Embed Size (px)
Citation preview
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: PAD2559
INTERNATIONAL DEVELOPMENT ASSOCIATION
PROJECT PAPER
ON A
PROPOSED ADDITIONAL CREDIT
IN THE AMOUNT OF SDR 213.6 MILLION
(US$300 MILLION EQUIVALENT)
TO
NEPAL
FOR
EARTHQUAKE HOUSING RECONSTRUCTION PROJECT
NOVEMBER 21, 2017
Social, Urban, Rural and Resilience Global Practice
South Asia Region
This document has a restricted distribution and may be used by recipients only in the performance of their
official duties. Its contents may not otherwise be disclosed without World Bank authorization.
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
CURRENCY EQUIVALENTS
(Exchange Rate Effective October 31, 2017)
Currency Unit = Nepalese Rupees (NPR)
NPR 103.63 = US$1
US$1.404 = SDR 1
FISCAL YEAR
July 16 – July 15
ABBREVIATIONS AND ACRONYMS
ADM Accountability and Decision Making
AF Additional Financing
BCR Benefit-Cost Ratio
CERC Contingent Emergency Response Component
CL-PIUs Central-Level Project Implementation Unit
CPF Country Partnership Framework
CQS Selection Based on the Consultant’s Qualification
CV Curriculum Vitae
DFID United Kingdom Department for International Development
DL-PIU District-Level Project Implementation Unit
DRM Disaster Risk Management
EA Economic Analysis
EHDC Earthquake Household Damages and Characteristics
EHRP Earthquake Housing Reconstruction Project
ESMF Environmental and Social Management Framework
ESMP Environmental and Social Management Plan
FM Financial Management
GoN Government of Nepal
GRM Grievance Redress Mechanism
GRS Grievance Redress Service
HRT Housing Reconstruction Team
IPF Investment Project Financing
IRR Internal Rate of Return
IUFR Interim Unaudited Financial Report
JICA Japan International Cooperation Agency
M&E Monitoring and Evaluation
MDTF Multi-Donor Trust Fund
MoFALD Ministry of Federal Affairs and Local Development
MoUD Ministry of Urban Development
NEARR Nepal EU Action for Recovery and Reconstruction
NPV Net Present Value
NRA National Reconstruction Authority
PA Participation Agreement
PDO Project Development Objective
PIU Project Implementing Unit
PMU Project Management Unit
POM Project Operations Manual
PP Procurement Plan
PPSD Project Procurement Strategy for Development
RAP Resettlement Action Plan
RPF Resettlement Policy Framework
TA Technical Assistance
TPMA Third-Party Monitoring Agent
USAID U.S. Agency for International Development
VCDF Vulnerable Community Development Framework
VCDP Vulnerable Community Development Plan
Vice President: Annette Dixon
Country Director: Qimiao Fan
Country Manager: Takuya Kamata
Senior Global Practice Director:
Practice Manager:
Ede Jorge Ijjasz-Vasquez
Christoph Pusch
Task Team Leader(s): Kamran Akbar, Hemang Karelia
NEPAL
NP: ADDITIONAL FINANCING EARTHQUAKE HOUSING RECONSTRUCTION
PROJECT
CONTENTS
Project Paper Data Sheet i
Project Paper
I. Introduction 1
II. Background and Rationale for Additional Financing 4
III. Proposed Changes 5
IV. Appraisal Summary 10
V. World Bank Grievance Redress 16
Annex 1: Revised Results Framework and Monitoring Indicators 17
Annex 2: Summary of Project Procurement Strategy for Development 21
Annex 3: Legal Covenants 23
i
ADDITIONAL FINANCING DATA SHEET
Nepal
NP: Additional Financing Earthquake Housing Reconstruction (P163593)
SOUTH ASIA
GSU18
Basic Information – Parent
Parent Project ID: P155969 Original EA Category: B - Partial Assessment
Current Closing Date: 31-Jul-2020
Basic Information – Additional Financing (AF)
Project ID: P163593 Additional Financing
Type (from AUS): Scale Up
Regional Vice President: Annette Dixon Proposed EA Category: B - Partial Assessment
Country Director: Qimiao Fan Expected Effectiveness
Date: 29-Mar-2018
Senior Global Practice
Director: Ede Jorge Ijjasz-Vasquez Expected Closing Date: 30-Jun-2023
Practice Manager: Christoph Pusch Report No: PAD2559
Team Leader(s): Kamran Akbar, Hemang
D. Karelia
Borrower
Organization Name Contact Title Telephone Email
Ministry of Finance Dr. Baikuntha
Aryal
Joint
Secretary 97714211837 [email protected]
Project Financing Data - Parent (Earthquake Housing Reconstruction Project-P155969) (in US$,
Million)
Key Dates
Project Ln/Cr/TF Status Approval
Date Signing Date
Effectiveness
Date
Original
Closing Date
Revised
Closing Date
P155969 IDA-57060 Effective 29-Jun-2015 14-Aug-2015 28-Jan-2016 31-Jul-2020 31-Jul-2020
Disbursements
Project Ln/Cr/TF Status Currency Original Revised Cancelled Disbursed Undisbu
rsed
%
Disbursed
P155969 IDA-57060 Effective XDR 143.90 143.90 0.00 90.78 53.12 63.09
ii
Project Financing Data - Additional Financing NP: Additional Financing Earthquake Housing
Reconstruction (P163593) (in US$, Million)
[ ] Loan [ ] Grant [ ] IDA Grant
[X] Credit [ ] Guarantee [ ] Other
Total Project Cost: 300.00 Total Bank Financing: 300.00
Financing Gap: 0.00
Financing Source – Additional Financing (AF) Amount
International Development Association (IDA) 300.00
Total 300.00
Policy Waivers
Does the project depart from the CAS in content or in other significant
respects? No
Explanation
Does the project require any policy waiver(s)? No
Explanation
Bank Staff
Name Role Title Specialization Unit
Kamran Akbar Team Leader
(ADM
Responsible)
Senior Disaster Risk
Management
Specialist
Senior Disaster Risk
Management
Specialist
GSU18
Hemang D. Karelia Team Leader Operations Officer Disaster Risk
Management
GSU18
Shambhu Prasad
Uprety
Procurement
Specialist (ADM
Responsible)
Senior Procurement
Specialist
Senior Procurement
Specialist
GGO06
Franck Bessette Financial
Management
Specialist
Program Manager Program Manager GGO24
Avani Dixit Team Member Disaster Risk
Management
Specialist
Disaster Risk
Management
Specialist
GSU18
Caroline Mary Sage Social Safeguards
Specialist
Senior Social
Development
Specialist
Senior Social
Development
Specialist
GSU06
Drona Raj Ghimire Environmental
Safeguards
Specialist
Senior
Environmental
Specialist
Senior Environmental
Specialist
GEN06
iii
Junko Funahashi Counsel Lead Counsel Lead Counsel LEGES
Lalita Rai Team Member Program Assistant Program Assistant SACNP
Malik Najaf Khan Team Member Consultant Operations
Consultant
GSU18
Peter Nigel Fisher Team Member Consultant GSU18
Rekha Shreesh Social Safeguards
Specialist
Social Development
Specialist
Social Development
Specialist
GSU06
Seble Berhanu Counsel Legal Analyst LEGES
Sulochana Nepali Team Member Program Assistant Program Assistant SACNP
Yogesh Bom Malla Team Member Sr Financial
Management
Specialist
Financial
Management
Specialist
GGO24
Extended Team
Name Title Location
Locations
Country First Administrative
Division
Location Planned Actual Comments
Nepal Central Region Madhyamanchal X X
Institutional Data
Parent (Earthquake Housing Reconstruction Project-P155969)
Practice Area (Lead)
Social, Urban, Rural and Resilience Global Practice
Contributing Practice Areas
Social Protection & Labor
Additional Financing NP: Additional Financing Earthquake Housing Reconstruction (P163593)
Practice Area (Lead)
Social, Urban, Rural and Resilience Global Practice
Contributing Practice Areas
Consultants (Will be disclosed in the Monthly Operational Summary)
Consultants Required? Consultants will be required.,
1
I. Introduction
1. This Project Paper seeks the approval of the Executive Directors to provide an additional
credit in the amount of SDR 213.6 million (US$300 million equivalent) to the Nepal Earthquake
Housing Reconstruction Project (EHRP; Project ID: P155969; Credit Number: 5706-NP;
US$200 million equivalent).
