean Sub-region. The objective of the Project in Grenada is to measurably reduce vulnerability to natural hazards and climate change impacts in Grenada and in the Eastern Caribbean Sub-region. The objective of the Project in Saint Vincent and the Grenadines is to measurably reduce vulnerability to natural hazards and climate change impacts in Saint Vincent and the Grenadines and in the Eastern Caribbean Sub-region. 17     Change in the Results Framework Explanation: The indicators and targets would be increased to account for the change in project scope. Finance Loan Closing Date - Additional Financing ( Regional Disaster Vulnerability Reduction Project (Additional Financing) - P146768 ) Proposed Additional Financing Loan Closing Source of Funds Date International Development Association 31-Dec-2018 (IDA) Strategic Climate Fund Grant 31-Dec-2018 Loan Closing Date(s) - Parent ( Regional Disaster Vulnerability Reduction PHHCLCD APL1 - Grenada and Saint Vincent and the Grenadines - P117871 ) Explanation: The loan closing dates, pertaining to SVG, would be extended by two years to December 31, 2018 to accommodate the increased scope of the Project with the Additional Financing. Status Original Current Proposed Previous Ln/Cr/TF Closing Date Closing Date Closing Date Closing Date(s) IDA- Effective 31-Dec-2016 31-Dec-2016 Grenada* 31-Dec-2016 49850 IDA- Effective 31-Dec-2016 31-Dec-2016 31-Dec-2018 31-Dec-2016 49860 TF-10204 Effective 31-Dec-2016 31-Dec-2016 Grenada* 31-Dec-2016 TF-10206 Effective 31-Dec-2016 31-Dec-2016 31-Dec-2018 31-Dec-2016 TF-11131 Effective 31-Dec-2016 31-Dec-2016 Grenada* 31-Dec-2016 TF-11132 Effective 31-Dec-2016 31-Dec-2016 31-Dec-2018 31-Dec-2016 *Note that the closing dates for the Grenada loans/credits/grants would not change. Change in Disbursement Arrangements Explanation: The threshold ceiling of the Designated Account would be variable based on the estimated cash flow needs for the following six months. Change in Disbursement Estimates (including all sources of Financing) Explanation: Additional Financing would be added to the original project. Expected Disbursements (in USD Million) (including all Sources of Financing) Fiscal 2015 2016 2017 2018 2019 2020 2021 2022 2023 18     Year Annual 1.00 6.00 16.00 17.60 0.00 0.00 0.00 0.00 0.00 Cumulativ 1.00 7.00 23.00 40.60 40.6 0.00 0.00 0.00 0.00 e Allocations - Additional Financing ( Regional Disaster Vulnerability Reduction Project (Additional Finance) - P146768 ) Disbursement % Source of Currenc Category of Allocation (Type Total) Fund y Expenditure Proposed Proposed TF USD Category 1 5.00 12.00 Total: 5.00 IDA USD Category 1 34.60 88.00 Category 2 1.00 100.00 Total: 35.60 Components Change to Components and Cost Explanation: The proposed AF of US$40.6 million equivalent would be used for: a) emergency recovery activities in the amount of US$20.7 million (51 percent); b) scale up activities in an amount of US$16.9 million (42 percent); and c) cost overrun in an amount of US$3.0 million (7 percent). The AF is required to cover the reconstruction needs as a result of the disaster, the financing gap for completion of the on-going RDVRP activities as well as to scale up in form of new activities of similar type and objective to activities already included in RDVRP. There would be no change in the overall project design, and the project components would remain the same. The AF would be used to increase all the components of the RDVRP: • Prevention and Adaptation Investments in an amount of US$23.56 million; • Regional Platform for Hazard and Risk Evaluation and Application for Improved Decision making in an amount of US$15.44 million; and • Natural Disaster Response Investments in an amount of US$1.00 million; and • Project Management and Implementation Support in an amount of US$0.60 million. The main causes for the cost overruns are: a) inflation since the approval of RDVRP in June 2011; b) increase in the scope of civil works activities due to damage occurred on account of heavy rain events experienced since 2011 combined with further deterioration and damage to 19     identified rehabilitation sub-projects due to a lack of maintenance; and c) expanded scope of pre- engineering and design consultancy services required to further incorporate disaster and climate risk. For project scale up, the proposed additional activities are in line with the original project objectives and would be the best mechanism to maximize development impact. The magnitude of scale up activities can be easily accommodated within the context of the project framework. Moreover, most of the scale-up activities were part of the initial RDVRP appraisal, but were not included in the Parent project due to financing limitations. Additionally, the PSIMPU would hire additional staff to ensure that they will have the adequate capacity to implement the scaled up project. Component 1: Prevention and Adaptation Investments (Increase by US$23.56 million) The proposed AF would support the carrying out of selected infrastructure investments and related supporting studies, including: (a) retrofitting and rehabilitation of selected public buildings and emergency shelters and construction of selected satellite warehouses; (b) rehabilitation of selected transportation infrastructure; and (c) rehabilitation of selected bridges, slope stabilization, and related supporting studies; (d) improvement of selected roads and coastal defense infrastructure; and (e) support for the preparation of future sub-projects all through the provision of works, technical advisory services, operating costs and acquisition of goods. It would be used to cover emergency response activities, financing gaps and scale up to increase the impact of RDVRP in terms of building disaster and climate resilience of the built infrastructure in the proposed Project locations. Specific sub-projects and activities identified under this component are summarized as follows: • Emergency response river training and bridge rehabilitation using the CRW resources; • Financing gaps for consulting services to develop detailed designs for the Milton Cato Memorial Hospital using IDA resources; • Scaled up consulting services and civil works to construct 2 additional satellite warehouses using IDA and PPCR resources; • Emergency recovery and scaled up consulting services and civil works for slope stabilization and road realignment works in the Dark View, Troumaca, Petit Bordel, Rose Bank, Ginger Village, Mt. Greenan, Maroon Hill, Spring, English Gutter, German Gutter, Coull’s Hill and Belle Isle areas, using CRW, IDA and PPCR resources; and • Consulting services to carry out feasibility and pre-engineering studies and preparation of preliminary designs - including reliable cost estimates at Paget Farm in Bequia. Component 2: Regional Platforms for Hazard and Risk Evaluation, and Applications for Improved Decision Making (Increase by US$15.44 million) The proposed AF would support building the regional capacity for assessment of natural risks and 20     integration of such assessment into policy and decision making process for the development of investments, disaster risk mitigation and disaster response across sectors, through the provision of technical advisory services, training and acquisition of goods. In addition, it would facilitate regional collaboration, including knowledge sharing and learning process to develop coastal defenses, including the construction of coastal protection, designation and delineation of drainage channels and buffer zones all through the provision of works, technical advisory services, training and acquisition of goods. Funds would be used to cover financing gaps and scale up for the following sub-projects and activities, summarized as follows: • Scaled up scope for construction of: (i) South River Bridge; (ii) Green Hill Bridge; (iii) Dauphine Bridge; and (iv) Fenton River Fords aimed at Flood Mitigation measures for Arnos Vale/Warrawarrow River Watershed Pilot area using both PPCR and IDA resources; • Scaled up consulting services and civil works for River Defense Works at (i) Buccament; and (ii) Carriere, using both PPCR and IDA resources; • Capacity building in the Ministry of Transport and Works to strengthen disaster response, using CRW resources; • Emergency recovery coastal defense works in Dark View and Sans Souci using CRW resources; and • Financing gaps required for the construction of Georgetown Coastal Defense using IDA resources only. Component 3: Natural Disaster Response Investments (US$1.00 million) The proposed AF would support carrying out of Emergency Recovery and Reconstruction Subprojects under an agreed action plan of activities designed as a mechanism to implement the Recipient’s rapid response to an Emergency. This would make funds available in case of a natural emergency. AF funding would replenish the Natural Disaster Response Investment Component of the original operation, which was utilized in response to the December 2013 disaster event. Component 4: Project Management and Implementation Support (Increase by US$0.60 million) The AF would support strengthening and developing the institutional capacity for Project management, and improving the capacity for disaster risk management and climate change monitoring, including (a) recruiting a Senior Quantity Surveyor ,and Procurement and Contract Management Specialist; (b) recruiting a monitoring and evaluation (M&E) specialist; and (c) provision of training to the Public Sector Investment Management Unit (PSIPMU) staff and the staff of relevant key agencies in Project management, implementation support, coordination of disaster risk management and climate resilience activities under the Project, all through the provision of technical advisory services, training, operating costs and acquisition of goods. The AF would also support M&E training, including the PPCR program level M&E, for the PSIPMU and staff of key implementing agencies. Project management and implementation support 21     activities may include training and capacity building through participating in regional workshops and seminars. These activities are designed to improve national capacity for disaster risk management and climate change monitoring to support the integration of risk management principles