Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD2346 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT PAPER ON A PROPOSED ADDITIONAL GRANT AND RESTRUCTURING IN THE AMOUNT OF SDR 15.2 MILLION (US$20.8 MILLION EQUIVALENT) TO THE REPUBLIC OF NIGER FOR THE THIRD COMMUNITY ACTION PROGRAM June 8, 2017 Agriculture Global Practice Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Exchange Rate Effective April 30, 2017 Currency Unit = FCFA FCFA 603 = US$1 US$1 = SDR 0.72938396 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS 3N Initiative Nigeriens feed Nigeriens AF Additional Financing AFOLU Agriculture, Forestry, and other Land Uses APL Adaptable Program Loan CAADP Comprehensive Africa Agricultural Development Program CAP3/PAC3 Third Community Action Support Program/Programme d’Actions Communautaires Phase 3 CAS Country Assistance Strategy CDP Communal Development Plan CERC Contingent Emergency Response Component CFA Communauté Financière Africaine/African Financial Community CNP National Steering Committee/Comité national de Pilotage CPS Country Partnership Strategy CSA Climate-Smart Agriculture DA Designated Account FM Financial Management EA Environmental Assessment ECOWAP Economic Community of West African Agricultural Policy ECOWAS Economic Community of West African States EMP Environmental Management Plan ERR Economic Rate of Return ESIA Environmental and Social Impact Assessment ESMF Environmental and Social Management Framework ESMPs Environmental and Social Management Plans FAO Food and Agriculture Organization FCFA Franc CFA FM Financial Management FY Fiscal Year GDP Gross Domestic Product GHG Greenhouse Gas GNI Gross National Income GRM Grievance Redress Mechanism GRS Grievance Redress Service ha Hectare ii IBRD International Bank for Reconstruction and Development IDA International Development Association IEG Independent Evaluation Group IFAD International Fund for Agricultural Development IFR Internal Financial Report IRR Internal Rate of Return ISR Implementation Status and Results Report LC Letter of Credit M&E Monitoring and Evaluation MDGs Millennium Development Goals MoAL/MdAE Ministry of Agriculture and Livestock/Ministère de l’Agriculture et de l’Elevage MP Micro-project NCU National Coordination Unit NEPSD/PNEDD National Environment Plan for Sustainable Development/Plan National de l’Environnement pour un Développement Durable NGO Non-Governmental Organization NPV Net Present Value OP/BP Operational Policy/Bank Policy PAD Project Appraisal Document PCU Project Coordination Unit PDO Project Development Objective PHRD Population and Human Resources Development PIM Project Implementation Manual PMP Pest Management Plan PP Project Paper PRODEX Agro-Sylvo-Pastoral Exports and Market Development Project PRSP Poverty Reduction Strategy Paper RAP Resettlement Action Plan RBMAS Results Based Management and Accountability System RCU Regional Coordination Unit RDP Regional Development Plan RPF Resettlement Policy Framework SCD Systematic Country Diagnostic SDR Special Drawing Rights SIIP Sahel Irrigation Initiative Project SOE Statement of Expenditures SORT Systematic Operating Risk Tool SWC Soil and Water Conservation TA Technical Assistance TTL Task Team Leader UNCCD United Nations Conventions to Combat Desertification UNFCCC United Nations Framework Convention on Climate Change UNICEF United Nations Children’s Fund US$ United States Dollars WAAPP West African Agricultural Productivity Program iii WAEMU West African Economic and Monetary Union WB World Bank Regional Vice President: Makhtar Diop Country Director: Soukeyna Kane Senior Global Practice Director: Juergen Voegele Country Manager: Siaka Bakayoko Practice Manager: Simeon Kacou Ehui Task Team Leader: Soulemane Fofana iv REPUBLIC OF NIGER Third Community Action Program (CAP3) Additional Financing CONTENTS Contents I. Introduction .................................................................................................................................. 1 II. Background and Rationale for Additional Financing..................................................................... 2 III. Proposed Changes......................................................................................................................... 8 IV. Appraisal Summary ................................................................................................................. 26 V. World Bank Grievance Redress ................................................................................................... 29 Annex 1: Revisited Results Framework and Monitoring Indicators .................................................... 30 Annex 1B: CAP3 Additional Financing - Revised Results Framework.................................................. 34 Annex 2: Detailed Project Description ................................................................................................ 39 Annex 3: Implementation and Institutional Arrangements ................................................................ 49 Annex 4: Economic and Financial Analysis.......................................................................................... 58 Annex 5: Greenhouse Gas (GHG) Accounting ..................................................................................... 61 Annex 6: MAP ...................................................................................................................................... 63 v ADDITIONAL FINANCING DATA SHEET Niger CAP3/PAC3 Additional Financing (P163144) Agriculture Global Practice . Basic Information – Parent Parent Project ID: P132306 Original EA Category: B - Partial Assessment Current Closing Date: 22-Dec-2017 Basic Information – Additional Financing (AF) Additional Financing Type Restructuring, Project ID: P163144 (from AUS): Scale- Up Regional Vice President: Makhtar Diop Proposed EA Category: B – Partial Assessment Expected Effectiveness Country Director: Soukeyna Kane 30-Nov-2017 Date: Senior Global Practice Juergen Voegele Expected Closing Date: 20-Dec-2019 Director: Practice Simeon Kacou Ehui Report No: PAD2346 Manager/Manager: Team Leader(s): Soulemane Fofana Borrower/Recipient Organization Name Contact Title Telephone Email Ministry of Agriculture and Boukary Secretary +227-96981857 Bdiamoitou@yahoo.fr Livestock Diamoitou General National Community Action Program, Ali Moha Coordinator of +227-96977108 alimohakiri@gmail.com NCU CAP3/PAC3 Project Financing Data - Parent (Third Community Action Program Support Project-P132306) (in US$ Million) Key Dates Effectiveness Original Revised Project Ln/Cr/TF Status Approval Date Signing Date Date Closing Date Closing Date P132306 IDA Grant Effective 24-May-2013 7-Jun-2013 4-Sep-2013 22-Dec-2017 22-Dec-2017 Disbursements % Project Ln/Cr/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P132306 IDA-H8550 Effective US$ 40.00 40.00 0.00 34.30 3.53 85.74 vi Project Financing Data - Additional Financing of CAP3/PAC3 (P163144) (in US$ Million) [ ] Loan [X] Grant [X] IDA Grant [ ] Credit [ ] Guarantee [ ] Other Total Project Cost: 23.05 Total Bank Financing: 20.80 Financing Gap: 0.00 Financing Source – AF Amount BORROWER/RECIPIENT 0.00 International Development Association (IDA) 20.80 JAPAN Ministry of Finance - PHRD Grant 2.25 Total 23.05 Team Composition World Bank Staff Name Role Title Specialization Unit Soulemane Fofana Team Leader (ADM Senior Rural Rural Development GFA01 Responsible) Development Specialist Sylvain Rambeloson Procurement Specialist Senior Procurement Procurement GGO07 (ADM Responsible) Specialist Josué Akre Team Member Financial Financial GGO13 Management Management Specialist Cheikh Sagna Team Member Senior Social Social Development GSU01 Development Specialist Bolong Sonko Team Member Senior Social Social Development GSU01 Development Consultant Bougadare Kone Team Member Environmental Environmental GEN07 Specialist Specialist Medou Lo Team Member Senior Environmental GEN07 Environmental Specialist Specialist Michel Rogy Adviser Program Leader Sustainable AFCW3 Development Julie Rieger Team Member Senior Counsel Legal Matters LEGAM Emelyne Calimoutou Team Member Senior Counsel Legal Matters LEGAM Faly Diallo Team Member Finance Officer Loan Operations WFALA vii Samuel Tafesse Team Member Senior Rural Rural Development GFA01 Development Specialist Dilnara Isamiddinova Team Member Senior Operations Operations GFAGE Specialist Ademola Braimoh Team Member Senior Natural Natural Resources GFA13 Resources Management Management Specialist Juvenal Nzambimana Team Member Senior Operations Operations GFA01 Officer Najat Yamouri Team Member Senior Social Social Development GSU01 Development Specialist Andre-Marie Taptue Team Member Economist Light Monitoring and GPV07 Evaluation Seenithamby Peer Reviewer Senior Rural Rural Development GFA06 Manoharan Development Specialist David Casanova Peer Reviewer Senior Water Rural Development GWA03 Resources Specialist Sheu Salau Peer Reviewer Senior Rural Rural Development GFA01 Development Specialist Nicolas Ahouissoussi Peer Reviewer Senior Rural Rural Development GFA01 Development Specialist Hadidia Djimba Program Assistant Program Assistant Rural Development AFMNE Extended Team Name Title Location Rachida Ouro Gbele Costab Specialist Lomé, Togo Ernst Lutz Economist, Consultant Switzerland Locations Country First Administrative Division Location Planned Actual Comments Niger Region of Agadez Region of Agadez X Niger Region of Diffa Region of Diffa X Niger Region of Dosso Region of Dosso X Niger Region Maradi Region Maradi X Niger Region of Tahoua Region of Tahoua X viii Niger Region of Tillaberi Region of Tillaberi X Niger Region of Zinder Region of Zinder X Niger Region of Niamey Region of Niamey X Institutional Data Parent (Niger: Third Community Action Program Support Project-P132306) Practice Area (Lead) Agriculture Contributing Practice Area Water Additional Financing CAP3 Additional Financing (P163144) Practice Area (Lead) Agriculture Contributing Practice Area Water ix I. Introduction 1. This Project Paper (PP) seeks the approval of the Executive Directors to provide an Additional Financing (AF) in an amount of US$20.8 million to the Government of Niger in response to the letter from the Ministry of Economy and Finance dated November 3, 2016. The PP also seeks a restructuring of the parent project for an extension of the project’s closing date for 24 months from December 22, 2017 to December 20, 2019 to allow the full implementation of the AF activities, and revision of the results framework of the Niger Third Community Action Program (CAP-AF P163144). The AF will come from the national International Development Association (IDA) allocation for Niger. 2. The proposed AF will be used to support the Government of Niger in consolidating and scaling up the successful achievements obtained so far under the parent project to enhance the development impact of CAP3. The AF will focus on financing micro-projects (MPs) in 125 communes to enhance agricultural production and productivity. 3. The AF will finance the scaling-up of activities related to: (i) further strengthening of farmer organizations, communes, and local governments; and (ii) socio-economic infrastructures to enhance agricultural production and productivity; the socio-economic activities to be financed by the AF will include small-scale irrigation and support to other economically profitable activities; (iii) income- generating activities related to agriculture, livestock, storage, and processing facilities and other investments or technical assistance that would help with commercialization, based on local priorities; and (iv) sustainable land and water management, including strengthening climate resilience. The AF will deliberately promote the inclusion of women and young people in all micro-projects so that they benefit directly. The project will also include a contingent emergency response for eligible crises. 4. The development objectives are changed from “to strengthen the Recipient’s local development planning and implementation capacities, including the capacity to respond promptly and effectively to an eligible crisis or emergency, and to improve the access of the targeted population to socio-economic services” to “to strengthen the Recipient’s local development planning and implementation capacities, to support the targeted population in improving agriculture productivity, and to respond promptly and effectively to an eligible crisis or emergency.” The proposed AF will result in the restructuring of the parent project, including a proposed two-year extension of the project activities from the current end date of December 22, 2017, to December 20, 2019, and a revision of the results framework. 5. Project implementation arrangements remain the same. No new safeguard categories will be triggered for the AF, and the risks rating will remain the same. 6. The AF will be implemented in close cooperation with other IDA-financed operations, taking into account complementaries and avoiding duplicity. Partnership with other development partners will also be undertaken with agencies active in support of local development and other project intervention areas. 1 II. Background and Rationale for Additional Financing A. Country Context 7. Niger is a large, landlocked country in the arid Sahel region. The country’s relatively young population (<15 years old representing 48.6 percent of the total) is estimated at 17 million and growing rapidly at about 3.8 percent per year. Two-thirds of the country is inhospitable desert and more than 84 percent of the population is concentrated in rural areas along the Niger River in the southwestern part of the country and along its long southern border with Nigeria. The climate is mostly arid (in 85 percent of the total area, annual rainfall is less than 350 mm). 8. Since 2000 Niger has had a good track record for macro-economic stability and has embarked on reforms to foster private sector-led economic growth, reduce the debt, and improve social indicators. However, despite these gains, Niger continues to face persistent, long-term development challenges. In addition, returning refugees from Nigeria and Mali, and security risks related to Boko Haram and others, have become more serious in recent years. 9. Niger’s political institutions have strengthened since the restoration of constitutional order in 2011, and the country is rebuilding its democratic governance mechanisms. The Government of Niger (GoN) is pursuing important measures to combat organized crime and terrorism and to promote the safety and property rights of its citizens. Military and law enforcement agencies have created new crisis response units, and border security has been strengthened in close collaboration with regional and international partners. As a result, both unrest in certain zones of Niger and the problems of insecurity in the border zone with Mali have diminished. Nevertheless, the country continues to face significant risks related to domestic and regional instability, as well as organized crime and transnational terrorism. The rise of Boko Haram in Nigeria and the recent expansion of its operations to neighboring countries, including Niger, is cause for particular concern. 10. Poverty incidence is declining, but Niger remains among the poorest countries in Africa, with an average per capita gross national income of US$410 (gross national income - GNI, Atlas method) in 2014, well below the average GNI in constant prices of US$1,638 for Sub-Saharan Africa. 1 Niger is ranked last out of 188 countries in the 2015 Human Development Index. The most recent poverty assessment from 2011 estimated the national poverty headcount rate at 48 percent, down approximately 5 percentage points from 2006. Poverty is heavily concentrated in rural areas. The rural poverty rate stands at 66 percent versus 39 percent in urban areas. 11. Niger is extremely vulnerable to severe climate shocks, with drought the most important risk in terms of frequency and impacts. A strong correlation exists between changes in gross domestic product (GDP) and the meteorological situation, demonstrating the fragility of the economy and particularly the agriculture sector. A 2013 World Bank agriculture sector risk assessment report indicated that Niger’s GDP growth rate dipped into negative territory eight times between 1984 and 2010, and drought was largely responsible for the negative GDP growth rate in at least six years. Between 1980 and 2012, 10 major episodes of drought were recorded, of which five led to severe food crises. The food crisis resulting from the 2011 drought affected more than 7 million people, almost half of the country’s total population. 1 Source: World Development Indicators 2015. 2 12. Food insecurity and malnutrition are major concerns for Niger. Overall, growth of major food production was slightly less than the population growth over the period 1980-2011, with the increase in the food deficit being filled by imports. An estimated 2.5 million people in Niger are chronically food- insecure and unable to meet their basic food requirements even during years of average agricultural production. During periods of constrained access to food, millions more can quickly fall into acute transitory food insecurity. Over the past years, Niger made progress on nutrition indicators, but the country still lags substantially behind other low-income countries and Sub-Saharan African counterparts. Malnutrition accounts for more than one-third of child mortality in the country and remains high due to a host of health, sanitation, and behavioral factors, worsened by recurrent food shortages. 13. Climate change is likely to exacerbate Niger’s food security situation. While uncertainty remains regarding longer-term climate change projections (2050-2100), short- to medium-term rainfall deficits will most likely continue to plague Niger’s agriculture sector and the frequency and severity of droughts may remain the same or increase. 14. In Niger, the agriculture, forestry, and other land uses (AFOLU) sector accounts for 89 percent of total greenhouse gas (GHG) emissions while the energy sector accounts for 9 percent. Since Niger is a non-Annex 1 party to United Nations Framework Convention on Climate Change, it does not have a quantitative obligation in terms of mitigation, but its ambition is to limit its emissions from 2.8 t CO2e (base year 2000) to 2.1 t CO2e per inhabitant in the 2030 horizon. The national priority for the AFOLU sector in Niger’s Intended Nationally Determined Contribution (INDC) relates to improving the resilience of the agriculture, animal husbandry, and forestry subsectors. For Niger, the adaptation options considered as top priority are those that will permit higher co-benefits with respect to climate change mitigation, particularly those good adaptation practices and techniques that will permit carbon sequestration and reduction of GHG emissions at the same time. Niger’s climate change strategy is based on the vision of climate-smart agriculture (CSA) and access to modern energy services for everyone in 2030. B. Sectoral and Institutional Context 15. Of the 17 million population of Niger, the vast majority of Niger’s 8.2 million poor (2014 estimate) live in rural areas where food insecurity is high. Poverty incidence has remained high mainly due to lack of resources, low agricultural productivity, and high population growth. About 84 percent of the population depends on natural resources that are highly vulnerable to climate factors. Inadequate yields, poor diversification of incomes, climate change and increasing pressure on land due to population growth are the reasons why economic and food insecurity persist and why levels of malnutrition are high. Niger is a net importer of food (food is the second most important import item after capital goods). Regularly, Nigeriens undertake seasonal migration to reduce the pressure for food at home and to earn some income during the off-season. 16. The Government adopted a PRSP - the ‘Plan for Economic and Social Development 2012-2015’ (PDES) in August 2012. It represents an operational framework for the Government’s mid-term development agenda, in line with the Millennium Development Goals (MDGs). It covers the following strategic axes: (i) creation of conditions conducive to sustainable, equitable, and inclusive development; (ii) food security and sustainable agricultural development; (iii) promotion of a competitive and diversified economy; and (iv) promotion of social development. The National Environment Plan for Sustainable Development (‘Plan National de l’Environnement pour un Développement Durable’/PNEDD) is the key document unifying all the efforts related to environment and sustainable development. Niger has also 3 made numerous efforts and committed itself over the recent years to implementing key international environmental Conventions, such as the United Nations Conventions to Combat Desertification (UNCCD, 2008-2018), the 1992 Convention on Biological Diversity (CBD), and the 1992 United Nations Framework Convention on Climate Change (UNFCCC). 17. On April 18, 2012, the Government also adopted and started implementation of the ‘3 N Initiative’ (“Nigeriens feed Nigeriens”) for sustainable food security and agricultural development, representing axis 3 of the PDES, whose objective is to protect communities from hunger and malnutrition and guarantee them adequate conditions to participate in production and income generating efforts. Key objectives of the initiative stress, among others, the following: (i) working through local governments/communes; (ii) involving beneficiaries in planning and implementing development projects; (iii) developing resilient crops; and (iv) scaling up sustainable management of natural resources. 