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AFRICAN DEVELOPMENT BANK
ANGOLA
INSTITUTIONAL SUPPORT FOR THE SUSTAINABILITY OF URBAN
WATER SUPPLY AND SANITATION SERVICE DELIVERY
OWAS DEPARTMENT
March 2015
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TABLE OF CONTENTS
I– STRATEGIC THRUST & RATIONALE ....................................................................................................... 1
1.1. PROJECT LINKAGES WITH COUNTRY STRATEGY AND OBJECTIVES ............................................................... 1
1.2. RATIONALE FOR BANK’S INVOLVEMENT ...................................................................................................... 2
1.3. DONOR COORDINATION ................................................................................................................................ 3
II. PROJECT DESCRIPTION ............................................................................................................................ 4
2.1 DETAILED PROJECT COMPONENTS ................................................................................................................ 4
2.2 TECHNICAL SOLUTION RETAINED AND OTHER ALTERNATIVES EXPLORED .................................................. 5
2.3 PROJECT TYPE .............................................................................................................................................. 5
2.4 PROJECT COST AND FINANCING ARRANGEMENTS ........................................................................................ 6
2.5 PROJECT’S TARGET AREA AND POPULATION ................................................................................................ 7
2.6 PARTICIPATORY PROCESS FOR PROJECT IDENTIFICATION, DESIGN AND IMPLEMENTATION .......................... 8
2.7 BANK GROUP EXPERIENCE, LESSONS REFLECTED IN PROJECT DESIGN ........................................................ 8
2.8 KEY PERFORMANCE INDICATORS .................................................................................................................. 9
III – PROJECT FEASIBILITY ........................................................................................................................... 9
3.1 ECONOMIC PERFORMANCE ............................................................................................................................ 9
3.2 ENVIRONMENTAL AND SOCIAL IMPACTS..................................................................................................... 10
IV – IMPLEMENTATION ................................................................................................................................ 14
4.1 IMPLEMENTATION ARRANGEMENTS ............................................................................................................ 14
4.2 MONITORING .............................................................................................................................................. 16
4.3 GOVERNANCE ............................................................................................................................................. 16
4.4 SUSTAINABILITY ......................................................................................................................................... 17
4.5 RISK MANAGEMENT .................................................................................................................................... 18
4.6 KNOWLEDGE BUILDING .............................................................................................................................. 19
V – LEGAL INSTRUMENTS AND AUTHORITY .......................................................................................... 19
5.1 LEGAL INSTRUMENT ................................................................................................................................... 19
5.2 CONDITIONS ASSOCIATED WITH BANK’S INTERVENTION ............................................................................ 19
5.3 COMPLIANCE WITH BANK POLICIES ............................................................................................................ 20
VI – RECOMMENDATION .............................................................................................................................. 20
APPENDIX 1: MAP OF ANGOLA AND PROJECT LOCATION APPENDIX 2: ANGOLA’S COMPARATIVE SOCIO-ECONOMIC INDICATORS APPENDIX 3: TABLE OF ADB’S PORTFOLIO IN THE COUNTRY APPENDIX 4: SIMILAR PROJECTS FINANCED BY THE BANK AND OTHER DEVELOPMENT
PARTNERS IN THE COUNTRY APPENDIX 5: WAIVER REQUEST FOR FINANCING 80% OF THE PROJECT COST THROUGH AN AN
ADB LOAN
i
Currency Equivalents
June 2014
1UA = US Dollar (USD) 1.54047
1UA = AON 151.30445
1USD = AON 98.21967
FISCAL YEAR:
1 April – 31 March
WEIGHTS AND MEASURES
1 metric tonne = 2204 pounds (lbs)
1 kilogramme (kg) = 2.200 pounds (lbs)
1 metre (m) = 3.28 feet (ft)
1 millimetre (mm) = 0.03937 inch (“)
1 kilometre (km) = 0.62 mile
1 hectare (ha) = 2.471 acres
ii
ACRONYMS AND ABBREVIATIONS
ADB African Development Bank
ADF African Development Fund
AOFO AfDB Angola Field Office
AON Angola Kwanza
CPPR Country Portfolio Performance Review
CSP Country Strategy Paper
CSO Civil Society Organisations
DNA National Directorate for Water
DP Development Partners
ESU Environmental and Social Unit
EPAL Luanda Water Supply and Sewerage
Company
EU European Union
FCMU Financial and Contract Management Unit
FHH Female Headed Households
FM Financial Management
GGI Gender Gap Index
GOA Government of Angola
HDI Human Development Index
JAS Joint Assistance Strategy
JMP Joint Monitoring Program
INAS Instituto Nacional de Água Potável e
Saneamento (Asset Management Entity)
INARH Instituto Nacional de Recursos Hídricos
(National Institute for Water Resources
Management)
IPCC Intergovernmental Panel on Climate
Change
IRSE Electricity Sector Regulatory Authority
MINEA Ministry of Energy and Water
MINECON Ministry of Economic Development
MINAMB Ministry of Environment
MINFAMU Ministry of Family Affairs and the
Advancement of Women
MIS Management Information System
M&E Monitoring and Evaluation
O&M Operation and Maintenance
PDISA Programa de Desenvolvimento
Institucional do Sector de Águas (Water
Sector Institutional Development Program)
PFM Public Financial Management
PIU Project Implementation Unit
PCR Project Completion Report
PND National Development Plan
PWSU Provincial Water and Sanitation Utility
RMC Regional Member Country
SISAS Sistema de Informação Sectorial de Água e
Saneamento (Water and Sanitation
Information System)
TA Technical Assistance
U5MR Under 5 Mortality Rate
UA Unit of Account
WSIDC Water Sector Institutional Development
Commissino
WSS Water Supply and Sanitation
WWTP Waste Water Treatment Plant
iii
LOAN INFORMATION
Client’s information
BORROWER: Republic of Angola (GoA)
EXECUTING AGENCY: Ministry of Energy and Water (MINEA)
Financing plan
ADB’s key financing information
Loan (ADB) Currency
United States Dollar (USD)
Interest type Enhanced variable spread Loan (floating rate with option to fix)
Interest rate spread Funding margin+60 bps lending spread
Commitment fee None
Other fees None
Tenor 20 years
Grace period 5 Years
EIRR (base case) 18.4%
Timeframe - Main Milestones (expected)
Concept Note Approval May 2014
Project approval May 2015
Effectiveness September 2015
Completion December 2020
Last Disbursement December 2021
Last repayment October 2034
Source Amount
USD Million
Instrument
ADB 123.77 US$ Loan
GoA 30.94 US$ Counterpart
TOTAL COST 154.71US$
iv
Project Summary
1. PROJECT OVERVIEW: The Institutional and Sustainability Support to Urban Water Supply
and Sanitation Service Delivery Project aims to improve water sector governance, strengthen
institutional capacity and efficiency in the water and sanitation sector institutions at central and
provincial level, and improve access to sustainable water supply and sanitation services. The Project
will result in the empowerment of people through the capacity development and creation of
employment directly within the utilities. The Project focuses in seven provinces of Angola namely:
Cabinda, Cunene, Lunda Norte, Lunda Sul, Namibe, Bengo, and Cuanza Sul. Other provinces are
being covered by other partners and GOA.
2. The Project’s main outcomes include (i) the establishment and effective functioning of seven
Provincial Water Supply and Sanitation Utilities which are autonomous, (ii) enhanced capacity for
service provision at the central and provincial levels, and (iii) expanded access to water supply and
sanitation. The project is planned to be implemented over a 60 months period beginning January
2016 at a cost of US$ 154.71 million.
3. The Project will directly benefit a total population of 922 thousands immediately and
indirectly (but gradually) all the 2.3 million urban population of the seven provinces through
improved management and service delivery. The project will in particular increase access to water
supply for an additional 338,000 people in peri urban areas of the provincial capitals and an
additional 75,000 people having access to safe disposal of wastewater. The project will develop
sector gender policy, strategy and action plan and will ensure empowerment of women through
capacity development in training and employment generation through the management of water
kiosks and fertiliser waste by-products.
4. NEEDS ASSESSMENT: Access stands at 54% for water supply and 60% for sanitation
nationally as at 2012. The majority (85% or 6 out of the 7 provinces) of the Project beneficiary
provinces have coverage below the national average (ranging from 7% to 56%) and hence there is a
strong justification for the Project intervention in these provinces. Angola has been investing
heavily on infrastructure after the end of the three decades of conflict and made progress in many
areas including water supply and sanitation services. However, the investment in physical
infrastructure has not been matched with adequate institutional and capacity emphasis. The lack of
capacity and appropriate institutional mechanisms have negatively impacted the sustainability of the
investment made so far. Service delivery is erratic and inefficient and highly subsidised with no cost
recovery mechanisms in place. As a result of inefficient service delivery, the poor and vulnerable
are the most affected in the peri-urban areas. Recognising these needs, the GoA through its National
Strategic Program for Water (2013-2017) and the Energy and Water Action Plan (2013-2017) made
an emphasis on the improvement of the sector governance (establishing a water regulator and asset
management entity) and professionalising service delivery (establishing corporatized and
autonomous utilities) along with critical investment to further expand access to services.
5. BANK’S ADDED VALUE: The African Development Bank intervention in this project will add
significant value to the investment made by the GoA and other partners. Its holistic approach
combining investment with developing capacity and strengthening institutions is its distinct
character of focusing on development and sustainability. The synergetic value addition for reforms
and capacity building through the recently approved Power Sector Reform Support Program is
significantly high and builds the momentum positioning the Bank as the trusted partner.
6. KNOWLEDGE MANAGEMENT: The Project has significant knowledge building activities:
technical assistance and studies aimed at developing strategies to address issues identified in the
project will provide an analytical basis for future decision making. The inbuilt dialogue mechanisms
through the Water Sector Institutional Development Commission (WSIDC) and annual urban water
sector forums shall be instrumental in dissemination and utilisation of knowledge generated from
the Project.
v
VII. Results Based Logical Framework Country and project name: Institutional and Sustainability Support to Urban Water Supply and Sanitation Service Delivery
Purpose of the project: Improve sector governance, strengthen institutional capacity and efficiency in the water and sanitation sector institutions at central and provincial level and improve access and service delivery.
RESULTS CHAIN
PERFORMANCE INDICATORS MEANS OF
VERIFICATION RISKS/ MITIGATION MEASURES
Indicator
(including CSI) Baseline Target
IMP
AC
T
Contribute to equitable and
inclusive development
through improved water
and sanitation service
delivery
Proportion of people with access to safe and clean water – 52% women1 54.02% (2012) 100% (2025) of
which are
52% women
AfDB/Annual Sector
report / Annual
Government report/
Annual JMP report
Risk: Reform in the institutional framework being slow.
Mitigation: Coordination and dialogue through
the Institutional Development Commission and capacity creation within DNA
Risk: Resistance to change and relinquish
control at provincial level – confusion with the
decentralization. Mitigation: This risk will be mitigated through
stakeholder engagement, communication and
change management. This aspect is supported by component 3 of the project.