into national development planning. In addition, the activities would strengthen the capacity of the PSIPMU to coordinate disaster risk management and climate resilience activities under the Project. Current Proposed Current Component Proposed Component Cost Cost Action Name Name (US$M) (US$M) Component 1 - Prevention and Component 1 - No 19.10 42.66 Revised Adaptation change Investments Component 2 - Regional Platforms for Hazard and Risk Component 2 - No Evaluation, and 22.20 37.64 Revised change Applications for Improved Decision Making Component 3 - Natural Component 3 - No Disaster Response 2.00 3.00 Revised change Investments Component 4 - Project Management and Component 4 - No 3.80 4.40 Revised Implementation change Support Total: 47.10* 87.70 * Parent Project, includes Grenada’s amounts. Other Change(s) Change in Implementation Schedule Explanation: The closing dates of all credits and grants to SVG supporting this operation would be extended by two years to December 31, 2018. Change in Procurement Explanation: Upon approval of the AF, the part of project implemented in SVG would operate under the 2011 22     Procurement and Consultants’ or Guidelines, January 2011. Additionally, given that the activities proposed under the AF and all forthcoming activities under components 1, 2 and 3, represent in urgent need of assistance because of a natural disaster, the procurement of these activities would be implemented following the streamlined procurement procedures enabled under OP/BP 10.00 – Special Considerations10, and in particular applying the following Procurement Methods and Prior Review Thresholds: Expenditure Contract Value Procurement Contracts Subject to Category (Thresholds) Method Prior Review US $ thousands 1. Works >1,500 ICB All >200-<1,500 NCB First three regardless of value and all >500 200< Shopping First Regardless of value Direct Contracting All 2. Goods >150 ICB All >100<150 NCB First 100< Shopping First Regardless of value Direct Contracting All 3. Consulting Services -3.1 Firms >100 QCBS,QBS,FBS, LCS All <100 QCBS,QBS,FBS, LCS and CQS First Regardless of value Single Source All -3.2 Individuals Regardless of value Comparison of 3 CVs in accordance First five and then TORs with Chapter V of the Guidelines Note: ICB= International Competitive Bidding; NCB = National Competitive Bidding; QCBS = Quality and Cost Based Selection; QBS = Quality Based Selection; FBS = Fixed Budget Selection; LCS = Least-Cost Selection; CQS = Selection Based on Consultant Qualifications. Appraisal Summary Economic and Financial Analysis PHHASEFA Explanation: The activities to be financed are a scale-up of current activities that would reduce macroeconomic vulnerabilities and have significant benefits on the local economy. A detailed economic cost- benefit analysis was conducted to determine the economic viability of the new sub-projects to be financed by the proposed AF. These sub-projects represent new physical interventions where data availability permitted a thorough cost-benefit analysis. The goods proposed to be purchased under the AF were not included in the economic analysis. The additional satellite warehouses were also not included as they provide an emergency support function in which the economic return cannot                                                              10 http://intranet.worldbank.org/WBSITE/INTRANET/OPSMANUAL/0,,contentMDK:20064659~menuPK:51456940~pagePK:5 1457169~piPK:51457175~theSitePK:210385,00.html 23     be calculated. Additionally, the sub-projects in which the scope of the originally designed works would be expanded under the proposed AF that are currently included in the original project were not analyzed – as the analysis conducted and economic return calculated under the original project would remain valid with likely additional benefits. The Economic Internal Rate of Return (EIRR) of the sub-projects evaluated in the analysis is 30.2 percent and, using a discount rate of 12 percent, the Net Present Value (NPV) is US$74.9 million. These figures confirm the sizable economic benefits that would result from the activities outlined in the AF. The detailed economic and financial analysis can be found in Annex 4. Public sector financing is the appropriate funding vehicle as the Ministry of Transport and Works (MoTW) has a legal obligation to build and maintain all public infrastructure in SVG. In addition, SVG does not have toll roads and the transportation infrastructure is accessible for all public use. Finally, all activities are designed to improve national capacity for disaster risk management and climate change monitoring to support improved integration of risk management principles into national development. The World Bank has experience working on climate resilience and vulnerability reduction infrastructure projects in SVG, the Caribbean and globally. The Bank has proven capacity to provide technical assistance and guidance as SVG continues to build capacity and become more resilient. Lessons learned and best practices from across the world were applied during project design and will be applied during implementation. In addition, the Bank has the convening power to leverage partnerships with donor partners and additional funds to support scaled up vulnerability reduction and climate resilience activities in SVG. Technical Analysis PHHASTA Explanation: The proposed civil works, institutional strengthening, capacity building and project management activities have been evaluated and were found consistent with the short term and long term objectives of the program. Specific works have been included based on economic benefits and priorities identified by the GoSVG. The sites of the proposed works were visited and the detailed technical reviews were conducted in order to refine the proposed work program. In all cases, clear relationships between work and PDO were identified and the supporting engineering, environmental and safeguard activities are being prepared. Works would generally involve the construction of public satellite warehouses, slope stabilization, river defense, promoting airport safety, rehabilitation and risk reduction of transportation infrastructure including highways and bridges. The proposed civil works can be reasonably completed within the increased lifespan of the Project. Social Analysis PHHASSA Explanation: No additional safeguards were triggered for the AF, as such it has the same safeguards as the Parent Project, including: (i) Physical Cultural Resources OP/BP 4.11; and (ii) Involuntary Resettlement OP/BP 4.12. 24     Social safeguards. The sub-projects and activities proposed under the AF are similar in nature and scope to the sub-projects proposed under the original project. As a result, the anticipated social benefits are likely to be positive with impacts at country level. Some of the proposed works (for example Maroon Hill) may trigger the application of the Involuntary Resettlement Safeguard Policy (OP 4.12). Therefore, the Resettlement Policy Framework developed and disclosed under the original project was updated to include additional activities proposed under the AF and re- disclosed in-country on February 25, 2014. Poverty reduction. The proposed activities would target geographical areas with the highest levels of poverty in SVG, such as Georgetown 55.6 percent and Sandy Bay 55.6 percent - where income generating activities are dominated primarily by agriculture and fishing. The map in Annex 5 highlights that poverty is concentrated in the northern parts of the island, and the further a community is from the urban center of Kingstown the higher the poverty rates. The proposed interventions would improve the infrastructure along key transportation routes, which would allow the poorer communities of the north to continue to have access to Kingstown’s markets and public services. Shared prosperity. Agriculture is the primary income generating activity for a majority of the population – in particular, the poor. The roads at Maroon Hill and Ginger Village are feeder roads for the small farmers in SVG’s major agricultural basin. Without the access from these roads, farmers have to increase transportation costs to get their produce to the major markets located in Kingstown. In addition, the tertiary roads are in poor condition, so there is increased chance of bruising of crops en route to the market. This has resulted in reduced revenues for many farmers. Gender. Shelter Management plans developed under the original project included special considerations for privacy, health and personal needs of women, the elderly and the disabled. The lessons learned from this exercise would be applied in the context of the additional M&E activities financed under the AF to develop gender-specific publications that provide guidance to women and men on disaster preparedness, tools to adapt to a changing climate, and basic gender- specific guidelines for response to climate impacts and tools for a speedy and more resilient recovery. Environmental Analysis Explanation: No additional safeguards were triggered for the AF, as such it has the same safeguards as the Parent Project, including: (i) Environmental Assessment OP/BP 4.01; and (ii) Natural Habitats OP/BP 4.04. The project remains classified as Category B. No new environmental safeguards were triggered - as the project portfolio has not fundamentally changed. Existing safeguard instruments were updated and disclosed in-country on January 27, 2014 and re-disclosed on April 9, 2014 - including a comprehensive Environmental Management Framework (EMF) for which an interagency consultation workshop was conducted in December 2013. The EMF was updated and re-disclosed to include an inventory and preliminary scoping of all potential activities and sub- projects. Additionally, screening procedures to: (i) generate standardized Environmental 25     Management Plans (EMPs); and (ii) identify conditions where more complex or sensitive environmental conditions exist will be defined through sub-project specific Environmental Impact Assessments (EIA). Specific EMPs will be developed during implementation, and the Operations Manual will be modified to reflect the improved screening and management procedures. The CPD’s capacity to implement environmental