The World Bank Kenya Water Security and Climate Resilience Project (P117635) REPORT NO.: RES36374 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF KENYA WATER SECURITY AND CLIMATE RESILIENCE PROJECT APPROVED ON JUNE 18, 2013 TO REPUBLIC OF KENYA WATER GLOBAL PRACTICE AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Carlos Felipe Jaramillo Senior Global Practice Director: Jennifer J. Sara Practice Manager/Manager: Catherine Signe Tovey Task Team Leader: Xiaokai Li The World Bank Kenya Water Security and Climate Resilience Project (P117635) CURRENCY EQUIVALENTS (Exchange Rate Effective as of March 18, 2019) Currency Unit = Kenya Shilling (KES) KES 100.38 = US$1.00 US$1.00 = SDR 0.72 FISCAL YEAR July 1 – June 30 ABBREVIATIONS AND ACRONYMS AF Additional Financing IA Implementing Agency BWRC Basin Water Resource Committee DMA District Metering Area EA Executing Agency EFA Economic and Financial Analysis FEWs Flood Early Warning System FM Financial Management GoK Government of Kenya HVC Higher-value Crop KMD Kenya Metrology Department IF Investment Framework ISC Implementation Support Consultant IWUA Irrigation Water User Association KWPF Korea World Bank Group Partnership Facility LNIP Lower Nzoia Irrigation Project M&E Monitoring and Evaluation MOWASCO Mombasa Water and Sewerage Company MWS Ministry of Water and Sanitation MTR Midterm review NIB National Irrigation Board NRW Non-revenue Water O&M Operation and Maintenance PDO Project Development Objective PIU Project Implementation Unit NPMU National Project Management Unit PS Principal Secretary PSC Project Steering Committee SCMPs Sub Catchment Management Plans SRI System for Rice Intensification TF Trust Fund WRA Water Resources Authority The World Bank Kenya Water Security and Climate Resilience Project (P117635) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P117635 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 18-Jun-2013 31-Dec-2022 Organizations Borrower Responsible Agency Republic of Kenya Ministry of Water & Sanitation Project Development Objective (PDO) Original PDO The project development objectives of KWSCRP-1 are to: (i) increase availability and productivity of irrigation water for project beneficiaries; and (ii) enhance the institutional framework and strengthen capacity for water security and climate resilience for thecountry. Current PDO The PDOs of KWSCRP-1 are to (a) increase availability and productivity of irrigation water for project beneficiaries and (b) enhance the institutional framework and strengthen capacity for water security and climate resilience in certain areas of the country. Within the PDO, ‘capacity for water security and climate resiliency’ primarily includes improved water services, flood protection, and analytical capacity to understand and manage hydrological variability. OPS_TABLE_PDO_CURRENTPDO The World Bank Kenya Water Security and Climate Resilience Project (P117635) Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-56740 26-Jun-2015 07-Sep-2015 07-Sep-2015 31-Dec-2022 58.00 3.02 54.16 IDA-52680 18-Jun-2013 29-Jul-2013 24-Oct-2013 31-Dec-2022 141.31 50.79 79.56 TF-A0761 26-Jun-2015 07-Sep-2015 07-Sep-2015 31-Dec-2020 3.50 0 3.50 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Kenya Water Security and Climate Resilience Project (P117635) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. Background. This project was approved by the Board of Executive Directors on June 18, 2013, in the amount of US$155 million. The project became effective on October 24, 2013. An additional financing (AF) of US$58 million (P151660), a US$3.5million grant from the Korea World Bank Group Partnership Facility (KWPF) Trust Fund (TF), and a level one project restructuring were approved by the Board of Executive Directors on June 4, 2015. The AF was prepared at the request of the Government of Kenya (GoK) to finance new activities that were not envisioned in the original project, specifically, support for improved and new flood control infrastructure on the Lower Nzoia River providing enhanced flood protection for 66,700 people as well as new watershed management activities in the Nzoia Watershed. The additional grant from the KWPF was to support an improved flood forecasting and early warning system for the flood prone Lower Nzoia river reach. The restructuring was required to amend the development objective to narrow the geographic scope of the project from the entire country to certain agreed areas of the country. In addition, the restructuring reallocated funds to add a program of support for improvement of water services in Mombasa County to enable it to receive additional water once the Mwache Dam is operational. Finally, small adjustments and reallocations were made to specific subcomponents and the project closing date was extended by two years to December 31, 2022. 