The World Bank Climate Resilience: Transforming Hydro-Meteorological Services (P131049) REPORT NO.: RES34724 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF CLIMATE RESILIENCE: TRANSFORMING HYDRO-METEOROLOGICAL SERVICES APPROVED ON APRIL 25, 2013 TO GOVERNMENT OF MOZAMBIQUE WATER AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Mark R. Lundell Senior Global Practice Director: Jennifer J. Sara Practice Manager/Manager: Catherine Signe Tovey Task Team Leader: Odete Duarte Muximpua, Shelley Mcmillan The World Bank Climate Resilience: Transforming Hydro-Meteorological Services (P131049) I. BASIC DATA Product Information Project ID Financing Instrument P131049 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 25-Apr-2013 31-Dec-2018 Organizations Borrower Responsible Agency National Directorate of Water Resources Management Government of Mozambique (DNGRH),The National Institute for Meteorology (INAM, Instituto Nacional de Meteorologia) Project Development Objective (PDO) Original PDO To strengthen hydrological and meteorological information services to deliver reliable and timely climate information to local communities and to support economic development. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-14031 22-May-2013 22-May-2013 02-Sep-2013 31-Dec-2018 15.00 7.75 7.25 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank Climate Resilience: Transforming Hydro-Meteorological Services (P131049) The proposed restructuring is to extend the project closing date by 12 months from December 31, 2018 to December 31, 2019, in order to allow achievement of the project development objective (PDO). This would be the first extension of the project closing date. Achieving the PDO would enhance the Mozambican Government’s capacity to provide hydromet services and improve preparedness for climate related events. A - Project Description 1. The Project was approved by the Board on April 25, 2013 and declared effective on September 6, 2013. The current closing date is December 31, 2018. The Project Development Objective (PDO) is to strengthen hydrological and meteorological information services to deliver reliable and timely climate information to local communities and to support economic development. The project has three components: Component A - hydrological services; Components B - meteorological services and Component C- pilot projects for hydromet services. A level 2 restructuring was carried out in May 2017, and some indicators were changed to better align with existing implementation capacity and short-term on-the-ground needs for improving hydromet services. The number of project indicators were reduced from 30 to 19, to cut some overlapping indicators that were not directly attributable to project interventions and difficult to measure. 2. The project is financed by a grant from the Pilot Program for Climate Resilience (PPCR) for US$ 15 million and directly supports the National Water Resources Development Project (P107350). Parallel financing in the amount EUR 4.5 million is being provided by the Nordic Development Fund (NDF) to finance technical assistance activities under Component B in support of the National Meteorological Institute (INAM). B – Overall Status 3. The project suffered from persistent delays due to a protracted process to agree on the design of the optimized hydromet network and procurement-related delays on the strategic technical assistance (funded by NDF) to INAM, as well as weak cooperation between the National Directorate of Water Resources (DNGRH) – the implementing agency and INAM. This was communicated to the client eight months ago along side with the message that extension would not be considered without any significant improvement in project performance. Key areas flagged for improvement included (i) enhanced coordination between the implementing agencies facilitated by an assistant project coordinator; (ii) procurement of the priority meteorological equipment and (iii) completion of the design and launching of the pilot projects. The client acted on the recommendations and this has delivered results. Now, the project is on a much stronger track to achieve its intended results on component A and C. The project is currently rated Moderately Satisfactory with respect to the PDO and implementation progress Two of the four PDO indicators have been fully achieved and the other two are close to being achieved: accuracy of meteorological forecast for temperature stands at 60 percent out of the 70 percent target and flood forecast in the Limpopo and Zambezi basin stands at 65 percent out of the 80 percent target. These indicators can be achieved by the end of November 2019 if extension is granted. The data sharing protocols for hydromet information have been developed, approved and are under implementation by National Meteorological Institute (INAM), the National Directorate of Water Resources (DNGRH) and the Regional Water Administrations (ARAs). There is tangible evidence of strengthened government capacity (on meteorological and hydrological information systems) and coordination mechanism to mainstream climate resilience vis-à-vis a fully functioning and effective hydromet working group. Most of the intermediate project indicators are close to 75% of achievement, except for those related to meteorological information systems which are about 50% achieved. To date, 167,488 people out of the target 174,000 (primarily fishermen and farmers from Inharrime and Mabalane Districts) have directly benefited from project interventions. 4. Over the last eight months, significant effort was made by the implementing agencies to enhance project performance, including the hiring of the assistant coordinator, improve due-diligence on both procurement and technical activities, and streamline hydromet operations and coordination between the two agencies. About 35 The World Bank Climate Resilience: Transforming Hydro-Meteorological Services (P131049) percent of project funds (U$ 5.23 million) were committed during the last six months leading to a cumulative commitment of 80.3 percent (U$ 12.1 million). All key activities have been procured, except for the weather radar upgrade which is pending project extension. Assuming a one-year closing date extension, the weather radar upgrade, valued at U$ 1.5 million is projected to be delivered by the end of November 2019. Disbursement currently stands at 52 percent (U$ 7.75 million) with 12 percent disbursed over the last six months and is projected to reach 75 percent by June 2019. The remaining 25 percent is planned to be disbursed between June and September 2019, once all the equipment packages have been delivered. 5. All the activities related to strengthening hydrological information have been completed or are in an advanced stage of implementation, including the development of the National Water Resources Information System and delivery of the last batch of hydrological equipment. The pilot projects are progressing reasonably well. Completion of the pilots will require at least 6 months to ensure that all target communities benefit from project interventions. Implementation status of each project component is summarized in the following paragraphs. Environmental licenses for all the project sites have been approved and DNGRH is currently processing the payments for MITADER to issue the licenses. All the equipment will be installed in DNGRH and INAM owned land with existing complementary equipment and only minor civil works are expected. 6. Component A – Hydrological Services. Key activities under this component have progressed reasonably well. The project financed hydrological equipment and training for DNGRH and the Regional Water Administrations (ARAs). To date, 51 percent out of the target 60 percent river gauge stations are reporting, and 29 out of the target 40 stations are providing real time hydrological information. The remaining gauging stations have been procured and are currently being installed. The last batch of equipment is expected to be delivered by the end of January 2019. To date, 163 staff have been trained, exceeding the target 115 set at appraisal, thus increasing the capacity for data collection and transmission by the ARAs. 7. Collaboration and coordination between the ARAs and DNGRH, and INAM has improved, with the implementation of the data sharing protocols and guidelines, and facilitation from the assistant coordinator. In addition, various training activities have been undertaken to further enhance capacity for coordinated hydromet planning and management. 8. Component B – Meteorological Services. After significant initial delays, INAM and DNGRH have made strong efforts to improve coordination with support of the project assistant coordinator. This has started to show results, including the joint development of the data collection and sharing manuals, prioritization of INAM’s procurement processes by DNGRH, the implementing agency. Of the 60 synoptic stations, 45 are currently reporting as a result of the project upgrades and INAM is also issuing downscale forecast for the South, Center and North regions of Mozambique. Twelve of the target 25 stations are providing real time data, which is critical for providing early warning weather information and improve the level of preparedness for climate related events. Completion and commissioning of the remaining 13 stations will require a 12-month extension. This will be primarily installation of equipment without major civil works, and the team will supervise the works closely to ensure its completion within the remaining implementation period. 9. All the major procurement packages have been signed for this component, except for the upgrade of the weather radars which was put on hold and is subject to the project extension. INAM has started the negotiations with the Radar supplier, and they have been provided with the cost and time estimates required for the upgrade. This will be a single source contracting process with the original supplier of the radar and the team doesn’t expect any significant delays with contract processing. The Bank team assesses, based on the current project status, that an extension of 12 months to the current project closing date (i.e. up to December 31, 2019) would be sufficient to allow for full completion and commissioning of the outstanding equipment. The rational for the team’s conclusion is the fact that (i) all the key packages have been contracted out (except for the weather radar), with the duration not exceeding the 12 months after current closing date; (ii) the implementing agencies have deployed the required capacity and The World Bank Climate Resilience: Transforming Hydro-Meteorological Services (P131049) coordination mechanisms to ensure adequate monitoring and implementation of the project activities; and (iii) Uk- met technical assistance for INAM is fully mobilized and providing support on the ground. 