safeguards has been increased by practical experience in management of the Hurricane Tomas Emergency Project (P124939), for which a field engineer has provided on the ground oversight with visible results. Line ministry capacity has also recently improved with staffing of a new Senior Engineer with broad experience in Eastern Caribbean countries. Finally, a regional safeguards training workshop will also be conducted in order to strengthen ties and enhance practical environmental management practices in the Eastern Caribbean. Risk Explanation: As referenced in Annex 2: Operational Risk Assessment Framework (ORAF), key risks to achieving the PDO were identified along with mitigation measures to minimize the potential impacts of these risks for each activity under the Project. The ORAF would also be used to monitor, re-assess and review mitigation measures during Project implementation. The identified risks fall into the following four broad categories: (i) Project Stakeholder Risks; (ii) Operating Environmental Risks; (iii) Implementing Agency Risks including Fiduciary Risks; and, (iv) Project Risks. This information along with specific risk mitigation measures can be referenced in Annex 2. The size of SVG limits its’ in-country human capital, which can lead to concentrated capacity transfer for a few individuals and a risk of losing this capacity in the case of staff turn-over. The Project would therefore aim to train existing Government staff as well as new staff to ensure that climate and disaster risk management capacity is adequate. Implementing Agency risks would include inadequate capacity to handle the large number of contracts under the Project and inadequate coordination, quality control and information sharing mechanisms across various agencies and levels (regional and national). The project would finance additional project management capacity through appointments of technical assistance staff. In order to improve Government coordination and promote data and information sharing the Bank is providing technical assistance in data management and risk modeling to the relevant Government institutions. To ensure quality control, the Bank would, in the context of Project implementation support , carry out physical inspections and prepare action plans to establish critical path inspection procedures and integrate them into construction contracts. Sustainability of project activities after the lifespan of the Project is likely as there is strong national ownership over the Project and the government is committed to fulfilling the objectives and activities outlined in the SVG SPCR. 26     Annex 1: Revised Results Framework and Monitoring Indicators Project Development Objectives Original Project Development Objective - Parent: The Program aims at measurably reducing vulnerability to natural hazards and climate change impacts in the Eastern Caribbean Sub-region. The objective of the Project in Saint Vincent and the Grenadines is to measurably reduce vulnerability to natural hazards and climate change impacts in Saint Vincent and the Grenadines and in the Eastern Caribbean Sub-region. Proposed Project Development Objective - Additional Financing (AF): Same. Results Core sector indicators are considered: Yes Results reporting level: Program Level . Project Development Objective Indicators Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target No Change Reduced risk of SVGs Number Value 320 320 0 population to failure of public Sub Type Date 23-Jun-2011 31-Dec-2013 31-Dec-2018? buildings due to natural hazards or climate change Breakdown Comment: 320 people at impacts11 No change risk in unsafe public buildings No Change Number of Government Number Value 2 23 8 officials in Saint Vincent and Sub Type Date 23-Jun-2011 31-Dec-2013 31-Dec-2018 the Grenadines able to produce location specific exposure Breakdown Comment: 2 technical 23 government maps No change officials with officials have specific been trained to training on produce location                                                              11 Aligned with PPCR Core Indicator #5: Number of people supported by the PPCR to cope with the effects of climate change. 27     GIS analysis specific maps, far tools exceeding the end target of 8 Intermediate Results Indicators Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target No Change Percentage of public buildings Percentage Value 0 100 100 geo referenced in a national Date 23-Jun-2011 31-Dec-2013 31-Dec-2018 exposure database in SVG Comment: 0 percent of All 366 public No change public buildings in SVG buildings in have been national included in a exposure national exposure database database No Change Public building geo spatial Number Value 0 366 366 information collected in SVG Date 23-Jun-2011 31-Dec-2013 31-Dec-2018 Comment: 0 public Geo-spatial No change buildings in information for which geo- 366 public spatial buildings in SVG information has been has been collected. collected No Change Number of gabion baskets used Number Value 0 0 8,400 in construction of flood Date 23-Jun-2011 31-Dec-2013 31-Dec-2018 mitigation works Comment: 0 gabion No change baskets have been used at the start of the project No Change Designs and Pre Number Value 0 0 6 28     engineering/geotechnical Date 23-Jun-2011 31-Dec-2013 31-Dec-2018 studies completed for roads and Comment: 0 designs and bridges rehabilitated under the No change Pre- Project in SVG engineering/ge otechnical studies are complete Revised Reduced risk of SVG’s Number Value 32,156 32,156 0 population to failure of roads Date 23-Jun-2011 31-Dec-2013 31-Dec-2018 and bridges due to natural hazards or climate change Comment: Daily users impacts12 Revision to currently at target only risk: 1) Fenton (2) - 500 2) South River Rd Bridge - 10,000 3) Spring – 9,800 4) Carriere, Maroon Hill & Ginger Village - 10,200 5) Coulls Hill - 1,656 No Change Number of Government Number Value 2 23 8 officials who complete training Date 23-Jun-2011 31-Dec-2013 31-Dec-2018 on producing location specific exposure maps in SVG Comment: 2 technical 23 government No change officials have officials have completed been trained, far                                                              12 Aligned with PPCR Core Indicator #5: Number of people supported by the PPCR to cope with the effects of climate change. 29     training on exceeding the end producing target of 8 location- specific exposure No Change Number of location specific X Number Value 0 9 20 exposure maps completed by Date 23-Jun-2011 31-Dec-2013 31-Dec-2018 staff trained under the Project in SVG Comment: 0 exposure 9 exposure maps No change maps have been completed by completed by staff trained staff trained under under the the Project Project Revised Reduced risk of SVG s X Number Value 1,275 1,275 0 population to flooding in areas Date 23-Jun-2011 31-Dec-2013 31-Dec-2018 with flood mitigation works financed by the Project in Comment: 425 SVG13 Revision to households target only with an average of 3 people per household for a total of 1,275 people                                                              13 Aligned with PPCR Core Indicator #5: Number of people supported by the PPCR to cope with the effects of climate change. 30     New Increased capacity of Number of fully Value 0 0 6 communities to respond to operational satellite Date 17-Dec-2013 31-Dec-2013 31-Dec-2018 disaster events14 warehouses located within vulnerable Comment: 0 fully communities New target operational satellite warehouses located within vulnerable communities .                                                              14 Aligned with PPCR Core Indicator #3: Quality and extent to which climate responsive instruments/investment models are developed and tested. 31     Annex 2 Operational Risk Assessment Framework (ORAF) Saint Vincent and the Grenadines: Regional Disaster Vulnerability Reduction Project (Additional Finance) (P146768) . Risks . Project Stakeholder Risks Stakeholder Risk Rating Low Risk Description: Risk Management: SVG: The risk that users of public SVG: The activities to be financed under the AF have been chosen based on observed buildings and infrastructure are deficiencies and vulnerability and in processes involving the beneficiary communities. The dissatisfied with the civil works communities are likely to be supportive of the interventions since they perceive and actually financed under the Project.. benefit directly from them. Resp: Clien Stage Imple Recurrent Due Frequenc Status: In t : ment : Date: y: Progre ation ss Implementing Agency (IA) Risks (including Fiduciary Risks) Capacity Rating Moderate Risk Description: Risk Management: SVG: There is a risk that the addition of SVG: The project team is sufficiently staffed, and targeted training has facilitated capacity the scaled up project will overburden development to manage Bank-supported projects. In order to ensure that the Public Sector the Central Planning Division (CPD) Investment Program Management Unit (PSIPMU) has the appropriate staff required to staff, and if additional support is not implement the scaled up project, the AF would provide financing for a Senior Quantity provided, the quality of procurement Surveyor and an additional Procurement and Contract Management Specialist to increase the output and coordination across various procurement capacity in the unit. Additionally, there is strong government ownership of the 32     agencies and levels (regional and project, which has helped to enhance the climate resilience and disaster risk management national) may be compromised. agenda in the country. The PSIMPU has also contracted a Field Engineer with proven in- country environmental supervision experience. Resp: Clien Stage Imple Recurrent Due Frequenc Status: In t : ment : Date: y: Progre ation ss Governance Rating Moderate Risk Description: Risk Management: SVG: Risk of inadequate mechanisms SVG: The project would continue to be implemented through established implementation and to ensure quality control, transparency internal quality control mechanisms. In addition, the PSIPMU would submit a progress report, and accountability. which includes updates on the results framework and the unaudited interim financial report, every three months. To ensure quality, the Bank implementation