2. Second Project Restructuring. A second level 2 restructuring was approved in September 2017. The major changes in that restructuring were: (a) cancellation of SDR10 million from the first IDA credit, namely, Cr. no. 52680-KE (mainly from consultancy costs of the 'reform support' and ‘investment pipeline’ subcomponents; (ii) inclusion of all executing agencies such as National Irrigation Board (NIB) and Water Resources Authority (WRA), etc. in the Project Steering Committee (PSC); (iii) results framework (RF) rationalization and revision (indicators and targets); and (iv) changes in project costs, financing and disbursement, in line with the mid-term review (MTR) agreement. 3. Project components and costs. The Project components and revised costs after the second restrucruting are as indicated below: Table 1. Project Costs after Second Restructuring Project Component At Appraisal After AF and 1st After 2nd (US$ million) restructuring Restructuring (US$ million) (US$ million) A. Component 1: Water Resources Development 1. Water Sector Investments: Water Security in the Nzoia 54.5 46.9 81.3 River: Irrigation (SC 1.1.1.1) 2. Water Sector Investments: Lower Nzoia Flood - 54.0 25.0 Protection (SC 1.1.1.2) 3. Water Sector Investments: Lower Nzoia EWS - 3.5 3.5 (SC 1.1.1.2) 4. Water Sector Investments: Nzoia Watershed - 4.0 5.2 Management (SC 1.1.1.3) 5. Program for Improved Water Services in Mombasa - 25.0 25.0 County (SC 1.1.2) 6. Water Investment Pipeline (SC 1.2) 50.0 30.0 20.0 Subtotal 104.5 163.4 160.0 B. Component 2: Effective Water Sector Institutions 1. Support for Water Sector Transition and Reforms 26.1 21.1 5.0 (SC 2.1) 2. Strengthening Water Management and Planning 30.2 30.2 27.5 (SC 2.2) Subtotal 56.3 51.3 32.5 The World Bank Kenya Water Security and Climate Resilience Project (P117635) C. Component 3: Support for Project Implementation 15.2 15.2 30.0 Project Preparation Advance 3.7 3.0 0.7 Total Baseline Costs 179.0 232.9 223.1 Unallocated 3.7 3.7 Total Project Costs 182.7 236.6 223.1 4. Implementation Status and Challenges. The Project is in the sixth year of implementation. It has been in problem status due to slow progress. The implementation progress and project development objective (PDO) achievement have been rated unsatisfactory for the past 23 months. Although all the main works have so far been contracted except Mombasa North Mainland non-revenue water (NRW) reduction works, the general pace of implementation of the Project has been slow since the credit effectiveness. Under Component 1, the Lower Nzoia irrigation scheme is some 20% completed and construction of the flood protection dikes has just started due to delays in land compensation. The NRW reduction works in Likoni of Mombasa stand at 90% completion. Under Component 2, the Water Resources Authority (WRA) activities including river basin planning and capacity building are significantly behind schedule, so are the soft activities of the Ministry of Water and Sanitation (MWS) including support to water sector institutional development and future investment studies. Limited project results have been achieved on the ground to date. The cumulative IDA credit disbursement as of May 31, 2019 is US$53.6 million (29 percent) after over five years of implementation; and the KWFP TF has not yet disbursed. The disbursement for FY19 stands at US$11 million. The slow implementation progress has been due to extensive delays in procurement of major contracts and the fact that the project design is very complex, with a wide scope and large number of scattered activities and contracts ranging from institutional capacity building and investment studies to water resources management, to irrigation and water services improvement, and to flood management investments, which are implemented by multiple agencies. The management team of the implementing agency (MWS) managing this and the Coastal Region Water security and Climate Resilience Project (P145559) at the same time, is overstretched and has many competing priorities. The recent implementation reviews concluded that the Project needs to be scaled down to enable the government project team to focus the limited capacity on the high priority activities and speed up project implementation and the IDA fund utilization. B. Rationale for restructuring: 5. This third project restructuring was agreed upon during the high-level Bank mission that visited Kenya from February 20 - 27, 2019 to review the Kenya water portfolio performance and optimize the use of available IDA resources allocated to the water sector. Following that mission, the Bank received a request on March 18, 2019, from the National Treasury requesting a partial cancellation of US$70 million equivalent from the undisbursed credit balance of the Project. The goal of the restructuring is to scale down the project investment and focus on activities critical to achieving the PDO through cancelling uncommitted activities and cancelling and/or scaling down low