18. IDA is supporting the Government strategy through a 12-year Adaptable Program Loan (APL) called Community Action Program (CAP)/Programme d’Action Communautaire (PAC). Two phases of this APL have been completed. The third phase is currently under implementation and performing satisfactorily. The proposed AF will scale up the activities of the third phase. The APL contributes to the achievement of Niger’s key development objectives of reducing poverty through initiatives aimed at improving food security, raising the income of rural producers, and increasing, securing, and diversifying food production. The project also supports the implementation of key national development policies and strategies, and is implemented in synergy with other development programs, in particular, current World Bank-supported projects, including the West Africa Agricultural Productivity Program (WAAPP), the AF of the Agro-Sylvo Pastoral Exports and Markets Development Project/Projet de développement des exportations et des marchés agro-sylvo-pastoraux (PRODEX-AF), and the CSA. 19. Malnutrition in Niger is structural and endemic. The prevalence of malnutrition has remained above the 10 percent warning threshold. During the years with food crises the level of malnutrition was at or above the emergency threshold of 15 percent, as was the case in 2005 (15.5 percent), in 2010 (16.7 percent), and 2012 (14.8 percent). Acute malnutrition results in stunting which affects about 42.5 percent of children under the age of five (Nutrition Survey 2013). 20 percent of children between the ages of two months to six years suffer from moderate to severe malnutrition. Child nutrition has experienced only limited improvement, even though the practice of exclusive breastfeeding increased from 9 percent in 2009 to 23 percent in 2012. The main factors explaining this are the frequency of infectious and parasitic diseases, inadequate social and cultural practices of care, and limited access to health care and clean water. Micronutrient deficiencies are also a problem: disorders due to iodine deficiency are endemic, and vitamin A deficiency is a major public health problem; the prevalence of anemia is very high among the most vulnerable groups. 20. In addition to the 3N Initiative, many government and non-governmental organizations (NGO) initiatives have been undertaken and/or technical advice provided including by in Food and Agriculture Organization (FAO), International Fund for Agriculture Development (IFAD), United Nations Children’s Fund (UNICEF), and Helen Keller International which were consulted during the project preparation process. FAO has done work on land tenure and has partnered with the Government to develop a national food security policy (entitled in French: “Grandes Lignes de la Politique Nationale de Sécurité Nutritionnelle au Niger”). IFAD funded a project entitled: Project on “Food Security and Development Support Project in the Maradi Region”/Projet d’Appui à la Sécurité Alimentaire et au Développement de la Région de Maradi (PASADEM). One of its goals includes increased nutrition security for vulnerable groups. 4 21. The Systematic Country Diagnostic for Niger under preparation by the World Bank underlines that “improving the productivity in agriculture remains a first priority for poverty reduction”. Investments in the agricultural sector are therefore essential, such as through the proposed micro-projects under the AF. 2 Specifically, yields can and should be increased, including e.g. via use of highly productive varieties, small-scale irrigation, agroforestry and intercropping, which the AF will emphasize, while increasing the involvement of youth and women. 22. Aside from numerous other types of productivity-enhancing, agriculture-related micro-projects, the proposed AF would support small-scale irrigation. Some of these may be similar to actions proposed under the regional Sahel Irrigation Initiative Project (SIIP; P154482). The SIIP intends to improve irrigation development and management across various types of systems. The SIIP project development objective (PDO) is: “to improve stakeholders' capacity to develop and manage irrigation and to increase irrigated areas using a regional ‘solutions’ approach in six countries”. The IDA allocation for Niger under the SIIP is US$25 million, and it would finance various activities under three headings: (a) “Modernizing the institutional framework”, which will contribute to institutional strengthening and to improving the planning capacity by developing institutional frameworks, tools, and procedures; (b) “Financing irrigation investment solutions” which will be the laboratory to develop irrigation solutions testable at the country level and potentially applicable at a regional scale; and (c) “Knowledge management”. 23. The rationale for the proposed AF is that it would represent an opportunity for scaling up and achieving additional results under a well-performing project, including particularly increased agricultural productivity, along with the possibility for addressing malnutrition in five communes using Population and Human Resources Development (PHRD) grant resources that were approved on May 25, 2017. C. Relationship to Government and World Bank Strategies 24. The AF responds to the Government aspiration of building sustainable, equitable, and inclusive development, food and nutrition security, better management of natural resources, and resilient agricultural production system as elaborated in the following strategies: PDES, 3N, and the INDC. At the core of these strategies is the promotion of participatory development with a deliberate effort to improve the capability of communes to plan, prioritize, implement, and monitor local development activities. 25. The proposed project is supportive of the World Bank’s twin goals of eliminating extreme poverty and boosting shared prosperity. It would contribute to poverty alleviation and improved food security through the various micro-projects, most of which are related to agriculture and natural resources management. The proposed AF, in combination with community-based planning processes, will increase farm productivity and value addition in selected agricultural value chains, thus improving rural livelihoods. It will generate employment for women and young people in the targeted areas. In addition, the proposed AF project is fully aligned with the Country Partnership Strategy (CPS) for Niger, FY13-FY16, which was approved by the Board on April 30, 2013 3. The CPS is pursuing the following interdependent and mutually reinforcing strategic objectives, articulated as CPS pillars: (1) promote resilient growth; (2) reduce vulnerability; and (3) strengthen governance and capacity for public service delivery. The proposed AF would clearly contribute to these pillars as well as to agricultural productivity enhancements, which has been stressed by the Systematic Country Diagnostic (SCD); under preparation. The new Country 2 And in order to enhance the positive effect these micro-projects, trade should also be facilitated, which IDA supports via other operations. 3 Report No.76232 NE. 5 Partnership Framework (CPF) for FY18-FY21, scheduled to be delivered in FY18 (October 2017), will aim at addressing key development constraints identified by the SCD and will seek alignment with the Plan de Developpement Economique et Social of the Government of Niger. D. Parent Project Status and Performance 26. Design of the Original Program. The Niger Community Action Program (P065991) was designed as an APL. It was approved on March 20, 2003 and became effective on December 11, 2003. The on-going CAP III is the third phase of the APL, approved by the Board on May 24, 2013, and it became effective on July 7, 2013. The total APL IDA Grant was US$105 million. The original PDO of the APL was “to strengthen the Recipient’s local development planning and implementation capacities, including the capacity to respond promptly and effectively to an eligible crisis or emergency, and to improve the access of the targeted population to socio-economic services.” This PDO was maintained for all the three phases of the APL. No major changes were made to the design of the project throughout the implementation of the original APL. 27. Original Program’s Performance. The parent project is on track towards achieving the PDO. The PDO and Implementation Progress has been rated satisfactory throughout. There are currently 3,000,342 direct beneficiaries of the CAP3 projects, including 1,560,178 women (52 percent). The majority of results indicators exceeded targets well ahead of the current closing date. The project has disbursed 90.42 percent of the Grant by May 31, 2017. 28. At the PDO level, targets on management capacity, governance practices at the Commune level, and access to socio-economic services provided by the project have been fully achieved. As examples, to date: • 87 percent of “Newly targeted communes that have defined and implemented good governance practices (participation, accountability, and equity” against a target of 85 percent at the end the project; • 99 percent “Targeted communes that are enabled to sustain proper operation and maintenance of local development investments” against 100 percent of end target; • 92 percent of “Newly targeted farming households who adopted sustainable agro-sylvo- pastoral practices and technology promoted by the project” against a target of 90 percent; • 3,000,342 “Direct project beneficiaries” have been reached against a target of 3,000,000 at closing; and • 52 percent of “Female beneficiaries” have been reached, versus an end-of-project target of 50 percent. 29. Significant progress has also been achieved towards targets on intermediate results. Specifically, notable achievements include: (a) Under Component A / Capacity-building: The project reached 100 percent of “Targeted communes whose planning and AIP sessions are public” versus an end target of 60 percent; the project also reached 76 percent of “Targeted communes that timely prepare annual financial reports” versus a target of 75 percent at the end of the project. 6 (b) Under Component B / Local Investment Fund: As of April 21, 2017, 802 micro-projects, including six inter-communal micro-projects, were financed for the benefit of communes and their communities. Specific initiatives include: (a) socio-economic infrastructures; (b) income- generating activities; (c) sustainable land and water management; and (d) education and health infrastructures. Specific results for activities carried out under Component B include: • 95 percent of “Commune whose approved micro-projects integrate gender equity” versus a target of 90 percent at the end of the project; • 75 percent of “Communes whose grievance mechanisms have been created and are operational” against a target of 65 percent at the end of the project; • 85 percent of “Representatives of key Regional agencies whose planning capacities have been strengthened” versus a target of 60 percent at the end of the project; • 90 percent of “Representatives of deconcentrated line departments whose local development-related capacities have been strengthened” against a target of 90 percent by the end of the project; • 86 percent of “Targeted communes utilizing at least 80 percent of their investment allocations” against a target of 80 percent at the end of the project; • 79 percent of “Targeted communes which have protected and/or restored at least 200 hectares of land” versus 70 percent by project end; and • 85 percent of “Beneficiaries whose income increased by 30 percent because of farm and off- farm jobs created by approved micro-projects” versus a target of 80 percent at the end of project. 4 E. Rationale for the Additional Financing 30. The request for AF is justified given the Government’s aim to scale-up a successful series of operations and consolidate the gains made to ensure their sustainability. The World Bank will support the proposed AF for the following main reasons: (a) To respond to the demand from the Recipient to consolidate and scale-up project activities. CAP3/PAC3 has achieved significant results in the country with tangible impacts on the ground in rural areas where poverty is greatest. Under AF the project will deepen its focus on improving productivity of agricultural crops, including with small-scale irrigation, enhance income generating opportunities, especially for women and youth, and improve sustainable land and water management. (b) To maintain the momentum and build on CAP3’s overall achievements to address emerging issues, such as youth unemployment, insecurity, and climate-related problems, including droughts and famine. Results so far achieved by the project within challenging rural environments demonstrate that transformation of the agricultural sector is possible in Niger if the lessons are applied along with strong participation of the beneficiaries in the decision-making to foster ownership. 4 There are numerous additional achievements under Component B related to socio-economic infrastructures, income-generating activities, sustainable land and water management; these are detailed in the Implementation Status Reports (ISR). 7 F. Consideration of Alternative Funding 31. At least three possible financing alternatives were considered: (i) financing from the Government budget: the Government requested IDA for the AF after realizing that it would not be able to finance project activities through its own budgetary resources; (ii) other development partners: a number of donors are operating in Niger, but IDA is a leader in taking such a phased and sequential effort in local development, and other donors could not fill the gap as their resources were committed to other the programs; and (iii) the private sector: the private sector in Niger is at very low level of development, and by the very nature local development financing focused on capacity improvement and poverty in Niger is a public good. The Government has not been able to fully mobilize expected financial contributions as anticipated under the parent project, and even when these contributions are made, they were often not substantial and/or provided on time. 32. In terms of co-financing, a PHRD grant from Japan’s Ministry of Finance was requested to support nutrition-sensitive agriculture in five selected communes. 5 No other co-financing options, except co- financing with contributions in kind, such as with labor at the Commune level, are forthcoming. The request for PHRD funding was approved on May 25, 2017, by the Japanese Ministry of Finance under the Tokyo International Conference on African Development (TICAD) V. A Grant Agreement will be prepared between IDA, as administrator of the PHRD TF, and the Republic of Niger. III. Proposed Changes 33. The proposed AF would result in the changes in (i) PDO and results framework, (ii) reallocation of funds among categories, and (iii) the extension of the original closing date by 24 months from December 20, 2017, to December 20, 2019. 34. Project development objective. The PDO under the AF was slightly revised “to strengthen the Recipient’s local development planning and implementation capacities, to support the targeted population in improving agriculture productivity, and to respond promptly and effectively to an eligible crisis or emergency.” Several new performance indicators have been introduced, including two specific intermediate indicators for small-scale irrigation investments to account for the results that will be funded by the PHRD grant. The proposed results framework, presented in Annex 1, was reviewed and completed during appraisal to capture the additional level of outputs and outcomes envisaged to be generated during the AF period. 35. Geographic scope and beneficiaries. The AF will continue to be implemented at the national level and in each of the eight regions. It will scale-up project activities to cover an additional 109,800 direct beneficiaries with a focus on small-scale farmers, small livestock producers, young people, and women. Under IDA an estimated 11,200 people are expected to benefit from activities under Component A and 109,800 und Component B. Thus, total direct beneficiaries under IDA are expected to be 121,000. With an assumed household size of seven, the total number of IDA beneficiaries are expected to be around 5 Under the PHRD grant the focus is specifically on nutrition-sensitive agriculture. Thus, on the production side, small- scale irrigation will be emphasized to produce more fruits and vegetables. But there will also be efforts to educate and disseminate knowledge on nutrition and food preparation, to help induce increased home consumption of nutritious foods. It is expected that some of the nutrition-related communication tools will also benefit other communes, particularly those where small-scale irrigation investments will be made under the Additional IDA Grant. 8 847,000. The PHRD grant would benefit 5,000 direct beneficiaries from small-scale irrigation (and 35,000 total beneficiaries, assuming a household size of 7). 36. Links with ongoing initiatives. The AF will establish close linkages with ongoing projects and organizations which are supporting the same or similar actions within the targeted 125 communes. More specifically, it is envisaged that the project implementing entities for these projects will enter into coordination protocols or Memorandum of Understandings (MOUs) to strengthen the synergies between CAP3/PAC3 and the relevant operations, including the Niger Solar Electricity Access Project (NESAP)- P160170, the Niger Climate Smart Agriculture Project (CSA)-P153420, the Niger West African Agriculture Productivity Project (WAAPP)-P094084, the Niger Sahel Pastoralism Support Project (PRAPS)-147674, and any other project or initiative to better cover the needs of the targeted communes and communities. In case of WAAPP, one of the criteria to be utilized in the provision of seeds will be utilizing those that are certified and disseminated through the support of WAAPP. 37. Results Framework. Changes in the Results Framework include revisions and restructuring of the PDO and intermediate indicators and their targets. New indicators were added to measure new outcomes of the revised PDO. Also, new intermediate indicators for small-scale irrigation were added. The detailed changes are presented in the Appraisal Summary section below and reflected in Annexes 1 and 1B. 38. Project description 6. The AF will be implemented through the four components of the parent project: (i) Component A: Capacity Building; (ii) Component B: Local Investment Fund; (iii) Component C: Project Coordination, Management, Monitoring and Evaluation (M&E), Communication, and Preparation of Studies”; and (iv) Component D: “Contingent Emergency Response Component”. In order to avoid duplication with the Climate-Smart Agriculture Support Project (P153420), which will cover 60 communes, the focus of the proposed AF for CAP3 will remain on its 125 communes already supported by PAC3. But in order to qualify for assistance under the AF operation, any Commune wishing to be considered must already have implemented a micro-project under PAC3, and it must have been assessed as “satisfactory” or “highly satisfactory”. 39. Climate change and disaster risks. Such risks in Niger are mainly related to rainfall, as the country is located in an area south of the Sahara with semi-arid and arid conditions. Component B under the proposed AF will support small-scale irrigation and other micro-projects that are increasing resilience. Further, Component D of the CAP3 project has been maintained in order to explicitly deal with an eligible crisis, in case one should occur during the period of implementation. 40. Citizen engagement. Since CAP is a community-driven development program, citizen engagement has been, and continues to be, an integral part of developing and implementing the program. This meant that people at the Commune and community levels have consistently been involved in managing the activities (reflected in their Local Development Plans. This approach will continue under the AF. 41. Gender. The AF will support agriculture productivity-enhancing investments and in particularly those benefitting women and youth. Therefore, specific measures proposed under the AF project include increased representation of female and youth in the management committees for the micro-projects as follows: 6 This section presents a brief description of changes in project components. A more detailed description is provided in Annex 2. 9 (a) For small-scale irrigation projects, where women are expected to do nearly 100 percent of the actual work in terms of producing fruits and vegetables, management committees must include at least 80 percent women (e.g. 60 percent older ones [above 35] and 20 percent younger ones [between 20 and 35]), and 20 percent men (e.g.10 percent above age 35 and 10 percent between 20 and 35); and (b) For all other micro-projects, management committees should have 60 percent representation of women (e.g. 40 percent older ones and 20 percent younger ones) and 40 percent men (e.g.20 percent older ones and 20 percent younger ones). 42. Representation in the management committees will allow the women and youth to benefit from training and should ensure that women and youth are also among the majority of those benefitting from the specific projects. A precondition for grant-financing of small-scale irrigation under both the IDA and the PHRD grant would be certified security of tenure for the female farmers’ groups of the land to be irrigated, for a period of 30 years. Each group, in turn, will allocate secure, demarcated, legally certified/documented plots of 500 m2, on average, to its members. 43. Component A: Capacity Building (US$3.26 million in total, of which US$3.00 million from IDA and US$0.26 million from the Japanese PHRD). Up to now, under Component A, CAP3 supported the setting up and operationalization of a framework for the participation of local populations in the design and management of local development, namely the Communal Development Plans (CDPs). Now that all the CDPs are in place, the project will put more focus on targeted training and agricultural advisory services needed by small farmers for the implementation of their micro-projects. There are an estimated 11,200 direct beneficiaries under this Component. 44. Subcomponent A1, funded entirely by IDA (US$3.00 million): During the period of the AF, the contracting capacity of communes (Maîtrise d’Ouvrage) and the delegated contract management capacity of communes and communities (Maitrise d’Ouvrage Délégué) which implement micro-projects, will be strengthened. Activities include training for municipal executives and the beneficiary communities of micro-projects (mayors, deputy mayors, secretaries-general, municipal controllers, management committees for the micro-projects, etc.) in the areas of accountability, archiving of documents, fairness and targeting of micro-project beneficiaries, procurement, and environmental and social safeguards. 