Document of The World Bank FOR OFFICIAL USE ONLY Report No: 69499-EG PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT FROM THE GLOBAL ENVIRONMENT FACILITY (GEF) TRUST FUND IN THE AMOUNT OF US$1.05 MILLION TO THE ARAB REPUBLIC OF EGYPT UNDER THE SECOND PHASE OF THE MULTICOUNTRY REGIONAL COORDINATION ON IMPROVED WATER RESOURCES MANAGEMENT AND CAPACITY BUILDING PROGRAM (APL 2) June 25, 2012 Sustainable Development Department Middle East and North Africa Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank‟s Policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective April 30, 2012) Currency Unit = US$ FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS APL Adaptable Program Loan AWC Arab Water Council CRTEAN Centre Régional de Télédétection des Etats d‟Afrique du Nord CRTS Centre Royal de Télédétection Spatiale CNT Centre National de Télédétection CNRS Conseil National de la Recherche Scientifique CQS Consultant Qualifications DA Designated Account EIA Environmental Impact Assessment EMP Environmental Management Plan FM Financial Management FMS Financial Management Specialist FO Financial Officer IPCC International Panel on Climate Change IFR Interim financial report IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding ICBA International Center for Biosaline Agriculture ICARDA International Center for Agricultural Research in the Dry Areas IDA International Development Association IPSAS International Public Sector Accounting Standards IW International Waters GEF Global Environment Facility GRACE Gravity Recovery and Climate Experiment LCS Least Cost Selection MENA Middle East and North Africa METAP Mediterranean Environmental Technical Assistance Program MODIS Moderate Resolution Imaging Spectro-radiometer MOPIC Ministry of Planning and International Cooperation MOWI Ministry of Water and Irrigation NARSS National Authority for Remote Sensing and Space Science NASA National Aeronautics and Space Administration NCB National Competitive Bidding i NGO Non-governmental organization ORAF Operational Risk Assessment Framework PDO Project Development Objective POM Project Operations Manual PMU Project Management Unit RPMU Regional Project Management Unit QCBS Quality and Cost Based Selection QBS Quality Based Selection SBD Standard Bidding Documents SOE Statement of Expenditures SSS Single Source Selection TAC Technical Advisory Committee TOR Terms of Reference UN United Nations USAID United States Agency for International Development WA Withdrawal Application WISP Water Information System Platform Vice President: Inger Andersen Sector Director: Junaid Kamal Ahmad Regional Director: Jonathan Walters Sector Manager: Francis Ato Brown Task Team Leader: Claire A. Kfouri ii Table of Contents I. Strategic Context .................................................................................................................... 1 II. Program Development Objectives ......................................................................................... 4 III. Program and Project Description ........................................................................................... 5 IV. Implementation ...................................................................................................................... 7 V. Key Risks ............................................................................................................................... 9 VI. Appraisal Summary ............................................................................................................. 10 Annex 1: Results Framework and Monitoring............................................................................. 12 Annex 2: Detailed Project Description ........................................................................................ 14 Annex 3: Implementation Arrangements ...................................................................................... 18 Annex 4: Operational Risk Assessment Framework (ORAF) ...................................................... 23 Annex 5: Implementation Support Plan........................................................................................ 25 Annex 6: Team Composition…………………………………………………………………….26 iii PAD DATA SHEET SECOND PHASE OF THE MULTICOUNTRY REGIONAL COORDINATION ON IMPROVED WATER RESOURCES MANAGEMENT AND CAPACITY BUILDING PROGRAM – (APL 2) TO THE ARAB REPUBLIC OF EGYPT PROJECT APPRAISAL DOCUMENT MIDDLE EAST AND NORTH AFRICA Sustainable Development Department Date: June 25, 2012 Sectors: General water, sanitation and flood protection Sector Director: Junaid Kamal Ahmad sector (100%) Regional Director: Jonathan Walters Themes: Water resource management (100%) Sector Manager: Ato Brown Team Leader: Claire A. Kfouri Environmental Assessment Project ID: P130801 Screening Category: C Lending Instrument: GEF Project Financing Data: Proposed terms: [] Loan [ ] Credit [X] Grant [ ] Guarantee [ ] Other: Source Total Amount (US$M) Total Project Cost: 5.644 Co-financing: PLN: Total Bank Financing: IBRD (GEF Grant) 5.644 APL-1 4.594 APL-2 1.05 IDA Program Recipients: Phase I: Lebanese Republic („Lebanon‟) Hashemite Kingdom of Jordan („Jordan‟) Kingdom of Morocco („Morocco‟) Centre Régional De Télédétection Des Etats D‟Afrique Du Nord („CRTEAN‟) based in Tunisia Arab Water Council Phase II: Arab Republic of Egypt („Egypt‟) iv Implementing Agencies and Contacts: Phase I : Conseil National de la Recherche Scientifique (Lebanon) - Dr. Mouin Hamze Ministry of Water and Irrigation (Jordan) – Dr. Maysoon Zoubi Centre Royal de Télédétection Spatiale (Morocco) - Dr. Driss El Hadani Centre Régional de Télédétection des Etats de l'Afrique du Nord (Tunisia) – Dr. Neji Fekih Arab Water Council - Dr. Mahmoud Abu Zeid Phase II: National Authority for Remote Sensing and Space Sciences (Egypt) – Dr. Dr. Mohamed Medhat Mohktar Estimated Disbursements (Bank FY/US$ m) for APL-2 FY 2013 2014 2015 2016 2017 Annual 0.2 0.2 0.2 0. 2 0.25 Cumulative 0.2 0.4 0.6 0.8 1.05 Project Implementation Period: Start: 2012 End: 2016 Expected effectiveness date: August 1, 2012 Expected closing date: November 30, 2016 Does the project depart from the CAS in content or other significant ○ Yes  No respects? If yes, please explain: Does the project require any exceptions from Bank policies? ○ Yes  No Have these been approved by Bank management? ○ Yes ○ No Is approval for any policy exception sought from the Board? ○ Yes  No If yes, please explain: Does the project meet the Regional criteria for readiness for  Yes ○ No implementation? Program Development Objective: The proposed program development objective is to improve water resources and agricultural management and planning within and across beneficiary countries based on quantitative and spatial- based decision making tools. v Project description A multi-country Adaptable Program Loan (GEF Grant) APL, the program will finance the technical assistance and hardware/software infrastructure required to build the capacity of local governments to improve local and regional water resources and agricultural management using Earth observation tools. Phase 1 of the APL will support activities in each of Lebanon, Jordan, Morocco, the Arab Water Council and the Centre Regional de Télédétection des Etats d‟Afrique du Nord (CRTEAN) in Tunisia. Phase 2 of the APL will support the same activities in Egypt. Each phase will comprise the following Project components: Component 1: Improved Water Resources and Agricultural Management Component 2: Capacity Building and Project Management Component 3: Regional Integration and Cooperation Safeguard policies triggered? Environmental Assessment (OP/BP 4.01) ○ Yes  No Natural Habitats (OP/BP 4.04) ○ Yes  No Forests (OP/BP 4.36) ○ Yes  No Pest Management (OP 4.09) ○ Yes  No Physical Cultural Resources (OP/BP 4.11) ○ Yes  No Indigenous Peoples (OP/BP 4.10) ○ Yes  No Involuntary Resettlement (OP/BP 4.12) ○ Yes  No Safety of Dams (OP/BP 4.37) ○ Yes  No Projects on International Waters (OP/BP 7.50) ○ Yes  No Projects in Disputed Areas (OP/BP 7.60) ○ Yes  No Conditions and Legal Covenants: Description of Covenant Date Due Formal notification acceptable to the World Bank that the Recipient has duly entered into the Grant Agreement and its terms By Grant Effectiveness and conditions are fully valid and binding and all the necessary internal procedures have been completed by the Recipient Yearly audit report and management letter for the project sent to Within six months after the end of the Bank each fiscal year (or any other period agreed upon between the Recipient and World Bank). The Recipient/NARSS shall not use the WISP Tools and Ongoing Implementation Ancillary Equipment to further the Recipient‟s or NARSS own interests to the detriment of another country that is a member of the World Bank. vi The Recipient/NARSS, shall ensure that following installation of Ongoing Implementation the WISP Tools, the WISP Tools remain fully functioning and operational throughout the life of the Project. vii I. Strategic Context A. Regional Context 1. The scarcity of freshwater in most countries of the Middle East and North Africa (MENA) region is an increasingly acute problem, particularly as populations grow, rapid urbanization continues and the pressure to shift water from agriculture (which consumes over 84% of the region‟s water resources on average) to domestic and industrial uses increases. Fourteen of twenty MENA nations are classified as being in water deficit, defined as less than 500 m 3 of renewable water supply per capita per year. The Intergovernmental Panel on Climate Change further reports an expected precipitation decrease over the next century by over 20% for large parts of the MENA region, a likely increase in the frequency and severity of droughts and a reduction in groundwater recharge rates. 