support team would continue to carry out technical audits on a routine basis and monitor the adherence to the World Bank’s procurement guidelines. Finally, a supervision mission would go to SVG at least once every six months. Resp: Both Stage Imple Recurrent Due Frequenc Status: In : ment : Date: y: Progre ation ss Project Risks Design Rating Moderate Risk Description: Risk Management: SVG: The Project team would provide for detailed inspections at the pre-engineering stage to SVG: Physical environmental data is minimize hidden damage impacts. insufficient for design of climate- resistant infrastructure projects; Project Resp: Both Stage Imple Recurrent Due Frequenc Qua Status: In activities are located in numerous areas : ment : Date: y: rterl Progre spread over a wide but accessible ation y ss geographical area; Scope of Risk Management: rehabilitation works grows with SVG: Project works activities would be constructed in compliance with current adopted 33     discovery of hidden damages during International Building Code standards. The PSIMPU Senior Project Engineer would review construction; and Rehabilitation of engineering assessments produced for rehabilitation works and MoTW would provide trained older infrastructure may put inspectors in accordance with current code enforcement procedures. improvements at risk due to existing Resp: Both Stage Imple Recurrent Due Frequenc Qua Status: In design deficiencies. : ment : Date: y: rterl Progre ation y ss Risk Management: SVG: The Project would seek to build capacity at both regional and national levels, including institutional strengthening for multiple Ministries across a shared data platform to insure maximum distribution of analytical capacity. Resp: Both Stage Imple Recurrent Due Frequenc Qua Status: In : ment : Date: y: rterl Progre ation y ss Risk Management: SVG: The Project would build country and regional capacity for strengthening the understanding of climate change adaptation needs throughout the lifetime of the Project. Resp: Both Stage Imple Recurrent Due Frequenc Yea Status: In : ment : Date: y: rly Progre ation ss Social and Environmental Rating Moderate Risk Description: Risk Management: SVG: The Bank team composition includes a Senior Social Development Specialist who SVG: Purchase of private lands for would provide training and technical assistance in the application of Bank safeguard on Project works would require application Involuntary Resettlement in a timely and on-going manner during project preparation and of resettlement safeguards as it relates implementation. The PSIPMU already has experience with these requirements from a previous to land acquisition. project (P124939). Resp: Bank Stage Imple Recurrent Due Frequenc Yea Status: In : ment : Date: y: rly Progre 34     ation ss Risk Management: SVG: In order to boost the capacity of the PSIPMU, and the social specialist, to handle land acquisition, targeted capacity building training is planned in FY14. In addition, the Bank will continue to pay close attention to the implementation of safeguards through frequent supervision missions. Resp: Bank Recurrent Due Frequenc Yea Status: In : Date: y: rly Progre ss Risk Management: SVG: Projects would also emphasize compliance with national environmental policies in addition to Bank safeguards. Resp: Both Stage Imple Recurrent Due Frequenc Yea Status: In : ment : Date: y: rly Progre ation ss Risk Management: SVG: An EMF is in preparation that would define criteria and triggers for additional assessment work (project-specific EIAs) if necessary for river defense, coastal defense, and road realignment works due to project complexity, sensitive environmental conditions, or presence of factors triggering the Natural Habitat or Physical Cultural Resource policies. In addition, these screening mechanisms would be incorporated into the Operations Manual for the project. Resp: Both Stage Imple Recurrent Due Frequenc Yea Status: In : ment : Date: y: rly Progre ation ss Delivery Monitoring and Rating Moderate Sustainability Risk Description: Risk Management: SVG: Future funding is not secured as SVG: The Pilot Program for Climate Resilience is a multi-phased donor-funded Project that 35     the Government has not fully would support Project activities after the life of the Project; thereby improving the established monitoring and evaluation sustainability of the activities. In addition, a commitment would be sought from the systems designed to capture Government to cover Project activities after the Project closes. quantitative climate and disaster risk Resp: Both Stage Imple Recurrent Due Frequenc Yea Status: In reduction, representing a risk to the : ment : Date: y: rly Progre sustainability of the model. ation ss 36     Annex 3: Detailed Description of Modified or New Project Activities 1. The proposed AF to the SVG RDVRP would meet the GoSVG’s most critical emergency recovery and rehabilitation needs following the recent December 2013 flood event, scale up investments of the same type and meet an unanticipated financing gap in Component 1- prevention and adaptation investments and Component 2 - regional platforms for hazard and risk evaluation, and applications for improved decision making; replenish Component 3 - natural disaster response investments; and allocate additional funds to Component 4 - project management and implementation support. 2. The activities identified for inclusion under the proposed AF include emergency recovery river training, bridge rehabilitation and reconstruction, road realignment, coastal defenses and replenishment of the emergency contingency component. The activities would rehabilitate and reconstruct the infrastructure that were damaged in the floods to be more disaster resilient. The proposed AF would also include additional and expanded slope stabilization works, expansion of river defense works, the construction of additional satellite warehouses to support community disaster preparedness, augmented institutional strengthening activities to address disaster preparedness, disaster risk reduction and climate change, pre-engineering studies and support to monitoring and evaluation (M&E) capacity development in SVG. AF proceeds would also be allocated to meet sub-project specific shortfalls and to hire additional project management staff. Collectively, these activities would aim to increase national resilience to the impact of natural disasters and improve the capacity of government ministries to identify and manage the impacts associated with climate change. 3. Emergency Procedures. Given the emergency nature of the proposed AF, special procurement procedures enabled under OP/BP 10.00’s Special Considerations would be utilized for the implementation of remaining activities under Components 1, 2 and 3 of the original project (RDVRP-P117871) as well as for all new activities financed under the AF. The urgency of the activities identified under these components either directly address the GoSVG’s emergency recovery needs or address activities with increased urgency as a result of the December 2013 disaster. 4. With the exception of the emergency response activities, a program level Environmental Management Framework (EMF) was disclosed in-country on January 27, 2014 and re-disclosed on April 9, 2014 and covers new activities to be financed under the AF, with the exception of the emergency response activities, in addition to activities covered in the already disclosed Environmental Assessment (EA) prepared under the original project. The Bank team together with the client visited all sub-project sites to assess potential environmental and social implications of the proposed activities. For sub-projects that would require a stand-alone EIA and/or resettlement plan, requisite environmental requirements and resettlement action plans would be completed prior to the commencement of any civil works activities. These requirements are included in the current Project Operations Manual, and would be updated as necessary. As required under the current Project, all sub-projects that require a stand-alone EIA or resettlement plan would be subject to prior review by the Bank. 37     Emergency Challenge 5. Overview of Disaster Impacts. A rapid Damage and Loss Assessment (DaLA) carried out by a World Bank team from January 6 – 15, 2014, estimated that the combined physical damage and economic losses, from the December 2013 disaster, were approximately US$108.4 million (15 percent of GDP). The vast majority of damages were in the transport and infrastructure sector (including the housing sector) and amounted to total damages and losses of approximately US$104 million15. Over 38 bridges (21 percent of SVG’s bridge infrastructure) were affected - of which 24 were damaged and 14 were completely destroyed. Numerous landslides blocked key transportation routes throughout the country and substantial interventions would be required to stabilize affected slopes. Rehabilitation and reconstruction efforts will require an estimated 1 – 2 years to complete. 6. Poverty Assessment of the Disaster. The impact was concentrated in zones with the highest levels of poverty such as Georgetown and Sandy Bay (55.6 percent poverty headcount16), where the focus of economic activity is on agriculture, fishing and services. An estimated 44 percent of the people affected are classified as living in poverty. Agricultural losses are estimated at US$1.4 million and while the losses represent only 1 percent of the GDP, the impact is disproportionately felt by low-income families whose agricultural production is primarily for personal consumption and local sales (i.e. farmers markets). Although a more detailed social analysis is required, preliminary observations indicate that vulnerable families, dependent on agricultural production, may be at risk of falling below poverty line as a result of the disaster. 