Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD2715 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON PROPOSED CREDITS AND GRANTS TO FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA IN THE AMOUNT OF SDR 107.2 MILLION (US$75 MILLION EQUIVALENT CREDIT & US$75 MILLION EQUIVALENT GRANT) REPUBLIC OF KENYA IN THE AMOUNT OF EUR 51.5 MILLION (US$60 MILLION EQUIVALENT CREDIT) UNITED REPUBLIC OF TANZANIA IN THE AMOUNT OF SDR 53.6 MILLION (US$75 MILLION EQUIVALENT CREDIT) INTER-UNIVERSITY COUNCIL FOR EAST AFRICA IN THE AMOUNT OF SDR 5.8 MILLION (US$8 MILLION EQUIVALENT GRANT) FOR AN EAST AFRICA SKILLS FOR TRANSFORMATION AND REGIONAL INTEGRATION PROJECT (EASTRIP) October 9, 2018 Education Global Practice Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective August 31, 2018) Currency Unit = United States Dollars (US$) Ethiopian Birr (ETB) 27.53 = US$1 Kenya Shillings (KES) 100.90 = US$1 Tanzania Shillings (TZS) 2,275.00 = US$1 Ugandan Shillings (UGX) 3,880.03 = US$1 US$0.71 = SDR 1 US$1.16 = Euro 1 FISCAL YEAR Ethiopia: July 8–July 7 Kenya: July 1–June 30 Tanzania: July 1–June 30 Uganda: July 1–June 30 ABBREVIATIONS AND ACRONYMS ACE Africa Center of Excellence AGOA African Growth Opportunity Act ARGeo African Rift Geothermal Development Facility Program ASEAN Association of Southeast Asian Nations ATC Arusha Technical College BoFED Bureau of Finance and Economic Development BOT Bank of Tanzania CDACC Curriculum Development Assessment and Certification Council COMESA Common Market for Eastern and Southern Africa CPF Country Partnership Framework CWPF China World Bank Group Partnership Facility DA Designated Account DIT Dar es Salaam Institute of Technology DLI Disbursement-linked Indicator DLR Disbursement-linked Result EAC East African Community EAPP Eastern Africa Power Pool EAQFHE East African Qualifications Framework for Higher Education EASTRIP East Africa Skills for Transformation and Regional Integration Project ECOWAS Economic Community of West African States EEP Eligible Expenditure Program ERC Ethiopian Railway Corporation ESIA Environmental Social Impact Assessment ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan ESPJ Education and Skills for Productive Jobs FDI Foreign Direct Investment FM Financial Management GDP Gross Domestic Product GTP Growth and Transformation Plan IAIP Integrated Agro-Industrial Park IATA International Air Transport Association ICT Information and Communication Technology IFMIS Integrated Financial Management Information System IFR Interim Financial Report IPF Invest Project Financing IRENA International Renewable Energy Agency IRI Intermediate Results Indicator IRR Internal Rate of Return IUCEA Inter-University Council for East Africa IVA Independent Verification Agency JICA Japan International Cooperation Agency KenGen Kenya Electricity Generating Company KIHBT Kenya Institute of Highway and Building Technology KWPF Korea World Bank Group Partnership Facility LAPSSET Lamu Port-South Sudan-Ethiopia-Transport MoE Ministry of Education MoEST Ministry of Education, Science and Technology MoFEC Ministry of Finance and Economic Cooperation M&E Monitoring and Evaluation MoU Memorandum of Understanding NACTE National Council for Technical Education NCIP Northern Corridor Integration Project NIT National Institute of Transport NPCU National Project Coordination Unit NPV Net Present Value NSC National Steering Committee PASET Partnership for Skills in Applied Sciences, Engineering, and Technology PCU Project Coordination Unit PDO Project Development Objective PFM Public Financial Management PIM Project Implementation Manual PIU Project Implementation Unit PMU Procurement Management Unit PPA Project Preparation Advance RBF Results-based Financing REC Regional Economic Community RFU Regional Facilitation Unit PPSD Project Procurement Strategy for Development RSC Regional Steering Committee SADC Southern Africa Development Community SBD Standard Bidding Document SCD Systematic Country Diagnostic SIP Strategic Investment Plan SMEs Small and Medium-Sized Enterprises STEM Science, Technology, Engineering, and Mathematics TAB Technical Advisory Board TCU Tanzania Commission for Universities TVET Technical and Vocational Education and Training UNEP United Nations Environment Programme VETA Vocational Education and Training Authority Regional Vice President: Hafez M.H. Ghanem Country Director: Paul Noumba Um Senior Global Practice Director: Jaime Saavedra Chanduvi Practice Manager: Sajitha Bashir Task Team Leader(s): Xiaoyan Liang, Girma Woldetsadik, Ruth Charo The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) BASIC INFORMATION BASIC_INFO_TABLE Country(ies) Project Name Eastern Africa, Ethiopia, Kenya, East Africa Skills for Transformation and Regional Integration Project (EASTRIP) Tanzania Project ID Financing Instrument Environmental Assessment Category Investment Project P163399 B-Partial Assessment Financing Financing & Implementation Modalities [ ] Multiphase Programmatic Approach (MPA) [ ] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [ ] Fragile State(s) [✓] Disbursement-linked Indicators (DLIs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster [ ] Alternate Procurement Arrangements (APA) Expected Approval Date Expected Closing Date 30-Oct-2018 31-Dec-2024 Bank/IFC Collaboration No Proposed Development Objective(s) To increase the access and improve the quality of TVET programs in selected Regional Flagship TVET Institutes and to support regional integration in East Africa. Components Page 1 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Component Name Cost (US$, millions) Strengthening selected Regional Flagship TVET Institutes for high quality skills 246.00 development in priority sectors Creating national TVET enabling environment 39.00 Enhancing regional collaboration in TVET and project coordination 8.00 Organizations Borrower: Ministry of Finance and Economic Cooperation, Ethiopia Ministry of Finance and Planning, Tanzania The National Treasury, Kenya Implementing Agency: Ministry of Education, Ethiopia Inter-University Council for East Africa, Uganda Ministry of Education, Science and Technology, Kenya Ministry of Education, Science and Technology, Tanzania PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 293.00 Total Financing 293.00 of which IBRD/IDA 293.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Development Association (IDA) 293.00 IDA Credit 210.00 IDA Grant 83.00 IDA Resources (in US$, Millions) Credit Amount Grant Amount Total Amount Ethiopia 75.00 75.00 150.00 Page 2 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) National PBA 25.00 25.00 50.00 Regional 50.00 50.00 100.00 Kenya 60.00 0.00 60.00 National PBA 20.00 0.00 20.00 Regional 40.00 0.00 40.00 Tanzania 75.00 0.00 75.00 National PBA 25.00 0.00 25.00 Regional 50.00 0.00 50.00 Eastern Africa 0.00 8.00 8.00 Regional 0.00 8.00 8.00 Total 210.00 83.00 293.00 Expected Disbursements (in US$, Millions) WB Fiscal Year 2019 2020 2021 2022 2023 2024 Annual 48.00 55.00 55.00 55.00 55.00 25.00 Cumulative 48.00 103.00 158.00 213.00 268.00 293.00 INSTITUTIONAL DATA Practice Area (Lead) Contributing Practice Areas Education Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks Gender Tag Does the project plan to undertake any of the following? a. Analysis to identify Project-relevant gaps between males and females, especially in light of Yes country gaps identified through SCD and CPF Page 3 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or Yes men's empowerment c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating 1. Political and Governance  Substantial 2. Macroeconomic  Moderate 3. Sector Strategies and Policies  Moderate 4. Technical Design of Project or Program  Moderate 5. Institutional Capacity for Implementation and Sustainability  Substantial 6. Fiduciary  Substantial 7. Environment and Social  Moderate 8. Stakeholders  Moderate 9. Other  Moderate 10. Overall  Substantial COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [✓] No Does the project require any waivers of Bank policies? [ ] Yes [✓] No Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 ✔ Performance Standards for Private Sector Activities OP/BP 4.03 ✔ Natural Habitats OP/BP 4.04 ✔ Page 4 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Forests OP/BP 4.36 ✔ Pest Management OP 4.09 ✔ Physical Cultural Resources OP/BP 4.11 ✔ Indigenous Peoples OP/BP 4.10 ✔ Involuntary Resettlement OP/BP 4.12 ✔ Safety of Dams OP/BP 4.37 ✔ Projects on International Waterways OP/BP 7.50 ✔ Projects in Disputed Areas OP/BP 7.60 ✔ Legal Covenants Sections and Description Ethiopia, Kenya and Tanzania: Section I.A.3(c) of Schedule 2 to each country Financing Agreement 1. The Recipient shall, not later than forty-five (45) days after the Effective Date, ensure that the respective RFTIs have, in form and substance satisfactory to the Association: (i) established respective project implementation units with appropriate terms of reference and mandate; and (ii) adequate staff with qualifications, terms of reference and experience, acceptable to the Association. Sections and Description Ethiopia, Kenya and Tanzania: Section I.B.1 of Schedule 2 to Financing Agreement 1. The Recipient shall, not later than May 15 for Ethiopia and August 31 for Kenya and Tanzania, in each calendar year during Project implementation, prepare, in cooperation with the pertinent RFTIs and furnish to the Association, a program of activities proposed for inclusion in the Project during the following fiscal year (Annual Work Plan), including: (a) a detailed timetable and budget for the sequencing and implementation of said activities; and (b) the types of expenditures required for such activities. Conditions Type Description Effectiveness Effectiveness: Tanzania and Ethiopia: Section 5.01 (a) and (b) of the two countries Agreements 1. The respective Performance and Funding Agreements, including respective Strategic Investment Plans, have been executed in form and substance satisfactory to the Association, on behalf of the Recipient and the respective RFTIs. 2. The Recipient has prepared and adopted, or caused to be prepared and adopted, a Page 5 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Project Operations Manual, in form and substance satisfactory to the Association. Kenya: Section 5.01 of the Kenya Agreement 1. The respective Performance and Funding Agreements, including respective Strategic Investment Plans, have been executed in form and substance satisfactory to the Association, on behalf of the Recipient and the respective RFTIs. IUCEA: Section 5.01 of the IUCEA Agreement 1. The Recipient has adopted the Project Implementation Manual, in form and substance satisfactory to the Association. Type Description Disbursement Ethiopia and Kenya and Tanzania: Section III.B.1(b) of Schedule 2 to each country Agreement 1. No withdrawal shall be made for any DLI or DLR unless the Association has received from the Recipient or the Independent Verifiers, the EEP Spending Reports confirming that the DLI and DLR have been achieved and containing a proposal for disbursement under each Withdrawal. Page 6 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) EASTERN AFRICA EAST AFRICA SKILLS FOR TRANSFORMATION AND REGIONAL INTEGRATION PROJECT (EASTRIP) TABLE OF CONTENTS I. STRATEGIC CONTEXT ...................................................................................................... 9 A. Region and Country Context .............................................................................................. 9 B. Sectoral and Institutional Context ................................................................................... 13 C. Higher Level Objectives to which the Project Contributes ............................................. 16 II. PROJECT DEVELOPMENT OBJECTIVES ............................................................................ 17 A. PDO ................................................................................................................................... 17 B. Project Beneficiaries ......................................................................................................... 17 C. PDO-Level Results Indicators ........................................................................................... 19 D. Results Chain .................................................................................................................... 19 III. PROJECT DESCRIPTION.................................................................................................. 23 A. Project Components ......................................................................................................... 23 B. Project Cost and Financing ............................................................................................... 26 C. Lessons Learned and Reflected in the Project Design ..................................................... 27 IV. IMPLEMENTATION........................................................................................................ 29 A. Institutional and Implementation Arrangements ........................................................... 29 B. Results Monitoring and Evaluation ................................................................................. 31 C. Sustainability .................................................................................................................... 32 D. Role of Partners ................................................................................................................ 33 V. KEY RISKS ..................................................................................................................... 33 A. Overall Risk Rating and Explanation of Key Risks ........................................................... 33 VI. APPRAISAL SUMMARY .................................................................................................. 34 A. Economic and Financial Analysis ..................................................................................... 34 B. Technical ........................................................................................................................... 35 C. Financial Management ..................................................................................................... 36 D. Procurement ..................................................................................................................... 37 E. Social and Environment (including Safeguards) .............................................................. 38 F. World Bank Grievance Redress ........................................................................................ 38 Page 7 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) VII. RESULTS FRAMEWORK AND MONITORING .................................................................... 40 ANNEX 1: DETAILED PROJECT DESCRIPTION ......................................................................... 93 ANNEX 2: IMPLEMENTATION ARRANGEMENTS .................................................................. 100 ANNEX 3: IMPLEMENTATION SUPPORT PLAN .................................................................... 135 ANNEX 4: ECONOMIC AND FINANCIAL ANALYSIS ............................................................... 137 ANNEX 5: COUNTRY-SPECIFIC PROJECT DESCRIPTION......................................................... 147 Page 8 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) I. STRATEGIC CONTEXT A. Region and Country Context 1. Sub-Saharan Africa experienced solid growth over the last 15 years. Gross domestic product (GDP) grew at an annual rate of 3.6 percent in 2000 and reached 5.4 percent in 2010. The growth rate, however, fell to 3.1 percent in 2015 and dropped further to 1.3 percent in 2016. A sharp decline in commodity prices accounted for much of the decline, placing several of the region’s larger countries under severe strain. Additionally, a few countries in the region experienced severe drought caused by El Nino that prompted a decline in agricultural production and cutbacks in hydroelectric generation. The Global Economic Prospects predicted a modest recovery in the region with economic growth estimated at 3.1 percent in 2018 to increase to an average of 3.6 percent in 2019–20. Countries including Ethiopia, Kenya, and Tanzania, however, have sustained relatively high economic growth over the last decade, averaging 10 percent for Ethiopia, 6 percent a year for Tanzania and 5 percent for Kenya.1 2. Sub-Saharan Africa faces serious challenges in maintaining sustainable and inclusive economic growth. These challenges include limited diversification in the economic structure that makes the economy vulnerable to price fluctuations in primary agriculture and oil and gas products. The recent slowdown serves as another reminder of the importance and urgency of economic diversification in Africa. Industrial GDP remains very low across Africa and the structure of manufactured exports is still resource- based and low-technology.2 Traditional agriculture and the provision of services tend to dominate the structure of African economies. Low productivity further impedes the industrial transformation. 3. African countries, with support from the international community, have shown strong commitments to transforming the continent through industrialization. African leaders have taken major initiatives. Ethiopia’s Growth and Transformation Plan (GTP) Phase II, Kenya’s Medium-Term Development Plan 2013–2018, and Tanzania’s National Five-Year Development Plan 2016/17–2020/21 under the Tanzania Development Vision 2025 are examples of such initiatives. Kenya’s Big Four Action Plan includes (a) enhancing manufacturing to 20 percent GDP by 2022, (b) 100 percent food security, (c) universal health coverage, and (d) affordable housing. The 2008 Africa Union Summit adopted the theme, ‘the industrialization of Africa’, which endorsed and adopted a plan of action for accelerating industrial development in Africa. In September 2016, the G20 Summit pledged support to the Africa industrialization Action Plan. 4. Regional integration is part of the development and transformation strategy for Africa. The small, sparsely populated, fragmented, and often isolated economies across Africa make a compelling case for these economies to integrate regionally to create larger markets, reduce barriers to trade and mobility of labor, and accelerate economic growth and poverty reduction. The continent registers the lowest percentage of trade within the region worldwide—a mere 12 percent of total exports take place within Africa, compared with 25 percent in the Association of Southeast Asian Nations (ASEAN) and over 60 percent in the European Union. Regional integration has been an important development agenda for Africa since independence. The East African Community (EAC) embraces broad strategic regional integration goals of customs union, common market, monetary union, and political federation. The 1 World Development Indicators. 