Proportion of people with access to improved sanitation – 52% women 60% 2(2012) 100% (2025)
of which are
52% women
Under age 5 mortality rate due to diarrheal disease 173/1000 (2012)3 108 (2025)
OU
TC
OM
ES
Outcome 1: Improved
operational and institutional efficiency in
water and sanitation
service delivery
No. of autonomous functional provincial water and sanitation utilities 8 (2013) 15 (2020) Annual Sector
Report/Project progress
report/supervision
reports
Proportion of O&M cost of water supply and sewerage facilities covered
through revenue from charges
20% (2012) >80% (2020)
Outcome 2: increased access in urban water
supply and sanitation
services in the project provinces
Proportion of urban people with access to potable water supply – 52% women
53%4% (2013) 85% (2020) Annual Sector report/project
progress report Proportion of urban people with improved sanitation - 52% women 85% 5(2013) 95% (2020)
No. of people with new WS access (50% women, disabled, vulnerable groups and people with special needs ) in peri urban of provincial capitals6
0 338,000 (2020)
OU
TP
UT
S
Component 1: Development of Provincial Water Supply and Sanitation Utilities
Autonomous water and
sanitation utilities
established
No. of PWSUs established by law 0 (2013) 7 (2017) Project progress
reports/supervision
reports
Provincial water and
sanitation utilities operating optimally
Proportion of PWSUs with Cost recovery strategy and tariff for user charges
in place and effective
0(2013) 100% (2020) Project progress
reports/supervision reports Proportion of PWSUs staff trained (on job or through training centers), %
women
0 (2013) 75%, 40% of
women (2020)
Proportion of PWSUs with integrated and disaggregated MIS and billing system
0(2013) 100% (2020)
1 Women form 52% of the population of Angola. 2 UNICEF and WHO Joint Monitoring Program 2014 Report 3 World Bank 4 UNICEF (Op-cit) 5 Ibid 6 The percentage is demonstrate the national effort for providing service to the vulnerable population.
vi
Proportion of PWSUs with social charter7 (customer care, women, youth involvement, vulnerable and those with special needs)
0 (2013) 100% (2020) Risk: Weak cost recovery – people are used to free services in many places.
Mitigation: The project will carry out initial
gender & social quintile beneficiary assessment to determine willingness and affordability and
determine tariff and cost recovery plan. The
social mobilization will also enhance residents’ awareness.
Risk: Lack of capacity and skill to operate and maintain water and sewerage systems.
Mitigation: The project will provide on the job
training through the technical assistance and support to vocational training will be provided
Risk: Weak project implementation capacity
and highly centralized bureaucratic process
Mitigation: The overall capacity of the FCMU will be strengthened in critical functions such as
procurement and financial management
including the preparation of a project implementation manual to guide
implementation.
Component 2: Sanitation and Water Infrastructure
Development of Sanitation
facilities
Length of Sewer reticulation 0 (2013) 47km (2019) Project progress
reports/supervision
reports / utility report Capacity of sewage treatment created 0 (2013) 7500m3(2019)
Development of sanitation
guideline for coastal towns
and investment plan
No. of coastal towns with sanitation investment plan 0 (2013) 9 (2019)
Increase number of water
supply connections to
households
no. of new connections 0 (2013) 37,100 (2019)
No. of water kiosks managed by women established in peri urban areas 0 (2013) 140 (2019)
Strengthening capacity in water quality monitoring
Water quality monitoring centers developed 6 (2014) 9 (2019)
Component 3: Capacity Building and Change Management:
Strengthening the institutional capacity of
MINEA, DNA, Water and
Sanitation Training Centre and Women groups in the
Provincial Capitals
Inter-ministerial coordination revived 0 (2014) Yes (2015) Annual sector report / project progress
report / supervision
report
Annual Sector report produced (including reporting on social inclusion) 0 (2014) Yes (2016)
System of supervision of PWSUs in place 0 (2014) Yes (2016 )
Water Sector Gender Policy and Action Plan developed 0 (2014) Yes (2016)
Women Kiosk operators trained on basic water kiosk management 0(2014) 140
Project Execution Capacity
of DNA strengthened
Gender and Social expert engaged at FCMU 0 (2014) yes (2015)
No. of staff of FCMU trained in core business areas, 40% women 0 (2014) 50 (2019)
Project implementation manual developed 0 (2014) Yes (2015)
Component 4: Project Management
Effective Project Management
Project Delivered on time & within budget N/A Completed in 2020 PCR
Project Audited annually and submitted on time N/A Anuual Audit Report
Project Quarterly Progress Report Submitted on time N/A Quarterly QPPRs
Project ESMP succesfuly implemented and reported quarterly N/A Quarterly QPPRs
ACTIVITIES
The project activities include component 1 - Development of Provincial Water Supply and Sanitation Utilities: Key activities include initial assessment, preparation of legal document, approval and provision of technical assistance (US$ 49.12 million); component 2 - Sanitation and Water Systems: key activities include construction of sewerage system
and sewage treatment plant, carryout sanitation feasibility in coastal towns, connection to water system (US$ 80.18 million); component 3 - Capacity Building and Change
Management: support reform program, undertake trainings, develop strategies and communicate, mobilize stakeholders and build capacity (US$ 15.95 million); and Component 4 – Project Management: carry out project planning, monitoring, control, procurement management, financial management, reporting and communication (US$ 9.46 million)
ADB – US$ 123.77 million
GOA – US$ 30.94 million
Total –US$ 154.71 million
Additional GOA investment of US$ 896 million for improving the water
and sanitation facilities is taking place
in the project beneficiary provinces.
7 The Gender and Social Charter for each utility will include measures to reach the poorest of the community.
vii
PROJECT IMPLEMENTATION SCHEDULE
Activity
1
Component 1
Component 2
Component 3
Component 4
31 22 3 2
Coastal towns wastewater management study
4 64 56 1 2 3 4 55
Legal formation of the PSWUs
3 4 5
Loan Approval
6 1 2 36 16 1 2 3 4 5 4 56
Support to the Establishment Process for utilities (TA1)
Capacity building of Utilities
Sumbe design review, bid documents, tendering
Construction of Sewerage works
Loan Signature
Loan Effectiveness
First Disbursment
Support for enhancing the sector reform
Water quality monitoring infrastructure and equipment
Project Disbursment Deadline - Dec 2021
Provision of meters and access expansion
Preparation of Project Implementation Manual
Project completion
Sumbe additional water distribution works
Project Management and monitoring and audit
Appointment of core project management staff
Appointment of Project Auditor
Water Sector Institutional Development Commission Formed
Support to DNA in the creation and utility supervision
Strengthening of the FCMU under DNA
Training and change management
Communication Strategy and Action Plan
Communication and awareness activities
20202015 2016 2017 2018 2019
1
REPORT AND RECOMMENDATION OF THE MANAGEMENT OF THE ADB GROUP TO
THE BOARD OF DIRECTORS ON A PROPOSED LOAN TO ANGOLA FOR THE
INSTITUTIONAL SUPPORT FOR THE SUSTAINABILITY OF URBAN WATER SUPPLY
AND SANITATION SERVICE DELIVERY
Management submits the following Report and Recommendation on a proposed ADB loan not exceeding
US$ 123.77 million (estimated at UA 80.37 million) to finance the Institutional and Sustainability
Support to Urban Water Supply and Sanitation Service Delivery Project in Angola.
I– STRATEGIC THRUST & RATIONALE
1.1. Project Linkages with Country Strategy and Objectives
1.1.1 Angola has made progress in all spheres of development and achieved a stable overall
macroeconomic performance during the last few years using its rich endowments from natural resources
with a clear break from long years of conflict which ended in 2002. Its long term development strategy,
Vision 2025, outlines equitable and inclusive development and It envisions the achievement of universal
water supply and sanitation services to its citizens prior to 2025. This project contributes to this Goal
through its focus on service delivery.
1.1.2 Enshrining the Goals of the Vision 2025, the 2013-2017 National Development Plan (PND)
focuses on eight key objecitves for development in the medium-term including addressing gender in its
objectives by emphasizing the creation of economic, social, cultural and political conditions for women
and families.. The pillars of the PND are (i) National Cohesion and Unity (ii) Democratic and Inclusive
Society (iii) Human Development and Angolans Wellbeing (iv) Sustainable, Competitive and Equitable
Development (v) Science, Technology and Innovation Development (vi) Private Sector and
Entrepreneurship Development (vii) Development of National Territory in Harmonised manner, and (viii)
Competitive Insertion of the Angolan Economy Globally and in the Region. Water and Sanitation sector
is mainly anchored under the pillar “Human Development and Angolans Wellbeing” and GOA elaborated
its specific sector investment framework and policy objectives through the National Strategic Program for
Water 2013-2017 (NSPW). In an effort to translate and implement the provisions of the PND and NSPW,
the GOA further prepared the Energy and Water Sector Action Plan 2013-2017 (Action Plan).
1.1.3 In the Action Plan aligned with the PND, the Government has set out its main objectives to be
achieved by 2017 and these include: (a) deepen institutional reforms and improve the enabling
environment for service delivery improvement, (b) expansion of access levels (water and sanitation) to up
to 100% in urban areas and 80% in rural areas; (c) build a system of network for monitoring of water
quality across the country; (d) guarantee the construction of small community water supply and sanitation
systems in peri-urban and rural areas; and (e) ensure the integrated management of water resources. The
achievement of these objectives will require investment in physical infrastructure as well as policy and
sector reform measures to ensure long term sustainability and contribution of the sector to the overall
economy. The Action Plan outlines a total budget of US$ 6 billion requirement for the water and
sanitation component and this project forms part of it, contributing towards the achievement of the key
objectives highlighted above.
1.1.4 The proposed project’s intervention forms part of the CSP (2011-2015) and is anchored in pillar 2
(economic infrastructure) with a significant contribution to pillar 1(stimulus to the competitiveness of the
economy). Through the significant improvement in sector governance, quality of service delivery and
long term sustainability, the proposed project contributes to the improvement of the competitiveness of
the economy by providing reliable service. The investment in physical infrastructure will contribute to the
pillar 2 – economic infrastructure development.
2
1.1.5 Furthermore, the project is aligned with the Bank’s Ten Years Strategy 2012-2022 through its
contribution to the economic infrastructure development, skills and technology and private sector
development. The project supports expansion of the water and sanitation infrastructure and builds
capacity through skills and institutional development. The project’s focus on service delivery through
improvement in governance and sustainability is well aligned with the objectives of inclusive growth by
supporting skills development and job creation especially for women and youth and by prioritizing the
specific needs in the underserved peri-urban areas. It additionally supports transition to green growth
through enhanced wastewater management. Furthermore, the project is supported by the Bank’s
Integrated Water Resource Management (2000) and Urban Development Strategy (2011). The project is
also aligned with the Bank Gender Strategy, 2014 – 2018, as gender equality is an important aspect of
Africa’s transition to green growth, the availability of clean and safe water will open new economic
opportunities for women and men in addition to the direct permanent and temporary benefit from
employment generation within the utiltities to be established and their associated services.
1.2. Rationale for Bank’s Involvement
1.2.1. Angola has made modest improvement during the last decade in access to water supply and
sanitation services. Water supply improved from 42% in 1990 to 54% in 2012 disaggregated at 68% for
urban and 34% for rural. Access to sanitation increased from 29% to 60%, disaggregated at 87% for
urban and 20% for rural8. With the continued commitment and investment in the sector, access will
dramatically increase in the next few years as pronounced in the Sector Action Plan. However sustaining
the gains and improving service delivery would be a challenge without improvement in the governance of
the sector. GOA has already started key institutional reforms for improving the enabling environment
and professionalising service delivery with support from Development Partners (DPs) including the Bank.
As enunciated in the Action Plan, GOA desires to scale up and deepen the reforms and requested the
assistance of the Bank to contribute for the creation of utilities in seven provinces of Angola9 (Cabinda,
Lunda Norte, Lunda Sul, Cuanza Sul, Bengo, Namibe and Cunene) with a total population of 4.1 million
(20% of total Angola population) and strengthen the capacity and regulatory functions at the centre and
provinces for improved quality of service delivery. The project will complement the investments being
financed by DPs and GOA which is well over an estimated amount of US$896 million in the Project
beneficiary provinces.
