Page 1 PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB3032 Project Name Ghana Small Towns Water Supply & Sanitation Additional Financing Region AFRICA Sector Water supply (70%); Sanitation (20%); Sub-national government administration (5%); Other social services (5%) Project ID P105098 Borrower(s) GOVERNMENT OF GHANA Implementing Agency Community Water and Sanitation Agency (CWSA) Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared April 3, 2007 Estimated Date of Appraisal Authorization N/A Estimated Date of Board Approval June 21, 2007 1. Key development issues and rationale for Bank involvement 1. In Ghana, it is estimated that about half the population do not have access to safe water and two-thirds do not have access to adequate sanitation. Water-related diseases such as guineaworm infections resulting from the inadequate water supply situation continue to plague the rural poor. Access to safe water in rural Ghana remains low, currently estimated at 53% and progress towards achieving the ambitious sector target of 85% by 2015 remains slow (this target is set higher than the MDG target of 73% by 2015). If important gains are to be made in other areas of human development, such as health and education, then access to safe water supply and adequate sanitation is required to improve considerably. 2. The Government’s strategy for rural water supply and sanitation is embedded in the Ghana Poverty Reduction Strategy (GPRS2) and stresses that increasing access to potable water and sanitation is key to achieving health outcomes and sustained poverty reduction. This is affirmed in the Government of Ghana’s (GOG) draft water supply policy. The draft policy states that the overall objective of the community water supply and sanitation program is to “improve the public health and economic well being of rural and small town communities through provision of adequate, safe and sustainable water for domestic, commercial and industrial purposes in a planned and coordinated manner, with integrated hygiene education and sanitation interventions.” 3. Important developments have taken place in the water sector over the years with the strengthening of Government-Development Partner coordination and sector dialogue focusing on the essential policy and strategy issues including programmatic approaches. Given the fact that the majority of Ghana’s poor live in the rural areas where health care is also limited, there should be no diminishing of efforts to accelerate access to potable water and safe sanitation, albeit in a sustainable manner. Page 2 4. Small Towns Water Supply in Ghana, given the right approach and adequate investments has tremendous potential to significantly increase water supply access in rural Ghana and enhance the possibility of meeting the MDG target for water. In Ghana, it is estimated that about 6.7 million or 32 percent of the population reside in small towns (with a population of 2,000 to 50,000 inhabitants). As in other countries in the sub-region, small towns have not received focused and adequate attention in the context of water supply and sanitation. 5. Recognizing the trend of rural migration to towns and cities in Ghana, focused attention to the needs of small towns remains critical. Ensuring that water and sanitation projects adequately address issues associated in particular with operation and management requirements of water services in small towns is of paramount importance.. Rationale for Bank Involvement 6. The World Bank has been an active player in the rural water sector in Ghana over the last few decades. Bank involvement in the sector has added tremendous value to the quality and effectiveness of sector dialogue culminating in the adoption of much needed reforms and the establishment of vital sector institutions including the Water Resources Commission, and the Community Water and Sanitation Agency. In 1994, the Bank funded the full scale implementation of the national sector strategy and followed this up with an APL to deepen decentralization of rural water supply services as a means of scaling up access to water supply in Ghana. The result of this approach has contributed to the shift towards district-based water programs gradually gaining momentum in the water sector. The unique contribution the Bank makes as an institution with global experience and ability to innovate and share knowledge ensures that the sector continues to benefit from good practice while also receiving much needed investments for infrastructure and capacity building. 7. It is thus important for the Bank to sustain its engagement in the sector alongside other development partners to help the sector develop further and meet its goal of scaling up sustainable water supply and sanitation services to rural and small towns in Ghana. The current engagement in the sector through the Small Towns Water Supply and Sanitation Project, the second phase of an APL approved by the Board in July 2004 is therefore appropriate. Furthermore, t he Bank’s continued involvement in rural water supply and sanitation in Ghana will facilitate a process of harmonization in the sector, wherein the Bank can work with the Government and other donors to align assistance more effectively towards Government systems. 2. Proposed objective(s) 8. The Development Objective of the project remains unchanged. The Project’s development objective is to increase access to small towns water supply and sanitation services in six regions over the next four years, providing 500,000 people with water supply facilities, and 50,000 people with sanitary facilities. Following are key development indicators for measuring principal project outcomes: ¾ number of Water Boards trained and functioning; ¾ number of people served with improved access to water supply services; ¾ number of people served with improved access to sanitary facilities. Page 3 3. Preliminary description 9. The project, the second phase of an APL was approved by the Board in July 2004 and became effective on November 17, 2004. The original credit amount of $26.0m credit is financing three distinct project components; Community Subproject ($21.6m), Sector Support ($3.1m) and Project Management ($1.3m) and has a duration of 4 years (closing date April 30, 2009). It is decentralized to the Districts and is based on a demand driven approach. The project was effective on November 17, 2004 and implementation is on-going in 6 Regions namely; Ashanti, Brong Ahafo, Central, Western, Upper West and East Regions. In total 54 communities are participating in the project in 42 District Assemblies. A key feature of the project is the flexibility in planning and implementing service delivery based on community and district demand for improved water and sanitation services. Eligible communities are also to receive assistance to enable them operate and maintain the facilities in a sustainable manner. 10. The proposed Additional Financing of $10m is required to meet an unanticipated financing gap that would enable the project meet its original Development Objective. There are no anticipated changes in the Project Development Objective or the project scope/design. Key factors contributing to the projected financing gap are (i) the predominance of participating towns with relatively small population sizes resulting in a shortfall in the access target (ii) higher per capita investment costs of these towns with small population sizes impacting on the overall cost. 4. Safeguard policies that might apply 11. The proposed additional financing is to meet an unanticipated cost overrun and does not alter in any way the project design, scope, activities or objectives. The project will have significant positive impacts on the population’s health and quality of life through a reduction in water borne diseases. There are no foreseeable negative social or environmental issues implicated. The project has been designated as a Category B project, consistent with the provisions of OP/BP/GP 4.01 and OP/BP 4.12. An Environmental Safeguards Management Framework was adopted for the project and the same will apply to the activities funded by the additional financing. According to the May 2005 guidelines for additional financing, there will be no updating of the ISDS. 5. Tentative financing Source: ($m.) BORROWER/RECIPIENT 0.085 District Assemblies and Beneficiaries 0.70 International Development Association (IDA) 10 Total 10.785 6. Contact point Contact: Arthur Majoribanks Swatson Title: Water & Sanitation Spec. Tel: 5337+4128, Fax: Email: aswatson@worldbank.org Location: Accra, Ghana (IBRD) Page 4