Qt TEil n WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE INTRODUCTION There are 16 currently active IDA projects in Bosnia and Herzegovina. Four IDA credits have been closed but the projects they financed remain active under Trust Funds. Sixteen projects have been fully implemented and closed. Total project costs of these 36 projects is US$1.9 billion, including US$768 mil- lion of World Bank funds. From this amount, US$ 600 million have been disbursed. Since the World Bank started operating in Bosnia and Herzegovinia, in 1996, we have begun to see, in. several respects, a transformiation of the devastated society and economiiy which was the legacy of four years of war. The rebuildinig of the countl-y's infrastructure, the birth and nurturing of new democratic institutions and processes are gradually producing conditions more and mor-e favorable to private investment which is impera- tive with the inevitable decline in public capital flows. The elimination of some of the vestiges of the pre-war socialist economy - notably the payments bureaus, higlhly regimienited labor markets, and a state dominated banking system - combined with relative political stability, the adoption of new concepts and laws of jurisprn- dence, are all contributilng to a slow but nevertheless discernable growtlh in confidence. First, confidence amongst the thousands of minority refugees who have returned to BIH this past year; then aniongst depositors who dramatically increased deposits in a select numliber of banks recenitly established in BIH; and finally amongst the tenls of thousanids of small investors who have foulid livelihoods through micro-enterprises fi- nanced througlh a growing network of non-goverinmenital micro-credit organiisations. While these are all positive developmenits, BIH still needs more solid building blocks if economic growth, a fuLictioning market economly, and more equitably distributed prosperity are to be sustained in the longer term. The new operations we are adding to our project portfolio seek to do just that; creating conditionis for private investnient on a small and medium scale, includinig foreigni investment; nurturing more export-led growth; providing a better balance between state and entity institutions consistent with European Union acces- sion requirements; and helpilig build a single economic space in BIH in which poverty is largely alleviated and corruptioni no longer erodes developmenit poteintial as it has done recently. Through the projects described here and thiough the knowledge and advice we are able to offer, we look forward to helping the governimiienits in BIH imiplemilenit their ambitious projects and programs so that when we next update this preamble, we are also able to say proudly that investor, consumner, and the general public's con- fidence, has been restored and the groulidwork laid for economiiic growtlh and prosperity in the longer term. Sarajevo, April 30, 2001 Direct f the World Bank Office in osnia and Herzegovina Mg WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE 2 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE CONTENTS INTRODUCTION 1 CONT EN'I'S 3 SUMNIMARY 4 PROJECT UPDATES 5 BASIC l-IEALTI-I PROJEC'I' 5 EDUCAT1ION DEVEI-OPMEN'1' 1'ROJEC'I' 6 EMERGENCY DEMOBILIZATION A\D REINT'GRATION PROJEU'I' 8 EMERGENCY DISTRIC'I' I-IEA'I'ING RECONST'RUC'I'ION 13ROJECT 9 EMERGENCY EDLCA'I'ION RECONS'I'RUCT'ION PROJEC'I' 10 EMERGENCY ELECTRIC POWER RECONSTRUCTION PROJECT I I EMERGENCY FARM RECONSTRUCTION l'ROJEC'I' 12 EMERGENCY GAS SYSTEM RECONSTRUCTION PROJECT 13 EMERGENCY HOUSING REPAIR PROJEC'I' 14 EMERGENCY INDUSTRIAL RESTART PROJECT (INCLUDING POLITICAL RISK GUARAN'I'EE FACILITY) 15 EMERGENCY LANDMINES Cl EARANCE l'ROJECT 16 EMERGENCY PILOT CREDIT PROJECT (RS) 17 EMERGENCY PUBLIC WORKS AND EMPILOYMEN'I' PROJECT 18 EMERGENCY RECOVERY P'ROJECT' 20 EMERGENCY'I'RANSPOR' RECONSTRUCTION PROJECT 21 ENTERPRISE AND BANK PRIVATIZATION ADJUSTMENT CREDIT 22 ENTERP'RISE EXPORT FACILITY PROJECT 23 ESSENTIAL I-IOSPI'I'Al SERVICES PROJECT 24 FORESTRY PROJE CT 25 LOCAL DEVEIOIPMENT PILOT PROJECI' 27 LOCAL INITIATIVES PROJECT 28 MOS'I'AR WATER SUPPLY AND SANITATION PROJICT 29 PILOT CULT'URAL l-IERI'I'AGE PROJEC'T' 30 PILOT FMERGENCY LIABOR REIDPLOYMENT PROJEC'I' 31 PUBLIC FINANCE STRUCTURAI ADJUSTMENT CRIEDIT (PFSAC) 32 RE CONSTRUCTION ASSISTANCE PROJ.ECT 33 SECOND ELEC'I'RIC POWER RECONS'I'RUCTION PROJECT 34 SFCONI) FMIRGF.NC'Y EDUCATION RECONSTRlJCT'ION PROJECT 35 SECOND EMERGENCY TRANSPORT RECONSTRUCTION PROJECT' 36 SECOND PUBIIC FINANCE STRUCTIJRAI ADJUSTMENT CREDIT (PFSAC 11) 37 SOCIAI SECT'OR TECHNICAL ASSISTANCE CREDIT (SOTAC) 38 SOCIAL SECTOR ADJUSTMENT CREDIT (SOSAC) 39 TRADE AND TRANSPORT FACILITATrION IN SOU'I'HEASTr EUROPE PROJECT ('rl'FSE) 39 TRANSITION ASSISTANCE CREDIT 40 WAR VICTIMS REI-IABILITATION PROJECT 41 WATER, SANITATION AND SOLID WAS'I'E URGENT WORKS PROJECT 42 IDF GRANTS 43 TREASURY (UNDER PREPARATION) 43 SUPPORTING THE INSTITUTIONAL DEVELOPMENT OFTIE STATISTICAL SYSTEM IN BOSNIA AND I-IERZEGOVINA 43 ENVIRONMEN'I'AL CAPACITY BUILDING 43 WVORLD BANK PROJECTS UNDER PREPARA'I'ION 44 PRIVA-T-E SECT-OR CREDI I'PROJECTI' 44 PRIVATIZATION TECHICAL ASSISTANCE PROJECT (PTAC) 44 ILOCAL INITIATIVES (MICROFINANCE) PROJECT II 44 COMMUNITY DEVELOPMIENT PROJ ECT 45 TIIIRD ELECTRIC POWER RECONS'I'RUC'ITION PROJECTI' 46 THE WORLD BANK COUNTRY ASSISTANCE STRATEGY FYOO-FY02 48 COUNTRY ASSSISTANCE STRATEGY IFY00-02) 48 KEY MEDIUNI-TERM CI-IALLENGES 48 'I'HE FYOO-02 COUJNTRY ASSIST-ANCE STRATEGY 48 FUTURE WORLD BANK PROJECTS 50 ENVIRONMENTAL INFRASTI'RUCT-URIE PROJECT 50 AGRICULTURE 1I PROJECT' 50 ROAD MANAGEMENT AND SAFE'I'Y PROJECT 50 BUJSINESS ENVIRONMEN'I' ADJUST'MEN'I' CREDI'I' (BAC) 51 IFC BOSNIA AND l-IERZEGOVINA 52 MIGA BOSNIA AND HERZEGOVINA 54 3 M WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE SUMMARY Approved Projects in Implementation Project Name WB Funds WB Man- Total Funds (US$ m) aged Funds (US$ m) Basic Health Project 10.00 10.70 14.70 Education Development Project 10.60 11.80 14.60 Emergency Industrial Restart Project (incl. Political Risk Guarantee Facility) 10.00 73.50 73.50 Enterprise and Bank Privatization Adjustment Credit 50.00 65.00 65.00 Enterprise Export Facility Project 12.00 12.00 12.00 Essential Hospital Services Project 15.00 21.30 33.50 Forestry Project 7.00 11.70 20.40 Local Development Pilot Project 15.00 16.29 17.00 Mostar Water Supply and Sanitation Project 12.00 12.00 13.38 Pilot Cultural Heritage Project 4.00 7.00 15.40 Pilot Emergency Labor Redeployment Project 15.00 17.97 17.97 Second Electric Power Reconstruction Project 25.00 25.00 173.80 Second Public Finance Structural Adjustment Credit (PFSAC II) 72.00 98.10 98.10 Social Sector Technical Assistance Credit (SOTAC) 3.55 3.55 3.88 Social Sectors Adjustment Credit (SOSAC) 20.00 20.00 20.00 Trade and Transport Facilitation in Southeast Europe Project (TTFSE) 11.00 11.00 14.90 C Emergency Demobilization and Reintegration Project 7.50 9.60 20.00 C Emergency District Heating Reconstruction Project 20.00 29.90 44.50 C Emergency Education Reconstruction Project 10.00 10.50 32.80 C Emergency Electric Power Reconstruction Project 34.40 45.70 196.40 C Emergency Farm Reconstruction Project 20.00 28.20 50.40 C Emergency Gas System Reconstruction Project 10.00 10.00 43.50 C Emergency Housing Repair Project 15.00 28.80 60.40 C Emergency Landmines Clearance Project 7.50 25.50 67.00 C Emergency Pilot Credit Project (RS) 5.00 9.10 20.00 C Emergency Public Works and Employment Project 9.60 26.91 45.00 C Emergency Recovery Project 45.00 109.70 160.00 C Emergency Transport Reconstruction Project 35.00 38.50 163.00 C Local Initiatives Project 6.69 18.82 22.35 C Public Finance Structural Adjustment Credit (PFSAC) 63.00 85.30 85.30 C Reconstruction Assistance Project 17.00 25.40 65.00 C Second Emergency Education Reconstruction Project 11.00 12.90 12.90 C Second Emergency Transport Reconstruction Project 39.00 50.00 184.00 C Transition Assistance Credit 90.00 110.00 110.00 C War Victims Rehabilitation Project. 10.00 13.22 30.00 C Water, Sanitation and Solid Waste Urgent Works Project 20.00 25.20 74.50 Total 767.84 1,130.16 2,095.18 C - Completed Project Implemetation Summary (30-April-2001) WB Funds WB Man- Total Funds (US$ m) aged Funds (US$ m) Contracts completed 361.64 569.82 1,307.00 contracts signed 16.00 38.20 38.90 being procured 8.50 47.02 72.22 to be procured 77.70 87.72 97.26 financing gaps 0.00 0.00 192.40 Subtotal Contracts 463.84 742.76 1,707.78 Budget Support disbursed 239.00 320.40 320.40 to be disbursed 65.00 67.00 67.00 Subtotal Budget Support 304.00 387.40 387.40 Tota I completed/disbursed 600.64 890.22 1,627.40 to be procured/disbursed 167.20 239.94 275.38 fiancing gap 0.00 0.00 192.40 GRAND TOTAL 767.84 1,130.16 2,095.18 4 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE PROJECT UPDATES BASIC HEALTH PROJECT STATUS ACTIVE CREDIT EFFECTIVE 1-Sep-1999 ESTIMATED COST 14.70 CLOSING DATE 30-Aug-2003 Financing Table US$ mil. Implementation Summary (US$ mil.) Governments of BH (local counterpart) 1.00 CONTRACTS WB WB mnad Total funds Italy (grant) 0.70 COMPLETED 0.70 0.70 0.75 World Bank (soft loan) 10.00 CONTRACT SIGNED 0.50 0.50 0.50 TOTAL FINANCING 11.70 BEING PROCURED 1.10 1.20 1.30 GAP/SHORTFALL 3.00 TO BE PROCURED 7.70 8.30 9.15 FINANCING GAP 0.00 0.00 3.00 TOTAL 10.00 10.70 14.70 Project Background - public health innovation grants completed, while in the RS design for ex- The Basic Health project is third in a Accreditation and Quality Assuranice tension of the teachinig center in Banja Luka planied series of three operations in suppon This componcit will support the carly stage has beeti completed, and medical anld of the Governmenits' healtli sector recovery of strategic planning and program develop- teachinlg equipmilenit has been purchased. and development program. It will help es- ment for quality improvemienit. Bidding for literature for the family medi- tablish cost-effective primary healthi care l'roject Managemernt cine component, public health and accrecdi- and build entity healthl care provision ca- This componienit will support oiffice equip- tation and quality assurance has been pacity. menet, teclinical assistance, trainiiig. auditing launched in the Federation. Bidding for civil The Programs were prepared in 1998 and and recurrent cost. works on family medicine ambulantas in 1999 by the Federation Ministry of llealth World Bank financing supports all conipo- Trebinjc is in process, while in the Federa- and RS Ministry of Health, with support nents Donor support is also being soughlt tion contracts for civil works design for I from partner inistitutions and with the under- for all componients. phase in all pilot cantons are being final- standilig that IDA and other donors will mpIlemlentation Arrangemlents ized. Initial workshops for family mediciie SuppOIt cohereit modules as "projects". The Ministry of H-lealth of each Enltity is teamiis have been conducted in the Federa- Project Objectives responsible for imlplenlIenitation. It is being tion. while in RS training in management of The overall objective of the Project is to donle thIrougil thle Project Managemilent Unit chanige has been conducted together with a support the developmenit of a viable Basic (IMU) InI the Federationl and the Project Phare team. A request for a proposal for Health System consisting of primary healtli Coordiniationi Uniit (PCU) in RS established curriculumii developmenit for post graduate care, public health anid disease conitrol. for the broader Basic Ilcalth Plrogram. It programis in health management and man- Project will support: facilitates effective implemilenitationi througIl agement training has been launched jointly (a) developmenit of a primary lhealthi car-e establishcd mechanlismis. for the Federation and RS. Techinical assis- system based on cost el'fective interveni- Procurement tance for Managemile nt and perfomiance tions; (b) reduction of productivity lost dute Goods and services finaniced by the WB are incentives has been selected in RS, while in to preventable illiesses, disabilities and procured competitively by the Plroject Irn- the Federation TA is expected to start prematuire deaths; and (c) improvement of plementation Units. Suppliers should ad- workiig by July 2001. national capacity for managing the health dress all expressionis of interest to those Selection of a consultant company for In- sector. Units. stitutional support to the public health in- Project Description Project Achievements stitute has been finalized in RS, while in the l'rimiary Health Care Projcct implementation hals accelerated Federation proposals are due by mid April. This component will aim to establishi a considerably in the past six milonitls. Local Out of 43 applications received in the Fed- framework for primary care withini a global iilplemilenitationl planis have beenl developed eration and 48 in RS. each entity has se- referial system with the following suib- in pilot areas for impliecimentationi of primilaty lectcd 7 proposals for award of small public compoienlts: healthi carc reforim. The implementation of ininovationi grants for public healthi promo- -development of family medicinie the concept of family medicinie is most ad- tion activities. Ihe contracts have been - ifinastructure and equipmenit vanced in the Trcbinje pilot region. Local signed and the implementation is ongoilig in - management training and capacity build- authiorities demonistiatcd highl commintmenit botli etitities. ing to the project by providing the counterpart Technical assistance for the first phase of -maniagciicint and performiance inceitives funds, selecting family medicinie teamlis anid implementation of th accreditation and Public I-lealthi and Disease Control tranisferrinig the patients records in the Fed- quality assurance component has been se- This component vill Suppoit capacity cratioii; anid in Trebinje (RS) by adopting of lected in both entities. Work has been more building, planniniig and implementation of new regulations to enable redefiniition oitIlc advaniced in RS. All necessary regulations inteivenitions for preventioni anid control of role of the health ceilter, foriniig 12 familily and plans should be adopted by the RS gov- diseases with significanit iilpact on bLirdein medicinie teams and initiating a registrationi emninicnt and the agency fbr accreditation of disease with following sub-comilponenits: process ibr citizens. In the Federationi, civil aiid quality assurance should be established - inlstitutionial SUppOIt (surveillanice arid works and provision of mied(lical anid teachl- prior to initiatiig the second phase. monitorinig system anid tobacco control ing equipmllenlt for three teaching ceniters The project managemilenlt has been satistac- strategy) Sarajevo, Tuzla and Ljubuski lhave been tory in both cntitics. Close coordiniation 5 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE with other donors has continued. The Fed- 440-108 WB Sat. (5244) 3041 Project Director Sarajcvo eration and RS ministries of healtil have WB HQ Washington DC Phonie: (+387 33) 203-404. 203-477 Fax: signed Memoranda of understandinlg withi Ms. Betty Hanan (+387 33) 203-267 Phare related to management training and Phone: (+1 202) 473-4525 Fax: (+1 202) PCU Republika Srpska capacity building activities. The PCU and 477-0711 WB Sat. (5220) 34525 Basic HIcalth Project PMU have established satisfactoi-y finanlcial Dr. Nedirn Jaganjac Dr. Gordaoi Jelic management systems. IPhonie: (+1 202) 458-5968 Fax (+1 202) PCU Director Banja Luka Contacts 477-0711 WB Sat. (5220) 85968 Phone: (+387 51) 319-161, 319-162 Fax: The World Bank External (+387 51) 3 19-168 WB Country Of fice in Sarajevo PMU Federation Ms. Mirjana Karahasaniovic Basic Heaitli IProject Phone: (+387 33) 440-293 Fax: (+387 33) Dr. Ibrahlimii RZamilic EDUCATION DEVELOPMENT PROJECT STATUS ACTIVE CREDIT EFFECTIVE 16-Oct-2000 ESTIMATED COST 14.60 CLOSING DATE 31-Dec-2004 Financing Table US$ mil. Implementation Summary (US$ mil.) European Commission (parallel grant) 0.70 CONTRACTS WB WB mngdl Total funds Governments of BH (local counterpart) 2.10 COMPLETED 0.00 0.0() 0.00 Italy (grant) 1.20 CONTRACT SIGNED 2.40 2.90) 3.60 World Bank (soft loan) 10.60 BEING PROCURED 0.00 0.0() 0.00 TOTAL FINANCING 14.60 TO BE PROCURED 8.20 8.90 11.00 GAP/SHORTFALL 0.00 FINANCING GAP 0.00 0.01) 0.00 TOTAL 10.60 11.80 14.60 Project Background neilts: secretariat will be establisihed under thc The proposed project is fully consistent with (I) a Quality Fund (USS 3.7 million) will l-iECB terms of reference to focus on twvo the World Bank's Country Assistance Strat- provide financinig for non-salary incenitives objcctives: egy (CAS) for Bosnia and Herzegovina to primary schools and primary school 1) increased strategic plianniilg :ind institu- whicih was presented to the Board of Di- teachers with the aim of stimulatinig ininlo- tional consolidationi and rectors with this project on May 18, 2000. vation and creativity at the school level. It 2) iilprovecd qualificationi and accreditation T his project represents a major elemenit in also provides support for building capacity systems. the CAS priority given to building social and stimulatinig innovation in teacher train- To provide incentives for strategic planniniig, sustainability in Bil-l, and its central focus ing ilstitutiolns a Ilfigher EdLIcation Fund will be established on governance reform and institutionl (2) a newly established Standards and in the amounlt of $2.5 miillioni. building responds to the CAS priority given Assessment Agency (US$ 3.7 millioni) will (5) Living Standards iMleasurement Sur- to strengthening governance. The project provide informilationi to the education com- vey (US$ 0.6 million) -- The goal of this also gives a high priority to promoting so- nltinity and the public at-large on student componienit is to provide reliable data, for cial cohesion through education, and is con- achievemienit and overall system perform- the entire couLntry, on the levels anid deter- sistent with the Bank's sector support strat- ance with the aim of learinilng about the minianlts of welfare, the causes of observed egy for education. system's strengths and weaknesses, pro- social sector outcomes and the incidence of Project Objectives moting accouLItability in public education public expenditures. The specific objectives The project has the followinig objectives: and measLirinig compatibility between edu- of the component are to carry out a Living (1) to mobilize tile professional capacity of cationial standards in Bi-l and the rest of Stanidard Measuremilent Stidy Survey, create teachers to improve the teaching and learn- Europe. The Agency will be a shared inter- the capacity in the country to carry out stici ing processes in schools, and as a result mediary insltitItioln suIpplyilng high quality surveys and promote the use of such data improve the quality of education being of- professional services in the field of student through wide dissemination of the results, fered to primary school children in BiH; assessments; the various analyses of poverty, as well as (2) to promote the efficient and effective (3) anl Education iMlanagemilent Inforina- the unit-record data sets use of scarce public resources for eduIcation tion System (US$ 2.1 millioni) will enable The project will also provide financinig to in BiH by providing public policy makers improved sector managemiienit and compati- support project imlplementation ullits in the and decision makers with management tools bility ot inforimiation among BiH's decen- Federation of BiH and RS. and information necessary to measure in tralized educationi systems. It will also test In addition to the S10.6 miiillioi IDA credit, puts, outputs and outcomes in the education the viability of a per studeitt budgeting the project is cofinanced (see above) by a system; and model designed to promote icineased effi- World Bank admniistered Italian Trust FuLid (3) to promote cooperation and coordination ciency anid equity in education spending; and by the Governmlent. Parallel financing across the three main constituent groups in and for tcehniical assistance and training is being an effort to reduce inefficient resource use (4) a l-liher Education Componient (USS provided by the European Commission. and build a professional basis for 3.5 millioni) is designed to stimiiulate profes- Implementation Arrangements stakeholder dialogue in education through- sional coordiniation, innovation, strategic Project implementationi is maniaged by the out BiH. planning and efficient governanice at both Project Coordinatioll Units (PCUs) estab- Project Description sector and institutional levels in higher edu- lishedt within the respective Ministries of The project includes five principal compo- cationi in BiH. P'eindinig creationi of a Highier Education of the Federation and the Repub- EdLication Coordination Board (HECB), a lika Srpska. The two PCUs share technical 6 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA . PROGRESS UPDATE Coordinators for the Quality Fund. Highcr to work, since the appointmcnt of'a perma- in order to definie criteria and guidelines lbr Educationi and EMIS componienits. Technii- nenit Director by the SAA Board continiules disbursemilent of the Higher Education Fund. cal assistance provided by the EC is being to be a major impediment to effective start It is expected that the first proposals will be procured and managed by the EC-Sarajevo of the Standards and Assessmenlt Agency. awared to higher education institutions in with assistance throughL a MemoranlduLil of The Board has forimially asked the Prime BFI prior to September 2001. Understanding from the PCUs. Ministers of each Entity to resolve the ini- Living Standards Measurement Survey - Procurement passe as called for in the Decision creating the Cost Sharing Agreement with UNDP to Goods and serviccs financed by the WB and the SAA. It is expccted that a Director will carry out the LSMS in the amount of US$ the Government of' Italy are procured com- be appointed in May 2001 and the SAA wvill 600,000 has been signed. The LSMS is petitively by the PCUs (see contacts below>. bc filly staffed and fuLnctionial by the begin- underway and expected to produce its first A single EC-ftulded techilical assistance ning of the 2001-2002 school year. results in the spring. contr-act is begin procured by the E C- Education Management Information Contacts Sarajevo. Suppliers should address all ex- System - a techlinical assistance and traillilig The World Bank pressions of interest to those PCUs. contract to SuppOIt software developmenit WB Country Office in Sarajevo Project Achievements aid maiagemilenit traililig for the EMIS Ms. Zorica Lesic WB credit finanlcinig for the project was conipoicilt hias beeni sigined by the PCUs in Phone: (+387 33) 440-293 Fax: (+387 33) approved on May 18, 2000. The project bothi Entities anid the conitractor. GOPA 440-108 WB Sat: (5244) 3022 became ef'fective on October 16, 2000, and ConIsilt, Gerimianiy, begani miiobilizationi in W13 I-IQ Washington DC: is currently under implemeintation. mid-February. Given the lead timile needed Mr. Jim Stevens QualityFund - A total of 46 grants inder to proctire equipnment, one of ttie first tasks Phone: (+1 202) 473-2848 Fax: (+1 202) the Itaiian Grant have been approved by the shlouild bc a finial decisioni on specifications 477-1996 WB Sat: (5220) 32848 QF Board to date for a pilot in the Neretva anid quatlities for equipmeilt needed to SLIP- Exterinal Canton and RS. and the contract for techni- port pilot work ill RS anid two Federationl PCU Federation cal assistalce to the Quality Fund has been canltols. Tlhe Tuzla anid Middle Bosilia Mr. Kerini Karabdic signed with CFBT, UK. Access to the canitonis have becn identified and agreed Director Quality Fund will be maade available to all \with the EMIS workinig group as the pilot Ministry of Education, Sarajevo primary schools in BH at the beginining of sites in the Federation. A seconid equlipmlleCnt Phonie/Fax: (+387 33) 471-767 next scilool year (Septemilber 2001). procuremilenit will be organized wheln the l'CU Republika Srpska Standards and Assessments Agency was project is expanided to all Feder-ationi canl- Mr. Zdravko Marjanovic created by the Entity Prime Ministers' deci- tolls. Director sion on March 10, 2000 and Governinig Higher Education component - a H-ligher Ministry of Education of RS, Banja Luka Board established in May 2000. EC-1'aer Edticationi Coordinationi Board hias been Phonie/Fax: (+387 51) 218-416, 218-417 techniical assistance is in place, but technical appointed and is working in close coopera- experts do not have coLmnterparts with whicil tion with thc EC-Tacr technlical assistance WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA . PROGRESS UPDATE EMERGENCY DEMOBILIZATION AND REINTEGRATION PROJECT STATUS CLOSED CREDIT EFFECTIVE 28-Aug-1996 ESTIMATED COST 20.00 CLOSING DATE 30-Sep-1999 Financing Table US$ mil. Implementation Summary (US$ mil.) Netherlands (grant, FBiH) 1.80 CONTRACTS WB WB mngd Total funds Sweden (grant, RS) 0.30 COMPLETED 7.20 8.80 9.60 World Bank (soft loan) 7.50 CONTRACT SIGNED 0.30 0.40 0.00 TOTAL FINANCING 9.60 BEING PROCURED 0.00 0.00 0.00 GAP/SHORTFALL 10.40 TO BE PROCURED 0.00 0.40 0.00 FINANCING GAP 0.00 0o00 10.40 TOTAL 7.50 9.60 20.00 Project Background Education and Retraining Services (US$ contracts up to lJS$25,000. The ETFs con- At the time of project preparation, in early 16.0 million): finanicinig of subproject con- tract for coLinseling and retraining services 1996, demobilization and reintegration of tracts for demand-driven education and under approved subprojects. The ETFs have ex-combatants was one of the highest pri- retraining services (includinig small business extension agents covering all cantons and orities for the BH Government for security, training). local service providers. humanitarian, and economic reasons, as Counlseling anid Job-Finidinig Services Procurement well as a basic requirement of the Dayton (US$1.8 million): technical assistance to Goods and services finaniced by the World Agreement. There was widespread concemn develop counselilig and job-findinig serv- Batik are procured competitively by each that a large injection of fomier soldiers into ices, and subproject contracts for delivery of ETF. the economy could threaten peace and re- counseling and job-findilig services; Project Achievements covery unless ways were found to expedite Labor Market linforimiationi Data Base (US$ The project was approved by the WB on their reintegration. In addition, there were at 1.5 ilmillion): Re-establishlimlent, upgrade anld July 30. 1996, and becamc eff'ective on the time, according to Government figures. broadening of the Muniicipal level labor August 28, 1996. Techilical assistance to an estimated 1,250,000 refugees who were market iliformation data base, broadeniing of develop the ETF has been successfully expected to return to BH. Like the demobi- the job vacancy systemll alnd broadening of conipleted. Despite severe shortages in lized soldiers, many would be unable to thc job seeker registration system; funding, training outputs are impressive. return to their original homile and place of Management Assistanice (USS 0.7 Illil- About 17,500 displaced workers, primarily work, and would likely also join the ranks lionl): technical assistanice anld goods to demobilized soldiers, are already heing of the unemployed. Furthermiore, many of develop and mainltaini two smiiall Maniage- integrated back into the civilian workforce. the 900,000 people employed in the civilian ment Units (Federation and RS). Job-Search and Trauma counseling services economy in 1991 were unemployed in 1996 Initial Dutcli funidinig of US$ 0.4 In finialiced were developed and provided to about 3,800 because they were displaced by the war, or the settinIg uip of thle Federation Employ- demobilized soldiers anid other target popu- due to the fact that their place of employ- ment anld Traininig Founcdationl; World Banik lation, with related job placement rates in ment was damaged and/or working at a finanlcilng sLipports all components; the sec- the rangc of 27%. About 2,700 of these are reduced capacity. Other smaller, but signifi- olnd DLitchi granit of US$ 1.0 m for the Fed- located in the Federation and 1,100 in the cant groups who needed assistance to rcturn eration, sLipported all componlenits. The RS. to work were the disabled and widows of Swedishi Granit for the Republika Srpska Retraining has been provided to about soldiers killed in the conilict. The disabled supports edLication anid retraining serviccs. 20,000 demobilized soldiers and displaced needed training for altemative employment, Thle additionlal DUtchC Granit of DEM workers. with related job placemelit rates in and many widows were faced with the nie- 700,000 for the Federation was signied on the range of 80%°. About 14,500 of these cessity of entering the workforce to support August 9, 1999. were in the Federationi and 5,500 in the RS dependenits without appropriate qualifica- Implementation Arrangements . A comprehicinsive national/local Labor tions. The project was designed in a modu- The Project is being impleiinieited by two Market Iniforimiationi System is being devel- lar fashion to address specific needs for noni-profit Employmiienit and Traininig Fotin- oped for operation in all 191 mnLlicipal employment counseling, and education and dations (ETFs). Each ETF has a Board of labor offices across BI-H. Procuremenit of retraining to adjust skills to emerging mar- Trustees with representatives olf the respec- related hardware and delivery of the equip- ket needs. tive Federationi and RS Ministries of Refu- meilt to project sites is completed. Software Project Objectives gees and'Social Aft'airs, Finance, Defense, development and testing at three pilot loca- The project aims to assist economic reinte- Education, Employmenit Iistitutes, Chalin- tions was completed in July 1999. The sys- gration of displaced workers into the civil- bers of Commerce, and trade uInions. The tem will be operational by end-Septemilber ian workforce in order to reduce the burden Project Executive Director, approved by the 1999. on families, decrease dependency on social ETF's Board of Trustecs, has signatuire Contacts assistance, and increase economilic produc- autilority for expenditures Llider the project. hlie Worcld Banik tivity. The primary target group is demobi- The ETF Boards reviews anld approves ET1F WB Colintry Oftice in Sarajevo lized soldiers. Secondary target groups in- policies, regulations, and major service Ms. Zorica Lcsic clude refugees, war victims and the dis- delivery conitracts (over US$25,000). LIpllI Phonie: (+387 33) 440-293 Fax: (+387 33) abled, widows, and the general unemilployed. thlc recomimiendation of the Canitonial Steer- 440-108 WB Sat: (5244) 3022 Project Description iig Committees. The Executive Commiiittee The project has the following componlents: of the ETF approves all service delivery 8 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE EMERGENCY DISTRICT HEATING RECONSTRUCTION PROJECT STATUS CLOSED CREDIT EFFECTIVE 18-Jul-1996 ESTIMATED COST 44.50 CLOSING DATE 31-Mar-1999 Financing Table US$ mil. Implementation Summary (US$ mil.) Denmark 1.40 CONTRACTS WB WB mnqd Total funds European Commission 1.80 COMPLETED 20.00 29.90 40.90 Finland (soft loan) 4.10 CONTRACT SIGNED 0.00 0.00 0.00 Finland (grant) 4.30 BEING PROCURED 0.00 0.00 0.00 Netherlands (grant) 9.30 TO BE PROCURED 0.00 0.00 0.00 World Bank (soft loan) 20.00 FINANCING GAP 0.00 0.00 0.00 TOTAL FINANCING 40.90 TOTAL 20.00 29.90 44.50 GAP/SHORTFALL 3.60 Project Background Iellit of' boileis and boiler componenlts in- been broughit back to full capacity, the net- Prior to the war, BH had district hcatinig cludinig measules to increase techilical and work was surveyed and all leaking sections (DH) systems in most citics with a popula- operational efficieincy; were replaced. In addition, system cffi- tion of 25,000 and above. Except for the Distributioni Networks (US$ 2.1 In): re- ciency has been increased, and a preventive Tuzla and Kakanj combined heat and power placemncit of 10 km of pipelines out of a mainitenlanice system was introduced at To- plants, heat for Dl-l systems was generated total of 62 km network and interconiniection plane. All networks are now in full opera- by local heat-only boilers. DHl systems in of networks; tion, including those in Sarajevo's severely BH served 120.000 flats, equivalent to Substationis (US$ 0.9 In): repair of up to destroyed reintegrated and refugee-retumn 450,000 inhabitants or 10% of the popula- 120 substations; areas. tion. Inter-nial Building Installations (US$ 13.2 IProject imiplemiienitationi took a two-phase The Sarajevo DH system was the largest in ni): repairs to radiators, valves and pipe approach: (i) a fast-track repair program to Bl-l, serving 180,000 people, or 45% of the coniectionis in flats; re-supply as many consumliers in Sarajevo as pre-war population of Sarajevo. It consists Otlier EquipmIecilt and Oflice Facilities possible througli December 1996; (ii) a two- of 44 independent area nctwor-ks, supplied (US$ 0.9 m) year reconstructioni program for full reha- by medium to large-sized boilers produCin1g Techliical Assistance (US$ 4.4 m) bilitation of the Sarajevo DH system, aimed heat only, and 87 separate buildinigs sLip- In Banja Lilka, fuLidinig was provided (US$ at a maximum increase in system efficiency plied by rooftop boilers, most of whichi 0.5 In) to prepare a ifLture DI-l project. and resulting in a sustainiable reduction of provide both hcat and domestic hot water. WB fuLnds supported repairs and replace- system operating costs. Today, the country's DH systems are still menit of boilers and intenial installationis. Toplanie re-started billing and collection only partly operational. In Sarajevo, shell- civil works for most componlenits in Sara- after a five-year interluLption with a new ing and freezing of pipes had caused major jcvo, and the rc-stall of thc Banja Luka Dl-l billiig system introduced under the project. system damage. Buildinig iitemals in resi- system in priority areas. Fiinlanid and Den- In the 1998/99 heatilig season. Toplane denitial dwellinlgs (pipes, radiators and mark financed urgently needed equipmenit began to take eiforcing actiols and success- valves) had iiictLrred sLibstanitiali damage, as well as technical assistance. Tentative EC fully improved the collection of revenue:s. also due to corrosion associatcd witli noi- comimiitilicimts of ECU 6.0 were reduced to Special attention still needs to be paid to usage of the systemn. In Banja Luka, most E CU 1.8 million and are under implenmein- tariffs and collection rates to ensure that. damage is related to 10n1-Llsage of the sys- tation. - Toplanie covers an increasilig portion of its tem caused by lack of ILiel, whlich led to Implementation Arrangements operatiig expenses, and managemenit needs rlstiig and freezing. The lack of spare parts Toplane, the Sarajevo Dl-l company, was to ensure that the enterprise lowers its oper- affected maintcnance and aggravated the responsible ior projcct implementation re- ating costs and improves its efficienicy at all problems. garding the Sarajevo-related componicilts of levels. Project Objectives the project. A l'roject Iimplemit.eitationi Unit The project compolielit for rc-start of the The project aimed to restore Dl-l service in (PIU) was set up within Toplane. P'roject Banja Luka DH systeimi in priority areas is Sarajexo and to enihance systemil efficienicy imlpilementation in Banja Luka was carried fully disbursed. and the comimlercial pertbnlinance of the Dl-I Out by the local DlI company. Contacts enterprise. The project has rcduccd BlIl's Project Achievements The World Bank dependenice on natural gas by provicling Major physical reconistruction started at the WB Country Office in Sarajevo dual gas/oil firing capability. beginninilg of August 1996 and has achievcd Mr. Felix Martin Project Description the full reconniectioni and restoration of hcat lPhonie: (+387 33) 440-293 Fax: (+387 33) The project included the iollowing comlipo- supply to 45,000 ilats. The reconnection ofi 440-108 WB Sat: (5244) 3020 nients for the Sarajevo Dl-l system: ilats is bcing brougIht to compIltioll uLidcr Boilers (US$ 23.0 m): repair and replace- donor lianiciig. Boiler operations havc 9 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA . PROGRESS UPDATE EMERGENCY EDUCATION RECONSTRUCTION PROJECT STATUS CLOSED CREDIT EFFECTIVE 1-Aug-1996 ESTIMATED