2. The Government of Nepal (GoN) faces a financing gap in their housing reconstruction
program where the total number of eligible and enrolled beneficiaries has increased from the
preliminary estimation of 500,000 in 2015 to more than 650,000 and the amount of housing grant
provided by the GoN has been revised upwards to NPR 300,000 (approximately US$3,000
equivalent) from the earlier NPR 200,000 (approximately US$2,000 equivalent). This revision
has become necessary due to increased construction costs. The proposed additional credit would
scale up the EHRP’s support to the housing reconstruction program by financing hazard-resistant
reconstruction of an additional 96,000 houses approximately. The Project Paper does not propose
any other major changes to the design and activities supported by the project.
3. Housing grants are provided in three tranches. The first tranche of NPR 50,000 is paid
upon signing of the Participation Agreement (PA) by an eligible beneficiary; the second tranche
of NPR 150,000 is paid once it is established that the plinth has been constructed in accordance
to the reconstruction guidelines approved by the National Reconstruction Authority (NRA). The
third tranche of NPR 100,000, which includes NPR 25,000 for toilet or alternate energy, is paid
after inspection at roof-band level upon finding it to be compliant with the reconstruction
guidelines.
4. In view of the large scope of the housing reconstruction program, a World Bank-
administered Multi-Donor Trust Fund (MDTF) has been established to facilitate the participation
of development partners interested in contributing to the housing reconstruction program. This
MDTF, through its Recipient- and World Bank-executed components, supports the
implementation of the EHRP and will also support EHRP’s expanded scope with the proposed
additional credit. The MDTF has received commitments from U.S. Agency for International
Development (USAID), U.K. Department for International Development (DFID), Switzerland,
and Canada totaling US$34.14 million to date. Japan International Cooperation Agency (JICA) is
providing parallel financing of about US$100 million and the Government of India is providing
US$100 million grant and US$50 concessional credit to support housing reconstruction.
5. Country context. Nepal is one of the world’s most disaster- and climate-vulnerable
countries. An estimated 80 percent of the geographic area in Nepal is at risk from multiple
hazards and therefore majority of the country’s population lives in high risk areas. Its per capita
income is estimated at US$730 with about 25 percent of its population living below the poverty
line. The impact of the 2015 Gorkha earthquake and its major aftershocks are estimated at 35
percent of GDP with recovery needs of about US$7 billion. Every year, intense monsoon rainfall
causes floods in many parts of the country. The country was severely hit by 2017 monsoon
floods that affected more than 30 districts. Nepal is also exposed to high levels of risks from
landslide and glacier lake outburst floods. Glacier thinning and retreat in the Himalayas has
resulted in the inherently unstable process of formation of new glacial lakes and the enlargement
of the existing ones. Recent surveys indicate that many glacial lakes in the country are expanding
2
at a considerable rate, increasing the risk of sudden outbursts. For Nepal to continue to make
progress on its key development indicators, it is critical to invest in resilient recovery and post-
disaster reconstruction to avoid creating new risks and strengthen disaster preparedness and
response capacity to manage the disaster risks.
6. Institutional context. In December 2015, the GoN established the NRA to lead and
manage recovery and reconstruction after the 2015 earthquakes. The NRA’s roles and
responsibilities include identifying priorities for reconstruction based on damage assessments;
allocating reconstruction funds; approving plans, budgets, and programs; relocation and
rehabilitation; collaborating with key stakeholders; building implementation capacity;
monitoring and quality control; and ensuring accountability and transparency. The project, with
its expanded scope thanks to the Additional Credit, will continue to complement these efforts
and lay the groundwork for a longer-term program to strengthen disaster and climate resilience in
Nepal.
7. Economic context. Over the past decade, Nepal’s economy has performed reasonably
well. Growth averaged 4.3 percent (at market prices) over 2005–2015. Although declining as a
share in the economy, agriculture continues to play a large role, contributing one-third of value
added. The service sector has grown in importance, accounting for more than half of value added
in recent years. Industry in general, and manufacturing in particular, has grown more slowly and
its relative share in the economy is falling. Similarly, exports continue to struggle, while imports
are fueled by remittances that exceed 30 percent of GDP. Inflation was in the single digits for
most of the past decade, with the peg of the Nepalese rupee to the Indian rupee providing a
nominal anchor. Fiscal balances remained sustainable owing to strong revenue growth and
modest spending. The incidence of poverty measured against the national poverty line fell by 19
percentage points from 2003–2004 to 2010–2011, and in 2010–2011,1
25 percent of the
population was counted as poor. Most multidimensional indicators of poverty also showed
improvements across regions in Nepal. However, these gains remain vulnerable to shocks and
setbacks, such as the 2015 earthquakes that were followed by trade disruptions resulting in the
lowest economic growth in 14 years in 2016.
8. Economic activity, which rebounded strongly in FY2017, following two challenging
years, has once again been disrupted by floods affecting more than one-third of the country.
Rebound in FY2017 stemmed partly from a base effect, as well as a favorable monsoon boosting
agricultural output and earthquake reconstruction gathering speed to raise investment. High
inflation in the past two years has moderated sharply and has decelerated to 2.7 percent (year on
year) in July 2017. Government revenue continued to perform well, and spending has also picked
up significantly in FY2017 compared to previous years. Nevertheless, ambitious expenditure
targets envisioned in the budget have not been met and the quality of spending has not improved
with 60 percent of capital spending occurring in the last quarter. Meanwhile, rapid credit growth
in early 2017 has slowed but deposits growth has continued to decline, pushing up the interest
rates. On the external side, the cumulative effect of a sharp trade balance deterioration and a slow
growth of remittances has put some pressure on current account. Economic activity, which was
expected to progress well in FY2018, has been affected by the worst floods in decades
particularly affecting the agriculture output.