2. Furthermore, over 60% of the MENA region‟s water supply flows across international borders which further engenders political tensions between communities, stakeholders and countries and therefore necessitates equitable appropriation of available water among riparians. This underlines the need for regional cooperation in the Arab world‟s water resource management. 3. Quantitative measurements of the location, availability, quality and current/future uses of local and regional water resources are critical for sound decision making and management. To date however, the high cost of in-situ data collection and analysis, the lack of data management systems and the non-standardized methods and protocols for data collection, management and validation across MENA have obstructed the development and effective use of reliable local and regional water information systems. 4. Modern advances in technology (including geographic information systems, data assimilation, and modeling techniques among others) and space based remote sensing techniques now enable the routine collection of accurate water data. Data collected in this manner can provide measurements over areas where no data have otherwise been available and at greatly reduced costs as compared to traditional methods. Such data can also easily be turned into valuable information through maps and graphs that allow stakeholders and water managers to make better, more informed decisions for water management and planning. B. Sectoral and Institutional Context 5. Water data collection, in Egypt and the MENA Region, has traditionally been made through in situ (i.e. in place) measurements of the major fluxes and storages (rain, stream flow, groundwater, snow, reservoir capacity etc). In-situ datasets however tend to be unreliable or incomplete due to the cost of collection, temporal and spatial variability. Stakeholders in the water, agriculture, planning and other sectors thus have limited access to reliable real-time information on important issues including water availability, evapotranspiration, agricultural water consumption and the impact of climate change on water resources. 1 6. A number of Water Information System Platform (WISP) tools have been developed by commercial entities, academic centers and institutions1 and are able to significantly enhance the frequency, relevance, consistency and application of water data collection. WISP tools, which include remote sensing equipment (such as satellite receiving stations, digital map analysis software and others), land surface models and land data assimilation systems, can operate without relying on ground based data and thus are not limited by human and technical resources, geographic constraints and political boundaries. Ground based data that does exist should be used to validate the remotely-sensed data and will improve the results. The validation step is critical to convince users that the data produced by the tools can be used with a high degree of confidence. 7. These tools have been successfully used across the United States, parts of Africa and South America in drought and flood management, groundwater flux and evapotranspiration mapping, and in monitoring the impacts of climate change on hydrological environments. Specifically, WISP tools enable: (i) significant improvements in water managers‟ ability to monitor changes in water availability, including surface and groundwater storage, river runoff, and related land use changes retrospectively and in near real-time; (ii) improved prediction of regional hydrological impacts of climate change scenarios; and (iii) the creation of a forum for cooperation and data sharing among nations including coordinated management of transboundary water resources, estimation of recharge rates of oversubscribed shared aquifers, and optimization of the response to droughts and floods among other advantages. 8. Under this project, various WISP tools will be transferred to and implemented in the National Authority for Remote Sensing and Space Sciences (NARSS) in Egypt who will in turn work directly with relevant line ministries (including the Ministry of Water Resources and Irrigation, Ministry of Agriculture and Ministry of Environment among others) to ensure that the data and methodology is transferred to these entities for improved water resources and agricultural management. 9. The WISP toolbox and associated technical assistance to NARSS will be custom configured to optimize local capacity in addressing high priority water resource needs. WISP tools will also be tailored to adapt to existing remote sensing infrastructure and staff capacities within NARSS to ensure complementarity to existing systems and sustainability in the long term. A detailed description of the various WISP tools and the local applications of priority in Egypt is provided in Annex 2. 10. To catalyze the regional dissemination of water data and enhance international communication and cooperation among implementing agencies and stakeholder ministries, the Arab Water Council, through its project grant (currently under implementation under Phase I of the Program), will: (i) finance regional dissemination workshops among implementing agencies; (ii) publish yearly summary reports on the impact of climate change on regional water resources; and (iii) liaise between the implementing agencies and international and regional experts in remote sensing and associated fields. The Arab Water Council, an established partner of the Arab 1 Examples include the National Aeronautics and Space Administration (NASA), the Goddard Space Flight Center (GSFC), National Oceanic and Atmospheric Administration (NOAA), US Department of Agriculture, University of Wisconsin-Madison and others. 2 League‟s Ministerial Council for Water and other regional institutions across MENA and a regional non-profit organization operating under its constitution effective December 17, 2009 and its by-laws and presidential decision number 157 dated 2009 of the Arab Republic of Egypt, will play an important role in enabling effective cooperation among regional partners and in ensuring that regional opportunities for improved water resources management are effectively captured, documented and communicated to regional stakeholders. C. Higher Level Objectives to which the Program and Project Contributes 11. The GEF Global Objective of the proposed project is to better manage local and regional water resources and reduce the threat of land degradation and climate change to vulnerable agricultural production systems and water resources in and across the project areas while developing options to address land-based pollution affecting the Mediterranean Sea. The project is in line with both (i) the long-term objective of the GEF‟s International Waters Focal Area: “to foster international, multi-state cooperation on priority water concerns� and (ii) with GEF‟s Strategic Program for International Waters “to balance overuse and conflicting uses of water resources in surface and groundwater basins that are transboundary in nature�. 12. The proposed program is consistent with the national priorities of Egypt to improve the sustainability of water resources management. The program forms part of the World Bank Arab World Initiative (AWI), which emphasizes cooperative regional solutions to major challenges such as water resource management, food security and climate change nexus. Indeed, it is the first regional cooperation project which was presented, in May 2011, to the Board under AWI. Finally, the proposed project is fully consistent with the World Bank “Water Resources Sector Strategy – Sustaining Water for All in a Changing Climate�, particularly in improving client countries‟ access to technologies to increase the availability and dissemination of information for results-based decision making. 