COST 32.80 CLOSING DATE 30-Sep-1998 Financing Table US$ mil. Implementation Summary (US$ mil.) ECHO (grant) 4.60 CONTRACTS WB WB mnod Total funds European Commission (grant) 2.00 COMPLETED 10.00 10.50 25.70 Germany (grant) 0.30 CONTRACT SIGNED 0.00 0.00 0.00 Greece (grant) 1.30 BEING PROCURED 0.00 0.00 0.00 Islamic Fund (grant) 0.60 TO BE PROCURED 0.00 0.00 0.00 Netherlands (grant) 3.20 FINANCING GAP 0.00 0.00 7.10 Norway (grant, NMFA) 0.80 TOTAL 10.00 10.50 32.80 Soros Foundation (grant) 0.80 Sweden (grant, SIDA/SDR) 0.70 UNDP (grant) 0.30 UNHCR (grant) 0.10 United States (grant) 1.00 World Bank (grant 5 mil + soft loan 5 mil) 10.00 TOTAL FINANCING 25.70 GAP/SHORTFALL 7.10 Project Background schools in areas where school facilities are designs and assessments. The PlUs are re- Prior to the war, Bosnia Herzegovina had a destroyed. sponsible for coordination at the regional, well developed education system. With the Books and Educationlal Materials (USS 6.1 canton and municipality levels. exception of a few religious schools, all ni): financiilg of the printing and distribu- Procurement education was publicly provided. Virtually tion of about 40 textbook titles and 30 Goods and services financed by the WB all children completed the eight years of reader titles anid the provision of a basic were procured competitively by the PlUs. primary schooling and most completed four package of educational materials and Project Achievements years of secondary schooling. The war has equipment for primary schools. The WB grant and Credit were 100% dis- led to the disruption of education at all lev- Capacity Buildinig anid Project Impleelinel- bursed, as of May 1998. els. Approximately 70% of schools have tation (US$ 0.9 iln): office equipmilent, velhi- . Primary School Rehabilitation: been damaged, destroyed or requisitioned cles, techlinical assistanice and training tO 28 primaly schools identified in the Federa- for military uses. Many schools have been facilitate project imilpleimientation and equip tion as part of the priority program were rendered all buLt Iseless through loss of the Federation Ministry of Educationi to reconstructed with World Bank financing, windows, fiumiture and educational materi- begin planililg sector reforms. and another 37 schools were reconstructed als. Many teachers were drafted into mili- P'roject Plreparationi anld Pilots in RS (US$ throughi parallel financing; tary services, killed, displaced or took ref- 0.5 In): consLiltalit services to assess eduica- Books and Educational Material: uge in other countries. Resources to pay tion reconistrLIctioll nieeds in RS anid provi- 34 textbooks and over KM 1.0 million teachers and provide textbooks are virtually sion of textbooks, readers anld educational worth of educational materials were deliv- nonexistent. In spite of these extremely materials for primary schools. ered to Bosnian schools with WB financinig, difficult circumstances, due to the extraor- Funliding fromii Greece, the United States, and 44 other priority textbooks were pro- dinary efforts of parents, local govemment EU/ECFO. SIDA/SDR, UNHCR. NMFA/ vided with parallel financing; of-ficials and aid agencies, most children Norxvay, and UNDP supported the primary - Capacity Building and Project Iniplemen- managed to continue their education during schiool reconistructioni componcnt; the Soros tation: office equipment, vehicles, techniical the war, though in a very disrupted fonn. Foulidationi, Germani Govermilenit and Is- assistanice anid traininig has been provided to Project Objectives lamic Funtd funds supported thte textbooks facilitate project impleimiintation and equip The primary objective of the project was to anid readers comilpoinenit; EC funds finianccd the Federation Ministry of Education to help restore classroom conditions whiich furinituire; Nethierlanlds fLinds finaniced tlhe bcgin planniniig sector reforms. permit effective teaching and leamning -- reconlstmrLetion and textbooks componieilt as . Project Plreparation and Pilots in RS: particularly, in primary schooling. A secon- well as project implementation: WB fi- three primary schools were reconstructed in dary objective was to help build govenmenlt nanicing sLIpported all componients. the Republika Srpska. implemilenitation capacity to plan and deliver Implementation Arrangements Contacts education programs at the enitity. canton and Project Implementation Units (PlUs) in the The World Banik mLlniCipality levels. IFederation and Reptlblika Srpska Ministries WB Country Office in Sarajevo Project Description of Education are responsible for managing Ms. Zorica Lesic The project had the following componients: project activities in the Federation and RS. Phone: (+387 33) 440-293 Fax: (+387 33) Primary School Rehabilitationi (USS 25.3 IMG has becin emilploycd by the F ederal IPIU 440-108 WB Sat: (5244) 3022 In): construction of about ten and refur- using a Dutch grant and UNDI' funids to bishing of 80 primary schools primary maniage the preparationi of architectural 10 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE EMERGENCY ELECTRIC POWER RECONSTRUCTION PROJECT STATUS CLOSED CREDIT EFFECTIVE 20-Sep-1996 ESTIMATED COST 196.40 CLOSING DATE 31-Dec-1998 Financing Table US$ mil. Implementation Summary (US$ mil.) Austria (grant) 3.90 CONTRACTS WB WB mngd Total funds Belgium (grant) 2.40 COMPLETED 34.40 45.70 164.60 Czech Republic (grant) 0.90 CONTRACT SIGNED 0.00 0.00 0.00 EBRD (loan) 13.00 BEING PROCURED 0.00 0.00 0.00 European Commission (grant) 38.40 TO BE PROCURED 0.00 0.00 0.00 France (grant) 2.60 FINANCING GAP 0.00 0.00 31.80 Germany (grant) 2.30 TOTAL 34.40 45.70 196.40 Ireland (grant) 0.50 Japan (grant) 11.70 Norway (grant) 1.50 Switzerland (grant) 7.90 United Kingdom (grant) 11.90 United States (grant) 33.20 World Bank (soft loan) 34.40 TOTAL FINANCING 164.60 GAP/SHORTFALL 31.80 Project Background 61.3 Im) througilout the Federation; operation. Prior to the war, BI-l produccd 13.090.GWhl * Spare lPaits (US$ 13.7 ni); The Grabovica Hydro Power Plant was of electricity from generating plants located Mainteniance Vchiclcs (US$ 7.5 in); recomimiissioned in December 1996. on its territory, while electric consuLIlption Engineering Supervision (US$ 6.0 ni); * The rehabilitationi of the Jablanica hydro was 11,181 GWh. The system comprised 13 Coal Mine Rehabilitation (US$ 16.5 ni): in power plant is nearly completed. In total, hydropower and 12 thermial power plants. Tuzia, Central Bosnia, and Ugljevik nine contracts were signed. The full amount As of January 1996, 49 percent of BHi's Technical Assistance and Project Man- of committed funds is under implementa- total generating capacity in the Federation ageineit Support (US$ 4.6 m). tion. According to the agreed schedules, the was damaged. About 60 pcrcent of the Key areas left unfi-ianiced are the Mostar commercial operation of the Unit, scheduled transmission network and control system hydropower plant (US$13.4 ni), distribution to comimielice in Julne 1999, is about 6 are seriously damaged. Thle distribution in many areas (US$12.0 ni), vehicles molthis bellind the original scliedule. network and many transformer stations, (US$7.5m) and spare parts (US$6.2 In). The spare parts for operation of 32 MW civil works, telecommunicationis and main- WB fuids supported the rehabilitationi of congcneration units in Themial Power Plant tenance equipmenit were also damilaged or the hydropower planit at Grabovica. the (TPP) TIizla and TPP Kakanj were pro- destroyed. Tuzla therimial power plant and coal minie, as vided. Uiiit 6 at TPP Kakanij was re-started In 1980, BH's coal minies produced annu- well as repairs to various transmission sub- in early November 1996, and the rehabilita- ally about 18 millions tons ol'coal, of whiclh stations, spare parts, and enginicerilng and tion of Unit 5 was completed by March more than 80 percent was used for electric project manlagemicint scrvices. 1997. The second stage of the rehabilitationi power generation. Due to the war, coal pro- Implementation Arrangements of the Units 5 and 6 (2xl 10 MW) consisting duction, in 1994, dropped to less than 10 A Project Iilplemilelitationi Unit (PIU) had of the purchase of the environmenlial nioni- percent of pre-war levels, withi much of the beeni establishied withinl Elektroprivreda BI-l. toring system and of rehabilitationl of the miniilng equipment destroyed. Tlhe PIU was in charge of project schedul- ESl's for Unit 5 was completed by the end Project Objectives ing, coordinationi, monlitoring, and procure- of September 1998. Dtie to the delay in The project aimed at restoring electricity ment aid fuLids iiaiagemienit. installationi works and entering'tihe winter service to acceptable levels in major cities Procurement season, the second stage of the rehabilita- and to vital industries; increase coal pro- Most goods aniid services Finan.iiced by the tion of Unit 6 is extended and will be started duction to supply iuel required for thcirimal WB were procuired comilpetitively by thle on March 1, 1999. The rehabilitation of power plants; reconFigure the electric power PIU. Unit 3 (100 MW) at TPP Tuzla is coni- network; and enhance institutional capacity Project Achievements pleted. This Unit was restarted at the end of and help restructure the electric power and The WB Credit lias bccil fully used anid 1997. Since theni it has operated success- coals sectors. closed as schieduled on Decemiiber 31, 1998. fully and lias already generated a total of Project Description WB fuLids were used to fund civil works 400 GWhl of electricity and 66 GWh of heat The project included the following coimpo- contracts for repair works at the Grabovica energy. nenits: Hydro Power Plant (US$ 2.4 millioni) and All scheduiled contracts for a value of US$ * Rehabilitationi of Power Generation Plants for repair works to thle El) 131-I office build- 28.9 Ill. were signed for the import of (US$50.2m): including Grabovica, ing in Sarajevo. equipment and of spare parts for TPPs, in- Jablanica, Jajce, Mostar; TuIzla, Kakanj, and In additionl: cluding US$ 5.2 In. for coal mnies. Con- Ugljevik plants F'our major 220 kV tranisimiissioni linies were tracts were also executed with Bosniani, * Recoistructioji of'Transmissioni Linies anid restored. The overall tranisimiissioni capacity Norwegian and Atistria.i firms, providing Substations (US$ 32.6 ni); has been increased by 1.600 MVA. Tlhirty- consulting anid enginieerinig services. Project * Communicationi and Control Systems four sibstatiois have been rehiabilitated. impleelitationl involved a total of 103 (UJSS 4.0 ni); T'he Salakovae Hydro Power Planit (tihiee conitracts at a value of US$ 79.65 ni. Distribution Networks Reliabilitationi (US$ units 70 MW eachi) was brotigit back to full Contacts The World Bank WORLD BANK RECONSTRuCriON AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA . PROGRESS UPDATE WB Country Office in Sarajevo Phole: (+387 33) 440-293 Fax (+387 33) Mr. Felix Martin 440-108 WB Sat: (5244) 3020 EMERGENCY FARM RECONSTRUCTION PROJECT STATUS CLOSED CREDIT EFFECTIVE 1-Apr-1996 ESTIMATED COST 50.40 CLOSING DATE 30-Jun-1998 Financing Table US$ mil. Implementation Summary (US$ mil.) European Commission (grant) 6.90 CONTRACTS WB WB mnqd Total funds Federation of B&H (local counterpart) 1.40 COMPLETED 20.00 28.20 42.40 Germany (grant) 2.20 CONTRACT SIGNED 0.00 0.00 0.00 IFAD (soft loan) 7.30 BEING PROCURED 0.00 0.00 0.00 Netherlands (grant) 3.20 TO BE PROCURED 0.00 0.00 0.00 Others (grant, International NGO's) 0.40 FINANCING GAP 0.00 0.00 8.00 Saudi Arabia (grant) 1.00 TOTAL 20.00 28.20 50.40 World Bank (soft loan) 20.00 TOTAL FINANCING 42.40 GAP/SHORTFALL 8.00 Project Background port of cattle and goats: completed for all items, respective livestock Agriculture had always been a central part Animal Health Services (US$ 2.2 ni): and equipment have been imported. All of the Bosnian way of lifc, witlh nearly 20 equipping and rebuilding veterinary stations tractors financed by thc European Commis- percent of the pre-war labor force working and institutes, iliding for artificial in- sioti have also been delivered to Bosnia. full-time in the sector and at least a simlilar semination; and Veterinary equipment number of people working part-time. Be- Project Implementationi Support (USS 1.5 provided by the German Govenmment was cause of the mountainous topography, good In): equipimienit, TA, traililig. delivered as well. agricultural land was scarce at only 0.25 ha World Bank and EC funlds sLupported the During 1996. unlder IFAD-financing, and in of arable land per capita (1991), and live- farimi mechanization component; IFAD, cooperation with the WB, the following stock production predomniated. Of BHs Federation Bl-l, Saudi atid Dutclh Goverin- livestock were imported and distributed: total area of 5.11 million ha, some 20 per- melit fuLids t-ianiced livestock; Germian 3,929 cattle (Simmental, Brown-Swiss, cent was arable land, of whiich 792,000 ha Government lunds supported the animal Black and White, and Gray Tyrol), as well were planted before the war. health componient. Implemenitationi support as 650 Saanen goats and 701 Mountain The 540,000 small private famis that made was financed by IFAD and the Dutch Gov- Alpine goats. Livestock finanlced by Saudi up 95 percent of the sector had remained ernlenit. Arabia (797 heiters). the Federation of BH relatively backward prior to the war. Even Implementation Arrangements (505 heifers and 5,000 sheep) and the NGOs before the war, BH needed to import half of Fanm equipimienlt and( livestock were distrib- (252 heifers) were procured and distributed required basic foods from the outside. uted to farmiers following bulk procuremncit. by the PIU as well. Under Dutch Govern- The results of more than 3 years of war had Distribution was carried out by 4 regionial menit procurement and financing (NLG 4.2 beeti devastating to agriculture. Fami pro- implementationi units in thle Canitonis of million), 946 hcifers were imported and ductioll fell to one third of nceds; nornal Tuzla, Zeinica, Bihac, anid Mostar. Tractors distributed to farmiers in 1997. food processing, distribution and marketinig were provided againist a 10-year credit, with Under WB-finaniciig, 2,912 farm tractors systems had broken down. Fartii equipmenit 2 years grace at 2% intercst: livestock loanls (single-axle motor-cultivators and smiall was stolen or destroyed (losses of up to 80% had a 5-year terimi. Repaymilenits are cihanz- two-axle tractors) and 14 combines were in some areas), irrigation systems vandal- neled through banIks. imported. The PIU completed the distribu- izcd, livestock taken or slaughtcrcd, houses The following farmer eligibility criteria tion of these items to farmers against sig- and barns bumed, while vineyards and or- were used: F-irst, farimers needed to be lo- natUlrC of supply and credit contracts. Also, chards in war areas were not cultivated for cated in areas that had suffered suibstantial 1,300 EC-financed tractors were allocated several years. war damage (more thani 50 percenit of war to farmers. The final contracts for 30 single- Project Objectives damage to agriculture, based on suIveys). axle motor-cultivators and 15 heifers, whichi The project aimed to jump-start farmi pro- Second, in addition, farmers must have were delivered by end-October 1997 wer-e duction, improve food security, and create sui'l'ered loss of a tractor/ of livestock due to distributed to the eligible farmers by mid- employmienit 'and income for the war- the war. And third, in addition, priority was November 1997. affected rural population includinig returning given to farmers wlho were refugees or in- Contacts displaced persons. The target group was the temally displaced persons, and who in- The World Batik private fanr sector. tentdcd to returni to their farlis. WB Counltry Oflice in Sarajevo Project Description Procurement Ms. Vesna Francic The project had the following comilponenits: Goods and services finaniced by the World Plllhoe: (+387 33) 440-293 Fax: (+387 33) Farm Mechanization (US$ 32.3 ni): import Bank were procured competitively by the 440-108 WB Sat: (5244) 3024 of' motor-cultivators, small tractors, tractor Project Implementatioln Unit iilplemilenits; Project Achievements - Livestock Production (US$ 14.4 In): ini- P'rocuremcielt maiagced by the l'lU has been 12 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE EMERGENCY GAS SYSTEM RECONSTRUCTION PROJECT STATUS CLOSED CREDIT EFFECTIVE 17-Apr-1998 ESTIMATED COST 43.50 CLOSING DATE 31-Jul-1999 Financing Tab US$ mil. Implementation Summary (US$ mil.) European Commission (parallel grant) 6.40 CONTRACTS WB WB mngd Total funds Local financing (local counterpart, Canton COMPLETED 10.00 10.00 39.40 Sarajevo and Sarajevogas) 14.10 CONTRACT SIGNED 0.00 0.00 0.00 Netherlands (grant) 2.30 BEING PROCURED 0.00 0.00 0.00 Others 4.50 TO BE PROCURED 0.00 0.00 0.00 United Kingdom (ODA) 2.10 FINANCING GAP 0.00 0.00 4.10 World Bank (soft loan) 10.00 TOTAL 10.00 10.00 43.50 TOTAL FINANCING 39.40 GAP/SHORTFALL 4.10 Project Background recons-rLictinig the gas tralnsmlissioln anld Project Achievements TIhe natural gas system in Bosnia and 1-Ier- distribtitioni systemis. This incliided the iiie- lhe WB Credit has been futly used and zegovina consists ofla transmission pipeline, tering and reguilaizinig of all hiousehold closed on July 31, 1999. imlportinig gas from Russia, and several connlections anld the conversion of self- A WB project start-up advance of US55 distribution systems, mainily for the supply miade conlniectionis to rcgular district heatlig millionl was given to SarajevoGas in 1996 to ot the city of Sarajevo, the steel plant in or gas coonlectiois. Further objectives were provide financing for urgent repairs, until Zcnica, the brick factory in Visoko. the to strenigtheni the institutional capacity of the the project became effective. Together with cement factory in Kakanj and smaller con- Sarajevo gas eniterprise, to re-inltrodtice other donations and the help of Sarajevo's sumers along the pipeiine. The transnmission billing and coliection and to identify alter- citizens, this enabled SarajevoGas to carry pipeline, with a lenigtil of I 17km and a native sources of gas supply to B-l-. out vital repairs to the transmission pipeliie, 65km branch line to Zenica, is designed to Project Description includinig the re-installationi of cathoclic supply 1.2 millionl cubic meters of gas per The project included the following compo- protection and metering. In the distribution anill.111 Gas consumption peaked in 1990 at nenits flo the Bl-I gas system: system, 48,000 illegal conniections have 610 million cubic ileters per year. Engineering (US$ 2 rn): Inspection. sur- becn regularized, 11,000 deteriorated pie- Today, the gas system in BI-l serves mainly veys. analysis and supervision; war connaections have undergone repair, and the city of Sarajevo, where natural gas has - Transmiiissioni system (US$ 7.8 in): Pipe- new meters have been installed. 300 km of become the maini source of ecirgy. While In1e recon1structioln, meterinig an1d regulation, low-pressure polyethylene piping has be-n industrial consumption in Kakanj and cathodic protection. spare parts; laid to reguiarize the majority of illegal Zenica is still significanitly reduced by the - Distributioll system (US$ 30.3 rI): Reha- household conn1ections. implacts of war, the numilber of household bilitationi of consuml1er connec-tions, (re- With the project's compietion, the number conn1ectionis in Sarajevo increased fromii )construction of piping. meterinig and regu- of househiolds reconnected has reached the 15.000 pre-war to 58,000 today. In addition. lation, spare parts: target numilber of 58,000, includinig many in Sarajevo's district heatinig systen in being Techniical Assistance (US$ 2.7 ni): Strate- Sarajevo's severely destroyed refugee- operated on gas, serving 36.000 houselholds gic planni1ilg, studies on tariffs, alternative returnl areas. The rehabilitation of the and most public institutiols, gas suppiy, scctor restrtictLlriig, biliilig and transmliissionl pipeline, including landimiine War damia.zge to the gas system included collectioni; clearing, has been fully accomplished. dcterioration and landmine contaminationi of Landminc cleartig (US$ 0.3 im). Technical Assistance in billing and collec- the transmiiission pipeline, and a vast in- * Other Donors included: 1he cities of An- tion, and studies on tariffs, sector restruc- crease in illegal househiold connections. kara, Modena, Bolzano, 13arcelona. Brescia. turinig and sector developmilenit has been These connectionis were noni-regulated con- IstanbLul, the Qatar Relief Fulid Saudi Ara- uLidertaken to support the enterprise in de- nectionis to the highi-pressure gas system atid bia/IRC, USAID/IRC. Egypt, Kuwait, Saudi veloping and planning its fulture activities. led to explosions, injuries and fatalities. Arabia, IllItO. MDD Mc-liamiet. and various SarajevoGas re-started billing aid collectioni Non-paymieint for gas consulicd durinig thc foreign gas companiies (GASTEC-Ilolland, after a tive-year interruption with a new war resuited in tihe reductioll of gas dcliv- EGO-Turkey, VerbundnetzGas-Gerniany billing system introduced under the project. eries by the Russiani supplier and the gas etc.) Special attention is being paid to collection transport agencies, and cventLially caused Implementation Arrangements rates to ensure thlat SarajevoGas covers an the fiial cut-off in splilg 1997. Gas supply SarajevoGas, tlhc Sartjcvo gas colipally, increasiig portion of its operating expenses. to BI-I was successuilly rcstored, LiiLtcr ac- was responsible for- project implemcintation. Contacts tive involvement of thic Ofticc of thc Hligh A lProject Implementation Unit (PIU) was Tlhe Worid Baiik Representative, tile Goverinimicit of the cstablishied withinl SarajevoGas as a team of WB CoLi.try Office in Sarajevo Nethierianids and the World Bank. in No- several engiicers, procuremilenit stafT and Mr. Felix Martin vember 1997 and since thile supply has financial staff lhone: (+387 33) 440-293 Fax (+387 33) been continuous. Procurement 440-108 WB Sat: (5244) 3020 Project Objectives Most goods, works and services financcd b y The project aimed to restore sat and reli- the WB were procured competitively by the ablc gas supply to BI-l by rcpairinig and lIU. 13 fl WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE EMERGENCY HOUSING REPAIR PROJECT STATUS CLOSED CREDIT EFFECTIVE 1-Aug-1996 ESTIMATED COST 60.40 CLOSING DATE 30-Jun-1998 Financing Table US$ mil. Implementation Summary (US$ mil.) European Commission (grant) 6.40 CONTRACTS WB WB mngd Total funds Germany (grant) 0.70 COMPLETED 15.00 28.80 53.10 Italy (grant) 3.90 CONTRACT SIGNED 0.00 0.00 0.00 Netherlands (grant) 3.50 BEING PROCURED 0.00 0.00 0.00 Saudi Arabia (grant, Saudi Fund) 20.00 TO BE PROCURED 0.00 0.00 0.00 UNHCR (parallel grant) 3.60 FINANCING GAP 0.00 0.00 7.30 World Bank (soft loan) 15.00 TOTAL 15.00 28.80 60.40 TOTAL FINANCING 53.10 GAP/SHORTFALL 7.30 Project Background emienlt s approach in this area. specifying the terms and amounts of repay- Four years of war had damaged an esti- Project Description nient through increased rental charges. mated 40 percent of the social housing stock The project had the followinig components: Procurement and 60 percent of private houses in BHI. Public Housing Repairs (US$ 28.5 In): Goods, works and services financed by tile forcing large parts of the population to live repairs to commnonl elements of apartmenit World Bank were procured competitively in damaged units and crowded shelters. War buildings ihat were up to 60 percenit dam- by the PIlJ. damage was exacerbatcd by collateral dam- aged. so as to miaximilize the niumiiber of Project Achievements age caused by weather conditions and dete- benefiting The project is 100% completed. Housing riorationi of infrastructure installations, A flats. Typical works included repairs to repairs wvere completed for a total of over complex set of ownership issues was the roofs, external walls, staircases, windows 650 public apartment buildings, beniefitirig result of widespread displacement of the and utility systems. Repairs within individ- some 17,500 flats in the cities of Sarajevo, pre-war population. The Commaiission for ual apartments were the respotnsibility of the Mostar, Gorazde, Olovo, Kupres and Novi Real Property Claims of Displaced Persoiis owncr. Cities included were Sarajcvo, Mo- Travnik. Financing for tilese works was and Refugees, established under Ann1ex 7 of star, Kupres. Travnik, Olovo an(d Gorazde. provided by the World Bank, the EC, tile the Dayton-Paris Peace Agreement, has Up to 17,000 flats benefited fromll the proj- Netherlanids. UNHICR. Repair works of addressed competing ownership claims, but ect, providing hoLsinlg for some 85.000 puiblic apartment buildings and houses were settlement will, in many cases, take timie. individuals: generally located within the UNIICR- To move rapidly with housing repairs, be- P Irivate l-lousing Repairs (USS 30.1 m): designated refugee retuin areas. fore ownerslhip issues could be resolved, repair of some 2,680 individual homiies in Concerinii1g private housing repairs, works many donors including UNHCR, the EU. six Cantonis to minimiiumll habitable stani- carried out with the Dutch funds had been bilaterals and NOOs, had started to carry dards, at a cost ceiling of US$ 10,000 per completed by the [all of 1996, leading to out repairs to the private housinig stock. A housc; repairs of 216 private houses in thrce cities. total of some US$ 273 m. had been pledged -Techiical Assistance and Incremenital Cost Under Saudi Fund financing. 1650 houses for housing repairs during 1996 by the do- Support (USS 1.8 in). were repaired. Using remainiing Saudi nors. This World Bank-supported project World Bzaik, Europeani Comimiliission and FuLids, as well as futnds provided by Italy aimed both at municipal apartmenit build- Italian funids supported public housing re- and UNHCR, the PIU repaired anotlher 790 ings which provided the bulk of housing in pairs. Dutch funids fiiianiced private housing private houses, sonic of whichi are located cities, and private housing. Very close coor- repairs in Gornji Vakuif Olovo and Vitez, as on the Federation side of the Brcko muniici- dination with UNHCR was maintained so well as public housing repairs in Sarajevo, pality. that the project could support many of the atid finaniced techilical assistance and oper- Joint vemitures witil Bosnian partners were UNHCR-dcsignatcd priority refugee return ating cost. Germailai funids also supported fomied by interested foreign contractors, areas. project implementation. The Sauldi FIund for despite the Imnited valuc of most repair Project Objectives Development and Italy finianiccd primarily contracts. The objectives of the project were to carry private housinig repairs. Contacts out repairs to publicly owned housing, and Implementation Arrangements The World Bank to recover the cost of such repairs fronm The F ederation Ministry of P hysical Plan- WB Country Oftice in Sarajevo residents through rent supplements, so as to ninig and Environimilenit had establislhed a Ms. Vesna Francic allow for the required maintenanice of the Plroject Ilplemiienitation Unit (PIU) for the Photie: (+387 33) 440-293 Fax: (+387 33) repaired houIsing stock. The project also goverinineit's housing repair programii. Thc 440-108 WB Sat: (5244) 3024 provided fuLidiig for repairs of some private PIU entered into agreements with the (mu- individual houses in order to test the Gov- nicipal) owiners of apartment buildings. 14 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE EMERGENCY INDUSTRIAL RESTART PROJECT (INCLUDING POLITICAL RISK GUARANTEE FACILITY) STATUS ACTIVE CREDIT EFFECTIVE 1-Mar-1997 ESTIMATED COST 49.00 CLOSING DATE 31-Dec-2003 Financing Table US$ mil. Implementation Summary (US$ mil.) Japan (grant) 5.00 CONTRACTS WB WB mngd Total funds Netherlands (grant) 1.00 COMPLETED 10.00 18.50 18.50 Private sector insurers 49.00 CONTRACT SIGNED 0.00 18.30 18.30 Sweden (grant) 1.00 BEING PROCURED 0.00 36.10 36.10 Switzerland (grant) 7.50 TO BE PROCURED 0.00 0.60 0.60 World Bank (soft loan) 10.00 FINANCING GAP 0.00 0.00 0.00 TOTAL FINANCING 73.50 TOTAL 10.00 73.50 73.50 GAP/SHORTFALL 0.00 Project Background trading companies, and comimiercial lenders actions that are larger and of longer duration BH was a well developed industrial econ- from financing working capital for corn- than those covered by IGA. It also admin- oniy befbre the recent war, ratiking amlionig mercially viable enterprises in Bli. isters a EU Trust Funid offering political risk thc leaders of thc former socialist econo- Project Description guarantees to EU companiies investing in lilies of Eastern ILurope. There were about The main project componenit is support to BH. 1,000 industrial organizations that contrib- thc Investmenit Guaranitee Agency (IGA), an Procurement uted about half of the GNP and employed independenit corporationi established by the The World Bank credit does not directly nearly 450,000 people - about half the num- Governmnent of BH to operate the Lever- finance inputs and equipment for BH enter- ber of people il formal cmployment. The aged Insuraice Facility for Trade. IGA has prises. Bank funds are beilig used to back- industrial structure was dominated by a entered into a partnershiip with a syndicate stop insurance policies issued by the syn(li- dozen or so big export-oricitcd conglonier- of private risk ilisLircrs to create LIFT, cate ofprivate risk insurers. ates while a large number of smaller 1irimis where the syndicate issues policies of inisur- Project Achievements were catering mainily to the local market. ance for a multiple (up to thirce timies) of the Several policies of insurance have been Considerable industrial activity, natural donor atid IDA fulids allocated to the proj- issued uLider the new partnership arrange- resources, capital stock, and technical and ect. menits with the private risk insurance mar- commercial human skills existed before the lPolicy holders can puLrcliasc protectionl from ket. Several applications are being proc- cotiflict. Some of it is salvageable with IGA against losses that occur as a direct essed involving political risk insurance un- rclativcly minor investmenlts, mostly in result of the following risks: der the new arrangemenits whiere the private working capital. IndLustrial reconstruction * Inconvertibility or inability to transfer risk insurance market is providing parallel will provide considerable employmenit and local currency into foreign exchange; cover for commercial risk. The availability is one of the core elements of the future * Cancellationi of liceiises, restrictionls oil of political risk cover for Bosnia under development of Bl-l. import aiid export; LIFT has bcen the catalyst for the entry of The key to successfully re-starting viable Impositioni or increase of import or export the private market into commercial risk parts of the industt-y sector is to definie and taxes; assumption for these transactions. theni imiplemincit simple, low-cost projects * Expropriation of local enterprises involved Contacts that can be brought to profitable operation in a transaction; 'I'hc World Bank quickly in open competitioil in the world Seizure of goods, prevention of sale, or WB HQ Washington DC market. Surveys among large and mediulIl- preventioln of export; Mr. Lloyd Edgecombe sized industrial enterprises in both Entities * Inteferenice witi the cairiage or storage of Phonie: (+1 202) 458-5982 Fax: (+1 202) of BH show that there is no shortage of this goods; 458-5073 WB Sat: (5220) 85982 type of projects. Financing for such projects Imposition of a UN embaigo or sanctions; External needs to conic frdm foreign paltner- firimis or War or civil disturbanice; Investimienit Guarantee Agency (IGA). Fed- foreign banks and is mostly for working * Diversion of' voyage, resulting in an in- eratioln capital, with some small iivestimienits in crease of transport anid ilisulrancle charges Ms. Lamija Kozaric equipl)ment repair. While foreign partneis are for ilipilts. Director often ready to take on the commer-cial risks IGA sells guaranitees against a fee of LIp-to Mr. Vlatko Tvrtkovic of sucIh projects, they are ullWillillg to ac- 250 basis poitits per anllilil onl the covered Deputy Director cept the risk that political events, including anmotunt, for a maximumiL guiarantee period of Fra Andela Zvizdovica Street l, Sarajevo a renewed outbreak of hostilities, coulid five years. Eligible transactionis are those Phone: (+387 33) 262-720 Fax: (+387 33) jeopardize the projects. Export credit agen- that involve goods sold to enterprises in BH 262-730 cies currently do not cover transactions in which are used for a productive purpose and Branicih Office, RS BRH, making credit-guaranteed and insLured conform to environmental stanidards. Initer- Mr. Mirko Dejanovic commercial banking flows into BH unlikely ested foreign firimis that provide credit to Deputy Director to occur in the immediate to medium-term films in BRH should inquire with IGA for Banja Luka future. fLlrtier details. Phone: (+387 51) 215-844 Project Objectives IGA's transactionis complemilenit gilarantees The project provides a Leveraged Insurance offered by MIGA, thie Multilatei-al Invest- Facility for Trade (LIFT) to mitigate risks mcnt Guaranitee Agency of the World Bank that are inhibiting private input suppliers, Group. MIGA oflers guarantees for trans- , WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE EMERGENCY LANDMINES CLEARANCE PROJECT STATUS CLOSED CREDIT EFFECTIVE l-Sep-1996 ESTIMATED COST 67.00 CLOSING DATE 30-Sep-1999 Financing Table US$ mil. Implementation Summary (US$ mil.) Canada (grant) 0.70 CONTRACTS' WB WB mngd Total funds European Commission (grant) 16.60 COMPLETED 7.50 25.50 53.20 Italy (grant) 5.00 CONTRACT SIGNED 0.00 0.00 0.00 Netherlands (grant) 4.80 BEING PROCURED 0.00 0.00 0.00 Others (grant) 8.30 TO BE PROCURED 0.00 0.00 0.00 UN (parallel grant) 1.80 FINANCING GAP 0.00 0.00 13.80 United States (grant) 8.50 TOTAL 7.50 25.50 67.00 World Bank (soft loan) 7.50 TOTAL FINANCING 53.20 GAP/SHORTFALL 13.80 Project Background (iii) expand mine clearing capacity il BH; worked closely with the MAC for iiple- Landmnine contamination has been an issue and (iv) support the Governments' mine meniting the project, undcr the overall policy for all aspects of reconstruction, resettle- clearing agencies (mainly operating costs) guidance of the National Demininig Corn- ment and community development in post- througIl financiig. 