Page 1 PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB855 Project Name CO Sustainable Dev Programmatic SAL Region LATIN AMERICA AND CARIBBEAN Sector Health (35%); Sub-national government administration (35%); General water, sanitation and flood protection sector (30%) Project ID P081397 Borrower(s) GOV OF COLOMBIA Implementing Agency NATIONAL DEVELOPMENT PLANNING AGENCY Environment Category [ ] A [ ] B [ ] C [ ] FI [ ] TBD (to be determined) Safeguard Classification [ ] S 1 [ ] S 2 [ ] S 3 [ ] S F [ ] TBD (to be determined) Date PID Prepared April 19, 2004 Estimated Date of Appraisal Authorization June 30, 2004 Estimated Date of Board Approval September 23, 2004 1. Key development issues and rationale for Bank involvement Economic growth is crucial to reduce poverty. Economic growth is a function of increases in investment and productivity and reduction of inequality. Environmental degradation disproportionately affects poor people’s health and productivity and thus enhances inequality. The four highest environmental problems in terms of the cost of environmental degradation for Colombia amount to 5% of GDP. These costs are mainly linked with increased mortality and morbidity and decreased productivity associated with the following environmental issues, namely (i) poor urban air quality, (ii) inadequate water supply, sanitation and hygiene, (iii) natural disasters, and (iv) the use of fuel wood in rural households which results in poor indoor air quality. The Government of Colombia (GOC) is giving high priority to achieving the Millennium Development Goals, including the goals to reduce poverty (MDG 1), decrease child mortality (MDG 4) and ensure environmental sustainability (MDG 7). There is growing recognition among policymakers that an interdisciplinary approach to tackle the high and unequally- distributed costs of environmental degradation through improved environmental governance, to establish clear rules of the game, is essential for achieving increases in investments and in productivity and thus in attaining sustained economic growth and thus poverty reduction. The proposed loan is the first in an expected series of quick-disbursing loans aimed at supporting the GOC's interdisciplinary sustainable development program. Page 2 2. Proposed objective(s) The overarching objective of the proposed Sustainable Development Structural Adjustment Program (comprising of three operations, SusDevSAL I, SusDevSAL II and SusDevSAL III) is to support the Government’s efforts to move towards achievement of the Millennium Development Goals, particularly Goal Number 7, Target 9, which seeks to ensure environmental sustainability. Specifically, the program to be supported by the adjustment program has the following objectives: (a) integrating the principles of sustainable development into country policies and programs in priority sectors, with a particular emphasis on protecting the most vulnerable groups; and (b) improving the effectiveness and efficiency of the National Environmental Management System (SINA) in Colombia. 3. Preliminary description The first operation (SusDevSAL I) is expected to focus on the issuance of critical policies and decrees to (i) promote a focus on results in the institutions responsible for environmental management; (ii) improve inter-institutional coordination mechanisms and increase public participation in decision-making to promote greater transparency and accountability in governmental decision-making processes; (iii) initiate the preparation of critical policies and laws that embody sustainable development; and (iv) develop environmental tools to enable implementation of environmental management plans. The second and third operations are expected to focus on the development and passage of sustainable policies, aimed at achieving indicators closely linked with MDG number 7. 4. Safeguard policies that might apply [Guideline: Refer to section 5 of the PCN. Which safeguard policies might apply to the project and in what ways? What actions might be needed during project preparation to assess safeguard issues and prepare to mitigate them?] The proposed operation does not have an environmental rating, since it is classified as a SAL. However, since the raison d’etre of the operation itself is to help the Colombian Government mainstream environment in a number of key sectors, the operation’s design is very proactive with respect to internalizing environmental and social safeguards concerns within the operation at the macro level. This occurs at two distinct levels. At the sectoral level, three process-based policy Strategic Environmental Assessments (SEAs) are called for in the context of the second operation which seek to integrate environmental and social considerations in the broad context of sectoral policy development, including assuring that the most vulnerable segments of society are adequately represented. In addition to increased public participation in decision making, the program places particular emphasis in assuring improved transparency and accountability with respect to governmental decision-making processes. Page 3 5. Tentative financing Source: ($m.) BORROWER 0 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 100 Total 100 The proposed US$100 million SusDevSAL I is expected to be disbursed in a single tranche upon Board approval. The subsequent operations will be based on the pace of the GOC to implement its program. It is estimated that these operations will be about 18 months apart. Future amounts will be subject to the depth of the reforms. The proposed loan does not increase resources available for public sector spending. Under Colombia's fiscal regime, an adjustment loan from the Bank substitutes financing from alternative, more expensive debt sources and substitutes foreign for domestic lending. It does not increase aggregate fiscal resources available to environment and other sectoral agencies since the fiscal envelope is defined by the binding primary fiscal surplus targets. 6. Contact point Kulsum Ahmed and Ernesto Sanchez-Triana Task Team Leaders World Bank 1818 H Street, N.W. Washington, D.C. 20433 Telephone Nos.: (202) 473-1130 (202) 473-6952 Fax No.: (202) 676-9373 Email: Kahmed4@worldbank.org Esancheztriana@worldbank.org Note: This is information on an evolving project. Certain components may not necessarily be included in the final project.