1.2.2. Furthermore, the GOA has requested the Bank to expand its investment in Sumbe town by
including sanitation infrastructure and build on the ongoing intervention in the town which has seen
improvement in water supply provision. The increased water supply in the town results in increased waste
water and there is a need to develop wastewater management system for the town that are a source of
employment and generate resources in form of energy, fertilisers and nutrient rich water for farming. The
situation is more precarious owing to the topography and location of the town on the coast of the Atlantic.
Several coastal towns suffer from similar problems and the project will also undertake studies on options
of sustainable waste water management and sanitation services to inform future investments in sanitation
in coastal towns.
8 WHO/UNICEF Joint Monitoring Report – Progress on Sanitation and Drinking Water 2014 update.
9 There are eight utilities established so far and the remaining outside this project are planned to be covered through the
ongoing World Bank support. By the end of the project there will be responsible utilities in all provinces of Angola.
3
1.2.3. In light of the experience and expertise of the Bank and its commitment to support and assist
RMCs, the GOA requested the Bank for assistance to scale up the efforts for strengthening the
sustainability, institutional capacity and efficiency in service delivery and improve access to water
supply and sanitation in Angola for improved economic, health and life of the people of Angola. In this
regard the Bank would use its leverage and position to coordinate and collaborate closely with the DPs
actively involved in the sector and cross synergise to lay the foundation for sustainable and efficient
service delivery.
1.3. Donor Coordination
Sector or subsector*
Size
GDP Budget Labor Force
Water and Sanitation N/A 2.5% NA
Players – Water and Sanitation Public Annual Expenditure (2 yr average 2013 & 2014)**
Government Donors
UAm 1,096 37
% 96.7 3.3
Level of Donor Coordination
Existence of Thematic Working Groups N
Existence of SWAPs or Integrated Sector Approaches N
ADB's Involvement in donors coordination*** None
* as most appropriate ** Years [yy1 to yy2] *** for this sector or sub-sector
1.3.1. During the preparation of this project, the Bank has consulted key DPs active in the sector. Angola
does not have formal coordination mechanisms in the sector. The volume of overseas development
assistance flows into the country is limited to less than 3% of the national budget. The development
partners active in the sector include the European Union (EU), Norway, World Bank, UNICEF, AfDB
and bi-lateral creditors such as the Governments of China, Brazil, Germany and Spain.
1.3.2. The EU supports the institutional capacity development effort through a EUR 6 million program
which largely focuses on human resource development and support to water quality monitoring. It is
supporting the establishment of a water and sanitation training centre which is expected to begin its
services in 2016. Norway is also supporting the institutional strengthening of the water and energy
sectors, with greater emphasis for the energy sector. Its contribution to the water sector focuses on
building capacity of the national institute of water resources and management of hydrometric networks
and use of hydrologic data. The World Bank is providing its assistance through its water sector
institutional development project supporting institutional reform for regulatory and asset management
functions at central level and development of 9 Provincial Water and Sanitation Utilities (PWSUs) and
complementary physical investment in infrastructure. UNICEF supports Angola in the area of policy and
strategy and capacity building. It is currently working with government for the development of sanitation
policy. The bi-lateral creditors resources are mainly channeled to investemnent for physical infrastruture.
The Bank’s Angola Field Office (AOFO) is active in its dialogue and consultation between the GOA and
DPs. Furthermore, the DPs mentioned above technically coordinate their activities through consultations
and dialogue during their supervision missions or major events in the sector. The active DPs have been
consulted in the preparation of this Project. The proposed Water Sector Institutional Commission and the
Urban Water Sector Forums will stimulate sector coordination and provides a plateform for donors and
government to work together.
4
II. PROJECT DESCRIPTION
2.1 Detailed Project Components
2.1.1 The project will contribute to the achievement of the country’s Vision 2025 objective of improved
health and social wellbeing of the population through equitable, empowering women through capacity
development and employment creation and inclusive development and universal access to improved
water and sanitation services. The specific project development objective is to improve sector
governance, strengthen institutional capacity and efficiency in the water and sanitation sector institutions
at central and provincial level and improve access and service delivery.
Table 2.1: Project components
Nr. Component
name
Est.
cost
(million
US$)
Component description
1 Development
of Provincial
Water Supply
and
Sanitation
Utilities
49.12
(39.29)
(i) initial gender & social quintile beneficiary, technical and institutional
including tariff & affordability assessment for the establishment of five
Provincial Water and Sanitation Utilities (PWSU) (ii) technical assistance
for 7 PWSUs and for management of these utilities including training of
staff, developing small towns management system, guidelines and
procedures for various utility operations including social and gender
charters (iii) developing the customer information and billing systems
(Disaggregated by sex & social quintile) (iv) provision of Operation and
Maintenance vehicles, tools and equipment and inputs, (v) independent
performance audits
2. Sanitation
and Water
Systems
80.18
(64.15)
(a) Sumbe sewerage infrastructure (sewer system (47 km) and sewage
treatment – 7500m3/d), (b) gender informed and inclusive hygiene
Promotion including sensitisation on Ebola prevention measure, (c)
guidelines on appropriate technologies for wastewater treatment and reuse
and feasibility studies for 9 coastal towns, (d) increase water connection to
households (37,100), and provision of public standpipes (140) in the
provincial capitals to benefit people in the peri urban areas, and (e) water
quality laboratories (3)
3. Capacity
Development
and Change
Management
15.95
(12.76)
(a) support to enhance sector reform process and activities through
engaging an institutional and policy advisor, annual urban water sector
forum; strengthen M&E system, prepare annual sector report, and support
to the regulator and asset management entity when established; (b) support
in utilities supervision and monitoring; (c) strengthening the capacity of
FCMU/DNA in procurement, financial, gender inclusion, monitoring and
evaluation and project management; (d) training of staff of water and
sanitation entities including exchange for peer learning; (e) Social
mobilisation, and gender sensitive communication and awareness;
development of gender policy and action plan.
4 Project
Management 9.46
(7.57)
(a) support for recruitment of project management specialist, procuerment
expert, accountant; (b) development of project implementation manual; (c)
support to project monitoring and supervision and operation costs; (d)
project annual audits;
154.71
(123.77)
Note: Figure in bracket is proposed Bank financing.
5
2.2 Technical Solution Retained and Other Alternatives Explored
2.2.1 The management of water and sanitation service delivery requires unique business approach that
recognises the economic value of water, efficiency, cost recovery, sustainability, social and
environmental importance. In addition, in the case of Angola the capacity of municipalities is inadequate
and owing to the significant investment in improving the infrastructure asset, there is strong justification
for the creation of provincial utilities that are autonomous, independent and accountable. This process of
creating provincial utilities has already started through the ongoing Bank’s Sumbe Water Supply,
Sanitation and Institutional Project and also through a project funded by the World Bank.
2.2.2 The Bank considered investment in both water and sanitation in the provinces to accompany the
institutional transformation. However, the Government’s request was specifically for institutional support
for 7 provinces and invesment in Sumbe town for sanitation. The Bank noted the large investment taking
place in the provinces through financing by the GOA and other bi-lateral creditors such as China, Brazil,
Spain and Germany. Due to this high current investment, it was critical to focus in the area of GOA’s
request. The Sumbe sanitation was included in the project because the Bank is already providing
assistance to improve the water supply situation in the town and there is strong need for saniation and
wastewater management.
Table 2.2: Project alternatives considered and reasons for rejection
Alternative Brief Description Reasons for Rejection
Institutional
Stregnthening of
municipalities to run
water and sanitation
service delivery as
one of their regular
functions
Currently urban service delivery is
being provided through line
functions by municipalities or
town administrations or provincial
water and energy departments.
With further capacity building and
structuring, improvement in
service delivery could be achieved.
The management of water and sanitation service
delivery requires unique business approach that
recognises the economic value of water, efficiency,
cost recovery, sustainability, social and environmental
importance. Fragmented approach would undermine
the long term sustainaibility. In addition this option is
against the current reform process in the sector
Program covering
all provinces of
Angola
Investment, institutional and
capacity building in all the
provinces.
This would make the project more complex. There is
no Sector Wide Approach (SWAP) in Angola at the
moment. The sector organisations are under reform
and there is a need for sufficient capacity created to
coordinate and manage a SWAP type of operation.
Furthermore. GoA’s request for the Bank was to
extend its support in seven provinces.
Sumbe town onsite
sanitation systems
Provide effective onsite sanitation
management systems including
provision of decentralised small
communal systems.
This option was rejected because the solution is not
long term as the city is expanding.
2.3 Project Type
2.3.1 A project approach will be used as the sector governance and institutional framework is in
transition and capacity for sector planning and programming need further strengthening. The Bank
together with other donors will support gradual move to a sector wide approach at a later stage. This
project supports the sector coordination, strengthening of the monitoring and evaluation and capacity
development which will contribute to this end.
6
2.4 Project Cost and Financing Arrangements
2.4.1 The total cost of the Project for the components defined above is estimated at US$ 154.71 million,
net of taxes and duties, of which US$ 94.52 million (62%) is in foreign currency and US$ 60.19 million
(38%) in local costs. The table below provides a summary of the Project costs by component. These cost
estimates are based on feasibility study conducted and also recent cost estimates for similar activities. The
estimates include physical contingency of 10% and price contingence of 3% per annum.
Table 2.3: Project cost estimates by component in million US$
Components Foreign Local Total Foreign % %
Total
1. Development of Provincial Water Supply
and Sanitation Utilities
29.37 11.29 40.66 72% 32%
2. Sanitation and Water Systems 36.50 29.87 66.37 55% 52%
3. Capacity Building and Change
Management
9.24 3.96 13.20 70% 10%
4. Project Management 3.13 4.70 7.83 40% 6%
Base Cost 78.24 49.82 128.06 62% 100%
Physical Contingency 7.82 4.98 12.80
Price Contingency 8.46 5.39 13.85
Total Project Cost 94.52 60.19 154.710
2.4.2 The cost of the project will be financed by an ADB loan and GOA, as shown in Table 2.4 below.
The Bank will finance US$ 123.77 million and GOA will contribute US$S30.94 million new resources as
counter part contribution to the project activities. It is noted that the GOA is already investing US$ 896
million comprising of US$579 million by GOA and US$ 317 million from external sources in the water
and sanitation sector in the project beneficiary provinces as elaborated in Appendix 5 and together with
this project the overall contribution of the GOA will stand at 60%. The sustainability of the operations
will be further enhanced by turning wastewater treatment into resource generating that will bring income
to the utilities and a cleaner environment.Looking at the broader picture, Angola demonstrated its
commitment to implement the overall development program of the country by investing significantly in
the water sector.
Table 2.4: Sources of financing in million US$
*GOA’s Amount excludes the current investment for water supply and sanitation in the project beneficiary provinces hich amounts at US$896 million.