1 Recent data not available.
3
9. Political context. A new constitution that defined Nepal as a federal democratic republic
was promulgated in September 2015. With the formulation of the new constitution, Nepal is now
migrating to a federal state structure with autonomous sub-national governments. One major
impact of the transition is that the redundancy of the district offices and their sub-offices will be
replaced by the newly elected local governments. The country will now have 7 provinces and
753 municipalities. Funds, functions and functionaries hitherto managed through the 75 District
Development Committees will move to new local governments. While the proposed 753
municipalities are expected to provide better outreach and services, they will likely take
significant time to become fully operational. In addition to fresh general elections, Nepal will
also elect a new provincial tier of government by December 2017.
10. Situation of Urgent Need of Assistance or Capacity Constraints. The original project
and the Additional Financing (AF) are prepared under Situations of Urgent Need of Assistance
(OP 10.0 Paragraph 12) in view of the massive impact of the 2015 earthquakes on Nepal,
particularly on the rural districts with higher poverty rates and weaker service delivery and
substantial support required for post-earthquake recovery and reconstruction in short and
medium term. The demands of the large-scale multisector recovery program have further
strained the government’s management and implementation capacities and have led to delays and
lost opportunities in recovery process, notably in housing reconstruction sector. The large-scale
devastation caused by the 2017 monsoon flooding and subsequent recovery process may lead to
serious capacity constraints for the GoN. While Nepal’s ongoing transition to federal structure
offers opportunities to decentralize development benefits and make service delivery more
effective and accountable, the risks of jurisdictional overlap among the new tiers of government;
lack of clarity and coherence between policies and devolved powers are likely to remain high
during the coming few years. This will exacerbate the challenges to effective implementation of
the housing reconstruction program and calls for expanded implementation support and capacity
augmentation at federal to local levels.
11. Climate change. A detailed climate and disaster risk screening has been carried out for
the AF. The effects of climate change and extremes have further aggravated the disaster
vulnerability in Nepal2. Notre Dame - Global Adaptation Initiative (ND-GAIN) matrix estimates
that Nepal is on the road to responding effectively to climate change, but the adaptation needs
and urgency to act are greater.3 The projected change in flood risk hazard has remained static
since 1995, implying that the country continues to face flood risks. Rapidly growing urban
concentration4 coupled with geohazards and climate risks, puts Nepal in a high-risk position. The
technical and financial support extended through the project will help beneficiaries to reconstruct
houses on nonhazardous locations, away from harm’s way. Due to its focus on reconstructing
multi-hazard resistant housing units and strengthening disaster risk management (DRM) systems,
the EHRP was assessed to have 81.5 percent (US$163 million) climate adaptation co-benefit. At
the time of appraisal, the AF’s climate adaptation co-benefits were estimated at about 88.5
percent (US$265.6 million). The socio-technical assistance and trainings provided to
homeowners and artisans/masons for multi-hazard resistant construction techniques will also
2 Ministry of Home Affairs (2015).
3 http://index.gain.org/country/nepal.
4 http://index.gain.org/country/nepal.
4
help improve the construction quality in longer term in targeted and neighboring areas. This will
be an important co-benefit toward building resilience to natural hazards.
12. Gender. The EHRP has made women’s participation in the homeowner orientation
mandatory. As provided in the Results Framework, half of the targeted beneficiaries of
awareness programs must be women. Similarly, women participation in mason trainings
conducted by the GoN and different international/nongovernmental organizations have been
noted to be encouraging and effective. The project tracks the coverage of women-headed
households under the project, which is estimated to be about 26 percent of the total households.
The AF will build on this with enhanced focus on covering most vulnerable groups, including
women, under the AF and channeling special socio-technical assistance on hazard-resistant
housing reconstruction. The EHRP has developed specific criteria for identifying the vulnerable.
Of the 10 ‘Social and Demographic Indicators’, two are women specific whereas remaining are
gender neutral. The criteria will be used to provide additional benefits for the vulnerable as per
the GoN policy.
13. Citizen engagement and beneficiary feedback. Citizen engagement is central to the
EHRP and the AF because they follow homeowner-driven housing reconstruction approach. In
addition to providing socio-technical assistance directly to the beneficiaries and artisans in
earthquake-affected areas for effective reconstruction, a robust multitier Grievance Redress
Mechanism (GRM) developed for the EHRP will continue to be in use for the AF. The GRM has
so far received more than 200,000 grievances with more than 99 percent grievances redressed as
per NRA records. The NRA also conducted an awareness campaign for program beneficiaries
through Short Message Service during May–August 2017 that reached more than 450,000
enrolled beneficiaries with regular messages to inform them about the housing reconstruction
modalities and updates. This resulted in increased use of NRA toll-free line by the beneficiaries
for queries and feedback. Effectiveness of this service will be assessed through a third-party
beneficiary assessment to adjust, if required, and relaunch the service in light of the beneficiary
feedback.
II. Background and Rationale for Additional Financing
14. The project is aligned with the objective of the 2014–2018 Nepal Country Partnership
Strategy (CPS) (83148-NP5) to address natural disaster risks in a cross-cutting manner. The CPS
recognizes Nepal’s high vulnerability to climate change and disaster risks, particularly the high
earthquake risks, and commits to continue mainstreaming contingent emergency response
components (CERCs) across its portfolio to allow the GoN to request the reallocation of project
funds to support response and reconstruction in the case of an adverse natural event. The
proposed project with its focus on disaster-resistant reconstruction, strengthening of DRM
systems, and inclusion of CERC directly contributes to achieving the objectives of the CPS. The
project is also consistent with the World Bank’s twin goals of ending extreme poverty and
promoting shared prosperity and fully aligns with the GoN’s post-earthquake Housing
Reconstruction Policy. The project objectives also align with the Sendai Framework for Disaster
Risk Reduction (2015–2030) priority 4 that calls for enhancing disaster preparedness for
effective response and to ‘Build Back Better’ in recovery, rehabilitation, and reconstruction.
5 Discussed by the Board on May 29, 2014.
5
15. The original financing for the EHRP was approved by the Board on June 29, 2015, with a
credit amount of US$200 million equivalent, and it was declared effective on January 28, 2016.
The EHRP’s 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.”
16. The EHRP is rated Moderately Satisfactory for implementation progress as well as for
progress toward achieving the PDO. The PDO remains relevant and achievable because of the
progress attained so far and demonstrated commitments shown by the senior management of the
GoN. The EHRP has already disbursed 63.09 percent of the total credit as of October 31, 2017.
With the house inspection regimen gaining momentum, it is likely that the NRA will release
further instalments. The second tranche of NPR 150,000 to about 90 percent and third tranche of
NPR 100,000 to about 50 percent of the targeted 55,000 beneficiaries is expected to be released
by the end of the current calendar year. This will take the total disbursement to US$183 million
(about 92 percent) by end of calendar year 2017.
17. Since March 2017, the World Bank has been providing continuous implementation
support with monthly implementation review focusing on agreed actions and expedited decision-
making. This has resulted in substantial improvement in progress, especially in safeguards and
financial management (FM) compliances.