45. Subcomponent A2, funded entirely by PHRD (US$0.26 million), will build capacity, in five selected communes, of small farmers to increase their knowledge for increasing agricultural productivity, including food with a high nutritional value. This will include empowering small and marginal farmers, especially youth and women, strengthening producer organizations, promoting farmer-to-farmer services, and linking the farmer associations with other public and private sector agencies for the projects’ nutrition- related and other purposes. Activities will include technical assistance, training, and investments in farmer-led knowledge. 46. Component B: Local Investment Fund (US$15.75 million in total, of which US$14.00 million from IDA and US$1.75 million from the Japanese PHRD). This Component will be the centerpiece under the AF and support agriculture-related micro-projects in 125 communes already participating in CAP3. This Component will directly benefit 104,800 persons with the IDA grant and 5,000 with the PHRD grant, particularly youth and women, who may already be benefiting in a small manner from a micro-project financed under CAP3. Since the philosophy of community-driven development is that communes develop 10 proposal for micro-projects that are in line with local development plans, the micro-projects (MPs) cannot be fully described ex-ante. Overall, categories for eligible micro-projects 7 will include: (a) Micro-projects related to improved land and water management, including to strengthen climate resilience; (b) Income-generating activities related to agriculture; and (c) Micro-projects for socio-economic infrastructures. 47. The subcomponent on inter-communal grants included in CAP3 was not in much demand and will be discontinued. 48. Subcomponent B1: Micro-projects related to improved land and water management, including to strengthen climate-resilience, funded entirely by IDA (US$3.20 million). Further development of 7,500 hectare (ha) of soil and water conservation and BioCarbon sites as well as seeding of 92,450 ha of land on eligible sites to increase sylvi-cultural and fodder production will be done. The main activity will be the provision of high-quality herbaceous forage seeds and the organization of the population during: (a) field preparation and seeding; and (b) crop management and site maintenance. 49. Based on the progress so far, the project aims at the development of 100,000 ha of land to increase the agro-sylvo-pastoral production on favorable soil and water conservation (SWC) and bio- carbon sites using a set of technological packages. This will enable the permanent and sustained development of the sites, especially during the dry and rainy seasons of the year. In the areas recovered, intercropping, forage crops, and beekeeping will be promoted. Techniques for intensification of farming and pastoral systems will also be promoted. 50. Under this subcomponent the following four types of micro-projects will be implemented: (i) on soil and water conservation, as well as soil restauration, for agro-sylvo-pastoral purposes 8 to recover bare and/or encrusted land in order to upgrade it for reforestation in woody and herbaceous species for agroforestry purposes; (ii) on improved seed production and distribution to increase productivity of agricultural and pastoral land by providing 200 producers 9 of seed and fodder with improved seeds; (iii) on cultivation of agricultural products with high economic potential for 1,200 most vulnerable women during the most difficult periods (lean period), these micro-projects aim to contribute by supporting seeds, tools, and technical capacities for producing certain crops 10; (iv) for fisheries development of ponds, pond surroundings and other water bodies threatened by silting and aquatic plants 11. The detailed description is provided in Annex 2. 7 Detailed eligibility criteria are provided in the Project Implementation Manual. 8 The upgrading will be done by the mechanical recovery techniques (half-moons, zai, wood plantations, Acacia Senegal) and seeding of herbaceous species with high pastoral values, and it will include development of food crops as an adaptation to the adverse effects of climate change. 9 Each beneficiary will be equipped with seeds and agricultural implements to harvest 2 ha, which is expected to create the conditions for the distribution of seeds produced locally during the following years to about 15 percent of households in the beneficiary villages (see Annex 2 for more details). 10 Crops such as okra (Abelmoschus esculentus), Moringa oleifera, sesame, the jujube tree fruit (pomme de the sahel). 11 Planned activities include restoration of water storage, establishing and training management committees of these pools on management of natural resources and associative organizations, acquisition of breeding stock or fingerlings, transport, management, follow-up, food supplementation, training, and capacity building of fishers. 11 51. Subcomponent B.2: Micro-projects for income-generating activities (with two subcomponents) financed entirely by IDA (US$3.20 million). Based on local priorities, these could also include a variety of MPs, such as livestock development, livestock fattening, livestock replenishment, storage and processing structures/equipment for processing agricultural outputs (e.g.to avoid post-harvest losses) and other investments or Technical Assistance that would help with commercialization. 52. Subcomponent B.3: Micro-projects (MPs) in socio-economic infrastructures. As in the parent project, these grants will likely include a significant variety of projects at the commune level, which would be based on priority areas addressing key binding constraints to agricultural productivity as determined by communes. Priority areas for MPs will include, but not be limited to, small-scale irrigation for the production of food, including fruit and vegetables which are expected to improve nutritional and livelihood outcomes. 53. Subcomponent B.3.1, financed entirely by IDA (US$7.60 million), aims to develop small-scale irrigation on 1,000 ha. Around 125 ha of such small-scale irrigation per region would be distributed over several sites/communes (see Appendix to Annex 2). Eligibility criteria for small-scale irrigation sites remain same as in the parent project and include: (a) availability of mobilizable water resources at selected sites with a water table of less than 12 meters during the dry season; (b) legally guaranteed community property site; (c) limited distance between the sites and the place of residence of the beneficiaries; and (d) targeted beneficiaries organized, including at least 80 percent women and young people ages 20-35. 54. Subcomponent B.3.2, financed entirely by PHRD (US$1.75 million), would invest in small-scale irrigation micro-projects in five selected communes. These include two communes in Maradi (Korgom and Hawandawaki) and three communes in Tahoua (Kao, Bombèye, and Bangui). In each of the communes, the target would include about 20 communities/sites, totaling about 100 communities/sites. Female farmers’ groups will be provided, with support from the National Coordination Unit (NCU) and the Regional Coordination Units (RCUs), secure tenure rights for 30 years for one to maximum three plots per village, totaling on average 2.5 hectares per village. In turn, each group will allocate secure, demarcated, legally certified/documented plots of 500 m2, on average, to its members. Thus, 1,000 women would be the main/direct beneficiaries in each of those five communes, totaling 5,000 for the five communes. The other principles for IDA-financed irrigation will also apply. 55. Component C: Project Coordination, Management, Monitoring and Evaluation, Communication, and Preparation of Studies (US$4.04 million in total, including US$3.80 million from IDA and US$0.24 million from the PHRD grant). This component is comprised of three sub-components: Subcomponent C.1: Coordination and Management, entirely financed by IDA (US$3.2 million). Activities will include management of staff and equipment, financial management, procurement activities, management of the environmental and social safeguards aspects, preparation of annual work plans, and organization of supervision missions; Subcomponent C.2: Planning, M&E, and Preparation of Studies, entirely financed by IDA (US$0.40 million). The project will continue with the same M&E system put in place by CAP3 but with a revised results framework (see Annexes 1 and 1B. Furthermore, this subcomponent will finance key studies on agricultural sector development and for the preparation of the upcoming commercial agricultural project. The utility of a feedback mechanism (called “iterative beneficiary monitoring”) will also be assessed/considered. 12 Subcomponent C.3: Communication and Knowledge Management, entirely financed by IDA (US$0.20 million). Subcomponent C.4: Nutrition-related Activities and M&E, financed entirely by PHRD (US$0.24 million), would support communication, sensitization, and training, with regard to the nutrition as well as M&E, related to the MPs in the five selected communes. 56. Component D: “Contingent Emergency Response Component” (CERC). It will be part of the project on a contingency basis only, to provide an immediate response to an Eligible Crisis or Emergency. This contingency was triggered only once so far, in July 2014, during a serious drought, which resulted in the deaths of many animals.12 The Recipient has requested that this contingency, as Component D, be retained during the AF-period. 57. Disbursements would be made against a positive list of critical goods or the procurement of works and consultant services required to support immediate response and recovery needs. A specific Emergency Response Operations Manual will apply to this component, detailing financial management (FM), procurement, safeguards, positive list, and any other necessary implementation arrangements. 58. Project Cost estimates and financing. A summary of project costs for each component and project financing is provided in Table 1 below. Table 1: Project Costs and Financing Original Costs (US$ Changes with AF Total Project AF Components million) AF (US$ million) Costs IDA GEF Total IDA PHRD Total AF (US$ million) Component A: Capacity 7.17 1.17 8.35 3.00 0.26 3.26 11.61 Building Component B: Local 26.27 3.12 29.39 14.00 1.75 15.75 45.14 Investment Fund Component C: Project Coordination, Management, Monitoring and Evaluation, 6.56 0.23 6.78 3.80 0.24 4.04 10.81 Communication, and Preparation of Studies Component D: Contingent 0 0 0 0 0 0 0 Emergency Response Total Project Costs 40.00 4.52 44.52 20.80 2.25 23.05 67.56 Implementation arrangements 59. The implementation of the AF will build on “partnership arrangements” developed by the parent project in the previous phases, as well as other World Banks projects and particularly the Niger Community Action Project for Climate Resilience (CAPCR; P125669), PRODEX-AF, CSA, and SIIP SNP. 60. The Ministry of Agriculture and Livestock, which has been involved in all the previous phases, will keep overall responsibility for the implementation and the supervision of the project. The role of this 12 Under the emergency, 1,083 tons of animal feed was provided via 29 micro-projects in the regions of Zinder (12), Agadez (6), Diffa (6), and Maradi (5). 13 Ministry is justified by its comparative operational advantages, including the successful oversight of CAP1, CAP2, and CAP3. 61. Participating communes will have the legitimate leadership for all community-based and Communal initiatives of Component B, which should be integrated into their development plans and annual budgets. 62. Steering mechanisms for the AF would be built upon the existing institutional architecture: (i) at national level, national functions of guidance will be provided by the National Steering Committee (Comité national de Pilotage, CNP), chaired by the Secretary General of the Ministry of Agriculture and Livestock. The CNP will ensure coherence between CAP3 and other similar World Bank- supported operations in the sector; (ii) at district and regional levels, the district committee for project analysis (CDAP, CRAP) will analyze micro-projects selected by commune councils to be financed under Component B to ensure their compliance with sectoral policies, technical standards, economic effectiveness, and social and environmental safeguard policies; and (iii) at Commune level: municipal councils will approve funding of micro-projects. 63. The technical implementation framework of the project will be made up of: (i) national institutions that are directly involved in project activities, (ii) regional directorates of government institutions, and (iii) service providers as needed. 64. The current implementation arrangements under CAP3 will be maintained under the CAP3 AF as these have been working in a satisfactory manner. As indicated in more detail in Annex 2, the centerpiece of the Program are the micro-projects that enhance agricultural productivity, supported by relevant capacity building. Since the Grant Recipient has requested the AF to help pursue mainly activities covered by the parent project, disbursements could start immediately after declaration of effectiveness. 65. Financial Management (FM). In accordance with the Financial Management Manual for World Bank-Financed Investment Operations that became effective on March 1, 2010, the proposed financial management systems of the AF have been assessed to determine whether it is acceptable to the World Bank. To this end, the financial management aspects of the World Bank-financed Community Action Program (CAP3) – P132306, for which the proposed AF is being prepared, have been reviewed and judged acceptable. The proposed AF will follow an approach similar to the arrangements in place for the current World Bank-financed CAP3, implemented by the Project Coordination Unit (PCU) under the Ministry of Agriculture and Livestock. This PCU, which has demonstrated solid technical and fiduciary capacities to manage World Bank-financed projects will assume the AF financial management. The current FM staffing is adequate. The PCU’s current accounting software will be used for the AF. However, it will need to be updated to reflect the AF. The existing manual of FM procedures is deemed acceptable to IDA and will be used for the purpose of this AF. The Financial Management (FM) system and performance of the PCU are acceptable to IDA. The April 2017 implementation support mission rated the project’s FM performance as Moderately Satisfactory (MS). The residual FM risk after mitigation measures remains Moderate. 66. The CERC Operations Manual and the Disbursement Letter will include the detailed disbursement arrangements applicable under the Contingent Emergency Response part of the proposed project. As part of such arrangements, a positive list could be used, which would feature in the CERC Operations Manual and would include the items against which disbursements will be made. Where a positive list of expenditures is used, the documentation required to support disbursement requests should be agreed 14 (for example, invoices and bills of lading for food imports) and recorded in the CERC Operations Manual and the Disbursement Letter. 67. The interim un-audited financial reports (IFRs) are prepared every quarter and regularly submitted to the World Bank on time (45 days after the end of each quarter). The 2015 audit report was submitted on time and the auditor’s opinion was unqualified. There are no overdue audit reports under the project. The proposed financial management arrangements, including the mitigation measures for the proposed AF project, are considered adequate to meet the World Bank’s minimum fiduciary requirements under OP/BP 10.00. 68. Procurement. The New Procurement Framework (including Procurement Regulations for Recipient) that apply to projects with PCN after July 1st, 2016, would normally apply. However, the Task Team has received approval for an exception under the Procurement Directive from the CPO to apply the old Procurement Guidelines. Thus, procurement arrangements of the parent project will remain largely the same under the proposed AF in accordance with: (a) the World Bank’s “Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA Credits and Grants” dated January 2011 and revised July 2014; and (b) “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011 and revised July 2014. Although procurement on CAP3 has experienced its challenges, the PCU has conducted procurement activities for the parent project in a satisfactory manner. 69. Environmental and Social Safeguards. Just as its parent project for which the proposed AF is scaling up its activities, the AF project retains its social and environmental Category B rating. No additional safeguards policies will be triggered and the rating will therefore remain the same. The environmental and social risks and impacts of the project are expected to be generally positive, moderate, and low in scale, mostly site-specific, and thus easily manageable. The project is expected to have positive environmental impacts through its support for agricultural technologies that promote the better use of land and water resources. Potential environmental and social risks and impacts could include point and nonpoint pollution of water sources, issues associated with the use of agricultural chemicals, and negative environmental and social risks and impacts associated with the construction of small-scale irrigation works. The CAP3 safeguards documents (Environmental and Social Management Framework-ESMF, Pest Management Plan-PMP, and Resettlement Policy Framework-RPF) will also apply to this AF, and have been updated to include lessons learned from implementing the parent project, and were re-disclosed both in-country on April 7, 2017, and at the Infoshop on April 11, 2017, i.e. prior to project appraisal. The latest safeguards implementation support missions (December 2016 and April 2017), respectively), rated the safeguard compliance as Satisfactory (S), based on review of progress reports and project site visits. The Project Management Unit has extensive experience with the World Bank’s safeguards policies, and a dedicated team to follow up on both environmental and social aspects of the project; especially the implementation of the safeguards instruments. Likewise, all infrastructure contracts include implementable social and environmental clauses for consideration. In addition, the World Bank’s safeguards specialists will provide further technical guidance to the PCU through proactive regular supervision missions and in-field technical capacity strengthening of the Social and Environmental Safeguards Specialists. Summary of Proposed Changes For the proposed AF, the PDO is “to strengthen the Recipient’s local development planning and implementation capacities, to support the targeted population in improving agriculture productivity, and 15 to respond promptly and effectively to an eligible crisis or emergency.” Micro-projects that increase agricultural productivity will be emphasized, including small-scale irrigation that permits horticulture production during the dry season, and are expected to help poor households generate income and also improve their nutritional status (in collaboration with the forthcoming PHRD small grant on Nutrition Sensitive Agriculture and Capacity Building of Small and Marginal Farmers which will be implemented by the same PIU). An exception was requested to continue to use the World Bank’s Procurement and Consultant Guidelines of 2010 editions (as referred to in the Financing Agreement) for the proposed AF (just like for the parent project). The exception request was approved by the Chief Procurement Officer on March 17, 2017, pursuant to Section III, Paragraph 4 Table I(C) of the “World Bank Procedure - Procurement in Investment Project Financing and Other Operational Procurement Matters”. Change in Implementing Agency Yes [ ] No [ X ] Change in Project's Development Objectives Yes [ X ] No [ ] Change in Results Framework Yes [ X ] No [ ] Change in Safeguard Policies Triggered Yes [ ] No [ X ] Change of EA category Yes [ ] No [ X ] Other Changes to Safeguards Yes [ ] No [ X ] Change in Legal Covenants Yes [ ] No [ X ] Change in Grant Closing Date(s) Yes [ X ] No [ ] Cancellations Proposed Yes [ ] No [ X ] Change in Disbursement Arrangements Yes [ ] No [ X ] Reallocation between Disbursement Categories Yes [ X ] No [ ] Change in Disbursement Estimates Yes [ X ] No [ ] Change to Components and Cost Yes [ X ] No [ ] Change in Institutional Arrangements Yes [ ] No [ X ] Change in Financial Management Yes [ ] No [ X ] Change in Procurement Yes [] No [X] Change in Implementation Schedule Yes [ X ] No [ ] Other Change(s) Yes [ ] No [ X ] Development Objective/Results Project’s Development Objectives Original PDO The Project Development Objectives of the CAP3 Project are: “to strengthen the Recipient’s local development planning and implementation capacities, including the capacity to respond promptly and effectively to an eligible crisis or emergency, and to improve the access of the targeted population to socio- economic services.” 