priority activities, corresponding to the requested cancellation of US$70 million. These activities include the WRA data centers, hydro-met monitoring stations, watershed management, non-revenue water reduction works in Mombasa, the revolving fund for agriculture development support under the NIB component, and investment preparatory studies under the MWS component. II. DESCRIPTION OF PROPOSED CHANGES 6. The proposed Level 2 restructuring includes changes in the project results framework, project components, costs and financing (including partial cancellation of the IDA credit), allocations between disbursement categories, disbursement estimates, and legal agreement. The proposed key changes include: A. Results Framework The World Bank Kenya Water Security and Climate Resilience Project (P117635) 7. Some changes will be made to selected indicators and the results targets to make them more realistic and measurable, reflect the IDA cancellation and reallocation as well as implementation delays. Major changes are highlighted below: i. Outcome indicators: o Indicators: The indictor ‘establishment and operationalization of basin water resources committees (BWRC)’ will be deleted and replaced by a new one ‘Water Resources Authority (WRA) established and operational’ because the BWRC establishment requires an amendment to the Water Act 2016 which is beyond the Project’s control. The reestablishment and strengthening of WRA as the water resources regulator through the WRA component and activities under the support for water sector transition and reforms sub-component is critical to the water security of Kenya as a water scarce country; o Targets: Target values and dates will be amended to reflect the changes made to the project components. In particular, the target for ‘direct project beneficiaries’ will be adjusted to correct an error in calculation of the total beneficiary population at appraisal and be in line with the reduced scope of sub-component 1.1.2 program for improvement of water services in Mombasa county. As agreed with the GoK, the West Mainland non-revenue water (NRW) reduction sub-project will not be financed by the Project. This will affect the targets of two outcome indicators: direct project beneficiaries and NRW for MOWASCO, as well as that of the intermediate indicator ‘household water connections new and rehabilitated’. In addition, the targets of the sub-indicator ‘Area provided with irrigation and drainage services - New (ha)’ will be changed to be the same as the corresponding main indicator by correcting the error in the total area value. ii. Intermediate outcome indicators: o Indicators: Two new indicators are being added to replace the five indicators deleted during the last restructuring in September 2017. The new indicators under Component 2 – Effective Sector Institutions are: (a) Institutions Mandated by the Water Act Established, to measure the results of supporting the water sector transition and reforms; and (b) Number of Sub-catchment Management Plans (SCMPs) revised/developed and implemented. This is to measure the results of the Lower Nzoia watershed management sub-component; and o Targets: The target for indicator ‘household water connections new and rehabilitated’ will be lowered to align with the NRW reduction works scale-down in Mombasa, so will the target for the indicator ‘new or upgraded monitoring stations (hydrologic, hydro-meteorological, and groundwater) with real time telemetry’ due to reduction in investment. The final target for the indicator ‘Development and use of Investment Framework (IF)’ will be revised by deleting the word ‘all’ because the IF will be applied to limited number of projects. The rest of target changes is shifting the interim annual targets to realistic dates in view of the implementation delays. B. Project Components, Costs and Financing 8. The changes to project components, costs and financing are summarized as follows. i. Components: The following changes are being made under different project components: o deletion of a number of low-priority activities, including the West Mainland NRW reduction works in Mombasa (Sub-component 1.1), the national and regional data centers of WRA (Sub-component 2.2), future storage dams and regional water supply master plan studies (Sub-component 1.2); o scale-down of some activities including the coverage of the Lower Nzoia watershed management (Sub- component 1.1), number of hydro-met monitoring stations (unprocured part, Sub-component 2.2), and the revolving fund (sub-grants) for the Lower Nzoia irrigation scheme (Sub-component 1.1); The World Bank Kenya Water Security and Climate Resilience Project (P117635) o Increase in project management costs (Sub-component 1.1): Because the Lower Nzoia works and other project activities involve multiple executing agencies requiring frequent travel and coordination meetings, the project management costs, particularly