'he agenicies have set mission. war BH. More than 17.000 minefields were prioritics and standards. prepared, awarded Procurement identified in Bosnia Herzegovina, particu- and suipervised contr-acts, and coordiniated Goods, works and mine clearance services larly in bands of contaminationI about 5 km mine-clearilng activities, financed by the World Bank were procLured wide along former confrontationi lines. In Project Description competitively by tile PIUs these areas, there is still a considerable The project had the following comilponetits: Project Achievements quantity of unexploded ordnance. Mines * Institutional Developmenit: establishliimenit The project was ilmplemented successfully were used to deny access to various facili- and one-year operation of the Mine Action during 1997 and 1998. The nmajority of ties, including housing, public buildings, Center (MAC) in Sarajevo and three re- fulids were earmarkled to finance direct and kcy inf'rastructure, hindering the recon- gional MAC ot'fices. The MAC has set up a clearance activities (82 'Y. of all funds are struction of railways, roads and bridges, and miie iniorillatioli maliagemeilt systeimi, and used for demining works) il sLIpport of the the restoration of utilities such as electric has provided assistancec to the' Govern- following maini activity groups: a) Eco- power, water and gas as well as the reset- iients' mnie clearing agencics; nomic recovery / reconstruction 36%; b) tiement of many refugees and displaced * Mine Awareniess: settinIg up of a tiational ConimlUllity rescttlemenit I revival 34%; c) persons. informationi programi targeting vulnerable Other 30%. Many of thc mnie field maps and records groups; One of the major achievemeilts of the proj- were Linreliable, and mine fields have not . Mine Clearinig Capacity BuLildinig. in- ect has been thc introductioni of competitive always been mapped. Many minies are made Cludinig traininig f.acilities, teachers, stuidenit bidding for minie clearanice contracts. of plastic, making themii difficult to detect support dog scliool. trainiilng Cquliplmlelt, Furthermore, the project (i) has contracted a and likely to remaini dangerous for a loing and techilnical assistance: pool of qualified demininig sLipervisors, (ii) time. Clearinlg of all milles coulid still take a . Mine Clearing anid Quality Assuranice: established project managemilelit capacity. decade. This activity is very costly. An Ui- surveying, miarkitig alid clearinig of mulie- and (iii) supported the emergence of local tial effort was niade wheli, under the Dayton tields. demininig firmis. Peace Agreement, the ex-combatants were World Bank admiinlistered fLunids (inicluding The World Bank credit was closed on Sep- required to clear their own minefields from a US$7 illillioni World Bank credlit anid tcmber 30, 1999, and activities funded un- the Zone of Separation or other areas from about US$14 million wvorth of Trust Funids der World Bank - administered Trust Fuiids which their forces were withdrawn, and t0 adiniliister-ed on belhalf' of' various donors) have been completed on September 30. cariy out minefield markinig. Despite these wereC uised m1ainily inl support of nlinIe clear- 2000. An Implementation Completioni Re- ef'forts, to date, maniy mnies remain, and a ing atnd iinieficild survey contracts. EC port tor thc World Bank-finianiced portion of major clearance effort is still clearly re- funidinig was Llsed for traininig anid salary the project was issued oii Junie 16, 1999. quired. support of 13osiniani minie clearers. UnJited The Implementation Completion Report Priority has beeni given to make it possible States fundinig was Lused to establish anid was drafted jointly by the Batik and the to iniplemeiit reconstruction atid resettle- operate thic MAC anid partly for local ca- Borrower, represented by the Demnining mcnt projects as well as to reduce the risk pacity bulilding (t-aininig aild salaries). then ComlmlissiOti. coliiniutlities are cotifronting. In eaclh prior- at a sccoiid stage for mine clearaiice works Contacts ity area, the exact level of niine pollution pe- se. UN funiding was miainily for the es- The World Batik has been assessed: iflow, work was allowed tablishelient aiid operationis of thle MAC. World Batik Couiitry Office ii Sarajcvo to start; it' higl, miiic-clcariing works were Italian futinds hiave support capacity buildiiig Mr. Joseplil K. Ingraiii carried out. and niine cleariiig. Pihoiie: (+387 33) 440-293 Fax: (+387 33) Project Objectives Implementation Arrangements 440-108 WB Sat: (5244) 3025 The objectives of the project were to (i) set The World Bank-ftunidcd part ol' thc pioject up the institutioiial structure for iinine benefited bothi the Federationi and Rcpublika clearinig; (ii) protect the m10ost vuliierable Srpska. Each Enitity had established a Proj- groups tlhrougi niiiie awareness prograiiis; ect Implemientationi Unit (IIU) whichi has 16 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE EMERGENCY PILOT CREDIT PROJECT (RS) STATUS CLOSED CREDIT EFFECTIVE 1-Aug-1998 ESTIMATED COST 20.00 CLOSING DATE 30-]un-2000 Financing Table US$ mil. Implementation Summary (US$ mil.) Austria (grant) 0.50 CONTRACTS WB WB mngd Total funds Germany 1.20 COMPLETED 5.00 9.10 12.80 Netherlands (grant) 2.00 CONTRACT SIGNED 0.00 0.00 0.00 Sweden (grant) 1.50 BEING PROCURED 0.00 0.00 0.00 United Kingdom (grant) 1.60 TO BE PROCURED 0.00 0.00 0.00 United States (grant, USAID) 1.00 FINANCING GAP 0.00 0.00 7.20 World Bank (soft loan) 5.00 TOTAL 5.00 9.10 20 00 TOTAL FINANCING 12.80 GAP/SHORTFALL 7.20 Project Background similar and sLIccessIll credit line project in selected for the project, based on finanicial live years after the var, private sector busi- the Federation of Bill, the Emergenicy Re- and managemlenit criteria: BanjalLicka nesses in tile RS are still hinidered by a lack covery Project, active betweeln 1996 and Banka; Cristal Banka; Semberska Banka; of access to long-termli crcdit, reduceLl ac- 1998. and Agropromil Banka. cess to markets. poor economiiic growth. and Project Description Expected immediate project benefits inciude little investmizenit interest. Citizens continuic The project has thc following live compo- increased cconomiiic activity, employmeit, to keep personal fuLids out of the bankinlg nents: and incomile, resulting fi-om some 135 sub- system and mIluch of' the economily is ori- Line of Crelit (USS 16 In): for sLib-loans loans (at an average size of US$135.000). etited aroulid inifioiral barter and trade with to small and mediuimI-sizeC private RS enter- Resulting investillenits WoLld create some little finanicinig fiom local banks. A privati- prises to finianicc working capital, repairs, 1.500 new indListrial jobs in the first cycle. zationi program is in place but few cnter- andl equipmclt. Sub-loans are Iimited to in addition to indirect job creation throuighi prises have been sold, though significanit DM 250,000 cach and matLltity is between 3 sector Iinkagcs. Repaid principal and inter- progrcss is expected in 2000. to 5 years, including 6 monitils grace; Cost est would revolve for iurthler loans. The absence of a viable inter-batnk and bond of loan to the Final the beneficiary is DM Procurement market, ncgative deposit mobilizationi and Libor plus 7 points; Goods and services for project impleitcita- finanicial disinter-niediationi coupled with a Bankers 7riniig (USS I ni): comnprchcn- tion fiinaniced by the World Bank are pro- loss of pLiblic conFicfeice in banks and( a sive on-tie-job training, especially in credit cured competitively by thc CLS in the Proj- small range ol batikinig services oftcred evaluatioln an1d risk man1agemnent. for the ect Coordiniationi Unit (sec contacts below). signihicanitly challeniges the operations of project's niember banks. ProcLirciiemit by local RS businesscs LiSilig RS banks. . Entemeprise Stl)pport (USS I rn): business sub-loans financed uLinder the project will be Sinice 1998. new prudeitial regulatiolns havc advisory services to enterprises applying for carried oLit LiSilg local commercial prac- bcci tdeveloped and are beinig applied; an sib-loalis; tices. increased capital adcquacy requiremilenit has Bunting Siupl'rvision (US$ I In): resident Project Achievements becn legislated; and the privatization of advisor provided for tiic new RtS banking The Woorld Bank Credit was approved on state-owned banks is underway. This will supervision agency; ald May 19, 1998. It hias become eftectixe in lead to a contraction in, and then strenigth- -Iiip/lemenititiou Si)l)ort (US$ I rn) tech- August 1998. E xpatriate project advisors ening oft thc banking sector. In thc mean- nical assistance, incremenital operating financed by Swedenl started their assign- tilmc, private sector businiesses will be withi- costs, and CtCiipilicilt of the project coordi- meint in late Jutie 1998 and advisors fi- out a solid bankinig sectO that WoUld nor- naltiol Llilit. nanced by Germiianiy began work in Septem- mally contribUtC to economic growtvh and An amnount of' US$ 4.8 millionl of the WB ber 1998. Marcli 31, 2000, loans totaling development, contributioni will finanice sub-loans to local US$ 7.9 million have beenl approved and Project Objectives RS bLisiiesses; the balanice wvill be used to US$ 7.5 millionl disbursed. 98% of'available The proposed project is of' an emergency sLIpport project implementation. FLinds pro- loan fLuids have been comimiitted. Credit and pilot nature. Its goal is to provide cred- vided by Swedcn also finianice project im- Line funds are used quickly and efTicielitly. itworthy small private enterlprises wvith ac- pleimcitatioti as well as eniterprisc sLIpport. As of March 31, 2000, all World Bank, UK cess to long-terimi investment capital as well Funds of the United Kingdomil, Austria and and AListrian loan funds have been cc,m- as support the ref'orimi of the banking sector. Netherlanids finance stib-loais. USAID mitted. Subloanis are made to businesses By makinig long-terimi credit available at finances bankinig supervision support. throughout the RS. reasonable cost, smafl and mediulim-sized Funds fiom Germalany finanice training for Status Summary private enterprises are expected to restart comimieicial banik partiners. Fuirthier donior In the 21 months period (starting in late businesses that were destroyed in the war, finianicinlg is cotiltinously soughit for stib- September 1998 until the closing date for expand current businiess operations, or begin loans tlider the linie ofcredit comilpoienit. the Bank credit), 115 subloans totaling prodLictioll in new businesses as well as Implementation Arrangements about DM 15.5 million were approved. Of provide new employmenit opportuLnities for To implemicint the project, a new credit line this, 98 percent are being repaid on time and RS citizens. These results will not be fuilly scctionil (CLS) has ben cestablished as of the subprojects are meeting the intended dependent on mitajor reformis in the bankinig JuIIe 1, 1998 in the Plroject Coordinatioll development objectives. The subloans were sector, boreign investmncit, or cash invest- Untit (PCU) in Banija LLtka. The CLS re- extended to private enterprises in 25 tov.n- menit in enteiprises that result from success- views and recomimienids sub-loani applica- ships and villages and have had a significant ful privatizatioti. 'he project has been de- tions supported by participatinig local com- demonstration effect. The subprojects cov- signed based on lessons learnied tinder the meicial RS banks. Four RS banks have been ered most of the economilically important 17 O WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE sectors in Srpska. This included wood proc- forced private owners to commilit a much tiollal grant fundinig is wellcome to reduce essing, floors and furniture: lighl industry highier capital to the eiiterprise (equity was the USD7.2 million finalicing gap. The with textiles, leather, garments and foot- increased fiom two to tcn times. as coI11- Bank supeivision and f'unds managemilent wear, building materials, doors, windows; pared to equity declared in previous year) and adminiistiation services will remain chemicals and detergents: plastic, rubber and will force enterprises to declare (more available for as long as there are ulnutilized and glass products. Food production and realistic) before-tax profits and to start fuLids under the credit line. processing was represented with animal and payinig protit taxes and social security coni- Contacts chicken food, meat and poultry, eggs, milk tributiolns fol- tile new CmployCes. In addi- T'hc World Bank and milk products, mushrooms, herbs. and tion to providing tlhC mucli neecded funding WB I-IQ Washinigtoln DC food processing. AbouLt half of the approved for the private sector, the credit liine pro- Ms. Sonja Brajovic-Bratanovic subprojects have liad an export developimieint vided an opportuniity to take an active role Plhone: (t1202) 473-2985 WB Sat: (5220) component conceminig countries wvhicib in shapinig thc developmilit of the banikilng 32985 originated from the foniier Yugoslavia, and sector in Srpska. The demianid, howvever, External 20 percent were expected to export to the remainis very lhigli. For the small scale pri- PIU Republika Srpska European Union. T'he subprojects havc sig- vatc sector entities, subprojcct apl)tications Mr. Ranlko Labovic nificantly increscd output and proifitability in 1999 avcraged about 40-50 per monithis, PI'U Dircctor l3allja Luka of the final beneficiaries increased by all of whici an average of 10 per monithi was Vojvode Momcila St. I, 13anja Luka (RS) average of 80 percent. Subloans cteated approved. T'he numel r of nlew applications Plione (+387 51) 319-711 Fax: (+387 51) about 500 new permiianlent jobs and were evidently reiiainis iighi. 302-168 among the most important permanienit em- While the IDA credit has beci l'ully dis- E-mail: Iranko@inecco.ict ployment generatinig cntities in their locali- bursed and closed, the second Dutcli Grant ties. In all cases, the subloan appraisal has is currently under implementation. Addi- EMERGENCY PUBLIC WORKS AND EMPLOYMENT PROJECT STATUS CLOSED CREDIT EFFECTIVE 1-Aug-1996 ESTIMATED COST 45.00 CLOSING DATE 30-Jun-2000 Financing Table US$ mil. Implementation Summary (US$ mil.) Italy (grant, for Brcko) 1.60 CONTRACTS WB WB mngd Total funds Japan (grant) 5.00 COMPLETED 9.60 25.00 25.50 Netherlands (grant) 5.11 CONTRACT SIGNED 0.00 0.00 0.00 Norway (grant) 4.50 BEING PROCURED 0.00 1.00 1.00 Switzerland (grant) 1.10 TO BE PROCURED 0.00 0.91 0.91 UNDP (parallel grant) 0.50 FINANCING GAP 0.00 0.00 17.59 World Bank (soft loan) 9.60 TOTAL 9.60 26.91 45.00 TOTAL FINANCING 27.41 GAP/SHORTFALL 17.59 Project Background (b) rehabilitate small scale public inlf-a- high. Currciitly available financing will be Mass unemliploymilenlt was and still remainis a structure and clcall-up war dlamlaged public used to invest in public works and smiall- major concern in post-war BH. In 1995, property': scale infrastructure repair projects that sup- economilic activity was virtually at a stand- (c) reinifoice the dccision-making role of port refLigee return on a dematid-driven still and unileiploymilenit was around 90%. municipality govermilenits in investimienit basis. Job creation was a primary goal of the lPri- planning: antid Implementation Arrangements ority Reconstruction and Rccovery Pro- (d) deliver visible impact at the local level The project operates as a fund to which gram. But, it was clear that widespread job in the near term, municipalities can apply for financing in opportunities and employmilent growthi Project Description accordance with basic project eligibility would take tiime to emerge. Heice, a numli- To support thc above objectives, the project criteria. This design allows the Project to be ber of employnment programs were designed has two compoieints: responsive to local demanld and allocate as part of the reconstructioll program to P'ublic Works Fund The project finances rCsoLitces according to clear, transparenlt create jobs for the unemliployed in the im- labor-initetsive, puiblic works sub-projects, targeting criteria. Thc Federation and the mediate terii. up to a nZIaxUImam11 COSt 0f USS 100,000. RepUIblika Srpska ETFs, established as Tlle Public Works and Employmiretit Ploject SLab-projects are siple itll SCeUPC taking n1o autollomlous, goVernnlicit foundations, have wa.IS one of these cmploymilenlt programs, longer than 6 monithis to coiplete. Eligible overall responsibility for project imple- The Projcct created short-terimi jobs by fi- sLib-projects include clean up of war dam- meintation. The ETFs solicit public works nancinig labor-interisive public works at the age, rLtral toad repairs, water system repair proposals fromil mutlicipalitics according to local level. It also supported the repair of and otlier small-scale illfrasttrcturc reila- agreed eligibility criteria. Applications are small-scale iilnastructure at the comilmuniity bilitation. scrccned and, if eligible, appraised otn-site. level in the most war-damaged areas, with Insithutional Support: SuppOIt for the If approved, the municipality selects the an empilasis on areas where refiugees or operatinig costs and institutiolnal strelngtil- contractor to carry out the works in accor- displaced persons were returiring. eninig of a i'ublic WVor-ks Dlepartment withiii dance whith World Batik Procuretmcnt procc- Project Objectives the Employment and Tlaininig Foun1dations durcs. SupCIVisioll of the works is carried lhe project ias four stated objectives, to: (ETF) ol the Federation and Republika out by both the munlicipality and the ETF (a) create rapid employmicint for those un- Srpska. ficid engineers. Paymeint is made directly to cmployed as a result o the'l vlarl Demnand lor project services is still very thc contractor on a works donlc basis. 18 WORLD BANK RECONSTRUCTICN AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE Procurement ects are liikedLl to rctiigucg rctrlfll. Contacts The ii 1i9ol ty (Q92 ) ol proJCt cti;ldS iS Sleilt TIlle tvpc oI' proj ccts 1i1liacel raniigc 0'onl The/ World Bantk onI stllll-scalc civil works contracts prIo- tile cl:iliig llill war W i ttC to oral I \VI3 C oLIntrV Of(ICC il SarajC\ o ctrid locally LSillg boItI sitpli(icid nttional rcpalir to repjiaillrg watclr s\ystcmis and powver Mr. CGloail lint iic Conipetitive biddling alnd (iircct COnltractilig hiles A\velrag project tcrlill iS 2.1 11tto1titS. 'hon1e: (-+-3Y7 33) 440-293 FIax: J-37 33) plroCCdulrCs. aICCording to thc nature ° l'I o it s IS gi\(l) to un.icipalities where 440- 1Y \\'13 Sat: (5244) 3(t(( Works rcocsll' VBeoilit t upot0 I OfFicc ill London \\#{)rks I~~~~~~~~~~~CiiueCCS/F')PS ZliIC I'CtLUl-iilIg ill SLIIpIJl't 041' E(O i-lc l Oiel Project Achievements projects to taCilitltC reCItIl C.g road repair MS SatlCit F'orstel In the Federation, as ol' Febrl-ary 2 2t)2(01 andti iilities liitkeI to 1t1tISill repair p)rOj- ltlone: (--44 171) 222-7711 I i 14 applic t ions rcccived, 402 projects ccts, l7irtilertllore. havii\ig ill iiiitd thlc ticedI Ext t lall have bcci conttractcd loti- t total va1lue o1 ibr less lalbo)r ilItCllsiv\ and illolre sophlisti- I tltploytiment &: raFi,.itig IFondatiionll, Fel- I)l M 25.3 million. cCrcItiIlig 29')74 nimIt- catcd illitrStrlSOlirCt projecsCCI I'W I' has .i;tiol nlontlls of CtlI PloVtiletlI. Out oi' tilis 376 stallet oti contracting works wVit1o0t1 I'CStl'iC- Putblic Works Depatlitient prlojCCts lave ChCln Complleted . A totIII i'779 tiolns icIlatctiI t a labor coliteiit tanld pl'- Mr FcJsal K irlic Ill1.nitCipl)3lities (97.5% of totazl) IlavC I'C- (IIilCtLd cost p)er 111t1/lt11oii-. I I I I) irctor Saraj evo Cci\ CLti nl11licit)g t(o dIteC. Pri(rity iEIhS ieCCII SinICC tilC \Vorld 1i;II1k (il)?\) (,CreIt I lllle/l`Ix: (4 3 i87 33) 0 -2 125 i\t'ele to t' Ill ost war-alfcteld areaC'IS itlI I)eiH CIOsed(I dJowiI Oil JUn1C 30. 20tj0 0 I mploymient &. 'I'Traininig Foundation. lRe- atreIs where rctoc''cs ale rctllurilng. IS7 Imple ntillalt ilo (Ciipltionte MI iSSiloll was plbllika Sirpska pr'OeeCs were littiked to I.Cei;geCe ret tiirti. carried Oi t hy tIlC World I r ic Ilk. TIe pr oect RS DevcelolpieltI andlll I ployllcitlt Foui da - Il tIle Republika Srpskal as ol'i lcliruiiry activities aIs still Ollgoililg ill ileC FeClerationl t11ll 2S 20() I cult of'402 atpplicatiols received. 1311 tihiniks toi il1lilCi1Ig IproVided Wcider tile NIr. Sreetk Bo1)gloC 145 proj cels hav c ccb coittIlctcrla lot r ai totali new Dutch Iii lrant (IT 023566) - UJSS 1.1 9i ' irector Illanja 3l 11ka VaILoC cf' DVIM 15. million. creating I5.278 imiillioin. l'lPonll/Fax: (--37 51) 2 1 -140( 21 7-947 Illnlni o1 s of' cilltpl Oynihenllt. AIl Sblh- ''llhe Vorld Batik is Cil'(:rrIe tI 'l' ICSigilitig at projects hlic hcil bncompltdcl A total toI' 56 1lloHW Ll) oI)2crtti(II 1xiliC will bcil(i oIl mtillicipalities throughouit RS (X)%' ol' total) lcssolis Icarlnedl chLllilig the implemtentation hac Ccciicdl Iiiiatcitlg to ci;lc. 136 proj- o ilte l'WII'c 19 O WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE EMERGENCY RECOVERY PROJECT STATUS CLOSED CREDIT EFFECTIVE 1-Mar-1996 ESTIMATED COST 160.00 CLOSING DATE 30-Jun-1998 Financing Table US$ miu. Implementation Summary (US$ mil.) Canada (grant) 3.70 CONTRACTS WB WB mnad Total funds European Commission (parallel grant) 8,80 COMPLETED 45.00 109.70 129.70 Germany (bilateral grant, GTZ) 1.50 CONTRACT SIGNED 0.00 0.00 0.00 Iceland (grant) 0.20 BEING PROCURED 0.00 0.00 0.00 Italy (grant) 8.60 TO BE PROCURED 0.00 0.00 0.00 Japan (grant) 9.00 FINANCING GAP 0.00 0.00 30.30 Luxembourg (grant) 0.50 TOTAL 45.00 109.70 160.00 Netherlands (grant) 35.60 Others (bilateral grant) 9.70 Sweden (grant) 1.00 Switzerland (grant) 6.10 World Bank (grant 15 mil + soft loan 30 mil) 45.00 TOTAL FINANCING 129.70 GAP/SHORTFALL 30.30 Project Background and Objectives Unit (PCU) implemilenited the project, coor- ates an inflow of about DEM 2 million per When it was designed at the end ol the hos- dinating the direct implementation carried month which is continuously on-lent. Cur- tilities, this first WB-supported Project out by a variety of bcnefitinig State and Fed- rent repaymlent rates exceed 94 percent, dLue aimed to (i) help establish the governanice eration Ministries and Institutionis, as well to the iientlsive follow-up of the portfolio structure required by BH's constitution, (ii) as the power companies. Commercial banks imposed by the PCU to the commercial help restore BH's severely damaged pro- liaised with the LOCS of the PCU for the baniks. ductive capacity, (iii) rehabilitate key infra- implenmentatioii of the line of credit to Contracts for a total of US$ 11.8 million of strmcture facilities, and (iv) ease the hard- SMEs. critical inports in the power sector were ship faced by vulnerable groups in the irn- Procurement completed. This included repairs to the mediate post-war period. Goods, works and ser-vices fiiianiced by the Salakovac hydro power plant. The first unit This project left behind afidulfivncfioninig World Bank were procured competitively started generation on November 16. 1996, Line of Credit Section (LOCS) maniaginig by the PCU the second in mid-January 1997 and the the revolving portfolio for loans to small- Project Achievements third in March 1998. In the transport sector, and medium-size enterprises and entrusted A large niumber of conitiacts for a total of contracts worth US$ 10.7 million for im- with the recovery of the portfolio of loans USS 111.0 millionl were signled tlinder WB ported constructioni equiptmienit vere coIll- financed by the budget of the Federation. ifLiudinig and throtigl ftitids adminiistered by pleted. Farim inputs componelnts were sup- Project Description the WB, or 99.8 peercetit of the resoLirces plied directly by bilateral donors. The project had four maini componcints: managed by the PCU. Under the Emergency Social Fund, initial - Support to Kcy Governmencit Institutiolns For key governmiiienit institUtiOns, technical funds of DEM 28 nmillion covering every (USS 33.0 m) througlh technical assistance assistance aind eqLiplllcllt hlave been coli- muLIicipality in the Federation were dis- to the Central Bank, the Ministry of Trade plcted, inicltidinig stalt-Lp capital anld atidit- bursed. providing 5 quarterly payments to and Economic Relations, the Federation inig for tihe establishment of thie Cenitral I30.000 poorest households of about DEM Banking Supervision Agency, and the Fed- Banlk, programs to conisolidate the Federa- 37 eachi. A survey of houseihold income and eration Custom and Tax Adminlistr-ations, tioni and Canitonls Privatizationi Agencies, the expenditures carried out througlhout the among others. Federation Bankinig Agency and tihe Tax entir-e Federation founld that the targeting of - Line of Credit (US$ 30 ni): provided and Custom Administrations. Salary sup- the benefits was appropriate. Foster parents, working capital loans for small and medium pleimienits to the State and Fecicrationi hlelped hosting about 2000 children without paren- sized enterprises(SMEs), individual loani the establislhnienit of the adminiistiationi be- tal care, were supported for 12 monthls. size up to DEM 300,000, 2-year matiurity, tweein February 1996 anid lFebl-larV 1997. Emergenicy repairs to orphanages and insti- annual interest rate equal to DEM-LIBOR Repairs to governmeiicnit buildiligs have beeni tttioins for disabled valuied at US$ 1.1 mil- plus 4 %, available through commllercial virtually comlipleted, ilIclidinig tlhe Higlh lion have been completed. Finally, fouir sets banks in the Federation; Court Buildine., Statistical Buildinig, Mini- o' contracts for projects to the disabled, Critical Imports (US5 43.0 In): urgenit try of Foieigin Affairs, Plrcsidenicy. Palace of totaling 5 million DEM were completed, electric power and constructioni equipnment Justice, Parliament, Tax and CuIstOIms financing emergenicy assistance, healilt and imports Admii. Building, and other buildilIgs total- rehabilitationi treatmelnt, imiprovemlenlt of Emergency Social Fund (US$ 54.0 In): ing US$ 12.5 imiillioni. Inicluided is the facili- housing, trainilg, and other programs fbr cash benefits to poor hotiseholds (paid ties at Lukavica which has been repaired tilc disabled. througlh social welfare ofrices), mobility and are USCd as an alternate meetinig place contacts aids and traininlg and cmploymilenit programs for the Coticil of Ministers. The World Bank for the disabled. Under thc Line of Credit, by .Janu.ary 1998, WB I-IQ Washinigtoni DC * Project preparation and pilot project i'or 275 loans were approved, for a total of Mr. Wei Ding other sectoral emergenlcy reconstruction somc DE-M 52.2 millionl. virtuially exhlaulst- Plhone: (+1 202) 458-9105 Fax: (+1 202) projects following ERP (USS 8.2m). ing the initial resources. -T-his credit line was 477-1692 WB Sat: (5220) 89105 Implementation Arrangements then turned over to the Federaitioni Invest- The a State/Federation Project Coordinatioll ment Bank. The revolving poltfolio gener- 20 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE EMERGENCY TRANSPORT RECONSTRUCTION PROJECT STATUS CLOSED CREDIT EFFECTIVE 1-Jun-1996 ESTIMATED COST 163.00 CLOSING DATE 30-Jun-1999 Financing Table US$ mil. Implementation Summary (US$ mil.) Austria (grant) 1.50 CONTRACTS WB WB mnqd Total funds Czech Republic (grant) 1.70 COMPLETED 35.00 38.50 161.10 EBRD (loan) 32.70 CONTRACT SIGNED 0.00 0.00 0.00 European Commission (grant) 33.00 BEING PROCURED 0.00 0.00 0.00 France (grant) 3.60 TO BE PROCURED 0.00 0.00 0.00 Germany (grant) 4.70 FINANCING GAP 0.00 0.00 1.90 Italy (grant) 6.20 TOTAL 35.00 38.50 163.00 Japan 15.40 Local financing (local counterpart) 2.60 Malaysia 1.50 Netherlands 2.40 Saudi Arabia 2.30 UN (grant, SCS) 3.40 United Kingdom (grant) 0.90 United States (grant) 14.20 World Bank (soft loan) 35.00 TOTAL FINANCING 161.10 GAP/SHORTFALL 1.90 Project Background services Bank-admhinistered part of the project (lJS$ The transport sector was severely damaged Urban Transport (US$20.7 in): impo-t of 38,5 rn, including Dutch and Italian Trust due to the hostilities with links leading to or buses, spare parts, and equipment for the Fund contribtitions), has been completed. near fomier conf'rontationi lines being par- tram system; * Road sector: Bank-adininistered funds ticularly hard hit. Roads suffered damage Bitumene (US$2.6 in): import of bituLimen permiitted the rehabilitation of 19 road sec- duc to excess militaty traffic and lack of for road works; tions, 13 'bridges (including the Orasje- mainlteniance. Many bridges were strategic Technical Assistance., Support to P'roject Zupanja bridge across the Sava river), 2 targets and had bcen destroyed, and( tempo- Implemilentation Directorates (US$10.6 mn); tunn1els and 2 electric locomotives. In acidi- rary bridging or deviations created serious Mine Clearing (US$2.5 In); tion, 3 bridges and 8 road sections were bottlenecks with increasinig volumes of Gorazde Road Preparation (US$2.1 ni): completed tinder the EBRD part of the piroj- traffic. Road and rail bridges across the studies and designs. ect. Finally. USAID supported the rehabili- Sava and Una rivers bordering BH and the WB fuinds suppor-ted repairs to roads and tation of about 20 local road sections. Over- Republic of Croatia were cut. Road con- bridges, inciuding minie clearing. EBRD all. aboLit. 1,300 km of the main and regional strLCtion and mainiteniance equipmenlt was financing Supported roads, bridges, and networks and about 40 bridges have been destroyed or stolen. Rail networks in the Sarajevo airport. The EC finaniced equip- rehabilitated or are nearing completion Federation sul'i'ered heavy damage to the ment and ulbati buses, as well as techniical * Railvayvs sector: The Railway Commis- electrilied system. The rail system in the assistance. Japant finaniced road equipment sion has been establishied and passenger Republika Srpska was also claniagedl, but to and supply o' bLIses. Italy finaniced eqtuip- traffic is developing, notably between a lesser extent. Public transport in the cities menlt atid civil works; the Dutcih funds sup- Sarajevo and Caplinija. However, travel %vas also in nieed of repairs and upgrading. ported technical assistance. The US fi- speed remains, at about 50km/hI on average. Project Objectives nanced both civil works and technical as- EU memiber countries financed the basic The project aimedl to reconstruct and repair sistanice. rehabilitation of the Sarajevo-Mostar line, urgent highi priority ilinks and services in the Implementation Arrangements while the EU supported the rehabilitationi of transporl system, particularly roads, bridges, The WB-funded part of the project was the othcr parts of the main network. USAID tunLIlis, the railways, Surajcvo airpoil. and iziplemented by two Project Implermenta- financed thei rehabilitation of the Tuzla- urban transport. tion Directorates (PIDs), one at the level of Brcko Inie, (iicluding the Breko rail Project Description tlhe Ministi-y of Foreign Trade and Eco- bridge), and the reconstruetioti of tive T[lie project had the bollowitig cotttponients: iomlic Relations for works on internationial br-idges on the Una TIhe Sarajevo-Mostar Roads (US$37.3 ni): overlay and reihabili- litcks, and one withini the Federation Mitnis- lines were financed by the Govenmment of tatioti of 180 km of roads; try of Transpor-t and ComuilLnicationis for Gerimany. Bridges, Tunnils (US$26.3 In): reconi- civil works witliin the Federation. A l'io- * Civil avaiOtion sector: 'he rliway of the strietion of about 21 priority bridges, re- grain Managemilent Advisor of the Inteina- Sarajevo Airport was repaved and the coi1- pairs of tuLInnels anid laridslips ott critical tional Managemilenit Group atid his two trol tower rehabilitated. The en-route niavi- road links; Deputies assisted the two PlDs. gatiotnal equipimient is also in place and Equipmenit (US$16.9 ni): road constnic- Procurement works arc ongoing on thc terminal buildiig. tioin and maintenance, and asplhalt and Goodis, works and scrvices fi natieed by the Bids for items suchi as equipment, remrain- quarry equipmenlt; W13 are procured compelitively by the PIlDs inig part of navigation aids are in various Railway Equipment (US$18.3 in): equiip- (see coittacts below). Suppliers slhould ad- stages, some being procured, others ongo- mieit to open lines from Ploce to Sarajevo. dress all expressionis of itteiest to the l'Ds. iitg. Zenica and Vares; Project Achievements * Urlbas iran.sport sector: Arounid 150 Civil Aviation (US$ 25.7 ni): equipittent The project was 100%fl fiitattced (front 57%, buses and mini-buses were delivered, as and wvorks to allow for scheduled aviationi at tile timile of Bloard presenitation). The well as spare parts and workshop equip- 21 O WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS- UPDATE ment. In addition, it is estimated that 100 Contacts Mr. CesarQueiroz mainly second hand buses have been do- The World Bank Phone: (+i 202) 473 8053 Fax: (+1 202) nated by European cities, and several new W13 IiQ Washiigtoni DC 614 0900 WB Sat: (5200) 38053 tranis have beeni delivered to Sarajevo. Mr. Enn Peter VasLIr Phlonie: (+1 202) 458-7695 Fax: (+1 202) 614-0901 WB Sat: (52004) 87695 ENTERPRISE AND BANK PRIVATIZATION ADJUSTMENT CREDIT STATUS ACTIVE CREDIT EFFECTIVE 29-Sep-1999 ESTIMATED COST 65.00 EXT. CLOSING DATE 30-Jun-2001 Financing Table US$ mil. Implementation Summary (US$ mil.) Netherlands (grant, 10.5 FBiH 4.5 RS) 15.00 BUDGET SUPPORT WB WB mnad Total funds World Bank (soft loan, 30 FBiH 20 RS) 50.00 DISBURSED 25.00 40.00 40.00 TOTAL FINANCING 65.00 TO BE DISBURSED 25.00 25.00 25.00 GAP/SHORTFALL 0.00 TOTAL 50.00 65.00 65.00 Project Background justlient Credit (EBPAC) builds on BH's banks and entcrprises has beell enacted and Immediately post-war, the economic focus achieveilmenits to date in establishilig the instittitionis are functionlilng in both Entities. utider the Dayton Accord was on recon- required legal and Iiistitutiolial framework Smliall-scale privatization is well-uniderway stmrLction. Today there is broad consensus for privatization of' enterpr-ises and banks, in both the RS and the Federation, an(d both within BH that a niarket-based economy and suLpports furtiler progress il institution- Entities have begun interniational tendcrs of and a vibrant privatc sector are precondi- building and policy reforms in private sector large and strategic eniterprises with the as- tions to lasting growtth and for preparing the developilment. sistanlce of foreigin experts. Public offerinlg country for participatioti in Europe's eco- Project Description of shares/vouchier privatiztion is in process nomilic and political institutions. There is The EBPAC aims to achieve this objective in the Federation and the RS, respectivcly. also growing awareness that private busi- by focusinig on the following areas: (I) de- Securities Comillissiolis have been estab- ness activity requires an appropriate legal velopIllent of- the instittLItional capacity and lished and havc licensed and are supervising and institutionlal framnework to operate and impleieiicnitationi of the programii for tie pri- Privatization Investment Funds. a vehicle grow. vatization of solvent publicly-owined com- for niass privatization. Il each entity, ma- Historically, the economy consisted of so- mircial banks and liquidationl of ilnsolvelnt jority state-owined banks have begttn the cially 6wned or state-owned enterprises and ones; (2) finiancial sector reformis to inil- privatization process, but with Iimited suc- banks. There was an absence of laws en- prove bank supervision, streingthen baniking cess to date. Banik supervision agencies forcing adequate corporate governance and laws, establishi deposit inisurance systems, have becti fomied and are actively moni- shielding enterprises and banks from politi- atid Iimit public itteirverition in credit mar- toring their respective bankinig sectors. In cal iiterferenice. The accounltanlcy standards kets; and (3) comIipletion of the institutional the Federation, a Deposit Insuranice Agency fell short of those in most industrial coun- and legal framework for enterprise privati- has begull operating with fotir insured bantks t-ies; cntry and exit frotii economic activi- zationt, and preparation for enterprise priva- to date; in the RS, a law on Deposit Insur- ties was heavily regulated; investilment was tization, includinig rapid initiation of small alice was recently passed. First disbuise- directed by non-market considerations and enterprise privatization and preparationi for milets ttnder EIBPAC have beeni made to credits were subsidized by admniistrative privatization of largcr enterprises, holding both IEntities ($15 million to the F-ederation decisions: and state trading played a signifi- companies atid utilitics. In additioll, Ihc and $10 million to the RS), the Dutch co- cant role. All these characteristics were EBPAC provides support to rcforimis of the Finanicing has also been disbursed. inconisistent with the development of a mar- legal and institutional framework necessary Contacts ket economy. for private sector developmenit. The World Batik While BH has made considerable progress BH will on-lenid the credit througil a two- WB Country Office in Sarajevo since the end of the conflict in late 1995 to tranichie disbursement process to the two Ms. Vicki Krecic Peterson establish the legal atid operational frame- Entities (tIle Federation, $30 millioti; RS, Phone: (+387 33) 440-293 Fax: (+387 33) work for the development of a market econ- $20 million) to canry out the program. The 440-108 WB Sat. (5244) 301 1 omny, the cotLntry is still behind some other Netherlands govemnicilt is providitig addi- WB HQ Washingtoni DC former Yugoslav republics that were not tional grant cofitiaicitig of US $15.0 nillioni Mr. Ulrich Hewer paralyzed by war after they gained inde- ($10.5 to the Federatiot: $4.5 million to the Phonic: (+1 202) 473-2279 Fax: (+1 202) pendence and started their economic re- RS), increasing the total amoulit to US$ 522-0073 WB Sat. (5220) 32279 fomis. 