7. Macroeconomic Impact of the Disaster. Prior to the disaster, modest economic growth was expected in SVG over the next two years due to increases in the agriculture sector, large- scale public sector investment into construction, and growth in the tourism industry - in particular, growth in the construction of new hotels and the new airport. Due to the disaster, the likelihood of economic growth has drastically decreased - as due to the infrastructure damages, tourism and agriculture are two of the most devastated sectors in the country. According to the World Bank database, on average 74,000 tourists come to SVG annually, especially during the peak season from November to April, and tourism expenditures account for 48 percent of total exports. While the financial impact of tourism is still unknown, it is expected that the number of tourists going to the key tourism sites would decrease due to the poor road conditions as a result of the disaster. 8. Fiscal Impact of the Disaster. While the current event is estimated to represent a combined damage and loss total of approximately 15 percent of GDP, the flash flooding event comes at a time of a global recession, a significant downturn in worldwide tourism and high fuel prices which further constrain national growth. The GoSVG does not retain sufficient resources to deal with the fiscal shock from the disaster. With SVG’s public external debt relative to GDP ratio estimated at 70 percent in 2012 (IMF WEO, 2013), the GoSVG has limited capacity to manage the fiscal impact of any exogenous shocks. SVG’s debt-to-GDP ratio was projected to                                                              15 The focus of the assessment was on physical damages to the infrastructure sector – including the housing sector. 16 SVG Country Poverty Assessment, 2008 38     level off at 66.2 percent by 201717; however, due to the disaster, public debt levels are now expected to continue to increase. Description of Modified or New Project Activities 9. Selection Criteria. The activities in the AF were selected by the GoSVG based on prioritization criteria that included: (i) the level of infrastructure vulnerability; (ii) the connectivity of the road segments; (iii) the criticality of the road network for economic flows; and (iv) a cost-benefits analysis, where applicable. Detailed technical audits were conducted for the proposed sites for civil works. 10. Component 1: Prevention and Adaptation Investments (Original allocation US$7.3 million, increase by US$23.6 million to US$30.9 million). The proposed AF would support carrying out of selected infrastructure investments and related supporting studies, including: (a) retrofitting and rehabilitation of selected public buildings and emergency shelters and construction of selected satellite warehouses; (b) rehabilitation of selected transportation infrastructure; and (c) rehabilitation of selected bridges, slope stabilization, and related supporting studies; (d) improvement of selected roads and coastal defense infrastructure; and (e) support for the preparation of future sub-projects all through the provision of works, technical advisory services, operating costs and acquisition of goods. It would be used to cover emergency response activities, financing gaps and scale up to increase the impact of RDVRP in terms of building disaster and climate resilience of the built infrastructure in the proposed Project locations. Specific sub-projects and activities identified under this component are summarized as follows: Total CRW IDA PPCR (USD (USD (USD (USD Scale-up or Cost Activity millions) millions) millions) millions) Overrun Slope Stabilization and road re- alignment: Ginger Village, Mt. Greenan, Maroon Hill, Spring, Dark View, Scale-up & Troumaca, Petit Bordel, Rose Bank, Emergency: German & English Gutters Coull's Hill, expanding scope of Belle Isle $15.60 $5.58 $7.72 $2.30 sub-project in Parent River Training and Bridge Rehabilitation: North River and South River $2.36 $2.36 $0.00 $0.00 Emergency Satellite Warehouses: Bequia, Mesopotamia, (Rose Hall, Sandy Bay)**, Georgetown, Union Island $3.10 $0.00 $2.60 $0.50 Scale-up Milton Cato Memorial Hospital: Technical Designs $2.00 $0.00 $2.00 $0.00 Cost overrun Paget Farm Pre-engineering studies and design $0.50 $0.00 $0.50 $0.00 Scale-up Component 1 Sub-Total $23.56 $7.94 $12.82 $2.80                                                              17 IMF Projections. 39     Slope Stabilization and Road Re-alignment Sub-projects Ginger Village –Belmont Landslide sub-project 11. Background. On September 2, 2013, a large landslide occurred on the Belmont main road in the area of Ginger Village – rendering the road impassable. The road is the main inland arterial road that connects several large communities between Mt. Pleasant/Peruvian Vale and Arnos Vale viz Fairhall, Belmont, Mesopotamia, Ginger Village, Evesham, Hopewell, Calder and Richland Park. This road is also the main inland route to the new international airport at Argyle, which is scheduled for completion in late 2014. Accordingly, the route is being developed under phased program and its Phase 1 (beginning at Arnos Vale) is currently under construction. As a result of the landslide, the road has been blocked and the traffic is not able to use the road over half of its length. This has caused significant disruption in the movement of traffic and great difficulties for the road users. 12. Sub-project Rationale. The failure of the slope at Ginger Village has resulted in complete failure of the Belmont main road in the area of Ginger Village - affecting the normal life and significant economic losses in the areas. The objective of this activity would be to stabilize the slope to facilitate the re-construction of the road in order to restore connectivity of the main road. Several technical options of using alternate routes have been considered, but they have not been found technically and economically viable due to increased distances, difficult road alignments and higher costs. Under the present situation, the most appropriate option would be to reconstruct the affected sections of road by improving road alignments and better design standards to reduce current disaster vulnerability as well as long-term climate risk. The geo-technical studies for the slope stabilization will also inform the full technical design for the road re-alignment that will be prepared in house. Mt. Greenan, Spring and Maroon Hill Sub-project 13. Background. Vulnerability analysis of the national road infrastructure network has identified three critical locations, which require either preventative or rehabilitative work to vulnerable slopes adjacent to road infrastructure. Mt. Greenan is a village located on the Windward Highway. Immediately north of Mt. Greenan, the Windward highway follows a coastal route cut from an unstable slope bordering the sea. The upper slope varies up to 40 feet in height and is comprised of alluvial and reworked deposits, as well as loose pyroclastic (ash-fall) deposits. This 0.5 km stretch of road has suffered from continuous small-scale landslides over the years causing temporary blockage – particularly during the rainy season. The Windward Highway is the main route on the east coast of the island and provides access to approximately 54,000 people, 17,000 of which are directly affected by recurrent slope failures and resulting road blockage north of Mt. Greenan. 14. South of Mt. Greenan is an area called Spring where the Windward Highway road alignment borders the sea and where there is undercutting on the lower slope as a result of sea erosion. Although the area is comprised of hard material (lava flows and associated deposits), there has been steady erosion over the years to the road edge despite previous stabilization 40     interventions. Approximately, 23,000 persons would be affected if the road was to fail at this location. 15. Maroon Hill is located inland and is along the main road connecting the valleys of three communities viz Richland Park, Charlotte and Greiggs. Both the upper and lower road slopes are comprised of alluvial and reworked deposits and have registered failures along a 0.5km stretch over the years. 16. Sub-project Rationale. Landslides are common in Saint Vincent and the areas referenced above suffer from recurrent slope instabilities that result in road blockage and are likely to fail completely, which would result in a major road blockage along the identified routes. These slopes require long-term stabilization measures to avoid further economic losses. The objective of this activity would be to ensure that the Windward Highway remains always open to traffic. Several technical options of using alternate routes have been considered but they have not been found technically and economically viable as they are secondary and tertiary roads and would require longer road lengths, difficult road alignments and higher costs. 17. Each site requires a combination of slope stabilization, road re-alignment, construction of bypasses across weak sections, and improved drainage systems in order to reduce current vulnerabilities. The geo-technical studies at each of these sites is underway and the full technical designs are expected to be ready by January 2015. Slope Stabilization and Road Re-alignment Sub-project Beneficiaries 18. Maroon Hill and Ginger Village - Over 9,600 people (9 percent of the total population) would benefit from interventions at these sites. In particular, small farmers would be major beneficiaries from these sub-projects as the roads are feeder roads for the agricultural basin and small farmers depend on them to get their crops to market in Kingstown. Without access to these roads, small farmers may have increased transportation costs. 19. Mt. Greenan and Spring – Over 9,800 people (9 percent of the total population) would benefit from the interventions along the Windward highway. The beneficiaries comprise of people in communities with the highest poverty levels, such as Sandy Bay (55.6 percent) and Georgetown (55.6 percent) whose major economic activities are agriculture and fishing. If the Windward Highway were to fail at these sites, many communities would effectively be cut off from emergency services that require use of the transportation network such as ambulances and fire trucks. 20. At the national level, stabilizing the airport access road would benefit the entire population through the promotion of economic development, employment creation opportunities and advancing social life. Indirectly, these interventions would help the general population due to improved mobility and access to critical services. 