40425 BANK-NETHERLANDS WATER PARTNERSHIP-II WATER SUPPLY & SANITATION WINDOWS PROGRESS REPORT SECOND SEMESTER, 2006 JULY 1, 2006 ­ DECEMBER 31, 2006 Bank-Netherlands Water Partnership -Water Supply and Sanitation Windows www.worldbank.org/watsan/bnwp 1818 H street NW, Washington DC 20433 USA · bnwp@worldbank.org · tel. 1-202-458-7184 BANK NETHERLANDS WATER PARTNERSHIP WATER SUPPLY AND SANITATION WINDOWS FIRST SEMI-ANNUAL PROGRESS REPORT JULY 1, 2006 ­ DECEMBER 31, 2006 1. THE BANK-NETHERLANDS WATER PARTNERSHIP II ­ WATER SUPPLY AND SANITATION WINDOWS The main objective of the Bank-Netherlands Water Partnership (BNWP) is to improve the delivery of water supply and sanitation services to the poor. The first phase of the program closed its four-year cycle in June 2006. After an evaluation of the program was performed, the Government of Netherlands funded the second phase of BNWP-WSS for eight million dollars. The program officially started implementation on July 1, 2006. The development goal of BNWP-2 is to contribute to reaching the MDGs on WSS by enhancing the impact of World Bank operations through mobilization of practical expertise and by implementing innovative approaches at critical stages of the World Bank's project preparation and implementation cycle. The program complements World Bank operations by providing support to both existing and new projects, and strengthens three dimensions of World Bank sectoral assistance: scaling up work on thematic areas which are important, but not yet sufficiently addressed in regional operations; customizing and implementing improved methods and approaches; and streamlining the delivery of aid to respond to country needs. BNWP-2 is managed by the Water Anchor of the Energy, Transport, and Water Department. The program is structured in a decentralized manner, by financing regional blocks (7) (operational departments) as well as thematic blocks (3). BNWP-2 funds are complementary to other sources of funding. All block workplan proposals are quality-assured through peer-review carried out by water professionals selected from within the World Bank and based on their expertise. More details on the work done by BNWP-WSS are available at www.worldbank.org/watsan/bnwp, or by writing to bnwp@worldbank.org. 2 2. THE SEMI-ANNUAL PROGRESS REPORT 2.1 PURPOSE This Semi-Annual Progress Report outlines the progress of the Water Supply and Sanitation Windows of the Bank-Netherlands Water Partnership-II during the first semester of its implementation, which covers the period July ­ December 2006. The main objectives of the Semi- Annual Progress Report are to: report on components and outputs of the various BNWP-2 workplans and their implementation progress; report on disbursements that allows comparison across and within block workplans; facilitate identification of links and common interests between workplan components; and increase transparency of BNWP-2 operations. 2.2 STRUCTURE OF THE SEMI-ANNUAL PROGRESS REPORT The Semi-Annual Progress Report is organized with a main text and an annex presenting each block's components and their progress. Figures on block allocations, window percentages and planned/actual disbursements are based on figures covering the first of two workplans cycles ­ the first being July 2006 through December 2007, and the second being January 2008 through December 2008. 3. KEY DEVELOPMENTS IN THE SEMESTER In the first semester of BNWP-2's implementation, seven regional and three thematic blocks were called to submit workplan proposal for the program's first 18-month cycle (July 1, 2006 - December 31, 2007). By end of December 2006, all blocks but two ­ the Europe and Central Asia regional block and the Multisectoral Projects Support Team block ­ had submitted their respective workplans, which were reviewed and approved by BNWP-2 management. As expected, progress in implementing these workplans has been slow during these first six months. Most blocks have dedicated this initial stage to define in more detail the respective activities and align with countries' priorities to get the projects off the ground. As a result, overall disbursements ­ including program management costs ­ were $86,045 and operational commitments totaled $161,917. In the first six months of BNWP-2, $3,555,0001 or 44.4% of the entire program's operational budget was allocated. Throughout the semester, the BNWP-2 program management team got workplans reviewed and approved, created budget codes and transferred funds to water units in the regions so implementation could begin once workplans were approved. However, a few workplans were submitted after the last half of the semester, which did not allow blocks enough time for implementation in the period covered for this report. 