16 Change in Project's Development Objectives PHHCPDO For the AF, compared to the parent project, the Project Development Objectives were revised. However, the component structure will remain the same. Micro-projects that increase agricultural productivity will be emphasized, incl. small-scale irrigation that permits horticulture production during the dry season, are expected to help poor households generate income and also improve their nutritional status in collaboration with the requested PHRD grant on Nutrition Sensitive Agriculture and Capacity Building of Small and Marginal Farmers which will be implemented by the same PIU. Proposed New PDO - Additional Financing (AF) The PDO has been revised. It is “to strengthen the Recipient’s local development planning and implementation capacities, to support the targeted population in improving agriculture productivity, and to respond promptly and effectively to an eligible crisis or emergency.” Change in Results Framework PHHCRF Explanation: The Result Framework was revised to reflect the change in PDO. The revision will also reflect the achievements made at output level. Several new indicators were added, some discontinued, and some are proposed to be moved from the PDO to intermediate level. Also, some intermediate indicators were added to capture progress with small-scale irrigation and related agricultural production. The proposed changes are capture in the table below: PDO Indicators Percentage of newly targeted communes that have defined and implemented Revised and good governance practices (participation, accountability, and equity) moved to intermediate indicator Percentage of communes that are enabled to sustain proper operation and Moved to maintenance of local development investments intermediate indicator Additional land area under sustainable land and water management (SLWM) and Discontinued Sustainable Forest Management (SFM) practices [GEF Indicator] Percentage of newly targeted farming households who adopted sustainable agro- Discontinued sylvo-pastoral practices and technology promoted by the project [IDA core indicator] Area provided with irrigation or drainage (hectares) New Farmers adopting improved agricultural technology [Male/Female] New Direct project beneficiaries (number) of which female (percentage) Unchanged Farmers reached with assets or services, of which female New Increase in agricultural productivity of agricultural crops (%), by crop New IRM established and ready to provide access to financial resources to Niger in Moved to case of an eligible emergency [IRM-related indicator] intermediate indicator Intermediate Indicators Component A Percentage of targeted communes whose planning and AIP sessions are public Discontinued Percentage of targeted communes that timely prepare annual financial reports Unchanged (within legal delays) 17 Percentage of communes whose approved micro-projects integrate gender Unchanged equity Percentage of communes whose grievance mechanisms have been created and Unchanged are operational Percentage of targeted communes effectively interested in Intercommunalité Discontinued Percentage of representatives of key Regional agencies whose planning Unchanged capacities have been strengthened Percentage of representatives of deconcentrated line departments whose local Unchanged development-related capacities have been strengthened Component B Percentage of targeted communes utilizing at least 80 percent of their Unchanged investment allocations Percentage of targeted communes which have protected and/or restored at least Unchanged 200 hectares of land Percentage of beneficiaries whose income increased by 30 percent because of Unchanged farm and off-farm jobs created by approved micro-project Populations of newly targeted communes whose access to education improved Discontinued Percentage of populations (disaggregated by gender) of newly targeted Revised communes whose access to nutrition services improved Percentage of targeted intercommunal initiatives which have been implemented Discontinued Number of storage and processing facilities built New Number of beneficiaries that have increased consumption of fruits and New vegetables Component C Percentage of targeted knowledge & communication products prepared and Unchanged disseminated Component D IRM established and ready to provide access to financial resources to Niger in Unchanged case of an eligible emergency Compliance Covenants - Additional Financing (Third Community Action Program Support Project – P163144) Source of Finance Description of Funds Agreement Date Due Recurrent Frequency Action Covenants Reference Without limitation to the generality of the provisions in Schedule 2. paragraph (a) Section II. B. immediately above, IDA 1. (b) (i) of no later than (3) 2/28/2018 New the Financing three months after Agreement effective date or such other date as the Association may agree in writing, the 18 Recipient shall (i) have reconfigured its accounting software in manner satisfactory to the Association Without limitation to the generality of the provisions in paragraph (a) immediately above, no later than (3) three months after Schedule 2, effective date or Section II. B. such other date as IDA 1. (b) (ii) of 2/28/2018 New the Association may the Financing agree in writing, the Agreement Recipient shall (ii) have hired two regional accountants and one regional internal auditor, satisfactory to the Association. Without limitation to the generality of the provisions in paragraph (a) immediately above, no later than (3) Schedule 2, three months after Section II. B. effective date or IDA 1. (b) (iii) of 2/28/2018 New such other date as the Financing the Association may Agreement agree in writing, the Recipient shall (iii) have reviewed the terms of reference and contact of the external auditor. Conditions Source of Fund Name Type IDAT Withdrawal conditions. Schedule Disbursement 2. Section IV. B. 1. (b) (i) Description of Condition 19 Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: (b) under Category (5), unless and until the Association is satisfied, and notified the Recipient of its satisfaction, that all of the following conditions have been met in respect of said activities: (i) the Recipient has determined that an Eligible Crisis or Emergency has occurred, has furnished to the Association a request to include said activities in the IRM Part in order to respond to said Eligible Crisis or Emergency, and the Association has agreed with such determination, accepted said request and notified the Recipient thereof. Source of Fund Name Type IDAT Withdrawal conditions. Schedule Disbursement 2. Section IV. B. 1. (b) (ii) Description of Condition Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: (b) under Category (5), unless and until the Association is satisfied, and notified the Recipient of its satisfaction, that all of the following conditions have been met in respect of said activities: (ii) the Recipient’s Coordinating Authority has adequate staff and resources, in accordance with the provisions of Section I.C.2 of this Schedule 2 to this Agreement, for the purposes of said activities. Source of Fund Name Type IDAT Withdrawal conditions. Schedule Disbursement 2, Section IV, B, 1 (b). (iii) Description of Condition Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: (b) under Category (5), unless and until the Association is satisfied, and notified the Recipient of its satisfaction, that all of the following conditions have been met in respect of said activities: (iii) the Recipient has adopted an IRM Operations Manual in form, substance and manner acceptable to the Association and the provisions of the IRM Operations Manual remain - or have been updated in accordance with the provisions of Section I.C.1(c) of this Schedule 2 so as to be - appropriate for the inclusion and implementation of said activities under the IRM Part. P Source of Fund Name Type IDAT Withdrawal conditions. Schedule Disbursement 2, Section IV, B, 1 (c). (i) Description of Condition Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: under Category (6), unless and until the Association is satisfied, and notified the Recipient of its satisfaction, that all of the following conditions have been met in respect of said activities: (i) all conditions to a first disbursement under Category (5) as described in paragraph (b) immediately above are satisfied. 20 Source of Fund Name Type IDAT Withdrawal conditions. Schedule Disbursement 2, Section IV, B, 1 (c). (ii) Description of Condition Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: under Category (6), unless and until the Association is satisfied, and notified the Recipient of its satisfaction, that all of the following conditions have been met in respect of said activities: (ii) the Recipient has prepared and disclosed all Safeguard Documents required for said activities, and the Recipient has implemented any actions which are required to be taken under said Documents, all in accordance with the provisions of Section I.C.3(b) of Schedule 2 to this Agreement. 1. Political and Governance High 2. Macroeconomic Moderate 3. Sector Strategies and Policies Substantial 4. Technical Design of Project or Program Moderate 5. Institutional Capacity for Implementation and Sustainability Low 6. Fiduciary Moderate 7. Environment and Social Moderate 8. Stakeholders Moderate OVERALL Substantial Finance Loan Closing Date - Additional Financing (Third Community Action Program Support Project- P163144) Source of Funds Proposed Additional Financing Loan Closing Date IDA Grant 20-Dec-2019 JAPAN: Ministry of Finance - PHRD Grants 20-Dec-2019 Loan Closing Date(s) - Parent (Third Community Action Program Support Project - PHHCLC P132306) D Explanation: The closing date of the parent project is December 22, 2017. It is proposed to extend the closing date to December 20, 2019 to allow completion of the expanded project activities. Status Original Closing Current Closing Proposed Closing Previous Closing Ln/Cr/TF Date Date Date Date(s) IDA- H8550 Effective 22-Dec-2017 22-Dec-2017 20-Dec-2019 -- Expected Disbursements (in US$ Million) (including all Sources of Financing) Fiscal Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Annual 4.40 11.00 12.00 8.60 9.00 10.00 5.80 0.00 0.00 0.00 21 Cumulative 4.40 15.40 27.40 36.00 45.00 55.00 60.80 0.00 0.00 0.00 Allocations - Additional Financing (Third Community Action Program Support Project - P163144) Disbursement % (Type Source of Allocation Currency Category of Expenditure Total) Fund Proposed Proposed Goods and consultants’ services, including audits IDAT US$ 4.50 100.00 and Trainings under Parts A and C of the project Matching Grants under IDAT US$ 3.20 100.00 Part B.1 of the project Matching Grants under IDAT US$ Part B.2 and Part B.3 of 10.80 100.00 the project Operating Costs under IDAT US$ Part A and C of the 1.50 100.00 project Goods, works, non- consulting services, and consultants’ services for Emergency Expenditures IDAT US$ 0.00 100.00 under Part D of the project, which do not trigger World Bank Policies Goods, works, non- consulting services, and consultants’ services for IDAT US$ Emergency Expenditures 0.00 100.00 under Part D of the project, which trigger World Bank Policies IDAT US$ Unallocated 0.80 100.00 IDAT US$ Total IDA 20.80 GD, CONSULT, TR, PART PHRD US$ 0.56 100.00 A, C 22 MATCHING GRANT PART PHRD US$ 0.00 0.00 B1, B2 MATCHING GRANT PART PHRD US$ 1.69 100.00 B3 PHRD US$ OP COSTS PART A, C 0.00 100.00 GD, WK, NON/CS, PART D PHRD US$ 0.00 100.00 DO NOT TRIGG GD-WK-NON/CS-PART D 0.00 100.00 PHRD US$ TRIGGER BANK PO Total PHRD: 2.25 Total IDA and PHRD: 23.05 Reallocations between disbursement categories Explanation: There is a need to reallocate funds to Category 4 (Operating Costs under Parts A and C of the Project) which is fully disbursed due to support to additional Government institutions that joined the Project. These institutions are I3N, Haut Commissariat à la Modernisation de l'Etat, Haut Commissariat à la Consolidation de la Paix, etc. Current Category of Disbursement % Ln/Cr/TF Currency Allocation Expenditure (Type Total) Current Proposed Current Proposed GD, CONSULT, TR, 7,300,000.0 6,687,064.0 IDA-H8550 XDR 100.00 100.00 PART A, C 0 0 MATCHING GRANT 7,100,000.0 7,100,000.0 IDA-H8550 77.00 77.00 PART B1, B4 (a) 0 0 MATCHING GRANT 10,400,000. 10,400,000. IDA-H8550 100.00 100.00 PART B2, B3, B4 (b) 00 00 1,500,000.0 2,463,420.0 IDA-H8550 OP COSTS PART A, C 100.00 100.00 0 0 GD, WK, NON/CS, IDA-H8550 0.00 0.00 100.00 100.00 PART D DO NOT TRIGG GD-WK-NON/CS-PART IDA-H8550 0.00 0.00 100.00 100.00 D TRIGGER BANK PO IDA-H8550 PPF REFINANCING 400,000.00 49,516.00 0.00 0.00 IDA-H8550 Designated Account 0.00 0.00 0.00 0.00 IDA-H8550 Designated Account 0.00 0.00 0.00 0.00 26,700,000. 26,700,000. Total: 00 00 23 Components Change to Components and Cost PHHCCC Explanation: The components of the AF are the same as the ones of the parent project. Additional resources will be added to each component to finance the new activities under the AF (a detailed description of the AF activities is attached in Annex 2). Component A will get additional IDA resources of US$3.00 million; Component B US$14.00 million, and Component C US$3.80 million. From the PHRD grant, Component A will be allocated US$0.26 million, Component B US$1.75 million, and Component C US$0.24 million (see table below). Proposed Cost Proposed Cost Current and Proposed Current Cost of CAP3 of CAP3 AF of PHRD Grant Action Component Name (US$ Million) (US$ Million) US$ Million Component A: Capacity 8.35 3.00 0.26 Revised Building Component B: Local 29.39 14.00 1.75 Revised Investment Fund Component C: Project Coordination, Management, Monitoring 6.78 3.80 0.24 Revised and Evaluation, Communication, and Preparation of Studies Component D: Contingent Emergency 0 0 0 No Change Response Total 44.52 20.80 2.25 Other Change(s) Change in Implementation Schedule P Explanation: Extension of the project's closing date from December 22, 2017 to December 20, 2019 to enable the completion of the newly added project activities. 70. Lessons learned and reflected in the AF design. Lessons learned from current World Bank and non-World Bank projects in Niger, including: (i) the PRODEX-P148641; (ii) the WAAPP (P094084); (iii) the CSA (P153420); and (iv) analytical work on the Systematic Country Diagnostic (SCD) and on the ongoing Country Partnership Framework (CPF) on the constraints for growth and potentials for diversification and innovation informed the design of this AF. The design of this project incorporated these lessons and IEG’s review of ICRs for Niger projects that exited the portfolio. They highlight the following messages: • Application of simple water efficiency techniques combined with sustainable soil fertility management, the use of drought-tolerant seeds, and other conservation farming methods have the potential to significantly increase cereal productivity and to enhance households’ resilience 24 to climate change. Moreover: (i) investing in small Sustainable Land and Water Management infrastructure; (ii) agroforestry techniques; (iii) pastoral areas’ protection; and (iv) development of low-cost measures for the integrated management of soil fertility, as well as promotion of community-based natural resource management practices, help to build resilience by generating considerable monetary and nonmonetary benefits for smallholders and communities; • The proposed AF project is also enriched by lessons learned and recommendations from the World Bank flagship report Enhancing resilience in African dryland: towards a shared development agenda; 13 • Women can be more successful at specific types of micro-projects. In Niger, women proved to be more energetic and responsible in their commitments for financial and in-kind contributions, and better at making their micro-projects profitable than men, mixed groups, or commune administrations; • A program implemented in several phases should avoid gaps and delays in initiating each new phase. Gaps not only interrupt the program but carry the risk that experienced staff will seek opportunities elsewhere; • To realize the benefits of local participation, some guidance may be necessary. The leadership at the commune level should always work with the communities to set priorities of financing intercommunal micro-projects that take into account the tradeoff between immediate benefits and the medium to long term benefits. Some investments may be more suited to intercommunal micro-projects for the long term such as investments in feeder roads, while other sub-projects, such as schools, health centers, and even seed banks, medicines for health centers, and textbooks for schools are of immediate use by the beneficiaries; • Readiness for mainstreaming should be judged objectively based on a readiness survey. It is easy to underestimate the public sector, human and financial resources needed for an effective, countrywide, and multi-ministerial response to multiple objectives (decentralization, socioeconomic development, participation of the population). It is also easy to underestimate the additional strains that such integration may place on overburdened government staff, who often lack the necessary training to carry out expanded responsibilities. In Niger, the regional, departmental, and local administrators were not ready to assume the tasks involved in implementing the project in addition to their normal duties, and additional project-funded staff had to be recruited beyond the number estimated at appraisal; and • Incentives are needed to sustain environmental improvements. Poor people struggling with survival frequently rank micro-projects with production benefits as a higher priority than natural resource management micro-projects. To ensure adequate interest, natural resource micro- projects would benefit from their own priority listing and separately allocated funds. To interest people in long-term natural resource management and environmental protection (including the maintenance of trees), it is absolutely necessary to give them concrete incentives, such as food or 13 The reports recommends the following four major pathways to improve current livelihood strategies: (i) Productivity-enhancing interventions‒ such as providing improved animal health services, ensuring early off-take of young male animals, destocking quickly in the face of approaching droughts, and ensuring improved access to grazing areas‒ could raise the share of resilient pastoral and agro-pastoral households; (ii) Improved crop production technologies (e.g., use of drought and heat-tolerant varieties, improved fertility management, rainwater harvesting) can deliver sizable benefits on the productivity and resilience of key staples; (iii) Incorporation of trees (especially Farmer Managed Natural Regeneration) can increase resilience of many dryland farming systems; and (iv) Irrigation can provide an important buffer against drought. In addition, the flagship report suggested two cross-cutting interventions, both of which could make significant contribution to improving resilience in drylands: (i) restoring degraded dryland by addressing the drivers of land degradation, discouraging unsustainable use of natural resources, and scaling up improved land and water management; and (ii) reducing barriers to trade. 25 cash for work, and perhaps to be more “supply-driven.” To improve efficiency, the public sector environmental staff may also need incentives, such as transport, training, and allowances. IV. Appraisal Summary Appraisal Summary Economic and Financial Analysis PHHAS The economic and financial analysis shows that the AF is economically and financially viable. The Net Present Value (NPV) (at country level) is approximately US$23.4 million. The Economic Rate of Return (ERR) for the entire project is estimated at 19.4 percent. A sensitivity analysis was carried out for a variety of assumptions, including a 10 percent, 20 percent, and 30 percent increase in project costs, a 10 percent, 20 percent, and 30 percent reduction in project benefits, and a one-year and a two-year delay in the generation of benefits. It shows that the project is economically robust. ERRs were 17.9 percent, 16.6 percent, 15.3 percent, 17.7 percent, 15.9 percent, 13.9 percent, 16.5 percent, and 14.1 percent respectively. The corresponding NPVs are US$21.8 million, US$20.3 million, US$18.7 million, US$19.5 million, US$15.6 million, US$11.7 million, US$19.1 million, and US$15.0 million, respectively. The World Bank’s value added is high, given the extensive knowledge and expertise generated under CAP3 activities to date and the complementarity that this AF will bring to the existing WB-funded portfolio. The convening power of the World Bank is valuable to attract more development partners to build on existing implementation experience, such as the co-financing by a PHRD grant to take into account nutrition aspects. Technical Analysis The AF like the parent project focuses on community-driven micro-projects. They all are relevant in the context of the Country’s strategy to build a strong and sustainable agriculture sector. Agricultural technologies supported by the Project are readily available and have already been tested, showing proven benefits. Most project activities are to be developed through experienced government entities and service providers. Matching grants will be used as was the case during the implementation of CAP3. Social Analysis PHH The potential social impact of the proposed AF will be small-scale and site-specific, but hugely beneficial to the Recipient’s local communities, whose livelihood is pretty much dependent on these achievements. Project activities will not lead to land acquisition or major restriction of access to sources of livelihood; rather than portraying the good lessons learned for investments, such as small-scale irrigation, confirmed communal property will be used. The resettlement policy is already triggered and existing frameworks will be used. So far, the Recipient has shown a great deal of understanding and implementing social and environmental safeguards measures on the ground. The Recipient successfully carries out the micro-projects in accordance with the environmental and social safeguards frameworks of the CAP3. Indeed, the screenings that are done for all micro-projects make it possible to take different kinds of protective measures, where needed, including to prevent conflicts related to land security and social agreements. Project activities will be screened towards the applicability of OP/BP 4.12 (Involuntary Resettlement), and preparation of any additional safeguards instruments, such as site-specific Resettlement Action Plans (RAPs) will be based on the updated version of the Resettlement Policy Framework (RPF) prepared by the parent project. As a result of the screening of subprojects, and in the event that people will be physically and/or economically displaced as a result of new project activities, the Recipient will build on the RPF to prepare an updated, 26 well-consulted Resettlement Action Plan (RAP) which will be publicly disclosed both in-country (Niamey) and the InfoShop (Washington, D.C.) prior to the physical commencement of any civil works activities. Furthermore, with regards to community empowerment and engagement, because this project uses a community-driven development approach to formulate its priority activities, the project has fostered more ownership and social accountability mechanisms to reinforce the sustainability of its core activities. Beneficiary populations feel part and parcel of the