41     Slope Stabilization and Road Re-alignment Proposed Investments 21. The design of proposed interventions would ideally follow a three-pronged approach. Firstly, there would be a technically viable design approach based on several field studies (i.e. soil testing and geotechnical investigations - including an analysis to determine the cause of the landslide), followed by the detailed design of an appropriate intervention to ensure longer life and road traffic safety. Secondly, there would be a community-based approach in identification of relevant causes and solutions. Finally, there would be strict quality control and adherence to design standards in the implementation of the final solution. An EIA and EMP would also be carried out with an adequate M&E framework. Road Rehabilitation – Belle Isle - Coulls Hill Road Sub-project 22. Background. In the disaster event on December 2013, some sections on Leeward Highway in the areas of Coulls Hill and Belle Isle, were washed off and the road was closed to traffic, cutting off road access to a significant section of the Leeward side of the island for about two to three days. The areas were temporarily cleared, but remain in an unstable condition. 23. Sub-project Rationale. The Leeward Highway is the only access to the Western side of the island. The Belle Isle – Coulls Hill section of the highway provides the only access to (i) communities with population of 12,500; (ii) two hydro power stations; (iii) several local water supply systems; and (iv) the western slopes of the La Soufreire volcano. The rehabilitation of this road is critical to provide access to communities and to ensure proper functioning of the water supply system. Local communities in these areas were without water for as long as three weeks after the disaster. Moreover, if the La Soufriere volcano, which last erupted in 1979, were to erupt, the communities north of the Belle Isle Coulls Hill area would be trapped if the road failed. Tourist sites, such as the Dark View Falls and the La Soufriere trails, lie beyond this stretch of highway. Loss of this roadway will have limit access to tourism sites, which will have a negative impact of SVG’s economy. 24. Sub-project Beneficiaries. The affected population of 12,500 will be the primary beneficiaries. The rehabilitation of road will promote economic development through improving transportation system and advancing social life. Direct beneficiaries will also include the National Security, National Emergency Management Organization (NEMO), Power Company (VINLEC) and the Water Supply Company. 25. Proposed Investments. The rehabilitation of the affected sections of the road including gabion baskets, retaining walls, benching of slopes, surface water control and tree planting. River Training and Bridge Rehabilitation: North River and South River Sub-projects 26. Background. The North River and the South River breached at various points causing extensive flooding in the commercial and administrative areas in Kingstown. Due to high rainfall intensity and severe flooding, the following damages occurred: (a) abutments of a number of 42     bridges suffered scouring; and (b) bridge decks were overtopped on account of inadequate bridge openings and water above the design flood level. 27. Sub-project Rational. The North River Channel, suffered erosion during the event. The South River breached its banks in the lower reach in the Middle Street area. Over a length of approximately 1 km the river has approximately 15 bridges that serve the city road network. These bridges generally remained functional. However, due to overflow two bridges in the Middle Street and Bay Street areas were affected due to abutment scouring, and this will require immediate repairs. Parts of the main hospital on the island located in West Kingstown, were flooded causing evacuation of patients as well as damage and loss to the medical records, equipment (CT Scan machine and others), medical supplies and building finishes. The hydraulic study for North and South Rivers was carried out in 2005 by DLN consultants, which need to be updated. 28. Sub-project Beneficiaries. Direct beneficiaries would be the population who will have savings in the travel costs and enhance safety. Hospital authorities will also be the beneficiary. 29. Proposed investments. The proposed investments for the North River and South River areas include Bridge replacement, embankment protection and hydraulic design improvements. To prevent flooding of the hospital site, it requires a diversion of water from the existing drain to a new larger conduit into the North River. This will increase the flood levels in the lower reaches, which in turn will require the rehabilitation of the North River bridges. Additionally, the existing plan to relocate the Kingstown docks to the Western end of the bay will impose increased traffic loading on the old bridges, which in turn will require rebuilding or upgrading the existing drainage structures over the North River. Additional Satellite Warehouses at Mesopotamia, Georgetown, Bequia and Union Island sub-projects 30. Background. Aging and unmaintained infrastructure coupled with changing climatic conditions have deteriorated existing public infrastructure, resulting in high levels of vulnerability to natural hazards. Existing vulnerabilities of the road infrastructure related to landslides and rock falls, while currently being addressed, would continue to provide uncertainties related to their functionality following significant climatic and seismic events. Under the prosed AF, additional satellite warehouses in Mesopotamia, Georgetown and the islands of Bequia and Union Island, some of the most isolated communities in SVG, would be constructed to improve community resilience and increase localized capacity to respond to a disaster event. 31. Sub-project Rationale. SVG is a multi-island state, and due to its rugged topography, communities on vulnerable sections of its road infrastructure such as Georgetown and Mesopotamia can easily be cut off from services in the event of a major disaster. The islands of Bequia and Union by virtue of their isolation from the mainland would be required to be first responders to disasters in isolation of assistance from the mainland. The objective of this activity would therefore be to construct satellite warehouses in specific vulnerable communities to provide immediate access to emergency equipment following a significant disaster related event, 43     and to provide them with the capacity to respond to the crisis immediately following its occurrence. 32. Sub-project Beneficiaries. Direct beneficiaries of the proposed satellite warehouses would include the members of the communities in the various catchment areas of Georgetown (approx. 6,500 persons) with an estimated 55.6 percent poverty headcount, Mesopotamia (approx. 3,000 persons) with an estimated 29.2 percent poverty headcount, Bequia Island (approx. 4,000 persons) with under 20 percent poverty headcount and Union Island (approx. 3,000) with under 20 percent poverty headcount. 33. Proposed Investments. The satellite warehouses (reinforced concrete and block work structures) would primarily provide storage capacity for essential disaster response equipment and supplies. Also included, would be a small office, toilet and shower. It is anticipated that the office space would be used for meetings or converted into a Community Emergency Operations Center should the need arise. The building would be wired to receive power from the electric grid, generator and photovoltaic supply systems and have a limited water storage capacity. The warehouses would be managed by the local or district disaster committees. 34. Component 2: Regional Platforms for Hazard and Risk Evaluation, and Applications for Improved Decision Making (Original allocation US$10.8 million, increase by US$15.4 million to US$26.2 million). The proposed AF would support building the regional capacity for assessment of natural risks and integration of such assessment into policy and decision making process for the development of investments, disaster risk mitigation and disaster response across sectors, through the provision of technical advisory services, training and acquisition of goods. In addition, it would facilitate regional collaboration, including knowledge sharing and learning process to develop coastal defenses, including the construction of coastal protection, designation and delineation of drainage channels and buffer zones all through the provision of works, technical advisory services, training and acquisition of goods. Funds would be used to cover financing gaps and scale up for the following sub-projects and activities, summarized as follows: Total CRW PPCR (USD (USD IDA (USD (USD Scale-up or Cost Activity millions) millions) millions) millions) Overrun River Defense: Buccament, Carriere $2.05 $0.00 $0.55 $1.50 Scale-up Fords and River Defense: Arnos Vale/Warrawarrow River Watershed Pilot area: (i) South River Bridge; (ii) Green Hill Bridge; (iii) Scale-up: expanding Dauphine Bridge; and (iv) Fenton scope of sub-project River Fords $1.40 $0.00 $0.90 $0.50 in Parent Coastal Defense: Georgetown $1.03 $0.00 $1.03 $0.00 Cost overrun Coastal Defense: Dark View and Sans Souci $10.46 $10.46 $0.00 $0.00 Emergency Capacity Building to support emergency response in the Ministry of Transport and Works $0.50 $0.50 $0.00 $0.00 Emergency Component 2 Sub-Total $15.44 $10.96 $2.48 $2.00 44     Buccament and Carriere River Defense Sub-projects 35. Background. The lower sections of the Buccament and Carriere rivers pose potential threats to significant property and road infrastructure. In recent years, the Buccament valley has witnessed the development of a significant number of residential houses and a major hotel development. As a result, clearing and other poor land use practices in the development process have led to flooding of the river in its lower sections - requiring an intervention. The road through Carriere follows a vertical embankment of the Yambou River over a short (0.1km) stretch at a height of approximately 15m. The road is vulnerable to erosion at this point and requires an intervention on the river embankment. 