1Figures do not include staff cost. 3 3.1 NEW WORKPLANS SUBMITTED AND APPROVED In the first six months of BNWP-2, eight workplans were approved. The blocks approved and their respective allocations for the first 18 months are: 1. East Africa Regional Block - $360,000. The East Africa block's objective is to assist a cross section of borrowers to improve sector performance and access to WSS services. The focus of this block is on improving implementation strategies and building capacity to scale up WSS services. Focus countries are Angola, Ethiopia, Malawi, Mozambique and Zambia. 2. West Africa Regional Block - $360,000. The BNWP resources in this block are to be used to formulate Public Expenditure Reviews (PERs) in Burkina Faso, Ghana, Mali and Nigeria. The overall objective of the PERs is to gain an understanding of the financial framework in which investments are made in the aforementioned countries in the rural water supply and sanitation sub-sector and to propose strategic and operational options for meeting the MDGs. 3. East Asia & Pacific Regional Block - $360,000. In East Asia, the objective is to improve sector performance and access to WSS services through three interventions that aim at improving the performance of Urban WSS Utilities in China, the transparency and targeting of subsidies for urban and district towns WSS in Vietnam and the WSS service delivery to slum areas in East Asia (with a primary focus on Indonesia) 4. Latin America and the Caribbean Regional Block - $360,000. The objective of this block is to act as a catalyst to build client capacity, awareness and demand; and support the preparation of new, innovative projects in some of the poorest countries in the region (Bolivia, Peru and Honduras). 5. Middle East and North Africa Regional Block - $360,000. The main objective of this block is to increase the leverage of World Bank teams in engaging client countries in MNA in the reform path to provide sustainable WSS services to the urban population. 6. South Asia Regional Block - $360,000. The South Asia block aims to assist World Bank clients in South Asia with understanding better the scope and implications of upgrading water supply and sanitation services, including reform of the sector service provision framework and utilities. It also seeks to identify specific components for further assistance as well as leverage direct, innovative support for World Bank operations. 7. Learning Block - $645,000. The Learning block supports and reinforces country specific activities by making knowledge on successful approaches to scaling up improved WSS service readily accessible to regional task teams and to sector practitioners in the developing world. A particular focus of the learning block in the first year of operation is to leverage knowledge products completed in the past few years. 8. Sanitation Hygiene & Wastewater Support Service (SWAT) Block - $750,000. The objectives of the Sanitation, Hygiene and Wastewater Support Service are a) to increase the portfolio of World Bank investment and activity in sanitation and hygiene; b) to improve the quality of the World Bank's investments in sanitation and hygiene; and c) to build the long- term capacity of the World Bank and its clients in sanitation and hygiene. 4 3.4 PROGRAM MANAGEMENT The second quarter of 2006 was the first quarter that BNWP-2 was operational. The first tranche of funding arrived at the World Bank in early July 2006 from the Netherland's Directorate-General for International Cooperation (DGIS). Given that no financial resources can be committed until received in the Bank, this implied that considerable time was required once the resources where available, to meet with block leaders and inform them of the availability of funds and the process for submitting workplans. By the end of August, the program management team had met with all Regional Water Supply and Sanitation (WSS) Sector Managers. Some highlights: The Program Coordinator (Meike van Ginneken) officially started working on the program on July 1 but she spent considerable time preparing the program's structure and proposal almost a year in advance.BNWP-2's coordination team is integrated by Christina Kyprianou, BNWP-2 Program Officer, and Refat Abdallah, Resource Management Officer. A set of guidelines for development and implementation of projects and activities were written and distributed to Block leaders. During the final stages of BNWP-1 and beginning of BNWP-2, the BNWP-WSS website was revamped and now includes information on BNWP-2 as well as project summaries and publications stemming from BNWP-2 (http://www.worldbank.org/watsan/bnwp) A database for tracking block allocations, progress and outputs was also developed. E- mails and other important documents are filed in IRIS ­ the World Bank's online filing system. 