2018 2 Africa Development Bank. 2018. Industrialize Africa. Page 9 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) regional integration agenda was featured prominently in the African Union’s Agenda 2063 with an aspiration of being an ‘integrated continent with free movement of people, goods, capital, and services and infrastructure to promote integration’. The World Bank’s new Africa Regional Integration Strategy further espouses regional integration as a key strategy for support to Africa. 5. Regional economic corridors and sector markets are strategic pathways that can attract foreign investment and unlock growth potential. African countries have rolled out several initiatives, including the Northern Corridor Integration Project (NCIP) and the Central Transport Corridor Project. Simultaneously, integration of the commodity market is critical for smoother and faster trade flows and cost reduction, thereby creating employment, industrial links, economic diversification, and structural transformation. Some sectors may provide opportunities to develop regional markets and value chain: regional power pools, digital and telecom markets, aviation markets, financial services, agriculture products, and the market for skilled labor. 6. The NCIP seeks to open markets and support trade by providing a transportation gateway through Kenya to landlocked countries like Ethiopia, Rwanda, Uganda, and South Sudan. The concept of the NCIP was adopted in 2004 by Africa heads of states to promote regional cooperation in trade, monetary policies, energy, transport, tourism, culture, environment, information and communication technologies (ICTs), and in telecommunications, with an emphasis on railways, oil pipelines, submarine cables, and optic fiber network connections. Key NCIPs include the construction of the Standard Gauge Railway, regional power trade, the strengthening of a single customs territory, and collaboration of infrastructure technology, including regional mobile financial services, and the implementation of the One Network Area. 7. The Central Corridor Transit Transport Facilitation Agency forms the mainstay of the regional transportation system for import and export of goods and transport of passengers. It was established in 2006 to connect Tanzania, Burundi, Rwanda, Uganda, and the eastern part of the Democratic Republic of Congo through roadways, rail, and inland waterways. Key programs include transport policy and planning, customs and trade facilitation, infrastructure development, logistics and transit facilitation, and communications and advocacy. 8. The ongoing economic transformation and regional integration initiatives in Sub-Saharan Africa is boosting the demand for educated and skilled labor. Montenegro and Patrinos (2014)3 observed in a global comparative study of the returns to education, that the five economies with the highest returns are all from Africa: Rwanda, South Africa, Ethiopia, Namibia, and Burundi. There is a large gap in the demand and supply of skills in Africa. Low levels and quality of education and training impedes the productivity of the African labor force and perpetuates the vicious cycle of low economic growth, low diversification, and low education development. While significant gains have been made in access to secondary education, only 36 percent of qualified students are enrolled. In higher education, only 6 percent of the eligible age group are enrolled compared with the global average of 25 percent.4 Among 3 Montenegro, C., and H. Patrinos. 2014. “Comparable Estimates of Returns to Schooling Around the World.” https://openknowledge.worldbank.org/bitstream/handle/10986/20340/WPS7020.pdf?sequence=1&isAllowed=y. 4 The Africa-America Institute. 2015. State of Education in Africa Report 2015. New York, NY. http://www.aaionline.org/wp- content/uploads/2015/09/AAI-SOE-report-2015-final.pdf. Page 10 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) those enrolled in higher education, less than 30 percent major in science, health, ICT, and engineering programs. Enrollment in upper secondary vocational education is particularly low at 11.8 percent.5 According to the 2018 World Bank Enterprise Surveys, over 19 percent of the formal firms surveyed in Sub-Saharan Africa identify an inadequately educated workforce as a major constraint, and over 24 percent of all production workers are rated unskilled workers by these firms. And these are likely to be low estimates. 9. Shortage of specialized technical and vocational education and training (TVET) skills is particularly acute in transport, energy, manufacturing, including agro-processing, and ICT and, if not addressed, could seriously dampen the industrialization and integration agenda. A careful mapping of skills needs assessment for the Project sectors provides concrete statistics to illustrate the extent of such skills shortage. For example, the Ethiopian Railway Corporation (ERC) forecasts a demand for 11 technicians per kilometer of railway. Based on different scenarios, the ERC estimates demand for 82,878 railway technical workers just in Ethiopia for 2015–2044. The Ethiopian Ministry of Industry projected the need for about 400,000 skilled workers for textile, leather and garments, and agro-processing alone in the country’s planned industrial parks. Another example is in the energy supply and access which is an integral part of the EAC’s development strategy. The EAC has implemented a regional strategy to scale up access to modern energy services.6 The geothermal potential for the East Africa region exceeds 15,000 MW and represents a US$40 billion investment opportunity. The United Nations Environment Programme (UNEP) (2015) estimates 12,044 professional and technical staff in the geothermal industry against 861 technical staff working in geothermal institutions in the region (table 1). Digital innovation across sectors is generating a large pool of job opportunities in the ICT value chain - increasingly shaping the jobs of the future. Yet, more than 70 percent of Africans still lack access to the internet and digital infrastructures.7 Table 1. Mapping of East Africa Regional Projects and TVET Skill Demand Sector Project and Investments TVET Skill Demand Transport/Infrastructure • NCIP and Central Corridor Initiatives NCIP: 3.4 times workforce • Lamu Port-South Sudan-Ethiopia-Transport required for maritime transport (LAPSSET) Corridor Project; US$24.5 billion and shippingb logistics in 10 investment in infrastructure for major years (4,500 to 15,500) regional railway projects (Addis-Djibouti, LAPSSET: Total employment Tanzania-Burundi-Rwanda)a likely to be generated by the • Standard Gauge Railway of the NCIP port and its related activities estimated to be a US$14.8 billion investment amounts to 200,000 jobs netc Ethiopia: Estimated demand for approximately 83,000 technical workers in the railways in Ethiopia for 2015–2044d Tanzania: TVET skills demand for Central Corridor and transport projects 5 World Bank 2014 data. http://databank.worldbank.org. 6 Deloitte. 2015. Sub-Saharan Africa Power Trends Power Disruption in Africa. https://www2.deloitte.com/za/en/pages/energy- and-resources/articles/sub-saharan-africa-power-trends.html. 7 Africa Development Bank. 2018. Coding for Employment: Developing Africa’s next generation of digitally enabled labor force. Page 11 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Sector Project and Investments TVET Skill Demand Power/ Energy • Eastern Africa Power Pool (EAPP) and other Ethiopia: 8,000 to 11,500 TVET- energy-related regional projects/initiatives. level graduates required by • Geothermal institutions in Africa Rift Valley 2025 just for the Ethiopian System. energy sector • The geothermal potential for the East Africa Geothermal in the region: region exceeds 15,000 MW and represents a Around 3,000 technical staff US$40 billion investment opportunity. required by 2020; • Stiglers Gorge Hydropower, Hoima – Tanga 1,200 professional and technical Gas & Oil pipeline staff required between 2015 and 2030e Manufacturing • Industrial parks/export processing zones, for Ethiopia: 1.5 million job instance, US$1.5 billion investments in agro- opportunities will be created in industrial parks in Ethiopiaf the manufacturing sector by 2025g ICT • According to NCIP skills audit, a wide range of NCIP: Regional demand for ICT ICT skills are required in the region, such as skills expected to increase 3.7 systems engineering, software engineering times over the next 10 years and application developmentb (8,300 to 30,600)b • Central Corridor developers plan to have unified mobile phone tariffs across Central Corridor countries (that is, Tanzania, Rwanda, Burundi, and Democratic Republic of Congo)h Note: a. Railway ACE report. b. NCIP. 2017. Comprehensive Skills Audit Report 2017. c. JPC (Japan Port Consultants). 2011. Study for LAPSSET Corridor Feasibility Study and Lamu Port Master Plan and Detailed Design. d. Strategic Investment Plan (SIP) proposal. e. UNEP (United Nations Environment Programme). 2015. A Skills Audit and Gap Study for the Geothermal Energy Subsector in African Countries. f. UNIDO (United Nations Industrial Development Organization). n.d. Integrated Agro-Industrial Parks in Ethiopia. https://isid.unido.org/files/Ethiopia/Integrated-Agro-Industrial-Parks-in-Ethiopia-booklet.pdf. g. Ethiopia GTP II. h. Central Corridor (2016). Central Corridor Transport Observatory Annual report. 10. Furthermore, the impact of future climate change will be incorporated in the specialized skills training programs. Ethiopia and Tanzania, for instance, have already suffered from extreme precipitation, flooding and drought, and these natural hazards are expected to intensify in the future. In fact, drought is the greatest and most recurring climate risk in Ethiopia, and the magnitude, frequency, and intensity have significantly increased since the 1970s. Drought may affect training in sectors that require water such as textiles and garments and agro-food processing. Page 12 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) B. Sectoral and Institutional Context 11. TVET is gaining momentum in the developing and developed world as a policy priority to increase labor productivity and enable economic transformation. According to the 2018 World Development Report titled ‘Learning to Realize Education's Promise’, TVET can yield wages on par with equivalent levels of general education. In Brazil, workers with upper secondary TVET earn wages about 10 percent higher than those workers with a general secondary education. TVET can be a powerful engine of economic restructuring and transformation, as amply demonstrated in the Republic of Korea, Singapore, and now China, countries where TVET has been explicitly used as an instrument and channel for technology transfer and skills upgrading of workers. TVET is also associated with promoting social inclusiveness and poverty alleviation as it tends to attract students from lower socioeconomic backgrounds who have lower probabilities of reaching higher education. 12. TVET in Africa, however, receives less policy and financial support from governments.8 African countries on average devote only 2 percent to 6 percent of education budgets to TVET, compared to 10 percent to 30 percent to higher education. Inadequate and often inequitable financing mechanisms for TVET undermine access, equity, and efficiency. Secondary TVET enrollment9 in Ethiopia was at 38 percent (2012), and Kenya at less than 2 percent (2009). Female enrollment in technology and engineering fields is especially low. Data on employment after graduation and relevant to the program of study are often scant. TVET institutions do not commonly carry out graduate tracer studies. According to the limited data available, TVET employment rates six months after graduation vary widely from 23 percent in Botswana, 52 percent in South Africa, 55 percent in Zambia, 70 percent in Tanzania10, and 86 percent in Malawi. 13. National TVET systems in Africa have weak linkages with the productive sector, perpetuating skills gap and further impeding growth and development.11 TVET governance, management, and quality assurance tend to be fragmented among various agencies. For example, in Kenya, the TVET and the Post Training and Skills Departments in the Ministry of Education (MoE) both have oversight on training providers. Tanzania has three TVET relevant quality assurance bodies of Vocational Education and Training Authority (VETA), National Council for Technical Education (NACTE), and Tanzania Commission for Universities (TCU) with some different mandates. Countries have also attempted to introduce skills councils, national qualifications frameworks, and labor market information systems to strengthen the linkage with the productive sector and improve the relevance of training programs. However, the lack of adequate finances and contextualized know-how impede design and implementation. Policy and financing instruments are not fully aligned to promote excellence, relevance, and equity objectives at the provider level. A recent World Bank study consolidated the TVET benchmarking results and when comparing Africa with other regions, these weaknesses in the system strategic framework, oversight, and service delivery become more evident.12 A more conducive national TVET environment with streamlined quality 8 TVET traditionally refers to preservice and formal school-based training at secondary and tertiary levels. Increasingly, however, TVET is also being used to refer broadly to include in-service and short-term training taking place in formal as well as workplace settings. The EASTRIP project documents use the term ‘TVET’ to refer primarily to specialized formal diploma and degree TVET programs. 9 World Bank 2014 data, through http://www.factfish.com/country-selection. 10 Graduate tracer study conducted by Vocational Education Training Authority Tanzania. 11 African Union. 2016. African Critical Technical Skills: Key Capacity Dimensions Needed for the First 10 Years of Agenda 2063. 12 World Bank. 2018. The Skills Balancing Act in Sub-Saharan Africa: Investing in Skills for Productivity, Inclusion and Adaptability. Page 13 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) assurance, effective industry linkage, leadership, and advocacy is needed to promote TVET and skills development. 14. African TVET providers are struggling with widespread low funding, shortage of modern training facilities and equipment, lack of industry driven programs with modern curricula and pedagogy, and teachers/trainers with low competency and low pay. Recent assessment of Uganda and Tanzania highlight the following: low quality and relevance of skills development programs; outdated curricula, curricula lacking in attention to soft skills and other 21st century skills; focus on theory over practice, chalk- and-talk type instruction, teachers/trainers without industry-based or in-service training, and poor infrastructure and ill-equipped workshops with nonfunctioning equipment. In Kenya, findings from a training assessment project (2016) implemented by the World Bank in 50 TVET institutions revealed that only 60 percent of the institutions had functional equipment and less than 30 percent of this pool reported having enough equipment for all students. Urgent policy attention, financial, and technical support is needed for capacity building at the grassroots provider level across the African countries. Regional Approach to TVET Development 15. A regional approach to developing the specialized TVET skills can have a number of benefits, including exploiting economies of scale to lower costs of training for individual countries on specialized and industry certified training programs, facilitating mobility of people and skilled labor, promoting peer learning among countries and institutions and sharing good policies and practices, and targeting employment toward regional economic corridors such as the Northern and Central Corridor Initiatives and other mega infrastructure projects in the region. 16. Economies of scale to lower the cost of training for individual countries. Creating a cluster of Regional Flagship TVET Institutes (receiving both national and regional students) serving regional corridors, sector markets, and industrial parks can spread the cost of what would otherwise be costly training investments for each country. Each TVET institute will specialize in specific sectors and occupations with highly specialized TVET diploma and degree as well as industry-recognized training programs. Mobility of students, graduates, and faculty will facilitate a healthy exchange of skilled labor within the region so that each country does not have to produce all the skills at once. The sharing of standards, curricula, and state-of-the-art training facilities will help reduce costs. The ongoing Africa Higher Education Centers of Excellence Projects (ACE I: P126974 and ACE II: P151847) demonstrate that such economy of scale can be achieved. Several ACEs have already reached the 20 percent target of regional enrollment in postgraduate programs. Granted that the TVET sector generally has lower capacity than higher education, it is expected that the more specialized programs, such as those certified by industries can attract national, regional or even international students. Baseline and target data from the selected Regional Flagship TVET Institutes show that at least 7.5 percent of regional enrollment may be achieved. In some industries such as geothermal energy, students are already studying across countries (that is, foreigners are under training at Kenya Electricity Generating Company [KenGen] Geothermal Training Center). 17. People and labor mobility is an important part of Africa’s regional integration agenda. The free movement of people and related rights on entry, residence, and establishment is an essential pillar of the long-term goal of the Abuja Treaty to create a continental free trade area and common market. Movement of people and labor would complement (and foster) mobility of capital—foreign direct Page 14 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) investment (FDI) and domestic business creation—which often requires entrepreneurs and highly skilled managers, professionals and technicians, and skilled crafts and trades workers to move across borders. ADBI, OECD and ILO (2014) points out that international students are an important part of migration movements across countries and drive skilled migrations within and from Asia.13 Parey and Waldinger (2008) investigated the effect of studying abroad on the labor mobility in case of undergraduate students at German universities and confirmed that studying abroad increases the probability of students working abroad by 15 to 20 percent.14 18. Harmonization of standards and mutual recognition of qualifications are critical for the mobility of skilled labor. In ASEAN, the mutual recognition agreements are often used to facilitate the flow of skilled workers, allow workers’ qualifications to be recognized by other ASEAN countries, and permit them to work outside of their home countries (Tan 2017). The European Union Qualification Framework helped reduce the bottleneck of labor movement. The protocols of the free movement of people have been progressing, but the mutual recognition of qualifications in East Africa remains a work in progress. 19. A network of Regional Flagship TVET Institutes can provide a learning and knowledge-sharing platform critical for sustainable TVET development at the national and regional levels. Such benefits are often underestimated. Yet, the experience of the Africa Centers of Excellence (ACEs) clearly demonstrates that ACEs hugely value these opportunities and have effectively used them for joint research and faculty exchanges. For example, semi-annual ACE forums bring together centers within the same sectors of health, agriculture, and industries and this has resulted in concrete partnership agreements. Egerton University of Kenya is developing joint agribusiness training programs with the Nelson Mandela Africa Institute of Science and Technology of Tanzania. The Government of Rwanda learned about the ACE for Aquaculture and Fisheries Science in Malawi and contracted the center to provide technical assistance for a similar project. Compared to higher education, TVET institutes are even more inward looking. A regional approach will broaden the perspective and experience of these institutes. 20. A regional flagship approach can complement existing national skills and TVET programs. Over the last decade, attempts have been made to revamp the TVET systems in Africa, with prominent focus on establishing national TVET legal and regulatory framework, quality assurance, and top-level mechanisms to work with the private sector. On balance, however, it seems that less attention has been devoted to institutional capacity building at the provider level, benchmarked to regional or international standards. A recent training provider assessment in Kenya revealed a general lack of updated training facilities, most instructors with little industry experience, and graduates of these institutions having difficulty finding employment. About half of them find employment with an average monthly income of US$175. A regional flagship approach can complement the national TVET reform program efforts. For example, in Tanzania, the national IDA-financed Education and Skills for Productive Jobs (ESPJ) Program (P152810) supports capacity building for the entire national TVET system and has a broader coverage of beneficiaries ranging from informal to formal providers at different levels. East Africa Skills for Transformation and Regional Integration Project (EASTRIP) can complement the ESPJ by intensive technical and financial support to the four selected Tanzanian TVET institutes, adopting regional industry 13ADBI, OECD and ILO. 2014. Labor Migration, Skills & Student Mobility in Asia. 14Parey, M. and F. Waldinger. 2008. Studying Abroad and the Effect on International Labor Market Mobility: Evidence from the Introduction of ERASMUS, IZA Discussion Paper No. 3430. Page 15 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) standards, and mutual recognition of qualifications that can have spillover effects. Lessons learned from the Regional Flagship TVET Institutes can help inform and guide the broader array of national reforms. 21. Globally, the flagship approach has been used and proven effective in not only serving the short- and medium-term needs of skills development but also in catalyzing broader national reform and injecting dynamism into the system. The Korean government, as recently as 2010, converted a selected number of high schools into Meister Vocational High Schools that partner with companies in specific industries to create educational experiences tailored to the needs of the workforce. Currently, about 20 Meister Vocational High Schools are developing specialized skills jointly with industries. In the early 2000s, to reorient the TVET system to become more demand driven and relevant, the Chinese MoE selected, on a competitive basis, 100 tertiary and 1,000 secondary TVET institutes as national model institutes and provided concentrated financial and technical assistance to revamp them. These model institutes were granted policy and financial space to pioneer various mechanisms in school governance, links with industries, and incentives for instructors to promote relevant TVET programs, which are now being scaled up to all TVET providers, both public and private. Africa has a similar model of centers of excellence. Across Africa, 46 centers were established in postgraduate education and research, and progress has been made in expanding student enrollment in accredited short-term, master, and doctoral programs and in improving quality of teaching and research.15 Several ACEs are already on track to become true centers of excellence with programs meeting global standards. C. Higher Level Objectives to which the Project Contributes 22. By improving the capacity of flagship TVET institutes and expanding the pool of qualified skilled labor in the growing economic sectors, the project will contribute to the high-level objectives of poverty alleviation and economic growth for the participating countries and for the East Africa region. It will also promote regional integration through supporting the regional corridors and sector markets, developing common standards and qualifications, and promoting mobility of students, faculty, and graduates. It is fully aligned with (a) the World Bank’s twin goals of “ending extreme poverty and boosting shared prosperity in a sustainable manner” and (b) the World Bank’s Africa Strategy: to strengthen competitiveness and employment through the production of quality high-skilled human resources in priority growth sectors. The project is also part of the Africa Region’s new Regional Integration Strategy, which emphasizes rebalancing support for ‘hard’ and ‘soft’ infrastructure, addressing barriers to integration in identified priority areas and accelerating private sector leveraging. EASTRIP is aligned with the Country Partnership Frameworks for Ethiopia (FY18–22),16 Tanzania (FY18–22),17 and Kenya (FY14– 18)18 and directly supports strategic focus related to enhancing productivity and accelerating equitable and sustainable growth, boosting human capital and social inclusion, and modernizing and improving efficiency of public institutions. 15 World Bank Project Appraisal Documents (PADs) for Africa Higher Education Centers of Excellence Projects (ACEI and ACEII) 16 Report no. 115135-ET. 17 Report no. 121790-TZ. 18 Report no. 113547-KE. Page 16 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) II. PROJECT DEVELOPMENT OBJECTIVES A. PDO 23. The Project Development Objective (PDO) is to increase the access and improve the quality of TVET programs in selected Regional Flagship TVET Institutes and to support regional integration in East Africa. 24. The project supports the development of highly specialized TVET programs as well as industry- recognized short-term certificate level training. It will train technicians and provide training of teachers/trainers at the certificate, diploma and degree levels, targeting regional priority sectors in transport, energy, manufacturing, and ICT. The PDO will be achieved through complementary interventions at three different levels, including institutes, national, and regional levels. B. Project Beneficiaries 25. Three East African countries will participate in the project, including Ethiopia, Kenya, and Tanzania. The regional flagship TVET institutes were selected through a transparent and competitive two- stage process: (a) a long list of TVET institutes nominated by the Government based on national and regional priorities and (b) a final list of TVET institutes selected based on the recommendation by an independent technical committee. Based on these principles of government nomination and competitive selection, 16 Regional Flagship TVET Institutes were selected from the three participating countries. Table 2 provides the list of the Regional Flagship TVET Institutes along with sector focus and country affiliation. Table 2. Regional Flagship TVET Institutes Selected from Ethiopia, Kenya, and Tanzania Sector Focus Regional Flagship TVET Institute Country Transport/infrastructure Railway Meles Zenawi Memorial TVET Polytechnic College Ethiopia Railway Ethiopia Railway Academy Ethiopia Marine Kenya Coast National Polytechnic Kenya Air National Institute of Transport Tanzania Road Kombolcha TVET Polytechnic College Ethiopia Building Meru National Polytechnic Kenya infrastructure Highway Kenya Institute of Highway and Building Kenya infrastructure Technology Power/energy Power/energy General Wingate Polytechnic College Ethiopia Geothermal KenGen Geothermal Training Center Kenya Hydro Arusha Technical College Tanzania Manufacturing Tool TVET Institute Ethiopia making/leather Textile/garment Hawassa TVET Polytechnic College Ethiopia Textile Kisumu National Polytechnic Kenya Leather DIT Mwanza Campus Tanzania Agro-processing Holeta TVET Polytechnic College Ethiopia ICT ICT DIT Dar es Salaam Campus Tanzania Note: DIT = Dar es Salaam Institute of Technology Page 17 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 26. Some of the flagship TVET institutes specifically contribute to climate change adaptation and mitigation through their focus on renewable energy. For instance, Arusha Technical College in Tanzania intends to establish a flagship TVET institute for renewable energy technologies including hydropower. The institute also intends to build a laboratory to undertake studies in renewable energy resources harvesting and production. This visible new energy lab enhances energy awareness among students to save energy and reduce CO2 emissions. KenGen Geothermal Training Center in Kenya promotes the capacity building in renewable energy to accelerate geothermal, hydro, solar and wind energy development in the region. A range of practical and technical trainings in exploration, utilization and sustainability of renewable energy resources, care and maintenance of production equipment, and other specialized courses related to renewable energy development shall be offered, including a certificate in renewable energy. 27. Overall, the project aims to benefit the following groups of beneficiaries: (a) Students enrolled in selected Regional Flagship TVET Institutes and their partner institutions (non-project TVET institutes) in the country and across the region (b) Employers and targeted industries who will have access to a skilled workforce matched with their needs and standards (c) Faculty and staff from the selected Regional Flagship TVET Institutes whose academic, technical, management, and pedagogical skills will be upgraded and who will function in an improved teaching environment with upgraded facilities and can exchange knowledge and staff with other EASTRIP flagship TVET institutes and countries (d) Students, faculty, and staff in non-project TVET institutes partnering with the selected flagship TVET institutes who will benefit from knowledge sharing in good TVET management, program development, and instructional practices and from sharing of standards, curriculum, and training facilities (e) Public and private TVET institutes within the East Africa region that will have access to a network of specialized trainers, a framework of core curricular competencies, quality assurance standards, and state-of-the-art facilities for up-to-date training of the workforce in priority sectors in the region 28. By the end of the six-year investment period, the 16 flagship institutes will have at least doubled their capacity and can collectively enroll 20,000 students on an annual basis in both long-term and short- term training programs in the targeted disciplines. Cumulatively, the project will have directly benefitted close to 60,000 students. It is also projected that at least 30 percent of the enrollment will be female students. At least 310 staff will benefit from industrial attachment programs and 230 staff will benefit from foreign exchange program at the end of the project. Furthermore, the project will indirectly benefit all students who are enrolled in the flagship institutes due to the improved management, teaching, and infrastructure. Finally, the project will benefit students and faculty who are in non-project TVET institutes that have partnership arrangement with the flagship TVET institutes. Employers in the targeted industries will also benefit from an expanded and more qualified pool of skilled labor. Page 18 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Table 3. EASTRIP Direct Student Beneficiaries (annual) Total Ethiopia Kenya Tanzania Baseline Target Baseline Target Baseline Target Baseline Target Students enrolled (long- 3,201 9,119 997 4,587 772 1,532 1,482 3,000 term programs) Students enrolled 3,770 10,356 1,344 3,336 1,942 4,020 484 3,000 (Short-term programs) 29. In addition to the 16 flagship TVET institutes, the project’s institutional beneficiaries include the ministries of education and national TVET agencies, more specifically, the MoE and Federal TVET Agency in Ethiopia; the Ministry of Education (MoE), TVET Authority, and Curriculum Development Assessment and Certification Council (TVET CDACC) in Kenya; and the Ministry of Education, Science and Technology (MoEST), National Council for Technical Education (NACTE), Vocational Education and Training Authority (VETA), and Tanzania Commission for Universities (TCU) in Tanzania. The Inter-University Council for East Africa (IUCEA), as a regional entity, will also benefit from technical assistance and capacity building embedded in the project. C. PDO-Level Results Indicators 30. The PDO will be measured by the following key PDO-level and intermediate results indicators: (a) PDO Indicator 1: Student enrollment at flagship TVET institutes (by type of program, by gender, and by country of origin) (b) PDO Indicator 2: Graduate employment rates six months after graduation (c) PDO Indicator 3: Number of demand-driven programs developed and accredited by national TVET accreditation agencies or certified by industries (d) PDO Indicator 4: Number of qualifications developed that are bilaterally or regionally recognized (e) PDO Indicator 5: Beneficiary satisfaction (student and sector employer surveys) D. Results Chain 31. Given the above context and motivations, EASTRIP aims to achieve the PDO of ‘increasing the access and improve the quality of TVET programs in selected Regional Flagship TVET Institutes and supporting regional integration in East Africa’, to contribute to realizing higher order outcomes, of ‘promoting regional integration through supporting for the regional corridors and sector markets’. To achieve the PDO, the project will focus on three areas: increasing access to TVET programs, improving quality and relevance of TVET programs, and supporting regional integration. A detailed results chain is presented at the end of this section. 32. To achieve the project outcomes, the project will invest in the expansion of access to TVET programs, with a specific target of at least doubling annual student enrollment, by providing support for Page 19 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) implementing each TVET institutes’ Strategic Investment Plan (SIP) and necessary technical assistance and guidance. 33. The project will also be improving the quality and relevance of TVET programs, measured by the share of graduates who are employed within six months after graduation and the number of demand- driven programs developed that are accredited and/or industry recognized. The project will help increase the likelihood of students’ employment after graduation by providing good quality and relevant training programs to students, training, and exchange opportunities for trainers and management staff in academic, industry, and pedagogy skills areas. The signing of Memoranda of Understanding (MoUs) with industries will help collaboration with industries in curriculum development and industry attachment. At the national level, quality assurance and coordination mechanism will be strengthened by implementing activities in national work plans. To trace graduates, flagship TVET institutes will conduct tracer studies annually. 34. For the project outcome on regional integration, the Project will finance activities through the TVET institute-level SIPs to increase the percentage of regional students enrolled in each TVET institute and encourage faculty exchanges. In addition, the project aims to develop qualifications that are recognized bilaterally or regionally. To help achieve this objective, at the national level, mutual recognition of qualifications with other countries will be agreed, or guidelines on how to facilitate the regional students’ enrollment in EASTRIP will be developed. At the regional level, the project will finance activities to develop regionally harmonized standards and qualifications and to provide a regional platform for knowledge exchange and networking. 