The World Bank Earthquake Housing Reconstruction Project (P155969) REPORT NO.: RES25032 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF EARTHQUAKE HOUSING RECONSTRUCTION PROJECT (CREDT 5706-NP ORIGINAL PROJECT AND CREDIT 6164-NP ADDITIONAL FINANCING) APPROVED ON JUNE 29, 2015 TO GOVERNMENT OF NEPAL SOCIAL, URBAN, RURAL AND RESILIENCE GLOBAL PRACTICE SOUTH ASIA Regional Vice President: Hartwig Schafer Country Director: Idah Z. Pswarayi-Riddihough Country Manager: Faris H. Hadad-Zervos Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager/Manager: Christoph Pusch Task Team Leader: Kamran Akbar The World Bank Earthquake Housing Reconstruction Project (P155969) ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank CEO Chief Executive Officer CLPIU Central Level Project Implementation Unit DFID Department for International Development DRM Disaster Risk Management DTCO District Treasury Controller Office EHRP Earthquake Housing Reconstruction Project ESMF Environment and Social Management Framework ESS Environmental and Social Screening FA Financing Agreement GA Grant Agreement GMALI Grant Management and Local Infrastructure GoN Government of Nepal I/NGO International/ Non-Governmental Organization IT Information Technology JICA Japan International Cooperation Agency LG Local Government MDTF Multi Donor Trust Fund MOFALD Ministry of Federal Affairs and Local Government MOUD Ministry of Urban Development MTR Mid Term Review NPR Nepalese Rupees NRA National Reconstruction Authority PA Participation Agreement PDO Project Development Objective PMU Project Management Unit POM Project Operational Manner SIA Structural Integrity Assessment SIDA Structural Integrity and Damage Assessment TA Technical Assistance USAID United States Agency for International Development VDC Village Development Committee The World Bank Earthquake Housing Reconstruction Project (P155969) BASIC DATA Product Information Project ID Financing Instrument P155969 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 29-Jun-2015 30-Jun-2023 Organizations Borrower Responsible Agency Ministry of Finance National Reconstruction Authority Project Development Objective (PDO) Original PDO The Project Development Objective (PDO) is to restore affected houses with multi-hazard resistant core housing units in target areas and to enhance the government's ability to improve long-term disaster resilience. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-61640 15-Dec-2017 21-Jan-2018 26-Feb-2018 30-Jun-2023 300.00 69.44 227.78 IDA-57060 29-Jun-2015 14-Aug-2015 28-Jan-2016 31-Jul-2020 200.00 199.70 2.40 The World Bank Earthquake Housing Reconstruction Project (P155969) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. The Project Development Objective (PDO) of the Earthquake Housing Reconstruction Project (EHRP) is “to restore affected houses with multi-hazard resistant core housing units in targeted areas and to enhance the Government’s ability to improve long-term disaster resilience.” Based on the Mid Term Review (MTR) findings and progress achieved, the PDO remains relevant and achievement of the PDO looks realistic, though work on enhancing the Government’s ability to improve long-term disaster resilience needs to be accelerated. Achievement of the PDO, therefore, was rated as Moderately Satisfactory during the MTR. Following is the status of the project: Component 1: Housing Reconstruction 2. Significant progress has been achieved under this component with accelerated disbursement of the second and third tranches of the housing grants with a satisfactory rate of compliance with safer reconstruction requirements. As of May 4, 2019, out of 669,525 beneficiaries enrolled in the program, 99.48 percent have received the first tranche, 77.79 percent have received the second tranche, and 58.77 percent have received the third tranche of the housing grant. While the inspection regime has gained momentum, the processing time between successful inspection and tranche disbursement needs improvement. This lag is particularly higher for the third tranche payment, where 12,476 beneficiaries out of 405,979 approved beneficiaries have yet to receive the third tranche. The National Reconstruction Authority (NRA) has initiated an ‘output verification’ process through a third inspection of the completed houses verifying that reconstruction has been completed. Progress update of the 14 most affected districts is as shown in Table 1. TABLE 1. EHRP - PROGRESS REPORT - 14 MOST AFFECTED DISTRICTS S. No Indicator Beneficiaries Indicator Beneficiaries Indicator Beneficiaries Second Tranche Third Tranche A Total number 724,980 D Applicants1 534,884 H Applicants1 409,516 of eligible beneficiaries B Beneficiaries 669,525 E Approved 531,209 I Approved 405,979 - PA signed A-B PA not signed 55,455 F Not 2,339 J Not 1,962 Approved Approved C First tranche 666,047 G Second 520,842 K Third 393,503 recipients tranche tranche recipients recipients Reconstruction Completed 364,332 Source: Central-level Project Implementation Unit (CLPIU)-Building, CLPIU-Grant Management and Local Infrastructure (GMALI). Note: PA = Participation Agreement. 1 Total number of applicants include those approved, not approved, as well as those pending review. 3. Establishment of a dedicated Project Management Unit (PMU) and adequacy of staffing. The NRA has established a fully dedicated PMU for the EHRP with core staffing and a separate office space. The PMU provides focused attention to achieving the EHRP’s desired results and ensures smooth project implementation, facilitation, and coordination of the project The World Bank Earthquake Housing Reconstruction Project (P155969) activities. The Project Director has been delegated authority to make fiduciary decisions in the capacity of the Government of Nepal’s (GoN) Joint Secretary including (a) approval of the EHRP procurement plan within the approved annual budget; and (b) authority to make the procurement decisions with regards to the EHRP as per the Public Procurement Act and Regulations. The Project Director is supported by a Deputy Project Director/Senior Divisional Engineer, Account Officer, and a range of specialist consultants. The NRA provides appropriate financial and administrative authorities over the project to the PMU for smooth implementation and timely decision making. Annual budgets for the EHRP and the related Multi Donor Trust Fund (MDTF, P162067; see paragraph 33 for details) which is supporting the housing reconstruction project are being appropriated by the NRA to the PMU, and in turn the PMU provides budget authorizations and spending guidelines to CLPIUs. 4. Socio-technical assistance. Although the reconstruction of private housing has picked up pace, there are still many beneficiaries who have not started the reconstruction. One of the major reasons has been noted to be lack of enough technical field staffs to provide technical assistance and social mobilizers to facilitate community mobilization and information dissemination. Several options were discussed with the NRA on providing socio-technical assistance. NRA proposes to recruit Senior Engineers, Mobile Masons and Social Mobilizers and deploy them at municipal level. 5. Training. A number of national and international NGOs (I/NGOs) as well as bilateral development partners are supporting training of artisans to a large extent and that of engineers that include engineers, sub-engineers, assistant sub engineers and overseers. So far over 60,000 artisans and engineers have already been trained in housing reconstruction. The engineers are responsible for providing technical assistance to the beneficiaries during housing reconstruction. However, their major responsibility is to carry out inspections at plinth and roof-band levels to check compliance with construction guidelines for reconstruction of multi-hazard resistant structures as required in the PDO. Engineering staff turnover has remained high because of growing opportunities in the private sector, difficult geographical terrain and inconsistent incentive systems. The staff turnover and changes in reconstruction guidelines and inspection guidelines necessitates training of new staff as well as refreshers for the existing teams. The World Bank task team is focusing on training of engineers by NRA so that Bank compliance requirements are continuously met, though support for training of artisans in small number will continue. Component-2: Disaster Risk Management Systems 6. Component 2 relates to the second part of the PDO “to enhance the Government’s ability to improve long-term disaster resilience.” Progress on Component 2 was to be measured through two result indicators: i. Two-hundred (200) Government officials trained in Disaster Risk Management; ii. Four (4) Technical studies on disaster risk management completed. 7. Progress on Component-2 remains slow as only 29 government officials have received training and none of the studies has been conducted. The slow pace of activities has been on two accounts: (i) housing reconstruction has been prioritized; and (ii) the Government has been in transition from a unitary form of government to a federal structure, with counterparts awaiting clarity on roles and responsibilities with regards to devolved responsibilities and authorities. Further, it was felt that the results were of too small a scale to warrant diverting efforts from housing reconstruction. B. Rationale for Restructuring Background 8. Major changes have taken place in the governance structure of the country as well as within NRA. Therefore, the first and foremost imperative is to align the project with the new constitution, ‘the grand norm’, of the country. The restructuring of EHRP Original Project Credit 5706-NP and Additional Financing 6164-NP is necessary not only to align the project with the new governance structure but also to extend maximum possible support to federalism. 9. With implementation of the 2015 Constitution, a transformation has taken place in Nepal. With moving from a unitary form of government to a federal structure, the country has been divided into 7 provinces and 753 Local Governments (LG), The World Bank Earthquake Housing Reconstruction Project (P155969) referred to as local level, in addition to the already-existing 77 districts. The LGs are classified as, respectively: Mahanagarpalikas (Metropolitan cities), Upa-Mahanagarpalikas (Sub Metropolitan Cities), Gaun Palikas (Rural Municipalities), and Nagar Palikas (Urban Municipalities). The Village Development Committees (VDCs) of the Ministry of Federal Affairs (MOFALD) have been abolished or converted into Wards, the lowest tier administrative unit. 10. The number of federal ministries has been reduced from 30 to 22, as a number of functions have been devolved to sub- national levels. Under the new constitution there are five lists of subjects: (a) Schedule-5: List of Federal Powers (b) Schedule-6: List of Provincial Powers (c) Schedule-7: List of Concurrent Powers of Federation and State (d) Schedule-8: List of Local Level Power (e) Schedule-9: List of Concurrent Powers of Federation, Provincial and Local Level 11. Disaster management is a Schedule-9 subject, whereas international relations and agreements including external aid and borrowing remain federal subjects under Schedule-5. The Prime Minister’s Office, nine concerned federal ministries, provincial governments and LGs are required to play roles broadly defined in the ‘Disaster Risk and Management Act, 2074 (2017)’ as well as Government of Nepal (Work Division) Regulation, 2074. Structural Changes within NRA 12. With regards to NRA, there are two ministries that were an integral part of the EHRP implementation: Ministry of Federal Affairs and Local Development (MOFALD) and the Ministry of Urban Development (MOUD). The Participation Agreements (PA) for housing grants were signed between Government of Nepal and eligible beneficiaries through VDC secretaries. However, with the abolishing of VDCs, LGs become the legal entities with whom any amendment or new PAs will need to be signed. 13. As provided in the Financing Agreement (FA) ‘Para 2, Section I.A, Schedule 2’ and ‘Para 4, Section I.A, Schedule 2’, both ministries were required to maintain implementation units at the central and district levels. As provided in the Project Operations Manual (POM), MOFALD Central Level Planning Implementation Unit (CLPIU) and District Level Project Implementation Unit (DLPIUs) were responsible for verification of beneficiaries and endorsing the lists for release of instalments to District Treasury Controller Officer (DTCO). NRA has been restructured and the CLPIUs are now brought under administrative control of NRA with changed nomenclature except for CLPIU Education. The CLPIU MOUD is now referred to as ‘CLPIU- Building’ whereas CLPIU-MOFALD is now referred to as ‘CLPIU-Grant Management and Local Infrastructure’ or CLPIU- GMALI. These changes need to be reflected in the Financing Agreement (FA). Safeguards 14. Under the original financing, the project team experienced difficulties due to complicated safeguard arrangements which involved developing environmental and social screening (ESS) reports of each settlement in three districts totaling to approximately 1000 ESSs and several cluster level Environment and Social Management Plans (ESMP); meanwhile the safeguard assessments carried out in the three original districts also revealed limited environmental and social impacts arising from project activities. Considering the lesson learnt in three districts (Dolakha, Nuwakot and Dhading) in terms of the feasibility and usefulness of the safeguard arrangements, plus the recent changes in governance structure, the original Environment and Social Management Framework (ESMF) has been revised with mutual agreement between the World Bank and the GoN, to make it proportionate to environment and social risks and impacts and reflect legal, regulatory and institutional regime changes. The scope of the revised ESMF excludes Community relocation, Integrated settlement development, Urban areas, Areas supported by other donor or International/National Non-Government Organisations (I/NGO) and Reconstruction of heritage/cultural sites and other physical and social infrastructure and services. Preparation of a project level ESMP has been introduced as part of the ESMF which requires review, verification and validation through the consultation with local government. A separate site specific ESMP along with an accompanying technical verification report will be prepared as needed for special cases of environmental and social issues. Priority is given to coordinate and develop linkages with other similar agencies for sharing mitigation measure costs; low cost options will be adopted, and final mitigation costs must be approved by NRA and relevant agencies. CLPIU-GMALI, NRA will then play a The World Bank Earthquake Housing Reconstruction Project (P155969) coordination and linkage role with line agencies working in the sector to implement mitigation measures. Socio-technical assistance will be provided under the project to address vulnerable groups under the revised ESMF. The FA needs to be revised to reflect these simplified safeguard arrangements. Activities under Component-2 15. Activities supporting the second part of the PDO “to enhance the Government’s ability to improve long-term disaster resilience” need to be aligned with evolving post-disaster needs. As such, the following new activities are planned under Component 2 (“Disaster Risk Management Systems”) of the project, which is aimed at supporting GoN to put in place systems to provide better disaster risk reduction, preparedness, and disaster response. Implementation of these activities entails changes to the results framework and/or project implementation arrangements to align with Nepal’s new governance structure, which will be addressed through the restructuring. A. Structural Integrity Assessment (SIA) of Social Infrastructure 16. A World Bank-executed Technical Assistance (TA) on recovery and resilience of education infrastructure affected by the April 25, 2015 and May 12, 2015 earthquakes carried out a detailed Structural Integrity and Damage Assessment (SIDA) of education facilities located in the 14 most-affected districts. Over 5,000 schools comprising over 18,000 buildings were surveyed. The data collected revealed that 30 percent of the buildings were completely destroyed, another 30 percent suffered major damages and were recommended for retrofitting, while the remaining were either recommended for minor repairs or were found to be intact. The TA also prepared a prioritized investment plan for reconstruction, retrofitting, and repair of educational infrastructure. In addition to general information of damage caused, a vulnerability assessment survey was also conducted for all the public educational infrastructure in those districts. 