65.0 millioIn. Project Objectives Project Achievements The Enterprise and Bank Privatization Ad- Essential legislation for the privatization of 22 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE 0 - ENTERPRISE EXPORT FACILITY PROJECT STATUS ACTIVE CREDIT EFFECTIVE l-Oct-1999 ESTIMATED COST 22.00 CLOSING DATE 31-Dec-2004 Financing Table US$ mil. Implementation Summary (US$ mil.) Local financing (local counterpart) 10.00 CONTRACTS WB WB mngd Total funds World Bank (soft loan) 12.00 COMPLETED 2.00 2.00 2.00 TOTAL FINANCING 22.00 CONTRACT SIGNED 1.70 1.70 1.70 GAP/SHORTFALL 0.00 BEING PROCURED 0.50 0.50 0.50 TO BE PROCURED 7.80 7.80 7.80 FINANCING GAP 0.00 0.00 0.00 TOTAL 12.00 12.00 12.00 Project Background and Objectives enterprises seeking access to workinlg capi- require to establish, operate and manage Ihe 13osinia aird Flcrzegovinia (BIl) was thc larg- tal loans/pcrformiancc bonds unider the schcmes. est exporting republic of the formiler Yugo- slicihie. When an enterpr ise is approved for The project also provides for assistance to slavia, with exports at around USS1.7 hil- a workinig capital advance, IGA would dis- exporters to build eligible enterprises' abil- lion pcr anniumil. In 1997, cxports of goods bLirse up to onc half of thc working capital ity to market thcir products and find buyers were arouLtid the levcl of US$575 million. loan to thc enterprise's bank. At the same as well as to build their knowledge of export AIi iicrease in the level of BiI exports is time, the foreign banik will disbuIrSC thc proccdlurcs so that they can protect thcir urgenitly needed to reduce the economy's balance of the loan to the enteiprise's banLk. interests. To carry out this role, consultants dependence on aid. IGA will indeminilify the enterprise's bank Would work with IGA for about one year to BH exporters are faced with a numLiber of against failure of the enterprise to repay the identify cnterprises that can start exporting barriers to re-starting or increasing thcil tranicle of WB funds. The enterprise's bank if givenI access to working capital and not exports. Amonlg themil is a lack of liquidity would however, be required to pay to the initially requiring capital investment, but in the BH fiiianicial system as well as low foreigl bank its portioni of the working that have lost their foreign markets during credibility of BI- banks ahroad. The two captal loani if the enterprise fails to peroirimi the war and do not have tlhe skills required riiaini coniponciits of the BI-I Enterprise the export contract and ther-e are no export to regain these riiarkets or identify new cli- Export Facility (BEEF), the Working Capi- cashlilows available to extinguish the debt. erits and/or need to improve their in-house tal Facility arid the Plerformance Bond Fa- Performance Bon d Facility knowledge of cxport procedures. If sLIcess- cility address these two issues, to support TIlhe iacility will provide security to coill- frLl, the tcchliical assistance wouLld reSult ill SUStainlable ecorromilic growth by facilitating riiercial inslirarice comilpaniCs guaraniteeinig expandinlg their markets arid securiig addi- atid cxpandinig viable expori activity, lead- banks that issue plerlorniarice bonds fi sup- tiorial export orders. The assistanice would iig to an increase in the level of exports. port of cxports of goods arid sersvices froni be provided only to enterprises that are ap- Project Description 131-1. Thie iacility will involve placeriient of proved for suIpport under the Working BEEF will give BI-I enterprises the opporItu- loan/donor futiids in a banik aIcCOurIt on trust Capital Facility, arid a fee would charged to riity to incase their level of export activity for payment to suicli coriiriicrcial insuranice the blcefritirlg enterprise by providirng svorkirig capital liiiked to spc- colliparies ifa call oii the perfbirriance bonid Procurement cific export contiacts, andi by providirng occLirs aridc is duic to the B3-i eniterprise beilig Procureniierit of consultants financed under access to perforriiarice bonds for large ex- in breachi of te teriis of the cxport coitiract. the technical assistance coliiporierit will be port corntracts. This will be achieved Ilr sLichi circturiistanices, the BRI enterprise lonie accordiig to World Bank guLidelines as throug1h (i) a Workinig Capital Facility pro- riuLIst reiriibLilse thle facility. If tie call is ani stated in the "Guidelines for Selection and vrulirig World Bank fuLids in partnershlip uinfair call frorii the bulyer, the coniriiercial Eriiployriierit of Consultanits by World Batik with foreigin binrik f-uLids (or local bank risUiraneC company will riot have access to Borrowevs" (Janitrary 1997, as revised Sep- funids) to BI-I baniks to on-lend to exporters, the facility's ftiulds. teniber 1997 arid Janiary 1999). Procure- for LIse as workirig capital to allow the erl- Techinical Assistancc riierit of goods (raw riiaterials arid other terprises to fiilfill specitic export orders: (ii) Consultant scrvices are p)rovide(l unilder the inputs, but riot capital goods) Finaliced a Perforriiaince Bond Facility allowing BI-I pruject to work witi IGA for about ole year workirig capital loans under the workiig cnterprises to participate inl teiders whichi train stafl to perflo-rii duLe diligenice and capital facility will be done accordirig to require a bid/perforiliarice bond frorii a first- credit assessiliciit arid issist theni in proc- cornriiercial practices. class bank: arid (iii) introducinig export essirig applicationls tor working capital Project Achievements credit insLrtanice in BI-I to bcnefit BII cx- loans Lirider the facility. In addition, shiort- BEEF wvas approved by the World Bank porters. terlil assistance will be provided tO Boardl in June 1999 arid is expected to be Working Capital Facility (USS i0 niln.) strengtheln IGA's operations arid rnaiagc- effectivc by October 1999. Fulfillmenit of An incentive would be provided to forcigil nicit, ilIc Liding accoLnting services to in- the effectiveness coriditioris is well under- banks to participate by allowing the foreigil stall softwarc, write al olieratioris rliarlLial way. IGA has hircd a credit assessnierit banks to take security over the export cash- arid train IGA stafT to mainntairn its owni consultanit who will work with IGA startinig tlows produced as a result of the working books accordinig to accptable standards, in Septeriiber for about 9-12 riioriths. IGA capital firiarice arid havinig prioritv ovcr W13 eriviroliiiierit services, and legal services. has Ilied a firrin to install a firianicial nilari- foods when recoverinig against the assets of This coriipoIennt would liriance for a leriod ageriierit system and provide training to BI-I eriteriprises. of IS riioritlis following Credit effective- IGA's staff in usilg this systeni. The Irivestriielnt Gunararitee Agenicy (!GA) of' nCss, a sniall ari.ounit of office equiplucrilt Contact Sarajevo would iriipleriient the project on arid vchiclcs for IGA. arid a dcclininig pro- Thlie World Banik belialt' of thc Bi-I Goverrirerit. IGA's role portioni of its increnmental operating ex- WB I-IQ Washinigton DC would be to assess the capacity of the BR-l penises, incLiding salaries, that IGA would Mr. Lloyd Edgecoriibe 23 O WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE Phone: (+1 202) 458-5982 WB Sat: (5220) Fra Andela Zvizdovica St.l, Sarajevo Mr. Mirko Dejanovic 85982 PhIone: (+387 33) 262-720 Fax: (+387 33) Deputy Director External 262-730 Banja Luka Investment Guarantee Agency, Federation Mr. Vlatko Tvrtkovic Phone: (+387 51) 215-844 Ms. Lamija Kozaric IGA Deputy Director Sarajevo IGA Director Sarajevo Branchi Office RS ESSENTIAL HOSPITAL SERVICES PROJECT STATUS ACTIVE CREDIT EFFECTIVE 23-May-1997 ESTIMATED COST 33.50 EXT. CLOSING DATE 30-Jun-2001 Financing Table US$ mil. Implementation Summary (US$ mil.) Governments of BH (local counterpart) 1.20 CONTRACTS WB WB mnod Total funds Greece (grant) 1.00 COMPLETED 13.10 18.40 23.80 Italy (grant, 5.2 + 0.6 for Trebinje Hospital) 5.80 CONTRACT SIGNED 0.40 1.00 1.00 Netherlands (grant, co-financing ) 0.50 BEING PROCURED 1.50 1.90 1.90 Netherlands (grant) 1.60 TO BE PROCURED 0.00 0.00 0.00 UNDP (parallel grant) 0.10 FINANCING GAP 0.00 0.00 6.80 United Kingdom (grant) 1.50 TOTAL 15.00 21.30 33.50 World Bank (soft loan) 15.00 TOTAL FINANCING 26.70 GAP/SHORTFALL 6.80 Project Background hospitals and IRS IPH will be providcd with ered and majority of equipmeint installed. With the end of the war, the health sector in their most urgently nceded diagnostic and H-nemodialysis consumnables in the Federa- Bosnia and Herzegovina faces a triple chal- therapeutic equipment for secondary-level tion (US$ 1.0 m) and in RS (US$ 1.0 m) lenge. It mILst contillue to function onl an care. have been distributed to the hospitals. In the emergency basis for some time; undertake * The restorationi of an adequate and stable F ederation additional tender for medical its recovery; and transition to a moder national finanicing system for Flealll filialice equipment is being evaluated. This tender is efficient system. reform (Federation and RS, USS2.9m, re- being financed by recently approved Dutch The MOH of each entity has prepared an spectively). The entiec healtli sector in gen- grant, Italian grant and IDA funds. Anl ad- Essential lHospital Services Program as a eral, and the hospitals il particular. ditional Italian grant has been provided for part of the effoit to: (i) reduce the burden of X Project imlplementation support (Federa- Trebinje hospital. Civil works have been illnesses and deaths, and (ii) provide an tioni and RS USS 0.7m each): limiited civil completed and medical equipment is being effective means for rationalizing the func- works, office equipment, technical assis- delivered. tions, size, and financinig of the hospital tancc, training, anid incremilenital recuIrrent Civil works on the Tuzla clinical center, the sLub-sector. The Programs were prepared in expenditures for the two Entities. pediatric clinic and central sterilization ulnit 1996 by Working Groups of BH health World Bank finianicing supports all compo- in Sarajevo clinical center, Mostar clinical professionals, with the understanding that nents; the Italian Govt. finianices the reha- center, Bihac, Jajce, Gorazde and Orasje IDA and other donors will support coherent bilitation of hospitals, ilmedical equipmlienit cantonal hospitals have becn completed. modules thereofas "projects". atid healtli finance reform componenls; U.K Civil works, finanlced by Dutch grantt. are Project Objectives supports technical assistance for the health on-going in cantonal hospitals Travnik, The overall objective of the Project is to finance relorimi; the B&H Govt. finances Zenica and Livno ancI are scheduled to be support the development of a moderni, cost- equipmiienit and project maniagemienit il eachi completed by the cnd of May 2001. effective and fiscally sustainable hospital Entity, Greece finances rehabilitation of Civil works have been completed for Tre- sub-sector. More specifically, the Project hospitals, Hollatid provides X-ray equip- biije, Doboj, Rogatica and Banja Luka will: a) strengthen essential hiospital serv- ment, atid UNDP supports civil works de- health insuraice offices. ices at the cantonal level, focusing on the sign. Natiotial l-lealth Accounts (NHA) fbr 1999 most needy segmenits of the population; and Implementation Arrangements have been completed with assistance from b) establish and support the initial steps tn The Ministry of I-lealthl of eachi Elitity is DFID. StLtdy Public Knowledge and hiealth fitiancinig reforms. responsible flo implemicintation,. donie Awareniess of I-lealth Sector has been coIml- Project Description through the respective Project Impleillenta- pleted. Basic benetits of health services The project has the following componenits: tion Units (PlUs) established tor the broader package has been completed and nationals * Federation - Physical rehabilitation and Essential Hospital Services Program itl each trainied. T'ender for software tools and reconlstructioni of essential hospital facilities Etitity. It f:acilitates eficctive inpleienta- hardwvare is being re-bid in RS, docutments (USS10.0 ni): the needed civil works to tion throtgil established mechllanisilms. will be launched shortly. In the Federation restore to adequate operational conditions a Procurement consultanit companiy is working on desigti of nietwork of eight cantonal hospitals, and Goods and scivices finaniced by the WB ar-e software, while hardware tender offers are secondary-level facilities in three clinical procured competitively by the Project Inm- beiro evaluated. centers. piilemitationi Units. Sutppliers shiould ad- Stipport of the Government of Icelanid for RS - Rehabilitation of diagnostic facilities dress all expressiotis of interest to those upgradinig ofclinical skills in Federation hias at the InstitItte of Public [icalth, Banja Luka Units. becti canceled. Altcrnative partial Support (US50.7 miiilion) Project Achievements from the Medical University of Charleston * Medical equipmenit and sitpplies (Federa- Medical equipmnent it thie Federation (US$ T° P tion US57.4 m; RS US$6.2 mi): the selected 3.4 m) and RS (US$ 3.0 m) has beert deliv- eratiort. Training has been coipleted for 24 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE three groups of physiciais, nurLses, and lPllhone: (+387 33) 440-293 Fax: (+387 33) El-IS Project Director Sarajevo midwifes fromii three clinical centers Th'le 440-108 WB Sat: (5244) 3041 Phonie: (+387 33) 203-404, 203-349 Fax: workshop for dissemniationi Aof the gained WB I-IQ Washinigtoni DC (+387 33) 203-267 knowledge to cantonial hospitals staff is Ms. Betty I-lairan PCU Republika Srpska scheduled for April 2001. Fundinig for this lllhone: (+1 202) 473-4525 Fax: (+1 202) Dr. Gordan Jelic componienit in RS has not been provided. 477-0711 WB Sat: (5220) 34525 PCU Director Banja Luka Somiie sporadic training has been provided Mr. Nediil Jaganijac Phonie: (+387 5) 319-161, 319 162 Fax: by the Sloveniian Govcrlilmenlt. Phonic: (+1 202) 458-5968 Fax: (+l 202) (+387 51) 319-168 Contacts 477-0711 W13 Sat: (5220) 85968 The World Bank External WB Country Office in Sarajevo PMU Federationi Ms. Mirjana Karahasanovic Dr. Antiui Lovrincevic FORESTRY PROJECT STATUS ACTIVE CREDIT EFFECTIVE 20-Jul-1997 ESTIMATED COST 20.40 CLOSING DATE 31-Dec-2001 Financing Table US$ mil. Implementation Summary (US$ mil.) European Commission (grant) 8.70 CONTRACTS WB WB mngd Total funds Italy (grant) 2.20 COMPLETED 3.50 5.00 13.50 Norway (grant) 2.50 CONTRACT SIGNED 2.00 2.80 3.10 World Bank (soft loan) 7.00 BEING PROCURED 1.00 2.30 2.20 TOTAL FINANCING 20.40 TO BE PROCURED 0.50 1.60 1.60 GAP/SHORTFALL 0.00 FINANCING GAP 0.00 0.00 0.00 TOTAL 7.00 11.70 20.40 Project Background in thle iFederation of Bosnia arid l-lerzego- Of the total project cost of US$ 20.4 mil- Forest resources in Bosnia are atnotig the vina, and up to 25 percent in Republika lion, some US$ 13.4 million will benefit the higlhest il EuLope, coverillg abollt 2.6 mtil- Srpska (RS). Federation of Bosnia and Herzegovinia, the lion hectares, or about 50 percent of the Project Objectives balance of US$ 7.0 million would benefit total land area. The State owIns 81 percent The project aims to resulile sustainable Republika Srpska. of forest land, private holdings make LIp for managemilenit anId protectiont of Bosnian Implementation Arrangements the balatnce. Thle presenit distributioln of forest resources, it order to (i) ensure the Iwo project units (IPlUs) withiti the Minis- forest resources, in termis of areas of stand- sustainability of the post-wvar rapid recovcry trics of Agriculture of the Federation and mig stock, are about 55 percent for thc F ed- of the wood harvcstinig and processinig sec- RS will have overall responsibility for proj- eration of Bosnia and Herzegovina and 45 tors; (ii) control the potential environmental ect iilpleillentationl and monitoring. hley percent tbr Republika Srpska. impact of this recovery; and (iii) definie a would carry Out the institutional and fiscali Bcfoic the war, forestry and wood-based long-terimi strategy for forest developmenit marketinig studies as well as thc forest in- industries were a central part of the Bosniani within the market econolmiy. spection activities supported by the prqiect. cconomy, accoultinIg for more than 10 per- Project Description In the Federation, the sector Ministry. cent of Gross Social Product. In 1990 the The project has tile followinlg fouir miain through BI-H and IlB SoLImc will coordinate forest arid the forest industry sector ciii- corillpoielits: reforestation activities and the feasibility ployed some 36,000 persons. The forest . Suppor to i oresr Aianagenren (US$ 3.3 stirdy to create the Igmari Bjelasriica Na- industrics were well developed and con- tl): sLrppor-t to policy chaniges (studies on tiorial Park. stiuctiori materials arid high-quality furrii- institutionial and fiscal/ iimarketinig aspects of BH Suoime and Srpska Sume will be respon- Itire were important export products, getler- the forestry sector); forest nianagencilt sible for coordinating forest managemiienit ating art export value of sonmc US$ 250 plalnllilng (ilrclCLdinig re-establishlimlenit of planning and forest protection activities nmillion. forest inventory and imanagemeint planiiing funded under the project. Due to the war, the extraction of wood front uoiits); anid stipport to tlie forest inspectioni Private and public State Forest Enterprises Bosnia's forests and the prodtrctiolt of the service; (SF-Es) selected to participate in the projcct wood industry were mntcli reduced. After . Protcetion alird RelhabilituItio,l of Fo,ests in both Entities would be responsible for adjusting for illegal CLUttillg of logs and fuel (US$ 3.6 ni): a prograrit to control inscct implemenetinig project activities aime(d at wood, the recorded level of wood harvest- attacks oni Bosnian forests; a reforestation rehabilitating the SFEs' operational capac- ing in 1997 was about 60 percent ol the program of 500 ia in areas heavily damliaged ity. aninual allowable cut (AAC), adjuisted for duirinlg anid after the war; anid a program for The selection of eligible SFEs under the ililned areas. Some forest arcas near urban protected zareas arid( national parks develop- project is based ott the following criteria (i) centers have seen uncontrolled, and suffer melt; availability of an established, valid arid from severe overharvesting arid deforesta- - Relnabilitatio,t of Stafe Forest E,nterprises ecologically sound forest managetilerlt planl; tiOti. Operational Capaciut (USS 12.7 in): provi- (ii) an AAC in high forcsts, after adjustmient The var also severely atfected forest titan- sioni of road repair arid mainitenianice equip- for mined forest areas, of at least 20,000 agemenit, in varying ways. Equiptient was irierit and otheir forestry equlipmilent (velti- m3; (iii) sufficient wood processing capac- destroyed or lost and operators left. A sig- cles, transport, nuirsery and telecomninltlica- ity available Nvitlhin 80 km of the SFF: artd rnificant part of the national forests are now tiort equipritent); arid (iv) the degree of war danmage to the equip- ritaccessible because of riiiefields: front art - Project Manageriierit and ALiditirig (US$ meint of the SFE. estimated 15 to 20 perceit of the forest area 0.8m). 25 O WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE Procurement contract for forest inventory study was lPhonie: (+387 33) 440-293 Fax: (+387 33) Goods and services financed by the World sigiled with University of Alaska in No- 440 108 WB Sat: (5244) 3024 Bank, Norway and Italy are procured comn- vcimiber, 1999 and a filial reporl was pre- WB HQ Washingtonl DC petitively by the P'roject Implenmentationl seited December, 2000. An inventory for Mr. Gerhard Dietcrle Unit (see contacts below). Suppliers should folest species has beeni iniitiated to comple- Phone: (+1 202) 458-7334 Fax: (+I 202) address all expressions of interest to these menit the UOA imiapping and should bc 614-0697 WB Sat: (5220) 87334 Units completed in 2001. Ecological survey has Extemnal Project Achievements started in 131H (Igman, Bjelasnica) and RS PIU Ministl-y of Agricultire Water Man- The World Bank Credit became effective on (Jjan;. Loin) and linal report is expected by agement and Forestry, Federation July 20, 1998. Procurement of all WB- May enid. Anl implementationl plan for l'orest Mr. Alojz Dundjer finaniced equipment is underway and distri- sector refomi has bcen initiated. Procure- PIU Director Sarajcvo bution of equipmenlt to final beneficiaries mint of iardware aid software packages for Phone: (+387 33) 213-098 Fax: (+387 33) will be completed by April, 2001. 450ha of GIS is under-way. A detailed proposal for 213-099 replacement forest was planted in FBH in areas whichi will benelit fronm the project l'IU Ministry of Agriculture Forestry and 1999 and reforestation of further 100lha was savings is under review and proposed ac- Water Resources, Republika Srpska completed October, 2000. With the launclh- tivities are expected to be completed by Mr. Zeljko Stojanovic ing of the two studies on forest policy and Deceerber, 2001. PIU Director Banja Luka management planning, the real work on Contacts Phone: (+387 51) 211-418 Fax: (+387 51) refonm of the forestry sector has started. The World Bank 211-418 Forest Management and Planininig Study is WB Country Office in Sarajevo expected to be completed by April, 2001. A Ms. Vesina Franicic 26 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE E LOCAL DEVELOPMENT PILOT PROJECT STATUS ACTIVE CREDIT EFFECTIVE 1-Sep-1999 ESTIMATED COST 18.50 CLOSING DATE 31-May-2003 Financing Table US$ mil. Implementation Summary (US$ mil.) Governments of BH (local counterpart) 1.50 CONTRACTS WB WB mngd Total funds Italy (grant) 0.89 COMPLETED 1.00 1.10 1.10 Netherlands (grant) 0.40 CONTRACT SIGNED 1.00 2.00 2.00 World Bank (soft loan) 15.00 BEING PROCURED 0.00 0.00 0.00 TOTAL FINANCING 17.79 TO BE PROCURED 13.00 13.19 13.19 GAP/SHORTFALL 0.72 FINANCING GAP 0.00 0.00 0.71 TOTAL 15.00 16.29 17.00 Project Background vestIellt. Package I ) and the lank capacity-huilding Local goverllllSmnts (canloins alid IlIlliCi- Project Description componlenlt (CS Package 2) has bcen coIm- palities) are iniportant cconolicic playcrs in Thie prqiect has threce main components: pletel. BMB Arcadis & Cowater has hecn Bli, loct5 OI 'reconlSrIuclioti activity aIlid . Loccld Governtmeni Colpeocill Bil/(tiilg. cOiitraCtCd for CS I anid LUSO LFS for reftigee rettirin, wilh responsibility for provi- Technical assistance and Irain-inig will he CS2.. siOIl of, basic serviccs anL( ilifraslrlcLCrUc at provideLd to ll)Lllicipal goVcrnicrlits to ScrlenLitOg ,f A'luicipi/ities. 31 ITLillIiCipali- lihe Inlillicipal level. As stICIh. tIhey lace Ilitige strengthen tlihei finalici al nialiagenicit)t skills ties (2( in the Federatioi 13BH alid I1 in Re- demands as ihlcv try to mcct the nccds ol' af(l public palrtilii paliion i lhC calpilaI budg- pu blika Srpska ) have bchel sciccted as pilot existing anlll rCtLIriiil g co0Ililllities. Yct, cliing plrocess. In Ilhe fist year, tech nical 11L)li cipaiti es to parlicipate in this phase of' Bl-I local govermieiicilts and their utility assistance will bc targeted toxvards 15-30 Ilhe projcct. Tcchinical assistance is CL-ireltly compatlics are illStitLttiOllIlily a tillianiciallv pilo0 muln icipalilies that hav c demonstIn let) being provided to Ihlcsc mu1nicicpalitics to weak. their potential1 cred itworthiniess. hilId their financlie inianagernen t capacilics lPost-coililict reconistrtiCtioll has focilsed on 2. BonAiikg Sector Caopckitl B,,i/(l,,g. Tecil- atid identil'y appropriate in vestiiclts. Al tilc emrerClicy inifrastructurC reilabilitationi, nical assistance atid train)ilg will be pro- sailc tlimc. dLuc diligcnce assessIlicili of' will lilttic attcitioli to bUiIdih n local i istitti- vided to 3-5 locill private (oir to-be- co0iliici-cial han ks tbIat expressed in I rcst to tional capacity atid tilc finalncial plrivatizeLl) conmmercial banks (I1)(3s) to par-ticipate in the iroject is about to be cOtii- sustainIability of service delivery. Further, iniprove tlhCir olIllUicipal crecit atialysis anld pleted. 'he World Rank and the 13oard of 3osnmia's reconstriLctioll ef'fiot has, to date, project appraisal skills. T1riustees of the Federation LDF have al- bCCIe dl'ivenI by donior aid flows, 77%' of 3. Local Devel/opmleo;t TIl/iud (LDF1. A rc- relady agreed to approve participation ol the xviicli have beein oii granit terilis. SLcil gratit volving loan foiild will be establisited fiomii "Rai faissen l3ank" - Sarajexvo. filiancilig is likcly to ditiiittisih over thei next which i'Ltinds will be oti-letit to 1FCI3s flbr on- First OlUiLicipal borrowitig tacilitated uLlider fc\\ years. Yet, itifrastrLCtLure itivestmeit lending to 1111ilicipdlities and/or their utili- this project is expected dultring the 3rd necds (botl war daimage rehabilitation atid tis. Eligible invstielents will be mLlniCipal liarter otf2001. nev infr;asirLIlCtirc) total billiotis of dollars. iI)firstiLIcttLre and serxices. sLICh as Waler Contacts H-eticc. the toiec 10 SUpport local goVCern- supply. sewerage, district hcatitig and tratis- The World [3ank niells improve their revciiLie-gcicraltionl poIrlati(il. The 1lax imlUrn loan size ii ll lie WB Coulitry Office in Sarijevo capacity antd ability to attract long-teiim KM 2 iiiillion witli a ter-ll of up to 10 yeflts. Mr. Gorati Tiijic ivesmleintil. Also. apparent is tile iced to Implementation Arrangements llOlnCe: (+387 33) 440-293 Fax: (+387 33) increase cilizen) parlicipationi in local deci- Thle IDA Credit fias beeit letit to B[3. wilicil 440-108 WB Sat: (5244) 3061 si(ui making so as to increase the rCespol- lias oti-letit tliC pro)ceds oif the cr-edit to the NV13 Office in Lotidoti sivxness and accountability of TIlUnicipal Federationi atid RS. lPoject ianageniient atid Ms. Sarah Forster goxemmreits to citizeti dentand. Finally. the oti-lcnding if the ibtiLids tre the resporisibil- Ilhonic: (+44 171) 222-7711 priject will iinitiate crcatioti of ati appropir- ity of two L.ocal Developmrent Funds Exteirnal ate legal atid regLilatory rariiework Ibr muil- (1.Dls) that htave becil establislicd as Local Developmentt FLItid. Federatito ticipal borrowing. autonomnous, legal iistitutl(1is in eachi En- Ms. 1jiijaitia Si tll1oviC Project Objectives tily. In additioil to 1a small core st afi of 2-3 ExeCUtive Dircctor Sarajevo hle Local Dcvelopirient l roject hals two peoplc. cachi LDF has a Board o01Directors C/o Fecderatioti hivestieient 13atk mIaiti objectives: to oversce 1DF miianagemeint and set policy. I lamdije Ccnicllica 2 (i) to stretigtlicti Ile istitiLutiolial and finatn- Iiteriatiotial consultatits vill be coiititacted Phone/Fax: (+387 33) 230-127/8/9/ cial capacity of mutiicipal goverrniiertts so by the ILDFs to proxvide techliical assistalice LDF RepUtblika Srpska as to cnabie thelii to provicic improved in- atId trtlillilig to tilC mlllicipalitiCs azid the Mr. Srecko Bogunovic frastructurc atid services in respotlse to citi- PCBs. Exccutive Director Barija Luka zeti detiiatid and to help stimitlate local cco- Project Achievements RS Developmelt atid ltiiploytiietit Founda- tiornic gl'owth; atid Project ilipicipeiitatiort is proeedinig ac- liOtl (ii) to iniitiatc oti a pilot basis, the develop- corditig toi lili. The rnait activitics, to daite I'lione: (+381 51) 218-140 Fax: (+381 SI) tiieii. of a muLiicipal credit tiainket to prt- arecas follows: 2)17-947 vide a Iotig-terili source of tniaticitig for Procilto lewt of consxttatsll bothi for the creditworthy muniicipalitics for capital in- muniicipal capacity-bUildIding COiiliFiiCelt (CS 27 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE LOCAL INITIATIVES PROJECT STATUS CLOSED CREDIT EFFECTIVE 1-Mar-1997 ESTIMATED COST 18.00 CLOSING DATE 30-Jun-2000 Financing Table US$ mil. Implementation Summary (US$ mil.) Austria (grant) 0.60 CONTRACTS WB WB mnqd Total funds Italy (grant) 3.22 COMPLETED 6.69 18.72 22.25 Japan (grant) 2.00 CONTRACT SIGNED 0.00 0.00 0.00 Netherlands (grant) 5.19 BEING PROCURED 0.00 0.00 0.00 Switzerland (grant) 1.12 TO BE PROCURED 0.00 0.10 0.10 UNHCR (parallel grant) . 3.53 FINANCING GAP 0.00 0.00 0.00 World Bank (soft loan) 6.69 TOTAL 6.69 18.82 22.35 TOTAL FINANCING . 22.35 GAP/SHORTFALL 0.00 Project Background for the operational costs olf Local Initiatives the 8 best-performing instilutiolIS (5 in Fed- The developmilent of self-employmlient and Departmcints in the Employmilenlt and cration and 3 in RS) that have demonstrated micro and small businesses is likely to be an Training IFoundatiolis (ETFs) in boti tihe the capacity to achieve scale and long-term importanit mcans of creating jobs and stip- Fcderationl and Republika Srpska, whichi are sustaitiability. porting overall economic growtlh and the responsible for ovcrall project maniagemilent, Progress was made on the legal and regula- transitioni to a market economy in Bosnia specifically chainelinig financial and techni- tory franiework for microfiniance. The Mi- and l-lerzegovinia. cal resources to the micr-ocredit service crocredit Organization law was fully Tlle Local lInitiatives P roject is a micro- providers and molitorilg their perforimiaice. adopted in both cntities. A work plan was credit project that was designed as one in- Implementation Arrangements also agreed to address legislative chianges tervention to support business development, The Local Initiatives Departments (LIDs) for the other three legal forms -- finance particularly amonig low-income entrepre- have overall responsibility for project im- company. savings and credit associations neurs. It provides the working capital re- plimenitatioti. They conitract MCOs to miakc and microfinance bank -- but over a more quired to help people start-up or expand loans tip to 10,000 DM each to target clicnts extended time trale in linie with the Blank- small businesses and income-gcneratinlg and provide financial and teclihnical support ing Agenicy's ownI workplan and the dcmand activities. It also provides a means to en- to these organizationis. Conitracts betwecil for such legislative relfom fiom the micro- courage people to shift fromii dependence on the LID and the MC'Os are performiance- finanice sector. humnanitarian assistance to depcndinig on based. ContiltLued access to I-IL) fiiianicinig is The World 13ank is currently carryinig out their own initiative and entreprieneurial contitigenit upon the achievcilemit ol satis- preparation activities for a tollow-on operai- skills to earn a living. factory institutional and finanicial perfolill- tion that will bLuild on experiences and suc- Project Objectives ance targets. It is proposed that best- cesses of the first project. i) to provide access to credit to the low in- performing MCOs. that have demonstrated Contacts comile entreprenieurs wvho have no access to their potential to becomlic ulily financially The World Bank credit fromii the comiliercial banikinig sector, sustainable and r eilhc the target clictits of WB CouLitry Ofice in Sarajevo ii) to ifacilitate the developmilet of inde- the LIP, will be capitalized at ihe cnd of the Mr. Gorani Tinjic pendenit, financially viable micr-ohinanlcc project as indepenidenit microlfinianice institu- Phone: (--387 33) 440-293 Fax: (+387 33) institutions that will continuc to provide tions. The two Entity lIIDs work in close 440-108 WB Sat: (5244) 3061 credit to low income entrepreneurs over the cooperation and encourage intcr-E.ntity W13 Office in London long term; and collaboratioti amonig their pailtner institu- Ms. Sarali Forster iii) to create an appropriate legal fiamilework tilis. Phoie: (+44 171) 222-771 1 to support the developmeint oi microfinianice Project Achievements External services for low income entreprenieurs. As of Febrtary 28. 2001, the project has ETlF Federation Project Description achieved the following results: Mr. Mirzet Ribic -l-c project hlas three cotnponicits: 73. 672 Loanis disbuised to microcintrcpre- Project Director Sarajcvo Microcredit Programs: Provision of finanlc- neuis throughout thc colintry hielpilig to Local Initiatives Depatimenit Sarajcvo ing to best perloriniig Microcredit Organii- create or Sustain about 99.()00 jobs, with Phonie/Fax: (+387 33) 200-63(1 zations (MCOs - noni-govenimental, not for mon1th ly disbursemiienits now exceeding ETF Republika Srpska profit, credit only entities). 3,000 loals. Mr. 13raco Erceg InIstitutional Capacity Building: Provision of lmpressi ely high levels of repayment of Project Dircctor Sarajevo hanids-oni techilical assistance and training arouiild 98.5% with portfolio at risk of RS Employment and Traililig Foulidationi to build the institutional capacity of the 0.85% (30 days past due). Phoie: (+387 SI) 2 17-946 Fax: (-t-387 511 lilicrocredit service providers' as finani- 50% of borrowers ar-e womlen. 217-947 cially viable microfiinance institutiolis tilat 26% of borrowers are displaced persons or have the capacity to reacih large numiibers of returninig rcfugees. low-incomile entrepreneurs. Average loati size is 3,000 I)M. Project Managemlicnt: Financing is provided Since late 1998, financing WaS iocLised on 28 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE MOSTAR WATER SUPPLY AND SANITATION PROJECT STATUS ACTIVE CREDIT EFFECTIVE 12-Dec-2000 ESTIMATED COST 12.00 CLOSING DATE 30-3un-2005 Financing Table US$ miU. Implementation Summary (US$ mul.) Water utility ( counterpart financing) 1.38 CONTRACTS~. WB WB mnod Total funds World Bank (soft loan) 12.00 COMPLETED 0.10 0.10 0.15 TOTAL FINANCING 13.38 CONTRACT SIGNED 0.50 0.50 0.50 GAP/SHORTFALL 0.00 BEING PROCURED 1.50 1.50 1.55 TO BE PROCURED 9.90 9.90 11.18 FINANCING GAP 0.00 0.00 0.00 TOTAL 12.00 12.00 13.38 Project Background enitity Iliati Will enijoy greater auitonomly mo (ii) addrecssinig thec miost urgent repair and Prior 10 thec war, a sitigle Mostar- Waler, conlduCt its (tperations; (b) pr-ovide water for r-ehabilitationl imeeds of Mostar's sewer sys- SUpp)ly anld Sewerage uitility served the selected poor and non-served r-efuLgcc arecas tceni, anid enitir-e city of Mostar. As a result of thie war, oni tIe periphery of thle city: (c) assist tlie liii) strengthening of' MSWUJ's finlancial. the ultility was split inito tNvo par-ts: the East- mierged uitility to become financially viable commericicial anid adminiiistrativec operations emi U-tilitv servniti. the B3osniiac part of thle by imiprovinig billinlg and collectionis thriouglh the introduction anid/or uipgrade of citv anid the Westerni Utility serving thie tlhrOughl the introdUCtion Of beCtter conmner- computerized systems anid pr-ocedLires lor (roat part. I'lie division of' the utility and cial pr-actices andc by harmiionizinig tar iffs conniectioni management. COnTsum1ption VW- w,ar damiage reSulted inl substantial inieftfi- between the Easterni andic Westerni parts of' tCering. COIItisuter ser-vices, billing anld COl- cetencmes iti management anid operationis. the city; (d) improve the qutility and recli- lectionis Mostar (poptilationlI 10,000), was a pr-os- ability of Water scrs icc to the population of' Enginecerinig services for the prep)aration of' perous city in thec pre-war years andc the Mostar on bothi sidies of' the river: anld (e) 1final designs and biddinig dloctumients, assis- Mostar wVater utility was a prof-itable entetr- imiprove the efficiettcy of' the water supply tanice withi pr-ocuremencit atid supervision of prise. After tile war, the Eur-opeani Uniion systemi by reducinig water wastage anid adl- conistruCtionl for inivestmienits Admiinistrationl of Mostar and bilateral aid dressinig seriouis nect\\uork leakage problems Implementation Plan: agencies assisted in the par-tial reconlstruc- and hiydraulic inefficiencies. Thle proposed proiect WOUld be inml-Ie- tioni ofthtle potable water supply anid sewer- Project Description ilicnted durIinlg FY 2001-2005 unider the age ser-vices. Thlis assistanice helped restore I hfighi priority inlvestmienits thait arec ceo- overazll responsibility of' the Mostar- WVcter basic water services, but (lid niot aiddre-SS n1011iCally jUStified as f1ollows: anid Sewerage Utitlity. The utility created pervasive nletwork damage anld def'erried a. installation of' prodUCtion mieter-s oni within its organization a Plroject Imple- miainitenanlce that has led to theC current 60- SOurfCeS curremitly niot mletered: nincitinig Teami I PIT) staffied by its ow,n pier- 80% physical losses. Today, the infirastrUc- b. SeCUrity of suIpply amid protectioni zonec for sonnel. The P'IT w,\ill be responisible for all tore- oftlie water uitilities is severely in miccd fourf ofthlle five eXiStinIg wVater SOurCeS; aspects of prioject imlplemientiationi. It eon- of'rehiabilitation. In additioni, thieir- financial c. replacement of' pipes with known hiighi sists of a finianicial hecad, aCCOUntanlt. tfinam- situiationi is weak. Therecfore, fobr operatiotial volutme leaks amid beyond simiple repairs: cial assistanit, pr-ocuiremient off-icer- and twvo atid fitnancial reasotis. artid withi stronig guid- d. rehabilitation of thie 6001111 supply malZin etiginieers. arice arid support frionti tile Bank dul-riig fr-omi thle existinig Radobolja spring source to Procurement: project prepairationi, theC two Lutilities have ttie existiiilg Gilavicai reservoir: The IDA fina]iCCLI COmIponenlts Will follo0W recenitly reutiiited inito one cotmipany. e. cotist rttctioni of 1)1111I) statiotis to serve thle thie Association's Priocuiremncit Guide(lineis. The projeet seeks to stipport ai series o1' Commu11Lnities of 3iijelo P'olje anid Orlac; Suppliers should adldress all cxpiressions of' measures allowitig bor inicr-emenital mil- 1. pUrchase of' leak detectioni anld hlow interest to the prioject Contacts listed below. pr-ovemeiiii of thec management aiid perfornm- miaSuireinenit imstr-tmtrmCrmtS for the Ouitfittinlg Project Achievements ance of' the uitility. This appr-oachi is pr-ag- of a waler Llistr-ibLmtiOmi netwtork mtanagement I1lle World Banik cr-edit wvas approved lone matic - f-irst for thle ultility to he reLimiitcd. unlit; amid 30. 