PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Public Disclosure Copy Report No.: PIDC1317 Project Name DRINA FLOOD PROTECTION PROJECT (P143844) Region EUROPE AND CENTRAL ASIA Country Bosnia and Herzegovina Sector(s) Irrigation and drainage (100%) Theme(s) Water resource management (67%), Rural services and infrastructure (33%) Lending Instrument Investment Project Financing Project ID P143844 Borrower(s) Ministry of Finance and Treasury Implementing Agency Ministry of Agriculture, Water Management and Forestry (MoAWMF), Ministry of Agriculture, Water Management and Forestry (MoAWMF) Environmental B-Partial Assessment Category Date PID Prepared/ 28-Jan-2014 Updated Date PID Approved/ 28-Jan-2014 Disclosed Estimated Date of 18-Feb-2014 Appraisal Completion Public Disclosure Copy Estimated Date of 16-May-2014 Board Approval Concept Review Track II - The review did authorize the preparation to continue Decision I. Introduction and Context Country Context The Drina River, at 346 kilometers in length, is the largest tributary of the Sava River, which in turn is the largest tributary of the Danube. It is critically important to all three of its riparian countries: Bosnia and Herzegovina (BiH), Montenegro and Serbia. Originating in the snowy Dinaric Alps in Montenegro at an altitude of 2,500 meters, it drains a vast karst plateau which receives the highest annual rainfall in Europe (up to 3,000 mm), resulting in the highest specific runoff in Europe (up to 50 l/s/km2). The river is notorious for its extreme high and low flows, with part of the baseflow due to snowmelt. The extremes are exacerbated by the operation of eight hydropower plants that does not take into account downstream riverbed capacity. The Upper Drina is formed by the confluence of the Tara and Piva rivers, both of which rise in Montenegro and converge on the border of Montenegro and Bosnia and Herzegovina (BiH). Page 1 of 6 Downstream to its mouth, the lower Drina forms the border between BiH and Serbia over a length of 220 km, before emptying into the Sava River in northeastern BiH near Bijeljina. Upstream, the river is hemmed in by deep valleys and steep banks. In its downstream reaches, in the plains of the Public Disclosure Copy Sava River, it meanders and flows along several channels often changing course. The Drina River Basin (DRB) is about half the size of Switzerland and is home to almost one million people, with most settlements concentrated along the Drina River proper. The Basin is shared equally among the three riparians. In BiH, it covers 14% of the country’s territory; however, it is of much importance to the Republika Srpska (RS) Entity as it covers over a quarter of the Entity’s territory, as well as to the eastern part of the Federation of Bosnia and Herzegovina (FBiH) Entity. GDP per capita in BiH (2011) is about US$4,372. However, the national average masks the significant income disparity within the country. The local economies of many communities in the basin tend to be depressed due to difficult transportation links, comparatively long distances to markets, and the perilous state of the old local industries and the infrastructure. The downstream municipality of Bijeljina (in RS) has a stronger agricultural, industrial and service-based economy thanks to its proximity to Serbia and Croatia. Gorazde in the middle reach is more isolated, however, its local economy is improving thanks to investments in agriculture and eco-tourism, and new industrial investments. Sectoral and Institutional Context In both entities of BiH, the Drina Basin is at the forefront of their water management agendas. The Drina and its tributaries are historically known for recurrent floods. In the past decade, particularly wet conditions leading to severe inundation along the Drina in BiH were observed in 2001, 2004, 2005 and most recently in December 2010 and February 2013. The floods are caused by a combination of high rainfall, early snowmelt and ill-synchronized water releases from the large upstream Mratinje hydropower reservoir in Montenegro. The flood events are most pronounced in Public Disclosure Copy the downstream lower Drina tract between Zvornik and the confluence with the Sava affecting the left-bank municipalities of Bijeljina and Janja in RS; and in the Middle Drina, around the town of Gorazde, in the FBiH. The December 2010 flood inundated about 80 km2 of land east of the Bijeljina town center for 2 weeks. In the Bosnia Podrinje Canton area in FBiH which includes the Municipalities of Gorazde, Foca-Ustikolina and Pale-Praca, almost 400 ha was flooded or affected. Records show that the recurrence period of these discharges is about 1 in 20 years for Bijeljina, and 1 in 50-80 years for Gorazde, however, flood events have become more frequent in all these areas in the past decade. Smaller parts of the Bijeljina and Gorazde areas flood annually. In Bijeljina, the land at risk concerns primarily (very productive) agricultural and horticultural land, farm houses, commercial and hotel facilities, roads and residences. In the Gorazde area, the areas at risk comprise parts of the Gorazde town center, roads and utilities