Page 1 PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB573 Project Name Additional Financing-BR Espirito Santo Water and Coastal Pollution Management Project Region LATIN AMERICA AND CARIBBEAN Sector Sewerage (75%);Water supply (25%) Project ID P087711 Borrower(s) STATE OF ESPIRITO SANTO Implementing Agencies CESAN (State Water Company), IEMA (State Environmental Institute) State of Espirito Santo Secretaria de Planejamento, Orcamento e Gestao (SEPLOG) Av. Governador Bley, 236 Espirito Santo Brazil Tel: +55 27 3381-3248 Fax: +55 27 3381-3251 guilherme.dias@seplog.es.gov.br CESAN Av. Governador Bley, 186 Espirito Santo Brazil 29010-150 Tel: +55 27 3132-8200 Fax: +55 27 3222-4369 pruy@cesan.com.br IEMA (Instituto Estadual do Meio Ambiente) Rod. BR 262 - Km 0 Patio Porto Velho, Cariacica Espirito Santo Brazil 29140-500 Tel: +55 27 3136-3437 Fax: +55 27 3136-3441 presidente@iema.es.gov.br Environment Category [ ] A [X] B [ ] C [ ] FI [] TBD (to be determined) Safeguard Classification [ ] S 1 [ ] S 2 [ ] S 3 [ ] S F [X] TBD (to be determined) Date PID Prepared December 23, 2003 Estimated Date of Appraisal Authorization February 9, 2004 Estimated Date of Board Approval May 4, 2004 1. Key development issues and rationale for Bank involvement The State Government of Espírito Santo has requested an additional Bank loan of US$36 million in support of the Espírito Santo Water and Coastal Pollution Management Project (PRODESAN) which was partially financed by Bank loan 3767-BR between 19 December, 1994 (effectiveness) and 30 June, 2003 (closing date). The State Government’s request stems from a desire to meet the project’s original water and sewerage coverage targets as well as institutional development objectives. Additional financing for the project would allow the State Government to (i) connect additional users to the still under-utilized trunk sewerage infra-structure constructed during the last 3 ½ years; (ii) improve the water quality, service continuity and service pressure of water supply Page 2 systems, particularly in the poorer neighborhoods of Grande Vitória and Guarapari; and (iii) reach the institutional development objectives for the state environmental agency IEMA and the state water company CESAN. Initial estimates suggest that about 75% of the beneficiaries of additional water supply investments and 38% of the beneficiaries of additional sewerage investments would be poor (family incomes of less than 3 minimum salaries). Overall, about 1.4 million people are expected to benefit from follow-on investments in improved water supply services (improved service continuity, pressure and water quality) and about 410,000 people are expected to receive sewerage connections. Proposed project activities are consistent both with the State Government’s 2004-2007 environmental sanitation agenda and the Millennium Development Goals (Goal 7: “Ensure Environmental Sustainability”, Target 10: “Halve, by 2015, the number of people without sustainable access to safe drinking water”) and the Johannesburg Sustainable Development Summit target of halving those without adequate sanitation by 2015. 2. Proposed objective(s) The additional loan would support activities consistent with the project’s three original development objectives (DO’s): 1. to improve the efficiency of CESAN’s water supply and sewerage systems by supporting the company’s efforts to operate on a commercial basis with financial self-sufficiency; 2. to increase the coverage level of CESAN’s water supply and basic sanitation services (i.e. sewage collection, treatment and disposal) in the urban areas of Grande Vitória, Guarapari…and other towns in the Santa Maria and Jucu river basins; and 3. to provide appropriate water and sanitation infrastructure in low-income urban areas of Grande Vitória and Guarapari. 3. Preliminary description The additional loan would finance activities under the following four components: 1. Sanitation . Construction of additional sewage collection networks that would connect to the trunk infrastructure built with financing from loan 3767-BR. In addition to allowing about 230,000 additional people to enjoy the benefits of piped sewerage, the proposed investments are key to increasing CESAN’s revenues from sewage charges and fundamental to increasing capacity utilization of 4 large sewage treatment plants (STP’s) in Grande Vitória and Guarapari. In addition to the sewage investments that connect to existing infrastructure CESAN will construct sewage collection and treatment systems in other municipalities in the project area. 2. Water Supply . Capacity expansions for raw water intakes and water treatment plants, construction of storage tanks and distribution mains to improve the quality and service continuity of water supply in the Grande Vitória and Guarapari metropolitan regions. The proposed investments would complement the water supply infrastructure constructed with financing from loan 3767-BR. 3. Institutional Strengthening of SEAMA/IEMA. This component would strengthen the environmental management capacity of the State Secretariat of the Environment and Water Resources ( Secretaria de Estado do Meio Ambiente e Recursos Hídricos / SEAMA) which is charged with defining Espírito Santo’s environmental policies and its sister institution, the State Environmental Institute ( Instituto Estadual de Meio Ambiente e Recursos Hídricos / IEMA) which is responsible for carrying them out. Page 3 Possible activities include (i) the design of an institutional strategy for SEAMA/IEMA; (ii) implementation of an integrated environmental information system; (iii) improvements to the environmental licensing process in Espírito Santo; (iv) implementation of a monitoring network for water resources; (v) construction of a water resource management system; (vi) environmental education. 4. Institutional, Financial and Operational Strengthening of CESAN. This component would include activities designed to (i) improve CESAN’s financial and operational performance; and (ii) to hold CESAN accountable to its customers in terms of performance. 4. Safeguard policies that might apply Environmental Assessment (OD 4.01). The project is expected to have a very positive environmental impact overall, by connecting some 410,000 additional people to sewage collection and treatment systems in the Grande Vitória and Guarapari metropolitan areas, thereby cleaning up the estuarine and coastal water ways within and adjacent to these urban areas. Local construction impacts will be controlled through detailed environmental guidelines that will be incorporated into bidding documents. An environmental assessment will be prepared in January, 2004. 5. Tentative financing Source: ($m.) BORROWER 26 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 36 Total 62 6. Contact point Contact: Franz R. Drees Title: Sr. Sanitary Engineer Tel: (202) 458-7735 Fax: (202) 676-1821 Email: Fdrees@worldbank.org