project formulation, implementation, and monitoring; hence, giving no room to negative behavior that would hinder the sustainability of project activities. Moreover, thanks to the project, especially through its various sources of income-generating activities, it has empowered many women, youth, and vulnerable groups to play a central role in the sustainability of their livelihoods. Citizen Engagement, Social Inclusion, and Social Accountability have been the flagship of this project as beneficiary communities. Women and youth have especially been playing a pivotal role in the sustainable implementation of this operations. This trend will be further sustained under the proposed AF. Environmental Analysis The proposed AF, like the parent project, is category B. The overall environmental (and social) impacts of the project are expected to be positive; however, some negative impacts may arise during project implementation, such as limited impacts on soil, air, water, noise environments, and surrounding communities, essentially during construction and/or production. These impacts will be temporary and localized, and proper mitigation measures during construction and/or production could minimize or even eliminate them. The appropriate environmental and social safeguards instrument (Environmental and Social Management Framework - ESMF), prepared under the parent project, has been updated to capture lessons learned and way forward. The ESMF explains in detail what to doduring project implementation, including the preparation of simplified Environmental and Impact Assessment (ESIA) which have to be prepared and publicly disclosed prior to the commencement of civil works. Since the project also triggered the Pest Management and the Involuntary Resettlement policies, the initial Pest Management Plan (PMP) and Resettlement Policy Framework (RPF) have also been updated and publicly disclosed on recommended locations. The ESMF and the PMP, just as the RPF, were disclosed in Niger on April 7, 2017 and at the Infoshop on April 11, 2017. In terms of safeguards implementation and compliance, the PCU has a well-determined social and environmental team under a strong coordination leadership with proven-track record of implementing social and environmental safeguards instruments and recommendations. During implementation, the team will mainstream these lessons learned, and strengthen their technical capacity thanks to the very tangible support from the Social and Environmental Safeguards Specialists of the World Bank on the project. Safeguard Policies Triggered by the AF Project Yes No Environmental Assessment (OP/BP 4.01) [X] [] Natural Habitats (OP/BP 4.04) [X] [] Pest Management (OP 4.09) [X] [] Indigenous Peoples (OP/BP 4.10) [] [X] Physical Cultural Resources (OP/BP 4.11) [X] [] Involuntary Resettlement (OP/BP 4.12) [X] [] Forests (OP/BP 4.36) [X] [] Safety of Dams (OP/BP 4.37) [] [X] 27 Projects on International Waterways (OP/BP 7.50) [] [X] Projects in Disputed Areas (OP/BP 7.60)* [] [X] Risk PH Systematic Operations Risk-Rating Tool (SORT) Risk Category Rating 1. Political and Governance High 2. Macroeconomic Moderate 3. Sector Strategies and Policies Substantial 4. Technical Design of Project or Program Moderate 5. Institutional Capacity for Implementation and Sustainability Low 6. Fiduciary Moderate 7. Environment and Social Moderate 8. Stakeholders Moderate OVERALL Substantial Explanation: • The overall risk of the proposed project is rated Substantial, mainly due the political and governance challenges being rated High, as the country continues to face significant risks related to domestic and regional instability, as well as organized crime and transnational terrorism, including the rise of Boko Haram in Nigeria and the recent expansion of its operations to neighboring countries. The project will work in close cooperation with other IDA-financed operations and partner with other development agencies taking into account complementarities as a way to mitigate this risk. • In addition, sector strategies and policies risks are rated Substantial due to the absence of an effective system of transferring human and financial resources to local governments. Limited synergies between local authorities and deconcentrated technical services could also jeopardize the achievement of objectives. The AF activities will strengthen the local governments to plan, implement, and sustain the achievement beyond the project. • Technical Design of Project is considered moderate. Institutional capacity for implementation risks is considered Low. The proposed AF is based on clearly identified needs and based on experience gained from the parent project. There is also a broad buy-in from key stakeholders into planned interventions. • Environmental and Social risks are considered to be moderate. Similar activities are already under implementation as part of the parent project, and their impacts on the environment is moderate, while on the social side they are judged to be positive. • Stakeholder risks are considered to be moderate. Key stakeholders are committed to the implementation of the proposed AF and to the sustainable development in the countries’ eight regions. In carrying out the activities proposed under the components of the AF, the World Bank will ensure that stakeholder consultations will be conducted to build a strong constituency, 28 ownership and adopt innovative approaches that would ensure that the lessons learned during implementation of the parent project are deployed to the advantage of the AF. V. World Bank Grievance Redress 71. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org 29 Annex 1: Revisited Results Framework and Monitoring Indicators Project Development Objectives Original Project Development Objective - Parent: The Development Objectives (PDOs) of the CAP3 are “to strengthen the Recipient's local development planning and implementation capacities, including the capacity to respond promptly and effectively to an eligible crisis or emergency, and to improve the access of the targeted population to socio-economic services.” Proposed Project Development Objective - Additional Financing (AF): The PDOs under the AF are “to strengthen the Recipient’s local development planning and implementation capacities, to support the targeted population in improving agriculture productivity, and to respond promptly and effectively to an eligible crisis or emergency.” Results Core sector indicators are considered: Yes Results reporting level: Project Level . Project Development Objective Indicators Status Indicator Name Core Unit of Measure Baseline Actual (Current) End Target New Farmers adopting improved Number Value 0 0 109,800 agricultural technology Date 21-Apr-2017 21-Apr-2017 20-Dec-2019 Comment New Farmers adopting improved Number Value 0 0 76,900 agricultural technology - Female Sub Type Supplemental New Increase in agricultural productivity Percentage Value Tomatoes:30t/ha Tomatoes:30t/ha Tomatoes: 60t/ha of major crops, by crop Onions: 30t/ha Onions: 30t/ha Onions: 50t/ha Peppers:15t/ha Peppers:15t/ha Peppers:35t/ha Cassava: 15t/ha Cassava: 15t/ha Cassava: 30t/ha Date 21-Apr-17 21-Apr-17 20-Dec-2019 Comment Revised Direct project beneficiaries Number Value 0.00 3,000,342 3,110,142 Date 24-May-2013 21-Apr-17 20-Dec-2019 Comment 30 Revised Female beneficiaries Percentage Value 0.00 52.00 55.00 Sub Type Supplemental Moved from Targeted communes that are enabled Percentage Value 9 99 100 intermediate to sustain proper operation and Date 24-May-2013 21-Apr-17 20-Dec-2019 to PDO maintenance of local development indicator investments Comment New Area provided with new/improved Hectare Value 0 100 1,350 irrigation and drainage services Date 21-Apr-17 21-Apr-17 20-Dec-2019 Comment New Farmers reached with agricultural Number Value 0 0 109,800 assets or services Date 21-Apr-17 21-Apr-17 20-Dec-2019 New Farmers reached with agricultural Number Value 0 0 76,900 assets or services -- Female Date 21-Apr-17 21-Apr-17 20-Dec-2019 Intermediate Results Indicators Status Indicator Name Core Unit of Measure Baseline Actual (Current) End Target Revised Targeted communes that have defined Percentage Value 0.00 87.00 98.00 and implemented good governance Date 24-May-2013 21-Apr-17 20-Dec-2019 practices (participation, accountability, and equity) Comment Revised Targeted communes that timely Percentage Value 6.00 76.00 76.00 prepare annual financial reports (with Date 24-May-2013 21-Apr-17 20-Dec-2019 legal delays) Comment Revised Communes whose approved micro- Percentage Value 0.00 95.00 98.00 projects integrate gender equity Date 24-May-2013 21-Apr-17 20-Dec-2019 Comment Revised Percentage Value 8.00 75.00 100.00 31 Communes whose grievance Date 24-May-2013 21-Apr-17 20-Dec-2019 mechanisms have been created and Comment are operational Revised Representatives of key Regional Percentage Value 0.00 85.00 85.00 agencies whose planning capacities Date 24-May-2013 21-Apr-17 20-Dec-2019 have been strengthened Comment Revised Representatives of deconcentrated Percentage Value 0.00 96.00 96.00 line departments whose local Date 24-May-2013 21-Apr-17 20-Dec-2019 development-related capacities have been strengthened Comment Revised Populations (disaggregated by gender) Percentage Value 0.00 19.00 50.00 of targeted communes whose access Date 24-May-2013 21-Apr-17 20-Dec-2019 to nutrition services improved Comment Revised Targeted communes utilizing at least Percentage Value 0.00 86.00 86.00 80% of their investment allocations Date 24-May-2013 21-Apr-17 20-Dec-2019 Comment Revised Targeted communes which have Percentage Value 0.00 79.00 90.00 protected and/or restored at least 200 Date 24-May-2013 21-Apr-17 20-Dec-2019 hectares of land Comment Revised Targeted knowledge & Percentage Value 0.00 85.00 90.00 communication products prepared and Date 24-May-2013 21-Apr-17 20-Dec-2019 disseminated Comment Revised Beneficiaries whose income increased Percentage Value 0.00 85.00 90.00 by 30% because of farm and off-farm Date 24-May-2013 21-Apr-17 20-Dec-2019 jobs created by approved micro- projects Comment No change IRM established and ready to provide Number Value 0.00 1.00 1.00 access to financial resources to Niger Date 24-May-2013 21-Apr-17 20-Dec-2019 in case of an eligible emergency Comment 32 New Storage and processing facilities built Number Value 45 45 65 Date 21-Apr-17 21-Apr-17 20-Dec-2019 Comment New Beneficiaries that have increased Number Value 0 0 240,000 consumption of fruits and vegetables Date 21-Apr-17 21-Apr-17 20-Dec-2019 Comment 33 Annex 1B: CAP3 Additional Financing - Revised Results Framework D=Dis- continued Cumulative Target Values C=Con- Baseline (Achievements as Data Source/ Responsibility for tinued Frequency of April 21, YR 1 (June 30, YR2 (end of project Methodology Data Collection N=New 2017) target; December 20, R=Revised 2018) 2019) PDO-level indicators Number Indicator one: N 0 21,960 109,800 Program Farmers adopting Annual Coordination improved agricultural Annual Number of assessments Unit- technology N female farmers 0 15,380 76,860 Monitoring and (male/female) Evaluation Unit Indicator two: Program C Number 3,000,342 3,037,682 3,121,342 Direct project Coordination Annual beneficiaries (of Annual Unit- assessments which female) C Percentage 52 53 55 Monitoring and Evaluation Unit Indicator three: Area Supervision Program provided with Annual missions and Coordination new/improved N Hectare 100 900 1,350 annual Unit- irrigation and assessments Monitoring and drainage services Evaluation Unit Indicator four: Annual Program Increase in Tomatoes:30t/ha Tomatoes : 40t/ha Tomatoes: 60t/ha Annual assessment Coordination Tons/ Onions: 30t/ha Onions : 40t/ha Onions: 50t/ha productivity of major N and surveys Unit- hectare Peppers:15t/ha Peppers : 25t/ha Peppers:35t/ha crops, by crop Monitoring and Cassava:15t/ha Cassava : 29t/ha Cassava: 30t/ha Evaluation Unit Indicator five: Annual Monitoring and Farmers reached with N Number 0 21,960 109,800 Annual assessments Evaluation Unit agricultural assets or of services (of which PCU female) N Number 0 15,380 76,860 34 Intermediate Results Indicators Component A: Capacity Building A.1: Targeted Supervision Program communes that are missions and Coordination enabled to sustain annual Unit- proper operation and C Percentage 92 92 92 Annual assessments Monitoring and maintenance of local Evaluation Unit development investments A.2: Targeted Annual Program communes that have assessments Coordination defined and Unit-Monitoring implemented good Percentage 87 92 98 and Evaluation C Annual governance practices Unit (participation, accountability, and equity) A.3: Targeted Annual Program communes that assessments Coordination timely prepare 76 76 76 and surveys Unit- R Annual annual financial Percentage Monitoring and reports (with legal Evaluation Unit delays) A.4: Communes Annual Program whose approved assessments Coordination micro-projects R Percentage 95 96 98 Annual and surveys Unit- integrate gender Monitoring and equity Evaluation Unit A.5: Communes Annual Program whose grievance assessments Coordination mechanisms have R Percentage 75 86 100 Annual and surveys Unit- been created and Monitoring and are operational Evaluation Unit 35 A.6: Representatives Annual Program of key Regional assessments Coordination agencies whose and surveys Unit- R Percentage 85 85 85 Annual planning capacities Monitoring and have been Evaluation Unit strengthened A.7: Representatives Annual Program of deconcentrated assessments Coordination line departments and surveys Unit- whose local R Percentage 96 96 96 Annual Monitoring and development-related Evaluation Unit capacities have been strengthened A.8: Populations Annual Program (disaggregated by assessments Coordination gender) of targeted and surveys Unit- R Percentage 19 30 50 Annual communes whose Monitoring and access to nutrition Evaluation Unit services improved Component B: Local Investment Fund B.1: Targeted Annual Program communes utilizing at assessments Coordination least 80% of their C Percentage 86 86 86 Annual and surveys Unit- investment Monitoring and allocations Evaluation Unit B.2: Targeted Supervision Program communes which 79 84 missions and Coordination have protected 90 annual Unit- C Percentage Annual and/or restored at assessments Monitoring and least 200 hectares of Evaluation Unit land B.3: Beneficiaries Supervision Program whose income missions and Coordination increased by 30% R Percentage 85 87 90 Annual annual Unit- because of farm and assessments Monitoring and off-farm jobs created Evaluation Unit 36 by approved micro- projects B.4: Storage and Supervision Program processing facilities missions and Coordination built N Number 45 55 65 Annual annual Unit- assessments Monitoring and Evaluation Unit B.5 Beneficiaries that Supervision Program have increased N Number 0 50,000 240,000 Annual missions and Coordination consumption of fruits annual Unit- and vegetables assessments Monitoring and Evaluation Unit Component C: Project Coordination, Management, Monitoring and Evaluation, Communication, and Preparation of Studies C.1: Targeted Program Supervision knowledge and Coordination communication missions and C Percentage 85 87 90 Annual Unit- products prepared annual Monitoring and and disseminated assessments Evaluation Unit Component D: Contingent Emergency Response Component D.1: IRM established Supervision Program and ready to provide missions Coordination access to financial Unit- resources to Niger in N Number 0 0 1 Annual Monitoring and case of an eligible Evaluation Unit emergency Discontinued Indicators Unit of Baseline as of May Achievements by Target by December Responsibility of Frequency Measure 24, 2013 April 21, 2017 22, 2017 Data Source/ Data Collection Methodology 37 Additional land area Supervision Program under sustainable missions and Coordination land and water annual Unit- management (SLWM) assessments Monitoring and D Hectare 0 85,788 60,000 Annual and Sustainable Evaluation Unit Forest Management (SFM) practices [GEF Indicator] Percentage of newly Supervision Program targeted farming missions and Coordination households who annual Unit- adopted sustainable assessments Monitoring and D Percentage 0 92 90 Annual agro-sylvo-pastoral Evaluation Unit practices and technology promoted by the project Percentage of Supervision Program targeted communes missions and Coordination whose planning and D Percentage 0 100 60 Annual annual Unit- AIP sessions are assessments Monitoring and public Evaluation Unit Percentage of Supervision Program targeted communes missions and Coordination effectively interested D Percentage 0 39 60 Annual annual Unit- in Intercommunalité assessments Monitoring and Evaluation Unit Populations of newly Supervision Program targeted communes missions and Coordination whose access to D Percentage 0 20 40 Annual annual Unit- education improved assessments Monitoring and Evaluation Unit Percentage of Supervision Program targeted missions and Coordination intercommunal D Percentage 0 35 50 annual Unit- initiatives which have assessments Monitoring and been implemented Evaluation Unit 38 Annex 2: Detailed Project Description 1. The proposed Additional Financing (AF) will invest in micro-projects and selectively build capacity at commune levels, in particular to enhance agricultural production and productivity. To avoid duplication with the Climate-Smart Agriculture Support Project (P153420), which will cover 60 communes, the focus of the proposed AF for CAP3 will remain on the 125 communes already supported by PAC3. Similar to the parent project, micro-projects would be prepared in a demand-driven manner by proposals prepared by Communes with inputs from relevant technical services and/or private sector. However, in order to qualify for assistance under the AF operation, the communes wishing to be considered must already have implemented a micro-project under PAC3, and it must have been assessed as “satisfactory” or “highly satisfactory”. During appraisal, this approach was discussed and agreed with the PCU. 2. Climate change and disaster risks. Such risks in Niger are mainly related to rainfall, as the country is located in an area south of the Sahara with semi-arid and arid conditions. The dry season, generally from January to June is a normal condition, but when rainfall during the rainy season is limited, this causes more pronounced droughts and affects livestock and also crop agriculture. In that context, Component B under the proposed AF will support small-scale irrigation and other micro-projects that are part of the category of increasing resilience. A problem on the opposite side of the spectrum can be unexpectedly large amounts of rainfall within a short period of time (compared to historical amounts), which can cause flooding. The micro-projects under the proposed AF can be expected to help reduce flooding to some extent by an increase water absorption because of sustainable land management. Further, Component D of the CAP3 project (see below) has been maintained in order to explicitly deal with an eligible crisis, in case one should occur during the period of implementation. 3. Citizen Engagement. The project will seek to enhance an active citizen engagement in all its phases. Already the parent project has developed active participatory processes which provide key entry points for mainstreaming citizen engagement (CE). These include: (i) consultations to integrate beneficiaries’ views and decisions in different project interventions; and (ii) multi-level arrangements for registering and addressing grievances and complaints. The project will build on these and other mechanisms through a more structured citizen engagement strategy, targeting not only the beneficiary groups but also other stakeholders, such as the private sector and NGOs operating in the project zone through direct consultations with beneficiaries, strengthening partnerships, and obtaining their feedback on project implementation. An improved communication strategy will provide timely information and feedback which could be used to improve project performance. 4. The Grievance Redress Mechanism (GRM) will be strengthened to provide multiple channels for soliciting complaints, registering complaints and ensuring a timely acknowledgement, response, and resolution of the complaints in a transparent manner. The GRM will also spell out options for mediation and appeal. Through the GRM, affected persons will be provided a clear and accountable means to raise complaints and seek remedies when they believe they have been harmed by project activities. In each beneficiary community, the project shall explain how the GRM mechanism is expected to work in terms of registering and addressing grievances and complaints. The training for municipal executives and the beneficiary communities in the areas of accountability will further consolidate participatory processes, as well as citizen engagement. 5. The project will provide periodic reports on the implementation of the citizen engagement in close collaboration with the beneficiary communities. Such reports shall include the beneficiary’s feedback on project implementation, the level of beneficiaries’ participation in the project, and the grievances registered and whether/how they were addressed. 39 6. Gender. In Niger, women farmers contribute substantially to national agricultural production, particularly to food production. However, there are many gender gaps that negatively impact on their production and productivity, some of which were identified in the parent project. They include: access to land, financing, and income-generating activities, which the parent project has attempted to address through activities, such as income-generating activities, for which about 50 percent of the beneficiaries (241,000) were women. Other gaps, such as access to farm labor, fertilizer, and other production inputs as well as limited participation in decision-making and leadership (especially for micro-projects with an almost exclusively female participation) will also be addressed under the AF project. 