2000 anid thle C'rcdit becamei effective therm to establish a nmioderii planning amjid g. purchase of Comiil)Lmter'S and reclatedi December 1 2, 2000. preparatiomi of' teider-s managemiemit systemii undiLertake system)) re- equlipniemilt inl supp)ort of' project iiiipleilemm- is uniderway atiLl lirocUIretiemit Of' goodIS. hatbilIitat iotn amid carr-y ouit mna jor imip~rov~e- tat mon. eqLlipmlerml. Works amid services started ini memits in f-imiaticial mniaiageiTtemit imiid btill Least-cost piriomrity imiestmtemits for SOLurce early 2001. A First coimitiact for saUmpply (if ColleCtiomi. SUCh a process Would resLilt ini a amid consumiptionm mieter-ing, leak detcctiorm pipes hias becmi awatrdcd armld Llcliver-v is cx- mlodermiiized amid strenigtllieied uitility, which anid repair-, network rehabilitatiomi amid opiti- pietele by cmild of' Maiy. A temidler for, Supply iii thle fuiture COLtid lead to Liifuthler melaSLIres miizatioii. pressure zomiimig amid CeLlimlitiiCmt amid inistallatiomi of' 600iimii pipeimine If-omni includiinmg private sector participiatioii amid f'or Lipelratiomis. radobolja spring is ready to be Izlatmclhed. expiamnded provisiomi of wxastewater services. -LJrgemilt rehabilitatiomn aid repiair of'selected Cnat Project Objectives seWers amliL sewer miaintenamnce cqLmmPmitemit The World Batik Thle two miajor Libjectives ofthie pirojeet are: amidl pipe retilacemiemmt. W13 C'ounitry 0l1ficc imi Sarajevo (i) to create a umifiied water supply amid Assistanice to MWSIJ itt the identification, Ms. Vesmia Frammici sanitation uitility for the city (if' Mostar: anid planiinimg. desigti aitil( imiplemientiationl of Phonec: (+387 33) 440-293 Fax: (+387 33) (ii) toi improve sci-vice. The promject also programis aimiiedi at: 440-108 W13 Sat: (5244) 3041 seeks io achiieve progress biy including thc ( i) improvinig the operationmal pierformianice WV13 1 1Q Wash i iigtioi D)( followinig sccmor-al development objectives: of' Mostar's Water supply systemi anid idemiti- Ms. Seeiiia Maniglie (a) cLIevelop the miierged Lutility inito ani eff-i- f1yinig specific imnvestmenmts to be l'imid(ed f'or Phlione: (+ I 202) 473-5702 F-ax (+ I 2021) cemetily mia:naged amiid commiercially operated netwomrk rehiabilimationmi: 614-0)901 WB Sait: 15221)) 3570)2 29 M WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE External Address: 106 Mostar, Bosnia and I-ierzego- Mostar Water Supply and Scweragc Utility. vina Federation Plonie: (+387 36) 318-329 Fax: (+387 36) Mr. Mile Pulic/Mr. Mirsad 1-lusCilngic 315-016 PILOT CULTURAL HERITAGE PROJECT STATUS ACTIVE CREDIT EFFECTIVE 3-Dec-1999 ESTIMATED COST 15.40 CLOSING DATE 31-Dec-2002 Financing Table US$ mil. Implementation Summary (US$ mil.) Italy (grant) 2.00 CONTRACTS WB WB mnad Total funds Local financing (counterpart, City of Mostar) 2.00 COMPLETED 0.60 0.90 1.90 Netherlands (grant) 1.00 CONTRACT SIGNED 0.10 1.00 1.10 Turkey (grant) 1.00 BEING PROCURED 1.60 1.20 1.70 World Bank (soft loan) 4.00 TO BE PROCURED 1.70 3.90 5.30 TOTAL FINANCING 10.00 FINANCING GAP 0.00 0.00 5.40 GAP/SHORTFALL 5.40 TOTAL 4.00 7.00 15.40 Project Background (1919 boundary). for all assignments over UJSS 50(000. Tlle Mostar Bridge has been a symbol of - Th1le proieet will also iilnalice project illanl- Project Achievements Bosnia's lhistoric tolerance for diversity agcmicrit anid technical services The World Banlk credit was approved June amotig its peoples tor huLidrcds of years. Implementation Arrangements 28. 1999 and thlc Credit became eflective This symbol, and maniy other culturl-d trcas- The City of' Mostar is responsible for the Deccmiber 3. 1999. Geological inmestiga- tlics, were destroyed durinig the receilt war investImelt colmlponlent anid for overall proj- tioIs, sL'rvcyinig of the abutImlenits anld Now, however, local groups fiom diverse cct management. The existing Stari Mostar pathological analyses is complcted and fiiial backgroLunds have come together to revive Foulidatioi anid successor Iinterilationial Stari report hias been delivercd end October. that hiistoric symbol in the pursuit of social Mostar Foulidationi (ISMIF) will be respon- 2000. Dcsigin. Photograinnietty and Calcu- harimloniy and renexved economilic opportt- sible for promotional and fuiind raising ac- lations sttidy hlas beci completed and final nity. This project (a $4 million Learniig and tivities, as well as for providing counterpart report will be delivered by end Marci, linnovationi Loatl) aims to support this cffort, finianice to the City. UNESCO has formiied an 2001. Identificationi of ancienit materials and Project Objectives Intcrinationial Comiiiittce of Experts to pto- determiniiationi of new constiuctioni materials The project's dcvelopimicit objcctivc is to vide advice on CultUral. aestietic, historic, for thie Old Bridge has been completed and improve thc climatc for reconciliationl and tcchlinical standards for rehabilitatioti 1inial report will be delivered end Marcih. amonig peoples in Bosnia and lHlerzegovina work A bridge aidvisory Ullit fiianliced by thc 2001. Cuttinig of the available stone for the thiro.'h recognitioni and rchabilitatioll of Europcanl Comm11ullity is managinig the bridge constructioil has just becn completed. thcir comilmio cultuL-al hlcritagc in Mostal- bridge comilponeCnt. The Aga Khaii Tr-ust lor Completion of the trece studies permiit the Reconciliationi amonig the peoples is a pre- Culture and World MOInILIIumet Iunlid will pre(utalificationi process lor constr-uctioni of requisitc for economilic revitalization and manage the Neighborhood Improvement the bridge to plrocecd. The cotitract for tile social cohesioni in Bosnia's post conillict Compoinenit, provide teclicical assistanlce bridge collstlUctioli is expected to be period. This objective will be pursucd and training for thic institLitionial develop- awarded by cnd 2001. Thei maini span of thc through a unique cultural support partner- nteit of the ISMF. and give recommedcia- old bridge is expected to be constmrcted by ship thlat includes the local cotm1lunity, tioins for conservation for the whole of the end 2002. national and regional governments. (1919) historic city. The contract for repair of the foundations UNESCO, the World MonumiLenits Fund Procurement will have becn awarded end April, 2001 and (WMF), and the Aga Khani Trust for Culture All IDA finianiced comliponelnts and comlipo- completioni ol works is expected December, (AKTC). nellts with joilnt financing will follow tele 200)1. Ihe contract for the design of tile Project Description Associations' Irocureiiiemet Guidclincs. reconstructioti of the towers hias also been The Project ilcLiudes thc following: The Bridgc and adjacent tower reconlstr-uc- let. - The reconstructioni of the Old Bridge, a 27 tion will bc undertaken by contractors se- IProcuremenit for the seven sites identified m. stone arch built highi above the Neretva lected Ltider ititerilationial Compctitive Bid- uLiter thei neigihborhiood comilponeCnlt has River by the Ottoman Architect, Mimilar ding (ICB). The vork will be supervised by been IliiLuiched. liajr-uditi, in the 16th century, framed by the a coiisultiiig engineerinig firi engtiged Ibl- Contacts Tara and Halebija Towers (actual recon- lowing Association procCduics. A contr-act The World Banik struction is expected to take place in 2001 ); for civil works flo ncighiborhlood improve- WB Country Offiice in Sarajevo - The restoration of selected monlumlienits in IlmCilt will also be awarded thoughi ICB. Mr. Vesna Francic the listoric district of the city; aid Othier contiacts for the neighibohliood aitd Phone: (+387 33) 440-293 Fax. (+387 33) - The prcservation of the Old Town's his- monumielint works will be awaided thoughi 440-108 WB Sat: (5244) 3024 toric character through the adoption of ar- National Competitive Bidding and throughl WB I-IQ Washiligtoll DC chitectural guidelinies and small scale national shopping procedures flo minor Mr. Lavrenice 1-laniiall neighborhood upgrading of infrastructure, works. Parallel ftinanting using donior pro- Pllole: (+1 202) 473-3623 Fax: (+1 202) OipCI spaces. landscaping, and facades. This cedures will be perilitted for the monaU- 614-0088 WB Sat: (5220) 33623 would be the first phase of a more ambitious mients and neighborhtoods components. Exterinl preservation program wihich would Lilti- Most of the techinical assignmenits are re- PCU IFederation mately cover the city's Historic D)istrict latcd to the bridge reconsti-tction.. Propos- Mr. RusIlir Cisic als will be invitcd fromil a shiort-list of fimis Director 30 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE PCU Mostar - Central Zone Mr. ITiholioii Rozic P honie: (+387 36) 550-805 Fax: (+387 36) Deputy Director 550-804 PILOT EMERGENCY LABOR REDEPLOYMENT PROJECT STATUS ACTIVE CREDIT EFFECTIVE 15-Dec-2000 ESTIMATED COST 17.5 CLOSING DATE 30-Jun-2003 Financing Table US$ mil. Implementation Summary (US$ mil.) Governments of BH (local counterpart) 1.50 CONTRACTS WB WB mngd Total funds Netherlands (grant) 1.21 COMPLETED 0.10 0.20 0.20 Norway (grant) 1.76 CONTRACT SIGNED 0.00 0.00 0.00 World Bank (soft loan) 15.00 BEING PROCURED 0.00 0.00 0.00 TOTAL FINANCING 19.47 TO BE PROCURED 14.90 17.77 17.77 GAP/SHORTFALL 0.00 FINANCING GAP 0.00 0.00 0.00 TOTAL 15.00 17.97 17.97 Project Background Colouiselioig EmplpV)nlcnt (Iiid Training. viders for cmploymilenti sLipport and on-the- Following the Dayton Peace Agreement of These services include support lor employ- job/appirieticesliip traininig and financial November 1995, an estimated 425,000 sol- mlcilt, micro-enterprises, fanrling. skills services. TIhe PlUs tliroughi the exteinsioni diers were demobilized fi-om the armilies. cniliancemlent, aicl higlier educaltion. Coin- agents and public advertising will contact Their reintegration inito civilian life was prehcnsive informiiatioln and coLtiselinig reliable plrospective providers (owners of facilitated by the Banks Emer-genicy Demo- services vill be olfcred to all ex-soldiers in businiesses) to identify job/apprenticeshiip bilizationl and Reintegrationi Project (EDRIP) areas suchI as pre-discharge orientation. openings in their fimis. Service providers vhicli closed in Septemilbcr 1999. In the professional orientation, (self-) cmploymilent are expected to contact PliUs, submit pro- Madrid Declaration of 1998, the two Enti- opportunities. and "as needed" post- posals (numlber of monithis of tiainailng; nuim- ties comilmitted tltemselves for a fiuirlel traumatic stress disorder. Business advisory ber of ex-soldicrs to he trainied; ree for reductiol ini force of 30 % in two phases of services Will be available for ex-soldiers training; moithly stipcnd for each sol(licr 15 % each in 1999 and 2000. who choose to go into small-scale businiess and small investment for impr-ovemicint of The overall objective of thc militar-y or fiarnning. Service providers vill partici- business). The investimienlt for improv'ement downsizing is to ilmprove the policy cnvi- pate in thc Project uinider performarice-based in businiesses portion of the service provid- roilIneltI throLghl: (i) budgetary savings of contlractual arrangemicints with the Project ers contracts will be joititly owned by the 30 '%, ol the defenise budget; (II) Imiproved Impiciliimetationi Units (I lUs) and will bc cx-soldier-s tinder job traininig in thlat par- secCLrity in the region and sLib-regionl: and eligible fio teclihnical assistance to ticular firill. At the end of the training pc- (iii) increased mitItual trust between the strengthen their capacities. riod. if the firmii n1o longer wants to hire tlhe En-ltities. The first 15% reductiol inl force Project lnIplcmtcontaion. The Projcct %voLIld ex-soldier it will have to buy back froim1 the was accomplishied by December 31. 1999. support Project implpIeltation tIl-oLIgll ex-solclcir iis/lic- "sliarc" of the investmcit. Anotlier 15%, of soldiers are to be dis- providing necessary equipmiient, finaicinig iii. Those providers who hIaIve been verified charged at the end of 2000. Pilot Emergenicy operating costs. fiibanlcinig tcclilnical assis- as reliable Would be added to a list of scrv- Labor Rcdcploymenit IProject is aimed at tance. and carryilng out a staff development ice providers. Ex-soldiers interested in a assistilig reintegratioll of these ex-soldiers programn. Tllis assistance would be offered particular service woutld choose those ilito civilian life. nIot onily to the PlUs ill both Entities bLIt also amonig the service providers who would Project Objectives io local CxecLIting agnciiCs and parent min- mect thlei necds best. The set-vice providers lThe primimar Prjlect objective is to provide istlies will be paid on the basis of' moniitorablc ex-soldicrs with thc meanis for seitl-clianit Implementation Arrangements triggers for perfoninance and completed existence. Thle Project focLis is ol suipport- The I'lUs in thc RS and the Fcderation are OtpLIts. ing the ex-soldiers in their ability to find responsible otr Project implcmentation, Project Achievements cmploymilenit and to create sListailiable jobs Iransparenit fi nicial management, imoiii- Master lists for ex-soldlicrs discharged f iom and bUisincsses. re-deploying as it were, ex- toinig anl( evaluation, counIselinig on Project the tihree entity armnies have beci provided soldiers within thle economiiically active activities, supervision of CxeCLItiig ageincies to tihe PlUs by the Ministries of Defense in popUlatioll. aiicd consultants, and cooperation across the RS and the Federation. Trhc secondclrlt Project dcevelopmtenit ol(tec- Entities. Existing ageincies, local and iiter- F-ivc extensioni agcnts have becn recruited in tive is to test di'fferetit active labor market natiotnal. private and publ ic. will be responi- tihe Federation and tihree have becn rccruited measures to encouraIgc employlment gencra- siblc for the celcctioll J ifindividlblo acliji- inl ile RS. tion, small bLisilless creation for tlhe benefit ties thl/ooigi seriice cootracts. The Project An aniloulicemilebit for an inivitatioit for pro- of ex-soldiers and providc stimuluis to local would containi thiree cliferenit procedures for posals ifoimi poteintial service pro;id- tr-ainin1g atiLd consultanicv firimis. If success- contiactilig scivices: ers/employers was advertised by the PlUs in fulil, thicse mcasuLes could be applied on a i. Contracts betwveen PlUs and servicc pro- late Februar-y in nationial papers. broader scale flo otlier downrsizing pro- viders Ifo activities with genieral beneifits, The initial rcsponse hias becn Very stiolig gramis (closinig of' coal nines, privatization, such as market assessnients, heneficiaty fiomii the employers. etc.). assessments or pre-discharge orienitation, Tlic first tenders for service provider coil- Project Description may be awarded on the basis of' consultanit tracts will be advertised by early April To sUpport the above objectives, the project qLtialitic.ltiolis. 2001. las two components: ii. C-ontracts between PlUs and scivicc plro- 31 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA . PROGRESS UPDATE Contacts Tel: (Il 202) 458-1938 WB Sat: (5220) Republika Srpska The World Batik 81938 Mr. Srecko Bogunovic WB Country Office in Sarajevo External RS Employmiienit and Training Foundation Mr. Goran Tinjic PIU Federation Director Phonie: (+387 33) 440-293 Fax: (+387 33) Mr. Marko Plejcinovic Marije Bursac 7/11 440-108 WB Sat: (5244) 3060 PIU Director Sarajevo Phone/Fax: (+387 51) 218-140. 217-947 WB HQ Washington DC Tesanjska 9, Sarajcvo Ms. Maniza B. Naqvi Phone/Fax: (+387 33) 279-180/l/2 PUBLIC FINANCE STRUCTURAL ADJUSTMENT CREDIT (PFSAC) STATUS CLOSED CREDIT EFFECTIVE 1-Jul-1998 ESTIMATED COST 85.30 CLOSING DATE 30-Jun-1999 Financing Table US$ mit. Implementation Summary (US$ mil.) Netherlands (grant) 22.30 BUDGET SUPPORT WB WB mnad Total funds World Bank (soft loan) 63.00 DISBURSED 63.00 85.3 85.30 TOTAL FINANCING 85.30 TO BE DISBURSED 0.00 00.00 0.00 GAP/SHORTFALL 0.00 TOTAL 63.00 85.30 85.30 Project Background and Objectives of a soLind fiscal system by introdLlCilg new erations in this area. The Public Finance Structural Adjustmenit adminlistratixe processes, incluiditig the fol- Project Achievements Credit (PFSAC) is a policy-based operationi, lowing: The implementationi of the core refomis designed to help BH introduce key refonns proper definlitioni afid classificationi of supported by the PFSAC were successfully in the maniagement of its public finanices, public reveniLies and expellditLlres; compicted and fully disbursed by the end of thereby supporting the reconsItruction of bringinig into the budget extra-budgetary 1998 and hrought about substantial im- BH's war-ravaged economy. The PIFSAC resources; proveemeits in public financial maniagemilent constitutes an importanit milestone in the adopting adequaite reportilig standards for in BH. More specifically the PFSAC initi- country's reconlstruction program, repre- spenidinig coimimiitilimeits anid expenditures, ated important chaniges to the budget and senting a move from immediate reconstruc- and prioritizing expenditur-es: debt management process at the State and tion to consolidatinig public institutions and clarifying anld iilprovinig budget prepara- the Entity levels, set the framework for and implementing policy reform. tion, execution and reporting practices; and initiated the harimionization and refornm of Project Description establishinig sound procuremenit practices Entity tax systems, and initiated reform and Good govemnance of public finances is a key and creating aildit offices. re-organizationl of Entity pension systems. condition for establishing the market-driven Finially, the Credit inlitiated reforms in two The process of preparing and ilmplemlienting economy which Bli requires in order to crucial areas of public finanlce: the haroiloni- mutually consistent budgets between the achieve sustainable growth. The PF-SAC zationi of tax policies anld tax adminiistra- State and the Entities has been initiated. helped establish sound public finance sys- tiolns within Bl-l, as aniotlier step towards ani wlhicih has substantially increased stability tenms and to implemenit associated reform initegrated *econiomic space"; anld the iniitial and transparency of fiscal relations between policies at the State and Entity levels. reforimi of the pension system towards themn. Significant progress has been The project's first objective was to hielp the achieving financial viability. achieved both by the State and the Entities State and Entities prepare and adopt budgets The iiimiediate goal of suchI refomis wvas to in creating dcbt maniagemelit institutions ensuring that the State had adequate funding prevenit the systemiiic accUImUlation of ar- and regulations. Tax burdenis, particularly to undertake its admniistrative functions and rears, raise lmilimil1tm1 peInsioll levels for the for the customs, sales, and wage taxes, have meet its extemal obligations. This was elderly, create soLind eligibility rules, anid been reduced and initial reformis to establish achieved through the development and in- iniprove the coordiniationi amilotig mIUltipIC a tax system conducive to interinationial plementation of a revenue transfer mecha- pension schiemies. At a later stage, ilmore trade and encouraginig the free flow of nisni that provides a regular and predictable comprehensive penisioni reforimis are to be goods between the Entities have been put in flow of funds from the Federation and fromil considered anid thle WB will continlue pro- place. Expenditure control in Federation the RS to the State budget. viding support to that cid. pensions has increased substanitially, eligi- The second objective of this operation was The Nethierlanlds governiemnt provided ad- bility criteria have been tightened and bar- to help develop the needed debt manage- ditionial grant cofinancing of US S 22.3 nl. lioniizationi of pension policy across the nienit capacity in BH, through efficienlt leg- increasing the total amounit to UJSS 85.3. Federation has been initiated. islative and institutional arrangemilents. Bl-I With this Credit, the World Bank shifted its Contacts must also carefuily manage its external debt focus fiom reconstructioni projects -- whichl The World Bailk obligations in order to regain and mainitain con1tilLues to support on a selective basis -- WB l-IQ Washiingtonl DC intemnational creditworthiness. to policy-based leniditlg operations. The Ms. Sebneril Akkaya Thirdly, the Credit helped the Bosnian comiiprehicnisive reforimi agencda supported by Phone: (+1 202) 473-2346 Fax (+1 202) authorities address the issue of transparenicy the PF-SAC is beinig followed uLp throuIgih a 477-0816 Wb Sat: (5220) 32346 and accountability in government budgetary continued dialogue withi the autilorities and operations by supporting the developimienit niay be supported throughL futL-c Bank op- 32 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE RECONSTRUCTION ASSISTANCE PROJECT STATUS CLOSED CREDIT EFFECTIVE .17-Apr-1998 ESTIMATED COST 65.00 CLOSING DATE 31-Dec-2000 Financing Table US$ mil. Implementation Summary (US$ mil.) Austria.(grant) 0.50 CONTRACTS WB WB mngd Total funds European Commission (parallel grant) 12.70 COMPLETED 17.00 25.40 59.00 IFAD (soft loan) 5.50 CONTRACT SIGNED 0.00 0.00 0.00 Italy (grant) 3.10 BEING PROCURED 0.00 0.00 0.00 Japan (grant) 4.00 TO BE PROCURED 0.00 0.00 0.00 Local financing (EK 2.2, EP 1.8) 4.00 FINANCING GAP 0.00 0.00 6.00 Netherlands (grant) 1.80 TOTAL 17.00 25.40 65.00 Norway (parallel grant) 10.20 United Kingdom (grant) 0.20 World Bank (soft loan) 17.00 TOTAL FINANCING 59.00 GAP/SHORTFALL 6.00 Project Background Project Description limited to the common elements so as to This project is an emergency-type opera- The project has the followiing compolictnts: weatherp-oof the maximumil number of tion. aiming to address ililmcdiate recon- * Agricultule (US$ 10.2 ni): illport of live- buildinigs. structioni needs of Republika Srpska (RS), stock (breeding cattle) and larm maclhinery Repairs to water supply and sewerage sys- one of the two Entitics forming Bosnia and (motor-cultivators, small tractors and im- tems are selected, organized and supervised l-lerzegovina. Anotlier poject objective is to pictilemits), benefitinig tip to 3,400 private with the assistance of Zavod za Vodo- improve thc balance of Financial support for farimiers in RS; privrcda in RS. Imporls of electric power reconstructioni assigned to both BI-l Entities. I- lOusilg (US$ 15.2 In): repairs to damaged equipment and related civil works are being War damilagc in the RS was substanitial in public apartmcnt buildings in several se- coordinated through Elektro-privreda/ the agriculture sector where an estimated 30 lected RS muniicipalities. benefiting somiie Elektroprenos in RS. Thley will contribute percent of livestock and 40 percent of farmi 4,500 flats and 20,000 persons; financially by financinig repair and installa- maciniiery were lost. In housitg, some 24 * Water and Saniitationl (USS 22.1 ni): re- tion works for the imported equipment. pelrcet of the stock was damaged and about pairs to damaged water supply and sewer- Procurement 5 percent destroyed, resulting ini an esti- age systems. and supply of solid waste col- Goods and services finaniced by the World mated total danmage of USS I billion. In the lectiolt Cquipmlienlt. in up to 20 selected RS Bank are procured competitively by the water sector, direct war damagc aisd lack of' municipalities; Ilroject Coordination Unit (I'CU, sce con- mainilcinanice due to the war disrupted water * Electric Power (US$ 15.9 ni): critical ini- tacts below). Suppliers should address all supply and sanitation services in most RS ports for urgeint repairs to the electric power expressions of interest to that Unit Iunllicipalities. And in the elcctric power tranisimiissionl anid distribuItion networks in Project Achievements sector, many of the distribution & transmis- 13anja Luka; The project was approved by the World sioll ifacilities destroyed as a rcsult of local- * ImplemIenCotatioll Support (US$ 1.5 I): Bank on December 23, 1997 and the Credit ized fightilg aid lack of mainitenanice. incremlienital operating cost, office equip- became eif'ective on April 17, 1998. 100% This new project consplemiets the ongoinig nient and vehiclcs, techliical assistance, of WB-financed housing repairs is cons- reconstruction plrqojects that have already trainig, and procureilemlt and finanicial pleted and the balance is scheduled for been approved by the World Bank and audits. completionl by end August, 2001. A total of' xvhicli benef'it both the F7ederation and RS. World Bank fundls are allocated for all proj- 160 apartment buildings benefited some The project is an integral element of the ect components. Discussions with donors 3570 flats in eleven municipalities were Bank's post-memilbership support to the arc underway to finalize the planned usage repaired, utilizilng World Bank, Japanese reconstL-uctioll program ot the cntire COunL- of thei- co- and parallel financing contribu- and The Netherlands finianicing. All tractors try, and is the first operation of the World tions. Additional donors are encouraged to have been purchased and delivered to farm- Banlk cntirely devoted to RS. contribute to thc finanicing of this iilportait ers, and 100%, of heifers has been distrib- Project Objectives project. uted. 55 WB-financed tractors atid 336 utn- The projcct aims to impr-ove basic munici- Implementation Arrangements der Italian Govemisient financing motor- pal services and will jiiclude critical impolts A cross-sectoral lProlect Coordination Unit cultivators were distributed to the farmers in and urgeilt civil works, It hias four niain (PCU) has becil established Ltider the RS seven municipalities. Under IFAD- objcctives: (i) to assist economically- Ministry of Finance. located in Banja Luka. finailcirig 3876 heifers and 7218 sheep had disadvantaged private laincrs to restart and For the agriculture componeit, the PCU has been imported and distributed in 1998 atld streigtilsen their farminig activities: (ii) to caused RS municipalities to select individ- 1999. All contracts unider thse water colspo- iciscase the quality anid quantity of habit- ual private farmiers that fulfill agreed eligi- Iletit hIave beeni completed and sixteein Iu- able public housinlg stock; (iii) to restorc bility criteria. Tractors and livestock are nicipalities benefited uilder the project. All water, sanitationi atid solid waste services to ceded againist loisg-teriss in-kinid supply aind equipment under the electric power compo- a level that v.ill satisfy basic lisunsai needs, credit agreensents. Regarding housitig re- netit lias been procured and installationi mitigate public healthi risks aind support the pairs, the mui.icipal oWI1Crs of apartilmeit completed. Six substations and lines in retuirin of economilic activity: and (iv) to in- buildinigs save entered into project/ repay- transimiissioti aisd distribution network hsave prove reliability, availability & quality of ienit agreements withi the RS Minsistry of beets relsabilitated. rehabilitatioll of tele- electricity supply. Finanice to recover the cost of repairs cosmillunicationi systems in the distribution tlsrougis increased tenaist reits, Rcpairs are network and new informatiois systeisi in 33 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE distributioll has been installed. enid August, 2001. WB HQ Washinigton DC The project will be closed down enid Marchi, Contacts Mr. Sarah Forster 2001. Repair works of miore public apart- The Woricl Bank Ilhoi1e: (+44 171) 209-3492 Illenlt buildings in the three municipalities of W13 COLlitfy Oftice in Sarajevo the Eastern RS will be finaniced withi the Ms. Vesna Francic funds provided by the Netherlanids goverli- Phone: (+387 33) 440-293 Fax: (+387 33) menit. Completionl of works is scheduled by 440-1 08 WB Sat: (5244) 3024 SECOND ELECTRIC POWER RECONSTRUCTION PROJECT STATUS ACTIVE CREDIT EFFECTIVE 31-Mar-1999 ESTIMATED COST 170.00 EXT. CLOSING DATE 31-Dec-2001 Financing Table US$ mil. Implementation Summary (US$ mil.) Canada (grant, CIDA) 5.00 CONTRACTS WB WB mngd Total funds EUropean Commission (grant) 14.20 COMPLETED 16.80 16.80 137.05 Japan (grant, JICA) 25.50 CONTRACT SIGNED 7.00 7.00 7.00 Japan (soft loan, OECF) 26.80 BEING PROCURED 1.20 1.20 25.95 Local financing (local counterpart) 33.00 TO BE PROCURED 0.00 0.00 0.00 Netherlands (grant) 1.10 FINANCING GAP 0.00 0.00 3.80 United Kingdom (grant, ODA DFID) 15.70 TOTAL 25.00 25.00 173.80 United States (grant, USAID) 19.90 World Bank (soft loan) 25.00 TOTAL FINANCING 166.20 GAP/SHORTFALL 3.80 Project Background and Objectives tral 13osinia Coal Mines, Gacko Coal Mine 1998 and became effective on March 31. War-related damage to the power sector hias and Ugljcvik Coal Mine) and improving the 1999 with the establishment of the Joint been severe, not only bccause of destruction operationial reliability and efficienicy of Power Coordinatioll Center (ZEKC). The but also because of the lack of mainitenlanlce these coal minies, whichl are associated with Celter curreintly co-ordinates the operation due to shortage of materials, spare parts, the thermal power plants being rehabilitated of the 400kV-power transmission system by and manpower. Thle Seconid Electric Power under the project. the country s three electric power utilities. ReconstnLctioni Project will complemcnt the Distributioll (USS 40.9 In). As maniy of the and is plainned to develop ilto the Tralis- emergenicy repairs undertakeni under the distributioni netwvorks are in poor conclitionl. missioll Systeml Operator for the Bil-i sys- first project, whichi has already helped B1-l this componenit wvould focus onI areas wheie tcm. in accorcdanlce with UCTE andi EU restore electricity service to acceptable Icv- th. networks suIfcred extensive var-related gLIidelilies, over the mediumil termi. Its foun- els in major cities and for vital industries. damage and degradation. in order to restore dation was a pre-coniditioni for Credit effec- Project Objectives power supply to facilitate econotiiic irevival tiveness and for the reconstruIctioll of the lhe project is designed to restore norimial and tihe retur-ni of reftigees and displaced high voltage tranisillissioll system. and reliable power supply to Bl-l by in- persons. The crcdit hias finaniced an CNtensIve rccoIn- creasilig coal production, Llpgradinig geni- Technical Assistanice, Enginecerinig and struction anci rehabilitioni programmiie for eration capacity, imiproving transimiissioni Pr-oject Maniagemileitt (USS 6.1 ni): engi- tlimnial and hydr-ociectric power plants in networks, and imiprovinig the management niecrinlg services to prepare desigtis and both the Federation of Bosnia and 1-Ierzego- and operations of the electric utilities. This biddinig documilenits aind assist PMUs in vina and the Repubika Srpska. projcct aims to meet the increasing demand project implementation Contacts for power withinl the coLlitry, and to mini- Implementation Arrangements The World Bank mize the electricity supply costs by focusilig A Project Implementation Unit (PIIU) has W13 CouLitry Office il Sarajevo on the most cost-effective investmienits in been established at the Federation level with Mr. Felix Martin the power sector. branichi VIUs within Elektroprivre(a 13B-I alid Photie: (+387 33) 440-293 Fax: (+387 33) Project Description Flektroprivrelda Mostar. T'here is also a PIItJ 440-108 W13 Sat: (5244) 3020 This project comprises four componienits: in Elektroprivreda Republika Srpska. The External Power generationi (US$ 40.3 ni): rehabili- PlUs are in charge of project schedulinlg, PIU Federation tation and mainltellanice of existing hydro coordiniationi, miioniitorin1g, and procurelilelt Mrs. Mubera Bicakcic plants (Rama, Jajce 1, Capljina. 1'rebinje, alnd funtids mialiagellmelit. Director Bocac) and ther-miial power plants (Tuzla, Procurement Mr. Zdeniko SilnlUovic Kakan;, Gacko and Ugljevik) to extend the Contracts for all but two packages finianiced DeplUty Director useful lives ofttlese plants. by the IDA credit have been sigied, anid Ministry of Energy, Mining and Industry Transmission (US$ 38.6 ni): providinig most packages Fiianiced by the project co- Federation of BI-l. Sarajevo urgenit protection, communiication, anid me- financiers have been procured. The excep- Photle: (+387 33) 205-568 Fax: (+387 33) tering equipmenit for existing networks; tionis are the OECFI and E-U-financed pack- 642-064 rehabilitationi of transmiiissioni facilities to ages, whiich are cLIl-ently ulider procUIrC- Sarajevo 13ranchi Office cLIt-off areas: priority inter-entity high- menit. SutppliCe-s should address expressionts Ms. Sabahcta Sadikovic voltage tie-lines to improve powcr ex- olfinterest or enquiries to tie PlUs (contacts PIU Director Sarajevo changes within Bl-l. below). Elektroprivreda BFI, Sarajevo * Coal prodLlctioll (US$ 21.8 ni): increase ill Project Achievements Pllhone: (+387 33) 652-056 F-ax: (+387 33) the coal output (at Tuzla Coal Mines, Cen- 1he IDA Credit was approved on1 May 19, 525-236, 653-004 34 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE Brancih O'ffice in Mostar 322-831 Plhone: (+387 51) 215-645 Fax: (+387 SI) Mr. Josip Jerkovic 'IU Republika Srpska 215-667 Director Mr. Milan Bcjat Elektroprivreda Mostar Director Phone: (+387 36) 323-788 Fax: (+387 36) Elektropriveda RS, 13anja Luka SECOND EMERGENCY EDUCATION RECONSTRUCTION PROJECT STATUS CLOSED CREDIT EFFECTIVE 25-Sep-1997 ESTIMATED COST 12.90 CLOSING DATE 30-Jun-2000 Financing Table US$ mil. Implementation Summary (US$ mil.) Italy (grant) 1.50 CONTRACTS WB WB mnqd Total funds Japan (grant) 0.40 COMPLETED 11.00 12.90 12.90 World Bank (soft loan) 11.00 CONTRACT SIGNED 0.00 0.00 0.00 TOTAL FINANCING 12.90 BEING PROCURED 0.00 0.00 0.00 GAP/SHORTFALL 0.00 TO BE PROCURED 0.00 0.00 0.00 FINANCING GAP 0.00 0.00 0.00 TOTAL 11.00 12.90 12.90 Project Background ni): financing for reconistruction of about 25 project xv'as approved on August 28. 1997. Prior to the war, BH had a well developed primilary schools in the Fcdcration and RS; The project bccame ef'fective on September education systei. With the exception of a the provision of fuliliture for classrooms in 25, 1997, and closed on Junle 30, 2000. few religious schlools, all education was these schiools (USS 1.0 Im) Civil Works. In the Federation of BiH: 25 publicly provided. Virtually all children Books anid Educationial Materials (USS 0.8 primai y schools were reconstructed; furni- compileted eight years of primary schoolilig III): the provision of textbooks and other tLurc and equipmcnit were provided to 18 anid milost comipleted four years of secondary niaterials in the lecdleration, project schools by the Dutchi Governmiicit schoolilg. The war led to the disruption ol' Education Finanice, Governance andl Ad- and the Interimii Fund credit financed fuLini- cducationi at all levels. Approximately 70% Mlinistration Study (US$ 0.5 In): techniical tIre and cquipmenit for the remaininrg 7 of schools had been damaged. destroyed or assistance for the analysis of' policy issues projcct schools. In RS: 19 primal-y schiools requisitioned for military uses. Many in both Erntities, were reconlstricted arid fumiture and schools were rendercd all but useless , Project Implenientation (US$ 0.4 in): con- equipment provided to these schools. A througIl loss of winidows, furnituire and cdu- tilIuLed finianicinlg of saiaries and Iimited total of 417 classrooms wei-e repaircd and cational materials. Many teachers were operatinig costs, initiated Llirler the First furnishcd throLigli BiH. drafted into military services, killed, dlis- Project. 