17. The data collected has been used to develop a comprehensive web-based SIDA portal containing pictures of the structures, technical details including layouts, coordinates, and number of students, and cost estimates of repair, retrofitting, or reconstruction, whichever is applicable. The SIDA portal has been well received by and assists the GoN and development partners (Japan International Cooperation Agency [JICA] and Asian Development Bank [ADB]) to make informed decisions with regards to their interventions in school reconstruction. 18. Building upon the SIDA experience and considering disaster risks across the country, the idea of scaling up SIDA to carry out a structural integrity assessment of all the schools of the country was under discussion for two months during May-June 2018. During the MTR, carried out in August 2018, it was also agreed to widen the scope of the exercise to a manageable level to include the relevant social infrastructure; thus, health posts were also included in the scope of the proposed Structural Integrity Assessment (SIA) of Social Infrastructure. All the stakeholders, Ministry of Finance, NRA, U.K. Department for International Development (DFID) and other development partners supported the idea. During the MTR, the idea was discussed extensively among the NRA, CLPIU-Education, and the World Bank team, and it was agreed to undertake the exercise as part of EHRP, under Component 2. It was agreed that: (a) A structural integrity assessment of all the schools located in the remaining 63 districts will be carried out, as schools in the 14 most-affected districts have already been covered; (b) Public sector health facilities across the country will be surveyed; (c) Private schools with their own buildings will also be included; (d) Schools and health facilities already covered by other development partners will be excluded; (e) Concerned Local Governments (LGs) will be reached out to for their involvement in the process; and (f) Concerned ministries and departments will be kept informed. 19. This exercise will contribute to the second part of the PDO of the EHRP by enhancing the Government’s ability to improve long-term disaster resilience. This component entails the procurement of (a) five engineering firms to carry out the survey; (b) one engineering firm to provide technical guidance for the implementation, quality assurance, analysis of survey data, and development The World Bank Earthquake Housing Reconstruction Project (P155969) of a disaster preparedness plan; and (c) two management information system (MIS) firms to develop a mobile application and web- based portal. The CLPIU-Education team is being assisted in the procurement and implementation of these activities by two structural engineers and one procurement and contract management consultant, whereas procurement of IT Firm to develop mobile application for survey is under processing. B. Integration of LGs and Transfer of Data 20. The NRA was established under Act 11 of 2015 (2072) published in Extra Ordinary Gazette of Government of Nepal on December 20, 2015. Clause 3 of the Article 3 of the Act fixes the term of the Authority to five years with possibility of an extension of one year. NRA came into existence on December 25, 2015, implying that unless extended through an Act of Parliament, NRA will cease to exist on December 24, 2020. All the PAs and the inspection sheets are the GoN’s technical and financial records that will not only be subject to audit but may also serve as evidence in a court of law in case of any litigation. With promulgation of the 2015 constitution, DRM has become a concurrent subject among federal, provincial and local governments. NRA has started the process of transfer of reconstruction responsibilities, especially support to vulnerable beneficiaries, to local governments. 21. Local governments were established in May 2017 whereas provincial governments were formed in January 2018. Both the sub-national governments are new phenomena and are in the process of framing laws as per their respective mandates and developing systems. With these sub-national governments being nascent, substantial input is required to ensure that the reconstruction records are not only properly transferred, both in hard and soft form, but that a system of storage and retrieval is designed. 22. With the establishment of the Palikas under the new constitution, the legal status of Village Development Committees (VDCs) has changed. However, there was no mechanism developed to transfer reconstruction-related records from VDCs, and the project is facing serious difficulty in locating almost 25 percent of the PAs in original. As a result, now enormous effort is being undertaken to retrieve copies from commercial banks that are maintaining beneficiaries’ accounts. As explained in the following paragraph, if records are not transferred in a well thought out manner and well in time to the concerned tiers of government, beneficiaries, concerned authorities, and financial institutions are likely to face unsurmountable administrative problems, such as release of balance tranches to beneficiaries who will have already been paid one or two tranches at the time of closure of NRA or in cases of litigation locating PAs or inspection sheets. Therefore, to ensure that provincial governments and LGs as well as beneficiaries do not face any problems in managing necessary records and provision and receipt of services when the project closes, or the NRA Act expires, it was agreed that under EHRP Component 2, activities will be undertaken to support the integration of LGs into DRM: (a) Special orientation and training programs involving LG elected representatives and officials will be launched, covering all the Palikas in erstwhile 14 most-affected districts to start with. Under the proposed program, training/ orientation will be given on (i) multi-hazard resistant construction; (ii) Nepal Building Codes; and (iii) the NRA’s procedural requirements; (b) NRA will develop a road map for transfer of necessary records, first in soft form and finally in hard form to concerned provincial governments and LGs. 23. The integration of the local governments in DRM and transfer of records will be one of the significant contributions not only to build capacities for DRM but also to strengthen the federal structure. C. Post Disaster Economic Recovery 24. During pre-MTR consultations, the beneficiaries emphasized support for livelihood development, especially in agriculture, livestock, and tourism. The World Bank commissioned a study (August 2017) titled “Assessment of Business Development and Livelihood Enhancement in Nepal” to map the economic recovery potential in the earthquake-affected districts in both construction and non-construction sectors, with a focus on micro-entrepreneurship. The construction sector was analyzed to look at livelihood opportunities during the reconstruction phase, whereas development of other sectors was looked at to identify opportunities for entrepreneurship development for long-term sustainable livelihood opportunities. The study noted that the earthquake had a combined effect on the agriculture, manufacturing, and service sectors, thereby weakening the national economy. The gross The World Bank Earthquake Housing Reconstruction Project (P155969) domestic product (GDP) growth rate of Nepal in 2015 fell from 6 percent to 3.3 percent and further to 0.4 percent in 2016 due to the earthquake, weak monsoon, and trade disruptions, though it picked up in 2017 to 7.5 percent. The study identified four sectors having potential for livelihood enhancement in the most-affected districts i.e. construction, tourism, agriculture and livestock. 25. Government of Nepal is providing a housing subsidy of NPR 300,000 per beneficiary household through EHRP whereas the actual cost of reconstruction of a housing unit could be considerably higher than the grant amount based on the house size and construction material chosen by the beneficiary. This additional cost compounded with income/productivity loss after the earthquake may have led many poor and most vulnerable households to take high interest rate loans from private lenders. As the focus had been putting families under shelter, the affected households had to forgo livelihood and income generation in favor of housing reconstruction. With housing reconstruction having picked up pace and likely to see completion in the next two to three years, the EHRP beneficiaries now feel the need for support in livelihoods enhancement and entrepreneurship development to offset their debts, at least in part, and regain lost opportunities. 26. Government of Nepal has already launched a number of initiatives under various programs, especially poverty alleviation initiatives, to reduce poverty, help people in enhancing incomes and improving livelihoods. With devolution of powers, sub-national governments have been entrusted with responsibilities not only for poverty alleviation and economic development, they have also become an integral part of managing finances related to disaster risks and responses as well as mobilizing resources. 27. One of the important lessons so far from three years of implementation is that post disaster recovery and reconstruction needs to be a wholesome package i.e. physical reconstruction and economic recovery need to go hand-in-hand. As reconstruction of private housing has gained momentum, NRA’s focus is now shifting towards economic recovery, which was so far not a priority agenda. This need was realized for a number of reasons such as growing concerns from development partners and other stakeholders for increased and sustained livelihood and enterprise development, indebtedness of beneficiaries due to the loan taken to reconstruct their houses and NRA’s mandate and responsibility towards recovery and rehabilitation. Upon NRA’s request an assessment, first of a series of studies, for the post-earthquake economic recovery is ongoing under EHRP. Initial findings of the assessment indicate the presence of a number of actors, both governmental and non-governmental, in livelihood recovery and enterprise development. What is lacking is the consolidation of these efforts, needs assessment, identification of gaps and further facilitation and coordination with existing actors to fill the gaps. NRA’s way forward on the recovery agenda thus will be guided by the final recommendation of the assessment. II. DESCRIPTION OF PROPOSED CHANGES A. Implementation Arrangements 28. With CLPIU MOUD, renamed as CLPIU Building, and CLPIU MOFALD, renamed as CLPIU GMALI, having been placed under administrative control of NRA, the Financing Agreement (FA) will be revised to reflect the changes. Further, the SIA is a massive exercise that includes structural integrity assessment of almost 23,000 schools and 4,000 health posts. The SIA is targeted to be completed by December 2019. Keeping in view time constraints and the extent of the work, the assignment requires a different set of expertise and administrative arrangements, currently available in form of the CLPIU-Education. Therefore, it is proposed to add CLPIU-Education as an implementing entity under the Project for conducting SIA. 29. In view of adoption of the federal constitution as well as internal restructuring of NRA, changes are proposed in the Financing Agreements of the Original Project IDA Credit No. 5706-NP and Additional Financing IDA Credit No. 6164-NP in Implementation Arrangements. Changes in the IDA Credit No. 5706-NP are in Annex-I and that in IDA Credit No. 6164-NP are in Annex-II. B. Results Framework 30. The PDO level Outcome ‘Enhance the Government's Ability to improve long-term disaster resilience’ will remain unchanged, however the PDO level indicator is suggested to be changed as in supporting the federalization process the indicator will also cover local government elected representatives and officials: The World Bank Earthquake Housing Reconstruction Project (P155969) Existing Indicator Revised Indicator Component-2 Two-hundred (200) Government officials trained in Four Hundred (400) government officials trained in Disaster Risk Management Disaster Risk Management 31. As explained in paragraph, bilateral development partners and I/NGOs have already supported training of artisans, and continue to do so, therefore EHRP is focusing its training on engineers to strengthen the inspection regime. However, support for training of artisans will continue on need basis. To reflect the scope of the training, the