35. Assumptions. To achieve the project outcomes, the team identified the following critical assumptions that may affect the achievement of the outcomes: (a) Overall regional integration efforts will continue, and stakeholders’ commitment will remain the same. (b) Job creation by investments in priority sectors and demand for skilled workforces will continue. Private sector/industries will be actively engaged in training program development and training programs to upgrade students’ and trainers’ skills and experiences. (c) Sufficient number of graduates from lower-level education to enter TVET programs will continue, particularly female graduates with sensitization activities for the programs where, traditionally, female participation is low. (d) Governments’ commitment to improve the TVET subsector will continue. The key ministries will be actively involved. The Governments’ funding level to the TVET subsector to remain the same or even increase. The Governments’ budget allocation to the selected flagship TVET institutes will not decrease because IDA funds will be available for those institutes under EASTRIP. (e) Ongoing and planned activities (not funded by EASTRIP) which would affect project implementation at flagship TVET institutes under EASTRIP will go smoothly. For instance, Page 20 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) parallel financing for infrastructure development at the TVET institutes will continue as committed and agreed activities will be completed as planned. (f) Candidates of firms for technical assistance, contractors for civil works, and vendors for equipment will be available. Page 21 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Figure 1. Results Chain Page 22 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) III. PROJECT DESCRIPTION A. Project Components 36. The proposed PDO and results will be achieved through financing and implementation of activities grouped under the following three components (see figure 2). Specific priority sectors include transport, energy, manufacturing including agro-processing, and ICT. Country specific project descriptions are attached in Annex 5. Figure 2. Project Components and Subcomponents COMPONENT 1: COMPONENT 2: COMPONENT 3: Strengthening selected Regional Creating national TVET enabling Enhancing regional collaboration in Flagship TVET Institutes for high- environments TVET and project coordination quality skills development in priority sectors SUBCOMPONENTS SUBCOMPONENTS SUBCOMPONENTS 1. Strengthening governance and 1. Strengthening national TVET 1. Harmonization of standards and management quality assurance and industrial mutual recognition of 2. Institutionalizing industry links partnership qualifications for priority 3. Developing market relevant 2. Capacity building for TVET policy occupations competency-based training development and 2. Facilitating student and staff programs implementation mobility through exchange programs 4. Training of TVET managers and 3. Promoting regional integration 3. Regional project coordination teachers/trainers 4. Facilitating national project and M&E 5. Provision of key training coordination, and M&E facilities and equipment 6. Outreach and support for non- project national TVET institutes Component 1: Strengthening selected Regional Flagship TVET Institutes for high-quality skills development in priority sectors (SDR 174.66 million, US$246 million equivalent) 37. The objectives of this component are to strengthen the capacity of the 16 Regional Flagship TVET Institutes to produce high-quality skills for the regional sector markets in railway, highway, port management, energy, manufacturing, and ICT. Training programs will be developed based on standards and qualifications recognized by the industries operating in the East Africa regional or international markets. Each flagship institute will have a specific specialization with a set of training qualifications and enable students from countries across the East Africa region to join the programs. 38. Transformation of these TVET institutes to become regional flagships that would serve the regional markets and corridors will require action along the following lines: (a) understanding the demand-side skills requirements of the regional markets and identifying specific skills and qualifications the TVET institute will focus on; (b) understanding the capacity gaps in the flagship TVET institute in terms of faculty, curriculum, provision of training facilities, and governance and management; (c) rallying the institutional and national support for the TVET institute for its new role as Regional Flagship TVET Institute; Page 23 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) and (d) developing and implementing a Strategic Investment Plan (SIP) in close collaboration with industries that would ensure the provision of key inputs for the institute’s transformation and delivery of skills.19 39. Thus, the component will finance the development and implementation of institute-specific SIPs. Drawing on international ‘best practices’ of TVET institutional reform, SIP guidelines were developed to promote a virtuous and sustainable cycle of demand-driven TVET program development and implementation, along six interrelated subcomponents: (a) strengthening governance and management; (b) institutionalizing industrial linkages at institute and program levels; (c) developing market-relevant and competency-based training programs; (d) training managers and teachers/trainers to upgrade their technical knowledge and practical skills, as well as to promote student-centered pedagogy and digital competencies; (e) providing key training equipment and facilities; and finally (f) providing outreach and support for non-project national TVET institutes to maximize the spillover effects of the Project. Moreover, contents of the training as well as procurement of equipment will incorporate the potential impact of climate change such as droughts, flooding, and extreme precipitation through creating and teaching a disaster recovery plan and special protocol for the machine operation in case a lack of water and flooding affect the training institutes as well as machines. It is worth highlighting that the Project will explicitly encourage innovation and use of technology in the delivery of training and in promoting innovation and in-house production. These potentially include the use of Fab Lab20 models, smart classrooms, project-based learning, virtual reality technology, and provision of simulation training facilities such as the simulation power transmission station to provide the students and faculty a work environment close to real life to maximize the training impact. 40. The flagship TVET institutes will also promote inclusion of women. Female students are seriously under-represented in science, technology, engineering, and mathematics (STEM)-related TVET fields. For example, as low as 6 percent of students in the Ethiopian automotive, railway, and manufacturing institutes are female. To address the gender equity issue, the EASTRIP institutes are required to undertake gender analysis and stakeholder consultations and set gender equity targets for both students and faculty. Drawing on international practices related to gender, a menu of interventions that can help reduce the gender gaps at the institute level was provided. Each institute is encouraged to incorporate these interventions into the SIP and cost the associated expenditures. Overall, at least 30 percent of female enrollment (from a baseline of 17 percent) is targeted under the project. Gender breakdown in enrollment will be monitored throughout the project. 41. Further, the cluster of the institutes at the national level is expected to exert a demonstration effect to the rest of the national TVET systems. A specific subcomponent is designed to incentivize the institutes to partner with non-project TVET institutes through both horizontal exchanges as well as vertical articulation of programs at different levels (such as from certificate to diploma and to bachelor levels). 42. Each TVET institute will be an implementing agency, upon signing of a performance agreement with its respective government based on the SIP. The Regional Flagship TVET Institutes are required to 19 The Strategic Investment Plan was developed by the World Bank’s task team working on the Project. It includes a core document which describes the development challenges and the vision and mission for the institute, total investment, results framework, procurement plan, teacher/trainer development plan, and other guidance notes. 20 http://fab.cba.mit.edu/about/faq/. Page 24 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) develop Annual Work Plans based on the approved SIPs. A project staffing guideline has been issued to the flagship TVET institutes and requires a full complement of technical as well as project functions in financial management (FM), procurement, monitoring and evaluation (M&E), and environmental and social safeguards, including a gender focal point, and an industrial liaison officer. Financing to the flagship TVET institutes will be channeled through a results-based financing (RBF) approach with DLIs linking the funding with a mix of output and process indicators aligned with the objectives of access, quality, and regional integration (see the list of DLIs in the Results Framework). To ensure gender balance and regional integration goals, DLIs on enrollment will have higher incentives for female and regional students. A third- party verifier will be recruited to verify the fulfillment of the DLIs. This component will finance Eligible Expenditure Programs (EEPs) including all expenditure categories contained in SIPs including works, goods, consultancies, and operating cost. Component 2: Creating national TVET enabling environments (SDR 27.69 million, US$39 million equivalent) 43. As described in the Strategic Context section, the lack of a national enabling policy environment is a critical constraint to service delivery at the TVET institutes. An important lesson learned from the higher education ACE project is that national-level interventions can be critical to create an enabling environment for the ACEs and ensure regionality. For example, for the students and faculty to move across countries, ministries of education need to develop policies and guidelines on mutual recognition of qualifications. In addition, for the TVET institutes to develop new programs, the capacity in the national TVET quality assurance body will need to be strengthened so that national standards are available and efficient processes can be used to approve and monitor the programs. Kenya, Ethiopia and Tanzania are already embarking on national TVET reforms that would strengthen coordination, improve quality assurance, and overall capacity in policy development and implementation. In Ethiopia, the Government plans to establish a TVET quality assurance body. In Kenya, the government plans to establish an inter- agency coordination mechanism for TVET. Tanzania’s Education Sector Development Plan which includes Human Resource Development is also being operationalized. 44. Therefore, under this component, the project will finance the development of policy and guidelines to facilitate student, graduate, and faculty mobility and industrial partnership and strengthen the capacity of national agencies that are responsible for the approval of occupation standards, model curriculum, and accreditation of TVET programs. The project will finance interventions in four subcomponents: (a) strengthening national TVET quality assurance, as it relates to the regional flagship TVET institutes, (b) capacity building for TVET policy development and implementation, (c) promoting regional integration, and (d) facilitating national project coordination and M&E. In addition, countries implement annual regional skills competitions following the WorldSkills model.21 45. The national ministries of education will be the implementing agencies for this component. After the initial approval of the work plan for the component, implementing agencies will develop Annual Work Plans. IDA funds will be channeled to the national implementing agencies through RBF. A set of DLIs for strengthening quality assurance and for the development of specific policies and regulations, especially as they relate to the Regional Flagship TVET Institutes, regional integration, and capacity development have been identified along with annual targets/results for each indicator. This component will finance 21 https://www.worldskills.org/. Page 25 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) EEPs, including all expenditure categories contained in the national work plans including works, goods, consultancies, and operating cost. Component 3: Enhancing regional collaboration in TVET and project coordination (SDR 5.68 million regional IDA grant, US$8 million equivalent) 46. A regional component is needed to coordinate and support project implementation at the 16 Regional Flagship TVET Institutes and the three national TVET systems. A regional platform is also critical for networking, knowledge sharing, and the development of regional public goods to promote the regional integration objective. Thus, under this component, with IDA grant financing, the project will support three specific subcomponents: (a) harmonization of standards and mutual recognition of qualifications for priority occupations, (b) facilitating staff and student mobility through exchange programs, and (c) regional project coordination and M&E. 47. A Regional Facilitation Unit (RFU) has been put in place to implement the component. The IUCEA expressed interest and was nominated by the EAC Secretariat to coordinate all centers of excellence or flagship projects in the region. The IUCEA Act 2009 further provides for a mandate over ‘tertiary colleges’ in addition to the core mandate of higher education. Due to the relative lack of experience in TVET matters, however, the IUCEA is required to establish a project management structure at the regional level, including a Regional Steering Committee (RSC), a TVET technical advisory body, and recruit the EASTRIP project team including a project coordinator with industry and frontline experience for having managed a TVET institute, a deputy project coordinator who also serves as M&E officer, and a project accountant. Other project functions including procurement, communication, and internal audit will be shared with ACE II team within IUCEA. In case of ACE II closing before EASTRIP, IUCEA will retain the same functions for EASTRIP. 48. The regional component will produce a set of harmonized standards toward mutual recognition of qualifications for priority occupations supported by EASTRIP in project countries, in close partnership with industries. The component will also support the dissemination of project lessons learned, networking, coordination, technical assistance, and monitoring and evaluation of the 16-regional flagship TVET institutes and the three national TVET systems. In addition, the component will support technical assistance, including a governance study of the IUCEA with the aim of improving its efficiency and effectiveness in project management. An independent verifier to verify the results for Component 1 and 2 DLIs will be contracted by the IUCEA. 49. Implementation of this component will follow Investment Project Financing (IPF), based on an agreed work plan and Procurement Plan. The EASTRIP Project Coordinator will have the designated authority to update the work plans and Procurement Plans in close consultation with the World Bank. He or she will also have the authority to sign the relevant project documents, including procurement documents with approval from the World Bank, and can communicate directly with the World Bank on behalf of the IUCEA. B. Project Cost and Financing 50. For the total IDA allocation of US$285 million under EASTRIP for Components 1 and 2, US$95 million will come from national IDA and the remaining US$190 million from regional IDA. The regional Page 26 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Component 3 is to be financed by an IDA grant of US$8 million. A Project Preparation Advance (PPA) of US$1.5 million has been provided to the RFU (IUCEA) that financed project preparation activities. Table 4. Project Cost and Financing (US$, millions) Project Component Project Cost IDA Financing % IDA Financing Component 1: Strengthening selected Regional Flagship TVET Institutes for high-quality skills development in priority sectors (US$246 million) Ethiopia (7 flagship TVET institutes) 122.0 122.0 100 Kenya (5 flagship TVET institutes) 54.0 54.0 100 Tanzania (4 flagship TVET institutes) 70.0 70.0 100 Component 2: Creating national TVET enabling environments (US$39 million) Ethiopia 28.0 28.0 100 Kenya 6.0 6.0 100 Tanzania 5.0 5.0 100 Component 3: Enhancing regional collaboration in TVET and project coordination (IUCEA) 8.0 8.0 100 Total 293.0 293.0 100 C. Lessons Learned and Reflected in the Project Design 51. This project design incorporates lessons learned in designing and implementing technical and vocational education projects in Africa and other countries. In addition, lessons were drawn from Africa regional education integration projects, including the Western, Eastern, and Southern Africa Higher Education Center of Excellence Projects (ACE I and ACE II). The specific lessons learned and incorporated into the project are the following: (a) Center of excellence approach. The project is designed to provide direct institutional-level capacity building. Globally, the center of excellence approach has been used in different sectors, including in the TVET sector that has proven effective not only in serving the short- and medium-term needs of skills provision but also in creating long-term sustainable capacity and in catalyzing national reform and injecting dynamism to the system. The selection of the flagship TVET institutes follows a set of transparent and competitive criteria to ensure ownership as well as excellence. (b) Creating an enabling policy environment at the national level. ACE I and ACE II have only two components, a center-level component with funds going directly to the selected center of excellence and a regional component supporting regional initiatives and project coordination. During the ACE I and ACE II implementation, however, it became clear that the lack of a national connection tends to inhibit project implementation at the ACE level, due to lack of awareness and support for the project at the national level. Further, the regional benefits of economies of scale, learning network, and other public goods for higher education can be further realized if the national entities are part and parcel of the project design. The EASTRIP design reflects the lessons learned by incorporating Component 2 which addresses national level policy and capacity bottlenecks that would affect the successful implementation and sustainability of the flagship institutes. Page 27 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) (c) Strengthening and institutionalizing links between TVET institutes and industry. Training success is tied to how closely the program is linked to the real demands of the labor market, which requires employers to be involved in setting standards for training, engaging in validating these standards, and working closely with training providers to link theory and practice. Based on the review of past and successful TVET projects, EASTRIP will encourage each TVET institutes to develop and institutionalize industry links. In each of the Regional Flagship TVET Institute, a menu of mechanisms will be encouraged, including inviting industry representatives to be in the institute governance bodies, engaging private companies in the development of curriculum and training programs, developing customer- ordered training programs and establishing ‘learning factories’ with dual education and production purposes, sharing technology and production equipment, internships and workplace exposure for TVET instructors and students, piloting servicing of small and medium enterprises with research and development solutions, signing MoUs with companies for graduate employment, and organizing alumni and industrial outreach programs. (d) Stressing governance and management improvement for the whole TVET institute. Another important lesson learned from ACE I and ACE II is that ownership and support at the institute level is critical for the success and sustainability of ACEs. Both ACEs channel IDA investment directly to the departments and centers, bypassing the university-level management. In some of the ACEs, lack of university ownership starts to impede the successful implementation of ACEs. Based on these lessons, EASTRIP emphasizes a whole institute development, flagship TVET institute approach with a subcomponent in Component 1 to focus on strengthening the institution-wide governance and management. (e) Modular, competency-based training, anchored in core training programs benchmarked to industry or international standards. Trainees come with a range of capacities and experience. Modular, competency-based curricula can help accommodate such needs. This training model further supports market accountability, relevance, and quality by shifting attention to outcomes in the form of industry-established competencies rather than to inputs reflected in the number of classroom, instructors, and courses offered. (f) Building a learning culture for TVET networking and dissemination of good practices. Based on several past and ongoing initiatives, benefits of cross-country and cross-institutional learning are evident for sharing good practices and discussing common challenges. Some examples are the PASET initiative,22 ACE I and ACE II, Korea Knowledge Sharing Program,23 and Korea-World Bank Partnership Facility-funded Skills and Job Creation Program.24 EASTRIP is designed to promote a learning culture and provide platforms at the national and regional levels for networking and dissemination of good practices. In addition, the flagship institutes will develop capacity to routinely conduct tracer studies as an important tool for evaluation of training programs and assessing the impact of innovations on labor market 22 http://www.worldbank.org/en/programs/paset. 23 http://www.ksp.go.kr/. 24 http://www.worldbank.org/en/topic/education/brief/partnering-for-skills-development-in-east-asia-and-the-pacific. Page 28 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) outcomes. (g) Multilayered project management. For a regional project, it is important to balance the contextualized national interventions in relation to the objective of regional integration. It is important to establish the regional-, national-, and institute-level project implementation tiered structure. In addition, to ensure political support and guidance, a parallel steering committee structure has been set up at the national and regional levels. Mirroring that, within the World Bank, it is important to also establish task team management that has both regional and national representation. These are important lessons from the ACEs. (h) RBF. This approach can improve the focus on outcomes and potentially reduce the transaction costs normally associated with pure IPFs. The Africa region has had good success in using RBF within the IPF education projects. The new World Bank guidelines provide more clarity on policies and procedures related to IPF with DLIs. EASTRIP builds on the experience and has developed a list of DLIs by component that are relevant to the achievement of the PDO but also reflects the process to some extent. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 52. EASTRIP is designed to have three levels of intervention, at the flagship TVET institute, national, and regional levels, as outlined in the project description. Correspondingly, a three-layered project implementation approach is followed. The proposed implementation arrangement follows the successful model for the ACE I and ACE II projects and their lessons. The following are the three tiers of the governance and implementation arrangement proposed for the project (figure 3): (a) The Regional Flagship TVET Institutes will be responsible for institute-level project implementation. The institutes will establish a Project Implementation Unit (PIU) for strategic planning and implementation of the approved plans, based on core functions including project management, technical, industry liaison, fiduciary, and safeguards including a gender focal point, M&E, and other requirements as assessed and recommended by the World Bank and agreed with the counterparts. In addition, an Industrial Advisory Board/Committee will be established either at the institute level or at the specific center level to provide guidance on industry collaboration and to forge specific partnership programs with industry. (b) A National Project Coordination Unit (NPCU) will be established in the Ministry of Education in Ethiopia and Kenya and the Ministry of Education, Science and Technology in Tanzania with key project functions including project coordination, procurement, financial management, and monitoring and evaluation. The NPCU will work closely with relevant government agencies25 and relevant industrial partners to execute the national component 25Ethiopia: MoE and Federal TVET Agency. Kenya: MoEST, Ministry of Energy, Ministry of Transport, Infrastructure, Housing and Urban Development, TVET Authority Page 29 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) of the project and further provide national-level coordination, procurement and financial management support, M&E, and dissemination of good practices from the TVET institutes. (c) The RFU, IUCEA, will support the flagship institutes and national agencies in their implementation of the project. Further, the RFU will facilitate the implementation of the regional initiatives financed by the IDA grant. It will provide knowledge sharing and coordination of sector activities. The EASTRIP project will be led by a project coordinator, who will be responsible for overall project coordination and facilitation, and an adequate number of professional staff in key function areas, including a finance officer, a procurement officer, an M&E officer, and communications officer. In addition, a Technical Advisory Board (TAB) will be established to provide technical advice on the design and implementation of the project. The TAB will include members of the Partnership for Applied Science, Engineering, and Technology (PASET) Consultative Advisory Group (CAG).26 53. In addition, Project Steering Committees will be established at the national and regional levels with representation from relevant government agencies and industries to ensure political commitment and direction for the project and alignment with industries. A National Steering Committee (NSC) will comprise representatives from relevant sector ministries as well as industries in each of the three participating countries. A Regional Steering Committee (RSC) will comprise representatives of the national ministries of education and major regional industries from the transport, energy, manufacturing, and ICT sectors. 54. The NSC at the country level will be streamlined with existing project steering structures of other relevant World Bank-supported projects in higher education and skills, to promote synergies and efficiency. For example, the EASTRIP Tanzania NSC may be the same core steering committee as for the Eastern and Southern Africa Higher Education Centers of Excellence (ACE II), ESPJ, and the proposed new higher education project. Figure 3 depicts the project implementation arrangements. (TVETA), and TVET CDACC. Tanzania: MoEST, NACTE, VETA, and TCU. 26 PASET was launched in 2013 by African governments and private sector, with facilitation by the World Bank. Cote d’Ivoire, Ethiopia, Kenya, Rwanda and Senegal have made commitments of US$2 million each and are current members of PASET. The Governments of Nigeria, Tanzania and Guinea have also expressed strong interest in PASET. Page 30 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Figure 3. Project Implementation Arrangements B. Results Monitoring and Evaluation 55. Project monitoring indicators. The project will monitor and report on progress of the PDO-level indicators, sub-PDO-level indicators, and intermediate results indicators in three results areas: (a) increasing access to TVET programs, (b) improving quality and relevance of TVET programs, and (c) supporting regional integration and regional economic corridors. These indicators are listed in the Results Framework and Monitoring table (section VII). Regional Flagship TVET Institutes will be responsible for data collection for Component 1. At each TVET institute, an M&E expert is responsible for data collection and reporting. An NPCU in each country will collect data for the national component and consolidate the data from all the flagship TVET institutes in that country. Further, the RFU will be responsible for data collection from all flagship institutes and national components to provide consolidated monitoring and evaluation report for the EASTRIP project at the regional level. 56. Monitoring project implementation. For each component, different stakeholders will be responsible for monitoring the progress. For Component 1, while each TVET institute will be primarily responsible for the progress of its activities and report its annual progress and challenges to an NSC through annual progress reports, the NSC will oversee overall progress of activities and provide guidance for smooth implementation of the activities defined in SIPs. At each TVET institute, a designated M&E expert is part of the implementation team, and responsible for data collection and reporting. For Component 2, the NPCU will be responsible for monitoring the progress and reporting it to the NSC. The NSC will report the progress of Components 1 and 2 to an RSC. For both Components 1 and 2, interventions are designed to create TVET data collection and monitoring systems at the flagship TVET institutes and at the national agencies. 57. At regional level, the RFU will be responsible for monitoring implementation progress for the entire project and reporting it to the RSC. The Technical Advisory Board will provide technical advice when needed. At least once a year, the RFU will organize a dissemination workshop of project progress on Page 31 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Components 1, 2, and 3 where all regional TVET flagship institutes, NSCs, and RSCs will share the progress and challenges with each other and network with each other to enhance collaboration. C. Sustainability 58. The project is likely to be sustainable beyond the project duration due to several interventions built at the institute and national levels. At the institute level, each Regional Flagship TVET Institute will develop a SIP (a robust implementation plan, including annual implementation plan with budget and responsible parties, and specific time schedule; Procurement Plan; and staff development plan) with technical assistance from experts in partner institutes. As part of the SIP, flagship TVET institutes will develop a set of core training programs benchmarked with international or industry standards. These core programs will help build a brand and create a snowball effect to attract students and investments. Further, SIPs also include a plan for income generation, which will increase an institute’s ability to strategize income generation, and eventually, enable an institute to become more financially sustainable by increasing self-income. SIPs are building on core mandates of these institutes. Moreover, the project will provide capacity development not only for the technical team but also for the management team in the institutes to strengthen project management ability at the institution level. This will bring more sustainability to project management and implementation even after the project closes. 59. Each Regional Flagship TVET Institute also strengthens the partnership with industry and brings more industrial support for TVET (for example, sharing equipment and technology, providing industry instructors, more training of students in the enterprise). With the project’s support, TVET institutes will be models, and the project will enable governments to get more results from their spending on TVET. Furthermore, partnership with development partners cannot be overlooked because it continues to help strengthen the TVET system in countries and the project complements the existing efforts. For instance, in Ethiopia, the German Technical Cooperation heavily invested in the TVET system both nationally and at the institute level. Creating partnerships and synergy could help sustain the TVET institutes after the project closes. Furthermore, in the coming years, a huge demand for skilled workers from industry is expected in priority projects in the region and TVET institutes continue to contribute to supplying good quality graduates even after the project ends. 60. At the national level, the project will provide capacity building for the national TVET system, specifically in (a) strengthening the national quality assurance system, (b) capacity building for TVET policy, planning, and research, (c) supporting regional integration (enabling cross-country enrollment at flagship TVET institutes), and (d) project management and M&E. This would help countries strategize, plan, implement, and monitor activities in the TVET subsector. In the case of Ethiopia, the national work plan contains the development of a sustainable TVET financing strategy which will have far-reaching impact beyond the project once it is adopted. 61. Capacity building permeates the project design and emphasizes the key principles of the World Bank’s Regional Approach to promote Sustainable Capacity Building Outcomes in Africa: (a) sustainability, (b) leveraging partnerships including both industry and institutional partners, (c) sector oriented and providing technical solutions that are critical to the core functions of TVET institutes such as program development based on industry standards, and finally (d) using the project to create a learning and networking platform at the national and regional levels to strengthen the advocacy for TVET. Page 32 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) D. Role of Partners 62. The EASTRIP concept and framework was incubated under the PASET umbrella and hence benefited from the PASET governance, financing, and partnership. The Korea World Bank Group Partnership Facility (KWPF) and China World Bank Group Partnership Facility (CWPF) both provided initial funding for the team to develop the EASTRIP concept and to evaluate and select the Regional Flagship TVET Institutes. Capacity building and knowledge sharing for the participating countries and selected TVET institutes were carried out in Ethiopia, Korea, India, and China. 63. For industrial partnership, the EASTRIP institutes were selected based on a rigorous set of criteria including industry links, leadership and technical capacity, innovation, and alignment with national and regional development priorities. Industry partnership was given extra weightage in the selection. Hence, the existing 16 TVET institutes already have a network of industrial partners they work with. For example, the Ethiopia Railway Academy works closely with the ERC. The DIT Dar es Salaam has ongoing partnership with Huawei. The KenGen Geothermal Training Center is an offshoot of the Kenya Geothermal Cooperation. Under EASTRIP, the project will support and cultivate more and stronger partnership with industries. Each institute will establish an Industrial Advisory Board with at least 50 percent of membership from industries. The institute PIU will also have a dedicated industry liaison officer. Industrial partnership through the MoUs, faculty attachment in industries, development of programs jointly with industries, and industry-certified short-term programs are encouraged with specific DLIs. 64. EASTRIP will also finance the TVET institutes to partner with experienced TVET institutional partners preferably with industry certification or international recognition to develop curriculum, train faculty, student exchange, and implement the training programs. V. KEY RISKS A. Overall Risk Rating and Explanation of Key Risks 65. The overall project risk is substantial. Political and governance, institutional capacity and fiduciary risks are rated substantial. During implementation, the three participating countries could experience elections and government changes that might bring changes or uncertainties in policies, regulations, and implementation teams. Further, the Project has a total of 20 implementing agencies including 16 TVET institutes, 3 National Project Coordination Units, and 1 Regional Facilitate Unit. The 16 regional TVET flagship institutes have had limited experience in implementing World Bank projects and have overall low fiduciary capacity in procurement and financial management. At the technical level, the TVET institutes are also expected to face challenges in building TVET institute-industry partnerships, developing demand driven training programs, and introducing new management and teaching methods. 66. These risks, however, are being mitigated by a number of measures including: (1) establishment of a multi-agency national steering committee that represents the various government agencies involved in the project as well as private sector representatives, (2) institutional arrangements that have been clearly defined at institute and national levels and performance and funding agreements will be signed between each of the flagship TVET institutes and national ministries of education, and (3) fiduciary capacity-building activities will be financed as part of the SIPs as needed, and technical assistance will be Page 33 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) provided by the national level entities to accompany implementation at TVET level. To mitigate the risk of low technical capacity, each of the TVET institutes will establish an industry advisory board/committee to strengthen the industry linkage. Training of TVET managers and faculty on academic, technical, and industrial, as well as professional and pedagogical skills will be provided as part of the project. Focused technical assistance through partnership arrangements will be provided to each of the TVET institutes through specific disbursement linked indicator. National ministries of education and the regional facilitation unit will also provide additional support to the institutes. VI. APPRAISAL SUMMARY A. Economic and Financial Analysis 67. This section summarizes the findings of economic and financial analysis. For more details, see annex 4 (Economic and Financial Analysis). In the East Africa region, huge infrastructure projects have been emerging across countries, such as the NCIP and LAPSSET Corridor Project. In addition, at the country level, for instance, Ethiopia established industrial parks for export-oriented sectors. These mega projects create massive job opportunities. However, the available skilled workforce is a pressing issue at the regional level, education and training programs need to be upgraded, and the national TVET systems need to be strengthened with regional harmonization efforts. In this situation, the project aims to support existing efforts in the areas of expansion of access, enhancement of quality and relevance of training programs, and promotion of regional integration in selected priority sectors. 68. There is limited analysis of returns to TVET investment in Africa. However, the existing pool of studies support the fact that acquiring TVET qualification leads to improved future streams of income. Additionally, it has been observed globally that TVET can be an attractive option for those with lower earning potential and poor chances of continuing to higher education. Public sector provision or financing of TVET and skills training is justified on numerous grounds motivated by potential market failures. 69. A regional approach—with a merit from economies of scale—to skills development serves as a complementary regional solution to enhance the scope and success of the ongoing regional integration initiatives to develop larger markets, diversify the economy, scale up the use of modern technology, drive down cost, and create new jobs and skills. Baseline and target data from the selected Regional Flagship TVET Institutes show that at least 7.5 percent of regional enrollment may be achieved. In some industries such as geothermal energy, students are already studying across countries. 70. Moreover, the World Bank brings substantial value added in supporting this project through its ability to draw from extensive knowledge and operational experience in TVET reforms globally. In addition, the project is expected to yield significant economic returns. 71. Cost-benefit analysis for Component 1. The IDA allocation for Component 1 (US$246 million) is more than 80 percent of the total IDA investment. The cost-benefit analysis of this project focuses on economic costs and benefits and social benefits other than income and externality are not included as part of the calculation. The internal rates of return (IRRs) of investment for Component 1 are 8.0 percent for Ethiopia, 30.9 percent for Kenya, and 26.9 percent for Tanzania. These results suggest that the project is expected to yield significant economic returns and thus is a very sound investment. These are conservative estimates of the project benefits, given that they do not account for other potential benefits, Page 34 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) including the social benefits of education and training. The total economic and social impact of the project is likely to substantially exceed the economic benefits. Annex 4 includes more detailed information of the cost-benefit analysis, including assumptions of the analysis and conducts a sensitivity analysis with different scenarios. 72. Benefits from capacity development. Component 2 aims to create national TVET enabling environments in three countries, focusing on (a) strengthening national TVET quality assurance system, (b) capacity building for TVET policy development and implementation, (c) promoting regional integration, and (d) facilitating national project coordination and M&E. The project beneficiaries include sectoral ministries, as well as relevant government agencies on quality assurance and curriculum development. The project will bring, to three countries, not only IDA funding but also the World Bank’s global knowledge (best practices, international experts, and lessons learned from other projects) and contributions from partner countries such as China and Korea. Moreover, the RFU, through Component 3, will facilitate capacity building of the TVET institutes during project implementation. 73. Fiscal sustainability. The project investment for each flagship TVET institute is significant in the investment amount, considering its budget level in the latest year. A planned investment amount per institute is US$10 to US$25 million for five years (that is, US$2 to US$5 million per year on average). According to the data provided by the selected 16 institutes, the annual recurrent budget for five institutes is less than US$1 million, while it is between US$1 and US$5 million for nine institutes, and over US$5 million for only two. On capital budget, all institutes are below the US$5 million level and more than half of them are below US$1 million. However, during the implementation of the SIPs, the budget level for each institute is expected to increase by self-income generation (with an assumption that the budget level from other budget sources, including governments remains the same or increases), and the institute’s capacity to manage project, including budget planning, has been enhanced through capacity-building activities provided to the management and technical staff.27 74. For Component 2, the estimated investment for each country to support strengthening the national TVET system is at maximum US$28 million, US$6 million, and US$5 million for Ethiopia, Kenya, and Tanzania, respectively. According to the latest data available, the total government education expenditure is US$1.9 billion for Ethiopia, US$3.2 billion for Kenya, and US$1.5 billion for Tanzania.28 While specific expenditure data for the TVET subsector are not available, it is estimated that the project investment is a very small portion of the total government expenditure for the TVET subsector, and thus it is assumed that the fiscal impact is not significant. The Government is expected to fully use the project investment for the intended purpose of strengthening its TVET system. B. Technical 75. The EASTRIP design considers the contextualized challenges of TVET systems in the country and incorporates the global best practices for the development of excellent TVET institutes. The Project pays special attention to strengthening industry links with concrete and institutionalized mechanisms that permeate the three levels of interventions. The sustainability of a TVET institute lies in its capacity to 27Budget data is from draft SIPs submitted by institutes. 28Retrieved from UNESCO Institute of Statistics (UIS) database. Year of expenditure data is 2014 for Tanzania, 2015 for Kenya, 2013 for Ethiopia. Page 35 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) constantly renovate its programs based on the labor market demand and to align its managerial, technical, and academic resources accordingly to deliver quality training programs and graduates who will become the productive labor force. 76. The flagship approach ensures ground-up excellence and at the same time creates demonstration effects to the national TVET systems across East Africa. There are also technology innovations being built in the design. For example, the delivery of TVET using modern ICT and online teaching and learning resource bank is explicitly encouraged at the TVET institute level and is being built into each institute’s SIP. Capacity for the development of modern TVET curricula including the use of virtual and augmented reality is also being developed in Ethiopia. 77. The Project also supports capacity building for eventually creating an Africa charter of WorldSkills Competition. Skills competition has been increasingly used in the developed nations and in strong emerging countries such as China and Korea as an engine to promote excellence and improve the country’s image. Starting small from the project-targeted priority skills, the participating countries will benefit from technical assistance from Human Resource Development (HRD) Korea, the first capacity- building institution awarded by WorldSkills International, to develop tasks, select competitors and experts, and prepare sites and an operational manual and to rotate hosting the skills competition. 78. The regional approach promotes harmonization of occupational standards and qualifications within the EASTRIP priority occupations in transport, energy, ICT, and agro-processing, facilitating the mobility of faculty, students, and skilled labor across the East Africa region. 79. The project considers climate change in implementation. Some regional flagship TVET institutes will focus on issues of climate change, including energy and agro-processing to develop quality high-skilled human resources and build capacity of these institutes for research and innovation in their respective fields. C. Financial Management 80. As part of project preparation, FM assessments were carried out by the World Bank to evaluate the adequacy of FM arrangements at TVET institute, national, and regional level. The objective of the assessments was to determine whether the proposed FM arrangements (a) are capable of correctly and completely recording all transactions and balances relating to the project; (b) would facilitate the preparation of regular, accurate, reliable, and timely financial statements; (c) would safeguard the project’s assets; and (d) would be subject to acceptable auditing arrangements. The assessments build significantly on the World Bank’s knowledge of country FM systems and requirement, and experience and performance of national- and regional-level entities through its involvement in other World Bank-financed operations. 81. Based on the FM assessments, fiduciary risk is considered High. Main challenges are related to the following: (a) the number of implementing entities at different levels, different levels of capacity, and different institutional arrangements have an impact on budgeting, reporting, and funds flow arrangements; (b) the dynamics around the use of DLIs and eligible expenditures, although more common in the region, are still difficult to internalize within the implementing entities; (c) TVET institutes have no experience with World Bank requirements, and, in some cases (for example, regional TVET institutes in Page 36 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Ethiopia), have very limited capacity and significant weaknesses in the operation of basic FM systems; (d) the level of investment envisioned under the SIPs for some TVETs represents a significant increase in their regular level of spending but also in terms of the type of expenditures they regularly manage; and (e) in terms of specific FM arrangements, there are challenges related to inadequate accounting systems leading to the use of manual processes for the preparation of financial reports, weak internal audit, and in some cases severe internal control weaknesses. 82. The following mitigating measures have been discussed and agreed: (a) institutional arrangements have been clearly defined and performance and funding agreements or similar agreements will be signed; (b) fiduciary capacity-building activities will be financed as part of the SIPs as needed, and technical assistance would be provided by the national level entities to accompany implementation at TVET level; (c) FM arrangements, including funds flow arrangements and reporting arrangements, have been clearly defined in each country within the existing country requirement and institutional arrangements in which TVETs are operating; (d) eligible expenditures for Components 1 and 2 have been defined; and (e) strengthening of internal controls and internal audit function, staffing needs within the TVET institutes and internal audit, and reporting and audit arrangements have been discussed and are reflected as part of the FM action plan. 83. Subject to the successful implementation of the FM action plan and implementation and operation of the agreed mitigating measures described above, the proposed FM arrangements are considered adequate to support project implementation. The latter though will continue to require close monitoring from the World Bank side and a thorough assessment within the first year of implementation. D. Procurement 84. Procurement under the proposed project will be carried out in accordance with the following World Bank procedures: (a) Procurement and Regulations for Recipients under the IPF” dated July 1, 2016, and thereafter referred to as “Procurement Regulations” , and (b) ‘Guidelines on Preventing and Combating Fraud and Corruption in Project Financed by IBRD Loans and IDA Credits and Grants’, dated July 1, 2016 , and (c) other provisions stipulated in the Financing Agreements. 85. Procurement shall be carried out (a) at the regional level by the IUCEA; (b) at national level by the MoE in Ethiopia, State Department of Vocational and Technical Education under the MoE in Kenya, and MoEST in Tanzania; and (c) at TVET institute level by 16 regional flagship TVET institutes in Ethiopia (7 institutes), Kenya (5 institutes), and Tanzania (4 institutes). The World Bank carried out procurement assessments of the implementation arrangements. The procurement risk is rated Substantial. To address the risks and weaknesses identified, mitigation measures have been discussed and agreed with the respective PIUs. The details of the procurement arrangements are provided in annex 2 (Implementation Arrangements). 86. A Project Procurement Strategy for Development (PPSD) and an initial Procurement Plan have been developed for the IUCEA and each of the participating institutions at national and TVET institute level respectively. Each Procurement Plan covers at least the activities of the first 18 months of the project implementation in line with agreed SIPs. Each Procurement Plan will be updated in agreement with the World Bank annually or as required to reflect the project’s actual implementation needs and improvements in institutional capacity, upon revision of SIPs. Page 37 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) E. Social and Environment (including Safeguards) 87. Environmental and social impacts of rehabilitating academic/research institutions are expected to be Low to Moderate. The Environmental Assessment category is B (Partial Assessment), and Environmental Assessment (OP/BP 4.01 and OP/BP 4.11) is triggered. Under Subcomponent 1.5, the project will expand and upgrade facilities, including construction of training centers within the existing campus of the selected institutes. There will be no new land acquisition for the targeted flagship TVET institutes; the project will work with existing institutions. Each of the target institutes has developed a SIP to specify the goals, targets, and detailed investment. Five sectors are selected including transport, energy, agro-processing, manufacturing, and ICT. 88. To guide implementation of Subcomponent 1.5, Environmental and Social Management Frameworks (ESMFs) were prepared for Ethiopia, Kenya, and Tanzania and have been disclosed both in country and in the World Bank. A framework approach was taken as no designs for TVET rehabilitation/expansion activities were developed during the project preparation. The ESMFs’ preparation included a set of public consultations in each country and disclosure at the country level and at the World Bank website. Each of the ESMFs describes environmental and social risks from types of activities proposed for the project candidate institutions and described the measures to manage these potential environmental and social impacts. During implementation of the project, as the designs become available, each institution will use the national ESMF to prepare an Environmental and Social Impact Assessment (ESIA) or Environmental and Social Management Plan (ESMP) (according to the country’s requirements and OP 4.01). During the design stage, subprojects will be screened to ensure exclusion of investments that lead to land acquisition, loss of livelihood, or restriction of access to resources. Each institute-specific ESIA or ESMP will be reviewed and approved by relevant government agencies responsible for ensuring proper oversight of the adherence of selected institutions to safeguards requirements set forth in the ESIAs/ESMPs. Upon completion of the ESIA/ESMP, each center will undergo a training on ESMP application and review of relevant safeguards implementation arrangements. 89. Although labor influx is anticipated to be low or moderate and over short periods, the planned civil works will attract both external and local labor to the selected institutions and the neighboring communities. Such labor influx has been found to exacerbate sexual exploitation and abuse of women and girls. The ESMF provides guidance for prevention and response to this and other potential social risks. The inclusion of social risk management clauses in all bidding documents and mitigation measures in the contractor’s ESMP, such as workers codes of conduct, will be key. The relevant government agencies will be responsible for institutional capacity strengthening on overall social risk management. F. World Bank Grievance Redress 90. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, due to non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s Page 38 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects- operations/products-and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. . Page 39 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) VII. RESULTS FRAMEWORK AND MONITORING29 Results Framework COUNTRY: Eastern Africa East Africa Skills for Transformation and Regional Integration Project (EASTRIP) Project Development Objective(s) To increase the access and improve the quality of TVET programs in selected Regional Flagship TVET Institutes and to support regional integration in East Africa. Project Development Objective Indicators RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Increasing access to TVET programs Student enrollment at DLI regional flagship TVET 6,971.00 7,230.00 9,372.00 11,947.00 15,579.00 19,475.00 19,475.00 2.1 institutes (Number) Student enrollment at regional flagship TVET 3,770.00 3,887.00 5,004.00 6,407.00 8,318.00 10,356.00 10,356.00 institutes (short-term program) (Number) Student enrollment at 3,201.00 3,343.00 4,368.00 5,540.00 7,761.00 9,119.00 9,119.00 regional flagship TVET 29 Baseline year is 2018 and end year is 2024 Page 40 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 institutes (long-term program) (Number) Female student enrollment at regional flagship TVET institutes 450.00 717.00 1,075.00 1,512.00 2,170.00 2,847.00 2,847.00 (short-term program) (Number) Female student enrollment at regional flagship TVET institutes 741.00 797.00 1,166.00 1,609.00 2,172.00 2,996.00 2,996.00 (long-term program) (Number) Regional student enrollment at regional flagship TVET institutes 30.00 56.00 154.00 278.00 391.00 564.00 564.00 (short-term program) (Number) Regional student enrollment at regional flagship TVET institutes 1.00 50.00 164.00 280.00 452.00 686.00 686.00 (long-term program) (Number) Improving quality and relevance of TVET programs Graduate employment rate six months after graduation 47.00 51.00 60.00 66.00 71.00 77.00 77.00 (Percentage) Graduate employment rate six months after 51.00 54.00 63.00 69.00 74.00 79.00 79.00 graduation (female students) (Percentage) Page 41 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Number of demand-driven programs developed and accredited by national TVET DLI 34.00 96.00 154.00 203.00 243.00 276.00 276.00 accreditation agencies or 3.1 certified by industries (Number) Number of demand- driven short-term 13.00 50.00 80.00 106.00 128.00 151.00 151.00 programs developed (Number) Number of demand- driven long-term 21.00 49.00 76.00 100.00 116.00 135.00 135.00 programs developed (Number) Supporting regional integration Number of qualifications developed that are 3.00 22.00 43.00 63.00 79.00 94.00 94.00 bilaterally or regionally recognized (Number) Beneficiary satisfaction 61.00 62.00 69.00 76.00 82.00 87.00 87.00 (Percentage) PDO Table SPACE Intermediate Results Indicators by Components Page 42 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Strengthening selected TVET institutes for high quality skills development in priority sectors Number of regional flagship TVET institutes whose DLI project implementation 0.00 16.00 16.00 16.00 16.00 16.00 16.00 units are established 1.1 (Number) Number of flagship TVET institutes whose industry advisory DLI boards/committees are 0.00 16.00 16.00 16.00 16.00 16.00 16.00 1.2 established with 50% representation of the private sector (Number) MoUs signed with DLI industries and partner 24.00 66.00 106.00 145.00 186.00 225.00 225.00 3.4 institutions (Number) MoU signed with 13.00 39.00 62.00 84.00 111.00 134.00 134.00 industries (Number) MoUs signed with partner institutions 11.00 24.00 42.00 58.00 73.00 89.00 89.00 (Number) Number of teaching staff in regional flagship TVET DLI institutes who have 8.00 110.00 161.00 212.00 259.00 319.00 319.00 industrial attachment 3.2 (Number) Number of teaching staff who undertake exchanges DLI in another country 0.00 62.00 86.00 129.00 175.00 239.00 239.00 3.3 (Number) Training condition improved Contracts with No 50% completed 100% completed 100% completion 100% completion 100% completion and key training facilities contractors signed Page 43 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 provided (Text) Income generation by flagship TVET institutes 1,075,808.00 2,128,408.00 4,115,771.00 7,532,037.00 9,872,982.00 12,378,337.00 12,378,337.00 (Amount(USD)) Tracer study conducted DLI annually (Number) 3.00 13.00 16.00 16.00 16.00 16.00 16.00 3.5 Creating national TVET enabling environments Occupational standards in the EASTRIP priority sectors DLI 0.00 8.00 17.00 24.00 32.00 41.00 47.00 developed or updated 4.1 (Number) Model curricula with modern IT in EASTRIP DLI priority programs 0.00 10.00 19.00 28.00 37.00 46.00 51.00 developed or reviewed 5.1 (Number) National TVET forums and dissemination workshops 0.00 0.00 1.00 2.00 3.00 3.00 3.00 organized (Number) Mutual recognition of qualifications with other countries and/or guideline DLI on how to facilitate the 6.1, 0.00 4.00 11.00 18.00 24.00 30.00 36.00 regional students’ 6.2 enrollment in EASTRIP developed (Number) Number of national plans, policies, or strategies developed and DLI 0.00 1.00 4.00 5.00 6.00 9.00 10.00 implemented, and 7.1 enactment of authorities completed and Page 44 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 operationalized (Number) East Africa skills competitions implemented 0.00 0.00 1.00 2.00 3.00 3.00 3.00 (Number) Enhancing regional collaboration in TVET and project coordination Regional Steering Committee meetings facilitated and EASTRIP Yes Yes Yes Yes Yes Yes Yes technical and dissemination workshop conducted twice a year (Yes/No) Capacity building for regional flagship TVET institutes in TVET leadership, management, Yes Yes Yes Yes Yes Yes Yes and technical areas (Yes/No) Number of regional harmonized occupational standards developed for 0.00 1.00 2.00 4.00 6.00 8.00 10.00 selected occupations (Number) Regional qualifications framework developed No No Yes Yes Yes Yes Yes (Yes/No) IO Table SPACE UL Table SPACE Page 45 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Number of students enrolled at regional flagship TVET institutes in programs aimed at meeting skill needs of priority sectors (total of male and female, and short- and long-term programs). Each flagship TVET Annual institute collects student Student enrollment at regional flagship For long term programs, Annual progress Flagship TVET institute enrollment data and TVET institutes students are considered report prepares a report. 'enrolled' when students are enrolled at least for six months. For short-term programs, students are considered 'enrolled' when students complete training programs. Number of students enrolled in short-term Each flagship TVET programs at regional Annual Student enrollment at regional institute collects student flagship TVET institutes Annual progress Flagship TVET Institute flagship TVET institutes (short-term enrollment data and (total of male and female). report program) prepares a report. Short-term program refers to programs that last less Page 46 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) than six months. For Ethiopia, this indicator includes the number of students for in-service teacher training programs. At each institute level, disaggregated results of short-term training for non-teacher training (technicians, farmers, and others) and in-service teacher training are monitored. Number of students Each flagship Annual Student enrollment at regional enrolled in long-term TVET Institute collects Annual progress Flagship TVET Institute flagship TVET institutes (long-term programs at regional student enrollment data report program) flagship TVET institutes and prepares a report. (total of male and female). Number of female students enrolled in short-term programs at regional flagship TVET institutes. Each flagship TVET Annual Female student enrollment at For Ethiopia, this indicator institute collects student Annual progress Flagship TVET Institute regional flagship TVET institutes includes the number of enrollment data and report (short-term program) female students for in- prepares a report. service teacher training programs. At each institute level, disaggregated results of short term training for non-teacher training Page 47 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) (technicians, farmers, and others) and teacher training are monitored. Each flagship TVET Number of female students Annual Female student enrollment at institute collects student enrolled in long-term Annual progress Flagship TVET Institute regional flagship TVET institutes (long- enrollment data and programs at regional report term program) prepares a report. flagship TVET institutes. Number of regional students enrolled in short- term programs at regional flagship TVET institutes (total of male and female). 'Regional student' refers to students from Sub-Saharan African countries (but not from the country where a Each flagship hosting institute is Annual Regional student enrollment at TVET institute collects located). For instance, for Annual progress Flagship TVET Institute regional flagship TVET institutes student enrollment data institutes in Kenya, report (short-term program) and prepares a report. students from Sub-Saharan Africa (except for Kenya) are counted as regional students. For Ethiopia, this indicator includes the number of regional students for in- service teacher training programs. At each institute level, disaggregated results Page 48 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) of short-term training for non-teacher training (technicians, farmers, and others) and teacher training are monitored. Number of regional Each flagship TVET Annual Regional student enrollment at students enrolled in long- institute collects student Annual progress Flagship TVET Institute regional flagship TVET institutes (long- term programs at regional enrollment data and report term program) flagship TVET institutes prepares a report. (total of male and female). Percentage of graduates from long-term programs, at regional flagship TVET institutes, who are employed/self-employed within six months after graduation. In addition, if graduates Each flagship TVET pursue the next level of Annual institute collects data Graduate employment rate six months training/ education, those Annual progress Flagship TVET Institute through an annual tracer after graduation graduates are counted as report study. results for this indicator. For instance, if graduates from an engineering diploma courses pursue engineering degree course at the same or any other TVET institutes/ universities, and are enrolled within six months after graduation from Page 49 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) diploma courses, flagship TVET institutes count those graduates as results achieved. Namely, the following numbers are counted as results: 1) Graduates who are employed within six months after graduation 2) Graduates who are self- employed within six months after graduation 3) Graduates who are enrolled in the next level of training/ education within six months after graduation. Percentage of female graduates from long-term Each flagship TVET Annual Graduate employment rate six programs, at regional institute collects data Annual progress Flagship TVET Institute months after graduation (female flagship TVET institutes, through an annual tracer report students) who are employed/self- study. employed within six months after graduation. Number of demand-driven Each flagship TVET Number of demand-driven programs programs newly developed Annual institute collects data developed and accredited by national or revised by regional Annual progress Flagship TVET Institute and supporting TVET accreditation agencies or certified flagship TVET institutes report documents. by industries (total of short- and long- term programs). Page 50 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Newly developed or revised programs need to be accredited by national TVET accreditation agencies or certified by industries. 'Demand-driven programs' are programs requested and certified by industries, or programs initiated by flagship TVET institutes, and developed in consultation with industries. Target figures are cumulative. Number of demand-driven short-term programs newly developed or revised by flagship TVET institutes. Each flagship TVET Annual 'Demand-driven programs' institute collects data Number of demand-driven short-term Annual progress Flagship TVET Institute are programs requested and supporting programs developed report and certified by industries, documents. or programs initiated by flagship TVET institutes, and developed in consultation with industries. Page 51 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Target figures are cumulative. Number of demand-driven long-term programs newly developed or revised by flagship TVET institutes. 'Demand-driven programs' Each flagship TVET are programs requested Annual institute collects data Number of demand-driven long-term and certified by industries, Annual progress Flagship TVET Institute and supporting programs developed or programs initiated by report documents. flagship TVET institutes, and developed in consultation with industries. Target figures are cumulative. Number of qualifications developed that are bilaterally or regionally recognized. Annual Regional Facilitation Unit 'Bilaterally recognized' Number of qualifications developed that Annual progress collects data and Regional Facilitation Unit means qualifications are are bilaterally or regionally recognized report supporting documents. mutually recognized by two countries (for instance, through mutual recognition agreement). 'Regionally recognized' Page 52 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) means qualifications are recognized by more than two countries (for instance, harmonized qualifications among three countries, and so on.) 'Region' refers to Sub- Saharan Africa Region. 'Qualifications' refer to academic credentials in specific areas. For instance, diploma in agro-processing, degree in railway engineering, and so on. Target figures are cumulative. Measured by student and sector employment Regional Facilitation Unit Annual surveys. Survey instrument collects data through Annual progress Regional Facilitation Unit Beneficiary satisfaction will be developed, and student and employer report satisfaction level will be surveys. measured by annual surveys. ME PDO Table SPACE Page 53 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Number of regional flagship TVET institute Each flagship TVET whose project Number of regional flagship TVET Established institute collects data implementation units are One time Flagship TVET Institute institutes whose project implementation PIU and supporting established. units are established documents. Each institute's progress is measured by 'Yes/No.' Number of regional flagship TVET institutes whose industry advisory board/committee is established at each flagship Each flagship TVET Number of flagship TVET institutes whose Approved TVET institute with at least institute collects data industry advisory boards/committees are One time TOR, a list of Flagship TVET Institute 50% of members of the and supporting established with 50% representation of members board/committee at each documents. the private sector institute represented from industries. Each institute's progress is measured by 'Yes/No'. Number of MoUs signed with industries and partner Each flagship TVET Annual institutions by flagship institute collects data MoUs signed with industries and partner Annual progress Flagship TVET Institute TVET institutes. and supporting institutions report documents. Agreements that outline at least a two-year Page 54 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) partnership work program need to be attached to the signed MoUs. Target figures are cumulative. Number of MoUs signed with industries. Agreements that outline at Each flagship TVET least a two-year institute collects data Annual Annual report Flagship TVET Institute MoU signed with industries partnership work program and supporting need to be attached to the documents. signed MoUs. Target figures are cumulative. Number of MoUs signed with partner institutions. Partner institutions could include a) non-project TVET institutions in the country Each flagship Annual and b) partner institutions TVET institute collects Annual progress Flagship TVET Institute MoUs signed with partner institutions in foreign countries for data and supporting report staff exchange programs. documents. Agreements that outline at least a two-year partnership work program need to be attached to the signed MoUs. Page 55 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Target figures are cumulative. Number of teaching staff in flagship TVET institute who have industrial attachment Each flagship TVET Annual Number of teaching staff in regional for at least one month, and institutes collects data Regional flagship TVET Annual progress flagship TVET institutes who have return to the institutes and and supporting Institute report industrial