18,206 children in the Federation of [tiH placed, or took refuge in other countries. Originally the World Bank was to finainlce arid 3,040 in RS benefited froni the re- Resources to pay teachers and provide text- 100% of the USS 11.0 millioln invcstimienit pairs/reconstruction and provision of fuLili- books were virtually nonlexisteit. In spite of' plan. As policy dialogure atid school recon- turre. At least 30% of' refurbished schools these extreimlely difficult circuLImstaniccs, duc sttrCtioll neecis have expanded, arid addi- contributed to increased capacity in practi- to the extraordinary efforts of parents, local tional don0or support has becoriie available, cal termis, in that these schools were not goverinienit olfficials and aid agencies, rilost the project scope has becn cnlarged ac- usable at all prior to benefitinig from this childrcn managed to contiLuc thcir educa- cordirigly. project's reconstruction srupport. In the tion during the war, thougIl in a vcry dis- An Educationi Finance, Governance and remaininig 70%X, of schools, incremeintal rupted forrii. Adriiiiistiationi StuLdy has been financed by capacity was increased by restoring unus- Project Objectives a Japanese grant (US$ 0.4 ml), as well as able classroomiis. Conditionls for lcanliiig T'hc objective of this project is to improve stipport libr tcxtbooks refomi. were significantly imripoved in all project- primiary educationi access and qurality by The settinlg tip of Demonstration Schools, supported schools. reconstructing war-damilaged primary arid a Pilot School Grant Scheriie in thrce Textbooks arid Educational Materials: Tle scilools througilouLt B1-l, iticltidimig schools areas of Bil-I are beinig fiianiced by an Ital- pilot project involvinig competitive selection whicil are ready for tenderinig bLit fol wvhiich ialn grant, iicluditig the reconstiuctionl of of private sector devcloped textbooks wvas firraricirig was not available under- the F-irsl two to tilree pririnary schools in both E ntities completed successf'ully. This pilot was de- Emergency Educationi Recoristrtictiofn Proj- (total Italian granit US 1.5 million). veloped with the support of finterniationial cct, arid to support reconstruictioni of war- Implementation Arrangements Book Developmctit (IBD) Linder Dutch damiiagcd schools in the Repuiblika Srpska. Project iipleietiiitationi was maniaged by the Trust Fund fniiancilig. 14 niew iiiatli arid Thlis fimiaricinig will hielp to achiieve thc first Project lipIcnlicintation Units (PlUs) estab- scienice textbooks were published and dis- project's objective of'helping to restore the lislied withiin the respective Mimnistries of tributcd to schools by four private sector delivery of primary educatioti of acceptable Education of the F"ederationiof Bill arid the publishers chosen on the basis of conipeti- quality to the children of iotli Entities. The Republika Srpska. The PlUs were responsi- tive procLrreniiernt. The second phase of tilC Project also aimins to improve the capacity of ble for coordinationl at the regionial, cantoll Bank-supported textbook program was both Enitities' Ministrics of Edurcation to and municipality levels. comiipleted by July 2000 following several analyze arid address sonie of the key policy Procurement set backs. A contract for English language issutes in the sector. Goods and services financed by tihc WB training books, manuals for teachers arid Project Description were procured comiipetitively by the PlUs. auLdio tapes for grades 4-8 of primary The projectlas tile followiig conilporierils: Project Achievements schools was signed and 125,000 copies of Primary School Rehabilitation (US$ 8.1 The World Batlk credit finanicing for thlc books; 5,000 copies of riiariuals, and 1,500 tapcs were delivered to the schools by June 35 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE 2000. Savings from cancellation of the tion and develop consenIsLIs lbr needed gov- pact, althougIl indications thus fiar are gen- textbook procurement were re-allocated to ernance changes. As a result, World Bank erally positive. Its implelletatioln will reading materials and geographical maps and European Union fundinig is cuLirently contiiue unider the Education Development and atlases, whichi were shared to some supportinig the establishment of a shared Project, and it vill be managed by the Fed- extent across the Federation of BiH. 77 Standards and Assessment Agency for Bil-l, eration and RS Project Coordination Units titles or 122,318 copies of supplemiiental as well as a shared Coordinatinig Board for for that project. readers were procured, as well as 8,000 Higher Educatioll. These are the first ex- Contacts copies of geographical atlas and 5,000 amples of commillon inter-ethliic institutiolis The World 13ank maps. in educatioll followinig the war. In additioni. WB Countr-y Office in Sarajevo The Education Governance, Finance and World Bank funding under its EdLicatioll Ms. Zorica Lesic Administration Study -- carried out througih Dcvelopmeiet Project is supporting dcvel- Phoulc: (+387 33) 440-293 Fax: (+387 33) a unique joint venture between the World opiment of a commoi edLication manage- 440-108 WB Sat: (5224) 3022 Bank and the Council of Europe -- vas ment informiationi system and a jointly- External completed and presented at a public forum managed Quality Fund for prilary educa- IIU Federation early in fiscal year 2000. In addition, the tion. All of thlesc initiativcs were developed Prof. Dr. Azra Jaganjac participatory process used for the study was and promoted under the study initiative. Fedcral Ministry of Education. Sarajevo particularly successful in helpinig develop Italian co-financing, approved late in tile Phonie/Fax: (+387 33) 471-767 public support for the study's findings and second year of project implementationi, is PIU Republika Srpska conclusions. An international donor part- SULppOIting the transitioni fi-omii reconstruc- Mr. Zdravko Marjanovic nershiip (WB, Council of Europc, European tion to qualitative improvements in the edu- PIU Director Banja Luka Commission, IJNESCO, Office of the High cation system. The closinig date ol the Ital- Phone/Fax: (+387 51) 218-416, 218-417 Representative) helped bring Serbs, Croats ian Grant is October 31, 2001. As the ini- and Bosniacs together in BiH to focus at- plementation of this grant is not yet comI1- tention on social cohesion issues in educa- plete, it is too early to fully assess its ini- SECOND EMERGENCY TRANSPORT RECONSTRUCTION PROIECT STATUS CLOSED CREDIT EFFECTIVE 1-Sep-1997 ESTIMATED COST 184.00 CLOSING DATE 30-Jun-2000 Financing Table US$ mil. Implementation Summary (US$ mil.) EIB (loan, part of the Loan finan. activities) 25.00 CONTRACTS WB WB mngd Total funds European Commission (grant, incl. US$8 mil for COMPLETED 30.00 41.00 159.20 Samac bridge reconstruction.) 53.40 CONTRACT SIGNED 0.00 0.00 0.00 Germany (grant) 0.60 BEING PROCURED 0.00 0.00 0.00 Italy (grant) 4.00 TO BE PROCURED 0.00 0.00 0.00 Japan (grant) 20.00 FINANCING GAP 0.00 0.00 15.80 Local financing (local counterpart) 2.90 BUDGET SUPPORT Malaysia (grant) 3.00 DISBURSED 9.00 9.00 9.00 Netherlands (grant) 4.50 TO BE DISBURSED 0.00 0.00 0.00 Sweden (grant) 2.90 TOTAL 39.00 50.00 18 United Kingdom (grant) 0.20 United States (grant) 12.70 World Bank (soft loan) 39.00 TOTAL FINANCING 168.20 GAP/SHORTFALL 15.80 Project Background commercial trainis can rull regularly. Exten- Support to Reptiblika Srpska economic Since the end of hostilities, the conditioni of sive work is still required oti Sarajevo Air- program (USS 9 in): the transport infrastructure has significalitly port to accommodate regular traffic. Public Roads (US$ 50.5 mi): overlay and reha- improved, mainly through the implemenita- transport systems will continiue to require a bilitation of 200km of roads: tion of the Bank's Emergency Transport considerable level of assistance in the years Bridges, Tunnels (US$ 39.4 m): recon- Reconstruction Project (ETRP) and SFOR to come. struction of about 12 priority bridges (in- activities to restore strategic iifrastructure. Project Objectives cluding on the Sava river), repairs of tuLInnels Major transportationi bottlenecks remain, While continr-ing to support thc -eliabilitia- and landslips on critical road liiks; however. In the road sector, more thanl half tion of' the trailsport sector, the Project hias Equipilment (US$ 11.9 ni): road construc- of' the main network still needs to be reha- five main objectives: (i) rciloving critical tion and mainltenlanice, atid safety equip- bilitated. Road maintenanice needs to be infiastnUicture bottlenecks; (ii) resuLiig menit; lildertaken urgently to avoid fLirther rapid operation on thc major transport networks: Railway Equipmenit and Civil Worlks (US$ deterioration of ifinastructure arid inaiite- (iii) ensLirinig sustainable Ldevelopment of 38.4 i): ftirthier rehabilitation of the main nance organizations need to be organized the transport sectur and related institutiols: network; and equipped. In the railway sector, the (iv) rebuild the local cointiactinig anid coin- Civil Aviation (USS 11.1 ni): equipilimeit economically importanit part ofthe network sUlting ildListry: aiid (v) stipporting the and works to allow for scheduled aviation has been restored to minimal standards, but Republika Srspka ecoiot11ic program. SCIVices; implemiientationl of the operatiig agreements Project Description Urban Transport (US$ 12.7 Im): import of and fiurther rehabilitation are needcd before The project has the l'ollowinig components: buses, spare parts, and equipmncit for the 36 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE tram system; Implementation Arrangements have been rehabilitated in the Federation. In * Institutionl Building (US$ 2.5 in): support Thle WB-findcd part of the project is imi1- addition, the relhabilitation of the Dubica to transport institutions; pleimelited by 2 Project Implelmlelntatioll and Brod bridges over the Una and Sava * T'ech. Asst., Support to Project bimpl. Di- Directorates ('lDs), onie in the Federation rivers, financed by USAID, has becn coin- rectorates (US$ 7.3 in); Ministry of Transport and ComiUnicatiols plcted, white the reconstructioni, financed by * Mine Clearing (US$ 1.2 m); and one in the Republika Srpska Ministty of tile EC, of 5 bridges over the Sava/Una WB-adminiistered fLids totaling US$ 51,5 Tranisport and Comimiuntilicatiols. A Programil rivers is progressing, with the Gradiska millioni (includinig 'I'rust Funds administered Managemiienit Advisor of the InternationIal bridge over the Sava river now completed. on behalf of the Governments of Japan and Management Group anid hlis two Deptities Road construction and maintenance equip- Italy amounting to, respectively, USS 2.1 are assisting the two PIDs. ment, finianiced by the Government of Japan, million and US$ 10.4 rhillion) support the Procurement has been delivered. Road rehabilitation Republika Srpska economiiic program, and Goods, works and services Fiiianiced by thle activities fuLided by the Governmient of repairs to roads and bridges couLItry-wide. WB are procured competitively by the PlDs Malaysia are completed. Finally, activities The EC supports repairs of bridges on the (see contacts bclow). Suppliers should ad- are ongoing on the Banja Luka and Mostar Sava/Una rivers, railway and civil aviation dress all expressionls of interest to the PIDs. airports, finaniced mostly by the EC, the civil works and equipmeint, while the U.S. Project Achievements Governmllenit of the Netherlanids and the mainly supports road/bridge and railway 'rhe Bank-adiniilister-ed part of the project is UJinited Kingdomii. rehabilitationl. The EIB part of the loan in- nearing completioni. Only three bridges Contacts Cluded ulider the Project finanices the recon- remaini to bc complcted, uLider a donationi The World Bank structioll of the Capljina bridge and reha- fromii the ItalianC Govermienit. The Bank WB HQ Washingtoni DC bilitation of road sections. Japan finances Credit has closed on June 30, 2000, as ini- Mr. Aymeric-Albin Meyer repairs to tihe road network, supply of tially scheduled. Under the 13ank- 11honle: (-I 202) 473-7101 lax: (+I 202) cquipilmenit and techniical assistance lor su- administered part. works have been com- 477-0301 WB Sat: (5220) 37101 pervision. Italy f'uLids support works and pleted on twelve road sections and six Mr. Cesar Queiroz technical assistance; the DutcII fuinds sup- bridges in the Federation, and ten road sec- Phone: (+I 202) 473 8053 Fax: (+1 202) port the supply of'road equipmlecilt as well as lions and 2 bridges in RCpublika Srpska. 614 0900 WB Sat: (5200) 38053 equipmlnenlt for the lighitinig ol' the Mostar Fiftecei tipper trucks have also been dcliv- airport. ered to Rcpublika Srpska. Under the E13RD componicilt, 8 road sections and 5 bridges SECOND PUBLIC FINANCE STRUCTURAL ADJUSTMENT CREDIT (PFSAC II) STATUS ACTIVE CREDIT EFFECTIVE 3-Dec-1999 ESTIMATED COST 91.00 CLOSING DATE 31-Dec-2001 Financing Table US$ mil. Implementation Summary (US$ mil.) Netherlands (grant) 23.00 BUDGET SUPPORT WB WB mnod Total funds Switzerland (grant) 3.10 DISBURSED 52.00 76.10 76.10 World Bank (soft loan) 72.00 TO BE DISBURSED 20.00 22.00 22.00 TOTAL FINANCING 98.10 TOTAL 72.00 98.10 98.10 GAP/SHORTFALL 0.00 Project Background and Objectives Specifically, the PF'SAC 11 is providing nal debt manazigemenit structure in the State BI-I hlas made signifiicant progress in de- policy advice and assistance in implemnci- and the entities and developing the regula- signiilg and impleicintinig a moterin public tation to ifacilitate the following key public tory frameework for sub-entity external de.bt financial maniagemilenit structure for the en- finance reforilis: managemnent; and tire country based on the blueprint of the restructurinlg of intergoverinimiental Ii- establishment of an affordable, efficient, D)ayton Accords. A programil of iiiitial core nances withinl the cntities by identifying and and equitable social safcty net, with a par- reiflois was adopted dtirinig 1998, initiatinig improving existing imbalanices between ticular cmphasis on improvinig the ftinancial impIort1.iant chanlges to the budget and debt revenuc capacity anid expenditure responsi- viability of the pension system. manlagemilenit process at the State and the bility; Project Description entity levels, sCttilig the framnework for and desigin bf a broad halirmonizationi strategy The impleiieiintationi of the PFSAC 11 op- initiatinog the harimion iza iiio and refotrii of oIr cntity tax policies and adm in istration, eiratio vi will lielp BFH consolidate the public entity tax systems, anid initiatilig reform aind incltidiig fiianice reforms whichl begal ulider the re-organization of entity pensioni systems. measures to improve reveinue attribution PFSAC, stibstaiitially strcngthieni prospects These reformi-s were supported by the World rulcs betweeni the Entities for continiued fiscal stability, cnihanlcc Bank through the first Public Fillince atid eillianlce revenue capacity at the local sustainiability of the structural reforill proc- StrUettural Adjustimient Loan (1'l:SAC). The level ess, and reintegrate thc cconomiiy. The re-, PFSAC programil was sticcessfully com- * developmeilt of a compirhelisive budget- form program will promote free flow of' pleted in Dcciiibcr 1998 ary strategy aiimed at improving fiscal eiti- goods betweeni the entities and improve tax The l'FSAC 11 ailms to suppOIt the deepen- cicncy and controlk revenue collection by conipleting harimionii- ing and broadcuitig of the institution build- establishlilleit of a public atidit systcm zation of major tax structures, strengtlheiinig nig aItd policy reforimis implemilenited utnder aiimed at establishing greater traisparenicy administrative co-operationi and reven LIe thc l'FSAC, while providing much-nleeded and accoulitability in governimlicilt policies distributioll. It will ltacilitate developmenit of finianicinig lor essential budgetary expendi- and strategies. a more robust inteigovertifimenital systemil, tures in the next two years. strengthiniiig the newly established exter- which is supportive of the Entities' stabili- 37 1 WORLD BANK RECONSTRUCTION AND DEVELOPMIENI PROGRAIM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE ZatOllo anid StrUCttil-allCl01-11Salr a (lnd Which \%ii i C. llkiCinCyy. aild lCCOUItlhihii(t 0f ( ClCdi \\CIc disbuisCe in I ))CCCI1111- I)999 ilmpriove 'i\ ficelCv aIId coveCige of publii plihl ic serv ice operatCions;.11 IStIbi iSlleilt 01 :Ilid .1allVly I Cspeti rely.11 The ping ICr(g- sector services. Bey pUrsililn eSSCeltitil poliCN' all ell'ecIive :itid( inttegtated public liiaricc resy lowards ilpiillemeniation of tille key anlid i1Stitutli0ial reIfloIrmS it budget planning StruII-C \lure ill help 1311 ConduCt SOtiiI Ile- rI'0-nlS \NhliCh lir-C lnCCCSSary 1 ilIhe (dis- and CXCCuItionl theC Operaltion Will heClp7 the r-oconllOiliC Illailaeliclit. e-CeIUICCCl 11) 0t bUYSCIVlIlent oft' Ille thiil traVICCe lhias S) fal- CllitiCS COcrrCCt tilC 111Culi-tClni i hilbalanec cconniIC tlra'lSCl IoiS. Illd acIhiCVC CNW eill I been Slow, reflecting pa ritly the delays in thle bIe\VeCli lCVCel1UCS and Credit wor'thiness. forna f lionl of the new' Ioei i\tClelllnls in tlie expclnditurcs and sCt appropriate prioritiCs Tlhc Neth erlaids goverl'liellt alid tJe Swit- ailteriiiathl ol' the Novciibcr electionls last f'or public OutlayS. lie rfornll prouralll lvill zerlalind goveilleilt arle prviiiig add1itiO11,11 VClla. pIrtiCUlkIIry in tlX. hCIlIli finanilCC olIId aISO imprloe medtiuLm)-tClr 111fi11niCa11 viabil- Crant coflinanciio of' Ut SS 23 () n)0 arJnd 3.1 tIIC trea;SUre arCeaS. Ite aiid targctinig of' the pension svsteIll. I11 rCSpCCtivSCi i lie ISinig tie 10t111 1100lo1t Contacts IillatC dcsign Of' o111 CeIuitalblC ;ilnl SuSlain- to U SS 98. 1. The \Vorld Balizk ihle Social saflely n1Ct systeImr .and CistisuC ;I Project Implementation \V13 I IQ) \Vashiltngtloii D(' Celetalin ICeVc OifCeqaltliZatiol in tilc p'OVisiOn Thl pioject iS ciiirentlh b ilig iniplndl)cied. N,is. Sebonem Akka ya Of licaliI SerViCeS tihlrough deVeI 1opllICllt 0I' Severl'al Sul pc rvis imiOl InliSiIlls Wer CIlTicarid I'lloie (-,-I 20- ) 473-234o iax (+1 1 2) a;1 eiili 'ci nt lCa Itali instualnce SYStCIe il h(otil outI SilCec Illidi- I(99) olnditions ior cried'it 477-0)8 16( W13 Sat: (5 220) 32346 Entities. 1iV illStiiltiig SOtillI iIdllditiltng prO- e'ff'CtCi'eCllCSS 11j\ye beent mect satisj lactorile ceduies. it w5 ill SigIlificantly criul like t1ins- 111(1 the' fiiSt and tilbe ,tiid tidlin'he of, Il tle SOCIAL SECTOR TECHNICAL ASSISTANCE CREDIT (SOTAC) STATUS ACTIVE CREDIT EFFECTIVE 30-Apr-2001 ESTIMATED COST 3.88 CLOSING DATE 30-Jun-2003 Financing Table US$ mil. Implementation Summary (US$ mil.) Governments of BH (local counterpart) 0.33 CONTRACTS WB WB mnod _otal funds World Bank (soft loan) 3.55 COMPLETED 0.00 0.00 0.00 TOTAL FINANCING 3.88 CONTRACT SIGNED 0.00 0.00 0.00 GAP/SHORTFALL 0.00 BEING PROCURED 0.00 0.00 0.00 TO BE PROCURED 3.55 3.55 3.88 FINANCING GAP 0.00 0.00 0.00 TOTAL 3.55 3.55 3.88 Project Objectives: Project Description Implementation Arrangements The overall objectives of the Social Sector The project hals thte followiing conmponents: The Ministr-y of Labor, Social Policy, Rcfit- T echliical Assistanice Credit (SOTAC) are J. Social Protectioii Plolicy Component gees anti Displaced Persotis in the F-BI-I. and the provision of a sustainable systeni of (IJSS.1.73 millioii): lliis componecnlt would the Ministrics of Veteranis' Affairs. War social protectioni that targets spendinig morc support policy developilicim t auid im1pleiiciil- Casualtics atid Labor arid llcalthiSocial effectively on the poorest and is based on tlltioll fbr: WVel fare in RS are responsible for imple- reliable social statistics. anid the creationl of Social protectioli strategy and expenuditure nicitatiofi, an(d wili be carried coii thr-oLigi an improved labor relatiotis franiework in strategy development: the cxistin,g PilUs for the P ilot 1Emergenicy order to stimullatC cmploymiienit growth. IThe Social assistanice reforlils: Labor RedeploymIlenIt Project (PELRJP). projcct Would be a conmpaniioni credit to a Reform of labor rclationis tramilework aiid Project Achievements recetitly approved Social Sector Adjuistimienit l ls progralmis: Trhe project was approved by the Banks Credit (SOSAC). It would also act as a Disability programs reformi: and Board on December 7. 2000, aiid is now bridge betwvecn the First SOSAC, and a see- Suivey techntical assistanlce. awaiting paliarmentary ratification. onid SOSAC programm11ed for FY02, and in 2. Social Protection Instituitiollill Strelngthl- Contacts tbis way piroliiote continluity in the policy eniing and Public 1lnformlatioii C0111po1en11t The World Bank dialogue in social protection. Ihe project (USSI.95 millioin): This c0111pOnIenTt Would WB O1fice in lLuliigary objectives would be aclhieved throLigil: support funictionial reviewvs foi- relevant Mr. Philip O' KcCf support to devclopmilcnit of institutiolnal and miniistries adii capacity sti-elngthlenlilig ill p lotie: (±36 1) 374-957(0 Fax: 374-9510 budgetary meclhaniismils for development atid response to identified needs. ilnCludiiig at WB CouLntry Office in Sarajevo prioritizatioin of social policy in J31-J; CSWs to rolloLIt cliCllt Iegister. It woLIld Ms. Kendra Gregson improving tlhe policy fiamivework for genI- stippoit desigil arid ilm1ple'1iemetatioil of pLib- Phone: (+387 33) 440-293, Fax: 440-108 erationi of productive eniriloyiuieiut opportu- lie eoiisuItation!informlition ealilpaigis Oil W13 Sat: (5244) 3066 nities; soci al policy reforii an1d i the NGO/CSW J: xternal improving the impact and efficienicy of the innovation ftilid. ETF Republika Srpska social safety iet, in par-ticular tocusinig po- 3. Iroject Inliplcmieictatioln ComTIponent Mr. Srecko 13ogulnovic. Director graiis oil the iieeds ofthe poorest: (USSO.2 million): Triis componlent woUld Marije l3ursac 7/Il, Baltja Llika improving public informnation and consulta- support project management. colitracting plhonic: (±387 51) 218-140 Fax. 21 7-947 tion about tile objectives and( cleiiietits of out project mainagelmietut/proLi-CIurem lIt aiid PI J Federation sociail policy refonis; antd fitiancial maniagemcent fLiunctionis to existing Mr.Marko Pejcinovic, I'll.i Dircctor strengthening thc sociai statistics base in P JUs. Iesatijska 9. Sarajevo order to Censure that social policy is formu- PIloiic: (+387 33) 279-18(0 Fax: 279-181 lated on a well-iniflormcd basis. 38 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE SOCIAL SECTOR ADJUSTMENT CREDIT (SOSAC) STATUS ACTIVE CREDIT EFFECTIVE 30-Apr-2001 ESTIMATED COST 20.00 CLOSING DATE 31-May-2001 Financing Table US$ mil. Implementation Summary (US$ mil.) World Bank (soft loan) 20.00 BUDGET SUPPORT WB WB mnqd Total funds TOTAL FINANCING 20.00 DISBURSED 0.00 0.00 0.00 GAP/SHORTFALL 0.00 TO BE DISBURSED 20.00 20.00 20.00 TOTAL 20.00 20.00 20.00 Objectives assistance; and (iii) relbrm and imptove- groups to act as technical counterparts in The overall objectives of the proposed mncit of survey-based social statistics to development of the policy agenda. While SOSAC arc to: (i) support developnment of better-inf`rmn policy makers in Social Pro- these groups need broader representationi - institutionial and budgetary mechianlisimis for tection. in particLular from MOFs - they act as useful development and prioritizatioti of social The IDA credit would be Icict to B3il-l (the focal points. In the labor area, the Commis- policy in BiH; (ii) improve the policy State) for a period of 35 years, including a sion on Labor Legislation Reformi acts as firaniework for generation of productive 10 year grace period, on standard IDA counlterpart in the Federatioti. employmiieit opportunities; (iii) itiprove the terms. Tlhe State will onlenld, througlh sub- The project was jtust recently approved by impact anid efficicncy of the social salcty sidiary agreciicimts, the credit procccds to the Bank's Board on Fcbruary 15, 2001, and net, in particular locusing programs on the the two Entitics in agreed proportions on the is nlow awaiting govenmment signatuircs and needs of'thie poorcst; and (iv) strengtlhien the same teriiis as the IDA credit. FuLiditig for parliamentary ratification. social statistics base in order to ensuire that teciinical assistance ibr preparation is beinig Contacts social policy is formulatcd oin a well- providcd through a PI-IRD granit. The World 13ank inlforiiiecd basis. Implementation WB Office in Flungary Description The Ministry of Forcignl Trade and Eco- Mr. lhilip O'Keefe The lProject is a single tranclhe struCtLi-al nomiiic Relationis would be responsiblc for Phonie: (+36 1) 374-9570 Fax: (+36 1) 374- adjustment crcdit to BiH which would Sup- oveCall administration of the Credit on be- 9510 port: (i) reforiiis of labor legislation to cnl- half of Bil-l, the borrower. Each Entity's WB3 Country Office in Sarajevo able greater ilexibility in labor markets, in Ministry of F inalnce would be rcsponsible Ms. Ketidra Gregson particular with respect to hirinig and iiring for adminiisterinlg the pre-allocated fuLids lPhonc: (+387 33) 440-293, Fax: (+387 33) by firiims and setticillemit of' social welfar-e froii tle Credit. In terms of the fu-tlier work 440-108 WB Sat: (5244) 3066 claimns: and (ii) development of social pro- otn thc sLibstanltive agenda to be supported tectioII strategies. inlCLidilg expenditLure by SOSAC, the relevant miniistries in eachi strategies with pailicular focus oln social Etitity have constituted small workilig TRADE AND TRANSPORT FACILITATION IN SOUTHEAST EUROPE PROJECT (TTFSE) STATUS ACTIVE CREDIT EFFECTIVE 22-Feb-2001 ESTIMATED COST 14.80 CLOSING DATE 30-Sep-2004 Financing Table US$ mil. Implementation Summary (US$ mil.) FBIH (local counterpart) 2.20 CONTRACTS WB WB mnqd Total funds Governments of BH (local counterpart) 0.20 COMPLETED 0.00 0.00 0.00 RS (local counterpart) 0.80 CONTRACT SIGNED 0.00 0.00 0.00 United States (grant) 0.70 BEING PROCURED 0.00 0.00 0.00 World Bank (soft loan) 11.00 TO BE PROCURED 11.00 11.00 14.90 TOTAL FINANCING 14.90 FINANCING GAP 0.00 0.00 0.00 GAP/SHORTFALL 0.00 TOTAL 11.00 11.00 14.90 Background hiave amouLited to bottlenecks to trade, with 1995-97. The Southeast European Coopera- T'Ihe collapse of the Soviet Union and tie niacro-econonlic efliccts similar to those of tive Initiative (SECI) has, in parallel, set up break-tip of the Yuigoslav Federatioti led to protectionist trade policies. Thiey undernnuiile natioiial "PRO" comilittees to mobilize radical changes in the dit-ectioln of tralffic incenitives to improve comipetitivetiess; and public and private sectors to simplify proce- ilows anid the creation of nllew ronitiers alid deter fbrcitin direc investmeilt. dLires anid otherwise l'acilitate trade. in this cLsSomIIs scrviccs. P'erfotllanIce of'thc border To address these problemiis, the EU has beeti coniectioni the goveriniments of Albania, contiol agencies has beetI unsatisfactory: (i) advising Romania anid I3uLgaria oni CUStOtIIS Bosnia/l-lerzegovina, Bulgaria, Croatia, traftic has bceti subtject to lonig xvaititig rellonil alld comp0teICizition, as plrt of its FYR Macedonia and Romilaniia have each timiics. raisinlg the cost of' transport services pr a-acccssion assistallcc. In 13os- asked the Batik to fitiatice improvemTteilts to and makinig themIl itipredictabic; (ii) cus- nia1/ller-zegovina it has provided substanitial border crossitig points. toins revenue collectionl hals falicil short: direct operational Support to build up the Program Objectives and Description - (iii) anid smugglitig and corruption hiave custollIs adillinistrations after the war and TI'hc border crossing probleimi, by its ntatitre.- become vwidespread. These deficienicies likewise in Albania after the civil ulinst of requires coorditiateLl anid mutually reini- 39 , WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE forcing action in many areas. The ProLrarn trade. tions. The regional stccring comimiittee is thcrefore aims to integrate the cflorts of the Program Costs and Financing - The total responsible for coordination acr-oss COUln- EU. SECI and the World B3ank Group lor: cost of the project is estimated at USS 14.8 tries. To the extent possible the project im- (a) phiysical improvemienits to border cross- millioii equivalcit. An II)DA Credit of USS plernentation tcams are bcinig bulilt arouLnd ings, (b) techniical assistance to strengtileni II millioni equivalenilt Would Finianice abotut officials already managing the EU assis- the customs adminiistiationis (c) computteri- 74 peCent of this total. The US goveriiment tanice and SECI coordinatilig fnilctiols. Tlhe zation of procedures at the border crossitigs has been asked to provide grant lUndinl.g of PITs will assist cach governimlenlt in pro- and electronic ililg of CustOImIS declara- about $ 0.7 itillioni. The government wili Curelimenlt anid loal miallagen1cnit. tions. (d) improved exchange of infloriation finanice the remaining USS 3.2 niillion. Morc aboult TTFSE on betweenl tile border conitrol agencies and the about 21 perccit of the total estimated cost. httpl://\vww.secrecon.org/Regionallinitiatives busincss collilnunity USinig a web-site: and TIhc EU is providing miost assistance to ltie /tt'se.htmio (c) training for the busilIess comIm1ullity CLustomis administrations through oIl-gOing Contacts through seminars and distaice leariig. Ai gralits. hc Worild Bank the regional (i.e. interilationial) level a Preparation and Implementationi - The WB3 I-IQ Wasltingtoni DC stecrinig comm1littee has been created to pro- IProject is one of six ncarly simultalleous Mr. Gerald Paul Ollivier vide a forLmi for the exchiange of expericiiec cOuIntry operations linkc( uLn(der the TTFSF lPihone: (+1 202) 458-4(023. Fax: (+1 202) among the countries, the collective aligninlg Programi. Thle project wvill be implemilenited 614-(901 \VB Sat: (5220) 84023 of procedures on EU standards, and the over thirce years. starting in carly 2001. Thie External coordinationl of operating practices at customs administrations will be responisible PIU Flederation "paired" crossinig points. Thereby thc Pro- bio implementingl niost colipolicilnts al- Mr. Kemal Kiarkiti gramii aims to: (i) reduce costs to trade and tlougILh tile border police will also he in- PIU Director Sarajevo transport: (ii) reduce sIlmugglilng alnd corrup- volved. TraLie facilitation activities will be Plhonc/Fax: (+33) 664 831 tion at border crossings: and (iii) strengthen hosted by the clhamber-s of economily. the regionial partncrshiips and expand regionail PRO-committees and professional associa- TRANSITION ASSISTANCE CREDIT STATUS CLOSED CREDIT EFFECTIVE 5-Sep-1996 ESTIMATED COST 110.00 CLOSING DATE 31-Dec-1996 Financing Table US$ mil. Implementation Summary (US$ mil.) Others (loan) 20.00 BUDGET SUPPORT WB WB mnqd Total funds World Bank (soft loan) 90.00 DISBURSED 90.00 110.00 110.00 TOTAL FINANCING 110.00 TO BE DISBURSED 0.00 0.00 0.00 GAP/SHORTFALL 0.00 TOTAL 90.00 110.00 110.00 Project Background ties ol thie new governimental stirLctLlres. The this agency, as well as developing a comi- The TAC was designed to provide quick- core ref'ormi consists of uLlif'illg the Fcdcra- plete legal framiiework to transfer state and disbursing funds for fiscal and balancc-of- tion Customs Administration (FCA), to social lassets to private ownerslip. payments assistance, It was targeted for flacilitatC the dClivery of cListolims revenlLues Implementation Arrangements supporting the establishmiient of a funlctioln- fiomii their poinits ol collection to the budget The State andcl Federation governm1ients both ing Federation of Bosnia and Horzegoviiia of thc F-ederation. Other reforim1s iiclude the used TAC. one of the two Elntities that constitute Bos- establishinieit of hlic FIederationi T'ax Ad- Project Achievements nia and Herzegovina under the Dayton Ac- miniistration (FTA), progress in Core institutional reformiis were gcierally cords. given that the second entity, Repub- rationializinig intergovernmental fiscal rcla- imleminenled, and overall progress in de- lika Srpska, was subject to an cmbargo for tions, anid progress in ref'orim of penision and fining and impleimentinig a mediumii-terimi donor assistance at that tine. healti finianice: policy framework was significant. Specifi- Project Objectives * Improvemeints in the finianicial systemi. cally, The TAC's purpose was to support two These imilpr-ovemilenits at-e cr-itical to imiipr-ov- * T-he Federation Customs Authority is iiow maini development objectives: ing the flow of financial capital betweeni the operating as a singIC institution under pro- (i) postwar economic reintegration and h1 Bosiniac- anid Croat-iilajor-ity areas of the cedLires established and supervised by stitution building by the State and Federa- Federation. Core reformiis inclu(de thle Ullifi- ELlropeani Union advisors. The Federation tion governmllenlts anid cation of thc F7ederationl paymiienIts system Tax Adminiistrationi has been established, (ii) economiiic and employmiienit growthi by anld the adoption of the Federation Baniking and significant progress in reform of public relllitiatinig econoniic transforomation inter- Agency Law; iinances has been achieved. rupted by the war in the key areas of enter- * Creationl of a firamiework for- privatizinig * The Federation Banking Agency (FBA) prise and banking reform. banks and cnterprises. Privatization is hias becii established, and the Federation Project Description needed to stinlUlate restruLctLlriiig. encourage paymenits system is moving toward unifica- The Project had the followinig components: inivestimcnit, as well as limit the potential tion. -lowever, full uniiicationi of the pay- * Reforimis in the system for maniaginig pub- liability of thie government lbr debts of nion- menlts systemil has been blocked by an in- lic finances. These improvemiienits are criti- private banks anid enterprises. The core ability to merge the two central Payments cal to providing an adequate revenue base refomr conisists of presentation to Parlia- Bureaus in Sarajevo and Mostar. and clarifying the expenditure responsibili_ nment of the Privatizationi Agenlcy Law. * A legal framework for privatization of Longer term refor-miis iliclide establishilng baniks anid citerprises has been presented to 40 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE the Parliamncit, and the Federation Privati- WB Country Oflice in Sarajevo zation Agency (FPA) has bcen cstablished. Mr. Joseph K. Ingram Contacts Phone: (-387 33) 440-293, Fax: (+387 33) The World Bank 440-108 WB Sat: (5244) 3025 WAR VICTIMS REHABILITATION PROJECT STATUS CLOSED CREDIT EFFECTIVE I-Aug-1996 ESTIMATED COST 30.00 CLOSING DATE 31-Dec-1999 Financing Table US$ mil. Implementation Summary (US$ mil.) Canada (grant) 1.20 CONTRACTS WB WB mnod Total funds Council of Europe (soft loan) 5.00 COMPLETED 10.00 13.20 22.20 ECHO (grant, through NGO's) 1.00 CONTRACT SIGNED 0.00 0.00 0.00 Iceland (grant, Est.) 0.70 BEING PROCURED 0.00 0.00 0.00 Italy (grant) 3.20 TO BE PROCURED 0.00 0.02 0.00 Netherlands (grant) 0.50 FINANCING GAP 0.00 0.00 7.80 UNDP (grant) 0.30 TOTAL 10.00 13.22 30.00 WHO (grant) 0.30 World Bank (grant Smil + soft loan Smil ) 10.00 TOTAL FINANCING 22.20 GAP/SHORTFALL 7.80 Project Background supplies, training and tcchnical assistance physical and 38 psycho-social CBR centers The war in Bosnia-l-lerzcgovina has taken a for physical therapy, occupational therapy, and related hospital-based services, seven heavy toll on the physical and psychological clinical services fbr meintal illness, and psy- orthopedic and reconstructive surgical de- healtlh of the population. About 250,000 clio-social rehabilitation: partmenits (O&RSD) (in 3 Clinical Centers people were killed and 175,000 injured, Prostheses and Orthoses lProductioll (USS and 4 Cantonial hospitals), 6 prostheses and 3.000 to 5,000 of whom lost limbs. Fur- 6.2 in): supply, production and mainltenianice orthoses production and maintenanIcC units. thermore, the World Health Organization of quality prosthieses and orthoses; Procurement (WI-1) estimates that about a third of the Orthiopedic and Reconstiuctive Surgcry Goods and services finaiced by the W1B population suffers from post-trauma stress (US$ 8.8 1ll): improvement in the availabil- were procured competitively by the F'IU disorders. Thus, the war has greatly in- ity anid quality of essential Orthopedic and (see contacts below). Suppliers had ad- creased the case load for hcalth services, reconstructive surgical services; dressed all expressions of interest to that with sharply increased numiibers of patients Project Iimplemilenitationl Support (US$ 1.9 Unit. A General Procurement Notice was with war-related injuries, and physical and m): officc cquipmelit, vehicles, techniical published in Julle 1996 and updated in Mlay mncital disabilities. assistance and training. 