incremental operating costs become significantly higher; and o Reduction in support to project implementation (Component 3): The funding for this component is being reduced considering that the national project management unit (NPMU) and the related costs for implementation support and management are shared with the Coastal Water Security and Climate Resilience Project (P145559). ii. Costs: The total project costs are expected to decrease from US$223.13 million to an estimated US$146.07 million. This is resulting from cancellation of the uncommitted project activities and cancelling and/or scaling- down the low-priority activities. The revised costs of the three components are shown in Table 2. iii. Financing: The financing plan will be adjusted to reflect the cancellation of US$70.00 million equivalent from the IDA Credit as requested by the GoK, and corresponding reduction in project scope. The total IDA financing will decrease from US$181.33 million to US$111.33 million equivalent, while that of GoK counterpart funding from US$20.99 million to US$13.90 million equivalent. The funding from the KfW and KWPF will remain US$16.44 million equivalent and US$3.5 million respectively (See Table 2). Table 2. Original and Proposed Project Costs and Financing (Unit: US$ million) Original Budget Before Restructuring Revised Budget After Restructuring Components IDA KfW KWPF GoK Bene- Total IDA KfW KW GoK Bene- Total and Sub- ficiary PF ficiary components Component 1. 123.42 16.44 3.50 15.72 0.90 159.97 78.00 16.44 3.50 13.40 0.90 112.24 Water Resources Development SC 1. l: Water 103.42 16.44 3.50 15.72 0.90 139.97 68.27 16.44 3.50 13.40 0.90 103.41 Sector Investments SC I. l. 1: 49.53 16.44 14.42 0.90 81.29 39.10 16.44 13.40 0.90 70.74 Program for Enhanced Water Security in the Nzoia River SC1.1.1.a: 43.72 14.06 57.78 37.27 14.06 51.33 Water Sector Investments — Lower Nzoia Irrigation SC 1.1.1.b. 3.33 0.50 2.46 6.29 0.83 0.50 1.33 Agricultural Support and Value Chain SC 1.1.1.c. 2.00 1.76 1.67 0.90 6.33 1.76 0.90 2.66 Participatory Irrigation Management SC 1.1.1.d. 0.48 0.12 10.29 10.89 1 .00 0.12 13.40 14.52 Project Mgmt. SC 1.1.2: Lower 25.00 25.00 14.13 14.13 Nzoia Flood Protection SC 1.1.3. Nzoia 3.50 3.50 3.50 3.50 FEWS The World Bank Kenya Water Security and Climate Resilience Project (P117635) SC 1.1.4. Nzoia 3.89 1.30 5.18 I .50 1.50 Watershed Management SC1.1.5. 25.00 25.00 13.54 13.54 Program for Improvement of Water Services in Mombasa County SC 1.2: Water 20.00 20.00 9.73 9.73 Investment Pipeline Component 2. 30.72 1.78 32.50 15.74 15.74 Effective Water Sector Institutions SC 2.1: Support 5.00 5.00 5.00 5.00 for Water Sector Transition and Reforms SC 2.2: 25.72 1.78 27.50 10.74 10.74 Strengthening Water Mgmt. and Planning Component 3. 26.52 3.49 30.00 16.91 0.50 17.41 Support for Project Implementation Project Prep. 0.67 0.67 0.67 0.67 Advance Total Project 181.33 16.44 3.50 20.99 0.90 223.13 111.33 16.44 3.50 13.90 0.90 146.07 Costs Note: Amounts in IV. Detailed Changes – Components are in US$’000 and not US$M. C. Changes to Disbursement Categories and Disbursement Estimates 9. Reallocation between disbursement categories: There will be a reallocation of funds among different disbursement categories to accommodate the cancellation of US$70 million equivalent and the need to create a separate disbursement category of sub-grants for Parts 1.A(i)(c) and 1.A(ii) of the Project which was missed in the original Financing Agreement. The sub-grants as envisaged at project appraisal are intended to finance the community-based activities for agricultural and market development and Nzoia watershed management under Sub-component 1.1. A Sub-Grants manual (also referred to as community-based initiative (CDI) manual) has been developed for management of the sub-grants. Table 3a. Proposed Reallocation for IDA Credit 52680-KE (expressed in SDR) Category Original Proposed (IDA 100%) 1/ (IDA 100%) (1). Goods (a) Goods under Part 1 (a) (i) 0 0 (b) Goods excluded under Part 1 (a) (i) 287, 221 287,221 (2). Works The World Bank Kenya Water Security and Climate Resilience Project (P117635) (a) Works under Part 1 (a) (i) 0 0 (b) Works under Part 2 (c) (iv) 0 0 (3). Consultants Services (a) Consulting Services under Part 1 (a) (i) 0 0 (b) Consulting Services (excluding Consultants Services 2,522,899 2,522,899 under Part 1 (a) (i)) (4). Operating Costs 6,388,000 3,674,568 (5). Refund of Preparation Advance 666,850 666,850 (6). Unallocated 0 0 (7). Goods, Works, Consultants Services and 83,535,030 29,685,145 Training (under all Parts of the Project) (8). Goods, works, Consultants Services, Non-consulting 0 42,473,622 Services, Training and Operating Costs (under all Parts of the Project excluding Sub-grants under Parts 1.A(i)(c) and 1.A(ii) of the Project) (9). Sub-grants under Parts 1.A(i)(c) and 1.A(ii) of the 0 2,830,000 Project SUBTOTAL 93,400,000 82,140,305 