18. The EHRP is compliant with key legal covenants, including auditing and FM reporting
requirements. There has been satisfactory compliance on establishing Project Management Unit
(PMU) at the NRA and central and district level Project Implementation Units (PIUs). In spite of
some delays in filling certain positions due to lengthy recruitment processes, limited man power
availability in the market, and at times due to selected candidates declining the job offers, a
robust system has been put in place for enrolling the beneficiaries through a PA and making
grant payments to the beneficiaries’ registered bank account upon satisfactory inspection at each
stage of the multi-hazard resistant house reconstruction. A detailed status of the EHRP’s
compliance to the legal covenants is in Annex-3.
19. The EHRP was originally designed to address the housing reconstruction needs of about
10 percent (total 55,000) of the total beneficiary households estimated after the earthquake.
During the subsequent beneficiary surveys and resurveys, the number of total beneficiaries has
surpassed 650,000, widening the funding gap in the GoN’s umbrella housing reconstruction
program. Moreover, in February 2017, the GoN revised the ‘Private Housing Reconstruction
Grant Procedures 2017’ of its housing reconstruction program to allow an increase of NPR
100,000 (from NPR 200,000 to NPR 300,000) in the housing grant because of the rising
construction costs. In response to GoN’s request, the World Bank agreed on March 23, 2017 to
increase the individual housing grant amount and revise the amounts of respective instalments.
With the grant amount increase, the World Bank team estimated that the US$800 million funding
gap in the GoN housing reconstruction program will further widen to more than US$1.2 billion.
The housing reconstruction component of the original IDA credit is likely to be fully disbursed
within a year and there is an urgent need to secure AF to provide housing subsidies to additional
beneficiaries. In addition to requesting an additional IDA credit, the GoN has allocated resources
from its own budget. It is also receiving financial assistance from development partners such as
India (US$100 million grant and US$50 million concessional credit for housing reconstruction
6
and US$750 million credit for overall reconstruction), JICA (US$100 million), and MDTF
(US$34.14 million). The assistance from other development partners is channeled to earmarked
geographic areas to avoid overlaps with IDA financed target areas.
III. Proposed Changes
Summary of Proposed Changes
The proposed AF will help scale up the project to include approximately 96,000 additional beneficiary
households for multi-hazard resistant house reconstruction. The project design will remain unchanged.
The AF does not include any changes to the development objectives as defined in the original Financing
Agreement and follows the same component structure of the parent project.
Change in Implementing Agency Yes [ ] No [ X ]
Change in Project’s Development Objectives Yes [ ] No [ X ]
Change in Results Framework Yes [ X ] No [ ]
Change in Safeguard Policies Triggered Yes [ ] No [ X ]
Change of EA category Yes [ ] No [ X ]
Other Changes to Safeguards Yes [ ] No [ X ]
Change in Legal Covenants Yes [ ] No [ X ]
Change in Loan Closing Date(s) Yes [ ] No [ X ]
Cancellations Proposed Yes [ ] No [ X ]
Change in Disbursement Arrangements Yes [ ] No [ X ]
Reallocation between Disbursement Categories Yes [ ] No [ X ]
Change in Disbursement Estimates Yes [ X ] No [ ]
Change to Components and Cost Yes [ X ] No [ ]
Change in Institutional Arrangements Yes [ ] No [ X ]
Change in Financial Management Yes [ ] No [ X ]
Change in Procurement Yes [ X ] No [ ]
Change in Implementation Schedule Yes [ X ] No [ ]
Other Change(s) Yes [ ] No [ X ]
Development Objective/Results PHHHDO
Project’s Development Objectives
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.
Change in Results Framework PHHCRF
7
Explanation:
The key PDO indicators will remain unchanged with targets revised to reflect cumulative targets covering
the AF and clarifications provided on indicator monitoring. Few redundant intermediate indicators are
proposed to be dropped to simplify the Results Framework. No new indicators are being proposed.
Compliance PHHHCompl
Covenants - Additional Financing (NP: Additional Financing Earthquake Housing Reconstruction
- P163593)
Source of
Funds
Finance
Agreement
Reference
Description of
Covenants Date Due Recurrent Frequency Action
See Annex 3
Conditions
PHCondTbl
Source of Fund Name Type
Description of Condition
See Annex 3
Risk PHHHRISKS
Risk Category Rating (H, S, M, L)
1. Political and Governance High
2. Macroeconomic Moderate
3. Sector Strategies and Policies Moderate
4. Technical Design of Project or Program Substantial
5. Institutional Capacity for Implementation and Sustainability Substantial
6. Fiduciary High
7. Environment and Social Substantial
8. Stakeholders Substantial
9. Other
OVERALL Substantial
Finance PHHHFin
Loan Closing Date - Additional Financing (NP: Additional Financing Earthquake Housing
Reconstruction - P163593)
Source of Funds Proposed Additional Financing Loan Closing Date
International Development Association (IDA) 30-Jun-2023
Change in Disbursement
Estimates
(including all sources of Financing)PHHCDE
8
Explanation:
With the additional financing, approximately 96,000 beneficiaries will be added to the current list of
approximately 55,000.
Expected Disbursements (in US$, Million) (including all Sources of Financing)
Fiscal Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Annual 20.00 106.28 100.00 150.00 75.00 48.72 0.00 0.00 0.00 0.00
Cumulative 20.00 126.28 226.28 376.28 451.28 500.0
0
500.00 500.00 0.00 0.00
Allocations - Additional Financing (NP: Additional Financing Earthquake Housing Reconstruction
- P163593)
Source of
Fund Currency Category of Expenditure
Allocation Disbursement
%(Type Total)
Proposed Proposed
IDA US$
Goods, works, non-consulting
services, consulting services,
Incremental Operating Costs, and
Training and Workshops
12,500,000.00 100.00
IDA US$ Housing Grants 287,500,000.00 100.00
IDA US$
Emergency Expenditures for the
CER Component 0.00 100.00
Total: 300,000,000.00
Components PHHHCompo
Change to Components and Cost PHHCCC
Explanation:
There is no change in components. However, a larger share (96%) of the additional financing has been
allocated to the housing reconstruction component due to urgent demand and huge financing gap
indicated by the GoN.
Current Component
Name
Proposed Component
Name
Current
Cost (US$,
million)
Proposed
Cost (US$,
million)
Action
Housing Reconstruction Housing Reconstruction 185.00 472.50 Revised
Disaster Risk
Management Systems
Disaster Risk Management
Systems 10.00 15.00 Revised
Project Implementation
Support
Project Implementation
Support 5.00 12.50 Revised
Contingency Emergency
Response
Contingency Emergency
Response 0.00 0.00 No Change
Total: 200.00 500.00
9
Other Change(s) PHHHOthC PHImplemeDel
Implementing Agency Name Type Action
Ministry of Federal Affairs and Local
Development Implementing Agency
Ministry of Urban Development Implementing Agency
National Reconstruction Authority Implementing Agency
Change in Procurement PHHCProc
Explanation:
For Project activities to be supported by the AF, ‘World Bank Procurement Regulations for Borrowers
under Investment Project Financing’ dated July 1, 2016, will be applicable. Procurement arrangements
under the original financing remain unchanged.