7. It has been stated that the AF will support agriculture productivity enhancing investments and in particularly those benefitting women and youth. Therefore, specific measures proposed under the AF project include that female and youth representation be increased in the management committees for the micro-projects as follows: (a) For small-scale irrigation projects, where women are expected to do nearly 100 percent of the actual work in terms of producing fruits and vegetables, management committees must include 80 percent women (e.g. 60 percent older ones [above 35] and 20 percent younger ones [below 35]), and 20 percent men (e.g.10 percent older ones and 10 percent younger ones); and (b) For all other micro-projects, management committees should have 60 percent representation of women (e.g.40 percent older ones and 20 percent younger ones) and 40 percent men (e.g.20 percent older ones and 20 percent younger ones). 8. Representation in the management committees will allow the women and youth to benefit from training and should ensure that women and youth are also among the majority of those benefitting from the specific projects. 9. A precondition for grant-financing of small-scale irrigation under both the IDA and the PHRD grant would be certified security of tenure for the female farmers’ groups of the land to be irrigated, for a period of 30 years and for one to maximum three plots per community. Each group, in turn, will allocate secure, demarcated, legally certified/documented plots of 500 m2, on average, to its members. Project Components: Component A: Capacity Building 10. Financing for this Component is expected to amount to US$3.26 million in total, of which US$3.00 million from IDA and US$0.26 million from the Japanese PHRD). Up to now, under Component A, CAP3 supported the setting up and operationalization of a framework for the participation of local populations in the design and management of local development, namely the Communal Development Plans (CDPs). A total of 11,200 people are expected to benefit directly from Component A activities. 11. Subcomponent A1, funded entirely by IDA (US$3.00 million): During the period of the AF, the contracting capacity of communes (Maîtrise d’Ouvrage) and the delegated contract management capacity of communes and communities (Maitrise d’Ouvrage Délégué) will be strengthened where micro-projects will be implemented. This will include training for municipal executives and the beneficiary communities of micro-projects (mayors, deputy mayors, secretaries-general, municipal controllers, management committees for the micro-projects, etc.) in the areas of accountability, archiving of documents, fairness and targeting of micro-project beneficiaries, procurement, and environmental and social safeguards. 40 12. Subcomponent A2, funded entirely by PHRD (US$0.26 million), would build capacity of small farmers in five selected communes to increase their knowledge for increasing agricultural productivity, particularly of food with a high nutritional value supported by small-scale irrigation. This will include empowering small and marginal farmers, especially women, strengthening of women producer groups, promoting farmer-to-farmer services, and linking the farmer associations with other public and private sector agencies for the projects’ nutrition-related purposes. Activities will include technical assistance, training, and investments in farmer-led knowledge. Component B: Local Investment Fund 13. This Component will remain the centerpiece under the AF and support agriculture-related micro-projects in 125 communes already under PAC3 (US$15.75 million in total, of which US$14.00 million from IDA and US$1.75 million from the Japanese PHRD). This Component will expand and scale- up successful activities to reach 104,800 new beneficiaries under the IDA AF and 5,000 under the PHRD grant. With a household size of about 7, the total beneficiaries are expected to be in the order of 733,600 and 35,000, respectively. 14. Since the philosophy of community-driven development is that communes develop proposals for micro-projects that are in line with local development plans, the MPs cannot be fully described ex-ante. Nevertheless, categories for eligible micro-projects will include: (a) Subcomponent B.1: Sustainable land and water management, incl. to improve climate resilience. (b) Subcomponent B.2: Income-generating activities related to agriculture; and (c) Subcomponent B.3: Micro-projects for socio-economic infrastructures, such as small-scale irrigation, to enhance agricultural production and productivity. 15. As in the previous phases of CAP, allocations to the municipalities will be determined on the basis of the following criteria: the existence of potentialities or investments to be consolidated and extended in order to increase the results, increase the number of beneficiaries, and the availability of actors capable of intervening throughout the value chain of the agro-sylvo-pastoral and fisheries productions that the MPs will generate. The investments will focus on the consolidation of the achievements of the MPs funded during the previous phases of the CAP and on new micro-projects already identified, which will give priority to young people and women from the poorest households living in disadvantaged geographical areas. The activities to be carried out should, where possible, enable the target populations to produce throughout the year through crop rotations or the processing and marketing activities of agro-sylvo- pastoral products and by-products. 16. To enable the small producers targeted under the additional fund to properly carry out the agro- sylvo-pastoral production activities, to master the technical itineraries of high-value crops, and to have the know-how necessary for the success of their activities, technical services, decentralized NGOs, and specialized agencies in the various areas will be mobilized in line with the approach used in the CAP3. To this end, the resources needed for capacity building, advisory support, technical support, and support for small producers will be included in the budget for Component B to facilitate the mobilization of stakeholders and ensure the effectiveness of their production activities. 17. Subcomponent B.1: Micro-projects related to improved land and water management, including to strengthen climate-resilience, funded entirely by IDA (US$3.20 million). As part of the additional funding, the project will support SWC actions to promote land use systems through appropriate management practices, enabling land users to maximize the economic and social benefits of land, while maintaining or enhancing the ecological support functions of land resources. It will thus develop actions 41 of Conservation of Water and Soil-Defense and Soil Restoration for agro-sylvo-pastoral purposes through a technological package including assisted, farmer-managed, natural regeneration. 18. As part of the enhancement of the productivity of the land thus recovered, agroforestry and afforestation based on useful species (nutritional, medicinal, pesticidal, aromatic, and cosmetic) will be developed. Agroforestry is a method of land exploitation which combines trees and crops or pastures on the same surface. This technique makes it possible to increase the fertility of the soil thanks to the organic matter of the trees; these can also protect the soil from erosion, protect crops from winds, and increase productivity. 19. In this context, the project would include the further development of 7.500 ha of soil and water conservation and BioCarbon sites as well as seeding of 92,450 ha of land on eligible sites to increase sylvicultural and fodder production: the main activity would be the provision of high-quality herbaceous forage seeds and the organization of the population during: (a) field preparation and seeding; and (b) crop management and site maintenance. 20. On the basis of the successes so far, the project aims at the development of 100 000 ha of land to increase the agro-sylvo-pastoral production on favorable SWC and bio-carbon sites. The development of the SWC activities, through a set of technological packages, will enable the permanent and sustained development of the sites, taking into account the dry and rainy seasons of the year. Indeed, the choice of technological packages and the organization of producers will make it possible to value the existing agro- sylvo-pastoral potentialities in any season of the year and to increase the productions. In the areas recovered, intercropping, forage crops and beekeeping will be promoted. Techniques for intensification of farming and pastoral systems will also be promoted. To achieve this result, the following four types of micro-projects will be implemented: (i) Micro-projects related to soil and water conservation, as well as soil restauration, for agro-sylvo- pastoral purposes (Subcomponent B.1.1): Through this activity, the project will intervene in the recovery of bare and/or encrusted lands in order to upgrade it for reforestation in woody and herbaceous species for agroforestry purposes. The upgrading will be done by mechanical recovery techniques (half-moons, zai, wood plantations, Acacia Senegal) and seeding of herbaceous species with high pastoral values, and development of food crops as an adaptation to the adverse effects of climate change. (ii) Micro-projects on improved seed production and distribution to increase productivity of agricultural and pastoral land (Subcomponent B.1.2). The activity is based on the support of improved seeds and fodder for 200 producers, who will be supported to become multipliers of the most requested plant speculation. In the case of improved agricultural seeds, each multiplier will be equipped with seeds and agricultural implements to harvest 2 ha so as to create the conditions for the distribution of seeds produced locally during the following years. At each site selected, this operation will make it possible to provide improved seeds to about 15 percent of households in the beneficiary villages. Seed and equipment (plows) will be provided as a producer loan. The reimbursement is made in kind (seed produced) and per campaign to the consortium or to the municipality until the total amount of the loan is exhausted. To guarantee more seed production in the first year, the most adapted technologies will be used and the project will also provide support for field labor. The remainder of the seed produced will be stored and given for management to the input shops to provide the other producers. The project should ensure that input shops apply favorable prices to the most deprived in order to promote their access to agricultural production. Seed production should begin as soon as possible, in accordance with the growing season. 42 (iii) Micro-projects for the improvement of the cultivation of agricultural products with high economic potential for the most vulnerable women (Subcomponent B.1.3). In order to enable poorer women to emerge from their condition of poverty and low resilience during the most difficult periods (lean period), these micro-projects aim to contribute by supporting seeds, tools, and technical capacities for producing certain crops, such as okra (Abelmoschus esculentus), Moringa oleifera, sesame, pomme de the sahel (the jujube tree fruit), etc. for 1,200 women. These crops are traditionally run by women, and play an important role in improving household incomes. Each woman will be supported in equipment and training for the development of a quarter of a hectare of a species of her choice. (iv) Micro-projects for developing ponds and other water bodies for fisheries (Subcomponent B.1.4). The project will support the development of the conservation of ponds and their surroundings and other water bodies threatened by silting. Protection activities against the silting of rivers and watercourses will be considered. This activity will allow ponds to store more water. The management committees of these ponds will be set up, structured, and trained on themes related to "climate change and management of natural resources", "protection of the environment" and "associative organizations". Once the pond has been laid, it will be stocked by the introduction of species adapted to the water level. The following activities will be implemented: acquisition of breeding stock or fingerlings, transport, management, follow-up, food supplementation, training, and capacity building of fishers. 21. In general, fishermen face great difficulties despite the potential of the resources available to them. To help revitalize this activity, which not only generates income for users but also benefits for the population (food diversification, inter-village trade), the project will support the groupings in terms of equipment (canoes and nets) and capacity building, particularly on site and fisheries management (controlled or seasonal fishing trips, delineation of areas, etc.). The project will supplement the beneficiaries in the management of the activity and the creation of a revolving fund which will serve to perpetuate and make financially more autonomous the groupings 22. Subcomponent B.2: Micro-projects for income-generating activities, funded entirely by IDA (US$3.20 million). Depending on local priorities, these could also include a variety of MPs, such as livestock development, livestock fattening, livestock replenishment, storage and processing structures for processing agricultural outputs (e.g.to avoid post-harvest losses) and other investments or Technical Assistance that would help with commercialization. 23. Livestock-related micro-projects (Subcomponent B.2.1) for cattle or sheep fattening or breeding stock for small ruminants will be conducted with the participation of the direct beneficiaries and under the supervision of the livestock technical services and the members of the communal executives. On the basis of lessons from previous operations, sustained attention will be paid to the following aspects: (a) the signing of a delegation agreement between the municipality and the beneficiary organization and the setting up of a committee for responsible purchasing. The purchasing committee will include the representatives of the direct beneficiaries and the technical service and the recipient of the municipality. This committee will take care of the conduct of the purchasing operations in a transparent way so that each beneficiary knows the value of his animals; (b) the establishment of an insurance fund which will be financed by voluntary contributions from the beneficiaries of the operation and which must be able to cover the cases of mortality over a certain period of time. The conditions of access to the insurance fund will be enacted before the start of the operation; and (c) the determination of the conditions and periods for reimbursement and renewal of operations: the direct beneficiaries of each operation shall determine the repayment conditions at a village general assembly and the indicative periods. All the modalities are recorded in a report. 43 24. Micro-projects related to marketing, storage, and processing (Subcomponent B.2.2). Experiences from the previous phases have shown that such projects increase the level of achievement of results and of sustainability. Indeed, the increase in productivity leads to an increase in supply relative to the demand for certain products in local markets, hence the need to support value chain development to avoid losses. 25. Much of the income of women comes from the processing of peanuts into oil, paste, and cake. To strengthen these women's income-generation, the project will support more dynamic and raw material groups in processing tools such as hullers, peanut grinders, and toasting furnaces. The activity whose target is typically made up of women's groups can also give a fairly important impetus to the whole chain. 26. A hundred women's groups per commune will be identified and supported for the revitalization of the groundnut industry. The identification will take into account the vulnerability criteria, the internal capacities of the association (management, mobilization, motivation, etc.) but also the benefits in terms of supporting the cultivation of peanuts by improved seeds. This involves supporting other actors, notably young people and women, at the transport links, conservation, processing and marketing of agro-sylvo- pastoral products. Loans in local currency of around US$170 will be provided to each beneficiary wishing to work in this area of marketing of agro-sylvo-pastoral products. 27. In conjunction with the marketing fund, the project will provide women and youth organizations with large peanut production sites for huskers and oil presses to improve local groundnut processing capacities as well as product quality. To this end, the project will put huskers and oil presses at the disposal of actors / actresses (women and young people) involved in the processing of groundnuts. Production of fruits and vegetables can sometime lead to a strong increase in supply relative to demand at certain times of the year, and can therefore lead to lower prices in the local markets. The storage, drying, or other processing of certain products can make it possible for them to be sold at better prices at favorable times. Thus, the installation of 200 solar dryers and a dozen cassava rasping kits is envisaged at sites with high current or potential vegetable production. 28. Large quantities of fodder are produced and stored in the sun on land reclamation sites, cereal fields, market gardening sites, and on the roofs of dwellings in villages. This practice is not only a source of fires, loss of quality of fodder, but also causes fodder to become unhealthy. Grinding will reduce the risk of fires and improve storage, transport, marketing, and use of fodder. It also increases the palatability of coarse forages and their digestibility. The crushed forages will thus be better valued and used as inputs in animal production activities (milk, meat). Straw grinders will be made available to youth organizations that will use them like village mills. 29. Subcomponent B.3: Micro-projects (MPs) in socio-economic infrastructures. As in the past (see Section II D on the performance of the parent project), this category may include a variety of commune- driven projects, as the communes will determine based on what the particular/key binding constraints are in each commune to improving agricultural productivity and what their top choice is to try to overcome those. 30. Niger has a rich experience in the development of small-scale irrigation, accumulated over the last two decades, following the successful implementation of small-scale irrigation programs and projects. Simple, reliable, and inexpensive water catchment, drainage, and water supply technologies have been promoted and adopted by irrigators. The typology of perimeters proposed under the AF is based on these experiences as well as on certain new technologies, in accordance with the spirit of the Niger Strategy on Small-Scale Irrigation. Five types of small-scale irrigation are proposed. Type 1 involves direct capture of surface water with a pumping unit, with transport / distribution by a Californian network, and with a wire fence. Type 2 involves capture of groundwater with wells and a pumping unit, with transport / distribution by a Californian network, and with a wire fence. Type 3 involves capture of groundwater by manual 44 drilling, with a pumping unit, with transport / distribution by a Californian network, and with a wire fence. Type 4 involves capture of groundwater by medium-size, submerged well, with a Californian system and a submerged pump, and with a wire fence. Type 5 involves capture of groundwater by medium borehole, with solar-powered, submerged pump, with basin, with drip irrigation, and wire fence. These types are well adapted to the physical context of the sites, known and even preferred by the beneficiaries encountered. 31. Under Subcomponent B.3.1, funded entirely by IDA (US$7.60 million), small-scale irrigation investments will be considered for about 31 communes where such irrigation is feasible/advisable for the production of food, including fruit and vegetables, during the dry season. 1,000 ha would likely be developed with small-scale irrigation (drip, Californian system, etc.) under the IDA grant, see Table 2.1. Small-scale irrigation per region would be distributed over several soil and water conservation, BioCarbon sites, or other profitable sites. Eligibility criteria for such sites include: (a) availability of mobilizable water resources at selected sites with a water table of less than 12 meters during the dry season; (b) guaranteed community property site, including donated sites to women producer groups; (c) limited distance between the sites and the place of residence of the beneficiaries; and (d) targeted beneficiaries organized, including at least 80 percent women and young people ages 20-35. 32. Under Subcomponent B.3.2, funded entirely by PHRD (US$1.75 million), the production of horticulture crops with high nutritional value would be promoted, particularly during the off-season via investments in wells and small-scale irrigation. The first objective would be to construct functioning small- scale irrigation systems. The second objective would be to have at least 90 percent of the irrigable surfaces under dry season agricultural production. This can be expected to subsequently improve nutritional and livelihood outcomes for female farmers and their families. For the small-scale irrigation in five communes, preparation work was carried out already in 2015 and 2016 for the PHRD grant. It would include financing of small-scale irrigation in two communes in Maradi (Korgom and Hawandawaki) and in three communes in Tahoua (Kao, Bombèye, and Bangui). In each of the communes, the target would include about 20 communities/sites, totaling about 100 communities/sites. Female farmers’ groups will be provided secure tenure rights for 30 years for one to maximum three plots per village, totaling on average 2.5 hectares per village. In turn, each group will allocate secure, demarcated, legally certified/documented plots of 500 m2, on average, to its members. Thus, 1,000 women would be the main beneficiaries in each of those 5 Communes, totaling 5,000 direct beneficiaries in the five communes. 