Intermediate level indicator for Component- 1 is proposed to be revised as follows: Existing Indicator Revised Indicator Component-1 Artisans trained in multi-hazard resistant construction Engineers and artisans trained in multi-hazard resistant construction Current value: 75,000 Revised value: 12,000 32. As explained in paragraphs Error! Reference source not found. thru Error! Reference source not found., structural integrity of social infrastructure will be assessed throughout the country. This will lead to developing a baseline to enhance the Government’s ability to improve long-term disaster resilience, which was originally envisioned to be done through 4 technical studies. Therefore, intermediate level indicator for Component-2 is suggested to be revised as follows: Component-2 Four (4) Technical studies on disaster risk Structural Integrity Assessment of Social Infrastructure management completed carried out Current value: 4 Revised value: 1 III. SUMMARY OF CHANGES Changed Not Changed Implementing Agency ✔ Results Framework ✔ Legal Covenants ✔ Institutional Arrangements ✔ Social Analysis ✔ Environmental Analysis ✔ DDO Status ✔ Project's Development Objectives ✔ Components and Cost ✔ The World Bank Earthquake Housing Reconstruction Project (P155969) Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_IA_TABLE IMPLEMENTING AGENCY Implementing Agency Name Type Action Ministry of Urban Development Implementing Marked for Deletion Agency National Reconstruction Authority Implementing No Change Agency Ministry of Federal Affairs and General Implementing Marked for Deletion Administration Agency OPS_DETAILEDCHANGES_LEGCOV_TABLE LEGAL COVENANTS Loan/Credit/TF Description Status Action Para 3, Section I.A, Schedule 2 of the Financing IDA-57060 Complied with Revised Agreement. Description: Recipient to establish and The World Bank Earthquake Housing Reconstruction Project (P155969) maintain (subject to paragraph 3 of the Section I.A of Schedule 2 to the FA), the PMU, with membership, powers, functions and competencies acceptable to the Association. Para 3, Section I.A, Schedule 2 of the Financing Agreement. Description: Recipient to establish and maintain (subject to paragraph 3 of Section I.A of Schedule 2 to the FA), two PMUs, one for Housing Proposed Unknown Reconstruction and one for Social Infrastructure Integrity Assessment, with membership, powers, functions and competencies acceptable to the Association Para 2, Section I.A, Schedule 2 of the Financing Agreement. Description: Recipient to establish and maintain two project implementing units, one within IDA-57060 MoUD and one within MoFALD, with adequate Complied with Revised professional and administrative staff, in numbers and with qualification and experience, and under terms of reference satisfactory to the Association. Para 2, Section I.A, Schedule 2 of the Financing Agreement. Description: Recipient to establish and maintain two project implementing units, one for Housing Reconstruction and one for Social Proposed Unknown Infrastructure Integrity Assessment, with adequate professional and administrative staff, in numbers and with qualification and experience, and under terms of reference satisfactory to the Association. Para 4, Section I.A, Schedule 2 of the Financing Agreement. Description: Recipient to establish and maintain throughout the period of implementation of IDA-57060 Complied with No Change the Project, one or more district-level project implementation units (the “DL-PIUs”), meeting the requirements set forth in the Operations Manual. Para 4, Section I.A, Schedule 2 of the Financing Agreement. Description: Recipient to prepare and IDA-57060 through each MoFALD and MoUD adopt and carry out Complied with Revised the Project in accordance with the Operations Manual, acceptable to the Association. The World Bank Earthquake Housing Reconstruction Project (P155969) Para 4, Section I.A, Schedule 2 of the Financing Agreement. Description: Recipient to prepare and Proposed through each PMU adopt and carry out the Project in Unknown accordance with the Operations Manual, acceptable to the Association. Para 2. (i), Section I.D, Schedule 2 of the Financing Agreement. Description: Recipient to publicly disclose the list of such eligible household beneficiaries at the After delay complied IDA-57060 No Change Project relevant sites by no later than fifteen (15) days with before the date on which a Housing Grant is first proposed for release. Para 1. (i), Section I.B, Schedule 2 of the Financing Agreement. Description: Recipient to enter into a Participation Agreement with each Participating IDA-57060 Complied with No Change Household Beneficiary under terms and conditions set forth in the Operations Manual before providing a Housing Grant to a Participating Household Beneficiary. Para 3, Section I.D, Schedule 2 of the Financing Agreement. Description: Recipient shall engage the services of one or more payment service providers in accordance with criteria acceptable to the Association IDA-57060 as set forth in the Operations Manual and conclude and Complied with No Change implement one or more payment service agreements in form and substance satisfactory to the Association by no later than the date on which a Housing Grant is first proposed for release. Para 8. (ii), Section I.D, Schedule 2 of the Financing Agreement. Description: Prior to the release of the second and subsequent tranches of Housing Grant, Recipient to ensure that the verification procedures are carried out in accordance with in the Operations After delay complied IDA-57060 Manual and that the proceeds of the Credit are only No Change with used to pay for Housing Grants to Participating Household Beneficiaries that have completed reconstruction of their multi-hazard resilient core housing unit, in accordance with the quality standards set forth in the Operations Manual. The World Bank Earthquake Housing Reconstruction Project (P155969) Para 1, Section I.E, Schedule 2 of the Financing Agreement. Description: Prior to the public disclosure of the list of eligible household beneficiaries, Recipient shall establish and maintain an efficient and cost IDA-57060 Complied with No Change effective grievance redress mechanism, based on international experience and best practices adapted to the local context, as further described in the Operations Manual. Para 1, Section I.F, Schedule 2 of the Financing Agreement. Description: Prior to the payment of any Housing Grant, Recipient to carry out the Project in accordance with the ESMF, the RPF, and the IPPF, and IDA-57060 the instruments (to be) prepared thereunder (the Complied with No Change “Safeguard Documents”) and refrain from taking any action, or consenting to an action to be taken, which would prevent or interfere with the implementation of the Safeguard Documents. Para 2, Section I.F, Schedule 2 of the Financing Agreement. Description: Recipient to refrain from releasing any Housing Grant until and unless a social and environmental screening has been carried out, in accordance with the guidelines, standards and IDA-57060 Complied with No Change procedures set forth in the ESMF, the RPF, and the IPPF and publicly disclose the Safeguard Documents and the related Housing Reconstruction Guidelines environmental and social safeguards checklists in local language(s) at the Project relevant sites. Para 4, Section I.F, Schedule 2 of the Financing Agreement. Description: Recipient to: (i) maintain monitoring and evaluation protocols and record After delay complied IDA-57060 No Change keeping procedures to supervise and assess compliance with with Safeguard Documents; and (ii) report on quarterly basis on compliance with Safeguard Documents. IDA-57060 Para 6, Section I.F, Schedule 2 of the Financing Complied with No Change Agreement. Description: With respect to any housing reconstruction activities for which technical support is provided under the Project, but the activities are The World Bank Earthquake Housing Reconstruction Project (P155969) themselves financed from sources other than the Credit, Recipient to retain sole responsibility for the design, construction, safeguards, fiduciary controls and implementation of such activities and to ensure that all activities financed, in whole or in part, out of the proceeds of the Credit are made in accordance with the Operations Manual, the Safeguards Documents, and the Financing Agreement. Para 1. (i), Section I.G, Schedule 2 of the Financing Agreement. Description: Recipient to: (a) determine the occurrence of an eligible crisis or emergency; (b) prepare a component-specific operations manual; (c) IDA-57060 identify, strengthen and maintain a coordination Not yet due No Change authority capable of carrying out the activities and responsibilities set forth in the operations manual; and (d) prepare and disclose any required safeguard document. Section IV.C, Schedule 2 of the Financing Agreement. Description: Recipient to ensure that the total amount of disbursements against achievement of outputs under IDA-57060 Complied with No Change the Project does not exceed the total amount of expenditures incurred by the Participating Household Beneficiary. Para 1. (c), (i), Section IV.B, Schedule 2 of the Financing Agreement. Description: To access the funds allocated from time to time to Category 3, Recipient must have determined/declared an eligible crisis or emergency, IDA-57060 identified response activities and expenditures, Not yet due No Change prepared and disclosed any required safeguard documents, identified and/or staffed a coordination authority responsible for implementation, and prepared a component-specific operations manual. IDA-57060 Para 1. (b), Section IV.B, Schedule 2 of the Financing Complied with Revised Agreement. Description: To access the funds allocated to Category 2, Recipient must have: (i) adopted an Operations Manual satisfactory to the Association; and (ii) adopted and published the ESMF, the RPF, and the IPPF, all in a form and substance satisfactory to the The World Bank Earthquake Housing Reconstruction Project (P155969) Association; and (iii) engaged financial management staff in MoFALD and MoUD in such number and with qualification, experience and terms of reference satisfactory to the Association. Para 1. (b), Section IV.B, Schedule 2 of the Financing Agreement. Description: To access the funds allocated to Category 2, Recipient must have: (i) adopted an Operations Manual satisfactory to the Association; and Proposed Unknown (ii) adopted and published the ESMF, the RPF, and the IPPF, all in a form and substance satisfactory to the Association; and (iii) engaged financial management staff in all the CLPIUs Para 2. (a), Section IV.B, Schedule 2 of the Financing Agreement. Description: Notwithstanding the provisions of Section IV.A of Schedule 2, withdrawals under Category (2) shall be output-based and shall be available for withdrawal by the Recipient subject to: (i) the Association having communicated in writing to the Recipient the unit amount of each Housing Grant; (ii) such Participating Household Beneficiary having IDA-57060 Complied with No Change satisfactorily achieved the agreed output in the construction work of the multi-hazard resilient core housing unit, subject to the verification mechanisms provided for in paragraph 8 of Section I.D of this Schedule as further detailed in the Operations Manual; and (iii) the Association having received, through the Recipient, a satisfactory summarized version of the . reports furnished by the verifiers for such works. The World Bank Earthquake Housing Reconstruction Project (P155969) . Results framework COUNTRY: Nepal Earthquake Housing Reconstruction Project Project Development Objectives(s) The Project Development Objective (PDO) is to restore affected houses with multi-hazard resistant core housing units in target areas and to enhance the government's ability to improve long-term disaster resilience. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target Restore affected houses with multi-hazard resistant core housing units in targeted areas Households with resilient core housing reconstructed under the 0.00 151,000.00 project (Number) Out of which women headed households (Number) 0.00 39,260.00 Citizens made aware of earthquake resilient reconstruction 0.00 151,000.00 (Number) Enhance the Government's Ability to improve long-term disaster resilience. Four Hundred elected representatives and government officials given orientation on disaster risk management and housing 0.00 400.00 reconstruction with transfer of project records. (Number) Rationale: Major changes have taken place in the governance structure of the country as well as within NRA. Therefore, first and the Action: This indicator has been Revised foremost imperative is to align the project with the constitution, ‘the grand norm’, of the country. Therefore, the restructuring of EHRP is necessary not only to align the project with the new governance structure but also to extend maximum possible support to federalism. The World Bank Earthquake Housing Reconstruction Project (P155969) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target With implementation of the 2015 Constitution, a transformation has taken place in Nepal. With moving from unitary form of government to a federal structure, the country has been divided into 7 provinces and 753 Local Governments (LG), referred to as local level in addition to existing 77 districts. The Village Development Committees (VDCs) of the Ministry of Federal Affairs (MOFALD) have been abolished or converted into Wards, the lowest tier administrative unit. Under the new constitution there are five lists of subjects: (i) Schedule-5 is List of Federal Powers; (ii) Schedule-6 is List of Provincial Powers; (iii) Schedule-7 is List of Concurrent Powers of Federation and State; (iv) Schedule-8: List of Local Level Power; and (v) Schedule-9 is List of Concurrent Powers of Federation, Provincial and Local Level. Disaster management is a Schedule-9 subject, whereas international relations and agreements including external aid and borrowing remain federal subjects. The Prime Minister’s Office, nine concerned federal ministries, provincial governments and LGs are required to play roles broadly defined in the ‘Disaster Risk and Management Act, 2074 (2017)’ as well as Government of Nepal (Work Division) Regulation, 2074. PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Housing Reconstruction Direct project beneficiaries (Number) 0.00 649,300.00 Female beneficiaries (Percentage) 0.00 50.00 Intended beneficiaries aware of project info. and project 0.00 100.00 investments (%) (Percentage) Intended beneficiaries aware of project info. and project 0.00 39,260.00 