10. Component C- Pilot projects for hydromet services. Both the Mabalane and Inharrime impact-based forecast has been launched, targeting farmers and fishermen respectively. The objective of this component was to test solutions to improve the exchange and delivery of tailored hydromet information, including delivering early warning information and disseminating weather and water forecasts to targeted communities. In Inharrime, the fishermen have been receiving daily weather forecast since August 2018, allowing them to better plan their activities. In Mabalene, farmers are also receiving daily and seasonal forecasts since mid-October to allow them to better select their crops and plan their irrigation activities. The pilots would require at least 6 months of implementation, to cover the rainy season and reach the full district population in the target areas by April 2019. C - Rationale for restructuring and Description of Proposed Changes 11. The primary reason for the restructuring is to extend the project closing date by 12 months from December 31, 2018 to December 31, 2019, allowing for the full completion of the meteorological activities, under component B, that is critical to achieving the project objectives. This will be the first extension of closing date. 12. Improved accuracy of meteorological information is critical to ensure achievement of the PDO indicator on improved accuracy of flood forecast for both this project and the National Water Resources Development Project (P107350), which is financing complementary activities in the Limpopo and Zambezi river basin. Project extension to December 31, 2019 will allow for a full delivery and commissioning of the meteorological equipment already procured, totaling $ 3.5 million. The list of ongoing contracts is presented in Annex 1. The National Information System is expected to be operational by the end of December 2019 but will require an additional 6 months of assisted operations, the costs of which would be provided by government funds, as confirmed by DNGRH. This will not impact in the overall project performance as the platform will be operational and in use by the beneficiary institutions. 13. The NDF is financing technical assistance activities aimed at improving INAM’s capacity. However, the success of this TA is dependent on the availability of the equipment financed under this project. NDF has granted an extension of 24 months to the current closing date to allow for a full completion of the TA. All the equipment is expected to be delivered and commissioned by December 31, 2019 and subsequent TA from NDF will assist in consolidating the hydromet operations and services for one additional year. Project closure without completion of the meteorological activities will negatively impact the performance of the parallel financing and may likely impact donor relations with NDF. 14. In addition, there are about US$5.4 million of contracts currently under implementation, including the delivery of priority hydrological and meteorological equipment for the regional (Southern Africa) and national flood warning system. The Government has expressed concerns about the cancellation of these contracts, as there are no available funds to complete these activities within the government budget. Moreover, cancellation of this contracts and deliverables is likely to impact the country’s commitments to the regional targets on improved flood forecast and early warning systems. 15. The Task Team has consulted the PPCR manager, which is supportive of the extension of the TF closing date by 12 months to December 31, 2019. The Task Team confirms that the requirements of OP/BP10.00 regarding extension of closing date have been met: (i) the PDO is achievable within the extended period; (ii) performance of the implementing agency has improved significantly and is assessed as moderately satisfactory; (iii) the implementing agencies have prepared a plan acceptable to the Bank to complete all activities by the revised closing date, and the team is confident that these activities will be completed, as they are primarily related to delivery and installation of equipment, and the contracts include 2 to 3 months buffer to ensure the delivery and commissioning of the equipment; and (iv) there are no outstanding or unsatisfactory project audits. The key milestones agreed with Government to ensure close monitoring of project performance and deliverables include (a) the establishment of a dedicated team with focal points from each of the implementing agencies, under the guidance of the assistant The World Bank Climate Resilience: Transforming Hydro-Meteorological Services (P131049) coordinator; the team has been appointed and is working together, and has by-weekly monitoring sessions with the Bank team to unlock any implementation bottlenecks; and (b) completion and documentation of the pilot projects by July 2019. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications TF-14031 Effective 31-Dec-2018 31-Dec-2019 30-Apr-2020