1998 in Dev'elopment Busineess (for stlb- Ilhe exteinsive damage to health fticilities World Bank and Cotincil of Europe Social scriptions contact the United Nations, I'( and the loss of' health staff duLinig the war Development Fulid (SI)F) resources Sup- Box 5850 Grand Central Stationi. New has made responding to these healthi care ported all components: Italian and Iceland York, NY 10163-5850, USA, philoIe +I nccds difficult. Many hospitals and ciinlics Govt. filialiced the Prostheses Productioni (212) 963 1516, fax - 1 (212) 963 I18I). are not ftully f'unctional because of loss of comilponienit; Canadian Govt. inids sup- This notice was also published in the local iacilitics, equipmllelnt and staff. ported Technical Assistance for the CBR press. Project Objectives component: 1-iollanid provided six imiobile X- Project Achievements The principal objective of the project was to ray niachinecs WHIO provided equi'pmllelnt All planned project activities were success- help reintegrate people with war-rclated anid imIplemnelItation suIpport for CBRs; and fully completed. Overall project objectives disabilities into productive lifc. Seconidary UNDP supported CBRs' civil wol-ks relia- were achieved. Iimplementationi Completion objectives was to introducC a more cost- bilitation. Report (ICR) was completed on June 28, effective approach for dealing with disabili- Implementation Arrangements 2000. ties, aind to support tihe development ot local A Plroject Iimplemicnitationi Unit (PIU), es- Contacts aiid regionial capacity to maniage and delivcr tablisied within the Federation Ministry of The World Banik rehabilitation services. I-lealthl was responsible for manlaginig all WB Counitry Office in Sarajevo Project Description project activities, including coordinationi at Mirlana Karahsanovic The project had the following componienits: tile canitonial anid niunicipal levels. IMG wvas Phone: (+387 33) 440-293 Fax: (+387 33) * Comnuitniy-Based Rehabilitationi (CB3R) conltiacted to prepare assessments and dc- 440-108 W13 Sat: (5244) 3041 (IJSS 13.1 rii): rehabilitation offacilities and sigins for civil works with UND13 fLndiig. provision of eqUiipTIelt, csscntial drtigs and Civil wNorks included the rehabilitation of 38 41 M WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE WATER, SANITATION AND SOLID WASTE URGENT WORKS PROJECT STATUS CLOSED CREDIT EFFECTIVE 1-May-1996 ESTIMATED COST 74.50 CLOSING DATE 30-Jun-1999 Financing Table US$ mil. Implementation Summary (US$ mil.) Austria (grant) 2.50 CONTRACTS WB WB mngd Total funds European Commission (grant) 22.60 COMPLETED 20.00 25.20 74.50 France 0.80 CONTRACT SIGNED 0.00 0.00 0.00 Italy 5.20 BEING PROCURED 0.00 0.00 0.00 Kuwait 5.40 TO BE PROCURED 0.00 0.00 0.00 Netherlands (grant) 1.70 FINANCING GAP 0.00 0.00 0.00 Saudi Arabia 4.70 TOTAL 20.00 25.20 74.50 Switzerland 2.00 United States (USAID ) 9.60 World Bank (soft loan) 20.00 TOTAL FINANCING 74.50 GAP/SHORTFALL 0.00 Project Background World Bank funds supported urgent works; tensioni of sewers, US$ 0.6m: Sanski Most, Before the war. piped municipal urban wa- EC funds vere for imported material, construction of water supply pipeline, US$ ter supply coverage in BHI was rather good equipment and works. Dutchl cofinanicing 1.3m; Kresevo, completion of works to with 90% of the population scrved and 24 supported urgent works, the emergenicy increase supply, US$ 0.8m; Bosansko Gra- hour service being the norm. The service development plan, and institutional hovo, water supply system rehabilitationi. had deteriorated sharply from pre-war levels strengthenin1g. Austriani fuiiids supported US$ 0.25m; Breza, rehabilitation of the due to: increased demand fiom refugees; preparation of the next sector project. watcr supply system, USS 0.39m; Kljuc, loss of access to existing water sources; Implementation Arrangements rehabilitation of Ihe local water supply sys- water waste by consumilers since billing for Municipalities have primiiary responisibility tcm (hoLIsilng project), USS 0.2m; Fojnica, water no longer takes place; water network for the provision of water supply, sewerage construction of water supply system leakages; and direct war damage of systems. and solid waste services in BIl. At tile fed- Bakovici. US$ 0.13m; Konjic, water supply Prior to 1991 BI-l's water-bornc sewerage eral level, the Ministry of AgricUltUre, WVa- pipelinc and reservoir, US$ 2.2m: Fojnica, collection system coverage in urban areas ter Managemilent and Forestry sets policy for water reservoir and pipeline. US$ 2.1m; averaged 70%. War damage and poor water maniagemilenit fuLictionis whicil are Citluk. completionl of four pump station, maintenanice contributed to sewer pipe calTied out by Vodoprivrcda BI-I (VBI-l). USS 0.73m; Kladanj, water intake and damage, pumping station failure and treat- V1311 has overall responsibility for imple- pipeline, USS 1.3m; Trnovo, rehabilitationi ment plant shutdowins. Solid waste collec- mentation of the project, assisted by advi- of water supply system, US$ 0.3m; Odzak, tion services, well organized prior to the sors of the Intcrinationial Managemilenit Group system rehabilitation, US$ 0.4m; Neum, war, had collapsed in many urban areas. ([MG). Each benefiting muinLicipality is pipelile and pump rehabilitation, US$ Disposal sites were no longer shared by responsible for suipervisioni of conitractors, 0.2m; Siroki Brijcg, rehabilitation of watcr muniicipalities. with regional VBH officcs in Mostar, Tuzla supply system, US$ 0.3m; rehabilitation Project Objectives and Bihac providing works oversight. works of flood protection measures along Tlhe project aimed to rapidly improve water, Procurement Neretva river, US$ 5.2m; Ljubuski, w ater sanitation and solid waste services and re- Goods, works anid seivices finianiced by the intake, pump station and reservoir, US$ move risks to public health. The project also World Banlk were procurcd comilpetitively 1.6m, Ramila, pump station rehabilitation, prepared for future works and helped bring by the PIU and VBFI US$ 0.2m; Visoko, construction of sewer- about institutional changes to ensure the Project Achievements age collector in old part of town, Buzim, long temi sustainability of the sector. The project componenits finanlced with Banik drillinig of well, US$ 0.8m; rehabilitation of Project Description anid Banik-adimlinistered funds are essentially gaulging station in area of Mostarsko Blato, The project has the following componenits: comipleted. Fifty-eighit civil works anid USS 0.05m; Sarajevo, sewer rehabilitation, * Equipment and Materials (US$ 19.6 in): goods contracts at a total value of US$ US$ 2.6i1; Visici, pt Umnp stationi reliabilita- import of rolliig stock and construction 20.9m and 96 contracts for design, supcrvi- lio, US$ 0.23mii; Livino water suipply sys- equipimient for system mainitenlanice and sion and other services in the aimounit of temi.- US$ 0. 16m1; Kiseljak. US$ 0,24i; repair in 12 selected muniicipalities of the US$ 4.3mii were comiipleted unlder the project Ljubuski pipeline, US$ 0,9m. Final works Fcderation; with Bank maniaged fuLids. All platined are beinig completed at Svitava pump sta- Urgent Works (US$ 47.2 ni): repair and works are contracted aid alimtost completed. tl(01 US$ 0,lm; anid Tomilislavgrad water rehabilitation works (including goods, con- A samplinig of completed sub-projects are: supply system, USS 0,15m sultants' services and commercial services) Jablanica, water supply pipeline, US$ 0.2m; Contacts in 20 priority municipalities of the Federa- Baanovici, water supply pipeline for The World Banik tion; Strazbenica, US$ 1.0nm; Rama, constructioll WB HQ Washiigigtoni DC * Emergency Development Plan for Water of pipeline, USS 0.03m; Livno, civil works Ms. Seema Manighee Management Sector (US$0.9 n1); for pumpinig station, US$ 0.25m11; To- P'hone: (+1 202) 473-5702 Fax: (+1 202) . Institutional Strengthening (US$ 1.6 nm): mislavgrad, well coniinctede to WSS, USS 614-0901 WB Sat: (5220) 35702 training and financing of incremental oper- 0.08111; NeuLim, water reservoir, USS 0.1 m; atiilg cost; Busovaca, laying of pipeline donated by the Next Project Preparation (US$ 5.2 ni): Netherlanids, US$ 0.1lm GrLde, rehabilita- equipilenit, vehicles, training. tion of waste water treatment plant aind ex- 42 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE IDF GRANTS TREASURY (UNDER PREPARATION) lhe maini objective of the TreasLiry IDF ing to internatiotially acceptable standards compoieint. This assistance will supple- grant will be to provide technical assistance of governance anid transparenicy. Particular nIenCt anid will be fully hariTnonized with the and t-aininig to the Entity and Canton Gov- attention will be given to the establishmlieilt technical and material input being provided ernilenits in the implemilenitationi of the of the Treasury Siigle Accoulit system as a by the US Treasury, USAID, and other Bank-Fund recomimicindationis on the estab- cornerstone of a well ifunctioninig treasury, agencies in this field. lishmlieint of a comprciehisive treasury mailn- and at the same tiile a conditioniality of the agelilelit systems throughlout 13il- coniformil- World Bank PFSAC II budget maniagemicnt SUPPORTING THE INSTITUTIONAL DEVELOPMENT OF THE STATISTICAL SYSTEM IN BOSNIA AND HERZEGOVINA The maini puipose of the Grant is to support Force Survey and design of new houiseihold vina. building of the institIltionial capacity of the suIvey (Living Stanldard Measurenilent Grant is curreiltly under implementatiolln Statistical Offices inl 1Bosnia an d lterzego- StuLdy Survey). anid in the area of institu- 45%) of the fuLids have been disbursed or vinla ill the areas of data collection. imple- tionlal arrasigemiinilts in Ioreigll trade data comitted, while contract negotiations are melitation of the System of National Ac- collectionl, transmission, processing and oligoilig tor additional 27% of fulids. The Counts (SNA) and inforiliationi disseminia- sharing; (iii) provision of traininlg in Englishi rest of the funds will be committed after tion. Main activities that will be suportcd ior local statisticians: (iv) building initial some of the consultancies now under way by the Grant arc: (i! advising and training of capacity to derive anid disseminate macro arc completed. Thc Grant has been extended statf in SNA methodology, its impiemcinta- information througi inistallationi of LAN Llitil July 22. 2002. tion and providing assistance in buildinig of and desktop pLlblishlinig stations in all three initial satellite accounts; (ii) providing tech- statistical institutions; alid (v) designing of a nical assistance in implementation of tech- long-ter-mil strategy for devclopimienit of the nical classifications, reintroduction of Labor Statistical System in Bosnlia and 1-lerzego- ENVIRONMENTAL CAPACITY BUILDING Bosnia and t-terzegovina has received a the ESC is to provide overall coordination: counting have been hirel. Bidding for ilhe grant in the amount of US$ 292,490 for serve as a techinical advisoly boardc super- office cqtlipielt has been prepared and will Environimiienital Capacity Building. The vise the grant activities; and oversee tihe be launched soon. Grant agreemenit was signed on July 18, steerinig comillittee. Since the ESC is not an The NEAP was introduced officially at the 2000 and the Amenidimient was sigined on official government entity the NEAPI Di- Mediterranean Action. Plan workshop held November 11, 2000. rectorate is officially reportilig to respective in Sarajevo on March 19. 2001. Substantive The miain IDF grant activities are (i) an miniistics in chiarge othie enlvironiienit. preparationl activities have been completed InstitUtional Needs Assessn ent; (ii) an En- Progress so far. Several mnetings of the NEAP joint viroillmental Standards anid Environmileiital DeIC to all amlicindimicit to the grant, wlicil themiatic working groups (WG), have becn Monitor-ing System Review; and (iii) the chianiged the provisioni related to the opellilig held, TORs for the WG have been prepared Devclopmietnt of a3i Environimilenital Strategy of the accounit funids hiave becomlie available as well as a proposal of outline of the NEAP and National Actionl Plan (NEAP). only recently. Elections and chaliges of doculient, whichl will be discussed at the Al Inter - Entity Etivironmeilneital Steering govenrnicmt also slowed down initial irn- first NEAP workshop scheduled for 7, 8 & Comm11ittee (ESC) is responisible for imiple- plemerintation activities. Neverltheless, the 9 May, 2001 in Banja Luka. The Bank has menitationi, through one implemiienitatioll NEAP Directorate has been establishied, the engaged a consultant to help the Directorate agency for both entities, wlichi is the NEAP selectioni process for project niialager anid to coordinate NEAP activities. Director-ate with twVo stIb-oiffices. one in deputy manlager has been comlipletcd, con- Sarajevo and onle in Banja Luka. The role of sultantts fol procurement and finanice / ac- 43 I WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE WORLD BANK PROJECTS UNDER PREPARATION PRIVATE SECTOR CREDIT PROJECT The proposed project would comprise a vatized enterprises providing that the pri- attempt to raise additional donor fulnding for credit line of USD8-10 miilion to be ex- vate sector share excecds two thirds of the technical assistance to be extended to par- tended throughi participating banks to cred- total outstanding shares. The Bank will ticipating banks and/or to banks interested itworthy private enterprises for viable proj- attempt to raise additional donor fiiiancing in participation, and/or to the Banking Su- ects. The finanicing will include invest- or co-finanicinig for the credlit Iine. Besides pervision Agcncy (the Agency), and/or to ments and/or increniienital, permanent sLIpplyinIg mucIh needed funlding for the Banking Association to improve institu- working capital in industry, agro-processing priivate sector, the: project would play an tional capacity, to address specific issLIcs or and the related service sectors. In addition active role in shaping the development of for training. to indigenious private sector enterprises, the bankinig sector in Republika Stpska. credit line will also be open to newly pri- Parallel to the credit Iie, the Batik will PRIVATIZATION TECHICAL ASSISTANCE PROJECT (PTAC) T'he lPTAC aims at accelerating large scale privatizable by unbuLidlinig thcimi; (iv) assist be iblloxved by quick enterprise restruCtUil- privatization through the tender sales. Spe- in facilitatinig the link between the comple- ing and large productivity gains. The ex- cifically, the project would: (i) assist in the tion of privatizationi and the start of the pected effective date is July 2001. The sale of manucaturing companies; (ii) hielp capital market. Tic estimated iLifuding is US project team leader is Mr. Ulricil Hewer prepare the legislative and regulatory S 20M. The miaini expected achievemilenits (ECSPF). framevworks required for diverting utility are to sell roughily 45 enterprises (27 in companies: (iii) render holding companies FBil-l and 18 in RS) to strategic investors, LOCAL INITIATIVES (MICROFINANCE) PROJECT II Project development objective: and KM 35 millioni in RS) by December 31, positive adjusted Retum on Assets. Finanie- The overall development goal of ihe project 2004 (project close). ing to the MFIs vill be in accordance with is to address the urgenit need to iilprove Thc project's perfoi-rimanice and imipact vill perfomiance-based contracts. livelihoods, raise incomes and create jobs in bc mieasLired at botil thle clicint level anid the Project components: Bosnia and l-lerzegovina, throughi provisioll microfinianice institution (M Il) level. Componenit 1: Microftianlce Fund of financial services to the smallest busi- At the clienit level, imiipacts oni the followxing Finalncinig Objectiv'e. To provide market- nesses, from the informal self-employed to variables will be measuied: (i) hoLIseoild driven finanicinig for selected, high- small enterprises. Specifically, the project income, (ii) employmcint and job creation; perforiniig mirc-ocr-cdit organizations will: (iii) businIess registration; (iv) improve- (MCOs) so as to increase their oLitreachi and Inxvest in the growxth and institutionial devel- ments in business assets; anid (v) profitabil- quality of scrvices to loxv-income clients. opment of highi-perforiniig microfiniance ity. In addition, ilmore intangible impacts, Fina(ncinig Principles. Fiianicinlg xill be institutions that have the capacity to serve such as how access to microcredit has provided in accordance witil the following significanlt numlibers of low-income clients helped ease the post-conflict transition, vill priniciples: not typically served by the comimlercial be nionitored, Transparency: use quantitative / objective banking sector. At the MFI level, key pcrformiaice indica- criteria in determininig MCO eligibility for Support the tranisitionl of the microfinance tors include: (i) outreach to low-inicomile project fiiianlcinig to the greatest extent pos- sector towards sustainiabic sources of fi- clienits (expected increasinig no. of active sibic. nancim,. clients; and average outstanding loan size Client Orientationl: fuiild those MCOs that Key performance indicators: less than 150%, per capita G DP): (ii) portfo- will achieve the goals of the Project and The overall target is for partner microcredit lio quality, xxwitli an MFI periormance stani- havc a comimlitimient to scrvinig low-income organiizations (MCOs) to serve a total of dard thiat Plortfolio at Risk (past 30 days clients. 50,000 low-incomile clients (35,000 in the oxerdue) is less tlhani 5 peicenlt; (iii) operl- Sustainability: fund thosc institLitiolis that Fedcrationi and 15,000 in RS) with an esti- tional efficienicy (imiproving tr-enids ex- have a comimlitimienit to sustainability and mated loan portfolio outstanidinig of KM 125 pected); and (iv) profitability, wixit a per- accessing sustainable sources of finianiciig. millionl (KM 90 million in the Federation formanice stanidard that MlFIs maintain a Perforniianice-based: fLuid those MCOs that 44 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE 101 have the best performiance in the scctor pend on f-uLnds available. nance sector through investment in training based onI interinational microfinancc stan- Financing will be perforimance-based in the and techinical assistance and otiler capacity dards. sense that MFIs will be obliged to maintaini building activities. Equal Access: fund those MCOs that eni- certain performiaiice standards to remaini Coniponeilt 4: Impact Assessment / courage equal access to all Bill citizens. eligible for ongoinig and future linancinig. Research and Development Single EcoInom1lic Space: encoulage, as far Component 2: MFI Legal and Regula- This component will finance a longitudinal as is possible, those MCOs that want to tory Reform impact assessment, the objectives of which operate in BiH as a single economic space The ob jective of this conipolient is to sup- are: i.e. that operate across Entity boulidaries. port furthier development of the legal and To doctlimenit the impacts of a sustainable Qualifying MCOs will receive long-term, regulatory framework for inicrofinance, so microfinance sector in BiH. [KM]-denominated loans with a 15 year as to enable MCOs to expand their sources To provide client-level information to MFIs temi, includinig a 5 year interest-only pe- of capital and the types of services they can for use in management decisions. riod. The interest rate to the MCOs fiom the provide. The aim is to develop alternative To build interest and understanding among oii-lendinig intermediaries will be fixed at 5 institutiolIal formis for MCOs, within a fi- MFIs on the use of client-level information percent per annum until December 31, nanicial sector framework, that would pro- for documlienting program impacts, iniprov- 2003, subject to review and agreemenlt dur- vide themii the possibility to mobilize more ing program maniagement, and developing ing appraisal and negotiations. sustainable sources of finanicinig, such as new products and services. I-or the first rouid of financinig in year I ot commercial bank financinig, equity invest- To build local research capacity for col- the project, eligible MFRs will receive a meiit and savings. Iecting and analyzinig client-level informia- USS i million loan to be disbursed in two Componienit 3: Microfiiianice Sector Capac- tion on microeniterprises aid microfinanice. trenches of USS500,000 each. A second ity Building Support round of financing will be organized in The objective of this compolient is to sup- 2002. Furthcr roulids of financinig will de- port ttie developmeiit of a strong microfi- COMMUNITY DEVELOPMENT PROJECT Project development objective: level of ilivcsticilts on the part of citizens; gional differences in local goveniment The Community Development Project Ievel Of retLrirees directly attributable to spending levels (CDP) will be a follow up operationi to the projects; througil targeting of central government Eniergency Public Works anid Employmeiit employmilenit opportunities created from ftinds to low-income areas Usin1g poverty Project (PWEP) and would build oii the investmlelits nuder the project. work as aii input to a targetinig strategy; PWEI' implementatioii capacity. By focus- Project components Applications for such non revenue generat- ing on commullities in tinder served aiid low The project would improve the qtiality of ing investments coLld be initiated by mu- incomile municipalities it would dovetail basic infiastruicture and services in poor nicipalities or with the Local Development Project (LDP). comniuniities witliin low-incomlie Iiiulici- by associations at the neighborhood, coni- The Entity Govermiienits, while palitics, while seekiiig to strengtlhen the muinity and, village level representing citi- stroiigly supportive of the LDP, recognize institutionial and 1iiianicial capacity to manl- zens groups. that m10ost municipalities would not be eligi- age sucIh services over the long-terimi. The Investmients could include repair of infra- ble and therefore would like to sec colitill- prqicct would have threce compolnelits structure such as water supply, rural roads, tied assistance for non-creditworthy mtinici- (1) Performance Based Grant Agreements bridges, schools, clinics, market places etc. palities, where poverty incidenice is highest. for Noni Rcvenue Generatiiig Iiivestimienits Services would include mainteliance serv- The objectives of the proposed project are: (2) Institutionial Developmeiit ices; garbage collection, community recrea- *improveniciit of basic services and tacilities (3) Projcct Impleiieliitation tion, parks, liglitinig, day cares, etc.. Ilvest- (throtigli investnieiits in nion revenue gcner- Component 1: .Ieri-foi-riiace Based Gralit mcnts would include those which are non atinig socially oriented projects and pro- Agreemenits revenue generating and have largely social grams) for low incomile and poor commnilllli- The proposed opeiration would provide benefits. Selection of investments in infra- ties in tinder served murnicipalities; and grants as a mechianlisilm to target noni reve niUe structure or services sub-projects would be *improvement of governaice and capacity generating investmilents to low-inicomile illu- based on proposals with well defined planis of local govermilenits to deliver services to nicipalities anid their poor comminlilities witih includinig for opcrations and maintenianice. poor comImlunities. a focus on inproving service delivcry, cost Under the Performanice Granit Program1, the Key performance indicators: recovery, the financial managemilenit capac- IPlUs jointly with their clients are expected Thle projects performanilce will be measttred ity of local govermilenits; and public ac- to: against: countability/comimiiiuniity pallicipation. § conduct a financial and operational as- thc numilber and quality of sub projects The perfomiiianice based grant fuLnds would: sessmenit (FOA) of Local Governments and created; the quality of services provided to § bc dcmand dr-ivcil mcclhanlisimis 1o targct otlher groups to analyze their current per- beneficiaries; tion reventie generating investimienit to low- formiance and identify the primary issues the type of development plans developed incomlie and problems affecting their performiance; througih democratic procedures for mullici- mtllicipalities and their poor comnitinlities; § develop a fitiaicial and operational action pahities; the participation levels of citizens § liik stibseqoielt pertorilianicc grant IfLtid- plan (FOAP) describing the necessary steps in decision makinlg: ing to iiiiproved service delivery and public in seqLuenlce to iilproving Local Govern- *the numliber of partnerships and tlinkages accounitability to encourage mtllicipalitics menit performiaicc; and through contiacts between municipalities to move towaids imploveLd local goverin- § enter inito a series of Perforimianice Grant and citizenis associations and organizatiolns: ment performance; Agreemcnits (PGAs) with local govermenits eCollectioll of users fees: § provide a micchianlisnm to help couLiter re- in whiich the Fund agrees to provide capital grant(s) in tranchie (maximiium 3) in ex- 45 O WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE change for local government perfonrance municipalities would be developed in the Componienit 3: Project Implementationl imlprovemiienit in accordance with FOAP. areas of participatory inclusive procedures The project would be imiplenienited by the Component 2: Institutional Capacity BLuild- for identifying; appraising, iilplemiienting, two lPlUs in the Federation and the RS ing financing, monitoring, evaluation, opera- which were responsible for the implemen- Efforts would focus on building the capacity lions and nlaintenanice of investments. In tationi of the PWEP. The project would be of participating agencies in the areas of keeping with the context of post contlict imiplemlenited in partnership between PlUs, social analysis, project identification and capacity building goals will be fairly mod- miuinicipalities and citizens associations and monitoring and evalution. The project est. Traininhg on development planninig, NGOs. woLild increase the capacity of municipali- project prioritization, finalicial manage- ties and other organizationis throuigih techni- ment, revenue-raisinlg techniiiques, woLild cal assistance and training. Capacity for also be suppor-ted under this compolent. THIRD ELECTRIC POWER RECONSTRUCTION PROJECT Project would be implemenited by the three prises which were reliuctanlt to cooperate arrangements lack the economies of scale PlUs: EPBiH, EPHZHB and EPRS. Pro- with each other. The exchanges whiclh were and coordination that existed before the jected Appraisal Date is April l , 2000 and made were in kind and constrainied so that war. They also lack the potential benefits of Projected Board Date is March 30, 2001. net trade between any pair of companies competition (lower costs and prices and 1. Country and Sector Background: was always zero or close to it (e.g., cxports grcater supply quality and reliability). Until (i) Reconstructing the power system. The from one company to a service area with a now, although private investors have ex- Federation and RS governments place high power deficit of another companly are offset pressed some interest, there has tiot becn priority on reconstructing the power system by imiports of the same amouLint from a any private sector investmlenit in the sector. as one of the primary means to relaunch power surplus area of the other company). Private involvemiienlt, particularly if it cotimes economic activity. IDA and other interna- The development of comimiercial trade was from abroad, could bring valuable expertise tional donors have been supportitlg this also hinidered by difFiculties in making as wcll as ncw resources for investmlent. reconstruction, mainly through the Einer- payments because of a poorly functioninig The challenige fio the future is to establish gency Electric Power Reconstruction Proj- bankinig system. Morc recenltly, commilercial clear policies tor refol-riln i the Federation ect (Cr. No. 2903) and the Second Electric exchaniges have been initiated on a Imilited and Republika Srpska, incorporate these in Power Reconstruction Project (Cr. No. scale. Re-establishlmlent of utilindered electricity legislation which is in tune with 3071). Further investments are needed to power exchanges would: (i) permit surplus developmenits in the European Unioni, es- continue the post-war reconstruction pro- power of onc companiy to be used to allevi- tablislh a regulatory framework. and estab- gram. ate shortages of anotlher com1paniy (caused lish a power sector structure which is con- (ii) Improving cost recovery. Since the by itiadequate generationi capacity or by dLIcivc to both the emergence of beneficial Dayton peace accord, the revenue situation outages of large generatinig units or surges competition and privatization. i-lowever, of the three enterprises, both in termis of in power dcilianid); (ii) redLIcc transitnissioni privatization may require significant third tariff levels as well as collection perform- costs by allowing the most direct roLItes to part gLuarantees in order to reduce perceived ance, has improved, particularly for EPBiH. be used, rcgardless of whetlher these routes risks. Further progress is required, however, to cross thc territorics of the other companies; (vi) Restructuring the coal mine sector in reach full cost recovery, includinlg coverage and (iii) recluce generatinig costs by permit- the Fcderation. Investmeilts have been of normal depreciation charges. This will tiig the lowest cost generatitig units in the carried out to enable the Federationt coal require progressive increases in: (i) billing coun1try to be used at each time of day and mines to mieet the needs of the thrctllal and collection; (ii) cost efficiency througih year. A Joint Power Coordiniating Center power statiois ofTuzlaiand Kakanj ovcr the adequate system repair and maititeniaice (JPCC) vas established in March 1999 to next several years. In the mediumi term the and commercial trade of electricity within facilitate the eventual economiiic dispatclhing forecast needs of the power stationis coutld Bil-H: and (iii) tariff levels. of power for the whole COulntry, but the be met fiom about four low-cost mnies. The (iii) Improving tariff structures. A re- companies themlilves still mainitain respon- other mines appear to be financially and cently completed tariff study has shown that sibility lbr the physical controls and are not economilically unviable. A coal sector re- average industrial tariff rates in Bil-H are not obliged to accept the recomimendations of structurinlg study is being carricd out under far below economic and financial costs. By the JPCC. Further progress towards im- Power 2, which will determnie vwhich mnies contrast, household rates for all three cnter- proved power exchanges would be demon- are economiiically viable, recommenld an prises are well below cost levels. The strat- strated by the establishmnenit of more coni- organiizationial structure for these mines, and egy of the Governments and companies is to mercial trade contracts betwcen the three propose appropriate measULres to protect the gradually raise houschold rates towards the companies, a readitiess by the companiies to incomiles of redundatit coal mniiers and help economiiic level in accordance with the fi- help each other out in emICIgeIcies, and an thCIem find altermative enployment. nancial requiremenlts of the companies and incrcasinig acceptance by the thice cotilpa- 2. Objectives: as the ability of louseiholds to pay increases. inies of the power dispatch recommlienda- The project developmerit objective is to (iv) Increasing mutually beneficial power tions of the JI CC. ensLure access to reliable, lower cost clec- exchanges between EPBiH, EPI-IZHB (v) Power sector reform. Prior to the war. tricity, to be sLupplied with redLiced envi- and EPRS. In the period immiilediately fol- Bill had a sinigle vcrtically-ilttegrated so- ronilmental and safety risks, and improved lowing the war, power exchaniges between cially-owned power comnpatiy. Therc are cost recovery by suppliers. The componlent the different parts of BiH were restricted cLrrenitly thrce veilically-initegrated compa- outputs cotltributinig to this objcctive in- bccause of the breakdown of malty tratns- nies (two in the Federation and one in RS) clude: (i) improved safety at hydropower mission lhies and the existence of three serving three separatc grotLps of consLIifers plants; (ii) redLtced polILltioni at therimial separate vertically-integrated power enter- (Bosniiaks, Croats and Serbs). The cuirenit power plants; (iii) iticreased transnmission 46 WORLD BANK RECONSTRucTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE capacity; (iv) increased distribution capac- of the equipi)ment to be financed linder the continue for the proposed project. However, ity; (v) improved operation of the Bi-ll project. Similarly, neithier the allocation of the Project Implemenltationi Lnits (PlUs) in power system on an integrated basis; (vi) the investments covered under the project EPRS and EPHIIZHB need assistance in establishmilent of a legislative and regulatory between the three power companies, nor procuremenit-related activities. A procure- framework conducive to competition and cost estimates are currently available. These nient capacity assessment of the iilple- eventual privatization; and (vii) iistitution- data are expected to be available by January meintinig agencies will be carried out by building througih corporatization of the 2000. appraisal. The implementation of the sub- power companies and operation oni a colll- 4. Financing: projects would be the responsibility of the mercial basis. The project would continlue Total (US$million) local generation, transmissioni and distribu- the post-conflict reconstructioni program in IDA 30 tion entities. the power sector. OTHER 165 Accounts, Auditing and Reportinig 3. Description: BENEFICIARIES 30 The financial management systems of the The project Would focus on restorationi of Total Proicct Cost 225 three Elektroprivredas will be reviewed by the 400 kV and other ligh voltagc transmis- S. Implementation: appraisal and appropriate measures to sion systems, especially reconstructioni of Tlle IDA credit would be lent to Bosnlia alid strengthen these systems would be included damaged substations. This would help Bil-l FHerzegovinia anid onilent thiroughi the Fed- under the project. The financial statements to restore the pre-war iiterconinlectionis witlh ciationl Goverinimient to EPBilH anid of thesc companlies and the project accounts the other parts of fomier Yugoslavia and EPI-IZI-IB anid thirouIgIl the Govemrment of would be audited annually by qualified, eventually to re-join the Uilioi for the Co- lRepublika Srpska to EPIRS. Onlending independent, external auditors acceptable to ordination of Transmiiission in Europe would bc at tlel IDA service ciarge, for a 20 IDA and under terms of reference approved (UCTE). The projcct could also include a year term, includinig five years of grace. by IDA, as is being dotie under Power 2. All Supervisory Contiol and Data Acquisition Cofinianicinig would bc providcc through audit reports would be made available to (SCADA) System componienit to improve parallel filanicinig arrangements, withi eacih IDA withinl six months after the end of the power dispatchinig and facilitate the opera- donior responisible for separate componients. fiscal year. The Beneficiaries would prepare tioti of the high voltage network within BiH As a result. possible delays in imilplemilenita- and fLirnish to IDA quarterly project imple- on an integrated basis. It w ould include tioni of'onie donior-'s comilponient would gcnier- mentation reports summarizing the status of investeilniits in power distributioll to provide ally caulse little or no delay iil imlilementa- procuremilenit and disbursemilenits, imple- for returinig refugees, and to reconstrLuct tion