investments - female (Number) Grievances registered related to delivery of project benefits 0.00 95.00 addressed (%) (Percentage) The World Bank Earthquake Housing Reconstruction Project (P155969) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Grievances related to delivery of project benefits that are 0.00 100,000.00 addressed-(number) (Number) Engineers and artisans trained in multi-hazard resistant 9,319.00 12,000.00 construction (Number) Rationale: A number of national and international NGOs as well as bilateral development partners are supporting training of artisans to a large extent and that of engineers that include engineers, sub-engineers, assistant sub engineers and overseers. So far over 60,000 artisans have already been trained. The engineers are responsible for providing technical assistance to the beneficiaries during housing reconstruction. However, their major responsibility is to carry out inspections at plinth and Action: This indicator has been Revised roof-band levels to check compliance with construction guidelines for reconstruction of multi-hazard resistant structures as required in the PDO. Engineering staff turnover has remained high because growing opportunities in private sector, testing terrain and inconsistent incentive systems. The staff turnover and changes in reconstruction guidelines and inspection guidelines necessitates training of new staff as well as refreshers for the existing teams. The World Bank task team is focusing training of engineers by NRA so that Bank compliance requirements are continuously met. Disaster Risk Management Systems (Action: This Component has been Revised) Sructural Integrity of social infrastructure carried out across the 0.00 1.00 country. (Number) Rationale: 1. A World Bank-executed TA on recovery and resilience of education infrastructure affected by the April 25, 2015 and May 12, 2015 earthquakes carried out a detailed Structural Integrity and Damage Assessment (SIDA) of education facilities located in 14 most-affected districts. Over 5,000 schools comprising over 18,000 buildings were Action: This indicator has been Revised surveyed. The data collected revealed that 30 percent of the buildings were completely destroyed, another 30 percent suffered major damages and were recommended for retrofitting. The data collected has been used to develop a comprehensive web-based SIDA portal containing pictures of the structures, technical details including layouts, coordinates, and number of students, and cost estimates of repair, retrofitting, or reconstruction, whichever is applicable. The SIDA portal has been well received by and assists the GoN and development partners The World Bank Earthquake Housing Reconstruction Project (P155969) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target (Japan International Cooperation Agency [JICA] and Asian Development Bank [ADB]) to make informed decisions with regards to their interventions in school reconstruction. 2. In Nepal, the number of school buildings destroyed or damaged, identified through SIDA, establishes that had the disaster struck on a school day, the casualties would have been manifold. Keeping in view the fact that Nepal is disaster prone, it is imperative that schools building structures be given special attention, as most of the public school buildings were constructed by communities through School Management Committees (SMCs). It is clearly understood that SMCs lack technical capacities to build multi-hazard resistant buildings. 3. Building upon the SIDA experience and considering disaster risks, the idea of scaling up SIDA to carry out a structural integrity assessment of all the schools of the country was under discussion for two months during May- June 2018. During the MTR, it was agreed to widen the scope of the exercise to a manageable level to include the relevant social infrastructure; thus, health posts were also included. All the stakeholders, Ministry of Finance, NRA, U.K. Department for International Development (DFID) and other development partners supported the idea. During the MTR, the idea was discussed extensively among the NRA, CLPIU-Education, and the World Bank team, and it was agreed to keep the exercise on the priority list under Component 2 of the EHRP. It was agreed that: 1. A structural integrity assessment of all the schools located in 63 districts will be carried out, as schools in 14 most-affected districts have already been covered; 2. Public sector health facilities across the country will be surveyed; 3. Private schools with their own buildings will also be included; 4. Schools and health facilities already covered by other development partners will be excluded; 5. Concerned LGs will be reached out for their involvement in the process; and 6. Concerned ministries and departments will be kept informed. 4. The data collected from the SIA will be used to develop a comprehensive web-based platform that will have structural vulnerability parameters for each unit of assessed social infrastructure and required intervention such as repair, retrofitting and reconstruction will be identified. This platform will be linked with the current web-based SIDA platform to develop one comprehensive web-based platform, which will assist the GoN and other concerned stakeholders in informed decision making. 5. This component will contribute to the second part of the PDO of the EHRP by enhancing the Government’s ability to improve long-term disaster resilience. The World Bank Earthquake Housing Reconstruction Project (P155969) IO Table SPACE The World Bank Earthquake Housing Reconstruction Project (P155969) Annex-I: Changes in Financing Agreemment of IDA Credit No. 5706-NP signed on August 14, 2015 and Amendmnet of March 28, 2016 SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) 1 Article 2.01 The Association agrees to No Change extend to the Recipient, on the terms and conditions set forth or referred to in this Agreement, a credit in an amount equivalent to one hundred forty three million nine hundred thousand Special Drawing Rights (SDR 143,900,000) (variously, “Credit” and Financing”), to assist in financing the project described in Schedule 1 to this Agreement (“Project”) 2 Article 2.02 The Recipient may No Change withdraw the proceeds of the Financing in accordance with Section IV of Schedule 2 to this Agreement 3 Article 2.05 The Payment Dates are No Change June 15 and December 15 in each year 4 Article 3.01 Article 3.01 Article 3.01 The Recipient declares its The Recipient declares its The Recipient declares its commitment to the objective of the commitment to the objective commitment to the objective Project. To this end, the Recipient of the Project. To this end, of the Project. To this end, the shall carry out Parts 1, 2 and 3 of the the Recipient shall carry out Recipient shall carry out Parts Project through MOFALD and Parts 1, 2 and 3 of the Project 1, 2, and 3 of the Project MOUD as per the allocation of through NRA, MOFALD through NRA as per the responsibilities set forth in the and MOUD as per the allocation of responsibilities Operations Manual and Part 4 of the allocation of responsibilities set forth in the Operations Project through the Coordinating set forth in the Operations Manual and Part 4 of the Authority, all in accordance with the Manual and Part 4 of the Project through the provisions of Article IV of the General Project through the Conditions Coordinating Authority, all Coordinating Authority, all in in accordance with the accordance with the provisions of Article IV of provisions of Article IV of the the General Conditions General Conditions. 5 Part 3 of Schedule 1 (Project Part 3 of Schedule 1 (Project Part 3 of Schedule 1 (Project Description) Description) Description) Provision of support to MOFALD and Provision of support to NRA, Provision of support to NRA, MOUD (including the PMU, PIUs and MOFALD and MOUD including the CL-PIUs and the DLPIUs) to strengthen their capacity (including the PMU, PIUs PMU to strengthen their to effectively procure and manage and DLPIUs) to strengthen capacity to effectively procure delivery systems, including their capacity to effectively and manage delivery systems, monitoring and evaluation, damage procure and manage delivery including monitoring and assessment, beneficiary household systems, including evaluation, damage assessment, identification, payment systems, monitoring and evaluation, beneficiary household management information systems, damage assessment, identification, payment The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) grievance redress and beneficiary household systems, management communication/outreach as set forth identification, payment information system, grievance in the Operations Manual systems, management redress, and communication/ information system, outreach as set forth in the grievance redress and Operations Manual. communication/outreach as set forth in the Operations Manual. 6 Paragraph 1 of Section I.A of Paragraph 1 of Section I.A Schedule 2, Section I.A, Schedule 2 (Project Execution) of Schedule 2 (Project Paragraph 1 (Project The recipient shall establish by not Execution) Execution) later than August 1, 2015 and The Recipient shall maintain The Recipient shall maintain thereafter maintain throughout the throughout the period of throughout the period of period of implementation of the implementation the Project, implementation of the Project, Project (except as may be otherwise the Project Management the Project implementation provided in paragraph 3 of this Unit, housed within NRA, units, namely the CLPIU- Section), the Project Management with adequate professional Building, CLPIU-GMALI and Unit, housed within MOF, with and administrative staff, in CLPIU-Education (collectively, adequate professional and numbers and with the “CL-PIUs”) and the PMU, administrative staff, in numbers and qualification and experience, with adequate professional and with qualification and experience and and under terms of reference administrative staff, in numbers under terms of reference satisfactory satisfactory to the and with qualification and to the Association, including a project Association, including a experience, and under terms of director responsible for supervising project director responsible reference satisfactory to the the Project, as shall be required to for supervising the Project Association, including: (a) a provide policy guidance and and qualified procurement, project director responsible for coordination for and exercise general social, and environmental supervising the Project: (b) oversight of, the implementation of specialists with skills and procurement specialists; (c) Project activities qualifications, experiences financial management and terms of reference specialists; and (d) social and satisfactory to the environmental specialists, for Association, as shall be purposes of implementing the required to provide policy Project as per the allocation of guidance and coordination responsibilities and budget set for, and exercise general forth in the Operations Manual. oversight of, the implementation of Project activities, including preparation of an annual consolidated Procurement Plan for the Association’s review and clearance, and coordination, oversight and guidance on procurement, financial management, safeguards, monitoring and evaluation aspects of the Project. The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) 7 Paragraph 2 of Section I.A of Paragraph 2, Section I.A of Schedule 2 Schedule 2 The Recipient shall establish by not In each District in which the later than August 1, 2015 and Project is implemented, the thereafter maintain throughout the Recipient shall maintain period of implementation of Project, throughout the period of two project implementation units (the implementation of the Project, “PIUs”), one within MOUD and one one or more district-level within MOFALD, for purposes of project implementation units implementing the Project as per the (the “DL-PIUs”), meeting the allocation of responsibilities and requirements set forth in the budget set forth in the Operations Manual with adequate professional Operations Manual, including and administrative staff, in numbers with adequate professional and with qualification and experience and administrative staff, in and under terms of reference numbers and with satisfactory to the Association, qualification and experience, including without limitation: (i) and under terms of reference Project Coordinator, (ii) a senior-level satisfactory to the Association, account officer, (iii) a finance officer; and responsible for, inter alia: (iv) a procurement officer; and (v) a (a) providing close technical safeguards specialist to be responsible support to, and supervision of, for the day-to-day planning and the implementation of the implementation of Project activities Project in such District; (b) within their purview, as set forth in the approval of annual work plans Operations Manual for such District; and (c) monitoring, supervising and reporting to the PMU and CL- PIUs on the progress achieved in carrying out the activities within such District. 8 Paragraph 3 of Section 1.A. of Paragraph 3 of Section 1.A. Paragraph 3, Section 1.A of Schedule 2 of Schedule 2 to the Schedule 2 (a) Upon the establishment of the Financing Agreement shall The Recipient, through NRA, Reconstruction Agency, the Recipient be deleted in its entirety and shall cause the Local and the Association may agree in the subsequent paragraphs Governments to assist in the writing to transfer the ·guidance and renumbered accordingly implementation of the Project, oversight responsibilities of the PMU including the carrying out of to such agency in a manner communication and outreach satisfactory to the Association. (b) In activities, and first-tier addition, in the event that, at any grievance redress in accordance time during Project implementation, with the provisions of the the Recipient proposes that the Operations Manual. Reconstruction Agency also be vested with additional responsibilities under the Project, such as implementation , procurement and/or financial management, then (i) the Recipient The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) shall provide the Association with such information as the Association may reasonably request to assess the capacity of the Reconstruction Agency to undertake such additional responsibilities, and (ii) subject to satisfactory assessment thereof, the Association and the Recipient may agree in writing (including, if required, an amendment to this Agreement) to reflect the transfer of such additional responsibilities. 