Change in Implementation Schedule PHHCISch
Explanation:
The activity under the parent project are on track and will be completed by the closing date. The
implementation schedule for the Project, whose scope is expanded with the AF is extended in view of the
approximately 96,000 additional households it will cater to for house reconstruction.
Implementing Arrangements
20. There is no change in the implementation arrangements and the AF will also be
implemented through the NRA, Ministry of Federal Affairs and Local Development (MoFALD)
and Ministry of Urban Development (MoUD). The Financing Agreement of the original
financing and Project Operations Manual (POM) will be amended to reflect the GoN requests
agreed by the World Bank to remove the reference of village development committees and revise
the definition of ‘municipalities’6 in view of the new administrative structure in Nepal and to
drop a requirement to have a Safeguards Specialist in the MoUD PIU. These changes will not
have any bearing on the implementation modalities in place, which means, in particular, that
municipalities will not manage project’s proceeds.
21. The key project mechanism of transferring housing grants directly to beneficiaries’ bank
accounts will continue to ensure that the right beneficiary gets the right tranche amount upon
verification. A key lesson from the EHRP implementation has been the need to expand socio-
technical assistance and facilitation services to the homeowners. In view of this, the NRA is
deploying multidisciplinary housing reconstruction support teams at each municipality covered
under the project to provide socio-technical assistance. Such teams will be deployed for the
targeted areas under the AF as well. The NRA has approved a special package of NPR 50,000
6 ‘Municipality’ means a rural municipality, urban municipality, sub-metropolitan 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, only refers to those municipalities which have been identified in accordance with the
Operations Manual and within which the Participating Household Beneficiaries reside. ‘Municipalities’ means more
than one such municipality.
10
for the most vulnerable beneficiaries in the affected districts though no funding has been
earmarked for the purpose. Categorization of the most vulnerable beneficiaries is in the final
stages of approval. The socio-technical assistance teams will extend targeted assistance to the
most vulnerable by mobilizing communities to physically participate in the reconstruction of
vulnerable beneficiaries’ houses.
IV. Appraisal Summary
Economic and Financial Analysis
22. The direct beneficiaries of the EHRP are the members of approximately 55,000
participating households whose homes were destroyed in the earthquake. The proposed AF will
add approximately 96,000 additional beneficiary households under the housing reconstruction
component. An economic analysis (EA) performed for the EHRP assessed the rate of return of
capital investments needed for the reconstruction and recovery from the earthquake. Since it is
difficult to make any assessment of benefits from resilient housing in terms of protection from
future such earthquakes, the analysis adopted a more straightforward approach of calculating the
returns to the households living in a resilient home and staying out of poverty compared to them
not receiving any benefits to jump-start their post-disaster life. The main benefit of this project is
the shadow annualized rental income from the newly built multi-hazard resilient housing units.
The EA found the EHRP to have the internal rates of return (IRR) of 21.2 percent and net present
value (NPV) of US$265.0 million, with the benefit-cost ratio (BCR) of 1.8, indicating that the
project was economically viable by conservative estimates. The EA under the same assumptions
as before found the IRR of 24.1 percent, NPV of US$541.9 million, and BCR of 2.0 for the
proposed AF’s housing reconstruction component of US$287.5 million.
Financial Management, Disbursements, and Procurement
Financial Management
23. The FM capacity assessment of the NRA and its implementing partners is found to be
moderately satisfactory for the EHRP. The World Bank has switched to continuous
implementation support and monthly review meetings since March 2017 to address the overall
capacity constraints and boost the performance ratings, with particular focus on FM. This has
helped in early identification of critical issues and increased implementation pace. The AF will
use the same FM processes and procedures for planning, budgeting, funds flow, accounting,
reporting, and audits. The World Bank task team will continue the expanded implementation
support, especially for synchronizing planning and budgeting, streamlined chart of accounts and
timely submission of financial reports. The staffing for accounts and finance functions at the
NRA and other key implementing partners are found to be adequate. However, it was agreed
during negotiations to have an additional full-time FM consultant and FM assistant at the NRA
due to added fiduciary responsibilities under the AF. The increased staffing and additional
mitigation measures such as the use of software for budgeting and accounting will help address
the quality and timeliness issues experienced in financial and audit reporting. The NRA will be
responsible for disbursement for this AF. The AF will follow the same disbursement
arrangements (output based) as for the original EHRP financing, under a specific Designated
Account to be opened at the Nepal Rastra Bank (NRB) for the AF for which a specific reporting
11
will be arranged. Accounting for AF payments and receipts will be conducted separately from
the original EHRP financing and both sets of accounts will be submitted separately to the auditor
and the World Bank. The same Interim Unaudited Financial Report format for the original EHRP
financing will be used for the AF.
24. Out of US$126.28 million advanced to the project, about US$51.53 million has been
transferred to the government treasury as of October 13, 2017, for the already incurred project
expenditure. Keeping in view the construction activities halted during monsoons and festival
periods from mid-June to end October, expenditure is projected to increase during the upcoming
reconstruction period of November to June.
25. Retroactive financing of up to US$120 million will be available for reimbursements of
the tranches paid for housing grant of 96,000 additional houses to be built in the selected districts
under Category 2 before the date of signing, but after March 1, 2017. As the first tranche of NPR
50,000 (approximately US$500) might have been paid to all the enrolled beneficiary households,
approximately US$47.5 million will be reimbursed to the GoN for the first tranche disbursed to
approximately 96,000 eligible beneficiary households. Remaining balance in retroactive
financing will be used to reimburse the second and third tranches paid to the eligible
beneficiaries covered under the AF upon verification of their compliance with safer
reconstruction requirements. Payments under retroactive financing will be traceable in the
accounts.
Expenditure Categories
26. The following will be the categories of eligible expenditure:
Category Amount of the Credit
Allocated (expressed
in SDR)
Percentage of
Expenditures to be
Financed
(inclusive of taxes)
(1) Goods, works, non-consulting
services, consulting services, Incremental
Operating Costs, and Training and
Workshops
8,900,000 100%
(2) Housing Grants 204,700,000 100% of amounts
disbursed
(3) Emergency Expenditures for the CER
Component 0 100%
TOTAL AMOUNT 213,600,000
Annual Audit/ Verification
27. The NRA will continue with original project audit arrangements. The Authority will
ensure flow of funds in accordance with the Operations Manual to the Participating Household
Beneficiaries. The EHRP is compliant with the existing audit covenant as of November 14, 2017.
As part of implementation review and support, the World Bank has hired an independent third
party monitoring consulting firm to monitor integrity risks of the project under original
12
financing. Such arrangement will also be ensured for the duration of the project under the
additional financing.
Procurement
28. The World Bank Procurement Regulations for IPF Borrowers, July 2016, will apply for
procurement using World Bank funds from the AF. However, the procurement arrangements for
the original financing will remain unchanged. Given that IDA disbursements under Component 1
are made against the agreed procedure for ‘Housing Grants’, no procurement is involved under
this component and therefore, the Procurement Regulations will not apply to this component.
