PROGRAM INFORMATION DOCUMENT (PID) CONCEPT STAGE August 8, 2012 Report No.: AB7116 Operation Name Solid Waste Sector DPL3 Region MIDDLE EAST AND NORTH AFRICA Country Morocco Sector Solid waste management (100%) Operation ID P127955 Lending Instrument Development Policy Lending Borrower(s) MINISTRY OF ECONOMY AND FINANCE Implementing Agency OEF, MOI, SEEE Ministry of Economy and Finance Avenue Mohammed V Rabat Chellah Morocco Tel: (212-3) 5376-77501 Fax: (212-3) 5376-7527 internet@finances.gov.ma Date PID Prepared August 8, 2012 Estimated Date of Appraisal November 26, 2012 Estimated Date of Board February 14, 2013 Approval Corporate Review Decision Following the corporate review, the decision was taken to proceed with the preparation of the operation. Key development issues and rationale for Bank involvement There is a strong need to capitalize on the progress accomplished during the first phase to increase the impact of reforms and address emerging challenges. With the National Solid Waste Program (PNDM) entering in its second phase (2013-2017), and a new context for municipal service delivery triggered by higher expectations on governance and a new regionalization/decentralization agenda, key challenges include ensuring that key players at the national, regional and local levels keep improving Municipal Solid Waste (MSW) service delivery while: (a) promoting public access to service information in order to enhance social accountability of service providers and municipal administrations; (b) strengthening the institutional and financial framework to professionalize investment planning, infrastructure development and service management, and sustain private sector participation; (c) developing environmental control and monitoring to better support the compliance of MSW infrastructure and services with national regulations; and (d) developing waste recycling activities in a manner that promotes income generation activities and works to include vulnerable groups whose livelihoods depend on waste picking. This requires a comprehensive and coordinated set of policy reforms in several key areas including sector governance, as well as institutional, financial, environmental and social dimensions. Bank support to the municipal solid waste sector in Morocco is among the core activities of the Bank’s Country Partnership Strategy (2010-13), in support of its second and third pillars “service delivery to citizens� and “sustainable development in a changing climate�, while contributing significantly to the CPS cross-cutting “governance� theme. Proposed Objective(s) The proposed operation is part of a programmatic series which aims to continually support the Moroccan authorities’ efforts in improving the economic, environmental and governance performance of the MSW sector. This new series builds on the excellent sector dialogue with Government, the overall success of the previous two operations and the need to consolidate medium-term reforms. It would be implemented in parallel with the second phase (2013-2017) of the ongoing 15-year National Solid Waste Program and would support its transition to full implementation and roll-out with a focus on the overall coherence of the sector with the new regionalization/decentralization agenda. DPL 3 will be the first DPL of this series (comprising two operations, DPLs 3 & 4). Expected overall outcomes of the supported program include:  Improved environmental and social conditions which would result from the on-going elimination of existing uncontrolled dumpsites and construction of sanitary landfills;  Enhanced access to waste collection services for the urban poor;  The public has access to MSW project information, sector performance measures and has the opportunity to provide feedback on their local MSW services;  MSW services are financed adequately over the medium term and municipalities are able to prepare and manage PSP MSW projects and contracts;  MSW facilities do not effectively harm the environment as they are environmentally controlled and inspected regularly according to international good practices;  A solid stream of revenues is generated, formal jobs and small and medium enterprises created, and less waste disposed in sanitary landfills because of the implementation of an efficient recycling value chain. Preliminary Description The supported program is based on the four following reform areas: (a) strengthening governance, and particularly demand-side governance, through improved accountability, transparency, public access to information, and citizen engagement; (b) anchoring long-term institutional and financial sustainability of the sector in line with the new regionalization/decentralization agenda; (c) strengthening and enhancing the country’s environmental control and monitoring system; and (d) developing a financially viable and socially inclusive waste recycling sector. Poverty and Social Impacts and Environment Aspects Poverty and Social Impacts The DPL program's design will take into account the results of the Poverty and Social Impact Assessments done during the first phase (PSIAs 1 and 2) as well as additional analysis of potential socio-economic impacts of the new proposed reform policy actions. To this end, it is planned to carry out an addendum to PSIA 2 which will assess the potential impacts of the introduction of the proposed eco-tax on vulnerable groups, such as waste pickers who are predominantly women and youth. Environment Aspects An assessment of the potential impacts of supported policies on the environment and natural resources was carried out, and concluded that the measures supported by the proposed program are likely to have a significant positive effect on the country’s environment, forests and other natural resources. As demonstrated in the Safeguards Diagnostic Review (SDR) of the solid waste sector, prepared in the context of the Morocco MSW carbon finance operation, there is appropriate environmental management capacity in Morocco to handle potential effects in the solid waste sector: in 2011, an SDR for the solid waste sector was prepared and disclosed in line the requirements of OP 4.00 on Piloting the Use of Country Systems for Environmental and Social Safeguards. The SDR includes: (a) an equivalence analysis; (b) an acceptability assessment of the Moroccan system; and (c) agreed gap filling measures. The SDR describes in detail the applicable legal and regulatory framework, as well as the existing corresponding institutional framework for EIA implementation, monitoring and enforcement applied in the solid waste sector. The SDR assessed the country system to determine whether there is appropriate environmental management capacity to handle potential effects. Minor differences and gaps with internationally accepted principles and practices have been identified and adequate gap filling measures agreed upon between the Bank and the Moroccan regulatory authority. The proposed operation has been specifically designed to address environmental issues and builds on the progress of the previous two operations to enhance their positive effect on the environment. The implementation of the first phase of the reform program has already allowed significant improvements in the country’s environmental regulatory and institutional framework. The system is now essentially coherent and complete and the EIA system is fully operational at both the national and regional levels. The proposed operation aims at enhancing the positive effects on the environment by upgrading the existing environmental monitoring and control system which will allow a systematic supervision of the implementation of EIA recommendations and help monitor compliance of facilities (including, inter alia, in the solid waste sector) with national environmental norms and standards. Tentative financing Source: IBRD Borrower: Kingdom of Morocco Amount EUR 100 million (US$130 million equivalent) Total Contact point World Bank Contact: Mr. Jaafar Sadok Friaa Title: Lead Urban Specialist Tel: (202) 473-7124 Email: jsfriaa@worldbank.org Borrower Contact: Mr. Khalid Safir Title: Secretary General Ministry of Economy and Finance Rabat, Kingdom of Morocco Fax: (212-537) 76 50 36 For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop