PROJECT INFORMATION DOCUMENT (PID)
APPRAISAL STAGE
Report No.: AB4161
Project Name
/ Yemen-Water Sector SupportRegion / MIDDLE EAST AND NORTH AFRICA
Sector / Irrigation and drainage (40%);General water, sanitation and flood protection sector (30%);Water supply (30%)
Project ID / P107037
Borrower(s) / GOVERNMENT OF YEMEN
Government of Yemen
Yemen, Republic of
Implementing Agency
Ministry of Water and Environment
Hadda Street
Sana'a
Yemen, Republic of
Tel: 418291
Environment Category / [X] A [ ] B [ ] C [ ] FI [ ] TBD (to be determined)
Date PID Prepared / December 1, 2008
Date of Appraisal Authorization / October 23, 2008
Date of Board Approval / February 17, 2009
1. Country and Sector Background
Yemen is populous, agricultural and water scarce. There have been dramatic socio-economic and political changes over the last three decades. Yemen is the Arabian peninsula’s second-most populous country, with a total population of 21.7 million. At 3.0% a year, Yemen’s population growth rate remains among the world’s highest, placing increasing demands on basic services, public utilities, housing, natural resources and job opportunities. The population has moved from a largely subsistence agricultural economy towards a mixed, market-oriented economy. The country has evolved towards a new hybrid governance system which has integrated traditional governance structures into the apparatus of a modern state. Decentralization, participation and partnerships with the private sector are essential to increase the role of civil society and of markets.
By world standards, Yemen is a country poorly endowed with water resources. Historically, Yemenis have been adept at managing their water sustainably but now use far outstrips renewable supply. Water shortages are now an increasing constraint to development and poverty reduction. There are essentially two major problems. First, groundwater is running out, and the large part of the rural economy dependent on the groundwater resource is consequently under threat. Second, Yemeni settlements are quite poorly provided with safe water and sanitation services Government has been aware of these reform challenges for a number of years, and has over the last fifteen years has taken some significant institutional steps. These institutional developments were complemented by economic measures, notably progressive increases in energy prices, the opening up of Yemen’s border to most agricultural trade, and extensive subsidy to improve performance in the sector, notably to urban and rural water supply and to water saving in agriculture. By the end of the 1990s, it was apparent that these measures were inadequate to deal with the situation. In 2002/3, Government determined that the time was right for a new strategic focus. The Ministry of Water and Environment (MWE) initiated a multi-stakeholder participatory process of preparing a consolidated strategy, action plan and investment program for the water sector as a whole – the National Water Sector Strategy and Investment Program 2005-9 (NWSSIP). NWSSIP was validated in a series of workshops and adopted and published by government in 2004. Overall, the NWSSIP process has brought some significant advantages to water sector management: (1) a common framework for planning, financing, implementation and monitoring; (2) a point of reference and a forum for stakeholders to maintain continuous dialogue through the Joint Annual Reviews (JARs); (3) a basis for an integrated inter-sectoral approach to water resources management; and (4) benchmarks to measure performance. However, experience showed that some improvements were needed. An increasing gap emerged between the investment program and actual spending. The action plan was not time bound and lacked clear performance and outcome indicators. Perhaps most importantly, the vital irrigation sector – and irrigation institutions – were not well integrated into NWSSIP.
2. Objectives
The Water Sector Support Project (WSSP) is designed as a contribution to the National Water Sector Strategy and Investment Program (NWSSIP) adopted by the Government of Yemen (GOY). The project development objective (PDO) is to support implementation of the NWSSIP and thereby achieve the NWSSIP goal of improving the Yemeni population’s sustainable and economically efficient use of the nation’s scarce water resources. This overall objective will be achieved through five intermediate objectives:
(a) strengthen institutions for sustainable water resources management;
(b) improve community-based water resource management;
(c) increase access to water supply and sanitation services;
(d) increase returns to water use in agriculture; and
(e) stabilize and then reduce groundwater abstraction for agricultural use in critical water basins.
Emphasis is put, not only on the safety of water supply services, but also on sustainability, affordability and equitable access. This will be achieved through a Sector-Wide Approach (SWAp) aligned behind NWSSIP.
3. Rationale for Bank Involvement
During the preparation of NWSSIP in 2003/4, government and donors agreed to explore the scope for adopting a Sector Wide Approach (SWAp) in Yemen. The Bank was asked to help assess the potential relevance and scope of a SWAp in the sector. The report “A Sector Wide Approach in Yemen’s Water Sector: Assessment of Readiness and Opportunities” (World Bank, December 2005) concluded that a SWAp approach was feasible but that different approaches were needed for different sub-sectors. In principle, government and donors have committed themselves to develop a SWAp for the water sector in Yemen, on the basis of NWSSIP. Government considers that SWAp should increase absorptive capacity and improve performance, and form the basis for government and donor commitment to increase levels of financing in support of NWSSIP. Government also anticipates that a SWAp approach will reduce both managerial and financial transaction costs. For the World Bank/IDA and for Germany, the Netherlands and the UK, who together make up the Donor Core Group, the main reason for endorsing a move to SWAp is to increase the momentum of sector reforms and development in a more integrated way within the NWSSIP framework. Donors also expect that a SWAp approach, relying more on national systems with appropriate improvements in transparent instruments and accountability, will help resolve the key governance issues affecting the water sector.
4. Description
The program is designed as a contribution to the NWSSIP Update, and it’s main objectives will be achieved through a sector-wide approach aligned behind NWSSIP. Following the key policy recommendations arrived at in two Poverty and Social Impact Analysis (PSIA, 2007 and 2008), the WSSP will aim to create community-based and cooperative rather than controlling management approaches, scale up public sector involvement, reform incentive structures, enhance equity in irrigation improvement programs, increase investments in low cost rural water supply, expand urban water supply networks in collaboration with private providers, and capacity development. The WSSP consists of the following components:
Component 1: Water Resources Management (US$ 38 million): WSSP would contribute US$38.0 million (IDA share US$ 4.0 million) through pooled financing and coordinated in-kind support of the NWSSIP integrated water resources management (IWRM) program 2009-2014, to be implemented by National Water Resources Authority (NWRA). The component would build on the NWRA decentralization and institutional support provided since 1996 through Bank, Netherlands, Germany, and UNDP-funded projects. As funds would be allocated in line with agreed annual plans, a detailed Annual Operating Plan for the first year of WSSP will be in place before effectiveness.
Component 2: Urban Water Supply and Sanitation (US$ 86.5 million): WSSP would contribute US$ 86.5 million (IDA share US$ 18.1 million) of pooled financing to Ministry of Water and Environment (MWE), Local Corporations (LCs) and Autonomous Utilities (AUs), and to private providers, including NGOs to implement the NWSSIP urban water and sanitation program 2009-2014. In addition to financing physical investment in system rehabilitation and expansion, the component is designed to support the development of efficient and autonomous utilities by helping to build the technical, administrative and financial capacity of the LCs and AUs, together with the enabling and regulatory framework. The component would build on and complete the urban sector reform program that has been underway since 1997, which has been supported by Germany and IDA. The beneficiaries would be the residents of cities who would benefit from: (a) improved quality and reliability of service and (b) increase in affordable and sustainable water supply and sanitation coverage.
Component 3: Rural Water Supply and Sanitation (US$ 173.9 million): WSSP would contribute US$173.9 million (IDA share US$ 15.4 million) of pooled funding to financing of the NWSSIP rural water and sanitation program 2009-2014, to be implemented by the General Authority for Rural Water Supply Projects (GARWSP). In line with the NWSSIP objectives, the component would increase access to sustainable and affordable rural water and sanitation services by ensuring that agencies operating in the sub-sector deliver efficient, least cost projects on a demand-driven basis. Although WSSP financing would be provided only to GARWSP, strengthened cooperation between GARWSP and other key partners such as the Social Fund for Development (SFD) and the Public World Project (PWP) would be supported within the NWSSIP framework.