9 Paragraph 4 of Section I.A of Paragraph 4, Section I.A, of Schedule 2 Schedule 2 In each district in which the Project is Changed to Paragraph 2 of implemented, the Recipient shall Section I.A of Schedule 2 establish, by the earlier of September 1, 2015 or the first date on which the Recipient proposes to make a Housing Grant in such District and thereafter maintain throughout the period of implementation of the Project, one or more district level implementation units (the “DL-PIUs”) meeting the requirements set forth in the Operations Manual, including with adequate professional and administrative staff, in numbers and with qualifications and experience and under terms of reference satisfactory to the Association, and responsible for, inter alia: (i) providing close technical support to, and supervision of, the implementation of Part 1 of the Project is such District; (ii) approval of annual work plans for such District; and (iii) monitoring, supervising and reporting to the PIUs on the progress achieved in carrying out the activities within such District. 10 Paragraph 5 of Section I.A. of Please see Paragraph 3 of Schedule 2 The Recipient, through Section 1.A. of Schedule 2 MOFALD, shall cause VDCs and Municipalities to: (i) assist in the implementation and outreach activities, assistance and inspection, and first-tier grievance redress and (ii) provide promptly as needed, the The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) funds, facilities, services and other resources required for the Project, all in accordance with the provisions of the Operations Manual. 11 Paragraph 1 of Section I.B of The recipient shall prepare Paragraph 1, Schedule 2, Schedule 2 and through each of NRA, Section I.B The recipient shall prepare and MOFALD and MOUD The Recipient shall, through through each of MOFALD and adopt, by the earlier of NRA, including the CL-PIUs as MOUD adopt, by the earlier of August August 15, 2015…. applicable, carry out the Project 15, 2015… in accordance with, the Operations Manual. The Operations Manual shall set forth: (i) the institutional (ii) the institutional arrangement for the arrangement for the implementation of the Project, implementation of the including: (a) eligibility criteria, Project, including: (i) eligibility methodology and procedural criteria, methodology and standards for the selection of procedural standards for the Participating Household selection of Participating Beneficiaries; (b) terms and Household Beneficiaries; (ii) conditions of the Housing Grants, terms and conditions of the including criteria for determining Housing Grants, including and the amount of each tranche, criteria for determining and and the format of the the amount of each tranche, participation agreement which and the format of the each Participating Household Participation Agreement Beneficiary must sign with the which each Participating Recipient, through MOFALD, prior Household Beneficiary must to receiving any Housing Grant; sign with each Local (c) management information Government, prior to systems, verification protocols, receiving any Housing Grant; financial management duties and (iii) management information disbursements, monitoring and systems, verification evaluation systems, grievance protocols, financial redress mechanisms, and management duties and payment reconciliation protocols; disbursements, monitoring (d) governance and and evaluation systems, accountability setups and grievance redress operating mechanisms, including mechanisms, and payment independent operational audits reconciliation protocols; (iv) and third-party monitoring; and governance and (e) selection and coordination accountability setups and mechanisms of Payment Service operating mechanisms, The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) Providers and the required terms of including independent agreement to be entered into operational audits and third- between each Payment Service party monitoring; and (v) Provider and the Recipient ; selection and coordination mechanisms of Payment Service Providers and the required terms of agreement to be entered into between the Recipient, through NRA and each Payment Service Provider; Paragraph 1 of Part-D of Section I of Removed Schedule 2: For purposes of carrying out Part 1 of the Project, the Recipient shall determine, by no later than fifteen (15) days before the date on which the Recipient first proposes to release a Housing Grant, the list of Participating Household Beneficiaries, which shall comprise those eligible households: (a) in the Targeted Areas; (b) whose houses meet the guidelines, selection and prioritization criteria set out in the Operations Manual for financing of construction/reconstruction out of the proceeds of the Credit; and (c) who have entered into a Participation Agreement. The Recipient shall at all times maintain, and shall provide to the Association, at its request, the list of Participating Household Beneficiaries. 12 Paragraph 2 of Section I.D of Paragraph 1, Section I.D, Schedule 2 Schedule 2 (Project Execution) Upon the Upon the determination of the determination of the household household beneficiaries eligible beneficiaries eligible to participate in to participate in the Project, the the Project, the Recipient, through Recipient, through NRA shall: MOFALD, shall … 14 Paragraph 7 of Section I.D of Paragraph 6, Section I.D Schedule 2 Schedule 2 The Recipient shall release the first The Recipient shall release the tranche of each Participating first tranche of each Household Beneficiary’s Housing Participating Household The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) Grant upon the Participating Beneficiary’s Housing Grant Household Beneficiary’s signing of upon the Participating the Participation Agreement in Household Beneficiary’s accordance with Section I.D.2 of this signing of the Participation Schedule. Agreement in accordance with Section I.D.1 of this Schedule 2. 15 Paragraph 8 of Section I.D of Paragraph 8 of Section I.D Paragraph 7, Section I.D, Schedule 2 (Project Execution) of Schedule 2 (Project Schedule 2 (Project Execution) Prior to the release to a Participating Execution) Prior to the release to a Household Beneficiary of the second Prior to the release to a Participating Household and subsequent tranches of such Participating Household Beneficiary of the second and Participating Household Beneficiary’s Beneficiary of the second subsequent tranches of such Housing Grant, the Recipient through and subsequent tranches of Participating Household MOFALD shall ensure that: … such Participating Beneficiary’s Housing Grant, Household Beneficiary’s the Recipient shall ensure that: Housing Grant, the … Recipient, through NRA and MOFALD shall ensure that: … 17 Section II.A of Schedule 2 Section II.A Schedule 2 The Recipient shall monitor and The Recipient shall monitor and evaluate the progress of the Project evaluate the progress of the and prepare Project Reports in Project and prepare Project accordance with the provision of Reports in accordance with the Section 4.08 of the General provisions of Section 4.08 of Conditions and on the basis of the General Conditions and on indicators acceptable to the the basis of indicators set forth Association. Each Project Report shall in the Operations Manual. Each cover the period of one calendar Project Report shall cover the trimester, and shall be furnished to the period of each Fiscal Association not later than forty-five Quadrimester, and shall be (45) days after the end of the period furnished to the Association not covered by such report later than forty-five (45) days after the end of the period covered by such report. 18 Paragraph 2 of Section II. B of Paragraph 2, Section II.B of Schedule 2 Schedule 2 Without limitation on the provisions Without limitation on the of Part A of this Section, the Recipient provisions of Part A of this shall prepare and furnish to the Section, the Recipient shall Association not later than forty-five prepare and furnish to the (45) days after the end of each fiscal Association not later than forty- trimester, interim unaudited financial five (45) days after the end of reports for the Project covering the each Fiscal Quadrimester, trimester, in form and substance interim unaudited financial satisfactory to the Association. reports for the Project covering The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) the Fiscal Quadrimester, in form and substance satisfactory to the Association. 19 Paragraph 2 (a) of Section IV B of Paragraph 2(a) of Section IV.B Schedule 2 of Schedule 2 Except at the Association may Except as the Association may otherwise agree in writing, otherwise agree in writing, withdrawals under Category (2) shall withdrawals under Category (2) be output-based and shall be available shall be output-based and shall for withdrawal by the Recipient be available for withdrawal by subject to: (i) the Association having the Recipient subject to: (i) the communicated in writing to the Association having Recipient the unit amount of each communicated in writing to the Housing Grant; (ii) such Participating Recipient the unit amount of Household Beneficiary having each Housing Grant; (ii) such satisfactorily achieved the agreed Participating Household output in the construction work of the Beneficiary having multi-hazard resilient core housing satisfactorily achieved the unit, subject to the verification agreed output in the mechanisms provided for in paragraph construction work of the multi- 8 of Section I.D of this Schedule as hazard resilient core housing further detailed in the Operations unit, subject to the verification Manual … mechanisms provided for in paragraph 7 of Section I.D of this Schedule as further detailed in the Operations Manual; and (iii) the Association having received, through the Recipient, a satisfactory summarized version of the reports furnished by the verifiers for such works; 16 Paragraph 3 of Section IV B of Paragraph 3 of Section IV B of Schedule 2 Schedule 2 The Closing Date is July 31, 2020 The Closing Date is June 30, 2023 Section I. Definitions 1. 2. Section I. Definitions 3. 1. "Anti-Corruption 4. Guidelines" 5. “Anti-Corruption Guidelines” means the "Guidelines on means the “Guidelines on Preventing and Combating Fraud Preventing and Combating and Corruption in Projects Financed Fraud and Corruption in by IBRD Loans and IDA Credits and Projects Financed by IBRD Grants", dated October I5, 2006 and Loans and IDA Credits and revised in January 2011 . Grants”, dated October 15, 2006 and revised in January 2011. 6. 2. 7. set "Category" means a category 8. “Category” means a category The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) forth in the table in Section N of set forth in the table in Section Schedule 2 to this Agreement. IV of Schedule 2 to this Agreement. 9. 3. "CER Component" means Part 4 of 10. 11. “CER Component” means the Project, as described in Schedule Part 4 of the Project, as I to this Agreement. described in Schedule 1 to this Agreement. 12. 4. "CER Operations Manual" means 13. 14. “CER Operations Manual” the immediate response mechanism means the immediate response operations manuals referred to in mechanism operations Section LG.I of Schedule 2 to this manuals referred to in Section Agreement, agreed with the I.G.1 of Schedule 2 to this Association to be adopted by the Agreement, agreed with the Recipient for the implementation of Association to be adopted by the CER Component, in accordance the Recipient for the with the provision of said Section. implementation of the CER Component, in accordance with the provision of said Section. 15. 5. 16. "Consultant Guidelines" means the 17. “CLPIU-Building” means the "Guidelines: Selection and central level Project Employment of Consultants under implementation unit, under the IBRD Loans and IDA Credits and administrative control of Grants by World Bank Borrowers" NRA, responsible for dated January 201 I (revised July implementation of private 2014). housing at district, municipality and village level, including provision of technical assistance and guidance to house owners directly or through third parties, and carrying out inspections to ensure compliance with construction guidelines and digitalization of data. 18. 6. "Coordinating Authority" means the 19. 20. “CLPIU-GMALI” means entity or entities designated by the central level grant Recipient in the CER Operations management and local Manual, and approved by the infrastructure unit under the Association pursuant to Section administrative control of LG.I of Schedule 2 to this NRA, responsible for Agreement, to be responsible for managing environmental and coordinating the CER Component. social safeguards requirements of the Project. 21. 7. 22. "Displaced Persons" means persons 23. “CLPIU-Education” means The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) who, on account of the execution of central Project the Project, have experienced or implementation unit, under the would experience direct economic administrative control of and social impacts caused by (i) the NRA, responsible for involuntary taking of land, resulting managing social infrastructure in: (a) relocation or loss of shelter; integrity assessment across the (b) loss of assets or access to assets; Recipient’s territory. or (c) loss of income sources or means of livelihood, whether or not the affected person must move to another location; or 24. 8. (ii) the involuntary restriction 25. of 26. “Consultant Guidelines” access to legally designated parks means the “Guidelines: and protected areas resulting in Selection and Employment of adverse impacts on the livelihood of Consultants under IBRD the affected person. Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011 (revised July 2014). 27. 9. 28. "District" means an administrative 29. “Coordinating Authority” sub-division of the Recipient within means the entity or entities which one or more Participating designated by the Recipient in Household Beneficiaries reside. the CER Operations Manual, and approved by the Association pursuant to Section I.G.1 of Schedule 2 to this Agreement, to be responsible for coordinating the CER Component. 10. "DL-PIUs" means the district-level 30. 31. 32. “Displaced Persons” means project implementation units to be persons who, on account of the established by the Recipient in execution of the Project, have accordance with Section I.A.4 of experienced or would Schedule 2 to this Agreement. experience direct economic and social impacts caused by (i) the involuntary taking of land, resulting in: (a) relocation or loss of shelter; (b) loss of assets or access to assets; or (c) loss of income sources or means of livelihood, whether or not the affected person must move to another location; or (ii) the involuntary restriction of access to legally designated parks and protected areas The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) resulting in adverse impacts on the livelihood of the affected person. 