However, Components 2 and 3 related to DRM systems and project implementation support will
involve procurement activities, mainly selection of consulting firms and individual consultants
and some procurement of goods. Procurement under these components will be carried out in
accordance with the Procurement Regulations and the provisions stipulated in the Financing
Agreement. The procurement of goods and consulting services as agreed in the Project
Procurement Strategy Development (PPSD) and Procurement Plan (PP) may be carried out using
National Competitive Bidding (NCB) as per the GoN’s Public Procurement Act of 2007 and
regulations thereunder, along with the additional IDA-prescribed caveats.
29. The NRA is the primary responsible agency for project implementation and for providing
overall coordination and guidance to other implementing agencies. The MoFALD PIU and the
MoUD PIU may also carrying out procurement for their part of project implementation as per
need and as arranged by the NRA. All the implementing agencies, the NRA, MoFALD PIU, and
MoUD PIU have gained experience in managing procurement of the ongoing EHRP. The current
Project Operations Manual (POM) with necessary update will be followed for detailed guidance
on project procurement management. To enhance and maintain its procurement management
capacity, it was agreed during negotiations that the NRA needs to engage a procurement
consultant throughout the implementation period of the project to expedite the procurement
process and ensure the quality of procurement carried out by the NRA and other PIUs. PPSD and
PP for the first 18 months of the projects have been prepared for the smooth implementation of
procurement activities during project implementation. A summary of the PPSD and due
diligence measures are in annex-2.
Technical Analysis
30. There is no change in the technical analysis. The housing reconstruction component
scales up the provision of housing grants to the participating household beneficiaries in targeted
areas along with trainings and facilitation to homeowners on hazard-resistant reconstruction.
Core housing units are being reconstructed under owner-driven housing reconstruction approach
in compliance with the GoN/NRA's technical guidelines to ensure the multi-hazard resilience of
the reconstructed houses. These technical guidelines cover the popular building construction
technologies and locally available construction materials that are used in earthquake-affected
areas to ensure that the beneficiaries are likely to use them and have access to critical inputs.
Social Analysis
13
31. In terms of implementation, the GoN has the overall responsibility for ensuring
compliance with the safeguards documents prepared under the project. The NRA will be the lead
agency responsible for providing high-level oversight and policy decisions on project activities,
including those relating to safeguards issues.
32. Beneath the NRA, the PIU located under the MoFALD will be responsible for screening,
preparation, implementation and monitoring of the safeguards documents, namely the
Environmental and Social Management Framework (ESMF), Vulnerable Community
Development Framework (VCDF), and Resettlement Policy Framework (RPF) prepared under
the project. Both agencies’ (NRA and MoFALD) environmental and social management capacity
in emergency operation, such as this, is limited. Hence, an Environmental Specialist and a Social
Specialist have been recruited to support the PIUs. Further, the District-Level Project
Implementation Units (DL-PIUs) established under the MoFALD’s PIU will provide close
technical support and supervision to district-level project activities. A Social Specialist and an
Environmental Specialist have also been recruited in the MoFALD DL-PIUs of project districts
(Nuwakot, Dhading, and Dolakha) who are responsible for screening, preparation,
implementation and monitoring of the Environmental and Social Management Plans (ESMPs),
Vulnerable Community Development Plans (VCDPs), and Resettlement Action Plans (RAPs)
prepared for each of the settlements. If required, the DL-PIUs might seek support from partner
organizations and specialists. As required by the ESMF, settlement level environmental and
social screening reports and ESMPs are being prepared.
33. At the local/community level, the beneficiary households themselves will be responsible
for the implementation and compliance with safeguards issues. However, a mobile team
consisting of technicians and social mobilizer will be available to support the beneficiaries with
construction activities as well as for safeguard support and regular monitoring for safeguard
compliance.
34. The ESMF, RPF, and VCDF for the project were prepared by the GoN, and cleared by
the World Bank. During the preparation and finalization of these frameworks, two rounds of
consultations were held at the central level followed by local level consultations in the three
project districts, namely, Dolakha, Dhading and Nuwakot. Before the consultations, the relevant
stakeholders, including the earthquake affected households, indigenous peoples, Dalits, female-
headed households, local government authorities, government representatives, and so on, were
provided with the draft of the ESMF translated into Nepali. Following consultations, the ESMF,
RPF, and VCDF were revised and (a) disclosed at the country level, (b) officially submitted to
the World Bank for clearance, and (c) submitted for disclosure on the World Bank website.
35. On the district and specific project sites, these documents will be made available at the
public places. Additionally, consultations with stakeholders, including ‘Free, Informed and Prior
Consultation’ with project-affected households will be a continuous feature during project
implementation.
Environmental Analysis
36. The original project was prepared under Situations of Urgent Need of Assistance (OP
10.0 Paragraph 12). As per the Safeguard Action Plan of the original project, the ESMF has been
14
prepared to guide the identification of possible social and environmental issues, develop
mechanisms to comply with relevant GoN’s and World Bank’s policy requirements, and lay out
the approach and procedures relevant during settlement-level planning and implementation to
mitigate the environmental and social impacts. In addition, the ESMF also contains institutional
and implementation arrangements, the monitoring framework, and the capacity-building needs
for effective implementation of the ESMF. The ESMF will also apply to the proposed AF.
Risks
37. The overall risk rating for the AF is Substantial. The most critical risks and mitigating
measures associated with the AF are summarized as follows:
(a) Political and Governance risks are rated High. Nepal’s transition has been
characterized by frequent government changes. The country has constitutionally
adopted a federal government system; however, it is currently facing the daunting
task of smoothening the transition from the old unitary system to the new federal
one. The new system takes effect in January 2018 and, in principle, provides
opportunities to decentralize development benefits and make service delivery more
effective and accountable. However, the risks of jurisdictional overlap between the
three tiers of government, lack of clarity, and coherence between policies and
devolved powers, and duplication of efforts will remain high during the coming few
years. Key aspects of the new system require further definition and may continue to
be contested by different population groups.
(b) Macroeconomic risk continues to be Moderate. Economic growth is expected to
be moderate on the account of the heaviest floods in decades. Inflation is likely to
pick up, but is expected to remain relatively low compared to the rates seen in
previous years. The fiscal deficit is likely to widen, but given the large cash balances
on hand and low debt-to-GDP ratio, financing will be adequate. The debt
sustainability analysis conducted by the World Bank and International Monetary
Fund in 2016 maintains a ‘low’ risk of debt distress. The current account deficit is
expected to further widen as imports continue to grow, while remittances remain
sluggish.
(c) Technical design of the project and stakeholders risks remain Substantial. The
owner-driven housing reconstruction approach adopted under the project is new to
Nepal and providing socio-technical assistance and establishing home inspection
regime in remote, mountainous areas is logistically challenging. This risk is being
mitigated through expanded technical assistance (TA) to the PMU and the PIUs with
continuous implementation support. In addition, under the EHRP, Socio-Technical
Assistance Housing Reconstruction Teams (HRTs) are being launched at the
municipality level to provide TA to households. Further, the World Bank is
engaging a third party monitoring agent (TPMA) under the MDTF as World Bank
executed activity not only to ensure quality of inspection but also to build capacities
of implementing agencies and support verification of beneficiary eligibility and
disbursement of housing grants.