Cancelled as of July 18, 2017 10,000,000 10,000,000 Cancelled as of March 18, 2019 0 11,259,695 Original Financing Amount 103,400,000 103,400,000 1/ As approved through the Project Restructuring in September 2017 Table 3b. Proposed Reallocation for IDA Credit 56740-KE (expressed in SDR) Category Original Proposed (IDA 100%) 1/ (IDA 100%) (1). Goods 0 0 (2). Works 0 0 (3). Consulting Services 0 0 (4). Operating Costs 0 0 The World Bank Kenya Water Security and Climate Resilience Project (P117635) (5). Refund of Preparation Advance 0 0 (6). Unallocated 0 0 (7). Goods, Works, Consultants Services and 41,300,000 2,159,695 Training (under all Parts of the Project) (8). Goods, works, Consultants Services, Non-consulting 0 0 Services, Training and Operating Costs (under all Parts of the Project excluding Sub-grants under Parts 1.A(i)(c) and 1.A(ii) of the Project) (9). Sub-grants under Parts 1.A(i)(c) and 1.A(ii) of the 0 0 Project SUBTOTAL 41,300,000 2,159,695 Cancelled as of July 18, 2017 0 0 Cancelled as of March 18, 2019 0 39,140,305 Original Financing Amount 41,300,000 41,300,000 10. Disbursement Estimates: The disbursement projection will also be revised as shown in Table 4 below to reflect the partial credit cancellation and the revised financing plan, the disbursement lag vis-a-vis current disbursement estimates, and the implementation schedules of awarded contracts, etc. Table 4. Revised Disbursement Projection of IDA Funding Fiscal Year Planned (USD Million) Revised (USD Million) 2014 2.70 2.70 2015 5.50 5.50 2016 4.60 4.60 2017 7.80 10.10 2018 25.90 18.50 2019 39.80 21.70 2020 38.20 28.90 2021 36.00 9.40 The World Bank Kenya Water Security and Climate Resilience Project (P117635) 2022 14.80 6.00 2023 6.00 4.00 Total 181.30 111.30 D. Implementation Arrangements 11. There is no change in overall implementation arrangements for the Project. The responsibility division between the implementation agency (MWS) and the executing agencies including Mombasa county will be made clearer in the Financing Agreement. In addition, a legal covenant is being added to make clear the requirements on adopting and implementing by June 30, 2019, a comprehensive and robust monitoring and evaluation system for the project, in line with the PAD. E. Sub-Grants 12. A disbursement category of Sub-Grants is to be created for financing related community-based catchment conservation and management activities in the Lower Nzoia watershed, and the revolving fund to support agricultural and market development as part of the Lower Nzoia irrigation project, all under Sub-component 1.1. The disbursement requirements for the sub-grants, together with a new procurement method of community participation procedures (CPP) for the Sub-Grants financed activities, will also be added. The disbursement requirements and CPP are detailed in the Sub- Grants Manual as part of the project implementation manual (PIM) which needs to be revised by December 31, 2019. F. Safeguards Strengthening 13. Implementation of safeguard aspects will be strengthened as follows: (a) all the project works contracts will include requirements on environment, health and safety (EHS), gender-based violence (GBV) and grievance redress mechanism (GRM), etc.; (b) the implementing agency will be required to promptly notify the Association of any incident or accident related to or having an impact on the Project, including but not limited to any Project-related allegation of gender-based violence or alleged violation of Project-related labor and working conditions, which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers, including, in accordance with the applicable Safeguard Instruments; and (c) the GoK will commit to provide adequate counterpart funds for the resettlement expenditures under the Project. G. Operation and Maintenance institutional arrangements and financing for LNIP 14. In order to ensure the sustainable use of the large gravity scheme - LNIP (4,043 ha) being developed under the Project, a management entity for operation and maintenance (O&M) of the scheme is to be established and water tariffs (fees) renewed based on O&M cost recovery and users-pay principles. There is a management team and a tariff scheme for the existing small-scale pumping scheme of 777 ha at Bunyala. The management entity will be established and water tariffs renewed on the basis of the existing scheme. H. Irrigation developments in the upper reach of Nzoia river that would impact the viability of LNIP. 15. There are different large schemes being studied and designed upstream of the LNIP in the same river basin, their development may affect the water availability for and sustainability of the LNIP. Consultation with stakeholders needs to The World Bank Kenya Water Security and Climate Resilience Project (P117635) be carried out before decisions are taken on upper reach irrigation development. Accordingly, a legal covenant will