11. "Earthquake" means the earthquake 33. 34. 35. “District” means an which occurred on the Recipient's administrative sub-division of territory on April 25, 20I5, and its the Recipient within which aftershocks, resulting in, among one or more Participating others, devastating loss of life, Household Beneficiaries livelihoods, social services, and reside. infrastructure. 12. "Eligible Crisis or Emergency" 36. 37. 38. “DL-PIUs” means the district- means an event that has caused, or is level project implementation likely to imminently cause, a major units to be established by the adverse economic and/or social Recipient in accordance with impact to the Recipient, associated Section I.A.2 of Schedule 2 to with a natural or man-made crisis or this Agreement. disaster. 13. "Emergency Expenditures" means 39. 40. 41. “Earthquake” means the any of the eligible expenditures set earthquake which occurred on forth in the CER Operations the Recipient’s territory on Manual, in accordance with the April 25, 2015, and its provision of Section LG.I of aftershocks, resulting in, Schedule 2 to this Agreement, and among others, devastating loss required for the activities described of life, livelihoods, social in such manual to be financed under services, and infrastructure. the CER Component. 14. "ESMF" means the Recipient's 42. 43. 44. “Eligible Crisis or environmental and social Emergency” means an event management framework, which that has caused, or is likely to includes the GESI Action Plan, to be imminently cause, a major adopted and disclosed in a form and adverse economic and/or substance satisfactory to the social impact to the Recipient, Association pursuant to Section associated with a natural or I.F.1 of Schedule 2 to this man-made crisis or disaster. Agreement, and sets forth the guiding principles, standards and procedures for screening, managing and monitoring environmental and social impacts under the Project, including those related to natural habitats, chance cultural finds, and forestry, land acquisition, Displaced Persons, and Indigenous Peoples; as such framework may be revised, updated or supplemented from time to time with the prior written concurrence of the Association, and The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) such term includes any annexes or schedules to such framework. 45. 15. "General Conditions" means 46.the 47. “Emergency Expenditures” "International Development means any of the eligible Association General Conditions for expenditures set forth in the Credits and Grants", dated July 31, CER Operations Manual, in 2010. accordance with the provision of Section I.G.1 of Schedule 2 to this Agreement, and required for the activities described in such manual to be financed under the CER Component. 16. "GESI Action Plan" means Gender 48. 49. 50. ESMF’ means the Recipient’s Equality and Social Inclusion environmental and social Action Plan, the action plan management framework, incorporated into, and publically which includes the GESI disclosed with, the ESMF, setting Action Plan, dated March out actions to ensure equal 2016, and sets forth the participation of women and men guiding principles, standards beneficiaries without discrimination and procedures for screening, and better outreach to women, managing and monitoring children, and other vulnerable environmental and social groups. impacts under the Project, including those related to natural habitats, chance cultural finds, and forestry, land acquisition, Displaced Persons, and Indigenous Peoples; as such framework may be revised, updated or supplemented from time to time with the prior written concurrence of the Association, and such term includes any annexes or schedules to such framework. 17. "Housing Grant" means a 52. 51. grant 53. Fiscal Quadrimester’ means, made by the Recipient to a each of the following four (4) Participating Household Beneficiary month periods within the same from the proceeds of the Credit for Fiscal Year, namely on or the owner-driven construction and around: (a) July 16 to rehabilitation of such beneficiary's November 15; (b) November house under Part 1 of the Project (as 16 to March 15; and (c) March described in Schedule l to this 16 to July 15. Agreement) in the Targeted Areas, in accordance with operating The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) procedures and terms and conditions acceptable to the Association, including those set forth in Section I.D of Schedule 2 to this Agreement. "Housing Grants" means more than one such Housing Grant. 54. 18. "Housing 55. Reconstruction 56. ‘Fiscal Year’ means a fiscal Guidelines" means the technical year of the Recipient, guidelines for housing commencing on or around reconstruction under the Project, set July 16 of a calendar year and out in the Operations Manual, which concluding on or around July can be extracted for communication 15 of the next following to Participating Household calendar year. Beneficiaries, including the architectural standards, technical specifications, environmental and social safeguards standards consistent with the Safeguards Documents, and construction guidelines and milestones. 57. 19. "Incremental Operating Costs" 58. 59. “General Conditions” means means Project-related incremental the “International operating costs incurred on account Development Association of implementation, management and General Conditions for monitoring, dissemination of Credits and Grants”, dated Project-related information, July 31, 2010. including office equipment, equipment maintenance and repair, consumables, maintenance and repair of vehicles, vehicle rental/leasing , reasonable costs for rental of office space directly related to the Project, travel, including travel to Project sites, communication, commercial bank charges, and advertising, but excluding the salaries and benefits of the Recipient's civil servants. 60. 20. "Indigenous Peoples" means61. any 62. “GESI Action Plan” means distinct, vulnerable, social and Gender Equality and Social cultural group within the territory of Inclusion Action Plan, the the Recipient, that: (i) self-identifies action plan incorporated into, as such and claims, and is and publicly disclosed with, recognized by others as, having a the ESMF, setting out actions distinguishable cultural identity; (ii) to ensure equal participation has collective attachment to of women and men geographically distinct habitats or beneficiaries without The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) ancestral territories in the Project discrimination and better area, and to the natural resources in outreach to women, children, these habitat and territories; (iii) has and other vulnerable groups. customary cultural, economic, social and political institutions that are separate from those of the dominant society and culture; (iv) has an indigenous language, often different from the official language of the Recipient; and/or (v) as defined under the National Foundation for Upliftment of Indigenous Peoples/Nationalities Act, 2058 (2001). 63. 21. "IPPF" means the Recipient' 64. s 65. “Housing Grant” means a indigenous peoples planning grant made by the Recipient to framework to be adopted and a Participating Household disclosed in a form and substance Beneficiary from the proceeds satisfactory to the Association of the Credit for the owner- pursuant to Section l.F.l of Schedule driven construction and 2 to this Agreement, setting out: (i) rehabilitation of such the mitigation, enhancement, beneficiary’s house under Part monitoring, and institutional 1 of the Project (as described measures to ensure meaningful in Schedule 1 to this consultation with, and the informed Agreement) in the Targeted participation of, Indigenous Peoples Areas, in accordance with within the Project area who are operating procedures and affected by the Project, and (ii) the terms and conditions guidelines and procedures for the acceptable to the Association, preparation of indigenous peoples including those set forth in development plans with the Section I.D of Schedule 2 to objective of avoiding cultural, social this Agreement. “Housing and economic adverse effects on Grants” means more than one Indigenous Peoples caused or likely such Housing Grant. to be caused by the Project, and through a process of informed consultation and participation , involving concerned Indigenous Peoples in the design and implementation of relevant Project activities so as to ensure that the benefits received by the Indigenous Peoples under the Project are in harmony with their economic, social and cultural preferences and protect their customary user rights; as such framework may be modified from The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) time to time with the prior written agreement of the Association, and such term includes any annexes or schedules to such framework. 66. 22. "MOF" means the Recipient's 67. 68. “Housing Reconstruction Ministry of Finance, or any Guidelines” means the successor thereto. technical guidelines for housing reconstruction under the Project, set out in the Operations Manual, which can be extracted for communication to Participating Household Beneficiaries, including the architectural standards, technical specifications, environmental and social safeguards standards consistent with the Safeguards Documents, and construction guidelines and milestones. 23. "MOFALD" means the Recipient's 69. 70. 71. “Incremental Operating Ministry of Federal Affairs and Costs” means Project-related Local Development, or any incremental operating costs successor thereto. incurred on account of implementation, management and monitoring, dissemination of Project-related information, including office equipment, equipment maintenance and repair, consumables, maintenance and repair of vehicles, vehicle rental/leasing, reasonable costs for rental of office space directly related to the Project, travel, including travel to Project sites, communication, commercial bank charges, and advertising, but excluding the salaries and benefits of the Recipient’s civil servants. 24. "MOUD" means the Recipient's 72. 73. 74. “Indigenous Peoples” means Ministry of Urban Development, or any distinct, vulnerable, social any successor thereto. and cultural group within the territory of the Recipient, that: (i) self-identifies as such and The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) claims, and is recognized by others as, having a distinguishable cultural identity; (ii) has collective attachment to geographically distinct habitats or ancestral territories in the Project area, and to the natural resources in these habitat and territories; (iii) has customary cultural, economic, social and political institutions that are separate from those of the dominant society and culture; (iv) has an indigenous language, often different from the official language of the Recipient; and/or (v) as defined under the National Foundation for Upliftment of Indigenous Peoples/Nationalities Act, 2058 (2001). 25. "Municipality" 75. means 76. a 77. “IPPF” means the Recipient’s municipality-level administrative indigenous peoples planning subdivision recently established framework dated February within the Recipient's territory 2016, setting out: (a) the pursuant to the Local Self mitigation, enhancement, Governance Act, 2055 (1999), monitoring, and institutional which term, for the purpose of this measures to ensure Project, only refers to those meaningful consultation with, municipalities which have rural and the informed participation characteristics, have been identified of, Indigenous Peoples within in accordance with the Operations the Project area who are Manual, and within which the affected by the Project; and (b) Participating Household the guidelines and procedures Beneficiaries reside; and for the preparation of "Municipalities" means more than indigenous peoples one such Municipality. development plans with the objective of avoiding cultural, social and economic adverse effects on Indigenous Peoples caused or likely to be caused by the Project, and through a process of informed consultation and participation, involving concerned Indigenous Peoples in the The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) design and implementation of relevant Project activities so as to ensure that the benefits received by the Indigenous Peoples under the Project are in harmony with their economic, social and cultural preferences and protect their customary user rights; as such framework may be modified from time to time with the prior written agreement of the Association, and such term includes any annexes or schedules to such framework. 26. "Operations Manual" means 78. the 79. 80. “Local Government” or Recipient's manual, acceptable to “Municipality” means a rural the Association, guiding municipality, urban implementation of the Project and municipality, sub- meeting the requirements set out in metropolitan city and paragraph l of Section LB of metropolitan city-local level, Schedule 2 to this Agreement. as recently constituted within the Recipient’s territory pursuant to the Constitution of Nepal, 2015, which term, for the purpose of this Project, only refers to those municipalities which have been identified in accordance with the Operations Manual, and within which the Participating Household Beneficiaries reside; and “Local Governments” or “Municipalities” means more than one such Local Government or Municipality. 27. "Participation Agreement" means 81. 82. 83. “NRA” means the Recipient’s each agreement to be entered into National Reconstruction between the Recipient through Authority established MOFALD and a Participating pursuant to the Recipient’s Household Beneficiary, setting out Reconstruction of Earthquake the terms and conditions for the Affected Structures Act, 2015 provision of a Housing Grant, (2072), which is charged with meeting the criteria set forth in the general oversight and paragraph 2 of Section I.D of overall supervision and Schedule 2 to this Agreement. coordination of the The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) Recipient’s Earthquake emergency reconstruction program. 28. "Participating 84. 85. Household 86. “Operations Manual” means Beneficiary" means a family or the Recipient’s manual, individual residing in the Targeted acceptable to the Association, Areas and eligible to receive a guiding implementation of the Housing Grant in accordance with Project and meeting the criteria acceptable to the requirements set out in Association as set forth in the paragraph 1 of Section I.B of Operations Manual and which has Schedule 2 to this Agreement. entered into a Participation Agreement with the Recipient governing his/her participation in the Project; and "Participating Household Beneficiaries" means, collectively, all such families and individuals. 