of otier donors' comilpolelits. mentation progress for each component, as damaged facilities, ther-eby relieving serious The proposed project wouIld be expected to well as financial reports in a fomi accept- overloading in some areas and enable re- be completed withiin a period to be deter- able to IDA. duCtionl in the higih levels of techinical dis- mnied by the feasibility studies. Manage- 6. Sustainability: tribution losses. It would cover some in- imleiit of all aspects of project imilplemiienita- Factors critical for sustainability include: (i) vestmenlts at hydropower stations to im- tioni except tor tilose to be carried Ouit by the overall macroeconomic progress, wlich is prove safety. Investmenits at thermial power Federationi anid RS Governments (i.e., sector needed to restore consumers' ability to pay stations would be ihilited to reducilng pollu- reform) wvotild be carricd OuIt by EPBili, for electricity; (ii) satisfactory financial tion. Techniical assistance would be pro- EPI-IZI-113 anid EPMS wh1o WoUld be respoll- performance of the three Elektroprivredas; vided for commilrecializationi of the power sible fbr Cxecu6tion of their respective parts. and (iii) satisfactory coordinationi between companiies and implemilenitationl of power ProCLirciuiriet anid disbUrsemcnt of ftiuids the cnte-prises to operate the Bil-l power sector restructuring. would be hanidled in accordance with the system in the interest of BiH as a whole. At Pendinig completionl of tilc ongoilig t'casi- agreciimelnts r-cachlcd betweeni eachi donior this time the prospects for sustainability of bility studies on priority investments in anid 3osriia and l-lerzegovinia. All thirce Power 3 look to be substantial. poower transmission, distribution and hydro- Elcktroprivrcdas hiave quialified staff' anid Note: This is infoniiation on an cvolving power plants aiid SCADA, and fuliher de- expert stipport r-equiired for project manl- project. Certain componeints may not be velopment of proposals by EPBiH aild agemniet. T'hie PlUs responisible for imilplc- necessarily included in the final project. EPRS on enviroiinmental improvements at mcntatioln of Power 2 (The Federal PIU, the thermal power stations, it is not possible at brancil PlUs in EPBiil and EPI-IZI-IB, and this stage to provide a detailed descriptioni the PIU in EPRS) would be expected to 47 fl WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA . PROGRESS UPDATE THE WORLD BANK COUNTRY ASSISTANCE STRATEGY FYOO-FY02 niani-owined strategy that is intenided to re- celerated privatization, continued bankinig place the donor-led Priority Reconstruction sector reform and labor market reforms to COUNTRY ASSSISTANCE aind Recovery Plrogram as the basis for pol- help create productive employment oppor- icy and spendinig decisions, atid serve as a tillities. STRATEGY (FYOO-02) framiework to guide external developmenlt Building social stistainability. A growth assistance. A Poverty Reductioll Strategy strategy alone is not sufficient to address the Executive Summary Paper (IPRSIP) will build on the EDS and set needs of the poorest. Social sustainability Bosnia and Hlerzegovina is now at a cross- oLit, initer i/lia, a strategy to etisLt-e growth is implies broadly increasing incomes, but also roads. Over the next two to three years it sustainable and inclusive, and a plan to improved humnan and social conditions, and must begin to generate a sustainable growth overhaul social protectioti systemils to morc reduced risk and vulicrability. Targeted momiielntuLI. Postwar growth of the last four effectively meet the needs of the poorest.1 programils anid policies are required to com- years has been strong - brought about by a In the course oi preparinig thc CAS, we have plemnent better governance and sustainable. successfiul reconstniction effort and sound discussed vith thc autihorities and other inclusive growth. Together, these iactors macro perfomiance - but it is not yet sus- stakeholders the cotutry's developmilieit can also generate movement towards politi- taimable. And while recovery has brought a priorities. Thcre is broad consetisus on iour cal reconciliation. Medium-term priorities getieralized increase in incomiles, maniy Bos- maini componlenits of the refomi agenda the incilide imptovinig poverty and social sector nians remaini worse oft' than before the var government necds to tackle over the next data and capacities, refoniiing social pro- and unemploymilent is painfully high. Frag- several years (set out il greater detail in tcction systems, developing education and mented postwar governalce contillues to Section Ill oftheCAS): healthifinanice and governance, ald spurrinig make consensus difficult and has been at the greater participation and inclusioti in an root of a slower than hoped for reforill ef- cnvironlilietit where the legacy of var in- fort. Two external factors vill also affect eCludes discriminiiationi amion ethliic groups. KEY MEDIUM-TERM Copeigrcntuto.Fnly ed the developmenit outlook in the next tvo to Completing reconstructioll Fhially, needs three vears With completion othe postwar CHALLENGES remaini in housinig. community services such lPriority Reconstruction and Recovery Pro- as water and solid waste services, and de- gram (1996-1999) at hanid, donors will now Strengthening governance and public miniing. While the reconstruction effort begin to phase dowvn their programs of sup- sector imianiagemienit. Strong anid accoLtilt- produced remarkable achievemniets - e.g., port. This will require fiscal atid external able institutiotis and good goverianice are returningi most services to their prewar lev- adjustment as well as other less tangible pre-coniditionls to sustainied success in othier els in just fotir years - addressing the re- adjustlenits over this critical two to three reforimi aircas, There hlave beci significalnt mainiilng physical inipacts of war in sclectcd year period. Finally, the recently- an- achiievemilenits over thle last CAS period, sectors is likely to take mally more years. noLinced Stability Pact for Southeast Europe supported by IDA adjustmeiit lendiig. 13ut presents an opportunity for closcr integra- Blll's newly-established instituitionis, frag- tioti with European institutions. Accelerated mented goveriiilmnt structures and cotopeti- structural and institutionlal reforiiis to brinig tioin betweeie BIl's theCe constituenIt groups THE FYOO-02 COUNTRY the couLntrV closer to Europeati stanidards mcani developing good gover-niance wilt bc a ASSISTANCE STRATEGY will be needed to take advantage of this long-term objective requililig consistent, oppoltunity. vel-sequtinced efforts. The key medifLil- The FY00-02 CAS is fonred oti the basis of Thus, Bosnia and Herzegovina faces two tcrimi priorities center on cnilanicinig the consuiltatioiis with stakeliolders in Bosnia specific challeniges in the period ahead: transparenicy of public institutionis, and de- and Herzegovitia. It is consistcit with, and First, it must begiti to take ownershiip of its velopinig antd implementing a miediumli-terimi builds on, the tiiajor thrusts of our previous economic future by assutiling increased fiscal adjustmti01t stiategy in a climate of CAS and the lessonis of impicillemitation. respotisibility for economilic policies and lower and less conccssional donor re- Discussions with the manay other interna- outcomes. This will mfean strengtheninig sources. tional partners involved in Bosnia and Her- governaice at all levels and reducing de- Fostering private sectoi led-growth. Prog- zegovina's developimienit effort oti their planis pendenice on the interniationial comillullity. ress on striactiral refor-mils aimed at buil(iirg and progratms have also contributed to dc- Sccotid, it must promote sustainiable growth a market-oricitcd economily has been slower veloping an appropriate role for the Bank and employtilcnt in ati itclusive way that thani hoped; privatization in particular has Group. based oti our comparative advati- provides increasinig incomes anid oppornUIi- been dclayed. Deeper and mo-re consistenit tagc. Finally, the CAS also fits witliti the ties for all Bosnianis. Reforms aimed at in- structural reforimis are tieeded for sustainable broader framework of a recent Regional creasing private sector activity, and. in par- growth and employmicint. Growth that gen- Strategy Paper for Southeast Elurope. devel- allel, measures to ensure that growthi is in- crates substanitial cmploymilenit. particularly opcd by the Banik and the Europeati Unioll clusive and that salcty ncts are in place for in the SME sector, vill be a kcy eleilelet of ill coIsuilt.tion with other pairters, it the those vho cannot fecl its full betlefits are BHs poverty reduction strategy. The key CotitCxt of the Stability Pact. The reflorin ticeded. reform measures tieeded arc a trantsparent agciida set out it this CAS is otie to which As a key step in takitig iicreased owilership atid predictable cnabling environiment, ac- ali partiers in Bosnia and llerzegovina's for ecotiomiic outconies, the Bosnian developtiienit effort will contribute. The authorities are tiowv preparing a first Eco- Woorld l3atik Groutp's support (Sectioti V), notiiic Developmenit Strategy (EDS) for the As a iirst stcp in tihis proccss. the authorities are will continuc to be selective. We have beci period 2000-2004. The EDS will be a Bos- currently preparing anl Interimil Po\erty Reduictioii asked by the autilorities as well as by other Stratcgy. 48 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE key partncrs, to continue the policy reform safety net for the most vulnerable. recipients. Suf'ficienit resources are never- supportive role we played during the last In order to continLie the policy-refomi sup- theless required in order for the Bank to be CAS. and which fewv other donors are able portive role consistenlt withi our comparative able to continue to carry out its strong pol- to assume. In tandem, we intend to disen- advantage, the FYOO-02 CAS proposes icy-reform leadership role in this critical gage from reconstructioni related activities continued emphasis on policy refbrms. Un- next two to thrce year period. Thus an IDA over this CAS period. der a base case of strong macro perform- allocation that declines to normal per capita The overarching objective of the World ance and good progress in the reform areas levels by the outset of the next CAS in Bank Group's partinersilip with Bosnia and set out above, a program of both adjustmenit FY03 - which could coincide with the tim- Herzcgovina is to increase economic op- and investmcint Icnding in the three main ing of creditworthiness - is warranted. portunity and improve the quality of life areas outlined is proposed, uliderpininied by Risks of an internal and external nature for all Bosnians. Poverty reduction is an a strong AAA program. Both the AAA pro- dLirinig this CAS period remain similar to overarching, cross-cutting theme. In light of gram and policy refomi dialogue will coIn- the key risks highlighted in the CAS Prog- Bosnia and Herzegovina's development tribute to the authorities' EDS and its PRSP. ress Report. The most serious internal risk priorities, and the role that the World Bank Reform measures and activities importanit to relates to continued weak and fragmented Group can play in addressing these priori- reducing poverty in Bosnia and H-crzcgo- governaice in Bosnia and Herzegovina and ties. the strategic objectives of the vina's postwar context are key elemenits in the implications for the authorities' com- each of these areas. In termis of lending, our mitment to reform. We believe that the les- FYOO-02 CAS period will be: CAS Progress Report (August 1998) noted son1s learn1ed in the previous CAS have to help strengthen weak and fragmented that whiile highi postwar growth rates had hlcped us to design a program that takes governance arrangements to build a solid broughit per capita incomlies near the IDA into account this risk and mitigates it to tie foundationl for broad-based self-sustaininlg operational cut-off, we expected Bosnia and extent possible. The Stability Pact for growth and democratic participation; I-lerzegovina to be an IDA borrower during Southeast Europe provides a framework ft)r to hielp foster sustainable and incltisive the IDA 12 pleriod (and that the earliest date potential increased stability in the Region, private sector-lcd growth aiid enil)oy- creditworthiness for IBRD leIndinig could be helping to reduce the key external risk of nient as the most importanlt meanis of ini- achievable was late in this period). This contiLuing political uncertainty in the Re- provinig economiiic opportunity for all Bos- assessmenit remains valid. It is clcar, gion. nianis; and though, that the extraordinary level of IDA to help build social sustainability by estab- resources provided to Bosnia and Herzego- lishinig affordable and equitable social vinla over the last several years must now services for all Bosnianis, includinig a social decrease to levels consistenit with other IDA 49 1ii WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE FUTURE WORLD BANK PROJECTS ENVIRONMENTAL INFRASTRUCTURE PROJECT Many people contilue to receive public its contribuLtioll to the ci'ficienicy of the sec- ilismi to encourage private sector involve- services that are of- poor quality and with tor. The project will target uin1dinig to waste melit; and (d) correct etivironimilental prob- limited availability. Local services needed collection anid watcr supply, specifically to lems and reduce health hazards caused by are waste collection anid water supply, par- the mtLral areas. inadequate collectioni and disposal systems. ticularly in the rural areas. The project ad- 'I'lie main objectives of the proposed project Contact dresses environmental concemns througlh are to: (a) improve solid wastc scrvices and Ms. Secema Manghee, The World Bank proper disposal of waste, more efficient water supply cost effectively in participat- 1818 1-I Street, NW Washington D.C. 20433 public services and improving cost recovery ing priority cities; (b) increase regulatory, Telephone: (+1-202) 473 5702 Pax: 477 whichi are key challeniges to support, broad administrative and tcchilical capacity at the 1386 based developmenit in BiH. The project will local and entity level. (c) improve the legal seek to involve private sector to maximize and regulatory and cost recovery meclha- AGRICULTURE II PROJECT Small-scale. private farms, whicl usc oLit- and market agents would get access to the and medium-sized, private-sector agro- dated technology and practice low intenisity teclhnology and the resources they need to processors and marketinig and distribLution maniagement systems, dominate agriculturai increase productivity and continiue the sec- systems. (d) establish intemnational stan- production in Bosnia and l-lerzegovina. tor's initial recovcry. To be sustainable, dards for agricultural commodities and an Production is driven by family food re- these initiatives should be concur-renit with effcctive institutional framcwork for moni- quirenmenits and marketed surplus is low. those to reform the linancial sector and toring and enforcing these standards, and (e) The inccntive for these farmicrs to incrCase public and privatc institutiolls supportinig strcngthenl institutionis that provide support marketed surplus is weak, as the marketing agriculture and livestock. services to armiers anid support project ad- structure for most agricultural products is Project objectives are to pron0ote small- ministration. poorly developed and assembly system1s are scale commcrcial agriculture and raise farni Contact inadequate. Agro-processors are inefficienit incomes in selected poor rural areas of Bos- Ms. Rapeepunl Jaisaard, The World 13ank and unable to offer favorable prices, quality nia and Herzcgovina (Bil-l). To achieve 1818 1-1 Strcet, NW Washinlgton D.C. 20433 control, credit or technology to producers. these objcctivcs, thc prioject would (a) rchia- Teleplhone: (+1-202) 458 4057 Fax: 614 The project would focus on measures to bilitate the irrigationi, drailiage and market 0698 necrcase farn production and farm incotnes ilnfrastructuire serving the project areas, and link production to proccssing and mar- (b) promote the formlation of' producel- and keting. Private sector farmiers, processors marketinig associations, (c) support small ROAD MANAGEMENT AND SAFETY PROJECT Objectives rehabilitation. This component covers csti- Entities Ministries of Education. Ilealth and The project development objective is to mated maintenance anid rehabilitation needs of the Interior. The componienit will also increase efficiency and safety in the road on the maill road network on a 3-years pe- include modificationis to dangerous iiter- sector, wlhich accounts for about 95% of riod. This cot-nponienft will allow for the sections, creation of parking areas on tlhose good and passenger movements in Bosnia maintenance of the main network over a 3- sections of' the main network located withinl and l-erzegovina. The project will contrib- years period and thle relhabilitationi of about mountainious areas, and rehabilitationi of ute to economic growth by decreasing 300 km of the sections in worst conditioni lighting systems in tuniels. 3. Iistitution transport costs, thus increasing trade effi- atid with higlhest trat'fic. This componienit building. Strenigthieninig road administra- ciency, fostering private sector involvemiielnt will include improvements to horizonital and tions. Thle project will support the following in the road sector, and increasing efficiency vertical signalizations, and installationl of activities: (i) orgaanizational efficiency en- of road public expenditures withini a sus- crash barriers. 2. Road safety. The compo- hanieemilenit stridy; (ii) setting up of a road tamiable institutional framework. nent will support the creation of a Statc road database; (iii) introdLtctioll of tools such as Description safety moniitorinlg unlit, with coordination HDM-4, to develop an analytical capacity at The project consists of three componenits. as units within the Entities to prepare a Road the level of the entire network, aimnig at described below. 1. Road maintenance and Safety Strategy, in collaboration with thc optimizing atinual road mainiteniance and 50 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA e PROGRESS UPDATE rehabilitationi programs taking into account bridge matcrials; and (iii) create a road Financing Total fiscal constrainits, and evaluate proposals for safety database, as well as a small capacity Total Project Cost US$ 42.9 million. new construCtioll; and (iv) trainin1g of staff to conduct safety awareniess campaigns. d. Implementation in areas such as economic analysis, modern Developmenit of'a core concession capacity. The State of Bosnia and Flerzegovina will budgeting and accouL1tilng practices, new Techilical assistance and traininig will be be the Borrower of the Credit. The Bor- road tecliinologies, contract maniagemlenit, provided to review the existing conces- rower will on-lend, under subsidiary agree- quality control, road safety, and environi- sioning framework, establish a core conces- ments, their respective parts of the proceeds menltal and social aspects of roads. b. En- sion capacity able to evaluate concession of the Credit to both Entities on the same hancinig expenditures efficienicy. The proj- proposals and to advise on the dratinig of termis and conditions as the Borrower shall ect will support the elaboration and if nec- concession agreemnciits and finanicinig plans repay the Credit to the Association. The essary the implementationi of' the privatiza- in the various infrastructure sectors, suchi as State Government will be responsible for tion plan for the road mainltenianice compa- water, urbani tranisport, and possibly motor- implementing its part of the project, through nies which are still public enterprises. In ways. To maximiiize opportuniities lbr private the BRIC under the Ministry of Civil Af- addition, a review of design standardis and sector involvemlienit in a sustainiabie fashion, fairs and Communications. In the Entities. technlical solutions will be unlcdertaken, so as the assistance will inClude review of the i1lpimplemeltation responsibility will be dele- to optimize both the standards and the solu- concessioni legal framework, provision of gated to the Entity Ministries of Transport tions to the specific condition of and con- standard bidding and contractual docu- and Commlluniicationis and of Environment. strains imiposed on the differenit sections of menits, as well as guidelines for evaluation The implementing agencies will be the Ei- the maini network. Finally, mainiteitance of coricessiol plroposals. This comliponient tity road adminiistratiois. Implementation at performance-based contracts will be will complement the Bank's efforts in pro- all levels will be conducted in accordance launiched on a pilot basis, whichl will require vidinig for an enabling busilIess environm111ent with the provisions of the Credit and project provision of training to the road administra- ulider the Businiess Enivirotimiienit Adjust- agreemenlts, as well as with the project de- tion and the constructioni industry, to fuilly ment C'redit (BAC) planined tor FY01. e. sign and monitoring indicators (see Annex Litderstand the specific requiremiienits of Strengtleniniiig of environiment management 1). The Ministry of Civil Affairs and Comt- such contracts, and ensure that an adequate capacity. T'he project will: (i) support the municationis will be in charge of preparing supervision capacity is in place. c. Creation creationl of core environmental capacities consolidated quarterly progress reports on of a State road coordinationi unit. 'I'o be within the road adminiistrationis; and (ii) the basis of inputs provided by the Entity established unider the BRIC, the State road review envir-onilimenital staitdards arid monti- road administrationls. coordination unit will receive support to: (i) torinig pertaining to the road sector, as well Contact create a forum throughi which iiter-Enitity as how environimieniltal concernis are re- Task Manager Cesar Queiroz The World and internationial matters related to the main flected in technical specifications related to Batik 1818 11 Street, NW Washingtoni D.C. road network could be discussed, as well as road construction, rehabilitationi and maiin- 20433 Telepholle: (+1-202) 473 8053 Fax: inforiliationl and data could be exchanged; tenanlce activities. Thlis component is an 614 0900 (ii) establish a coordinated system of road integral part of the Environmental Action standards, includinlg geometric desigti, road Plan to be completed by the Bank by FY02. safety, and specifications for road and BUSINESS ENVIRONMENT ADJUSTMENT CREDIT (BAC) BAC will support a Govemmenlit program that impede domestic and foreign invest- 19/5, 71000 Sarajevo, Telephone: (387-33) for enihancinig the environmilenit for invest- ment 440-293, Fax: 440-108 merit, jobs anid sitstaitiable growtih, withi Contact spccitic fOcus on r-emIloviiig critical barriers Vicki Krecic Peterson, H.Kresevljakovica 51 O WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE IFC BOSNIA AND HERZEGOVINA The International Finance Corporation Investments SEED's quarterly report please contact (IFC), a member of the World Ranik Group, Following the Daytonl Accords, the initera- Christoplher Miller at (387-33)217-760. fosters economic growth in the developing tional comImlunity called upoIl the European Advisory Services world by financing private sector 'invest- Union and the World Bank Group to lead IFC's advisory services aim to facilitate the menits, without government guarantees, reconstruction in the country. IFC has so f'ar growthl of efficient and competitive private investinig its own resources. IFC mobilizes sLipported this effort by approving tcn proj- business activity in the developing world, funds in the international capital markets ects sinice the beginniniig of FY97, investing and are reinforced by the Corporation's and also advises businesses and govern- nearly USS36.5 million for its own account experiencc in project work. ments on investment related matters and by the end of 2000. Through its Corporate Finance Services provides technical assistance. SEED Department (CFS). IFC has been actively In FY00 (fiscal year 2000), IFC approved Southieast Europe Eniterprise Developmieinit promotinig privatization as a means to pro- 259 new projects in 81 countries, providing (SEED) is a ml)(1ti-donor iniitiative manlaged mote private sector development in its US$5.8 billion for private sector projects in by IFC to strenlgthien simiall and medium meimiber countries. In recent years, CFS has developing countries. This includes financ- citerprises (SMEs) in Bosnia anid Flerzego- been a lead advisor to governments on the ing for IFC's own account of US$3.5 billion vina, Albanlia, FYR Macedoniia, anid privatization of state-owned-enterprises. and a further US$2.3 billion mobilized Kosovo. Tllis programii was kinowin as the Experts fromii IFC's Central Capital Markets through IFC syndicated loans and undcr- Balkan Entierprise Facility duiniig its initial Departmenit (CCM) advise governments on writing. Under the loai synidicatiol program plainiiig. The five-year, $33 imiillioni eftbrt fiscal, legal and regtilatory matters related commercial lenders provide their ownI ftinds will offer a variety of seivices both to local to the development of a market-oriented anid take their own commercial risk, but IFC SMEs directly anid to othier organlizatiolns financial sector. And, the Foreign Invest- acts as the lender of record. This means that that supporl tilem, anid will also work ment Advisory Service (FIAS), an IFC af- investors obtain the same tax and country closely withi the World Batik Group anid filiate. provides assistance to govermilenlts risk benefits that IFC derives from its spe- othier inistitutionis to imliprove the diff'icuIlt on attracting toreigin direct investment. cial status as a multilatcral developmenit operating enivironilimeit for siliall businiesses FIAS recently completed all assignimlent in agency. in the four target economilies. i-leadquartered whiich it hielped prepare draf't foreign in- From the time IFC wvas founded in 1956, h in Sarajevo with offices opencd in Baunja vestment legislation in BI-I. has conmmitted more than US$29 billion in Luka, Skopje, anid Triiania, SEED is mall- Teehniical Assistance financinig for its owIn account and has ar- aged bv Marianinl KLurtz aiid employs nearly The donor-supported Technical Assistance ranged US$19.2 billion in syndications and 30 staff SEED is tLifuded by AuIstria, Call- Trust Funds Program (TATF) is an impor- underwritinig for 2,446 companies in 136 ada. Greece tile Nethierlanids, Norway. Slo- tant element of IFC's advisory services. developing nations. IFC's share capital is venia, Sweden, Switzerlanid thie Utiited Through TATF, IFC hires consultalits to provided by its 174 memiiber counitries, Kingdomil, and( IFC. conduct techniical assistatice activities, which collectively determiine its policies SEED will support the developimienit of ranging from helpitig enlrCprelneurs devclop and activities. Small and Medium Enterprises (SMEs) as project proposals to assisting with private IFC Strategy in BH well as individuals and institutionis that sector inistitution building. With the excep- IFC's strategy in Bosnia and Herzegovina is serve the nieeds of SMEs anid will enhianlce tion of one of TATF's major ftunds, cach to support post-war reconstruction by as- tile broader eniablitig enivironmiient ii whiicl tmist fLi d supports constiltalits froiii donor sisting -enterprises that can geiierate eni- all of tlhese stakeliolders opeiate. SEED will countries, and inidividual tcchnical assis- ployiiieiit opportunities. Critical sectors of' imiiplement its imianidate tlhrouglh tailored, tance assigniiients are approved by the do- focus in this effort include sniall and nie- etiterpr-ise- atid organiizationi-specific teclini- tior countries. This resoutrce helps IF' ex- dium etiterprises, financial institutions anid cal assistanice, capacity builditig prograniis, pand the rangc of its technical assistance related itifrastructure, anid wood processing. traittiiig couirses and r-esearcih / policy inter- el'brts-includinig sonie activities that Future IFC work is likely to center oti the venitionis. To imlipleinienlt our iiianidate fully, niiglt not othcrwise be possible-both for privatization of state-owned, mcdiuni-sized SEED will emiibr-ace thiree stratcgic targets of opcratiotial and advisory work. businesses. assistance: eniterprise-level investtiient IFC has developed a total of ten projects in Rosiiia atid Herzegovina is iticluded in the services; capacity bulildinig of enterprises, Bosiiia atid l-lerzegovina finaniced f'romll "Extending IFC's Reaclh" tiiitiative, wlhichi iliStitLutioiis, atid inldividLuals serving SME's Japaniese, Italian, Israeli. Dutch, Swiss and was created in October 1996 to promote nieeds; atid iiiiprovemiieiit oh' the bLisiliess Norwegian Trtist Futids. Assistatice has private investment in countries where the enablitig cnvironlmietit. been provided to enterprises in the devel- Corporation's activities have been coti- All prograiii activitics will be inilplciiietited opment and building of their btisiniesses. straitied by challenigitig conditionis. The as ticeds atid iliclies are definled in Albania, tiianageiiieiit support, finaticial audit and success of the Initiative is aided by ati cn- Bosnlia anid l-lerzegovina, aind Macedoiiia, legal review. TATF has been a critical re- haticed on-thie-ground prescnce of' IFC staff, and to a somiewhiat nian-ower extelit ill thle source in imiprovinig the bankable itivest- and further supported by IFC's Sniall En- provitice of Kosovo, due to its currenit iicnt opportunitics from of each of the ten terprise Funid (SEF), a financitig tool for status. pirojects. small atid niediuni enterprises. IFor futllicr informiation, or for a copy of' 52 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE 1E1 Projects Supported by IFC (in miiillionts of KM) Board Total l'roj- T otal IIC Project Approval ect Cost Financing Project Description Date SEF Bosnalijek I 1/99 11.8 5.4 Revitalization of the only pharmaceutical company in BiFl. Severely dainaged during-the war, Bosnalijek was no longer able to ensure production in compliance with good mnallufacturing practices. SEF Bosnalijek II 10/()0 10.8 5.1 Phase 11 of the coliipanly's investment program. It aims at com)pleting the rcconStlsCtioll of the solid oral drug plant and modeinizing it withi addition of tablet coating and packaging equipmellt. SEF Lijanovici 1/99 10.6 5.4 Expansionl of the production capacity of an integrated nieat processing plant througlh the acquisitioni of new processing and packing equipmenit and the construction of a new product storage facility to accommodate the addi- tional output. Wood Sector ACL 03/98 33.5 27.4 Mobilization of credit thiougil local agent banks for on Icnding to 8-12 tIfediLlil-size wood manlLfacturing enter- prises. The banks undertake a portion of the credit risk. USAID's Business Fiianice Unit has also been involved, providing 1inianicinig as well as training to these enter- prises. Kopex-Sarajlic (SEF) 09/98 11.2 5.0 Expansioni of Kupex's three existing retail fLiel stations, by constructioni of two modern retail fuel stations wvith car wash and other services, and construction of a central service/distribution warehouse with mechanical services. MIDD Lignosper 01/98 9.2 4.6 Rehabilitation of Lignosper's, a wood processor and fur- nitLl-e maker, productioll liies destroyed by war. Akova Inipex d.o.o. (SEF) 03/98 1 7.8 4.2 Conversioln of an existing building into a meat processing plant and cold storage facility, producing 3,000 tons a year of fresh and frozen meat products. I-lorizonte fill Enterprise 09/96 30.0 4.0 Establishment of'a veniture capital fLind to invest in equity Funl of small businiess. The Fund aims to htep rebLlild and restart private bUsiness, as well as cncourage new private busiiness. Sarajevska Pivara 06/97 24.2 10.2 Diversification of Sarajevska's product line into carbon- ated soft drinks and tile introduction of new types of packaging with polyethylenie terephthalate (PET) bottles. ilicrocredit Enterprise 1/97 15.2 1.2 Eistablishrilent of a finianicial institution specializing in Bank fiianicing tllicro-enterpr-ises by extending very small un- secCLred credits, mostly working capital loans. Contacts IFC Mr. I-laris KUskun1oviiC H-amdije Kresexljakovica 19/5, 71000 Sarajevo. 'ICelpCPoIe: (387-33) 440-293, Fax: 440-108 Soutilcast EuLrope Enterprise Development (SEED) Ms. Marianni Kurtz, Hamndije Kresevljakovica 19/4, 71000 Sarajevo. Telephione: (387-33) 217-760, Fax: 217-762 53 WORLD BANK RECONSTRUCTION AND DEVELOPMENT PROGRAM IN BOSNIA AND HERZEGOVINA * PROGRESS UPDATE A-LMI.G.A; MIGA BOSNIA AND HERZEGOVINA The Multilateral Investmenlt Guarantee sentative office in Sarajevo, for the Euro- Success Stories: Agency (MIGA) is a member of the World pean Union Trust Fund. The Fund was es- Investments to Date Bank Group since 1988. MIGA promotes tablished with a base of 10.5 ECU, iniitiatilng As of March, 2001, MIGA, in partnership foreign direct investmient flows to develop- the first jOillt ei'fort for political risk cover- with the European Commission, has com- ing countries by providing: age between tihC EU and MIGA. The Fund pleted three investmenlt guarantees, through Guarantees, or political risk insurance, to provides investimienit insuranice againist for- the European Union Investment Guarantee foreign private investors against the risks of eign investors' major political risk conicerils, Trust Fund. These projects have a total transfer restriction, expropriation, war and listed above, and the Tirist Fund follows the value of $40 millioll in foreign direct in- civil disturbance, and breach of contract in parameters of MIGA's guiarantee program vestments. The guarantees cover a Coca- the host country; and world-wide. Cola (Coke, Netherlanids) bottling facility; Investment marketing services to host gov- New investimienits, includinig contribLutions an Oesterreichische Volksbank (Vienna) emnments, with the goal of improving their associated with an expansion,. moderiniza- subsidiary in Sarajevo and a shiareholder ability to attract foreign investment. tion, privatizatioll or financial restructuring loan to Raiffeissen Bank in Bosnia. from the As of spring, 1999, MIGA's guarantee of existing projects are eligiblc. Only in- parent companly in Austria. There are ten program has facilitated an estimated vestors from member countries of the Euro- projects in the Trust Fund guarantee pipe- $27 billion in foreign investmenits, in peain Unlioti. anld certain East European li'ne. Up to $30 million in Trust Fund/ 63 developing member countries. In counltries, are eligible for Trust Fund guar- MIGA guarantees are expected in the year total, MIA as issued a total of 363 antes. 2001 for investimlenits. These investments are tahs3 MIGA can cover political risk for foreign expected in the service sector. Other proj- guarantee contracts for $4.5 billion in ilnvestmllelnts up to a limilit of $200 ilmillion ects in the pipeline have a value of over political risk insurance. MIGA's share- per project. Regaiding national coverage, $100 miillion. holders are its 149 industrialized and MIGA can provide up to $620 million in Contacts: developing member countries. total political risk itisuraiicc, for BH. Guar- Ms. Monique Konig, MIGA in Bosnia and Herzegovina antees provide long-tenit (up to 15 years) Mkoniitnc ,o lb;nli Ori In 1997, the Multilateral Investimient ilnsuranice oni sinall- and medium-sized in- M[GA - Country Devclopment Group Guarantee Agency (MIGA) established vestimients. 1800 G Street, Washiington DC a special Investimienit Guaranitee TruIst In addition, MIGA's marketinig departmeint Tel: (1-202)458-5467 Fuid, sponsored with funlds fromii the provides techlinical assistanice, via inlvcst- Ms. Emiily Harwit Fhar\\ iu'(l' I1k European Union to facilitate thflowmenit marketing services to the governmelt MIGA Bosnia Representative European Union, to facilitate the flowv throughi an agreemetit with the F-ederation The World Bank Resident Missioll Bill of foreign investments into Bosniia and Ministry for Privatization. Il-aidije Kresevljakovica 19, SarajevoTel: Herzegovina. +387 71 440 293 In April, 1999, MIGA established a repre- 54 Kc\, 41E72 D~~~A~~ j Iw~~~~~~D~~b'4