15
(d) Institutional capacity for implementation and sustainability risk remains
Substantial. The scope of the umbrella housing reconstruction program is huge and
implementation capacities of the NRA, a relatively new institution, and PIUs have
not developed at a required pace. In view of the current capacity constraints in
program management in general, and procurement and FM in particular, and
additional workload foreseen for the AF, the PMU capacities will be strengthened
with additional staff and consultants including engineers, procurement, FM, and
monitoring and evaluation (M&E) consultants. The NRA is in the process of hiring
firms to provide socio-technical assistance services to direct beneficiaries at
municipality level.
(e) Fiduciary risk remains High. The World Bank task team will continue the
expanded hands-on implementation support, especially for synchronizing planning
and budgeting, streamlined chart of accounts, and timely submission of financial
reports. A number of mitigation measures have already been taken. The task team
facilitated the establishment of an FM working group in April 2017 led by the NRA
and supported by the World Bank, USAID-Public Financial Management
Strengthening Project and Nepal European Union Action for Recovery and
Reconstruction (NEARR). An FM team is in place at the NRA, supported by
consultants seconded by development partners. A Financial Management Software
has been customized and installed to improve the FM and accounting functions, with
training of trainers completed. Full rollout of the Financial Management Information
System will take place in December 2017. The proposed additional staffing under
the AF at the PMU and use of software for budgeting and accounting will help
address the quality and timeliness issues experienced in financial and audit
reporting. The World Bank TPMA will be another source of data verification.
Moreover, the detailed Earthquake Household Damage and Characteristics survey to
identify beneficiaries, signed PAs while enrolling beneficiaries to the program,
multitier GRM, home inspection teams at the local level and housing grant tranches
disbursed through bank-to-bank transaction after verification have enhanced the
transparency and helped manage fiduciary, stakeholder, and governance risks.
(f) Environment and social risk remains Substantial. As per the Safeguard Action
Plan of the original project, the ESMF, RPF, and a VCDF were prepared to guide
the identification and management of possible social and environmental issues and
risks. In accordance, all settlements have been through a screening process and
where relevant settlement-level ESMP, VCDP, and RAP are being prepared. While
the frameworks are adequate and the teams have worked hard to establish a system
to do the requisite safeguards work, there have been delays in developing settlement-
specific safeguard documents in both clearance and implementation. To address
these concerns, the World Bank’s safeguards team is working closely with the
project teams. The Environment and Social Safeguard Specialists have already been
hired at the NRA PMU, MoFALD CL-PIU and DL-PIUs.
16
V. World Bank Grievance Redress
38. Communities and individuals who believe that they are adversely affected by a World
Bank (WB) supported project may submit complaints to existing project-level grievance redress
mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints
received are promptly reviewed to address project-related concerns. Project affected
communities and individuals may submit their complaint to the WB’s independent Inspection
Panel which determines whether harm occurred, or could occur, as a result of WB non-
compliance with its policies and procedures. Complaints may be submitted at any time after
concerns have been brought directly to the World Bank's attention, and Bank Management has
been given an opportunity to respond. For information on how to submit complaints to the World
Bank’s corporate Grievance Redress Service (GRS), please visit
http://www.worldbank.org/GRS. For information on how to submit complaints to the World
Bank Inspection Panel, please visit www.inspectionpanel.org.
17
Annex 1. Revised Results Framework and Monitoring Indicators
Project
Name:
NP: Additional Financing Earthquake Housing
Reconstruction Project (P163593)
Project
Stage: Additional Financing Status:
Project Development Objectives
Original Project Development Objective - Parent:
The 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.
Proposed Project Development Objective - Additional Financing (AF):
Results
Core sector indicators are considered: Yes Results reporting level: Project Level
.
Project Development Objective Indicators
Status Indicator Name Corporate Unit of
Measure Baseline Actual (Current)
Parent
Project
Target
End Target
(Cumulative)
Revised 1. Households with
resilient core housing
reconstructed under the
project
Number Value 0.00 31,776 55,000 151,000
Date 31-Jul-2015 05-Oct-2017 31-Jul-2020 30-Jun-2023
Comment The number of
houses found
compliant during
the house
inspection for
second tranche
of housing grant.
As houses being
reconstructed are
under different
stages of the
Cumulative
Target
18
reconstruction,
first inspection
has been taken as
a basis for this
calculation.
Revised 1.1 Out of which women
headed households
Number Value 0.00 8,261 14,300 39,260
Sub Type
Supplemental
Revised 2. Citizens made aware of
earthquake resilient
reconstruction
Number Value 0.00 31,776 55,000 151,000
Date 31-Jul-2015 05-Oct-2017 31-Jul-2020 30-Jun-2023
Comment The number of
beneficiaries
whose houses
were found
compliant during
the house
inspection for
second tranche
of housing grant.
As houses being
reconstructed are
under different
stages of the
reconstruction,
first inspection
has been taken as
basis for this
calculation.
Cumulative
Target
Revised 3. Government officials
trained on Disaster Risk
Management
Number Value 0.00 27 200 200.00
Date 31-Jul-2015 05-Oct-2017 31-Jul-2020 30-Jun-2023
Comment Cumulative
Target.
19
Intermediate Results Indicators
Status Indicator Name Corporate Unit of
Measure Baseline Actual(Current)
Parent
Project
Target
End Target
Revised 1. Direct project
beneficiaries
Number Value 0.00 136,637 236,500 649,300
Date 31-Jul-2015 05-Oct-2017 31-Jul-2020 30-Jun-2023
Comment 4.3 times the
actual
households with
resilient core
housing being
reconstructed to
date
Cumulative
Target
4.3 times the
total
households
with resilient
core housing
to be
reconstructed
under the
project.
No Change 1.2. Female beneficiaries
Percentage Value 0.00 50 50 50
Sub Type
Supplemental
Revised 2. Intended beneficiaries
aware of project info. and
project investments (%)
Percentage Value 0 57.77 100 100
Date 31-Jul-2015 05-Oct-2017 31-Jul-2020 30-Jun-2023
Comment
Revised 2.1 Intended beneficiaries
aware of project info. and
project investments –
female
Number Value 0.00 8,261 14,300 39,260
Sub Type
Supplemental
Revised 3. Grievances registered
related to delivery of
project benefits addressed
(%)
Percentage Value 0.00 92.61 95.00 95.00
Date 31-Jul-2015 05-Oct-2017 31-Jul-2020 30-Jun-2023
Comment There is no Percentage of
20
baseline for
this
indicator.
registered
grievances
redressed
Revised 3.1 Grievances related to
delivery of project benefits
that are addressed-
(number)
Number Value 0.00 49,051 2,145 100,000
Sub Type
Supplemental
Revised 4. Artisans trained in
multi-hazard resistant
construction
Number Value 0.00 44,647 60,000 75,000
Date 31-Jul-2015 05-Oct-2017 31-Jul-2020 30-Jun-2023
Comment There is no
baseline for
this
indicator.