29. "Payment Agreement" means any 87. 88. of 89. “Participation Agreement” the agreements referred to in Section means each agreement to be I.D.4 of Schedule 2 to this entered into between each Agreement. · Local Government and each Participating Household Beneficiary, setting out the terms and conditions for the provision of a Housing Grant, meeting the criteria set forth in paragraph 1 of Section I.D of Schedule 2 to this Agreement. 30. "Payment Service Provider" means 90. 91. 92. “Participating Household any bank or financial institution, Beneficiary” means a family including a microfinance institution, or individual residing in the or any other entity having the Targeted Areas and eligible to capacity to provide the services and receive a Housing Grant in comply with the obligations accordance with criteria described in the Payment acceptable to the Association Agreement. as set forth in the Operations Manual and which has entered into a Participation Agreement with the Recipient governing his/her participation in the Project; and “Participating Household Beneficiaries” means, collectively, all such families and individuals. 31. "PMU" 93. means the 94. project 95. “Payment Agreement” means management unit to be established any of the agreements referred The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) by the Recipient in accordance with to in Section I.D.3 of Schedule Section I.A.l of Schedule 2 to this 2 to this Agreement. Agreement. 96. 32. "PIUs" means the project 97. 98. “Payment Service Provider” implementation units to be means any bank or financial established by the Recipient in institution, including a accordance with Section I.A.2 of microfinance institution, or Schedule 2 to this Agreement. any other entity having the capacity to provide the services and comply with the obligations described in the Payment Agreement. 33. "Procurement Guidelines" means 99. 100. 101. “PMU” means the project the "Guidelines: Procurement of management unit established Goods, Works and Non-consulting under NRA and to be Services under IBRD Loans and maintained in accordance with IDA Credits and Grants by World Section I.A.1 of Schedule 2 to Bank Borrowers" dated January this Agreement. 2011 (revised July 2014). 34. "Procurement Plan" means103. 102. the 104. “Procurement Guidelines” Recipient's procurement plan for the means the “Guidelines: Project, dated June 17, 2015 and Procurement of Goods, Works referred to in paragraph 1.18 of the and Non-consulting Services Procurement Guidelines and under IBRD Loans and IDA paragraph 1.25 of the Consultant Credits and Grants by World Guidelines, as the same shall be Bank Borrowers” dated updated from time to time in January 2011 (revised July accordance with the provisions of 2014). said paragraphs. 35. "Public Procurement Act" means 105. the 106. 107. “Procurement Plan” means the Recipient 's Public Procurement Act, Recipient’s procurement plan 2063 (2007). for the Project, dated June 17, 2015 and referred to in paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines, as the same shall be updated from time to time in accordance with the provisions of said paragraphs. 36. "Reconstruction Agency" means 108. the 109. 110. “Provincial Government” agency to be established by the means the government at Recipient and to be charged with the provincial level in the general oversight and overall Recipient’s territory, as supervision and coordination of the described under Article 56(3) The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) Recipient's post-Earthquake of the Recipient’s Constitution reconstruction and rehabilitation of 2015. efforts. 111. 37. "RPF" means the Project 112. 113. “Public Procurement Act” Implementing Entity's resettlement means the Recipient’s Public policy framework, to be adopted and Procurement Act, 2063 disclosed in a form and substance (2007). satisfactory to the Association pursuant to Section l.F.l of Schedule 2 to this Agreement, for compensation, resettlement, and rehabilitation of Displaced Persons and setting forth the guidelines, principles and procedures for preparation of resettlement action plans identifying Displaced Persons on account of implementation of Project activities, and setting forth the terms and conditions for providing them with resettlement assistance and/or compensation, as well as the procedures to be applied in the identification, assessment and mitigation of potential Project related social impacts, including the protocols for consultation, the processing of complaints and grievance redressal, monitoring and reporting requirements; as such framework may be modified from time to time with the prior written agreement of the Association, and such term includes any annexes or schedules to such framework. 114. 38. "Safeguard Documents" means, 115. 116. “RPF” means the Project collectively, the ESMF, the IPPF, Implementing Entity’s the RPF, and each plan or plans (to resettlement policy be) prepared thereunder. framework, dated February 2016, for compensation, resettlement, and rehabilitation of Displaced Persons and setting forth the guidelines, principles and procedures for preparation of resettlement action plans identifying Displaced Persons on account of implementation The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) of Project activities, and setting forth the terms and conditions for providing them with resettlement assistance and/or compensation, as well as the procedures to be applied in the identification, assessment and mitigation of potential Project related social impacts, including the protocols for consultation, the processing of complaints and grievance redressal, monitoring and reporting requirements; as such framework may be modified from time to time with the prior written agreement of the Association, and such term includes any annexes or schedules to such framework. 39. "Targeted Areas" means the areas 117. 118.in 119. “Safeguard Documents” the Recipient' s territory affected by means, collectively, the the Earthquake and selected by the ESMF, the IPPF, the RPF, and Recipient and the Association to each plan or plans (to be) participate in the Project in prepared thereunder. accordance with criteria and procedures set forth in the Operations Manual. 40. "Training and Workshops" means 120. 121. 122. “Targeted Areas” means the reasonable and necessary costs of areas in the Recipient’s training related to the territory affected by the implementation of the Project, Earthquake and selected by including the fees owed to the Recipient and the educational and other institutions Association to participate in that provide training, costs related to the Project in accordance with attendance and organization of criteria and procedures set conferences, seminars, study tours forth in the Operations and workshops, and the trainees' Manual. cost of travel, boarding, lodging and per diem allowances. 41. "VDC" means Village Development 123. 124. 125. “Training and Workshops” Committee, a village-level means reasonable and administrative subdivision necessary costs of training and established within the Recipient's orientation of the project staff, territory pursuant to the Local Self artisans and beneficiaries Governance Act, 2055 (1999) within related to the implementation The World Bank Earthquake Housing Reconstruction Project (P155969) SN Original Financing Agreement March 28, 2016 Amendment Amended and Restated FA (August 14, 2015) (May 2, 2019) which the Participating Household of the Project, including the Beneficiaries reside. fees owed to educational and other institutions that provide training, costs related to attendance and organization of conferences, seminars, study tours and workshops, and the trainees’ cost of travel, boarding, lodging and per diem allowances within and The World Bank Earthquake Housing Reconstruction Project (P155969) Annex-II: Changes in Financing Agreemment of IDA Credit No. 6164-NP and amendment to IDA Credit No. 5706-NP signed on signed on January 21, 2018 Additional Financing Agreement January 21, Amended and Restated Financing Agreement 2018 May 2, 2019 1) 3.01 The Recipient declares its commitment to Article IV and Schedule 2 the objective of the Project. To this end, the The Recipient declares its commitment to the Recipient shall carry out Parts 1, 2 and 3 of the objective of the Project. To this end, the Project through NRA, MOFALD and MOUD as Recipient shall carry out Parts 1, 2 and 3 of the per the allocation of responsibilities set forth in Project through NRA as per the allocation of the Operations Manual and Part 4 of the Project responsibilities set forth in the Operations through the Coordinating Authority, all in Manual and Part 4 of the Project through the accordance with the provisions of Article V of Coordinating Authority, all in accordance with the General Conditions and Schedule 2 to the provisions of Article V of the General this agreement. Conditions and Schedule 2 to this agreement. 2) Section Il. Amendments to the Original Deleted Financing Agreement Sections I.A, I.B, I.D and Section Il of Schedule 2 (Project Execution) are amended to read as follows: "Section I. Implementation Arrangements Institutional Arrangements 3) At the central level Deleted The Recipient shall maintain throughout the period of implementation of the Project, the Project Management Unit, housed within NRA, with adequate professional and administrative staff, in numbers and with qualification and experience, and under terms of reference satisfactory to the Association, including a project director responsible for supervising the Project and qualified procurement, social, and environmental specialists with skills, qualifications, experience and terms of reference satisfactory to the Association, as shall be required to provide policy guidance and coordination for, and exercise general oversight of, the implementation of Project activities, including preparation of an annual consolidated Procurement Plan for the Association's review and clearance, and coordination, oversight, and guidance on procurement, financial management, safeguards, monitoring and evaluation aspects of the Project. The World Bank Earthquake Housing Reconstruction Project (P155969) Additional Financing Agreement January 21, Amended and Restated Financing Agreement 2018 May 2, 2019 4) 2. The Recipient shall maintain throughout the Deleted period of implementation of the Project, two project implementation units (the "PIUs"), one within MOUD and one within MOFALD, for purposes of implementing the Project as per the allocation of responsibilities and budget set forth in the Operations Manual, with adequate professional and administrative staff, in numbers and with qualification and experience, and under terms of reference satisfactory to the Association, including without limitation: (a) a project coordinator, (b) a senior-level accounts officer; (c) a finance officer; (d) a procurement officer; and (e) safeguards specialists (for MOFA LD), to be responsible for the day-to- day planning and implementation of Project activities within their purview, as set forth in the Operations Manual 5) Al the district level Deleted 3. In each District in which the Project is implemented, the Recipient shall maintain throughout the period of implementation of the Project, one or more district-level project implementation units (the "DL-PIUs"), meeting the requirements set forth in the Operations Manual, including with adequate professional and administrative staff, in numbers and with qualification and experience, and under terms of reference satisfactory to the Association, and responsible for, inter alia: (a) providing close technical support to, and supervision of, the implementation of the Project in such District; (b) approval of annual work plans for such District; and (c) monitoring, supervising and reporting to the PIUS on the progress achieved in carrying out the activities within such District. 6) At the Municipality/community level Deleted 4. The Recipient, through NRA, shall cause the Municipalities to assist in the implementation Of the Project, including the carrying out of communication and outreach activities, assistance and inspection, and first-tier grievance redress in accordance with the provisions of the Operations Manual. The World Bank Earthquake Housing Reconstruction Project (P155969) Additional Financing Agreement January 21, Amended and Restated Financing Agreement 2018 May 2, 2019 7) B. Project Documents Deleted The Recipient shall, through NRA, MOFALD, MOUD and its relevant agencies and units (including PMU, PIUS, and DL-PlUs, as applicable), carry out the Project in accordance with, the Operations Manual, acceptable to the Association. The Operations Manual shall set forth: (a) the institutional arrangement for the implementation of the Project, including: (i) eligibility criteria, methodology and procedural standards for the selection of Participating Household Beneficiaries; (ii) terms and conditions of the Housing Grants, including criteria for determining and the amount Of each tranche, and the format of the participation agreement which each Participating Household Beneficiary must sign with the Recipient, through MOFALD, prior to receiving any Housing Grant; (iii) management information systems, verification protocols, financial management duties and disbursements, monitoring and evaluation systems, grievance redress mechanisms, and payment reconciliation protocols; (iv) governance and accountability setups and operating mechanisms, including independent operational audits and third party monitoring; and (v) selection and coordination mechanisms of Payment Service Providers and the required terms of agreement to be entered into between each Payment Service Provider and the Recipient; 8) (b) the technical guidelines for housing Deleted reconstruction under the Project which can be easily extracted for communication to Participating Household Beneficiaries, including the architectural standards, technical specifications, environmental and social safeguards standards consistent with the Safeguards Documents, and The World Bank Earthquake Housing Reconstruction Project (P155969) Additional Financing Agreement January 21, Amended and Restated Financing Agreement 2018 May 2, 2019 construction guidelines and milestones for measuring tranche release of Housing Grants ("Housing Reconstruction Guidelines"); 9) (c) the administrative, accounting, Deleted auditing, internal control, asset management, reporting, financial, procurement and disbursement(flow of funds) procedures for the Project; which procedures shall be consistent with those of this Agreement and the Association's instructions hereunder; 10) (d) the procedural Steps for the update of Deleted the Procurement Plan and an outline of the mechanism for the settlement of procurement complaints and the disclosure of critical procurement information; 11) (e) policies and procedures for data Deleted collection, public awareness and information campaigns, provision of training, and monitoring and evaluation of Project activities and their related impacts; 12) (f) the guidelines and arrangements for Deleted training and capacity building activities under the Project; and 13) (g) the plan for implementing, monitoring Deleted and supervision of Project activities, including all technical, environmental and social aspects in relation thereto. 