infrastructure, horticultural land and some industries. In response to the flood emergency in 2010, the Bank reallocated about US$ 8.0 million of the Agricultural and Rural Development Project to help with immediate emergency interventions to repair dike breaches, and support the replanting of orchards and crops that had been destroyed. Although the need for flood control was identified decades ago, investments were not made due to the lack of finance, political upheaval, and regional unrest with the dissolution of the former Yugoslav Republic. Three reasons exist for the high vulnerability of the Bijeljina and Gorazde areas. First, the Bijeljina area is unprotected because the dikes on the left Drina bank (in BiH), Page 2 of 6 although included in the 1964 Drina Master Plan, were never built, while the dikes on the right bank (in Serbia), were partially erected. Similarly, some locations in the Gorazde area suffer from severe erosion of the riverbed and banks due to incomplete construction of revetments and crests. Public Disclosure Copy Moreover, these structures were designed to protect only against high-frequency, low-inundation discharges of up to 2730 m3/sec instead of about 4000 m3/sec (1-in-100 year flood), the minimum standard protection for commercial and (semi-) urbanized areas. A third major factor that raises the imminent flooding risk is that the structures, where in place, are no longer adequate or will soon lose their functionality due to lack of maintenance and modernization during the past two decades in the wake of the armed conflict. The need for investment in this infrastructure is confirmed by both analytic studies and existing orthophotometric maps and survey data. The simplicity of the operation is in part driven by the high-urgency nature of the interventions, and the aim to use the last remaining IDA resources available to BiH in FY13. The proposed works are high-urgency and priority investments because these locations have a local topography that keeps them especially vulnerable to high water as water overtops the river banks in these spots, that are low compared to other areas along the Drina and its tributaries. This has been the case in the 19th and early 20th centuries, as well as in the period after the construction of the four hydropower plants on the river. The 1964 Drina Master Plan provided for numerous flood protection works along the Drina; most of these protective works have been implemented but they have never been completed in the two locations that are the subject of the proposed project. Also, the 2012 Rapid Diagnostic Study on the Drina basin identified the proposed flood protection as among the highest priority initiatives for the BiH part of the basin. Irrespective of the fact that, later on, with better understanding of the modified hydrology of the river and future development scenarios, further improvements can be identified for flood prevention and mitigation, the proposed protection investments are very basic, essential and highly urgent given the very high recurrence of the inundation, as also reflected in the high ERR of the protective works. While the hydropower plants thus far mostly mitigated rather than exacerbated floods, the recent 2010 flood has confirmed that the main cause for the current vulnerability in the two locations remains essentially of natural origin. Public Disclosure Copy Several studies and plans exist that analyze water management and flood protection, including the highly detailed 1964 Drina Master Plan, and, more recently, the more generic ICPDR Danube River Basin Management Plan (2004) and the Sava River Basin Management Plan (2013). While these plans comply with the EU Water Directive, they focus on water quality and the status of the ecological quality. In 2007, the EU financed IPA support for developing the BiH Water Policy, which defines institutional responsibilities for the water sector. In 2013-15, EU IPA is likely to support additional digital terrain and flood risk mapping of the Drina basin area in BiH and Serbia. Early-warning and flood-forecasting mechanisms exist in part, however, their accuracy and effectiveness can be improved. BiH and Serbia are cooperating increasingly frequently on Drina management. The three riparian countries are receiving training and support under the International Sava River Basin Commission, to which they are signatory. The Drina Basin is also benefiting from the Bank’s Drina non-lending TA (NLTA) Program which has led to a Rapid Trans-boundary Diagnostic Scan and Analysis (2012) founded on a basin-wide data collection and cross-sectoral dialogue, and to a new Investment Prioritization Framework study for the whole basin to be funded by the West Balkan Investment Framework (2014-2015). A new GEF-funded Regional Drina Basin Management Project (2015-2018) is being prepared that would support TA and basin cooperation, but no investments. These studies and consultations will create the strategic framework to prioritize, Page 3 of 6 i.a., the future flood protective measures across the region and strengthen the institutions for national and regional management. Public Disclosure Copy Relationship to CAS