Table 2.5: Project cost by category of expenditure in million US$
Source
Foreign
Currency
Local
Currency
Total
Amount
% Total
ADB 94.52 29.25 123.77 80%
GoA* 0 30.94 30.94 20%
Total 94.52 60.19 154.71 100%
Category of Expenditure
Foreign Currency
Cost
Local Currency
Cost Total % Foreign
A. Works 25.19 20.61 45.80 55%
B. Goods 7.83 1.96 9.79 80%
C. Services 34.96 14.98 49.94 70%
D. Miscellaneous 10.26 9.46 19.72 52%
E. Operating - 2.81 2.81 0%
Total Base Costs 78.24 49.82 128.06 62%
Physical Contingencies 7.82 4.98 12.80
Price Contingencies 8.46 5.39 13.85
Total Project Cost 94.52 60.19 154.71
7
Table 2.6: Expenditure by component and source in million US$
Table 2.7: Expenditure schedule by component in million US$
2.5 Project’s Target Area and Population
2.5.1 The project’s beneficiary provinces include Cabinda, Lunda Norte, Lunda Sul, Cuanza Sul,
Bengo, Namibe and Cunene provinces with an overall population size of 4.1 million. Most of these
provinces are on the bottom of the ladder in terms of water and sanitation access and other social services.
The multiple survey result show that the majority (85% or 6 out of 7 provinces) are below the national
average and as low as 7% access for water supply in Lunda Sul (Technical Annex B7.2).
2.5.2 The proposed project through the institutional development, capacity building, and water and
sanitation infrastructure will directly benefit the population in the capitals of Cabinda, Lunda Norte,
Lunda Sul, Cuanza Sul, Bengo, Namibe and Cunene provinces with total population of 0.922 million
immediately and indirectly and gradually all the 2.3 million urban population of the provinces with main
outcomes of improved and sustainable service delivery. women’s constitute about 52% (demographic,
socio-economic, and health profile of the 7 provinces in Technical Annex B8.2). About 338,000 people in
the provincial capitals who are marginalised from services and living in peri urban areas will gain new
improved access. The sanitation infrastructure will impact directly Sumbe town and benefit about 75,000
people directly from better environmental sanitation systems which will impact sanition conditions in
schools and improve school attendance of the girl child. It is also expected that more than 960 people
(PWSU, DNA, DPEA staffs and women groups) will be trained on technical, financial, management and
governance aspects with expected impact on the sustainability of service provision.
2.5.3 As a result of the project, the sector institutions at the central and provincial level will directly
benefit from capacity building and change management component. They will be capacitated and
strengthened to support the sector reform process and respond to the service delivery pathway
improvement across the country.
Component ADB GoA Total
1. Development of Provincial Water and Sanitation Utilities 32.53 8.13 40.66
2. Sanitation and Water Systems 53.10 13.27 66.37
3. Capacity Development and Change Management 10.56 2.64 13.20
4. Project Management 6.26 1.57 7.83
Total Base Costs 102.45 25.61 128.06
Physical Contingencies 10.24 2.56 12.80
Price Contingencies 11.08 2.77 13.85
Total Project Cost 123.77 30.94 154.71
Component 2016 2017 2018 2019 2020 Total
1. Development of Provincial Water
and Sanitation Utilities 3.84 1.08 9.98 12.36 13.4 40.66
2. Sanitation and Water Systems 4.73 26.81 21.27 10.33 3.23 66.37
3. Capacity Development and Change
Management 1.5 2.79 3.27 3.02 2.62 13.2
4. Project Management 1.5 1.4 1.4 1.4 2.13 7.83
Total Base Costs 11.57 32.08 35.92 27.11 21.38 128.06
Physical Contingencies 1.16 3.21 3.59 2.71 2.13 12.8
Price Contingencies 0.38 2.15 3.66 3.74 3.92 13.85
Total Project Cost 13.11 37.44 43.17 33.56 27.43 154.71
8
2.6 Participatory Process for Project Identification, Design and Implementation
2.6.1 Extensive consultations with the relevant stakeholders; government ministries, line departments,
provincial officials, development partners, NGOs and community groups, women and youths were held
during the project identification, preparation and appraisal stages. Consultations were also held during the
Environmental and Social Impact Assessment which was carried out for the wastewater treatment system
under the initial Sumbe Water Supply, Sanitation and Insitutional Support Project. Furthermore, field
visits to the project sites and beneficiary provinces were conducted with focused group discussions during
the preparation and appraisal phases of the Project. The key issues emerging from the consultations are
mainly focused around understanding the changes coming as a result of the project and also the need for
inclusiveness and in particular people living in the peri urban areas and stakeholders participation in the
project implementation process. The project design has incorporated these key issues in its components.
Deliberate and specific provision has been made for expanding access in the peri urban areas with
particular emphasis to women and vulnerable sections of the communities including disabled and older.
Furthermore, the component on capacity development and change management has been specifically
designed to mobilise stakeholders participation for the implementation of the project.
2.7 Bank Group Experience, Lessons Reflected in Project Design
2.7.1 Some of the key lessons learnt from the on-going projects under implementation in Angola as well
as those supported by other donors’ are taken into account in the formulation and design of the project.
The main lessons taken into account are:
(i) Weak capacity and complex decision making process – the project design included a strong
capacity building and change management component to address the perceived weakness in this area. In
particular the decision making process for utility formation need to be smooth and well coordinated and
in this regard the project included the financing of an Institutional and Policy advisor to the sector along
with the establishment of the Institutional Development Commission based on the lessons from the
experience of the creation of eight utilities so far.
(ii) Lack of effective monitoring and evaluation mechanisms and weak project follow ups – this is a
key generic weakness experienced as reported through the country portfolio review. The project included
support for the strengthening of the sector monitoring and evaluation system and also strengthen the
Executing Agency in the implementation of the project and meet the various monitoring and reporting
obligations including those on service provision by the utilities which will be streamlined in the
Regulator’s and Asset Management Agency’s (INAS) monitoring framework.
(iii) Weak coordination among state actors – the project recommended the resuscitation of a formal
national coordination mechanism at the highest level supported by the reform advisor. In this regard an
agreement has been reached to establish the Water Sector Institutional Development Commission with
the Directorate of National Water as its secretariat and the convening of regular urban water sector forum.
The project will extend support to these activities to strengthen sector coordination within the
Government and with development partners.
(iv) Focus on strategic interventions with greater additionality and potential to enhance Bank’s
visibility – the project’s focus on sustainability and efficiency has greater visibility and far reaching
impact and consequences. The areas of intervention under the project are carefully selected and picked for
Bank’s value addition to the ongoing effort by GOA and DPs.
9
(v) Utility formation is a process and requires greater technical assistance effort – the project included
a two stage technical assistance. The initial stage focusing on the formation process while the second
stage on capacity building leading to a well functioning and capacitated utilities.
(vi) Need for greater effort to enhance the mainstreaming of gender, environment and social concerns
– special due attention will be provided to streamline these areas throughout the project implementation
process. A social and gender expert with attendant skills has been included in the team to complement the
existing environment experts in the Executing Agency. The project also includes the development of
gender policy and action plan for the water sector, development of gender and social charter for the 7
utilities, integrating gender and social aspect in the different activities of the project aimed at empowering
women and youths.
2.8 Key performance Indicators
2.8.1 The Result Based Matrix of the project reflects the performance indicators for the project at input,
output and outcome levels. Key among them are :(i) at outcome level the number of operational
autonomous utilities, number of people with access to water and improved sanitation; (ii) at output level
measures of infrastructure provided, number of utilities gazetted, evidence of incremental capacity at
provincial and central government level; number of people (% of women, youth) trained in managing
water points and hygiene promotion, number of people (% of women, youth, disabled, older) reached for
inclusive hygiene promotion. At the beginning of the project, the baseline (disaggregated by gender and
social quintile) for all the indicators will be re-validated through the initial assessment to be conducted.
Similarly, the project implementation schedule and procurement plan provide key indicators for
monitoring implementation progress. These will be updated with actual status for evaluation with planned
targets.
III – PROJECT FEASIBILITY
3.1 Economic performance
Table 3.1: Key Economic Figures
EIRR 18.4% and NPV AON 5,033 million (at 12% base case)
NB: detailed calculations are available in Annex B7
3.1.1 The economic analysis of the project has been undertaken by comparing “with project” and
“without project” of the various costs and benefits that will accrue to the beneficiaries of improved water
supply and sanitation services for the residents in the seven provincial capitals and surrounding areas. The
project will support the formation of water and sanitation utilities, autonomous institutions to manage the
water supply and sanitation services in their respective provincial towns for sustainable improved service
delivery.
3.1.2 It will improve access to reliable and clean water supply and sanitation services which will
promote environmental health. These will result in reduced water borne diseases for the populations
living in urban and peri-urban areas of the seven participating provincial capitals. These will also enhance
the quality of livelihood and well-being of the beneficiary population, and boost economic activities in
the project area. The economic returns are measured in terms of benefits which accrue to residents in the
form of clean, regular and adequate drinking water supply, improved sanitation services, improved health
and living conditions of the beneficiary population.
10
3.1.3 The main assumptions are: Improved water system management including formation and
functioning of water utilities, installation of meters and demand management will enhance operating
efficiency in the delivery of water services. This would contribute to generate incremental water and
sanitation revenues. Another major benefit is health benefit which accounts for the reduction in water
borne diseases of population living in urban and peri-urban areas of the participating provinces, which
results in savings in health expenditure. The costs side includes capital investments, periodic replacement
costs, and incremental operating and maintenance costs. All costs and benefits are considered net of
duties and taxes. In addition, the economic life of the investment is estimated at 25 years. The project’s
economic rate of return is estimated at 18.4%. The value is higher than the opportunity cost of capital of
12% and thus the project is considered economically viable. Sensitivity analysis to test the robustness of
the EIRR was carried out to determine the impact of adverse variations. The EIRR changes to 15.3%
assuming that investment cost increases by 20%, and changes to 14.1% when the benefits of the project
are decreased by 20%. The analysis shows that the project is economically viable and socially beneficial
for Angola. Annex B7 shows the assumptions and the calculations of the EIRR.
3.2 Environmental and Social impacts
Environmental Impacts 3.2.1 The project was classified as Category 2 on 17
th September 2014 mainly because the impacts are
site specific which could be adequately mitigated and project has significant social, health and
environmental benefits. The ESMP summary was prepared in July 2014 and disclosed on the Bank’s
website on 28 October 2014 with a minimum of 30 days prior to Board approval.
3.2.2 The most significant benefit derived from this project will be well developed institutional
capability for water and sanitation service delivery and a cleaner natural and living environment, and
greatly improved health standards in the seven provinces targeted by this project (0.92 million people).
This then has much broader implications in terms of better economic productivity, and it will contribute
to boosting development, particularly in the tourism sector for which reliable water supply and sanitation
facilities are essential.
3.2.3 The technical assistance components of the project strive to create capacity including those related
to environmental management. The new utilities to be formed will be assisted to develop their
environmental management plans, water quality monitoring plans, occupational health and safety plans,
leakage monitoring plans, energy and chemical management etc. among others. Staff of the utilities,
board members and other key staff of relevant institutions will be trained on various aspect of utility
management which would greatly contribute to environmental awareness. Most of the training will be
conducted by a network of local training providers through the coordination by the Onga Zanga technical
training centre under establishement with support by development partners. Furthermore, in order to
enhance the participation of communities and stakeholders and increase awareness, specific activities for
communication, social mobilisation and hygiene promotion have been included in the project. These
institutional technical assistance activities are mainly covered through Components 1 and 3 of the project
activities.
3.2.4 The project will also enhance capacity within the DNA/ESUto ensure environmental and social
impacts are avoided, mitigated or offset in all DNA/FCMUactivities, and enable more rigorous
environmental and social monitoring of projects in the targeted provinces, during their construction and
operation phases. The proposed laboratories to be established will enhance the provinces' ability to
monitor water quality and water discharges, as well as wastewater discharges.