4. OVERVIEW OF PRESENT PORTFOLIO As of December 31, 2006, $3,555,000 or 44.4% of the program's 8 million dollars was allocated to 6 regional and 2 thematic blocks whose proposals were approved by the Water Sector Board. A total of $240,000 or 1.7 % of these funds have been earmarked for program management costs for the first 18 months of the program. With the last two blocks expected to submit their workplans in early 2007, total operational allocations for the first workplan cycle will reach $4,560,000 or 57% of BNWP-2's entire budget. Figure 1: Breakdown of portfolio per window Figure 2: Block allocations of BNWP-2 funds (June 1, 2006 ­ December 31, 2007) Program Capacity Management East Africa Building 5% 7% West Africa 13% Multisectoral 7% 14% EAP Urban 7% 40% Sanitation Learning ECA 24% 16% 7% LCR 7% Towns SWAT MNA 5% SAR Rural 16% 7% 5 7% 18% The focus of the present portfolio is summarized in figures 2 and 3 (above). The majority of the portfolio for the active blocks, as of December 31, 2006, focuses on urban issues. This distribution is consistent with the Bank's portfolio in the sector. Sanitation has a very strong emphasis so does urban water. Activities in rural water supply and sanitation have increased from what was allocated in phase one of BNWP. In addition, certain regions have several other trust fund sources for WSS projects in rural areas, i.e. South Asia, and have provided evidence that BNWP-2 funds can leverage more lending if they are to be used for urban activities, which are not adequately funded. Overall, earmarked and actual allocations are evenly spread among regional and thematic blocks. 54% of the $4,800,000 for the first 18-month workplan cycle is dedicated to the regional water units. Thus, impact on the ground and enhancement of World Bank operations is achieved. The Sanitation Hygiene & Wastewater Support Service (SWAT) Block, which started providing its services under BNWP-1, has been allocated $750,000 in an effort to satisfy demand for this team's services and to enhance World Bank efforts in providing poor people with basic access to sanitation services; a sector priority in line with MDG requirements. 5. FINANCIAL AND PROGRESS REPORT Table 1 (below) and Figure 2 (above) details the accumulated progress as well as disbursements per block. Total disbursements for the period July 1 ­ December 31, 2006, reached $86,045 including program managements costs. This number constitutes 19% of planned disbursements for the period. Without program management costs been taken into account, only 5% of planned disbursements were actually expensed. This low rate of disbursements in the regional and thematic blocks is due to the following: The late arrival of the funds from the Netherlands. These funds were received in July 2006, resulting in work plans submitted by the Regions being approved late in the semester. Only financial resources available in the Bank can be committed to implement activities. An organizational restructuring within the World Bank delayed the process by causing changes in block leaders, i.e. a change in Sector Managers in the Middle East and North Africa, has put on hold the block's implementation.It is expected that some changes in this block's priorities and components may occur. In addition, lack of Water Anchor staff during this period has left no one available to take over the Multisectoral Projects Support Team block's leadership. In some cases, i.e. Bangladesh, delivery dates had to be postponed for a year later due to a political turmoil in the country, which has not allowed teams to carry out their planned activities. Exogenous shocks such as these are not uncommon in some of the countries and some delays are out of the control of the Bank. 6 Figure 3: Planned Vs. Actual Disbursements ­ July through December 2006 $100,000 $80,000 $60,000 Planned Actual $40,000 $20,000 $0 R t SA ProgramMgm AT East Africast Africa P R A EA LC MN arning SW We Le Blocks Note:West Africa, and MNA had no planned disbursements The blocks that disbursed in the second semester of 2006 were the Learning block and the Sanitation Hygiene & Wastewater Support Service (SWAT) block. Disbursements for program management were close to planned reflecting the extensive work it took the BNWP-2 management team to get the program up and running. It is expected that disbursements will rise sharply in the next six months and implementation will be as planned. Table 1: Progress and disbursements per block 18-month Disbursements Commitments Window Performance* Jun-Dec 2006 Jun-Dec 2006 (% of target) cycle budget % of % of USD budget USD budget East Africa (AFTU1) 0% $360,000 - - $37,260 10% West Africa (AFTU2) 0% $360,000 - - - - East Asia & Pacific 0% $360,000 - - $44,100 12% Latin America & the Caribbean 0% $360,000 - - $64,520 18% Middle East & N. Africa 0% $360,000 - - - - South Asia 0% $360,000 - - - - Sanitation Hygiene & Wastewater Support Service (SWAT) 16% $750,000 $12,564 - $10,400 1% Learning 7% $720,000** $5,903 1% $5,636 1% Program Management 84% $240,000 $67,578 28% - - Grand Total 20% $3,870,000 $86,045 2% $161,916 4% *This number represents a weighted average of the individual block achievements, as specified in the annex (based on semi-annual disbursements) ** The $720,000 allocation includes $75,000 allocated for various dissemination and publication purposes used by all blocks. 