13. The rationale for Bank involvement in the program lies primarily in its ability to apply innovative solutions to development challenges in the water sector by collaborating with renowned specialist technical institutions - such as NASA and top academic institutions in the field of remote sensing and hydrology. By mobilizing the international and regional expertise required to operationalize various WISP tools and validate output data on water availability, agricultural trends and climate change impacts among others, the World Bank will assist Egypt in identifying scale-up opportunities for the improved management of water resources. The Bank is furthermore already extensively involved in several of Egypt‟s water resources management- related research, projects and reforms. The proposed project, through the Bank‟s convening power and established relationships with MENA countries, will thus compound the positive development impacts of existing and ongoing initiatives in the water sector across MENA. 3 II. Program Development Objectives A. PDO 14. The proposed program development objective is to improve water resources and agricultural management and planning within and across beneficiary countries, based on quantitative and spatial-based decision making tools. 15. The beneficiary countries of this program will be: Hashemite Kingdom of Jordan, Kingdom of Morocco, Lebanese Republic, and the Republic of Tunisia in Phase 1 (currently under implementation) and the Arab Republic of Egypt in Phase 2. B. Beneficiaries 16. The direct beneficiaries of the proposed program are the local and regional remote sensing institutions and the ministries of water, irrigation, agriculture and planning, regional water stakeholders, local farmers and the citizens of each of Lebanon, Jordan, Egypt, Tunisia and Morocco which will benefit from improved access to real-time drought and flood monitoring outputs, improved crop yield and local and regional groundwater estimates among others. C. Project Development Objectives 17. The project development objective (APL2) is to improve water resources and agricultural management and planning in and across Egypt, based on quantitative and spatial-based decision making tools. It has the same development objective, beneficiaries and PDO level results indicators as the program, however they specifically pertain to Egypt, as opposed to the development objectives of APL1 which pertain specifically to Lebanon, Jordan, Morocco, the AWC and CRTEAN. D. PDO Level Results Indicators 18. Achievement of the development objective will be assessed through the following key performance indicators:  WISP operational within NARSS  Number of major water resources decisions made taking into consideration WISP tools.  Regional project data portal developed and operational (according to GEF International Waters (IW):LEARN guidelines). 19. Egypt will benefit from the expected project outcome of enhanced capacity in remote sensing and will be able to better:  Compile past and current water conditions to inform improved water policy decisions;  Generate maps of soil wetness and estimates of irrigation water use for large scale agricultural productivity assessments and planning; 4  Provide water balance data for a regional and temporal perspective to identify local, short term and long term trends in water usage anomalies;  Monitor extent and severity of droughts;  Estimate current water storage conditions in the uplands of river basins to improve river flow predictions and;  Evaluate potential increases/decreases in irrigation water requirements under various climate change scenarios to inform the planning of agricultural policies. III. Program and Project Description A. Program and Project components 20. The Regional Coordination on Improved Water Resources Management and Capacity Building Program consists of three components described below. These components are currently being implemented under Phase 1 (APL1) in each of Lebanon, Jordan, Morocco, AWC and CRTEAN. Under Phase 2 of the Program (APL2), the same three components will also be implemented in Egypt. Component 1: Improved Local Water Resources and Agricultural Management (US$ 3.61 million) 21. Component 1 will comprise: (a) the purchase, installation and validation of various WISP tools and other ancillary equipment; and (b) Support to NARSS and selected stakeholder ministries, agencies or institutions on the application of WISP Tools to selected research issues on topics such as local and regional water resources, agricultural and environmental management. Ancillary equipment includes computers, printers, scanners, applicable software, weather stations, other pertinent in situ measurements of the water balance and short time intensive field data collection programs and equipment required for the full functioning of the WISP tools. Applications priorities in Egypt as described in Annex 2. Component 2: Capacity Building and Project Management (US$ 1.64 million) 22. Component 2 will comprise: (a) Capacity building to the Recipient, NARSS and selected stakeholder ministries, agencies or institutions on implementation of the WISP Tools (b) Carrying out of training activities and workshops for knowledge sharing with stakeholders ; (c) Financing of NARSS’ and other selected stakeholders’ staff’s participation in international conferences and study tours on environmental remote sensing; (d) Support for the establishment of a national online portal for sharing and dissemination of data arising from the use of the WISP Tools; (e) Project management support to NARSS, including Incremental Operating Costs; and (f) Financing of Fellowship Grants. APL1 currently covers activities under Components 1 and 2 for each of Lebanon, Jordan, Morocco and CRTEAN. APL2 will cover the same activities under Components 1 and 2 for Egypt. Component 3: Regional Integration and Cooperation (US$ 394,545) 23. Component 3 comprises: (a) Financing of workshops organized by AWC for knowledge sharing with regional stakeholders; (b) Development by AWC of an online portal to share local 5 and regional results arising from the use of the WISP Tools; and (c) Support to AWC for the preparation of regional reports on applications of regional significance including the use of data provided by Beneficiary Countries or Local Implementing Entities under the Project. These applications are expected to include estimating the recharge rates of regional oversubscribed shared aquifers, optimizing the response to droughts and floods on a regional scale, and encouraging a more coordinated approach to management of transboundary water resources among others. B. Project Financing Grant Instrument 24. The Grant instrument is a GEF Grant (designed along the guidelines of a horizontal Adaptable Program Loan APL) in the amount of US$5.644 million which will be divided into six individual grants. The GEF Grant is from the Sustainable Mediterranean Program. The Grant to the Arab Republic of Egypt, under Phase 2 of the Program (APL2) is for a total of US$1,050,000. 25. Following on the highly successful Mediterranean Environmental Technical Assistance Program (METAP) over the past 20 years, and in cooperation with beneficiary countries and relevant partners, the World Bank and the GEF have established a comprehensive new framework program – the Environmental Mediterranean Sustainable Development Program, “Sustainable MED� – to deal with issues related to natural resources, land degradation, solid and hazardous waste, and climate change. Sustainable MED is a natural follow-up program to METAP, although it is only a framework, and not a project/program to be submitted to the Bank‟s Board. This new program will facilitate mainstreaming environmental issues in the economic development agenda of Mediterranean countries, following a shared common vision. 26. Sustainable MED is intended to leverage additional investments towards priority hotspots in the Mediterranean and will expand its scope to respond to the evolving landscape of environmental challenges in the region. In its first phase, Sustainable MED will comprise ten projects, including the Regional Coordination for Improved Water Resources Management project. It will prioritize projects with a high potential for replication and scale up. Project Financing Table 27. Under APL-1, four Grants, each totaling US$1,050,000, were granted to each of Lebanon, Jordan, CRTEAN (for the benefit of Tunisia) and Morocco to finance goods and related installation services, consulting services, training, operating costs, workshops and scholarships under Components 1 and 2. An additional fifth Grant of US$394,545 was granted to the Arab Water Council to finance goods, consulting services, training, workshops and operating costs under Component 3 (see Table 2 below). 28. Under APL-2, an additional Grant of US$1,050,000 will be granted to Egypt to implement activities under Components 1 and 2 listed above. 