11
3.2.5 Under component 2 of the project, it is envisaged to support effort to expand access for water
supply and sanitation. For water supply, this will be done through the support to the utilities to encourage
more water supply connections from existing network capacity and benefit from the recent large
investment in infrastructure in the provinces. No negative environmental impact is expected from this
activity as it does not involve new network expansion. It will mainly benefit the people in particular the
poor in the peri urban areas by providing access to potable water supply. For sanitation, the main focus is
for Sumbe town which lies on the coast some 330 km south of Luanda, and has a population of 143,000
people . Here it is proposed to provide a sewerage system that would include a small wastewater
treatment plant (WWTP).The Sumbe sanitation intervention was initially included in the ongoing Sumbe
Water Supply, Sanitation and Institutional Development Project which is a category 2 project but its
implementation was deferred due to lack of available funding. However, a detailed design and ESIA was
prepared for the interventions under the project.
3.2.6 Following review of the design, the Bank recommended revision of the wastewater treatment to
include a conventional WWTP with its effluent quality meeting Angolan standards appropriate for
disposal into the sea. The major negative impacts associated with the system will be the disposal of
sludge and backwash. But these will again turned into as a benefit through adequate treatment and use it
as an input in agriculture. The only other major risk is that due to pipe ruptures. This can be minimised
through proper design, careful supervision during construction and regular maintenance. Institutional,
capacity building and technical support under this component will ensure that the system functions
optimally, the quality of treated effluent eventually discharged to the sea is of acceptable quality and
meeting the required standard, and sludge and backwash are treated appropriately and in line with
international standards prior to disposal as an input for agriculture. Based on the demand and permissible
topographical situation, the design of the plant would accommodate for the effluent to be fully or partially
utilised for agriculture. The WWTP design would also accommodate energy production for consumption
on the plant itself and this will reduce its reliance on external power.
3.2.7 Poor sanitation is a major environmental concern in Sumbe, both in the urban and peri-urban
areas, and is the cause of numerous water-borne diseases, including cholera, malaria, typhoid and
diarrhoea. The benefits derived from the intervention will be reduced levels of pollution from sewage on
the land and in the sea, and therefore significantly improved health standards for the residents of Sumbe.
Climate Change
3.2.8 Institutional capacity building in the DNA as well as in the water utility companies in the
provinces will enable these agencies to better adapt to climate change, particularly in the planning of
water supply and distribution and wastewater infrastructure. Four of the provinces (Cabinda, Bengo,
Cuanza Sul and Namibe) are located on Angolan coastline, so the main concern with regard to climate
change is the potential rise in sea level. No information with regard to sea level rise specifically for
Angola is available, but the IPCC’s Fifth Assessment Report (2013)10 estimates that along the coast of
Central Africa, an anticipated rise of 0.5 m to 0.6 m can be expected by the end of this century. The
WWTP in Sumbe town would be located such that this risk is mitigated.
10Report available on https://www.ipcc.ch/report/ar5/wg1/
12
Gender
3.2.9 Women constitute 52% (8,468,911), of Angola’s 2009 estimated 16,367,879 population11
. Angola
ranks 92 out of 136 countries according to the 2013 World Economic Forum, Gender Gap Report, among
the five lowest performing countries on the wage equality for similar work indicator but also part of the
top six countries from the region that have closed their health and survival indicators. With 34.6% women
MPs and 29% women in ministerial positions12
(2013); Angola has one of the highest women
representation in public office. 31% (29% urban, 33% rural) of households are headed by women and
constituted the majority of households living in extreme poverty13
. School enrolment rates are relatively
high and evenly distributed, especially in the cities. Women in secondary and tertiary education also tend
to achieve higher grades than men, despite a more marked imbalance at the tertiary level, where the ratio
of women to men is 65.5:100. However, at national level, literacy rates remain unequal, higher at 82.8%
for men as opposed to 57% for women. Limited access to formal vocational training and higher education
opportunities contribute to women's access to gainful employment, resulting in reduced income levels and
strong presence in subsistence agriculture and informal trade where they remain the main income earners
for their families making up 70% of the workforce. Gender division of labour in Angola reported that
women work on average between 10 to 15 hours per day whilst men work for between 8 to 10 hours per
day.
3.2.10 With women doing the most pressing house chores: cooking, cleaning and fetching water, as well
as looking after the sick, old and children, the quality and availability of water and sanitation services is
highly gender sensitive. As the main users of water; women have a greater incentive to keep water and
sanitation facilities fairly functioning; thus justifying the need to involve the active participation of
women in planning, management and decision making of projects designed to deliver water and
sanitation services in their communities. The multiple roles of women play often subject them to crushing
workloads leaving them with no time for other activities, worse is their exclusion from decision-making
in the development of water and sanitation resources of their own communities. Reliable provision of the
needed quantity and quality water will lessen women’s workload and facilitate their domestic, economic
and social activities.
3.2.11 Against this background, the project included in its design to mainstream gender and address
women’s need in the sector. The focus will be on (i) developing a sector gender policy and action plan
which will promote gender mainstreaming in all activities, ii) reducing gender inequality by training
women and sensitizing stakeholders and communities, and iii) training will also be provided in gender
mainstreaming in water supply and sanitation at the peri-urban areas of the 7 Provincial capitals.
Furthermore, women groups will be trained and supported to manage water kiosks in peri-urban areas of
the provincial capitals. Women will also be trained in hygiene promotion to enable them play a leadership
role.
3.2.12 The Executing Agency has no gender and/or social expert/s at the national and provincial levels.
The sector has no Social or Gender policies and strategies to guide and inform the design and
implementation of programs/projects. At national level, a gender analysis will be carried out as one of the
first social / gender Technical Assistance (TA) activities to identify, qualify and quantify the specific
11 IBEP – Integrated Survey of Population Welfare Report 2011
12 MINFEMU Relatorio do Balanco de Execução do Plano Nacional – 2013
13 AfDB Multi-sectors Gender Profile 2008
13
gender needs and proposed benefits to inform setor policy development as well as the impact the project
would have on women, men and youth. At provincial level, each Utility will be assisted to develop their
gender/social policies and strategies and social charter. Women’s groups will be trained and supported in
running water kiosks in peri-urban areas of the 7 provincial capitals.
Social
3.2.13 The 2013 Human Development Report (HDR) ranks Angola, 148th out of 187 countries on the
Human Development Index (HDI). Poverty remains prevalent throughout much of the country. It is
estimated that 37% of the population is living below the poverty line and 15% of households are living in
extreme poverty with monthly consumption below the national poverty line of Kz4,973 ($2), the
country’s poor are predominantly women, especially in the rural areas mostly in the FHHs. A significant
proportion of the population uses drinking water from unsafe sources and the geographic disparity is very
high. Open defecation is high at 26% according to JMP 2013 report; it ranges from 6% in Cabinda to as
high as 70% in Namibe. Furthermore, the vulnerability of the Country is demonstrated by the persistence
of epidemics like the water borne diseases outbreaks.14
Similarly in 2013, WHO reported that there were
about 1215 cholera cases with no death in the record but in 2006/2007 more than 3092 related death and
82,204 cases were recorded. The underlying cause mainly due to 40-60%15
overcrowding and unsanitary
conditions coupled with poor hygiene.16
Angola has a high rate of under 5 death, diseases related to
diarrhoea and are responsible for nearly 19,700 child deaths a year.17
3.2.14 Although life expectancy at birth improved slightly to 51.7 years in 2011, health and social
indicators remain worrying. Despite Angola’s economic progress, infant and U5MR mortality rates are
among the highest in the world, at 179.5 deaths per 1,000 children and 260 deaths per 1,000 children
respectively, poor sanitation and lack of access to clean water as contributing factors. Only 54% of the
population has access to clean drinking water, with the figure dropping to 23% in rural areas. Coverage in
3 of the program’s provinces of Lunda Norte, Bengo and Lunda Sul is lower at 16%, 13% and 7%
respectively18
.
3.2.15 The program will undoubtedly have a positive impact on the population in the urban ad peri-urban
areas in the 7 provinces. With minimal physical construction work in the provinces, no associated
negative social impacts are invisaged. The program will strengthen the institutions to deliver better
services. Access to clean and safe drinking water and improved sanitation will ensure sharp decline in
diarrhoea and other water borne diseases and associated health care costs. There will be reduction in
infant and U5MR rates, improvement of maternal health, reduction in absenteeism and school-dropout
rates especially among girls, women and girls enjoy dignified sanitation, improved nutrition and dealing
with water bourne diseases such as cholera, typhoid, gastroenteritis, dysentery; and water enabled
diseases such as malaria. The hygiene promotion and education will also include creating awareness
regarding Ebola. Employment opportunities will be created during construction and for pump
attendants/repairers. The program will contribute to reducing poverty and improving the quality of lives
of the people in the urban and peri-urban areas in the 7 intervening provinces. The project will also
contribute to skill development in the sector through its support for on the job trainings and at the water
14 WHO Humanitarian Appeal 2009 Country Profile. 15 The Joint MISC/Household Incomes Expenditure Survey 2011 16 WHO, Global Task Force on Cholera Control, Cholera Country Prolife, Angola, Last update 22 January 2013 17 (WHO/ UNICEF, 2004). 18 The Joint MISC/Household Incomes Expenditure Survey 2011
14
and sanitation vocational centre. This is expected to greatly benefit the youth and increase their capacity
to participate effectively in the sector (details analysis in Annex B.8).
Involuntary Resettlement
3.1.4 The institutional and capacity building aspects of theproject donot trigger involuntary
resettlement. The MINEA/DNA Resettlement Framework Policy specifies that resettlement should only
be done as a last resort, and if absolutely necessary must be done in compliance with the DNA
Resettlement Policy and national legislation. The only activity in the project that has relevance to
involuntary resettlement would be the Sumbe WWTP intervention under Component 2. There are two
locations proposed for the WWTP which are uninhabited open spaces belonging to the GOA. Hence no
resettlement is envisaged in this caseThe sewage reticulation network will follow the main roads, and will
lie within the road reserves, so resettlement or compensation is not anticipated for this either.
IV – IMPLEMENTATION
4.1 Implementation Arrangements
4.1.1 The project will be executed in line with country’s sector organization with full recognition of the
roles and responsibilities of the different water sector institutions. In this regard the Ministry of Energy
and Water (MINEA) through DNA will be the Executing Agency of the Project responsible for project
implementation and coordination activities including procurement and contract management, financial
management, environmental, social and gender safeguards, monitoring implementation and coordinating
the various activities among others. MINEA will use the existing project management unit within DNA
known as the Financial and Contract Management Unit (FCMU) established to manage government and
donors financed investment project and programs. DNA will be strengthened through technical assistance
to produce a sector gender policy and action plan as well as develop gender mainstreaming and social
equity strategies for the sector conducting gender assessment of the sector. The ongoing AfDB funded,
Sumbe Water, Sanitation and Institutional Development Project, WB funded water sector institutional
development project and other projects funded by treasury or bi-lateral credits are all implemented
through FCMU. It remains within the operational responsibility of the Head of the Department of Water
Supply and Sanitation within DNA with subsequent reporting to the National Director of DNA who in
turn reports to the State Minister of MINEA.
4.1.2 In order to ensure high level coordination for supporting the reform process, DNA will be
supported by the proposed Water Sector Institutional Development Commission (Comissão de
Desenvolvimento Institucional do Sector de Águas). The Commission will be comprised of: (i)
Minister/Secretary of State for Water; (ii) the National Director for Water; (iii) The Director of the
National Institute for Water Resources Management (Instituto Nacional de Recursos Hídricos National or
INARH); (iv) the Electricity Sector Regulatory Authority (Instituto Regulador do Sector de Energia or
IRSE19) President; (v) The Head of Legal Affairs at MINEA; (vi) Ministry of Economic Development
(MINECON); (vii) Ministry for Territory Administration (MAT); (viii) Ministry of Family and Women
Promotion (MINFAMU); (iv) Ministry of Environment (MINAMB) and, (v) Ministry of Finance
(MINFIN).