The Project will contribute to the key objectives under the CPS FY2012-FY15, to promote: (i) competitiveness; (ii) social inclusion; and (iii) environmental sustainability, including for improved water resource management. One of the specific CPS outcomes is “…better flood preparedness and management along the Drina River Basin” which the government recognizes as critical not only to protect the lives and livelihoods of people in the basin but also to protect the overall health of this unique ecosystem. The Project will also enhance the hydraulic capacity of the riverbed, thereby contributing to increasing the environmental sustainability of hydropower production, and thus assist BiH’s efforts towards energy security in the light of climate change impacts. Finally, the Project will have a positive impact both on economic growth and productivity thanks to avoided disruption of the regional transport and utility links, and on poverty as lower-income families tend to suffer disproportionately from flood events. This is the case, for example in the Janja area in Bijeljina and in some of the Gorazde suburbs as the poor tend to live in areas prone to flooding. II. Proposed Development Objective(s) Proposed Development Objective(s) (From PCN) The Project’s objective is to provide increased protection from flood events to agricultural and commercial interests and communities in the project areas. The PDO would be achieved through construction, rehabilitation and modernization of flood protection and drainage infrastructure along the Drina river and tributaries in select areas. The higher-level goal is to stimulate longer-term investment in areas which heretofore were threatened by seasonal floods. Key Results (From PCN) The key results will be a reduced land area prone to floods and increased flood protection for project areas. The proposed PDO indicators are: (i) Land area prone to floods in each location (hectares) Public Disclosure Copy and (ii) Flood protection level for each location (1-in-50 year flood protection for agricultural lands; 1-in-100 year flood for semi-urban/urban communities). III. Preliminary Description Concept Description This proposed Project has been identified as a key priority by BiH, which have been underlined by the authorities after the December 2010 and February 2013 floods. The Project will address high- priority flood protection investments as defined by the 2012 analytic study conducted under the Regional Drina River Basin Program. The Project would only include those investments that are "no-regret," that is, they do not negatively impact neighboring or downstream countries; would not require extensive additional analysis; nor require additional management agreements amongst the riparians, thus averting potential preparation and/or implementation delays. The project would have the following components: a. Component 1 (about US$25.00 million): This component will fund the civil engineering works and related investments for the flood protection in the Bijeljina and Gorazde areas. It is expected that this component will be mostly earth moving, dike construction and/or re-construction, and river bank shaping works and building of protective structures for roads, bridges and other Page 4 of 6 infrastructure along the river. b. Component 2 (about US$1.5 million): This component will strengthen the flood forecasting Public Disclosure Copy and early-warning facilities, as well as provide training and capacity building. Procurement will include goods and installations as well as user training and data analysis to improve accuracy of forecasted flows and timing of crests including warnings. More detailed information will be made available as project preparation progress to date TORs are being prepared from project preparation and detailed designs of the works. IV. Safeguard Policies that might apply Safeguard Policies Triggered by the Project Yes No TBD Environmental Assessment OP/BP 4.01 ✖ Natural Habitats OP/BP 4.04 ✖ Forests OP/BP 4.36 ✖ Pest Management OP 4.09 ✖ Physical Cultural Resources OP/BP 4.11 ✖ Indigenous Peoples OP/BP 4.10 ✖ Involuntary Resettlement OP/BP 4.12 ✖ Safety of Dams OP/BP 4.37 ✖ Projects on International Waterways OP/BP 7.50 ✖ Projects in Disputed Areas OP/BP 7.60 ✖ V. Financing (in USD Million) Total Project Cost: 26.90 Total Bank Financing: 23.00 Public Disclosure Copy Financing Gap: 0.00 Financing Source Amount BORROWER/RECIPIENT 3.90 International Bank for Reconstruction and Development 13.00 International Development Association (IDA) 10.00 Total 26.90 VI. Contact point World Bank Contact: Guy J. Alaerts Title: Lead Water Resources Specialist Tel: 458-7288 Email: galaerts@worldbank.org Borrower/Client/Recipient Name: Ministry of Finance and Treasury Page 5 of 6 Contact: H.E. Nikola Spiric Title: Minister Tel: 38733663519 Public Disclosure Copy Email: Implementing Agencies Name: Ministry of Agriculture, Water Management and Forestry (MoAWMF) Contact: Title: Tel: Email: Name: Ministry of Agriculture, Water Management and Forestry (MoAWMF) Contact: Title: Tel: Email: VII. 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 Public Disclosure Copy Page 6 of 6