6 IV. Implementation A. Institutional and Implementation Arrangements 29. The Implementing Agencies are listed in Table 1 below. Table 1: Implementing Agencies Implementing Agency APL 1 Lebanon Conseil National de la Recherche Scientifique Jordan Ministry of Water and Irrigation Morocco Centre Royal de Télédétection Spatiale For the benefit of Tunisia Centre Régional de Télédétection des Etats d‟Afrique du Nord Regional Integration Arab Water Council APL 2 Egypt National Authority for Remote Sensing and Space Sciences 30. Within NARSS, a project management unit (PMU) has been established to: (i) manage the technical and fiduciary aspects of project implementation under Components 1 and 2; (ii) monitor and report on project outputs; (iii) coordinate with national stakeholders and; (iv) liaise with the Arab Water Council on the implementation of regional activities under Component 3. The PMU comprises a project coordinator, a procurement specialist and a financial management specialist. The PMU will carry out the Project in accordance with the Project Operations Manual which was adopted prior to negotiations. 31. As an established regional institution with proven capacity in gathering regional and international stakeholders within the water sector, the Arab Water Council is the implementing agency responsible for the implementation of Component 3. As an established partner of various leading water institutions across MENA, AWC is playing an important role in catalyzing knowledge sharing and cooperation. 32. Under APL1, the Arab Water Council has established a Regional Project Management Unit (RPMU) composed of one procurement specialist and one financial management specialist, a communications specialist and a project coordinator. The RPMU is responsible for: (i) organizing yearly regional workshops; (ii) coordinating the implementation of regional applications of WISP tools; (iii) compiling a yearly regional report on local and regional research results; and (iv) liaise with individual PMUs on implementation of regional activities. The RPMU will also establish a Technical Advisory Committee (TAC) for review and guidance of the technical aspects of the projects. TAC will comprise: (i) a representative from NASA or associated partners; (ii) representatives from each participating country and (iii) representatives from local centers of expertise, such as the International Center for Agricultural Research in Dry Areas (ICARDA), International Center for Biosaline Agriculture (ICBA), or others as deemed appropriate. 7 Table 2: Program Costs (US$) by Country and Component APL-1 APL-2 Components Activities Lebanon Morocco Jordan CRTEAN Egypt Hardware, software and data to include MODIS Receiving station, field Goods, Equipment and Component 1: equipment, IT 510,000 500,000 540,000 670,000 545,000 related installation services Improved Local Water upgrades, software Resources and licenses, peripheral Agricultural equipment, laboratory Management equipment and others Technical Assistance and training for the Consultants 100,000 305,000 140,000 100,000 200,000 implementation of WISP applications Subtotal 610,000 805,000 680,000 770,000 745,000 TOTAL Component 1 3,610,000 Publications, local workshops, travel, Component 2: Capacity conference Goods and Consultants 440,000 245,000 370,000 280,000 255,000 Building and Project registration, online Management portal, scholarships among others Incremental Costs 50,000 Subtotal 440,000 245,000 370,000 280,000 305,000 TOTAL Component 2 1,640,000 TOTAL GRANT PER COUNTRY 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000 PMU operating costs, publications, regional workshops, translation, Equipment/Goods 250,545 printing, travel, conference costs, room rental and other costs Component 3: Regional Integration and Regional publication Cooperation on impact of climate change on regional water resources, Consultants 144,000 regional online data sharing portal, PMU consultants among others Total Component 3 394,545 Project TOTAL 5,644,545 8 B. Results Monitoring and Evaluation 33. Each PMU will collect and present data and reports for bi-yearly review and compilation by the RPMU in conjunction with World Bank supervision missions, as per the results indicator matrix in Annex I. Technical discussions during supervision missions will also provide an especially effective means of monitoring progress. The progress reports will be published by RPMU on its website, and will be accessible to managers and decision makers. C. Sustainability 34. Sustainability of the proposed project will ultimately be determined by the established use of WISP tools for improved water resources management to inform infrastructure investment and impact policy reforms within the water sector. WISP tools will access and utilize remotely sensed data that is freely available in the public domain. By successfully demonstrating the capacity and relevance of WISP tools on various local and regional research applications and by linking to end-use stakeholders (Ministries of water, environment, urban planning, agriculture etc.), NARSS will establish sustainable relationships between science applications, investment and policy. The extensive training, capacity building and data dissemination included in the project will play an important role in building the capacity of NARSS to this effect. 35. On a regional scale, project sustainability will largely be determined by the extent to which MENA countries adopt the methods and protocols for water data collection, measurement and management. To this effect, and by implementing the various WISP tools envisaged under the project, each implementing agency will utilize a common platform of satellite data. By maintaining (either through recruitment or training) a roster of highly qualified hydraulic modelers, earth scientists and remote sensing experts, it is likely that sharing scientific data on water across the MENA region for a common positive outcome will also become more accepted. V. Key Risks 36. The project risks, which mostly center on anticipated unfamiliarity with WISP tools as well as Bank procurement and financial management standards, will be mitigated by the extensive capacity building anticipated under the project. The overall project risks are rated Medium - Low Impact, and are considered manageable with mitigation measures in place. Potential risks and mitigation measures are summarized in the Operational Risk Assessment Framework (see Annex 4). 37. Other project risks include slow cooperation among the various stakeholders in sharing hydrological information. This risk will be mitigated by close Bank supervision, organizing regular progress workshops to national and regional water stakeholders and by providing frequent opportunities for knowledge sharing and exchange in an environment of technical and scientific rigour. 9 VI. Appraisal Summary A. Economic Analysis 38. The Project is not amenable to a cost-benefit analysis, or financial analysis. The design of the Project however, has been based on the principle of cost-effectiveness through: (a) collaboration with NASA, which will provide the open source software as relevant, in addition to technical assistance and capacity support to the various implementing agencies through parallel grant financing by USAID; and (b) the co-financing commitments made by Egypt which are a measure of the direct impact on the water sector as a result of the activities under the proposed project. B. Technical 39. WISP tools to be implemented under the project include already established remote sensing techniques, digital image analysis tools, land surface models, and the land data assimilation system (LDAS) or other relevant software developed and widely used by NASA and its partners. 40. LDAS is designed to provide estimates of rainfall, runoff, soil moisture, evapotranspiration etc, at a variety of time and space scales (from 25 km to 1 km and 6 hours to 1 hour) and merges state of the art tools to operationally obtain high quality land surface storages and fluxes. The LDAS tool is thus particularly relevant to the MENA region which is characterized by a lack of traditional water balance data, high temporal and spatial variability in precipitation, large aquifers and intensive irrigation. Furthermore, LDAS is able to incorporate in-situ data traditionally collected by local and regional water institutions. 41. The project has been developed in coordination with NASA scientists and affiliated academic partners. NASA intends to make available the open-source LDAS and to provide technical assistance to select project beneficiaries. NASA will finance the costs of its staff and the technical assistance it proposes. NASA has furthermore entered into an agreement with USAID to finance additional NASA-staff costs. 