33. Component C: Project Coordination, Management, Monitoring and Evaluation, Communication, and Preparation of Studies (US$4.04 million in total, including US$3.80 million from IDA and US$0.24 million from the PHRD grant). This Component is comprised of four subcomponents: (i) Subcomponent C.1: Coordination and Management, entirely financed by IDA (US$3.20 million). Activities will include management of staff and equipment, financial management, procurement activities, management of the environmental and social safeguards aspects, preparation of annual work plans, and organization of supervision missions. (ii) Subcomponent C.2: Planning, M&E, and Preparation of Studies, entirely financed by IDA (US$0.40 million). The project will continue with the same M&E system put in place by CAP3, but with a revised results framework. Reflecting on the prevailing security situation in some parts of the country, such as the Diffa region, the World Bank is assessing with the Government appropriate arrangements for monitoring and execution. Third party monitoring arrangements could be envisaged, if necessary, that would likely involve NGOs and/or other CSOs as well as satellite based solutions. Further, the utility of “iterative beneficiary monitoring” will be assessed 45 and considered. 14 This subcomponent will also finance key studies on agricultural sector development and the preparation of the upcoming commercial agricultural and livestock sector project. (iii) Subcomponent C.3: Communication and knowledge management, entirely financed by IDA (US$0.20 million). (iv) Subcomponent C.4, Nutrition-related Activities and M&E, financed entirely by PHRD (US$0.24 million), would support communication, sensitization, and training, with regard to the nutrition as well as M&E, related to the MPs in the five selected communes. 34. Component D: “Contingent Emergency Response Component” (CERC). This component will be part of the project on a contingency basis only, to provide an immediate response to an Eligible Crisis or Emergency. This contingency was triggered only once so far, in July 2014, during a serious drought, which resulted in the deaths of many animals.15 The Recipient has requested that this contingency, as Component D, be retained during the AF-period. 35. In the event of major crises, particularly climatic-related ones (such as severe floods, droughts, climate-related epidemics, etc.), the project will define, in collaboration with the participating municipalities, 'Emergency Plans'. These plans will specifically integrate more flexible Community micro- project approval procedures and simplified procurement procedures. The communes will be authorized to quickly and efficiently reallocate some or all of the funds already allocated by them to their Annual Investment Plans to community-based crisis response initiatives. 14 The “iterative beneficiary monitoring” (IBM) System is a feedback mechanism elaborated to inform on what is not working during the project implementation phase. On a regurlar basis, this mechanism identifies and quantifies distortions and shortcomings that would put at risk the achievment of project objectives. Those distortions are brought to the attention of project leaders and project managers who use them to improve the project management. At the implementation stage, projects in a context of fragility face many external and internal constraints, including the non-compliance with procedural manuals, weak governance, delay in proceeding activities, communication issues with beneficiaries, lack of commitment from project managers, and poor capacities. Those constraints delay implementation of activities and further hamper achievement of project objectives. To mitigate their impact, it is necessary to target those constraints early at the start of implementation and ensure frequent monitoring. Contrary to other Systems that are heavy, lenghty, and expensive, the main advantages and innovation of the IBM System is that it may be light, low cost, short, rapid, iterative (with high frequency), and with a feedback loop that collects information directly from beneficiaries and produces short reports on challenges that can be addressed by the project team. It repeats data collection regularly, creating a positive and self-reinforcing cycles of improvement. Given that little information is collected on small samples, analysis is rapid and inexpensive. It is a mechanism that may help improve project results gradually and quickly without need of lenghty and expensive evaluations. 15 Under the emergency, 1,083 tons of animal feed was provided via 29 micro-projects in the regions of Zinder (12), Agadez (6), Diffa (6), and Maradi (5). 46 Annex Table 2.1: Identification of Potential Sites for Small-scale Irrigation and Preliminary Selection of Sites for Financing under the AF Proposed area for Potential area small-scale Type of Region Commune Site for small-scale irrigation irrigation irrigation (ha) under the AF (ha) Agadez Dirkou Aney 30 5 Type 3 Djado Siguidine 10 5 Type 3 Djado 15 5 Type 3 Yaba 15 5 Type 3 Fachi Fachi 18 5 Type 3 Dabaga Dabaga 50 20 Type 2 Total Agadez 138 45 Type Diffa Diffa Mamari 15 10 5 Gueskerou Waragou 25 10 Type 5 Gueskerou Argoram 30 10 Type 5 Type Mainé Mainé 40 10 4 Total Diffa 110 40 Dosso Guilladjé Afodamata 20 15 Type 3 Lougoudjam Kankandi 10 5 Type 3 Babadayi N'Gonga Kofouno 10 8 Type 3 Kiota Ballaré 10 7 Type 3 Koira Tégui Sakadamna 7 5 Type 4 Baro Tessa Mayakidey 10 7 Type 4 Guéchémé Lido 200 n.a. n.a. Bana Toudoun Wada 80 50 Type 3 Bengou Bengou 50 30 Type 3 Total Dosso 397 127 Maradi Hawandawaki GUERTAO 300 110 Type 3 Tsamia 30 20 Type 3 DAN KANO 20 10 Type 3 Korgom Mai Garao 10 8 Type 3 DAN DODO 50 30 Type 3 Total Maradi 410 178 Tahoua Babankatami Banbankami 15 8 Type 2 Dan Ala 5 5 Type 3 Tama Tsaida 37 15 Type 4 47 Cu Illéla Adjémouraba 5 0 n.a. Tarkamat 70 40 Type 3 Ibohamane Ibohamane 50 30 Type 3 Bahou Bidola Kao 68 20 Type 3 Chimboughar Total 250 118 Tahoua Tillaberi Diagourou BOUPPO 10 5 Type 3 TOURE 20 10 Type 1 Gotheye ATAFORME 10 5 Type 1 KOBE 3 1 Type 1 Simiri Simiri 50 21 Type 3 Total 93 42 Tillaberi Zinder Mallaoua Kollar 35 20 Type 3 Maja 200 60 Type 3 Tanout Koup koup 150 30 Type 2 Afadekou 100 40 Type 3 Guidiguir Yacoubari cuvette 120 80 Type 3 Gouchi Dossono 1000 150 Type 3 Zermou Zakouari 15 8 Type2 Total Zinder 1620 388 Baleyara Alkama 25 15 Type 3 Djoulde Koira 15 10 Type 2 Niamey Makalondi Bogga 10 7 Type 3 Niamey 3 Mouche Koira 20 10 Type 2 Maigari Koira 35 20 Type 2 Total 105 Niamey 62 Grand Total 3123 1000 48 Annex 3: Implementation and Institutional Arrangements Project Administration Mechanisms 1. No major changes are envisaged under the AF. The same structure that governed the implementation of the parent project will remain. The Ministry of Agriculture and Livestock will have overall responsibility for the implementation and the supervision of the project. Participating communes will have the leadership for all the initiatives of component B. At national level, guidance will continue to be provided by a National Steering Committee (Comité national de Pilotage, CNP), chaired by the Secretary General for the Ministry of Agriculture and Livestock. The CNP will ensure coherence between CAP3 and other similar World Bank-supported operations. At departmental and regional levels, the Departmental Committee for Project Analysis’ (DCPA, CRAP) will continue to analyze micro- projects selected by commune councils to be financed under the AF to ensure their compliance with sectoral policies, technical standards, economic effectiveness, and social and environmental safeguard policies. At commune level, municipal councils will approve funding of micro-projects. Leadership of local authorities will be provided with adequate technical advice and support. To assist with effective implementation of the PHRD-funded small-scale irrigation in two communes of Maradi and three communes of Tahoua, the National M&E Specialist and the two regional M&E Specialists will be tasked to focus part-time on the implementation of the PHRD-funded work. Financial Management 2. The PCU will remain the World Bank’s focal point, as it is familiar with the World Bank Financial Management (FM) requirements. The FM of the AF project will follow the same approach as the implementation arrangements in place under the ongoing PCU-managed parent project; these are considered acceptable to IDA. The Interim un-audited Financial Reports (IFRs) are prepared every quarter and regularly submitted to the World Bank (45 days after the end of each quarter) in form and substance in compliance with IDA reporting requirements. The FM performance and FM Risk were rated Moderately Satisfactory (MS) and Substantial, following the last implementation support mission of the Community Action Program Phase 3 (P132306) / PSG: Integrated Ecosystems Management (P143079) conducted in September 2016. There are no overdue audit reports under the ongoing PCU-managed projects. However, the ongoing Community Action Program Phase 3 (P132306) audit reports for fiscal year ending December 31st, 2015 that received an unqualified audit opinion, were transmitted to the World Bank with one-month delay. (i) Staffing: the FM aspects of the AF will be handled by the current FM team of the PCU. The team is headed by an experienced and qualified FM Manager, and comprised of a senior accountant, two accountants at the central level, and six accountants at the regional level. To strengthen the existing FM team and the internal control framework, a financial controller and two accountants would be recruited. (ii) Budgeting and planning: The annual work program, budget preparation, and approval procedures will follow the same arrangements currently in place; they are in compliance with the FM procedures manual (approved by the Steering Committee and submitted to IDA annually before the end of the year). (iii) Accounting software: The existing current TOMPRO accounting software in place under the ongoing PAC 3 will be used to manage this AF. The Diffa and Dosso regions accountants’ positions are vacant and need to be filled during implementation. 49 (iv) Internal controls/FM procedures manual: The current FM manual is acceptable to IDA and would be used for the AF. No additional updates would be required. (v) Internal audit: The internal audit arrangements in place for the parent project are satisfactory and would be applicable to this AF. The Niamey-Tillabéry internal auditor position is vacant, and needs to be filled during implementation. (vi) Financial reporting: The current content and format of the IFRs are acceptable to IDA. The IFRs of the AF will use the same format and content. The IFRs of the AF will be prepared every quarter and submitted to the World Bank (45 days after the end of each quarter) in form and substance that comply with IDA Financial Management reporting requirements. In case the project was to decide to use IFRs as the basis of disbursements, the contents and format would have to be revised to include disbursement-related information. At the end of each fiscal year, the project will prepare annual financial statements with content similar to that of the ongoing parent project. There are no overdue IFRs. (vii) External Audit: The AF audit arrangements will be similar to those of the ongoing PCU- managed projects; i.e. project accounts will be audited annually and reports submitted to IDA not later than 6 months after the end of each year. The contract of the existing auditor shall be amended to take into account the AF. Thus, a single Auditor will audit the consolidated Financial Statements comprising both the AF and ongoing the project. The AF is expected to become effective in the second half of 2017; consequently, the first audit report would be due on June 30, 2018. The terms of reference of the project external auditor covering all project expenditures will be updated, taking into account the specificities of the AF. There are no overdue audit reports under the ongoing PCU-managed projects. The AF project will comply with the World Bank disclosure policy of audit reports (made publicly available, promptly, after receipt of all final financial audit reports, whatever the opinion; and post the information provided on the official website within one month of the report being accepted as final by the team. Disbursement arrangements and flows of funds 3. Flows of Funds - Designated Account. A new Designated Account (DA) denominated in FCFA will be opened in a commercial bank acceptable to IDA. The PCU will manage that account which will receive IDA advances to pay for project expenditures eligible under the Grant financing. Interest income earned on the DA will be deposited into the project account. Additional advances to the DA will be made on a monthly basis against withdrawal applications supported by Statements of Expenditures (SOE) or records as specified in the Disbursement Letter (DL). 4. Disbursement arrangements. Upon AF effectiveness, transaction-based disbursements will be used. Advances to the Designated Account will be made against withdrawal applications supported by Statements of Expenditures (SOE) and other documents as specified in the Disbursement Letter. All supporting documents should be retained by the project team and readily accessible for reviews by IDA implementation support missions and external auditors. The option of disbursing the funds through direct payments to suppliers/contractors for eligible expenditures will also be available for payments equivalent to or more than twenty percent (20 percent) of the DA ceiling, which will be set at million. Another acceptable method of withdrawing proceeds from the IDA grant is the special commitment method, whereby IDA pay amounts to a third party for eligible expenditures paid by the Recipient under an irrevocable Letter of Credit (LC). 5. The option to disburse against submission of quarterly unaudited IFRs (also known as the Report- based disbursements) could be considered at any time, subject to both the quality and timeliness of the 50 IFRs submitted to the World Bank as well as the overall FM arrangements as assessed in due course. In the case of the use of the report-based disbursement, the DA ceiling will be equal to the cash forecast for two quarters as provided in the quarterly unaudited Interim Financial Reports. In case the project were to use the IFRs as the basis for disbursements, their contents and format will be revised to include disbursement-related information. 6. Disbursement of Funds to Service Providers and Suppliers. The PCU will make disbursements to service providers and suppliers of goods and services for specified activities under the AF in accordance with the payment modalities, as specified in the respective contracts/conventions as well as the procedures described in the Project’s Administrative, Accounting, and Financial Manual. In addition to these supporting documents, the project will consider the findings of the internal audit unit while approving the payments. The PCU, with the support of its internal audit unit, will reserve the right to verify the expenditures ex-post, and refunds might be requested for non-respect of contractual clauses. Misappropriation of resources toward the funding of activities could result in the suspension of financing for a given entity. 7. For the CERC, the existing flexibility in OP 12.00 - Disbursement will be used to provide significant advances to provide the necessary liquidity for a fast response. The level of the advance needed for the CERC will be established independently of any existing advances for the project components and recorded in the revised Disbursement Letter. The advances for the CERC will be deposited in a separate DA established for the purpose. 8. Governance and accountability: The risk of fraud and corruption for contracts of service providers and suppliers of goods and services and misuse of funds by beneficiaries is assessed as Substantial. The existing anti-corruption plan will be updated as needed. 9. Implementation Support Plan: Based on the outcome of the FM risk assessment, the following implementation support plan is proposed. The objective of the implementation support plan is to ensure that the project maintains a satisfactory financial management system throughout the project’s life. 51 FM Activity Frequency Desk reviews Interim financial reports review Quarterly Audit report review of the project Annually Review of other relevant information Continuous as such as interim internal control systems they become reports. available On site visits Review of overall operation of the FM Twice per year system (Implementation Support Mission) Monitoring of actions taken on issues As needed highlighted in audit reports, auditors’ management letters, internal audit and other reports Transaction reviews (if needed) As needed Capacity building support FM training sessions During implementation and as and when needed. 10. FM Risk assessment and mitigation. The World Bank’s principal concern is to ensure that project funds are used economically and efficiently for the intended purpose. Assessment of the risks that the project funds will not be so used is an important part of the financial management assessment work. The risk features are determined over two elements: (i) the risk associated with the Project as a whole (inherent risk); and (ii) the risk linked to a weak control environment of the project implementation (control risk). The content of these risks is described below: Risk Risk Risk Mitigating Measures Incorporated into Risk after Rating Project Design mitigation measures Inherent risk S S Country level S PFM actions plan in implementation to S Weak governance and address the weaknesses identified in PEFA anti- corruption assessment. institutions. Entity level S The PCU is familiar with IDA FM procedures S None except additional and staffed with experienced fiduciary staff. workload. However, The role of the Ministries and institution there is a high risk of involved in the implementation of the political interference program activities is established and clearly since the communes are outlined in the project implementation involved in the project manual and the manual of procedures and implementation. in relevant legal texts. The role of other institutions involved in project activities implementation will also be clarified. Project level S The existing Project Implementation a) The high Manual (PIM) as well as the procedures S decentralization aspect of manual will be used for the AF activities. 52 Risk Risk Risk Mitigating Measures Incorporated into Risk after Rating Project Design mitigation measures the project involving Financing agreement (service contract) will several stakeholders with be signed with the communities and other limited capacity may stakeholders entail a substantial risk in the flow of funds The PCU will strengthen ex-ante and ex-post b) The resources of control of funds through the convenient the project may not reach adaptation of the Internal Audit all beneficiaries and used arrangements. for unintended purposes. Control Risk M M Budgeting: Weak M The project FM Procedures Manual defines M budgetary execution and the arrangements for budgeting, budgetary control leading to over- control and the requirements for budgeting expense of budget item revisions. or inefficient used of the funds. Accounting: Increase of M The current FM staffing arrangements are M the FM staff workload adequate; no additional staff is required. leading to some delays However, the two regional accountants’ positions which are vacant should be filled to support the existing FM team. Internal Control: Specific S The FM Procedures Manual is acceptable for S aspects of the AF may not IDA; the current Internal Audit be applied or reflected in arrangements will ensure that the project the FM procedures complies with the procedures. manual; Increase in the activities may require more sophisticated control systems Funds Flow: Risk of M The Internal Audit work arrangements will M misused or inefficient use be updated to include frequent controls of of funds and weak each of the stakeholders involved in order to disbursement rate. help to prevent and mitigate the risk of diversion of funds. The project must ensure monthly submission of the withdrawal application. Financial Reporting: S (i) A computerized accounting system is in S Delay in submission of place; and adequate FM staffing IFRs due to the increase in arrangements in place; (ii) IFR format and the PCU activities; format content improved. and content of the IFRs may not be appropriate to report-based disbursement method. Auditing: S Auditing arrangements will be kept as it is; M Delays in submission of no need to implement specific actions audit reports or delays in except for the update of the ToRs and the implementing the 53 Risk Risk Risk Mitigating Measures Incorporated into Risk after Rating Project Design mitigation measures recommendations of the contract of the current auditor to take into management letter; or account the AF. the quality of audit report may not be acceptable to IDA. Fraud and Corruption: H Robust FM arrangements (updating of the S Possibility of colluding Internal Audit arrangements, World Bank practices as bribes, abuse FM supervisions including review of of administrative & transactions and assets verifications …) political positions, mis- designed to mitigate the fiduciary risks in procurement and misuse addition to the PCU overall internal control of funds etc., are a critical systems and the anti-corruption plan. issue. OVERALL FM S M RISK 11. The overall FM risk rating taking into account the mitigation measures is deemed Moderate. Financial Management Action Plan 12. The Financial Management Action Plan described below has been developed to mitigate the overall financial management risks. Issue Remedial action recommended Responsible Completion entity date Accounting software Configuration of the existing version PCU By 3 months of TOMPRO accounting system to after reflect the AF. effectiveness Two regional Recruit two regional accountants PCU By 3 months accountants and on and one regional internal auditor after regional internal effectiveness auditor’s positions are vacant External auditing Revision of the terms of references PCU By 3 months and contract of the current external after auditors to reflect the AF. effectiveness Procurement 13. Procurement regime. The New Procurement Framework (including Procurement Regulations for Borrowers) that apply to projects with PCN held after July 1st, 2016 would normally apply. However, the Task Team has received approval for an exception under the Procurement Directive from the CPO to apply the old procurement Guidelines. Therefore, procurement arrangements of the parent project will remain largely the same under the proposed Additional Financing, subject to the following changes to the existing procurement arrangements: 14. Guidelines: Procurement for the proposed AF will be carried out in accordance with: (a) the World Bank’s “Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA 54 Credits and Grants” dated January 2011; revised July 2014, and (b) “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011, revised July 2014. 