be added requiring that the Government shall consult with the World Bank prior to the issuance of any water withdrawal permit in the Nzoia river basin that may impact the viability of the Lower Nzoia Irrigation Scheme. I. Legal Agreement Amendment 16. The Financing Agreement will be amended to reflect the changes highlighted above, and introduce several legal covenants, as agreed with the Recipient, in relation to Lower Nzoia irrigation scheme management, safeguards requirements, and government counterpart funding to ensure smooth implementation and sustainable operation of project facilities. The main changes to the Financing Agreement are summarized below: i. Cancel US$70 million equivalent of the IDA credit financing as per the GoK request; ii. Adjust the disbursement categories, including by adding a new Sub-Grants category, and add the related disbursement requirements for the Sub-Grants as well as the related procurement method which were missed in the original Financing Agreement; iii. Significantly strengthen safeguards section to reflect gender-based violence (GBV), grievance redress mechanism (GRM), and environmental, health and safety (EHS), etc.), and measures to mitigate the Project- related environmental and social risks, particularly resettlement risks; iv. Add a covenant on counterpart funding availability for resettlement expenditures and inclusion of such financing in the annual budget; v. Add a covenant requiring the GoK to establish and maintain an LNIP (O&M) management entity, and a covenant on the establishment of irrigation water tariffs (fees) for the use of LNIP irrigation services; vi. Add a covenant requiring the GoK to establish and maintain a monitoring and evaluation (M&E) system; vii. Add a covenant requiring the GoK to consult with the World Bank prior to the issuance of any water withdrawal permit in the Nzoia river basin that may impact the viability of the Lower Nzoia Irrigation Scheme. I. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Legal Covenants ✔ The World Bank Kenya Water Security and Climate Resilience Project (P117635) Procurement ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Loan Closing Date(s) ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Institutional Arrangements ✔ Financial Management ✔ APA Reliance ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) C1: Water Resources C1: Water Resources 159964.00 Revised 112240.00 Development Development C2: Effective Water Sector C2: Effective Water Sector 32499.00 Revised 15740.00 Institutions Institutions C3: Support for Project C3: Support for Project 30000.00 Revised 17410.00 Implementation Implementation Project Preparation Advance 667.00 Revised Project Preparation Advance 667.00 Unallocated 0.00 Unallocated 0.00 The World Bank Kenya Water Security and Climate Resilience Project (P117635) TOTAL 223,130.00 146,057.00 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation BORROWER' S REQUEST IDA-52680- Disburs XDR 93,400,000.00 11,259,695.00 18-Mar-2019 82,140,305.00 FOR 001 ing COUNTRY REASONS BORROWER' S REQUEST IDA-56740- Disburs XDR 41,300,000.00 39,140,305.00 28-Mar-2019 2,159,695.00 FOR 001 ing COUNTRY REASONS BORROWER' S REQUEST TF-A0761- Effectiv USD 3,500,000.00 0.00 28-Mar-2019 3,500,000.00 FOR 001 e COUNTRY REASONS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-52680-001 | Currency: XDR iLap Category Sequence No: 1(A) Current Expenditure Category: Goods under Pt1a(i) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 1(B) Current Expenditure Category: Gds excl under Pt 1a(i) 287,221.00 287,220.73 287,221.00 100.00 100.00 iLap Category Sequence No: 2(A) Current Expenditure Category: Works under Pt 1a(i) The World Bank Kenya Water Security and Climate Resilience Project (P117635) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 2(B) Current Expenditure Category: Works under Pt 2c(iv) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 3(A) Current Expenditure Category: Cons Svcs Pt 1a(i) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 3(B) Current Expenditure Category: Cons Svcs exc Pt1a(i) 2,522,899.00 2,522,898.39 2,522,899.00 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: Operating Costs 6,388,000.00 3,674,567.68 3,674,568.00 100.00 100.00 iLap Category Sequence No: 5 Current Expenditure Category: PPF REFINANCING 666,850.00 666,849.13 666,850.00 iLap Category Sequence No: 6 Current Expenditure Category: UNALLOCATED 0.00 0.00 0.00 0 iLap Category Sequence No: 7 Current Expenditure Category: GDS,WKS,CS,TRN 83,535,030.00 25,344,609.19 29,685,145.00 100.00 100.00 Current Expenditure Category: GDS, WKS, CS, NCS, TRN, OC (under all parts of iLap Category Sequence No: 8 the Project excluding Sub-grants under parts 1.A(i)(c) and 1.A(ii)) 0.00 0.00 42,473,622.00 100 Current Expenditure Category: Sub-grants under Parts 1.