42. The Bank, under the proposed GEF Grants of the Sustainable Mediterranean Program, will finance all hardware and software requirements associated with the WISP tools, validation data and equipment as well as capacity building and training activities required for the full and sustainable operation of all WISP tools. The NASA satellite data required for the applications of water resources and agricultural management (such as MODIS data for example) is also available free of charge. Any other WISP tools such as drought monitoring, flash flood warning systems, land use/land cover mapping and evapotranspiration loss measurements among others will be procured under Grant financing and implemented in recipient countries. The GEF Grants will also fund regional integration and cooperation activities including yearly workshops, an online portal, and an annual regional report. 10 43. LDAS software is not essential to be provided by NASA in order for the project to reach a successful project outcome and therefore the project is not dependent on NASA‟s co-operation. Project implementation would not be irrevocably impacted should NASA‟s involvement be limited or end. This is because (i) independent qualified consultants (with direct LDAS experience) are capable of providing technical assistance to client countries; (ii) all countries will procure commercially available WISP tools. Rather, provision of LDAS software and related technical assistance by NASA would be an enhancement to the GEF project. C. Financial Management 44. A financial management assessment was undertaken for NARSS. The assessment identified a lack of experience with World Bank financial management standards as a risk. This risk will be mitigated by providing targeted capacity building on Bank standards, close monitoring and supervision, and the recruitment of FM specialists to the PMU. D. Procurement 45. A procurement assessment was undertaken for NARSS and identified implementing agencies‟ lack of experience with World Bank requirements as a significant risk. This risk will be mitigated by providing targeted capacity building on Bank requirements, close monitoring and supervision, and the recruitment of a procurement specialist to the PMU. 46. Procurement for the proposed Project will be carried out in accordance with the World Bank‟s “Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits and Grants� by World Bank Borrowers published by the World Bank in January 2011 in the case of goods and non-consulting services, and Sections I and IV of the “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers� published by the World Bank in January 2011 (“Consultant Guidelines�) in the case of consultants‟ services. 47. For each contract, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame have been agreed between NARSS and the Bank in the Procurement Plan available in project files. E. Environment and Social 48. The project has been classified as Category C. O.P 4.12 is not triggered and no project Environmental Impact Assessment (EIA) is required. The project does not involve any physical works, will not have any adverse environmental impacts and does not involve any land acquisition or resettlement. When completed, the project will have significant positive social benefits, particularly for local farmers who depend on reliable water data in irrigation management, drought prevention and crop yield estimates. 11 Annex 1: Results Framework and Monitoring Project Development Objective (PDO): The proposed project development objective is to improve water resources and agricultural management and planning within and across Egypt, based on quantitative and spatial-based decision making tools. Cumulative Target Values** Description Responsibility Core PDO Level Results Unit of Data Source/ (indicator Baseline Frequency Methodology for Data Indicators* Measure YR 1 YR 2 YR3 YR 4 YR5 definition Collection etc.) WISP operational within Number of Technical NARSS WISP 0 0 1 2 2 2 Bi-yearly Qrtly PMU specifications systems met operating Number of major water resources decisions made in at Number of least 3 of 4 beneficiary major countries on improved decisions agricultural and land use made 0 0 1 2 3 4 Bi-yearly Qrtly PMU management taking into consideration outputs of WISP tools. Regional project data portal IW Learn developed and operational in Project Guidelines all countries (according to portal in 0 0 1 1 1 1 Bi-yearly Qrtly RPMU applied, IW:LEARN guidelines operation Number of hits to the website INTERMEDIATE RESULTS Intermediate Result (Component One): Improved Local Water Resources and Agricultural Management WISP Hardware Purchased No. of Technical and Installed hardware 0 0 1 2 2 2 Bi-yearly Qrtly PMU specifications installed met Number of remote sensing and No. of stakeholder staff trained on staff use of WISP tools trained 0 3 6 9 12 15 Bi-yearly Qrtly PMU 12 Intermediate Result (Component Two): Capacity Building and Project Management Scholarships for advanced No. of As per study in environmental scholars selection science, remote sensing selected 0 0 2 4 4 4 Bi-yearly Qrtly PMU criteria set out techniques and/or other related in POM subjects selected.. Local stakeholder workshops No. of held. workshops 0 1 2 3 5 6 Bi-yearly Qrtly PMU held Intermediate Result (Component Three): Regional Integration and Cooperation Number of Regional No. of Workshops held. workshops 0 1 2 3 4 5 Bi-yearly Qrtly RPMU held Number of Regional Reports No. of on Impact of Climate Change Regional 0 0 1 2 3 4 Bi-yearly Qrtly RPMU on Regional Water Resources Reports Published. 13 Annex 2: Detailed Project Description Description of Components Component 1: Improved Local Water Resources Management 1. Component 1 will comprise: (a) the purchase, installation and validation of various WISP tools and other ancillary equipment in NARSS; and (b) the application of WISP tools to pertinent research issues in local and regional water resources management. Ancillary equipment includes satellite receiving stations, data servers, data storage, laboratory equipment, high resolution and meteorological data, computers, printers, scanners, applicable software and related licenses, field equipment, weather stations, other pertinent in situ measurements of the water balance and short time intensive field data collection programs, as well as, equipment required for the full functioning of WISP Tools. 2. Local application priorities identified by NARSS under Component 1 include the identification of drought and flood prone areas, estimation of evapotranspiration, monitoring climate change impacts, and crop yield estimates to inform agriculture and irrigation management decisions, as described below:  Drought management. Rainfall deficits across MENA will have different impacts depending upon meteorological conditions, ecosystem type, and social and economic circumstances. Remote sensing with modeling products provides significant enhancements in terms of spatial and temporal coverage in comparison to traditional ground-based measurement networks. These products include vegetation indices, surface drought wetness products and aquifer levels. WISP tools and data will be used to: (a) identify areas vulnerable to drought; (b) document historic trends; (c) enhance drought forecasting capacity; and (d) identify and institute alert systems to manage most vulnerable areas and provide improved desertification monitoring.  Estimation of evapotranspiration. WISP tools and data will be used to: (a) identify and monitor irrigated areas by determining the difference in evapotranspiration between irrigated and non irrigated land; (b) develop a distribution of hydrological parameters such as evaporative fraction, actual evapotranspiration; (c) develop optimized land cover/land use maps; and (d) develop regional evapotranspiration mapping to provide evapotranspiration estimate in the water balance component.  Monitoring climate change impacts. WISP tools and data will be used to: (a) identify historic mean annual temperature and rainfall, and track historic fluctuations in temperature and precipitation; (b) identify supported trends, strengthen forecasting models and predict the regional hydrological impacts of climate change scenarios and (c) monitor regional precipitation distribution to provide early warning services using real time high resolution satellite based precipitation observation techniques and online mapping services. 14  Flood management. WISP tools and data will be used to (a) identify areas vulnerable to floods and document historic trends; and (b) enhance flood forecasting capacity, identify and institute alert systems to manage the most vulnerable areas, and provide improved desertification monitoring.  Agriculture/Irrigation. WISP tools and data will be used to (a) identify agricultural components (spatial crop distribution, production rate, water demand), agricultural water consumption, and changes in vegetation; and (b) generate detailed maps of soil moisture and vegetation to estimate water use for irrigation and maps of irrigated lands to monitor irrigation intensity and identify crop types in the MENA region‟s croplands. 