15. Procurement of Works. Activities works to be financed by IDA are rehabilitation, storage and other facilities. Contracts of works estimated to cost US$10,000,000 equivalent or more per contract shall be procured through ICB. Contracts estimated to cost less than US$10,000,000 equivalent may be procured through NCB. Contract estimated to cost less than US$200,000 equivalent per contract may be procured through shopping procedures. For shopping, contracts will be awarded following evaluation of bids received in writing on the basis of written solicitation issued to several qualified suppliers (at least three). The award would be made to the supplier with the lowest price, only after comparing a minimum of three quotations open at the same time, provided he has the experience and resources to execute the contract successfully. For shopping, the project procurement officer will keep a register of suppliers updated at least every six months. 16. Procurement of Goods. The Goods to be financed by IDA would include seeds, fertilizer and improved technologies; Similar Goods that could be provided by a same vendor would be grouped in bid packages estimated to cost at least US$1,000,000 per contract and would be procured through ICB. Contracts estimated to cost less than US$1,000,000 equivalent may be procured through NCB. Goods estimated to cost less than US$100,000 equivalent per contract may be procured through shopping procedures. For shopping, the project procurement officer will keep a register of suppliers updated at least every six months. 17. Selection of Consultants. The project will finance Consultant Services such as technical studies, surveys, financial audits, engineering designs and supervision of works, trainers and workshops facilitators. Consultant firms will be selected through the following methods: (a) selection based on the quality and the cost (QCBS); (b) selection based on the Consultant’s Qualification (CQS) for contracts which amounts are less than US$300,000 equivalent and are relative to exceptional studies and researches which require a rare and strong expertise; (c) Least Cost Selection (LCS) for standard tasks such as insurances and, financial and technical audits costing less than US$300,000; (d) Single Source Selection, with prior agreement of IDA, for services in accordance with the paragraphs 3.8 to 3.11 of Consultant Guidelines. Individual Consultant (IC) will be hired in accordance with paragraph 5.1 to 5.6 of World Bank Guidelines; Sole source may be used only with prior approval of the World Bank. Whatever the cost, any terms of reference needed to consultant selection must get prior approval of the World Bank. 18. Short lists of consultants for services estimated to cost less than US$100,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines, if a sufficient number of qualified individuals or firms are available. However, if foreign firms express interest, they would not be excluded from consideration. Thresholds for procurement methods and prior review Expenditure Contract value Procurement Contract category (threshold) method subject to (US$) prior review (US$) ≥10, 000,000 ICB All contracts 1. Works <10,000,000 NCB None <200,000 Shopping none 2. Goods All contracts ≥1,000,000 ICB at or above 55 Expenditure Contract value Procurement Contract category (threshold) method subject to (US$) prior review (US$) US$ 2 million. <1,000,000 NCB none <100,000 for goods and Shopping none commodities <500,000 for fuel and Shopping none vehicles No threshold Direct contracting All contracts All contracts ≥500,000 QCBS of 1,000,000 and more All contracts QCBS; LCS; CQS; <300,000 of 200,000 Other and more All contracts 3.Consultancy ≥200,000 IC of 300,000 and more <200,000 IC none Single Source No threshold (Selection Firms & All contracts Individuals) 4. Training Annual Plan All Training All TORs regardless of the value of the contract are subject to prior review 19. Procurement capacity and risk. The PCU has conducted procurement activities for the parent project in a satisfactory manner. World Bank procurement specialist will undertake regular supervisions and a post procurement review at least once a year, given the experience under the parent project and the proposed mitigation measures, procurement risk is rated Moderate. 20. Procurement Plan. The client has finalized the Procurement Plan for the first eighteen (18) months of the project, and this plan has been endorsed by the World Bank during negotiations. Safeguards 21. CAP3 is classified as an Environmental Assessment Category B project. This indicates that the potential negative impacts are site-specific, are not irreversible, and can easily be corrected by appropriate mitigation measures. The CAP3 AF will not trigger any new safeguards policies and will therefore retain the same classification. It will focus on enhancing the sustainability of micro-projects, in particular those benefitting women and youth in the areas of vegetable production during the dry season, agroforestry, sylvo-pastoral, livestock, and fishery production; it will also support processing, conservation, and marketing of vegetables, agroforestry, fishery, and livestock products. All potential sites of possible investments are known; these are geo-referenced, and their socio-environmental situation has 56 been established. Therefore, the proposed AF is not expected to result in significant adverse environmental and social impacts; any possible effects are expected to remain temporary and local. 22. Social impacts of the proposed project activities are expected to be positive. The activities under the proposed micro-projects to be undertaken by the communes and communities will improve their capacity to deliver better services, be transparent, and use resources effectively, thereby improving the living conditions of their respective communities. The concept of social accountability is embedded in project activities, and it is intended to allow local authorities to be more accountable to their constituencies. Citizens will have better access to key information and participate in decision-making processes. During the preparation of the micro-projects, key stakeholders within the public sector, the private sector, and civil society will be involved and will remain engaged during the implementation, supervision, and evaluation stages of the AF project. Youth and women, in particular, are expected to benefit from this Project because they are heavily involved in most of the activities and processes. The Project is expected to improve the food security status of households, with a successful adoption of sustainable land management practices and income-generating activities. In addition, the Project will strive to respect and build on coping strategies devised by local communities in order to deal with a variety of possible environmental and climatic crises. 23. The safeguard instruments prepared for CAP3 in 2012 and updated in 2014 include: (i) the Environmental and Social Management Framework (ESMF), (ii) the Resettlement Policy Framework (RPF), (iii) the Resettlement Plan (RP); and (iv) the Pest Management Plan (PMP). Dissemination of tools and stakeholder capacity building, along with advisory support, have been provided by the Project, and both social and environmental compliance under the parent program is satisfactory. It is to be noted that, before the start of any (micro-project) investment, a simplified Environmental and Social Impact Assessment (ESIA) will be carried out in accordance with the environmental and social approach adopted. 24. The same safeguard policies are triggered (see Table 3.1) and the same instruments will be maintained as under the parent project. Annex Table 3.1: Safeguard Policies Triggered by the AF Safeguard Policies triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Pest Management (OP4.09) X Physical Cultural Resources (OP/BP 4.11) X Involuntary Resettlement (OP/BP 4.12) X Indigenous People (OP/BP 4.10) X Forests (OP/BP 4.36) X Safety of Dams (OP/BP 4.37) X Projects in Disputed areas (OP/BP 7.60) X Projects on International Waterways (OP/BP 7.50) X Policy exceptions and readiness 25. An exception to apply the World Bank’s Procurement and Consultant Guidelines of 2010 editions, as referred to in the Financing Agreement so that the AF can be implemented in necessary synergies and continuity with the original project, was sought and granted. 26. The project is fully operational. All conditions are in place to ensure that the implementation of proposed activities can be scaled-up as soon as the grant is declared effective. 57 Annex 4: Economic and Financial Analysis 1. The AF will consolidate the achievements of micro-projects financed during the previous phases of the CAP and support new micro-projects already identified which will give priority to the poorest, young people, women, and households living in disadvantaged geographical areas. It will: (a) strengthen the capacity of community leaders and beneficiary communities on equity, targeting, procurement, monitoring and evaluation, environmental and social safeguards, etc.; (b) capitalize project experiences and achievements; (c) support fruit and vegetable production through the development of small-scale irrigation (drainage, water supply) to improve producers' access to water for agriculture and livestock for growth from production; (d) support sheep farming through the development of fattening and breeding of breeding stock; (e) support processing, conservation and marketing of agro-sylvo-pastoral products; (f) support the expansion of sustainable land and forest management actions; (g) support the dissemination of improved seeds to increase the productivity of agricultural and pastoral land, (h) support the improvement of fisheries production through the development of ponds and water courses; and (i) support strengthening of the monitoring and evaluation system and knowledge management. 2. In order to meet these challenges, the CAP3 AF will finance: (a) actions to strengthen the capacity of targeted communes and communities and improve local governance (Component A; "Capacity Building", (b) private sector initiatives to improve productivity and agro-sylvo-pastoral production (Component B; Local Investment Fund) in a sustainable way and to capitalize on experience and knowledge, (c) to manage and disseminate knowledge, to monitor environmental and social investments (Component C; Coordination and Management, M&E, Communication, and Preparation of Studies); private initiatives (productive investments at the household level) will be supported through matching grants, but their management modes differ. The management of private initiatives (productive investments) is the responsibility of communities (households). 3. The benefits of structuring investments and capacity building are quite positive, but difficult to quantify. No attempt has been made to quantify them for the proposed AF operation, and these benefits have therefore not been taken into account in the calculation of project profitability. 4. Productive investments at the level of agricultural holdings carried out under the CAP3 AF will provide proven, high-performance technologies (irrigation equipment / equipment for processing / conservation equipment, sustainable land and water conservation techniques, etc.); these will generate benefits that will be used to assess the project's profitability and the interest of farmers in investing in activities likely to be supported by the project. 5. To do this, models of exploitations for targeted productive investments have been made from the technical and economic data taken from the initial CAP3 data base. These data were supplemented by data collected in the field by the evaluation mission. They were used to conduct the financial and economic analysis of the CAP3-AF ex ante. The establishment and regular monitoring of a panel of beneficiaries supported by the project will enable the actual technical and economic results of the farms to be known. 6. The financial and economic analysis consisted of comparing the situation “with project" with the situation “without a project" in order to establish the "additional situation", i.e. to highlight the advantages of the project. In each situation, the mission endeavored to identify costs and benefits as exhaustively as possible and document the technical parameters relating to the nominal capacity of the infrastructure and equipment put in place and the expected capacity of operation. 7. The main financial results generated by the analysis are the gross margin, the Internal Financial Rate of Return (IFRR) and the Net Present Value (NPV). These results have been consolidated to calculate 58 the internal economic rate of return (IERR) for the project as a whole. The sensitivity analysis was conducted on the basis of a 30 percent cost increase, a 30 percent benefit reduction, and a two-year delay in benefit generation. Analysis of investments at the level of farms or enterprises 8. The CAP3-AF will support the following production/enterprise models: (a) irrigated production of onions, cassava, and sweet potato; (b) processing, conservation, and marketing of agro-sylvo-pastoral products; (c) conservation and commercialization of agro-sylvo-pastoral products; (d) livestock production; (e) production of millet, fonio, peanut, and cowpea as intercropping of acacia senegalensis in the framework of soil and water conservation actions; and (f) production of improved seeds of millet. Although each targeted business model requires new technologies and increases expenditure (investment cost, operating costs, and possibly even recurrent costs), financial analysis shows that their implementation contributes to a substantial increase of gross revenues and gross margins of business / operations, demonstrating that the business models / businesses that can be supported are profitable. 9. The gross margins due to the project (additional situation = situation with project - situation without project) are positive: 0.45 million FCFA; 1.05 million FCFA; 3.8 million FCFA; 0.071 million FCFA; 0.088 million FCFA, and 0.086 million FCFA, respectively, for: (i) production of onion, cassava, sweet potato with small irrigation; (ii) processing and marketing of agro-sylvo-pastoral products; (iii) conservation and marketing of agro-sylvo-pastoral products; (iv) fattening of sheep; (v) production of millet, fonio, cowpea, and groundnut in intercropping with acacia plants; (vi) improved seed production; production of gombo, (vii) production of moringa, and fishing. 10. The IRRs due to the AF project are: 31.5 percent for onions with smalls-scale irrigation, 61.4 percent for processing and marketing of agro-sylvo-pastoral products, 46.5 percent for conservation and marketing of agro-sylvo-pastoral products, 83.2 percent for bovine fattening, 64.4 percent for production of millet, fonio, cowpea, and groundnut in intercropping ini association with acacia plants, 98.7 percent for improved seed production, 73.8 for production of gombo, 70.9 for production of moringa, and 41.6 for fish production in pondsThe NPVs corresponding to these IRRs are FCFA 0.71 million; FCFA 4.3 million; FCFA 10.7 million; FCFA 0.25 million; FCFA 0.4 million; FCFA 0.4 million CFA francs; FCFA 0.26 million; FCFA 3.09 million; and FCFA 2.0 million, respectively. 11. As a result of the project, cumulative cash flows are negative for the first two years for all targeted operating models except for the seed production operating model, which is negative only in the first year. Cash flow analysis shows that targeted farmers need liquidity in the first two years without which they cannot carry out their productive activities. Thus, the financial analysis confirms the relevance of the grant mechanism provided to communes to finance micro-projects. In an environment where access to financial resources, including credit, is limited, this mechanism has helped and will continue to significantly help improve the cash flow of small farm operations / businesses during the period of installation or development of their activities. Profitability at the level of the entire project 12. The economic analysis was based on the following assumptions: (i) the period considered is 15 years, corresponding to the lifetime of the hydro-irrigation infrastructure considered to be the longest- lived investment; (ii) 100 percent of the cost of the disbursement categories "Works", "Equipment and materials", "Consultant services", "Training, workshop, seminars, study tour". The amount of the disbursement category "Grants or subsidies" was not considered because these resources are already included in the operating budget analyzed; (iii) 90 percent of the financial prices corresponding to the economic price, the 10 percent difference between financial and economic producer prices being the 59 margins taken by the intermediaries and are not economic distortions; and (iv) the opportunity cost of the long-term capital employed is 6 percent. 13. On the basis of these assumptions, the Net Present Value (NPV) (at country level) is approximately US$23.4 million. The Economic Rate of Return (ERR) for the entire project is estimated at 19.4 percent. 14. A sensitivity analysis was carried out for a variety of assumptions including a 10 percent, 20 percent, and 30 percent increase in project costs, a 10 percent, 20 percent, and 30 percent reduction in project benefits, and a one-year and two-year delay in the generation of benefits. It shows that the project is economically robust. ERRs were 17.9 percent, 16.6 percent, 15.3 percent, 17.7 percent, 15.9 percent, 13.9 percent, 16.5 percent, and 14.1 percent respectively. The corresponding NPVs are US$ 21.8 million, US$ 20.3 million, US$ 18.7 million, US$ 19.5 million, US$ 15.6 million, US$ 11.7 million, US$ 19.1 million, and US$ 15.0 million, respectively. Sensitivity Analysis Assumptions IRR NPV Millions of Millions of FCFA US$ Base (NPV = 0) 19.4% 14,030.3 23.4 Costs increase by 10% 17.9% 13,090.2 21.8 Costs increase by 20% 16.6% 12,150.1 20.3 Costs increase by 30% 15.3% 11,210.0 18.7 Gross margin decrease by 10% 17.7% 11,687.2 19.5 Gross margin decrease by 20% 15.9% 9,344.0 15.6 Gross margin decrease by 30% 13.9% 7,000.9 11.7 Project benefits delayed by 1 year 16.5% 11,438.2 19.1 Project benefits delayed by 2 years 14.1% 8,992.9 15.0 60 Annex 5: Greenhouse Gas (GHG) Accounting 1. Corporate mandate. In its 2012 Environment Strategy, the World Bank has adopted a corporate mandate to conduct greenhouse gas (GHG) emissions accounting for investment lending in relevant sectors. The ex-ante quantification of GHG emissions is an important step in managing and ultimately reducing GHG emission, and is becoming a common practice for many international financial institutions. 2. Methodology. To estimate the impact of agricultural investment lending on GHG emission and carbon sequestration, the World Bank has adopted the Ex-Ante Carbon-balance Tool (EX-ACT), which was developed by the Food and Agriculture Organization of the United Nations (FAO) in 2010. EX-ACT allows the assessment of a project’s net carbon-balance, defined as the net balance of CO2 equivalent GHG that were emitted or sequestered as a result of project implementation compared to a without project scenario. EX-ACT estimates the carbon stock changes (emissions or sinks), expressed in equivalent tons of CO2 per hectare and year. 3. Project boundary. Project activities for which GHG accounting is summarized as below: a. Land use change: 100,000 ha from Perennial/Tree Crop (>10 years) to Shrub land; b. Forest degradation and management: 100,000 ha shrub land from moderately degraded status to non-degraded with reduction of fire occurrences; c. Improved practices on annuals: improved agronomic practices, no tillage and residue retention, no burning, and manure for millet on 50,000 ha; improved agronomic practices, no tillage and residue retention, no burning, and manure for sorghum on 10,000 ha; improved agronomic practices, no tillage and residue retention, and no burning for niebe on 10,000 ha; d. Grassland: 30,000 ha of shrub land recovery from severely degraded to non-degraded; e. Irrigation systems: 1,250 ha small-scale irrigation to produce food, including fruit and vegetables. 4. Key assumptions. Niger has tropical climate with dry moisture regime. The dominant soil type is sandy. The project implementation phase is 3 years and the capitalization phase is assumed to be 17 years. The 20 years’ implementation period is standard in the use of EX-ACT. 5. Results. The net carbon balance quantifies GHGs emitted or sequestered because of the project compared to the without project scenario. Over the project duration of 20 years, the project constitutes a carbon sink of 11,966,205 tCO2-eq (see Table 5.1). The project provides a sink of 40 tCO2-eq per ha, equivalent to 2.0 tCO2-eq per ha per year. The main carbon sink 11,047,026 tCO2-eq is from shrub land management from moderately degraded status to non-degraded with reduction of fire occurrences. 61 Annex Table 5.1: Results of the ex-ante GHG Analysis Over the economic project Annual average (tCO2 eq/ year) lifetime (tCO2 eq) GHG GHG Gross Gross emissions of emissions emissions Net GHG emissions Net GHG Project without of without of project emissions of project emissions activities project project scenario (2-1) scenario (4-3) scenario scenario (2) (4) (1) (3) Land use change from perennial (660,000) (96,378) 563,622 (33,000) (4,819) 28,181 to shrub land Improved practices on (1,278,476) (1,815,092) (536,616) (63,924) (90,755) (26,831) annuals Grassland - (946,275) (946,275) - (47,314) (47,314) recovery Shrub land (11,047,0 degradation 1,972,238 (9,074,788) 98,612 (453,739) (552,351) 26) management Irrigation system - 90 90 - 5 5 establishment (11,932,44 (11,966,2 Total 33,762 1,688 (596,622) (598,310) 3) 05) Per hectare 0 (40) (40) 0.0 (2.0) (2.0) 62 Annex 6: MAP 63