(A)(i)(c) and 1.A(ii) of the iLap Category Sequence No: 9 Project 0.00 0.00 2,830,000.00 100 Total 93,400,000.00 32,496,145.12 82,140,305.00 The World Bank Kenya Water Security and Climate Resilience Project (P117635) IDA-56740-001 | Currency: XDR iLap Category Sequence No: 1(A) Current Expenditure Category: Goods under Pt1a(i) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 1(B) Current Expenditure Category: Gds excl under Pt 1a(i) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 2(A) Current Expenditure Category: Works under Pt 1a(i) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 2(B) Current Expenditure Category: Works under Pt 2c(iv) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 3(A) Current Expenditure Category: Cons Svcs Pt 1a(i) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 3(B) Current Expenditure Category: Cons Svcs exc Pt1a(i) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: Operating Costs 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 6 Current Expenditure Category: UNALLOCATED 0.00 0.00 0.00 iLap Category Sequence No: 7 Current Expenditure Category: GD,WK,CS,TRN 41,300,000.00 2,086,302.77 2,159,695.00 100.00 100.00 The World Bank Kenya Water Security and Climate Resilience Project (P117635) Total 41,300,000.00 2,086,302.77 2,159,695.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2013 0.00 0.00 2014 2.68 2.68 2015 5.48 5.48 2016 4.55 4.55 2017 7.78 7.78 2018 25.95 25.95 2019 39.82 21.70 2020 38.18 28.90 2021 36.00 19.40 OPS_DETAILEDCHANGES_LEGCOV_TABLE LEGAL COVENANTS Loan/Credit/TF Description Status Action Financing Agreement :Co-financing for Lower Nzoia Irrigation Scheme Phase 1 | Description :The Deadline After delay complied IDA-52680 for the effectiveness of the Co-Financing Agreement for No Change with the Lower Nzoia Irrigation Scheme is December 31,2013. | Due Date :31-Dec-2013 Financing Agreement :Establishment of NIB PIU | Description :A Project Implementation Unit (PIU) for the IDA-52680 implementation of the Lower Nzoia Irrigation Scheme Complied with No Change Phase 1 has been established at the National Irrigation Board (NIB). | Due Date :31-Dec-2013 The World Bank Kenya Water Security and Climate Resilience Project (P117635) Financing Agreement :Establishment of IMOC | Description :An Inter-Ministerial Oversight Committee (IMOC), to provide strategic guidance and coordination IDA-52680 Complied with No Change support for the project, has been established. The IMOC has been established, members have been assigned and the first meeting was held in March 2015. Financing Agreement: The Recipient shall adopt no later than June 30, 2019, and, thereafter, implement, IDA-52680 throughout Project implementation, a monitoring and Not yet due New evaluation system, in form and substance satisfactory to the Association. Financing Agreement: The Recipient shall establish, no later than June 30, 2020, under terms of reference and IDA-52680 in form and substance satisfactory to the Association, Not yet due New and thereafter, maintain a management entity to . manage and operate the Lower Nzoia Irrigation Scheme The World Bank Kenya Water Security and Climate Resilience Project (P117635) . Results framework COUNTRY: Kenya Kenya Water Security and Climate Resilience Project Project Development Objectives(s) The PDOs of KWSCRP-1 are to (a) increase availability and productivity of irrigation water for project beneficiaries and (b) enhance the institutional framework and strengthen capacity for water security and climate resilience in certain areas of the country. Within the PDO, ‘capacity for water security and climate resiliency’ primarily includes improved water services, flood protection, and analytical capacity to understand and manage hydrological variability. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 Increase availability, and productivity of irrigation water for project beneficiaries 3. Number of people with increased flood 0.00 0.00 0.00 0.00 0.00 0.00 0.00 66,700.00 66,700.00 66,700.00 66,700.00 protection (Number) Direct project beneficiaries 0.00 0.00 0.00 404.00 1,770.00 2,100.00 2,100.00 100,000.00 200,000.00 225,000.00 225,000.00 (Number) Action: This indicator has been Revised Female beneficiaries 0.00 0.00 0.00 0.00 0.00 48.00 48.00 48.00 48.00 48.00 48.00 (Percentage) The World Bank Kenya Water Security and Climate Resilience Project (P117635) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 4. Decrease in Non- Revenue Water for 61.00 61.00 61.00 61.00 61.00 55.00 52.00 47.00 44.00 40.00 40.00 MOWASCO (Percentage) 2. Agriculture Production Per Cubic Meter of 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.30 0.40 0.60 0.60 Water Used (Number) Area provided with irrigation and drainage services 0.00 0.00 0.00 0.00 0.00 0.00 777.00 2,000.00 4,043.00 4,043.00 4,043.00 (ha) (CRI, Hectare(Ha)) Area provided with irrigation and drainage 0.00 0.00 0.00 0.00 0.00 0.00 777.00 777.00 2,000.00 4,043.00 4,043.00 services - New (ha) (CRI, Hectare(Ha)) Action: This indicator has been Revised Water Resources WRA Authority (WRA) WRA not established and Established and established operational Operational (Text) Action: This Rationale: indicator is New The World Bank Kenya Water Security and Climate Resilience Project (P117635) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 Establishment and proper function of the WRA as the water resources regulator as mandated by the new 2016 Water Act is very critical for a water scarce country like Kenya Enhance the institutional framework and strengethen capacity for WSCR for the contry as a whole BWRCs 7. Establishment operational BWRCs BWRCs BWRCs BWRCs and Formal and signed operational operational operational operational and Operationalization appointment Performance and included and included and included included in of 6 Basin Water N/A N/A and contract. in WRMA CEO in WRMA CEO in WRMA CEO WRMA CEO Resources establishment Regulations to performance performance performance performance Committees (BWRC) of 6No BWRCs support BWRC contract contract contract contract (Text) functions developed. Action: This indicator has been Marked for Deletion Transition Water Act Water Policy 6. Water Act Sector Water Act in Water Act in Water Act Water Policy Plan Adopted Water Policy submitted to Water Act submitted to Water Policy Water Policy Policy and Transition draft form with draft form submitted to submitted to for and Bill Parliament Adopted Parliament Adopted Adopted Plan Adopted (Text) Ministry with ministry Cabinet Cabinet Implementati adopted and Senate and Senate on PDO Table SPACE The World Bank Kenya Water Security and Climate Resilience Project (P117635) Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 C1: Water Resources Development 11. Six Basin Plans Developed and 0.00 0.00 0.00 0.00 0.00 1.00 3.00 6.00 6.00 6.00 6.00 Adopted (Number) 2. Value of scheme Agricultural 5.34 5.34 5.34 5.34 5.34 5.34 5.50 6.60 9.24 11.37 11.37 Products marketed (Amount(USD)) 1. Cropping Intensity 77.00 77.00 77.00 77.00 77.00 77.00 80.00 100.00 140.00 170.00 170.00 (Percentage) 13. New or Upgraded Monitoring stations (Hydrologic, hydro- 0.00 1.00 1.00 1.00 1.00 41.00 41.00 41.00 91.00 91.00 91.00 meterological and groundwater) (Number) Action: This indicator has been Revised 3. Operational IWUAs Created or 0.00 0.00 0.00 0.00 0.00 3.00 6.00 10.00 12.00 14.00 14.00 Strengthened (Number) C2: Effective Water Sector Institutions 5. Number of People 0.00 200.00 400.00 600.00 800.00 2,000.00 2,500.00 3,000.00 3,500.00 4,000.00 4,000.00 Consulted (Number) The World Bank Kenya Water Security and Climate Resilience Project (P117635) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 9. Studies completed to 0.00 0.00 0.00 2.00 2.00 2.00 3.00 6.00 9.00 12.00 12.00 advance investment pipeline (Number) 7. Revenue Collection Efficiency 90.00 97.00 (Percentage) Initial IF revised, including based on lessons learned from Initial revised IF for water 8. Development and Revised IF Initial IF has early IF approved sector If applied for If applied for IF applied for IF applied for IF applied for use of Investment applied for all been Draft IF application by national investments water sector water sector water sector water sector water sector Framework (IF) water sector developed and consultation prepared and investme investments investments investments investments (Text) investments stakeholder process approved consultation finalized includeding stakeholder consultaion Action: This indicator has been Revised Water users provided with 0.00 0.00 0.00 0.00 194.00 850.00 2,100.00 2,100.00 2,100.00 2,100.00 2,100.00 new/improved irrigation and The World Bank Kenya Water Security and Climate Resilience Project (P117635) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 drainage services (number) (Number) Water users provided with irrigation and drainage services 0.00 0.00 0.00 0.00 0.00 0.00 48.00 48.00 48.00 48.00 1,008.00 - female (number) (Number) 6. Household Water Connections New 0.00 0.00 0.00 0.00 1,475.00 4,475.00 4,475.00 5,300.00 6,500.00 7,500.00 7,500.00 and Rehabilitated (Number) Action: This indicator has been Revised Institutions mandated by the Water Act (2016) 0.00 100.00 established (Percentage) Action: This indicator is New Number of SCMPs revised/developed 44.00 59.00 and implemented (Number) The World Bank Kenya Water Security and Climate Resilience Project (P117635) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 Action: This indicator is New C3: Support for Project Implementation 14. Project M&E M&E system M&E system M&E system M&E system M&E system Not Not Not M&E system Fully Established and NA partially fully fully fully fully Established Established Established operational Operational Operational (Text) established operational operational operational operational IO Table SPACE The World Bank Kenya Water Security and Climate Resilience Project (P117635)