Component 4: Irrigation (US$ 74.9 million): WSSP would contribute US$74.9 million (IDA share US$ 51 million) through pooled financing of the NWSSIP irrigation program 2009-2014, to be implemented by the Ministry of Agriculture and Irrigation (MAI) through the National Irrigation Program (NIP) and associated agencies and programs. In line with NWSSIP objectives, this component would improve (or at least sustain) farmers’ livelihoods while ensuring resource sustainability both in quantity and quality by supporting NWSSIP policies and programs for: (a) modern (conveyance and localized) water-saving irrigation technologies and farming practices; (b) multi-purpose (diversion) works for harvesting spate water (for irrigation, rural water supply, flood protection, and for recharging groundwater and “conjunctive use”) (b) institutional development and empowerment of water-user organizations to manage their own resource locally within basin and local/district level plans; and (c) establishment of the NIP and expansion of the Irrigation Advisory Service (IAS). The NWSSIP approach builds on the experiences gained from IDA-supported projects which introduced the concepts of participatory irrigation management (PIM), “more crop per drop” (i.e., agronomic advisory) or “less drop per crop” (i.e., irrigation advisory), and conjunctive use of surface and groundwater. In order to maximize the impact on the water balance and on livelihoods, investments (particularly for areas irrigated on groundwater) would be targeted to geographical priority areas, giving priority to: (i) areas where agricultural use competes with water supply wells, (ii) areas where losses from open channels plus from irrigated fields are less likely to be recaptured (per the recommendations of the NWRA-sponsored Groundwater Incentives Study); (iii) areas of pronounced poverty; and (iv) areas where WUAs have already been formed and empowered.
Component 5: Institutional Strengthening and Capacity Development (US$ 7.7 million): WSSP would contribute US$ 7.7 million (IDA share US$ 1.5 million) to the pooled financing of the NWSSIP institutional strengthening and capacity development program 2009-2014, to be implemented by all participating water sector agencies and programs. The component will address the need for improved institutional capacity of implementing agencies to develop policy, plans and budgets, and to regulate the water sector, as well as the need for improved institutional capacity for planning and implementation at basin, governorate and district levels. WSSP support would be structured to be as flexible as possible through a set of seven “windows” or facilities: (i) support to program management; (ii) a capacity development facility; (iii) a facility to support subsector planning and evaluation; (iv) a project preparation and evaluation facility; (vi) support to the Anti-Corruption Action Plan (ACAP); (vii) support to communication programs; and (viii) a human resources development/training facility.
Monitoring and evaluation arrangements for WSSP will form a sub-set of the arrangements for NWSSIP as a whole. For NWSSIP and WSSP M&E, the Ministry of Water and Environment (MWE) has established an M&E Unit reporting directly to the Deputy Minister (Water). Data collection is based on a participatory approach, where sub-sector groups and representatives are responsible for M&E functions for their respective sub-sector. Staff at each level are responsible for M&E. WSSP’s institutional strengthening and capacity building component will provide needed training and technical support. The findings of the M&E system for both NWSSIP and WSSP will be distributed and used through: (i) regular (quarterly) reports; (ii) participatory M&E workshops (at least annually, in connection with the Joint Annual Review (JAR) preparation) to evaluate results with all stakeholder groups; (iii) an annual status report covering all aspects of the sector (the “JAR Report”); and (iv) the JAR conducted at national level among government, civil society, external partners, and other stakeholders.
5. Financing
Source: / ($m.)BORROWER/RECIPIENT / 141.1
IDA Grant / 90.0
UK: British Department for International Development (DFID) / 30.9
GERMANY: KREDITANSTALT FUR WIEDERAUFBAU (KFW) / 60.7
NETHERLANDS: Min. of Foreign Affairs / Min. of Dev. Coop. / 58.3
Total / 381
6. Implementation
IDA financing of WSSP would be through a Specific Investment Grant (SIG) for pooled financing (for GARWSP, NWRA and MAI/NIP) and through pooled financing with regular project disbursement procedures for the urban sector. The size of the IDA Credit will be approximately $90 million to be disbursed over five years 2009-2014. German financing is expected to be through pooled funds with regular project disbursement procedures. GTZ assistance will be fully coordinated within the WSSP, but will not be monetized and will not form part of the pool funding. Netherlands and UK financing is expected to be pooled financing for targeted budget support.
Oversight arrangements for NWSSIP/WSSP have been discussed during preparation. They will be finalized at appraisal and included in the Memorandum of Understanding (MoU) between development partners and the Government. Because of the inter-sectoral and inter-institutional nature of the water sector, overall program coordination of NWSSIP and WSSP will be provided under the aegis of the Inter-Ministerial Steering Committee (IMSC) its Executive Secretariat, supported by the Monitoring and Evaluation Unit. Support to the Executive Secretariat will be provided through short-term international and local consultants and with logistical support financed from Component 5 of WSSP (Institutional Development and Capacity Building). The Executive Secretariat will:
§ review the Annual Operating Plans for NWSSIP/WSSP and consolidate them into an overall NWSSIP/WSSP Plan. This would be done in collaboration with MOPIC and MOF;