Actual number
of engineers,
technicians, and
masons trained
as of date by the
EHRP
Cumulative
Target
Revised 5. Technical studies on
disaster risk management
completed
Number Value 0.00 0.00 4 4
Date 31-Jul-2015 05-Oct-2017 31-Jul-2020 30-Jun-2023
Comment There is no
baseline for
this
indicator.
Cumulative
Target
21
Annex 2: Summary of PPSD of the project
Project Procurement Strategy for Development
(a) General. Procurement would be carried out in accordance with the World Bank
Procurement Regulations for IPF Borrowers, July 2016.
(b) Procurement significance. Out of the total project cost of US$300 million, it is
expected that about US$12.5 million will be spent under Components 2 and 3 through
procurement, mainly involving consulting services, and goods and non-consulting
services.
(c) Procurement responsibility. The NRA PIU headed by the Joint Secretary will be
responsible for implementation of all procurements activities and associated
expenditures.
(d) Managing procurement risks. To minimize the procurement associated risks, the
following measures have been agreed upon with the implementing agencies.
Specific Measures
(a) PPSD and PP. The NRA prepared a PPSD and a draft PP for the initial 18 months.
The PP will be updated at least annually.
(b) Bid/proposal evaluation committee. The implementing agencies will ensure that the
bid/proposal evaluation committees have necessary expertise depending on the type
of contract and are formed in a manner acceptable to the World Bank with its prior
concurrence, including any alterations in composition.
(c) Procurement consultant. To partly mitigate procurement associated risks, an
experienced procurement consultant will be contracted engaged to assist the NRA and
additional procurement consultants, as per need, for the PIUs.
Due-diligence Measures (Others)
1. Other measures include the following: (a) include verification of recommended bidders’
post-qualification information in all bid evaluation reports; (b) make bidders aware about fraud
and corruption issues through letters and at pre-bidding/ proposal meetings, as applicable; (c)
preserve records and all documents regarding procurement (including correspondences with the
potential bidders as well as complaints/clarification requests, and so on) to facilitate smooth post-
procurement reviews; (d) publish contract award information at the PIU and the respective
agencies website within two weeks of contract award (and in United Nations Development
Business online for international contracts, if any); and (e) as an additional due diligence in
selecting consulting firms, CVs of all key experts proposed in technical proposals by consulting
firms will be verified and a pool of CVs is maintained by the implementing agency and shared
with the Bank.
Prior Review Thresholds
22
2. The PP shall set forth those contracts which shall be subject to the World Bank’s prior
review. All other contracts shall be subject to post review by the World Bank.
Table 3.1: Prior Review Thresholds
Contract Title, Description
and Category
Estimated
Cost US$
and Risk
Rating
Bank
Oversight
Procurement
Approach/
Competition
Evaluation Method (Rated
Criteria (VfM), Lowest
Evaluated Cost)
Selection of consulting firms
for various assignment (high
value contract such as DRM
consulting)
1,000,000/
High
Yes Open -
National/QCBS
Rated Criteria
Selection of consulting firms
for various assignments (low
value contracts), that is
M&E, partner organizations
- HRT, MIS, engineering
firm for TA to NRA, and so
on
660,000/
High
No Open - National/CQS Rated Criteria
Selection of individual
Procurement consultant
60,000/High Yes Open - National and
Direct
Rated Criteria/Negotiation
Selection of individual
consultants (FM, Social
Safeguard, Environmental,
M&E, and so on)
600,000/
High
No Open - National and
Direct
Rated Criteria/Negotiation
Procurement of IT/office
equipment and Software
100,000/
High
No Open - National/
RFB/Limited/RFQ
Lowest Evaluated Cost
Note: CQS = Selection Based on the Consultants’ Qualifications; IT = Information technology; MIS = Management
information system; QCBS = Quality- and Cost-based Selection; RFB = Request for Bid; RFQ = Request for
Quotation; VfM = Value for money.
23
Annex 3: Legal Covenants and Conditions
Loan/Credit/TF Description Status
IDA-57060
Para 3, Section I.A, Schedule 2 of the Financing Agreement. Description:
Recipient to establish and 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.
Complied with
IDA-57060
Para 2, Section I.A, Schedule 2 of the Financing Agreement. Description:
Recipient to establish and maintain two project implementing units, one
within MoUD and one within MoFALD, with adequate professional and
administrative staff, in numbers and with qualification and experience, and
under terms of reference satisfactory to the Association.
Complied with
IDA-57060
Para 4, Section I.A, Schedule 2 of the Financing Agreement. Description:
Recipient to establish and 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.
Complied with
IDA-57060
Para 1, Section I.B, Schedule 2 of the Financing Agreement. Description:
Recipient to prepare and through each MoFALD and MoUD adopt and
carry out the Project in accordance with the Operations Manual, acceptable
to the Association.
Complied with
IDA-57060
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 Project relevant sites by no later than fifteen
(15) days before the date on which a Housing Grant is first proposed for
release.
After delay
complied with
IDA-57060
Para 2 (ii), Section I.D, Schedule 2 of the Financing Agreement.
Description: Recipient to enter into a Participation Agreement with each
Participating Household Beneficiary under terms and conditions set forth
in the Operations Manual before providing a Housing Grant to a
Participating Household Beneficiary.
Complied with
IDA-57060
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 as set
forth in the Operations Manual and conclude and 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.
Complied with
IDA-57060
Para 8, 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 Manual and 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.
After delay
complied with
IDA-57060
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 effective
Complied with
24
Loan/Credit/TF Description Status
grievance redress mechanism, based on international experience and best
practices adapted to the local context, as further described in the
Operations Manual.
IDA-57060
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 the
instruments (to be) prepared thereunder (the “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.
Complied with
IDA-57060
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 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.
Complied with
IDA-57060
Para 4, Section I.F, Schedule 2 of the Financing Agreement. Description:
Recipient to: (i) maintain monitoring and evaluation protocols and record
keeping procedures to supervise and assess compliance with Safeguard
Documents; and (ii) report on quarterly basis on compliance with
Safeguard Documents.
Complied with
IDA-57060
Para 6, Section I.F, Schedule 2 of the Financing Agreement. Description:
With respect to any housing reconstruction activities for which technical
support is provided under the Project, but the activities are 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.
Complied with
IDA-57060
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)
identify, strengthen and maintain a coordination authority capable of
carrying out the activities and responsibilities set forth in the Operations
Manual; and (d) prepare and disclose any required safeguard document.
Not yet due
IDA-57060
Section IV.C, Schedule 2 of the Financing Agreement. Description:
Recipient to ensure that the total amount of disbursements against
achievement of outputs under the Project does not exceed the total amount
of expenditures incurred by the Participating Household Beneficiary.
Complied with
IDA-57060
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, identified response activities and expenditures, prepared and
disclosed any required safeguard documents, identified and/or staffed a
coordination authority responsible for implementation, and prepared a
component-specific Operations Manual.
Not yet due
25
Loan/Credit/TF Description Status
IDA-57060
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 (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 MoFALD and MoUD in such number and
with qualification, experience and terms of reference satisfactory to the
Association.
Complied with
IDA-57060
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
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.
Complied with