3. The unique characteristic of LDAS is data assimilation, which enables models to use data from a variety of sources, spatial and temporal scales and accuracies to arrive at optimal estimates of model variables and states. Data assimilation is a numerical method by which two independent estimates of a variable can be combined to determine a best estimate, which is less uncertain than either of the two inputs. In this case, the variable is a land surface state such as soil moisture. One estimate comes from the land surface model and the other from a satellite observation. The error characteristics of each are used to weight their contributions to the final estimate. 4. Land surface models are not empirical, and simulations conserve both mass and energy. They can run in coupled (to an atmospheric model) or uncoupled (land only) mode. Initial LDAS models will be run in uncoupled mode, with no forecasting capability. In other words, they can run up to near real time, depending on the availability of the necessary observation- based input forcing data. One way in which the uncoupled LDAS can be run in a predictive mode is to use atmospheric forecasts, such as downscaled climate model scenarios, as forcing input. 5. LDAS can be configured to best suit the needs of a user and the nuances of a particular region. One can define the extent and spatial resolution of LDAS, from resolutions on the order of tens of meters to hundreds of kilometers, though the resolution should not be finer than the finest scale input dataset. The time period is only limited by that of the input forcing datasets. Given synthetic forcing datasets, such as those produced by climate models simulating various climate change scenarios, LDAS could help plan possible water resource adaptations for practices such as irrigation scheduling and reservoir management. Component 2: Capacity Building and Project Management 6. Component 2 will comprise: (a) capacity building (workshops and consultants) to implement WISP tools; (b) local workshops to share results with local stakeholders; (c) participation in international conferences and study tour on environmental remote sensing; (d) funding graduate fellowships; (e) development of a national online portal to share data across stakeholder institutions; and (f) project management of the Grant. 15 7. Graduate fellowships will finance tuition and living expenses of competitively selected graduate candidates to study environmental remote sensing and related academic subjects at local and international graduate institutions. Component 3: Regional Integration and Cooperation 8. Component 3 comprises: (a) organization of quarterly workshops to share results with regional stakeholders; (b) development of an online portal to share regional results; (c) generation of an annual regional report on applications of regional significance. These applications include estimating the recharge rates of regional oversubscribed shared aquifers, optimizing response to droughts and floods on a regional scale, and encouraging a more coordinated approach to management of transboundary water resources. 9. Detailed description of project activities in Egypt  Assess the Impacts of Climatic Change on Water Resources LDAS or other relevant software based WISP tools and data will be used to define a baseline of historic mean annual temperature and rainfall, and track historic fluctuations in temperature and precipitation. Egyptian LDAS or other relevant software will provide a framework to project the impact of climate change scenarios of the region‟s water resources. Downscaled precipitation and temperature fields of scenarios taken from climate model projections will be used drive LDAS or other relevant software to provide estimates of the climate change impacts on Egypt‟s future water resources. Results of these model simulations will identify those regions within the country that are projected to be most vulnerable to the impacts of climate change as well as indicate the relative impacts.  Monitor the Spatial and the Temporal Characteristics of Drought Events Rainfall deficits across Egypt and its immediate region will have different impacts depending upon meteorological conditions, soils, crop type, and social and economic circumstances. Drought monitoring based on in situ measurements is very difficult because of the large spatial variability of land cover, soils and micro climates. Remote sensing offers new capabilities for monitoring drought, both from direct sensing and from satellite developed products. These products include several types of vegetation indices and surface wetness products. WISP tools and data will be used to: (a) identify areas vulnerable to drought; (b) document historic trends; (c) enhance drought forecasting capacity; and (d) identify and institute alert systems for damage mitigation in the most vulnerable areas and provide improved desertification monitoring.  Assess the evaporation rates of Lake Nasser Lake Nasser is a large reservoir on the Nile River that provides water supply for major population centers, industry and intensive irrigated agriculture. Because of the reservoir‟s size, there is a wide distribution of surface temperatures across the surface. These are the results of wind initiated upwelling and seasonal inflows from the Nile. Accurate estimation of evaporation losses from its surface is important for managing reservoir releases and long term planning. Daily MODIS thermal measurements of the surface temperatures will provide important data on the spatial distribution of water temperatures. When combined with surface air temperatures, 16 humidity and winds from mesoscale atmospheric forecast models, real time calculations of the evaporation losses will be possible.  Propose Water Management Strategies for Supporting the Agricultural Activities in the Egyptian Landscapes Accurate and timely information on crop type and irrigation extent in Egypt is fundamental to many aspects of water resources management. Recently, NASA has developed algorithms to identify and map major crop types and agricultural management practices, including irrigation, directly from satellite remote sensing. To identify individual crop types, this procedure relies on the temporal information afforded by MODIS sensor data. To accomplish this, a simple irrigation water requirements/use estimation algorithm is implemented within the LDAS or other relevant software framework. The irrigation algorithm combines the satellite-based extent of crop type and irrigation and ancillary information on agricultural practices (the type, timing, and efficiency of irrigation to be provided by the regional experts) to determine irrigation water requirements/use. The results from this effort will provide digital datasets on an annual basis for: (a) total area of croplands; (b) planted area of major crops; and (c) extent of irrigation for each crop type. 17 Annex 3: Implementation Arrangements A. Project Administration Mechanisms Project implementation and institutional arrangements 1. The Implementing Agencies and the respective project components to be implemented by each are listed in Table 1 below. Table 1: Implementing Agencies Implementing Agency Components 1 &2 Component 3 APL 1 Conseil National de la Recherche Lebanon Scientifique √ Jordan Ministry of Water and Irrigation √ Morocco Centre Royal de Télédétection Spatiale √ For the benefit of Centre Régional de Télédétection des √ Tunisia Etats d‟Afrique du Nord Regional Arab Water Council Integration √ APL 2 National Authority for Remote Sensing Egypt √ and Space Sciences 2. Within each implementing agency under APL1, a project management unit (PMU) has been established to: (i) manage the technical and fiduciary aspects of project implementation under Components 1 and 2; (ii) monitor and report on project outputs; (iii) coordinate with national stakeholders and; (iv) liaise with the Arab Water Council (AWC) on the implementation of regional activities under Component 3. The PMU in each implementing agency comprises a project coordinator, procurement specialist and a financial management specialist. Under APL2, NARSS has also established a PMU. 3. AWC is the implementing agency responsible for the implementation of Component 3. AWC has established a Regional Project Management Unit (RPMU) which is responsible for; (i) organizing yearly regional workshops; (ii) coordinating the implementation of regional applications of WISP tools; (iii) compiling a yearly regional report on local and regional research results. The RPMU is composed of one procurement and one financial management specialist, a communications specialist and a project coordinator. 4. The RPMU will establish a Technical Advisory Committee (TAC) for review and guidance of the technical aspects of Components 1 and 2 of the project. TAC will comprise: (i) a NASA representative; (ii) representatives from each participating country; and (iii) representatives from local centers of expertise, such as the International Center for Agricultural Research in Dry Areas (ICARDA), the International Center for Biosaline Agriculture (ICBA) or others as deemed appropriate. 