36. Sub-project Rationale. According to climatic and development trends, flood events experienced in recent years by both rivers would continue to be exacerbated. Hydrological and hydraulic studies (DLN 2006) have been completed for several rivers including the Buccament River with similar studies underway on the Yambou River (among others) by the IBI Group. 37. The current project seeks to implement the most critical flood mitigation measures proposed by the hydraulic studies. This would involve a combination of both academic and permanent remedial measures and that would comprise part of an integrated watershed management plan. 38. The technical design and construction of risk mitigation works and adaptation measures to mitigate flooding and promote river erosion control would reduce damage to public and private property, improve the mobility of the target population during and after a flood event, and offset other socio-economic effects due to road blockage caused by flood waters. Moreover, the implementation of comprehensive river management plans would improve river flows and its biodiversity. 39. Sub-project Beneficiaries. The direct beneficiaries of proposed interventions (approx. 2,600 people) would include affected residents and users of at risk public buildings and roads. Along the Buccament River, there are two public schools (1 primary and 1 secondary) that frequently flood during times of heavy rainfall. The students and faculty of these institutions would be some of the primary beneficiaries of the proposed sub-projects. Additionally, population statistics indicate a population growth of 6 percent in the Layou District (which includes Buccament) over the past two decades18; this emphasizes the growing importance of investing in vulnerability reduction interventions in these areas. In the Buccament and Carriere areas, the poverty headcount is just above the national average at 32.4 percent and primary economic activities include agriculture, fishing, construction and services. 40. Proposed Investments. The sub-project would include the appointment of a consultancy firm to design and implement recommendations derived from previous watershed studies - targeting the most critical vulnerable sections of the river, which the budget can support. This would include river defense measures that include a combination of reinforced concrete works,                                                              18 Government of Saint Vincent and the Grenadines Census Division Statistics. 45     gabion baskets, realignment, levees, tributary drainage improvements, vegetation, and any other proven complementary efforts to improve past designs. 41. The integrated watershed management activities would involve both technical studies and permanent remedial measures. With regard to the technical studies, this sub-project would inform the existing management plan for the Arnos Vale watershed by providing critical field data. The activities associated with this aspect of the sub-project would include workshops and knowledge management support, which would be organized to facilitate regional collaboration around integrated watershed management. Additionally, a maintenance plan would be prepared, which would include activities related to periodical drainage cleaning and educational programs to change human behavior in relation to land use and waste disposal management. Coastal Defense Dark View Sub-project 42. Background: In the disaster event on December 24-25, 2013, some sections on Leeward Highway in the areas of Dark View were washed off and the road was closed to traffic. The coastal erosion in the area of Dark View may be due to a process of coastal retreat in recent years, probably as a result of a combination of sea level rise, storm surge and human activities. 43. Project Rationale. The Dark View sub-project has two components, the upper and lower slope protection. For the upper slope protection, the funding of the geotechnical studies is covered under RDVRP, and is scheduled to commence in the 2nd quarter of 2014. For the lower slope protection, the funding of the coastal studies for the sea erosion is covered under the Caribbean Development Bank and the studies are currently in progress. The technical reports on the concept designs and the preliminary investigations have been submitted and are being reviewed by the MoTW. 44. The recent storm event caused landslides in the area and unfortunately five persons died in Rose Bank. As a result, the road was closed to traffic for two days and the vulnerability of the road structure increased significantly. Therefore, it is critical to carry out immediate planning, design and implementation of remedial measures on an emergency basis. For the upper slope interventions, the funds are available under RDVRP; however, for the lower slope interventions no funds are available. The damages that occurred have created a major risk to the stability of all coastal infrastructure and particularly this section of the costal infrastructure is vulnerable to disaster events and currently under serious threat of stability. Furthermore, the interventions proposed for the remedial works of the lower slope protection, has tremendous potential for economic development on account of planned improvement of amenities in the area, which has an expected outcome of increased tourism, local recreation and commercial activities. 45. Sub Project Beneficiaries. The affected population of about 9,500 will be the primary beneficiaries. The rehabilitation of road will promote economic development through improving transportation system and advancing social-economical life. 46. Proposed Investment. The proposed investment for the sub-project will include engaging consultants for carrying out feasibility studies, field surveys, soil investigations, engineering design, and preparation of bidding documents. This will also include awarding civil works 46     contracts to execute urgently needed interventions of slope protection, retaining walls, gabions, rehabilitation and reconstruction of roads, bridges and other drainage structures to ensure safety of traffic on the road. Coastal Defense- Sans Souci Sub-project 47. Background. Sans Souci is located in the southern end of the Mt Greenan slope stabilization project on the Windward coastline. This area, including the Mt Greenan stretch north of Sans Souci, has been subjected to steady erosions over the decades. Anecdotal information indicates an erosion rate of approximately 3 feet per year, similar to that of the Georgetown area to the north. 48. Project Rationale. The Mt Greenan slope stabilization project is primarily designed for interventions in the upper slopes along the Windward road. The geotechnical investigation about to be launched on the upper slope is anticipated to provide a solution, which is likely to involve the reduction of the slope angle. This will produce between 60,000 and 100,000 cubic yards of material that will have to be transported and placed elsewhere with substantial haulage costs. To identify location for the placement of such a huge quantity of material will impose a serious technical problem. The proposed Sans Souci coastal defense project would provide the following benefits: (a) an ideal location taking into account the economic and social development considerations; (b) providing opportunities for increased land area; and (c) ensuring protection of the foot of the lower slope of the Windward highway, which is currently being eroded along the Mt Greenan stretch. Furthermore there are four properties (combined value of approximately USD 100,000), which have been directly affected by the erosion in the Sans Souci area. These buildings are now vulnerable and under serious threat of collapsing, if the current rate of erosion continues. The proposed  Sans Souci project will have synergy with the Mt Greenan Slope Stabilization project resulting in reduced construction costs and increased coastal defense, and will ensure safety of road with both upper and lower slopes well protected. 49. Sub Project Beneficiaries. The affected population about 11,500 will be the primary beneficiaries. The rehabilitation of road will promote economic development through improving transportation system and advancing social life. 50. Proposed Investments. The proposed investment for this sub-project will include engaging consultants for carrying out a coastal erosion study, environmental impact assessment, design review and its updating based on recent field surveys, soil investigations, coastal erosion and geo-technical studies. Consultant will also update bidding documents, bill of quantities, works requirements and technical specifications based on which the bids will be invited, and civil work contract awarded. The anticipated interventions will include rock or concrete armor protection on geotextile fabric on the seaward side of the landfill, and the civil works, which will comprise of slope protection, retaining walls, gabions, rehabilitation and reconstruction of roads, bridges and other drainage structures to ensure safety of traffic on the road. 51. Component 3: Natural disaster response investment (Original allocation US$1.0 million, increase by US$1.0 million to US$2.0 million). The proposed AF would support carrying out of Emergency Recovery and Reconstruction Subprojects under an agreed action plan of 47     activities designed as a mechanism to implement the Recipient’s rapid response to an Emergency. Funds will be allocated to support the GoSVG’s future emergency response capacity, which can be reallocated to other components if not utilized by December 2016. The original allocation was mobilized in response to the December 2013 disaster event. Component 4: Project Management and Implementation Support (Original allocation US$1.8 million, increase by US$0.6 million to US$2.4 million). The AF would support strengthening and developing the institutional capacity for Project management, and improving the capacity for disaster risk management and climate change monitoring, including (a) recruiting a Senior Quantity Surveyor ,and Procurement and Contract Management Specialist; (b) recruiting a monitoring and evaluation (M&E) specialist; and (c) provision of training to the Public Sector Investment Management Unit (PSIPMU) staff and the staff of relevant key agencies in Project management, implementation support, coordination of disaster risk management and climate resilience activities under the Project, all through the provision of technical advisory services, training, operating costs and acquisition of goods. The AF would also support M&E training, including the PPCR program level M&E, for the PSIPMU and staff of key implementing agencies. Project management and implementation support activities may include training and capacity building through participating in regional workshops and seminars. These activities are designed to improve national capacity for disaster risk management and climate change monitoring to support the integration of risk management principles into national development planning. In addition, the activities would strengthen the capacity of the PSIPMU to coordinate disaster risk management and climate resilience activities under the Project. (CRW: $100,000; IDA: $300,000; PPCR: $200,000). 