19 Currently, it is only responsible for the Energy Sector Regulatory, however the GOA intends to expand its mandate to cover both the water and energy sectors, allowing these to be regulated by the same authority.
15
Implementation Schedule
4.1.3 The project will be implemented over a period of 60 months from fulfilment of conditions for first
disbursement in January 2016. Implementation of the capacity building components will begin from
January 2016 and works will commence during the first quarter of 2016. Project completion date is set for
December 2020.
Procurement Arrangement
4.1.4 The National Procurement Procedures in Angola have been reviewed and were not found fully
adequate for the implementation of project activities due to various reasons such as inherent risks of weak
control mechanisms, lack of enabling tools and regulation documents to ensure fiduciary compliance.
Therefore, all procurement of goods and works, and acquisition of consulting services financed by the
Bank will be in accordance with the Bank's Rules and Procedures (“Rules and Procedures for
Procurement of Goods and Works”, dated May 2008, revised in July 2012 and as amended from time to
time and “Rules and Procedures for the Use of Consultants”, dated May 2008, revised in July 2012 and as
amended from time to time) and the relevant Bank Standard Bidding Documents.
4.1.5 The Bank has carried out a procurement capacity and risk assessment of the Executing Agency
and has been found moderately adequate while the procurement risk is rated moderate. Risks mitigation
measures for strengthening procurement capacity of the executing agency include i) Recruitment of
additional senior procurement officer and maintaining the existing Procurement Officer of the FCMU
responsible for ongoing Bank project, ii) providing procurement training for the Procurement Officer, and
iii) preparing a project implementation/Procedures Manual.
4.1.6 The procurement arrangements including the assessment of the executing agency, the draft
procurement plan, an update of the national procurement procedures and the procurement package are
detailed in the technical Annex B5.
Financial Management and Audit Arrangements
4.1.7 The proposed project will be implemented by the National Directorate of Water (DNA) within the
Ministry of Energy and Water. An assessment of DNA’s Financial and Contract Management Unit
(FCMU) FM arrangements for the implementation of this project (that included a review of the
budgeting, accounting, internal controls, flow of funds, financial reporting and auditing arrangements)
indicates that these meet the Bank’s minimum requirements to ensure that the funds made available for
project financing are used economically and efficiently and for the purpose intended. However, the
following actions should be implemented on satisfactory manner to the Bank to establish an acceptable
project control environment: (i) ensuring the existence of a dedicated project accountant with
qualifications and experience acceptable to perform his/her duties, to be supported by an Assistant
Accountant; (ii) the preparation of a project-specific financial management procedures manual as part of
the Project Implementation Manual, (iii) purchase and installation of a conventional accounting software
to record and process project’s financial transactions. The overall project FM responsibility rests with the
project accountant, who will be supported by an assistant accountant, under supervision and guidance of
the Financial Manager of at Financial and Contract Management Unit (FCMU). The appointment of the
qualified and experienced Project Accountant is a condition for the first disbursement and the Assistant
Accountant should be appointed within six months after the first disbursement.
Disbursement Arrangements
4.1.8 Disbursement of the AfDB resources will be done in accordance with Bank’s procedures and the
Disbursement Letter will document the disbursement procedures and methods to be applied for the Loan.
Disbursement will be principally through the Direct Payment method (for works, goods and services),
16
however, the Special Account method will be used for smaller local eligible payment (training,
workshops, and operating costs). The option for reimbursement methods will be also available for this
project.
4.1.9 The Executing Agency will produce quarterly Progress Reports (within 30 days after the end of
each quarter), including statement of sources and uses and funds and statement of use of funds by project
component and activities, comparing budget and actual expenditures. These Progress Reports should link
financial information with physical progress and highlighting issues that require attention. The project
financial statements will be audited annually by the qualified and independent private audit firm, in
accordance with a Bank approved audit ToR. The audit report together with management letter shall be
submitted to Bank within six months after the end of each fiscal year.
4.2 Monitoring
4.2.1 The Executing Agency, DNA, will be responsible for the overall monitoring and supervision of
the Project activities including ESMP implementation. It will produce monthly, quarterly and annual
progress reports on the status of the various project activities, financial and procurement status, asset
management, environment, social and gender safeguards, risks and mitigation measures. Once the project
approaches substantial completion, a project completion report will be prepared by the Executing Agency
that includes details of project implementation, financial, procurement, asset, safeguard, measures of the
achievements of the project against the indicators in the log frame and lessons learnt. The lack of an
adequate system of collection, processing and making available information in the sector is a major
weakness and the project will build capacity in this regard. The activities undertaken under the sector
M&E subcomponent will benefit the monitoring and evaluation of the Project in terms of data availability
and quality, and M&E capacity in general. The project will support MINEA to produce an annual Sector
Status Report and strengthen its internal M&E capacity.
4.2.2 The Bank shall also conduct regular project monitoring through supervision missions. The
Executing Agency will present a consolidated biannual report to the Institutional Commission. The bi-
annual/quarterly discussion of the project activities by the Commission and reporting of the Executing
Agency to it is part of the project monitoring plan. A summary of the main milestones is presented below:
Table 4.1 – Key Project Milestones Timeframe Milestone Monitoring Process/feedback loop
May. 2015 Board Loan Approval
Sept. 2015 Signing and Effectiveness Loan signed and declared effective including precedent
conditions for first disbursment by the Bank
Sept. 2015 Launching Launching workshop organised
Mar. 2016 Start of Sumbe Sewerage works Works Contract Signed, Monthly Supervision Reports
Aug 2018 Completion of Sumbe Sewerage Works Commissioning of works
June 2016 Annual Sector Report 1st Annual Sector Report for 2015 prepared
June 2016 All Utilities formed Gazettes Issued
Dec 2016 Utilities Management and Technical
Assistance commencement
Contract concluded and effective
June 2017 Mid Term Review Comprehensive Review with Recommendations
Dec. 2020 Completion of Project Project completion report
4.3 Governance
4.3.1 The overall governance rating of the country has improved overtime following the end of
Angola’s civil conflict which damaged the institutions of governance and accountability. It made modest
improvements over the years: the Mo Ibrahim Governance Index from 34 in 2006 to 44.5 in 2012; the
17
Bank’s CPIA score from 3.33 in 2010 to 3.96 in 2013 (Cluster A-C20
), and Cluster D from 2.8 to 3.08 in
2013; the Transparency International CPI from 168th in 2011 to 153/178 countries surveyed in 2012; and
the World Bank’s Worldwide Governance Indicators in four out of six dimensions of governance
improved between 2000 and 2012, especially in political stability, and voice and accountability. However
the country need to make tangible progress in the area of fighting corruption, removing inefficiency from
the government bureaucracy and improving the overall business environment in the country.
4.3.2 In terms of water and sanitation sector governance, the country has embarked on a reform
program to re-organise the sector, strengthen institutions and improve service delivery. The country is in
the process of establishing autonomous and accountable utilities for delivery of water and sanitation
services. In order to promote accountability, ensure sustainability and protect future investment and
interest of the society at large, a process has been initiated to create a regulatory function merged with the
existing electricity regulation institute (IRSE) and an asset management entity. A National Institute for
Water Resources Management has already been established to strengthen the planning and management
of water resources in the country. The reform is strongly supported as a top priority intervention in the
Energy and Water Sector Action Plan (2013-2017). This project contributes to the improvement of the
overall sector governance.
4.4 Sustainability
4.4.1 The commitment of the Government of Angola to sustainable service provision and leading the
reform process with high sense of ownership is evidenced through a number of changes introduced in the
sector following the end of the conflict in 2002. The national water law was approved in 2002 which
introduced key reform elements such as the recognition of water as both a social and economic good and
decentralised service delivery. Following the water law, a strategy in 2003 and a water sector
development plan in 2004 were crafted. These initiated the massive investement in infrastructure in the
whole country afterwards with a US$500 million per year investment. Taking into account the need for
improvement in the service delivery pathway, the Government made a decision to use the country’s
public enterprise law to professionalise the management of urban water supply and sanitation service
delivery which is a key component of sustainability. The establishment of the water utilities, as
autonomous entities, to take over the function of water supply and sanitation service provision will
enhance sustainability as it will (i) uphold the principle of cost recovery, and ensure the proper use of the
revenue for the sustained improvements in the quality of service delivery, and (ii) allow for the
management of the facilities on sound business principles. Government is in the process of establishing
regulator and asset management entity which will further reinforce accountability and efficiency
improvement in the sector.
4.4.2 The long-term sustainability of sector institutions is a key objective of the on-going sector
reforms, which seek to achieve, in the long term, cost recovery in service provision through user charges.
As such, a review of the tariff regime and gradual tariff revision is critical to ensure that the water utilities
can meet their revenue requirements from user charges, taking into account both the needs of the poor and
the utilities’ financial sustainability. As part of the development of water utilities, the project will support
tariff and affordability studies for each utility. These studies will review efficient cost of service
provision, which also take into account the social nature and affordability of service provision to the poor.
As part of the project, the newly established water utilities will be supported with the necessary key O&M
assets to enhance proper operation and maintenance of facilities for sustainable service delivery. These
20
Cluster D looks at social context and human development including gender equality.
18
support will be provided as a stop gap measure on a declining scale to support gradual transition to
adoption of cost recovery tariff in the project towns. After completion of the project, the utilities will start
applying cost reflective tariffs, incorporating lifeline tariff, to cover at least operation and maintenance
costs in line with the policy of GOA and reduce their dependence on Government subsidy.
4.4.3 Affordability of service has been a key consideration in the design of the project and choice of
technology such that the majority of households falling within the poor strata of the population are not
overburdened by high user charges. In this regard, water-vending kiosks, each serving between 100 and
200 households are included for the poor peri-urban settlements. These options are all demand driven and
offer appropriate low cost solutions, bringing down operational costs within affordable levels for the peri-
urban population. In addition, a social (lifeline) tariff will be put in place to allow for subsistence
consumption up to cater for the needs of low-income households.
4.4.4 Technical sustainability of the project is assured through the extensive capacity building and skills
development integrated in the project design to ensure effective and efficient management of the piped
water and sewerage facilities. The project has also integrated social mobilisation as a key aspect of the
project in order to mobilise support for the project and also maintain partnership with cunsumers which in
the long term contributes to sustainability measures.
4.5 Risk management
4.5.1 The process of reform and institution formation is often a process facing resistance for change due
to deeply entrenched interest and fear of outcome as well as lack of clarity and understanding by key
stakeholders on the final desired objectives. These are inherent risks which need to be addressed carefully
and systematically. The project embraced some key activities to address these risks through a structured
and coordinated dialogue mechanisms and effective communication and engagement of stakeholders
during the project implementation process at strategic and implementation levels.
4.5.2 Water supply is considered by many as a social service, and as such there is often strong pressure
from various interest groups on government to keep tariffs low. There is therefore a risk of tariffs being
kept low to the detriment of the utilities. The application of appropriate tariffs throughout the project
horizon is essential to ensure that projected revenue requirements are met from user charges. As part of
the project there will be sensitization campaigns and wide consultation with various interest groups from
civil society, women’s groups, academia and political parties, to achieve broad consensus on project
design and pricing implication. The capacity building and institutional support to the water utilities will
include strengthening customer orientation and introduction of pro-poor supply strategy. The capacity of
the utilities to carry out campaigns to encourage customers to pay for services will be built to mitigate a
potential risk of resistance to user payments.