14) 2. In the event of conflict between the Deleted provisions of the Operations Manual, on the one hand, and those of this Agreement, on the other, the provisions of this Agreement shall prevail. The Recipient shall refrain from amending, suspending, waiving, and/or voiding any provision of the Operations Manual, whether in whole or in part, without the prior written concurrence of the Association. 15) D. Improving Housing Reconstruction Deleted Provision of Housing Grants The World Bank Earthquake Housing Reconstruction Project (P155969) Additional Financing Agreement January 21, Amended and Restated Financing Agreement 2018 May 2, 2019 16) 1. Upon the determination of the Deleted household beneficiaries eligible to participate in the Project, the Recipient, through NRA or any other entity which is acceptable to the Recipient and the Association, shall: 17) (a) publicly disclose the list of such eligible Deleted household beneficiaries at the Project relevant sites; and (b) before providing a Housing Grant to a Participating Household Beneficiary, enter into a Participation Agreement with such Participating Household Beneficiary, under terms and conditions set forth in the Operations Manual, which Participation Agreement shall provide: 18) (i) the Participating Household Deleted Beneficiary's voluntary participation in the Project and commitment to use the resources of the Housing Grant for the reconstruction of a multi-hazard resilient core housing unit, following the Housing Reconstruction Guidelines; 19) (ii) the amount of the Housing Grant to be Deleted paid on a nonreimbursable basis to such Participating Household Beneficiary, including the number and amounts of each individual tranche thereof; 20) (iii) the conditions for release of the Deleted Housing Grant to such Participating Household Beneficiary in multi ple tranches upon the Participating Household Beneficiary's signing of the Participation Agreement (for the first tranche) and the satisfactory achievement of pre-agreed milestones in the construction work of the multi- hazard resilient core housing unit (for subsequent tranches), subject to the verification mechanisms provided for in the Operations Manual; 21) (iv) the obligation and agreement of the Deleted Participating Household Beneficiary to The World Bank Earthquake Housing Reconstruction Project (P155969) Additional Financing Agreement January 21, Amended and Restated Financing Agreement 2018 May 2, 2019 accept random and/or unannounced physical inspection by the Recipient and/or the Association, in relation to the construction work; and 22) (v) the Recipient's right to suspend or Deleted terminate the right of the Participating Household Beneficiary to use the proceeds of the Housing Grant, upon any failure of the Participating Household Beneficiary to perform its obligations under the Participation Agreement, or upon notice served by the Association to the Recipient that it intends to exercise any of its remedies under Section 23) Methods of Payment Deleted 2. For the payment of Housing Grants to Participating Household Beneficiaries, the Recipient shall engage the services of one or more Payment Service Providers (as hereinafter defined) in accordance with criteria acceptable to the Association as set forth in the Operations Manual. 24) 3. The Recipient shall conclude, by no Deleted later than the date on which the Recipient first proposes to release a Housing Grant, and thereafter implement, one or more service agreements (each a "Payment Agreement"), in form and substance satisfactory to the Association, with a bank or financial institution, which may include a microfinance institution, or another entity having the capacity to provide the services and comply with the obligations described into the Payment Agreement, duly authorized to operate and operating in the Recipient's territory (each a "Payment Service Provider"). 25) 4. The Recipient shall exercise its rights Deleted under each Payment Agreement in such manner as to protect the interests of the Recipient and the Association and to accomplish the purposes of the Credit. The World Bank Earthquake Housing Reconstruction Project (P155969) Additional Financing Agreement January 21, Amended and Restated Financing Agreement 2018 May 2, 2019 Except as the Association shall otherwise agree, the Recipient shall not assign, amend, abrogate or waive any Payment Agreement or any of its provisions. 26) 5. No other method shall be used for the Deleted payment of any Housing Grant unless: (a) such alternative method has been agreed in writing with the Association; and (b) the criteria and provisions governing its use have been included by the Recipient in form and substance acceptable to the Association in an updated Operations Manual. 27) Conditions for the Release of Tranches Deleted 6. The Recipient shall release the first tranche of each Participating Household Beneficiary's Housing Grant upon the Participating Household Beneficiary's signing of the Participation Agreement in accordance with Section I.D. I of this Schedule 2. The World Bank Earthquake Housing Reconstruction Project (P155969) Additional Financing Agreement January 21, Amended and Restated Financing Agreement 2018 May 2, 2019 28) 7. Prior to the release to a Participating Deleted Household Beneficiary Of the second and subsequent tranches of such Participating Household Beneficiary's Housing Grant, the Recipient, through NRA and MOFALD, shall ensure that: (a) the verification procedures related to the Participating Household Beneficiary's compliance with the Housing Reconstruction Guidelines and satisfactory achievement of the pre- agreed milestones in the construction work of the multi-hazard resilient core housing unit, including the preparation of verification reports on the completion of outputs, are carried out following the procedures set forth in the Operations Manual; and (b) that the proceeds of the Credit are only used to pay for Housing Grants to Participating Household Beneficiaries that have completed reconstruction of their multi-hazard resilient core housing unit, in accordance with the quality standards set forth in the Operations Manual. Housing Grants paid to Participating Household Beneficiaries whose housing units are deemed incomplete and/or of substandard quality, shall be deemed ineligible for financing under the Project, except in the event of force majeure as determined by the Association. Any amounts advanced for the financing for such ineligible Housing Grants shall be promptly reimbursed to the Association upon the Association's request. The World Bank Earthquake Housing Reconstruction Project (P155969) Additional Financing Agreement January 21, Amended and Restated Financing Agreement 2018 May 2, 2019 29) Section Il. Proiect Monitoring. Reporting and Evaluation A Project Reports The Recipient shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 4.08 of the General Conditions and on the basis of indicators acceptable to the Association. Each Project Report shall cover the period of each Fiscal Quadrimester, and shall be furnished to the Association not later than forty- five (45) days after the end of the period covered by such report. 30) B. Financial Management, Financial Deleted Reports and Audits 1. The Recipient shall maintain or cause to be maintained a financial management system in accordance with the provisions of Section 4.09 of the General Conditions. 31) 2. Without limitation on the provisions of Deleted Part A of this Section, the Recipient shall prepare and furnish to the Association not later than forty-five (45) days after the end of each Fiscal Quadrimester, interim unaudited financial reports for the Project covering the Fiscal Quadrimester, in form and substance satisfactory to the Association. 32) 3. The Recipient shall have its Financial Deleted Statements audited in accordance with the provisions of Section 4.09 (b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Recipient. The audited Financial Statements for each such period shall be furnished to the Association not later than six (6) months after the end of such period." The World Bank Earthquake Housing Reconstruction Project (P155969) Additional Financing Agreement January 21, Amended and Restated Financing Agreement 2018 May 2, 2019 33) 2. Section IV.B.2(a) of Schedule 2 is Deleted amended to read as follows: "(a) Except as the Association may otherwise agree in writing, withdrawals under Category (2) shall be output-based and shall be available for withdrawal by the Recipient subject to: (i) the Association having communicated in writing to the Recipient the unit amount of each Housing Grant; (ii) such Participating Household Beneficiary having satisfactorily achieved the agreed output in the construction work of the multi-hazard resilient core housing unit, subject to the verification mechanisms provided for in paragraph 7 of Section I.D of this Schedule as further detailed in the Operations Manual; and (iii) the Association having received, through the Recipient, a satisfactory summarized version of the reports furnished by the verifiers for such works;" 34) 3. The new definition of the terms "Fiscal Year" and "Fiscal Quadrimester" are added as follows. Fiscal Quadrimester' means, each of the following four (4) month periods within the same Fiscal Year, namely on or around: (a) July 16 to November 15; (b) November 16 to March 15; and (c) March 16 to July 15. 'Fiscal Year' means a fiscal year of the Recipient, commencing on or around July 16 of a calendar year and concluding on or around July 1 5 of the next following calendar year." 35) 4. The terms "ESMF" "IPPF" Deleted "Municipality", "RPF" and "Training and Workshops" in the Appendix are amended to read as follows and the definition of the term "VDC" in the Appendix is deleted in its entirety; '"ESMF' means the Recipient's environmental and social management framework, which includes the GESI Action Plan, dated March 2016, and sets forth the guiding principles, standards and procedures for screening, managing and monitoring environmental and social impacts under the Project, including those related to natural habitats, chance cultural finds, and forestry, land acquisition, Displaced Persons, and Indigenous Peoples; as such The World Bank Earthquake Housing Reconstruction Project (P155969) Additional Financing Agreement January 21, Amended and Restated Financing Agreement 2018 May 2, 2019 framework may be revised, updated or supplemented from time to time with the prior written concurrence of the Association, and such term includes any annexes or schedules to such framework. 36) 'IPPF' means the Recipient's indigenous Deleted peoples planning framework dated February 2016, setting out: (a) the mitigation, enhancement, monitoring, and institutional measures to ensure meaningful consultation with, and the informed participation of, Indigenous Peoples within theProject area who are affected by the Project, and (b) the guidelines and procedures for the preparation of indigenous peoples development plans with the objective of avoiding cultural, social and economic adverse effects on Indigenous Peoples caused or likely to be caused by the Project, and through a process of informed consultation and participation, involving concerned Indigenous Peoples in the design and implementation of relevant Project activities so as to ensure that the benefits received by the Indigenous Peoples under the Project are in harmony with their economic, social and cultural preferences and protect their customary user rights; as such framework may be modified from time to time with the prior written agreement of the Association, and such term includes any annexes or schedules to such framework. 37) 'Municipality' means a rural municipality, Deleted urban municipality, submetropolitan city and metropolitan city-local level, as recently constituted within the Recipient's territory pursuant to the Constitution of Nepal, 2015, which term, for the purpose of this Project, The World Bank Earthquake Housing Reconstruction Project (P155969) Additional Financing Agreement January 21, Amended and Restated Financing Agreement 2018 May 2, 2019 only refers to those municipalities which have been identified in accordance with the Operations Manual, and within which the Participating Household Beneficiaries reside; and "Municipalities" means more than one such Municipality. 38) 'RPF' means the Project Implementing Entity's Deleted resettlement policy framework, dated February 2016, for compensation, resettlement, and rehabilitation of Displaced Persons and setting forth the guidelines, principles and procedures for preparation of resettlement action plans identifying Displaced Persons on account of implementation of Project activities, and setting forth the terms and conditions for providing them with resettlement assistance and/or compensation, as well as the procedures to be applied in the identification, assessment and mitigation of potential Project related social impacts, including the protocols for consultation, the processing of complaints and grievance redressal, monitoring and reporting requirements; as such framework may be modified from time to time with the prior written agreement of the Association, and such term includes any annexes or schedules to such framework. 39) "Training and Workshops" means reasonable Deleted and necessary costs of training and orientation of the project staff, artisans and beneficiaries related to the implementation of the Project, including the fees owed to educational and other institutions that provide training, costs related to attendance and organization of conferences, seminars, study tours and workshops, and the trainees' cost of travel, boarding, lodging and per diem allowances within and outside the country."