48     Annex 4: Economic and Financial Analysis 1. The activities proposed in the RDVRP AF would reduce the country’s macroeconomic vulnerabilities and benefit the local economy. The Project would limit the loss of economic output, lessen the fiscal shock, and ease balance of payment risks caused by violent weather patterns. The proposed sub-projects would reduce the likelihood of damage to transportation networks, lessening the need for post-disaster borrowing. Additionally, they improve the ability of the Government to provide vital services in the wake of disasters, reducing loss of life and allowing economic activity to return to normal levels quicker. 2. A cost-benefit analysis was applied to a representative sample of sub-projects, which were selected because they represent the new physical interventions where data availability permitted a thorough cost-benefit analysis. The goods proposed to be purchased under the AF were not included in the economic analysis. The additional satellite warehouses were also not included as they provide an emergency support function in which the economic return cannot be calculated. Additionally, the sub-projects in which the scope of the originally designed works would be expanded under the proposed AF that are currently included in the original project were not analyzed – as the analysis conducted and economic return calculated under the original project would remain valid with likely addition benefits. 3. The approach compared the costs of the interventions against estimated economic benefits. The analysis estimated cost savings of lower commute times and lower fuel expenditures that result from the project, as well as the cost savings of not having to repair or replace damaged infrastructure. The Economic Internal Rate of Return (EIRR) of the sub- projects evaluated in the analysis is 30.2 percent. Using a discount rate of 12 percent, the Net Present Value (NPV) is US$74.9 million for an initial investment of US$20.9 million. Previous research found that the average return on road construction in the developing world is 29 percent.19 These figures attest to the sizable economic benefits that would result from the activities outlined in the proposed AF. 4. Public sector financing is the appropriate funding vehicle as all activities are designed to improve national capacity for disaster risk management and climate change monitoring to support improved integration of risk management principles in national development. In addition, the Ministry of Transport and Works (MoTW) has a legal obligation to build and maintain the public infrastructure, so the physical works of the AF are under their purview. Finally, SVG does not have toll roads and the transportation infrastructure is accessible for all of the public. 5. The World Bank has experience working on climate resilience and disaster risk management (DRM) infrastructure projects in SVG, the Caribbean and globally. The Bank can provide technical assistance and guidance as SVG continues to build capacity and becomes more resilient. Lessons learnt and best practices from across the world can be applied to the Project in SVG. In addition, the Bank can support SVG in trying to leverage additional funds to support decreasing vulnerability disasters and the fiscal shocks of disasters.                                                              19 World Bank (1994), World Development Report 1994, Infrastructure for Development, New York, Oxford University Press. 49     6. The proposed sub-projects and activities are designed to mitigate climate change risks and boost economic activity. In general, there are three types of losses incurred by a country due to natural disasters: (i) macroeconomic risks prompted by the event - namely a sharp increase in indebtedness and worsening of the balance of payment situation; (ii) direct loss and damage to physical property caused by the event; and (iii) loss of economic activity that is displaced by the event. The methodology used here addresses each level of loss. 7. Natural disasters pose a serious risk to SVG’s macroeconomic stability. According to the International Monetary Fund, one of the main economic challenges facing Caribbean states is vulnerability to natural disasters.20 Additionally, the economic losses and the sudden inflow of international aid that tends to occur immediately following a natural disaster, creates balance of payments risks as exports drop and imports rise. The government debt of SVG relative to GDP was 70 percent in 2012 (IMF WEO, 2012), giving the country little fiscal space to deal with exogenous shocks. Similarly, the country faces large current account deficits, which would only be exacerbated by another natural disaster. 8. The interventions proposed in this project help mitigate macroeconomic risks by increasing the resilience of public structures to natural disasters. This reduces the likelihood of damage to public buildings and transportation networks and improves the ability of the government to provide vital services in the wake of disasters. Disaster preparedness measures reduce the long-term economic costs of disasters, as it allows activity to more quickly return to normal levels. Furthermore, the capital stock is less likely to be damaged, reducing the need for post-disaster borrowing. This improves the country’s long-term macroeconomic outlook keeping debt levels and current account deficits lower than they would be in the absence of such interventions. 9. The economic analysis assessed the economic returns of specific interventions proposed by the AF. A detailed economic cost-benefit analysis was conducted to determine the economic viability of four sub-projects. These sub-projects represent physical interventions where data availability permitted a thorough cost-benefit analysis, and comprise US$21.1 million of the total allocated budget under the AF. The sub-projects analyzed include: (i) slope stabilization and road realignments, including Ginger Village, Spring, Mt. Greenan, Maroon Hill, and Coulls Hill; (ii) river training and bridge rehabilitations, including North River and South River; and (iii) coastal defenses including Dark View and Sans Souci. 10. The methodological approach compares the costs of the interventions against estimated economic benefits. The benefits analyzed as averted costs due to the interventions proposed in the AF. The benefits are estimated by the averted costs of, as appropriate: (i) the opportunity cost of time spent in longer commutes due to detours and traffic congestion; (ii) the fuel expenditures that a driver would potentially spend due to longer commute times; (iii) the costs of landslide clean-ups; (iv) the costs of replacement of damaged infrastructure; and (v) the costs of property damage from landslides. The benefits, or cost savings, would be a direct result of the project activities. Other economic benefits may result from the interventions, for example the                                                              20 International Monetary Fund. Caribbean Small States: Challenges of High Debt and Low Growth.” February, 2013. 50     avoidance of loss of agricultural economic activity as the Maroon Hill road is a feeder road for agricultural basin in Marriqua, but they are not captured in this analysis due to lack of data. The two main results of the analysis are the EIRR and the NPV. Both figures capture the estimated economic returns of the project, rather than the financial returns used in traditional cash flow analyses. The high rates of return are in large part due to the yearly timesaving associated with the sub-projects, which are aggregated over a 50-year period. The low levels of road redundancy and the high levels of highway use mean that any road failure results in significant increase in commute times. Thus, the largest source of benefits is the opportunity cost of time, followed by fuel savings. 11. The results are based on data related to traffic flows, local fuel costs, fuel efficiency rates of local vehicle fleets, passenger counts, and average wage rates. The data was collected during a field mission and verified by several country experts. The analysis accounts for the risks of infrastructure failure that increase over time due to weather patterns and erosion. Future economic benefits were adjusted using a discount rate of 12 percent, which roughly equates to the country’s cost of capital. All sub-projects were assessed using an appraisal period of 50 years. The table below breaks down the EIRR for the analyzed sub projects. Table 1: Result of the Economic Analysis Original Investment EIRR (USD Sub-project (USD millions) NPV (USD millions) millions) Slope Stabilizations and Road Realignments Ginger Village $3.6 $15.1 55.0% Spring $0.5 $15.7 81.7% Mt Greenan $0.9 $1.9 33.9% Maroon Hill $0.5 $1.4 25.4% Coulls Hill $2.7 $2.1 16.3% River Training and Bridge Rehabiliations North River $1.8 $8.0 20.9% South River $0.6 $6.0 26.7% Coastal Defenses Dark View Coast $5.6 $4.4 17.3% Sans Souci Coast $4.9 $20.3 32.8% Total $20.9 $74.9 30.2% 51     Annex 5: National Poverty Map Showing the relationship between Poverty and the Major Road Network Figure 1: Poverty Headcount 2008 Major Road Network  Source: Country Poverty Assessment 2008 52