18 5. A Project Operation Manual (POM) will cover topics including project implementation arrangements, including inter-agency roles and responsibilities, procurement, disbursement and financial management procedures, and the rules and procedures relating to the scholarship/fellowship program. 6. The Grant implementation arrangements are summarized in Figure 1 below: APL-1 APL-2 Lebanon Jordan CRTEAN Morocco Egypt PMU PMU PMU PMU PMU Local inputs to regional Documents Participation in regional workshops AWC RPMU and TAC Figure 1: Grant Implementation Arrangements B. Financial Management, Disbursements and Procurement Financial Management 7. Financial management assessments were conducted for NARSS in accordance with the Financial Management Manual for World Bank-Financed Investment Operations dated March 1, 2010 and MNAFM Financial Management Assessment and Risk Rating Principles. The assessment concluded that the financial management arrangements meet the Bank‟s minimum requirements under OP/BP10.02. The overall residual risk rating is moderate for NARSS. The project will thus have on-field supervision twice a year. The financial management action plan outlines the mitigating measures, which, if implemented, would strengthen the financial management arrangements. 8. Budgeting arrangements NARSS: NARSS has limited budgeting capacity especially for cash flow management. Therefore, the PMU will be responsible for preparing the budget of the grant. The required funds and projected disbursements will be revised on a semi-annual basis. 9. Accounting arrangements NARSS: NARSS adopts the cash basis of accounting and depends mainly on manual bookkeeping in addition to the use of excel spreadsheets for reporting. Separate records will be opened to record Grant transactions in the manual accounting system and the Excel database will 19 include a template for the IFRs required under the Grant agreement. All supporting documents will be kept separately within the NARSS finance department. 10. Internal control. For NARSS, internal control weaknesses were noted during the FM assessment which may affect proper segregation of duties and efficient management of the grant funds. To mitigate these weaknesses it was agreed with the NARSS General Manager of Financial Affairs that the following measures will be carried out i) separate filing will be made for the TF proceeds and expenditures supporting documents and all original supporting documents will be maintained in a traceable and organized manner by the TF accountant within the Finance Department, ii) A TF responsible accountant with acceptable experience and qualification has been assigned before effectiveness to handle the recording of the project FM transactions and ensure proper segregation of duties is maintained, iii) a financial manual has been prepared before effectiveness by the Financial and Administrative Manger depicting the controls that will be applied over the use of funds. 11. Funds flow and disbursement arrangements Flow of funds and disbursement and arrangements: The proceeds of the Grant will be disbursed in accordance with the traditional disbursement procedures of the Bank i.e., Advances, Direct Payment, Reimbursement, and Special Commitment, accompanied by appropriate supporting documentation (Summary Sheets with records and/or Statement of Expenditures (SOE‟s)) in accordance with the procedures described in the Disbursement Letter for each implementing agency and the Bank‟s “Disbursement Guidelines�. The minimum application size for direct payment, reimbursement and special commitment will be the equivalent of 20% of the Advance ceiling amount. There will be no retroactive financing and there are no disbursement conditions. The Bank will honor eligible expenditures for services rendered and goods delivered by the Project closing date. A four months' grace period will be granted to allow for the payment of any eligible expenditure incurred before the Grant closing date. Designated Account: The NARSS PMU will open a segregated Designated Account (DA) at the Central Bank, acceptable to the World Bank, denominated in US Dollars to cover the Grant‟s share of eligible project expenditures. The ceiling of the Designated Account would be 10% of the Grant. The PMU will be responsible for submitting monthly replenishment applications with appropriate supporting documentation. Statement of Expenditure: Necessary supporting documents will be sent to the Bank for contracts that are above the prior review threshold. Expenditures under contracts with an estimated value of: (a) US$100,000 or less for goods; (b) US$100,000 or less for consulting firms; (c) US$50,000 or less for individual consultants, as well as training, operating costs, workshops and scholarships, will be claimed on the basis of SOEs. The supporting documentation will be retained at the NARSS PMU and will be readily accessible for review by external auditors and by Bank supervision missions. All disbursements will be subject to the 20 conditions of the Grant Agreement, and the disbursement procedures defined in the Disbursement Letter. 12. Financial reporting arrangements. The NARSS PMU will prepare semi-annual un- audited IFRs for the project in form and content satisfactory to the Bank, which will be submitted to the Bank within 45 days after the end of the period to which they relate. The contents and format of the IFRs were discussed with the PMU. These reports, which are in compliance with the cash basis of accounting as per International Public Sector Accounting Standards (IPSAS), should include: (a) “Statement of Cash receipts and Payments by component and by category for the period covered and a cumulative figures�; and (b) accounting policies adopted and explanatory notes to PFS as follows:  Statement for expenditures made under SOE;  Statement of ongoing commitments; and  Statement of reconciliation of the Designated Account (DA)  Statement of Fixed assets. 13. Audits of Project Financial Statements. At the NARSS PMU level, an external auditor will be appointed according to term of references acceptable to the Bank and will conduct the audit in accordance with international auditing standards. The auditor should produce: (i) an annual audit report, including his opinion on the project annual financial statements; and (ii) a management letter on the project internal controls. These reports should be submitted to the World Bank within six months from the closure of each fiscal year. 14. The scope of World Bank supervision missions will be adapted to the needs of the project. Based on the on the FM performance rating of the project, supervisory frequency will be once to twice per year, though this may be increased if needed. Procurement 15. A procurement assessment was conducted for NARSS. The assessment concluded that the procurement arrangements meet the Bank‟s minimum requirements under OP/BP10.02. The overall residual risk rating is moderate for NARSS. The project will thus have on-field supervision twice a year. 16. Procurement for the proposed Project will be carried out in accordance with the World Bank‟s “Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits and Grants� by World Bank Borrowers published by the World Bank in January 2011 in the case of goods and non-consulting services, and Sections I and IV of the “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers� published by the World Bank in January 2011 (“Consultant Guidelines�) in the case of consultants‟ services. 17. Procurement of Goods. Goods procured under this project will include satellite receiving stations, data, field equipment, laboratory equipment, IT system upgrades, data storage and server equipment, and other related equipment using the Bank‟s SBD for all ICB packages and national SBDs acceptable to the Bank for NCBs. 21 18. Selection of Consultants includes: individuals and firms for technical assistance, editing, publishing and training, as specified under Component 1, 2 and 3. In addition, individual consultants will be selected to strengthen project implementation capacity. Short lists of consulting firms for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. The short lists should normally be composed of firms of similar experience or of not for profit organizations (NGOs, Universities, UN Agencies, etc.) acting in the same field of expertise. If mixing is used, the selection should be made using Quality Based Selection. The short lists shall not include Individual Consultants. 19. Procurement Plans and Procurement Arrangements. The Procurement Plan for the project, prepared by NARSS, has been reviewed by the Bank and accepted. This plan (available in project files) will be updated annually to reflect the latest circumstances. Environmental and Social Safeguards 20. As discussed in paragraph 48 of the main text above. Monitoring and Evaluation 21. As discussed in paragraph 33 of the main text above. 