4.5.3 The weakness in the institutional capacity of the executing agency (DNA) could be a major risk in
the implementation of the project, as well as in monitoring and evaluating the impact of the project. The
overall capacity of the FCMU will be strengthened in critical functions such as procurement and financial
management and a project implementation manual will be prepared to guide implementation of the
project.
19
4.6 Knowledge Building
4.6.1 The implementation of the project components will generate vital knowledge that will be useful
for continuous improvement of performance and execution of similar extension of water supply and
sanitation services to the rural population living near a major water networks designed for bigger or main
urban towns. A mechanism designed to capture knowledge has been put in place and data and
information (gender and socially disaggregated) is collected on a regular basis on water schemes, access
to water and sanitation services at local levels. As part of its support to the project, the Bank will finance
in-depth analytical work to draw out lessons learnt from the implementation of the project, in particular
the experience related to the use of community, specially women and private operators in rural water
schemes. Knowledge will alse be drawn from the coastal sanitation studies. The knowledge gained will
assist the sub-sector in achieving optimal exploitation of the water sources and support the Bank to
replicate the good practice in other regional member countries. The project implementation review,
quarterly progress reports, audit, sector M&E and completion reports will also provide information on
various aspects of the project for further diagnosis. The knowledge obtained will be shared within the
Bank and with other development partners as well as with RMCs.
V – LEGAL INSTRUMENTS AND AUTHORITY
5.1 Legal instrument
5.1.1 The Project will be financed by an ADB loan.
5.2 Conditions associated with Bank’s intervention
A. Condition Precedent to Entry into Force of the Loan Agreement
(i) The loan agreement shall enter into force subject to fulfilment by the Borrower of the provisions of
Section 12.01 of the General Conditions Applicable to Loan Agreements and Guarantee Agreements
of the ADB.
B. Conditions Precedent to First Disbursement of the Loan:
The obligations of the Bank to make the first disbursement of the loan shall be conditional upon the entry into
force of the loan agreement and the fulfillment by the Borrower, in form and substance satisfactory to the
Bank, of the following conditions:
(i) Evidence of having opened a foreign currency special account for the deposit of the proceeds of the Loan
and a sub-account in local currency with a bank acceptable to the Bank;
(ii) Evidence of having appointed a Senior Project Management Specialist, Senior Procurement Specialist
and Senior Project Accountant with qualifications and experience, and Terms of Reference acceptable to
the Bank;
C. Other Conditions
The Borrower shall, in form and substance satisfactory to the Bank, fulfill the following conditions:
(i) Submit to the Bank an updated design, ESIA and ESMP reports and conduct proper consultations with
the local communities on the project activities, specifically the planned waste water treatment plant and
Sewerage network prior to disbursement for the Sumbe Sewerage Construction works activities;
(ii) No later than six months after the first disbursement, cause the establishment of a Water Sector
20
Institutional Development Commission (Comissão de Desenvolvimento Institucional do Sector de
Águas) to coordinate and lead the institutional reform in the sector;
(iii)No later than six months after the first disbursement: (a) prepare a project implementation manual;
and (b) engage an auditor with Terms of Reference acceptable to the Bank; (c) procurement and
installation of automated accounting package; (d) appointment of assistant accountant with relevant
experience and qualification based on terms of reference acceptable to the Bank;
(iv) By 30th
June 2016, cause the legal formation of the PWSUs and submit evidence thereof; and
(v) If applicable, provide evidence that, prior to commencement of civil works on any given section, all
Project Affected Persons (PAPs) in respect of such section of civil works have been compensated
and/or resettled in accordance with the Abbreviated Resettlement Action Plan (ARAP), any updates to
the ARAP, and the works and compensation schedule.
D. Undertakings
The Borrower undeertakes and agrees, in form and substance satisfactory to the Bank, to
(i) Cause the establishment of a water and sanitation service regulatory body and an Asset
Management Entity;
(ii) Guarantee the provision of adequate budget for the functioning of the PWSUs with a gradual
phasing out of the subsidy; and
(iii) Cause the preparation of the annual audit of the PWSUs by independent auditors and submit to
DNA within 6 months of after the end of the fiscal year;
(iv) Properly addressing all relevant environmental and social impacts and mitigation measures
commensurate to those impacts;
(v) Adequately addressing the current occupation of the road reserve in Sumbe, which if occupied,
would trigger the AfDB Involuntary Resettlement Policy, in particular loss of economic activities
on the part of the Project Affected People, leading to the preparation of an ARAP.
(vi) If applicable, not start any works on any section of a given lot of civil works, if all Project
Affected Persons on the concerned section have not been compensated and/or resettled with
respect to the relevant section of the relevant lot in accordance with the ARAP and any updates to
the ARAP as well as the works and compensation schedule;
(vii) Carry out, and cause its contractors to carry out, the project in accordance with: (a) Bank’s rules
and procedures; (b) national legislation; and (c) the recommendations, requirements and
procedures set forth in the Environmental and Social Management Plan (ESMP) prepared for the
project; and
(viii) deliver to the Bank project quarterly reports in form and substance acceptable to the Bank,
describing the Borrower’s implementation of the ESMP (including any implementation failures
and related remedies, if any).
5.3 Compliance with Bank Policies
This project complies with applicable Bank policies.
VI – RECOMMENDATION
Management recommends that the Board of Directors of the Bank approve the proposed ADB loan
US$123.77 million (estimated at UA 80.37 million) to the Republic of Angola for the purposes and
subject to the conditions stipulated in this report.
I
APPENDIX 1: MAP OF ANGOLA AND PROJECT LOCATION
Project Beneficiary Provinces Sumbe Town
II
APPENDIX 2: ANGOLA’S COMPARATIVE SOCIO-ECONOMIC INDICATORS
Indicator Year Angola AfricaDeveloping
Countries
Developed
CountriesCharts
Basic Indicators
Area ('000 Km²) 1,246.7 30,046.4 80,976.0 54,658.4
Total Population (millions) 2014 22.1 1,136.5 5,628.5 1,068.7
Urban Population (% of Total) 2014 61.5 40.6 44.8 77.7
Population Density (per Km²) 2012 15.7 35.4 66.6 23.1
GNI per Capita (US $) 2013 5,170.0 1,969.6 2,780.3 39,688.1
Labor Force Participation - Total (%) 2014 35.9 37.5 0.0 0.0
Labor Force Participation - Female (%) 2014 46.1 42.6 39.8 43.3
Gender -Related Development Index Value 2005 0.4 0.5 .. 0.9
Human Develop. Index (Rank among 169 countries) 2012 148.0 .. .. ..
Popul. Living Below $ 1 a Day (% of Population) 2009 43.4 .. 25.0 ..
Demographic Indicators
Population Growth Rate - Total (%) 2014 3.1 2.5 1.4 0.7
Population Growth Rate - Urban (%) 2014 4.3 3.4 2.4 1.0
Population < 15 years (%) 2014 47.3 40.8 29.2 17.7
Population >= 65 years (%) 2014 2.4 3.5 6.0 15.3
Dependency Ratio (%) 2014 91.0 77.3 52.8 ..
Sex Ratio (per 100 female) 2014 98.4 100.0 934.9 948.3
Female Population 15-49 years (% of total population) 2014 22.4 24.0 53.3 47.2
Life Expectancy at Birth - Total (years) 2014 52.3 59.6 65.7 79.8
Life Expectancy at Birth - Female (years) 2014 53.8 60.7 68.9 82.7
Crude Birth Rate (per 1,000) 2014 43.5 35.0 21.5 12.0
Crude Death Rate (per 1,000) 2014 13.6 10.2 8.2 8.3
Infant Mortality Rate (per 1,000) 2014 93.6 60.4 53.1 5.8
Child Mortality Rate (per 1,000) 2014 150.9 95.0 51.4 6.3
Total Fertility Rate (per woman) 2014 5.8 4.6 2.7 1.8
Maternal Mortality Rate (per 100,000) 2010 450.0 415.3 440.0 10.0
Women Using Contraception (%) 2014 16.0 32.5 61.0 75.0
Health & Nutrition Indicators
Physicians (per 100,000 people) 2004 8.0 52.6 77.0 287.0
Nurses (per 100,000 people)* 2004 135.0 .. 98.0 782.0
Births attended by Trained Health Personnel (%) 2007 47.3 .. 39.0 99.3
Access to Safe Water (% of Population) 2012 54.3 68.8 84.0 99.6
Access to Health Services (% of Population) 2000 24.0 65.2 80.0 100.0
Access to Sanitation (% of Population) 2012 60.1 39.4 54.6 99.8
Percent. of Adults (aged 15-49) Living with HIV/AIDS 2012 2.3 3.9 161.9 14.1
Incidence of Tuberculosis (per 100,000) 2012 316.0 223.6 .. ..
Child Immunization Against Tuberculosis (%) 2012 87.0 83.1 89.0 99.0
Child Immunization Against Measles (%) 2012 97.0 74.6 76.0 92.6
Underweight Children (% of children under 5 years) 2007 15.6 .. 27.0 0.1
Daily Calorie Supply per Capita 2009 2,079.0 2,564.7 2,675.2 3,284.7
Public Expenditure on Health (as % of GDP) 2011 2.2 5.9 4.0 6.9
Education Indicators
Gross Enrolment Ratio (%) .. .. .. ..
Primary School - Total 2011 140.5 101.8 106.0 101.5
Primary School - Female 2011 109.6 97.8 104.6 101.2
Secondary School - Total 2011 31.5 45.4 62.3 100.3
Secondary School - Female 2011 24.8 41.9 60.7 100.0
Primary School Female Teaching Staff (% of Total) 2011 36.8 43.7 .. ..
Adult Literacy Rate - Total (%) 2001 67.4 .. 19.0 ..
Adult Literacy Rate - Male (%) 2001 54.2 .. .. ..
Adult Literacy Rate - Female (%) 2001 82.9 .. .. ..
Percentage of GDP Spent on Education 2010 3.5 5.3 .. 5.4
Environmental Indicators
Land Use (Arable Land as % of Total Land Area) 2011 3.3 8.4 9.9 11.6
Annual Rate of Deforestation (%) 2000 0.2 0.6 0.4 -0.2
Annual Rate of Reforestation (%) .. .. .. ..
Per Capita CO2 Emissions (metric tons) 2011 1.3 1.1 .. ..
Last update: March 2015
Angola
Comparative Socio-Economic Indicators
Sources : ADB Statistics Department Databases; World Bank: World Development Indicators
UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports.
Note : n.a. : Not Applicable ; … : Data Not Available.
0
1000
2000
3000
4000
5000
60002
01
0
201
1
201
2
201
3
GNI per Capita (US $)
Angola Africa
0
0.5
1
1.5
2
2.5
3
3.5
201
0
201
1
201
2
201
3
201
4
Population Growth Rate - Total (%)
Angola Africa
0
10
20
30
40
50
60
70
80
201
0
201
1
201
2
Access to Safe Water (% of Population)
Angola Africa
90
95
100
105
110
115
201
0
201
1
Secondary School - Total
Angola Africa
III
APPENDIX 3: TABLE OF ADB’S PORTFOLIO IN THE COUNTRY
Division Long nameFinance
project
Status
of
Project
PFI STATUSApproval
date
Planned
project
completio
n date
Amount App. Amount Dis.Dis.