7 6. PLANS FOR THE NEXT SIX MONTHS The BNWP-2 program began its implementation phase on July 1, 2006. For the next six month, the efforts will concentrate on getting the work plans off the ground and on ensuring an effective and efficient implementation of the approved work plans. By the time of finalizing this report, the Europe and Central Asia block's workplan was approved and implementation will begin in January 2007. Finally, the Multi-sectoral Projects Support Team block is expected to have a workplan approved in early 2007. 8 ANNEX A: OVERVIEW OF BLOCKS & THEIR COMPONENTS Blocks Components Approved budget2 Semi-annual (USD) Windows3 Current status Completion date Performance East Africa Angola: Training of utility operators to quickly improve water supply (AFTU1) 1 services in urban areas. 110,000 U Active June 2007 0% Ethiopia: Dissemination of WSS Program information to help build 2 district-based rural and town water supply programs. 30,000 R, T Active May 2007 0% Malawi: Training local consultants to assist towns to establish water associations, train operators and introduce business planning 3 processes. 54,000 T Active June 2007 0% Mozambique: Assessment of local private sector capacity and identification of an effective delegated management model for town 4 water supply utilities. 81,000 U Active June 2007 0% Zambia: Identify effective management arrangements for improving 5 peri-urban water supply services in Lusaka. 50,000 T Active June 2007 0% Staff Cost 6 35,000 N/A Active December 2007 0% West Africa Public expenditures Review in the RWSS in Burkina Faso, Ghana, (AFTU2) 1 Mali and Nigeria 325,000 R Active September 2007 0% Staff Cost 2 35,000 N/A Active December 2007 0% East Asia & Pacific Improving the Performance of Urban Water Utilities in China 1 140,000 U Active December 2007 0% Improved transparency and targeting of subsidies in Vietnam 2 95,000 U Active May 2007 0% Improving WSS service delivery to slum areas in Indonesia 3 90,000 U Active May 2007 0% Staff Cost 4 35,000 N/A Active December 2007 0% Europe and Central Asia TBD N/A N/A N/A N/A 0% 2Approved budget = initial approved and adjusted budget. 3Windows: R = WSS in rural areas; T = Town WSS; U = Reform of urban utilities; S = Sanitation & Hygiene; CB = Capacity Building 9 Blocks Components Approved budget Semi-annual (USD) Windows Current status Completion date Performance Latin America & Peru: Support design of new water sector policy to promote the Caribbean efficiency and sustainability in the provision of WSS services and 1 the extension of those services to all. 130,000 U, CB Active December 2007 0% 2 Honduras: Decentralization of WSS to municipalities 95,000 U, CB Active December 2007 0% Bolivia & Peru: Prioritization of sanitation investments as part of 3 integrated municipal development lending 100,000 S, R, T Active December 2007 0% 4 Staff Cost 35,000 N/A Active December 2007 0% Middle East & N. Africa 1 Yemen - Preparation of the Urban Water Supply and Sanitation II 45,000 T, CB On hold N/A 0% 2 West bank and Gaza- Investment Plan 35,000 CB On hold N/A 0% 3 Lebanon - Bekaa Water Rehabilitation and Modernization Project 35,000 S On hold N/A 0% 4 Iraq - Promotion of MDG targets for water sector professionals 35,000 CB On hold N/A 0% Tunisia - Water Supply and Wastewater Sector - Institutional 5 restructuring for efficient service delivery 30,000 U On hold N/A 0% Egypt - technical assistance for the development of national 6 investment plan 35,000 U On hold N/A 0% 7 Regional - Preparation of a Data Book on the Region's WSS Utilities 40,000 U On hold N/A 0% 8 Djibouti - Technical Assistance for Sector Restructuring 70,000 U On hold N/A 0% 9 Staff Cost 35,000 N/A On hold N/A 0% South Asia New approaches to improve reliability, sustainability and 1 affordability of Urban WSS services in India 175,000 U Active July 2007 0% Punjab, Pakistan Urban Water Supply and Sanitation Lending 2 Revival 85,000 U Active December 2007 0% Bangladesh Low Income Communities service delivery 3 improvement 65,000 U Active December 2007 0% 4 Staff Cost 35,000 N/A Active December 2007 0% 10 Blocks Components Approved budget Semi-annual (USD) Windows Current status Completion date Performance Learning 1 Strengthening Sector Governance & Management 320,000 CB, U, R Active July 2007 0% 2 Scaling up Rural WSS 95,000 R On Hold TBD 0% 3 Building out M&E systems 115,000 U, R, S, CB Active October 2007 0% 4 Disseminating Knowledge Products 40,000 CB Active December 2007 0% 5 Dissemination of Various Knowledge Products 75,000 CB Active December 2007 8% 6 Staff Cost 75,000 N/A Active December 2007 0% Multi-sectoral Projects Support Team TBD N/A N/A N/A N/A N/A Sanitation Hygiene & 1 Support to Urban Sanitation Investment 320,000 S Active June 2007 0% Wastewater Support Service 2 Support to Rural Sanitation Investment 320,000 S Active September 2007 0% (SWAT) 3 Knowledge management and dissemination of lesson 20,000 S Active December 2007 0% 4 Staff Cost 90,000 N/A Active December 2007 14% 11