22 Annex 4 Operational Risk Assessment Framework (ORAF) ARAB REPUBLIC OF EGYPT REGIONAL COORDINATION ON IMPROVED WATER RESOURCES MANAGEMENT AND CAPACITY BUILDING Project Stakeholder Risks Rating S Description: Sensitivity of water data may preclude effective Risk Management: The World Bank will work with NARSS to develop and implement the POM in cooperation and data sharing even within local stakeholders. order to establish the nature and frequency of information exchanged. As a Cairo-based institution, the Arab Water Council (AWC) will also play an important role in (i) providing technical advice where appropriate/requested on various water issues and (ii) maintaining communication channels as appropriate. Resp: Client Stage: Impl. Due Date : Status: Ongoing Implementing Agency Risks Capacity Rating: S Description: NARSS may be unfamiliar with Bank procurement Risk Management: Support from the project, under Component 2, in the form of TA to build project and financial management standards. This could negatively impact management capacity, including in the areas of project management, procurement and financial project implementation due to the need for additional targeted management. training. Resp: Client Stage: Prep/Impl. Due Date : Status: Not Yet Due NARSS may not have the technical staff required to install and Risk Management: Component 2 will focus exclusively on building the capacity of implementing utilize the various WISP tools proposed under the project. This agencies in the collection and use of collected data. The Technical Advisory Committee will organize could adversely delay project implementation particularly over the frequent regional technical workshops and discussion forums to ensure capacity building. first year. Resp: Client Stage: Impl. Due Date : Status: Not Yet Due Governance Rating S Description: Various ministries and line institutions involved in Risk Management: The Bank team will work closely with NARSS to ensure that the national water resources and agricultural planning in Egypt may not workshops which are designed to bring together all project stakeholders are properly designed and collaborate and cooperate with NARSS in full and effective project implemented to ensure proper and effective project governance. The Bank team will further work implementation through effective data sharing of sensitive water closely with the Arab Water Council, in its role as the project regional coordinating unit, to ensure that data. stakeholder and community and end user engagement is ensured through the project. Resp: Client Stage: Impl. Due Date : Status: Ongoing 23 Project Risks Design Rating: L Description: Certain WISP tools have been successfully applied Risk Management: The NASA team has designed and developed WISP tools (the LDAS or other over large surface areas (across the entire mid-west US for relevant software) specifically adapted to the topology of Egypt and other MENA countries. example) and have not been tested as rigorously over smaller Furthermore, the capacity building workshops will focus specifically on ways in which to optimize the surface areas. These tools will need to be modified to be applicable use of WISP tools in local contexts. NASA staff and experts will provide this training and will assist over smaller surface areas. NARSS in tailoring the WISP tools to individual areas and climatic conditions. Resp: NASA Stage: Impl. Due Date : Status: Ongoing Social & Environmental Rating: L Description: An Environmental Management Plan (EMP) may Risk Management: The Bank team will monitor implementation closely and will reassess the need for be required to mitigate social and environmental risks. any environmental management plan if necessary. Resp: Client Stage: Impl. Due Date : Status: Not Yet Due Program & Donor Rating: M Risk Management : During project preparation, the Bank exchanged letter agreements with NASA clarifying the intention of both institutions to implement the project fully. Nonetheless, project Description: implementation would not be irrevocably impacted should NASA‟s involvement on the project be NASA‟s engagement (both in staff and resources) on the project limited or end. This is because (i) independent qualified consultants (with direct LDAS or other relevant may vary over the project implementation period. software experience) are capable of providing technical assistance to client countries; and (ii) Egypt will procure commercially available WISP tools. NASA involvement would be an enhancement rather than a necessity. Furthermore, all NASA satellite data is in the public domain and available free of charge on the internet. Resp: Client Stage: Prep/Impl. Due Date : Status: Ongoing Delivery Monitoring & Sustainability Rating: M Description: Risk of data collected using various WISP tools not Risk Management: The Bank team will monitor the technical aspects of implementation very closely being thoroughly validated for error prior to use as a baseline. This and will ensure that an expert with Earth observation expertise (from NASA or other as appropriate), could potentially lead to misinforming policy and infrastructure joins supervision missions as necessary and reviews technical progress reports submitted. Components 1 decisions with potentially negative impacts in the medium and and 2 will finance individual consultants and technical experts to assist NARSS with manipulating and short-term and associated reputational risk to both the World Bank, validating data collected under the newly installed WISP systems, thereby greatly reducing the margin NASA and all technical consultants involved in project for error. The project will also finance targeted regional workshops to build capacity on best practices implementation. for WISP use. Resp: Bank Stage: Impl. Due Date : Status: Not Yet Due Overall Risk Implementation Risk Rating: M Description: 24 Annex 5: Implementation Support Plan Strategy and Approach for Implementation Support 1. The strategy for implementation support has been developed based on the nature of the project and its risk profile. It will aim at making implementation support to NARSS more flexible and efficient, and will focus on implementation of the risk mitigation measures defined in the ORAF as well as the traditional supervision focus areas including fiduciary aspects. 2. Formal supervision and field visits will be carried out semi-annually, and will focus on: (a) Technical inputs. Technical inputs are required to review bid documents, monitor quality of data and reports generated by various WISP tools and ensure fair competition through proper technical specifications and fair assessment of the technical aspects of bids. Technical experts from NASA and affiliated institutions will participate in Bank supervision missions and provide technical assistance to NARSS as required. (b) Fiduciary requirements and inputs. Training will be provided by the Bank‟s financial management specialist and the procurement specialist before the commencement of project implementation. The team will support NARSS in their financial management capacity and to improve procurement management efficiency. The financial management specialist and the procurement specialist for each recipient country will be based in the Egypt country office to provide timely support. Supervision of financial management arrangements will be carried out semi-annually as part of the project supervision plan and support will be provided on a timely basis to respond to client needs. Procurement supervision will be carried out on a timely basis as required by the client. (c) Client Relations. The Task Team Leader will coordinate the Bank team to ensure project implementation is consistent with Bank requirements, as specified in the legal documents. S/he will meet with senior officials on a regular basis to keep them apprised of project progress and issues requiring resolution at their level. Implementation Support Plan 3. Staff skill mix required is summarized below. Skills Needed Number of Staff Weeks Number of Trips Comments Task Team Leader 2 SWs annually Two each year. Procurement Specialist 4 SWs annually Fields trips as required. Country office-based Financial Management 4 SWs annually Fields trips as required. Country office-based Specialist Technical Specialists 4 SWs annually Fields trips as required 25 Annex 6: Team Composition World Bank staff and consultants who worked on the project: Claire A. Kfouri Task Team Leader, Senior Water and Sanitation MNSWA Specialist Julie Rieger Counsel LEGEM Song Li Environmental Specialist MNSEN Hyacinth Brown Senior Finance Officer CTRFC Badr Kamel Senior Procurement Specialist MNAPR Wael Elshabrawy Financial Management Specialist MNAFM Heba Ahmed Operations Analyst MNSWA Georgine Seydi Language Program Assistant MNSSD Josephine Onwuemene Information Assistant MNSSD 26