Ratio
last
supervision
Mission
Window Project Age in YEARS
OSAN2 BOM JESUS -CALENGA RURAL DEV PROJECT P-AO-A00-001 OnGo NON PP / PPP 11/24/2005 12/312014 17,200,000.0 8,348,860.6 48.5 8/8/2014 [ ADF ] 8 years 11 months 0 daysOSAN3 ANGOLA: FISHERY SECTOR SUPPORT PROJECT P-AO-AAF-002 APVD NON PP/NON PPP 5/15/2013 6/30/2019 20,000,000.0 0.0 0.0 [ ADF ] 1 years 5 months 9 days
37,200,000.0
OSAN3 ENVIRONMENTAL SECTOR SUPPORT PROJECT P-AO-CZ0-001 OnGo NON PP / NON PPP 3/11/2009 12/31/2015 12,000,000.0 4,233,631.9 35.3 3/16/2014 [ ADF ] 5 years 7 months 13 days12,000,000.0
OSGE2 APPUI A LA GESTION FINANCIERE (PAGEF) P-AO-KF0-002 OnGo NON PP / NON PPP 11/14/2007 12/31/2014 5,900,000.0 690,063.7 11.7 12/9/2013 [ ADF ] 6 years 11 months 10 days5,900,000.0
ONEC2 POWER SECTOR REFORM SUPPORT PROGRAM P-AO-FA0-002 APVD NON PP / NON PPP 5/13/2014 12/20/2016 666,782,242.3 0.0 0.0 [ ADB ] 0 years 5 months 11 days666,782,242.3
OSHD1 CAPACITY BUILDING FOR POVERTY REDUCTION P-AO-IE0-001 OnGo NON PP / NON PPP 2/23/2011 12/31/2014 4,920,000.0 792,125.0 16.1 5/13/2013 [ ADF ] 3 years 8 months 1 daysOSHD2 ETUDES FINANCEMENT ET SECTEUR PRIVÉ P-AO-IAD-001 APVD NO SUPERVISION 2/14/2014 12/31/2014 398,478.0 0.0 0.0 [ MIC ] 0 years 8 months 10 days
5,318,478.0
OITC2 NATIONAL TRANSPORT SECTOR MASTER PLAN P-AO-D00-003 APVD NON PP/NON PPP 9/17/2013 12/31/2016 2,900,000.0 0.0 0.0 5/6/2014 [ ADF ] 1 years 1 months 7 days2,900,000.0
OWAS2 SUMBE WATER SUPPLY, SANITATION AND INSTI P-AO-E00-003 OnGo NON PP / PPP 11/28/2007 5/31/2015 12,000,000.0 3,207,688.4 26.7 2/24/2014 [ ADF ] 6 years 10 months 26 days12,000,000.0
742,100,720.3 17,272,369.5 2.3
690,080,720.3 17,272,369.5 2.5
IV
APPENDIX 4: SIMILAR PROJECTS FINANCED BY THE BANK AND OTHER
DEVELOPMENT PARTNERS IN THE COUNTRY
Donor Sub-sectoral Focus Name of Project
World Bank Urban Water Supply, Water Resources Water Sector Institutional Development
Project
EC Policy
RWSS
Water Resources
Water Sector Capacity Building Support –
Establishment of Vocational Training
Centre
Norway Policy
Water Resources
Institutional Strengthening of the Energy
and Water Resources Sectors in Angola
UNICEF POLICY
Capcity building
Sector Policy Support – Sanitation
Support to Vocational training centre
AfDB Urban Water Supply Sumbe Water Supply, Sanitation and
Institutional Development
V
APPENDIX 5: WAIVER REQUEST FOR FINANCING 80% OF THE PROJECT COST
THROUGH AN AN ADB LOAN
Introduction
Angola emerged from more than 27 years of civil war to become Africa’s third largest economy,
after Nigeria and South Africa. Since 2002, the country embarked on an ambitious infrastructure
rehabilitation program for urban water systems. Despite these investments, Angola’s water
utilities have been unable to cope with the burgeoning urbanization to the extent that about 40%
of the urban population relies on largely untreated water supply by vendors, according to the
Africa Infrastructure Country Diagnostic Report (AICD, 2011). The World Development
Indicators (WDI, 2014) report also indicates that the country’s access to safe drinking water
(54%) and sanitation (60%) remain below the regional standards. In addition, numerous
challenges remain in the water and sanitation sub-sector in Angola. Many of them involve going
beyond investment to strengthen and optimize the policy and the institutional environment for
provision of quality services. Therefore, the proposed intervention constitutes a joining effort to
assist the Government of Angola (GoA) in the implementation of its economic diversification
strategy and poverty reduction. This project mainly targets to support sector reform to strengthen
the water and sanitation service delivery and is critical for the success and sustainability of
Angola’s infrastructure development in the sector which has seen large investment in the recent
past following the end of the civil war.
In light of the above, the project should be granted a waiver in terms of the required 50%
financing by GOA due to the high level of investment for the sector committed by the GOA. The
country has already demonstrated high level of commitment through its various development
programs and in particular for the water and sanitation sector with on-going activities estimated
at US$ 896 million in the project beneficiary provinces. As highlighted in the “Policy on
Expenditure for Bank Group Financing”, the country’s commitment should not only be measured
by Government’s counterpart contribution but also by the ownership and commitment to the
overall development program.
Country’s commitment to implement development reforms in the water and sanitation
sector
Despite the rapid economic growth over the past decade, the Angolan economy remains heavily
dependent on oil which accounts for 47% of the GDP, 95% of the country’s exports and 75% of
fiscal revenues. Notwithstanding the country’s significant oil wealth, income inequality remains
high, with the top 10% of income earners concentrating one-third of total national income.
Unemployment is also a challenge as it stands at 26%, and with poverty headcount ratio
currently estimated at 37% of total population, of which 60% is in rural areas.
It is in this context that the government development in 2012, a National Development Plan
(PND, 2013-2017), a long-term development strategy aimed at promoting human development
and well-being of the Angolan population, ensure better living standards and reduce extreme
poverty. The PND, 2013-2017 focus on six main objectives among which is the expansion and
maintenance of the country’s infrastructure in order to improve competitive and promote
VI
sustainable economic growth. Water and sanitation is among the key priorities for infrastructure
investment as lack of access to treated water sources in Angola has been responsible for
disastrous public health consequences, leaving the country with one of the highest rates of
diarrheal disease in the world.
The National Development Program (PND) is the principal national development framework for
the period 2013 – 2017 highlighting the country’s development challenges and priorities,
investment framework and policy objectives. The PND is designed enshrining the national vision
for 2025 and leading efforts towards its achievement. Water and Sanitation sector is mainly
anchored through the Human Development pillar and further elaborated in the specific sector
investment framework and the National Strategic Program for Water (NSPW 2013-2014) which
further led to the preparation of the water component within the “Water and Energy Sector
Action Plan 2013-17”.
In its Action Plan for the Water and Sanitation Component, the Government has set out its main
objectives to be achieved by 2017 and these include: (a) expansion of access levels (water and
sanitation) to up to 100% in urban areas and 80% in rural areas; (b) build a system of network for
monitoring of water quality across the country; (c) guarantee the construction of small
community water supply and sanitation systems in peri-urban and rural areas; and (d) ensure the
integrated management of water resources.
Financial resources allocated to the sector
The achievement of these objectives will require investment in physical infrastructure as well as
policy and sector reform measures to ensure long term sustainability and contribution of the
sector to the overall economy. In this regard, the Action Plan outlines a total budget of US$ 6
billion.
Despite the slight growth in terms of the national budget in absolute value from 69 billion in
2013 to 74 billion in 2014, the share of the water sector budget declined from 2.1 billion to 1.4
billion. According the authorities the decline is mainly due to the competition in the different
sector for resource allocation and also the decline of the economic growth. The weakening of the
budgetary allocation observed increases vulnerability of the sector in particular the institutional
aspect due to the pressure for resource allocation to complete ongoing physical infrastructure
projects.
The size of projects currently under implementation by the National Directorate of Water is
estimated around US$ 3 billion and of this amount, about 896 million is being invested in the
seven project beneficiary provinces in water and sanitation infrastructure development. The
following table depicts the breakdown of the investment in the provinces.
VII
Existing Commitment by Province21
S. No. Provinces Amount in million US$
Ext. Financers Government External Financing
1 Cabinda 200
2 Cunene 98 105 Spain
3 Lunda norte 6.7 48.1
China
4 Lunda sul 6.4
5 Namibe 100 98.6 China
6 Bengo 29 BPC
7 Cuanza Sul 186 18 AfDB
Total 597.1 298.7 895.8
Country’s fiscal outlook and debt sustainability
According to IMF projections, economic growth is projected to decline from 5.9% in 2013 to
3.9% in 2014, mainly due to a temporary decline in oil output and a deceleration in agriculture
sector growth. The overall fiscal balance, in surplus in the last four years, is expected to
deteriorate substantially in 2014, reaching a yearly deficit of around 4% of GDP on average
between 2014 and 2019. After reaching a historic maximum level of USD36.1 billion in
September 2013, gross international reserves declined to USD31.4 billion at end-June 2014. The
falling oil commodity prices are expected to drive further decline on the country’s current
account from 5.5% in 2013 to less than 2% in 2015. This will constraint the government’s ability
to mobilize resources to fund large infrastructure projects. Given the budgetary constraints facing
the country, most of its public expenditures have been redirected to infrastructure projects. This
project is a critical step towards sustainability and reforming the sector to improve service
delivery.
In the medium-term, Angola’s oil revenues (as a share of GDP) are expected to decline while
there is high demand for increased spending on infrastructure and poverty alleviation. This
leaves the country in a challenging fiscal position characterized by large fiscal deficits over the
medium term, leading to increasing gross financing needs and rising public debt-to-GDP ratios.
Despite the challenging fiscal and external sector outlook, Angola’s external debt position
appears sustainable, although it is expected to increase from 22% of GDP in 2013 to 37% of
GDP in 2019. Moreover, total public debt is also expected to rise from 34.6% in 2014 to 45.6%
by 2019.
Table 1: Angola’s debt sustainability indicators
Description
20
10
20
11
20
12
20
13
20
14
External debt* 17.9 21.1 22.7 27.4 32.9
Domestic debt* 15.0 12.5 11.4 15.5 15.3
Total Public Debt-to-GDP (%) 39.8 32.2 29.6 34.6 36.6
External debt-to-exports (%) 35.3 31.0 31.8 39.6 48.6
Debt service as % of exports 9,6 2,4 8,5 4,4 6.5 Source : IMF Staff estimates, Present value, * : billion USD
21
The source is the DNA list of investment projects under execution (2014)
VIII
Conclusion
The GOA has demonstrated its commitment through its development program and spending in
critical sectors such as infrastructure development in water and sanitation. However investment
in physical infrastructure is not a sufficient condition for improved and sustainable service
delivery. There is need for greater need for support in institutional strengthening and
professionalizing service delivery which this project seeks to achieve. The commitment of the
Government is evidenced as depicted in the figures above and the overall National Development
Program. Owing to the importance of the project, current commitment levels and constraints in
the national budget and future outlook, the project seeks a waiver from the Policy on Expenditure
for Bank Group Financing requiring at least 50% counterpart contribution by the Government in
line with the provision of the Paragraph 4.2.2 and the project be allowed with ADB financing of
80% of the project cost while the remaining 20% is covered by the GOA. Looking at the broader
investment in the sector in the project provinces, Government contribution will stand at 60%
while the balance is covered through external financing.