attachment resume duties. documents. Target figures are cumulative. Number of teaching staff at flagship TVET institutes who undertake exchanges Each flagship TVET in another country for at Annual institutes collects data Number of teaching staff who undertake least one month, and Annual progress Flagship TVET Institute and supporting exchanges in another country return to the institutes and report documents. resume duties. Target figures are cumulative. Training condition is improved by completing construction of new Each flagship facilities or rehabilitation of Annual TVET institute collects Training condition improved and key existing facilities and Annual progress Flagship TVET Institute data and supporting training facilities provided completing installation of report documents. training equipment as set in approved Strategic Investment Plans (SIPs). Page 56 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Each institute's progress will be measured by the following milestones: a) contractor contract signed, b) 50% construction completed, c) 100% construction completed, d) vender contract for equipment signed, and e) equipment procured and installed. Amount of incomes (in U.S. dollar equivalent) externally generated by flagship TVET institutes. The amount includes externally generated income deposited into the institute's account from tuition fees, other student Each flagship TVET Annual fees, joint research, sales institute collects data Income generation by flagship TVET Annual progress Flagship TVET Institute of consultancies, sales of and supporting institutes report products, fund raising, documents. donations, or any other external sources. In-kind contribution from donors or any other sources (such as laboratory equipment) is not counted as a result by monetizing its value. Target figures are Page 57 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) cumulative. Flagship TVET institutes conduct annual tracer studies and publish the studies on-line (for instance, institute's websites), and institutes organize stakeholder consultation workshops, including with industries. Flagship TVET institutes will Each flagship TVET conduct tracer studies for Annual institute collects data existing programs until new Annual progress Flagship TVET Institute Tracer study conducted annually and supporting programs are developed or report documents. existing programs are revised. After new programs are developed, or existing programs are revised, institutes will conduct tracer studies for graduates from new or revised programs. Each institute's progress is measured by 'Yes/No' each year. Number of occupational Annual National Project National Project Occupational standards in the EASTRIP standards in the EASTRIP Annual progress Coordination Unit Coordination Unit priority sectors developed or updated priority sectors developed report collects data and or updated by countries. supporting documents. Page 58 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Target figures are cumulative. Number of model curricula with modern IT in EASTRIP National Project priority programs Annual Model curricula with modern IT in Coordination Unit National Project developed or reviewed by Annual progress EASTRIP priority programs developed or collects data and Coordination Unit countries. report reviewed supporting documents. Target figures are cumulative. Number of countries which organize national TVET forum and dissemination workshops each year. National Project Annual Coordination Unit National Project National TVET forums and dissemination Annual progress Target figures are collects data and Coordination Unit workshops organized report cumulative. supporting documents. Each country's progress is measured by 'Yes/No' each year. Number of mutual recognition of qualifications with other National Project Mutual recognition of qualifications with countries (one or more Annual Coordination Unit National Project other countries and/or guideline on how than one) and/or guideline Annual progress collects data and Coordination Unit to facilitate the regional students’ on how to facilitate the report supporting documents. enrollment in EASTRIP developed regional students’ enrollment in EASTRIP. Target figures are Page 59 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) cumulative. Number of national plans, policies and strategies developed and implemented, and enactment of authorities completed and authorities are operationalized as set out in approved national work plans for each of the governments. 'Implemented' means that relevant ministries, National Project Number of national plans, policies, or authorities and institutes Annual Coordination Unit National Project strategies developed and implemented, implement activities Annual progress collects data and Coordination Unit and enactment of authorities completed according to developed report supporting documents. and operationalized plans, policies and strategies at least for one year. At least one annual progress report of the implementation is prepared, and progress and challenges are discussed among stakeholders. 'Operationalized' means that established authorities are operational at least for one year. All key staff are in place, budgets are Page 60 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) allocated, a strategic plan for the authority is approved, an Operations Manual is available, and an annual report is published. Details of activities are included in approved national work plans. Target figures are cumulative. Number of skills competitions implemented. A host country of skills competition will be rotated among three countries. The National Project Annual first skills competition is Coordination Unit National project East Africa skills competitions Annual progress implemented in one collects data and coordination unit implemented report country in Year 2, the supporting documents. second competition in another country in Year 3, and the third one in Year 4. Target figures are cumulative. Regional Steering Regional Steering Committee meetings Annual Regional Facilitation Unit Committee meetings are facilitated and EASTRIP technical and Annual progress collects data and Regional Facilitation Unit facilitated by the Regional dissemination workshop conducted twice report supporting documents. Facilitation Unit twice a a year year. Page 61 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) EASTRIP technical and dissemination workshop conducted twice a year. Capacity building for regional flagship TVET institutes are facilitated by the Regional Facilitation Annual Regional Facilitation Unit Capacity building for regional flagship Unit and completed in the Annual progress collects data and Regional Facilitation Unit TVET institutes in TVET leadership, areas of TVET leadership, report supporting documents. management, and technical areas management, and technical areas as set out in an approved regional work plan. Number of regional harmonized occupational Annual Regional Facilitation Unit Number of regional harmonized standards developed for Annual progress collects data and Regional Facilitation Unit occupational standards developed for selected occupations. report supporting documents. selected occupations Target figures are cumulative. Annual Regional Facilitation Unit Regional qualifications framework A regional qualifications One time progress collects data and Regional facilitation unit developed framework is developed. report supporting documents. ME IO Table SPACE Page 62 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Disbursement Linked Indicators Matrix DLI_T BL_MATRI X DLI 1 Institutional readiness Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Number 24,595,000.00 0.08 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 16.00 24,595,000.00 2020 0.00 2021 0.00 2022 0.00 2023 0.00 2024 0.00 0.00 DLI_T BL_MATRI X DLI 1.1 Establishment of Project Implementation Unit at Regional Flagship TVET Institutes Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Number 12,297,500.00 0.04 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 16.00 12,297,500.00 Page 63 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 2020 0.00 2021 0.00 2022 0.00 2023 0.00 2024 0.00 0.00 DLI_T BL_MATRI X DLI 1.2 Establishment of Industry Advisory Board/Committee Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Number 12,297,500.00 0.04 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 16.00 12,297,500.00 2020 0.00 2021 0.00 2022 0.00 2023 0.00 2024 0.00 0.00 Page 64 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) DLI_T BL_MATRI X DLI 2 Access Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 36,892,500.00 0.13 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 6,969.00 4,234,497.55 2020 9,066.00 5,617,918.80 2021 11,645.00 7,346,415.45 2022 13,998.00 8,913,334.86 2023 16,759.00 10,780,333.34 2024 0.00 0.00 DLI_T BL_MATRI X Number of student enrollments at regional flagship TVET institutes in programs aimed at meeting skills needs of priority DLI 2.1 sectors Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Number 36,892,500.00 0.13 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 6,969.00 4,234,497.55 Page 65 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 2020 9,066.00 5,617,918.80 2021 11,645.00 7,346,415.45 2022 13,998.00 8,913,334.86 2023 16,759.00 10,780,333.34 2024 0.00 0.00 DLI_T BL_MATRI X DLI 3 Quality Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Number 184,462,500.00 0.63 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 265.00 43,553,091.00 2020 175.00 35,664,011.00 2021 190.00 35,319,445.00 2022 184.00 33,310,140.00 2023 214.00 36,615,813.00 2024 0.00 0.00 Page 66 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) DLI_T BL_MATRI X Number of demand-driven programs developed and accredited by national TVET accreditation agencies or certified by DLI 3.1 industries Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Number 36,892,500.00 0.13 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 52.00 8,831,496.48 2020 44.00 8,491,971.83 2021 41.00 7,179,471.83 2022 34.00 6,056,690.14 2023 35.00 6,332,869.72 2024 0.00 0.00 DLI_T BL_MATRI X DLI 3.2 Teaching staff in flagship TVET institutes who have industrial attachment Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 36,892,500.00 0.13 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 96.00 11,808,768.70 Page 67 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 2020 51.00 6,247,847.36 2021 51.00 6,058,569.29 2022 47.00 5,717,405.33 2023 60.00 7,059,909.32 2024 0.00 0.00 DLI_T BL_MATRI X DLI 3.3 Teaching staff who undertake exchanges in TVET institutes in another country Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 36,892,500.00 0.13 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 62.00 8,888,723.09 2020 24.00 5,583,049.15 2021 43.00 6,720,240.05 2022 46.00 6,762,425.22 2023 64.00 8,938,062.49 2024 0.00 0.00 Page 68 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) DLI_T BL_MATRI X DLI 3.4 Number of MoUs signed with industries and partner institutions Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 36,892,500.00 0.13 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 42.00 7,788,119.38 2020 40.00 7,677,013.48 2021 39.00 7,697,034.64 2022 41.00 7,109,490.35 2023 39.00 6,620,842.15 2024 0.00 0.00 DLI_T BL_MATRI X DLI 3.5 Tracer study conducted annually Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 36,892,500.00 0.13 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 13.00 6,235,982.97 2020 16.00 7,664,129.26 Page 69 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 2021 16.00 7,664,129.26 2022 16.00 7,664,129.26 2023 16.00 7,664,129.25 2024 0.00 0.00 DLI_T BL_MATRI X DLI 4 Occupational standards Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 9,762,500.00 0.03 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 8.00 2,375,595.00 2020 9.00 1,582,143.00 2021 7.00 1,373,810.00 2022 8.00 1,477,976.00 2023 9.00 1,582,143.00 2024 6.00 1,370,833.00 Page 70 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) DLI_T BL_MATRI X DLI 4.1 Occupational standards in the EASTRIP priority sectors developed or updated Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 9,762,500.00 0.03 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 8.00 2,375,595.00 2020 9.00 1,582,143.00 2021 7.00 1,373,810.00 2022 8.00 1,477,976.00 2023 9.00 1,582,143.00 2024 6.00 1,370,833.00 DLI_T BL_MATRI X DLI 5 Model curricula Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 9,762,500.00 0.03 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 10.00 2,505,804.00 2020 9.00 1,504,018.00 Page 71 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 2021 9.00 1,504,018.00 2022 9.00 1,504,018.00 2023 9.00 1,504,018.00 2024 5.00 1,240,624.00 DLI_T BL_MATRI X DLI 5.1 Model curricula with modern IT in EASTRIP priority program developed or reviewed Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 9,762,500.00 0.03 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 10.00 2,505,804.00 2020 9.00 1,504,018.00 2021 9.00 1,504,018.00 2022 9.00 1,504,018.00 2023 9.00 1,504,018.00 2024 5.00 1,240,624.00 Page 72 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) DLI_T BL_MATRI X DLI 6 Mutual recognition of qualifications Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Number 9,762,500.00 0.03 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 4.00 263,461.00 2020 7.00 4,625,168.00 2021 7.00 1,841,274.00 2022 6.00 1,315,337.00 2023 6.00 858,630.00 2024 6.00 858,630.00 DLI_T BL_MATRI X DLI 6.1 Mutual recognition of qualifications with other countries agreed Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Number 5,857,500.00 0.02 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 4.00 263,462.00 2020 4.00 720,168.00 Page 73 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 2021 7.00 1,841,273.00 2022 6.00 1,315,337.00 2023 6.00 858,630.00 2024 6.00 858,630.00 DLI_T BL_MATRI X DLI 6.2 Guideline on how to facilitate the regional students' enrollment in EASTRIP developed Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Number 3,905,000.00 0.01 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 0.00 0.00 2020 3.00 3,905,000.00 2021 0.00 0.00 2022 0.00 0.00 2023 0.00 0.00 2024 0.00 0.00 Page 74 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) DLI_T BL_MATRI X DLI 7 National plans, policies, strategies, and authorities Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 9,762,500.00 0.03 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 0.00 0.00 2020 3.00 5,131,250.00 2021 1.00 375,000.00 2022 1.00 375,000.00 2023 2.00 3,881,250.00 2024 0.00 0.00 DLI_T BL_MATRI X Developing sustainable TVET financing strategy (ET); Establishing a national inter-institutional collaboration framework for DLI 7.1 TVET (KE); Operationalizing National Qualifications Framework (TZ) Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 5,131,250.00 0.02 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 0.00 0.00 Page 75 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 2020 3.00 5,131,250.00 2021 0.00 0.00 2022 0.00 0.00 2023 0.00 0.00 2024 0.00 0.00 DLI_T BL_MATRI X Establishment of a TVET quality assurance agency (ET); Development of a sustainable national financing strategy for TVET DLI 7.2 (KE) Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 3,881,250.00 0.01 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 0.00 0.00 2020 0.00 0.00 2021 1.00 375,000.00 2022 0.00 0.00 2023 1.00 3,506,250.00 2024 0.00 0.00 Page 76 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) DLI_T BL_MATRI X DLI 7.3 Conducting national TVET skills mapping (KE) Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 375,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 0.00 0.00 2020 0.00 0.00 2021 0.00 0.00 2022 1.00 375,000.00 2023 0.00 0.00 2024 0.00 0.00 DLI_T BL_MATRI X DLI 7.4 Developing a policy for regional TVET integration (KE) Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 375,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 2019 0.00 0.00 2020 0.00 0.00 Page 77 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 2021 0.00 0.00 2022 0.00 0.00 2023 1.00 375,000.00 2024 0.00 0.00 Verification Protocol Table: Disbursement Linked Indicators DLI_T BL_VERIFICATI ON 1 Institutional readiness This DLI measures the institutional readiness to implement the Strategic Investment Plan (SIP) developed by a Regional Description Flagship TVET Institute. Data source/ Agency Regional Flagship TVET Institute Verification Entity Regional Facilitation Unit See description of DLR1.1 and DLR1.2 Procedure DLI_T BL_VERIFICATI ON 1.1 Establishment of Project Implementation Unit at Regional Flagship TVET Institutes Disbursed when a PIU is established at each flagship TVET institute. Description A PIU is considered "established" when a) key members are in place, and b) TOR for each member is ready. Data source/ Agency Flagship TVET Institute Verification Entity Regional Facilitation Unit 1. Each institute establishes a PIU by developing a TOR and appointing members of the PIU. Procedure 2. Each institute submits a TOR and a list of members of the PIU to the RFU for verification of the results. Page 78 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 3. The RFU reviews the evidence of the establishment of the PIU at each institute. 4. The RFU submits a short verification report to the World Bank for confirmation. 5. The World Bank reviews the verification report and confirms the achievement of the result. DLI_T BL_VERIFICATI ON 1.2 Establishment of Industry Advisory Board/Committee Disbursed when an Industry Advisory Board/Committee is established at each institute with at least 50% of the members of the board represented from industries. The board/committee is considered “established” when a) ToR of the board, b) a list of members of the board/committee, Description and c) appointed chairs (co-chairs by industry and TVET or chair and deputy chair by industry/ TVET respectively) are approved by a decision making body at the TVET institute. The TOR for the board/committee should include key tasks and responsibilities of the board/committee and a term of board members at least. Data source/ Agency Regional Flagship TVET Institute Verification Entity Regional Facilitation Unit 1. Each institute establishes an Industrial Advisory Board/Committee, by developing the TOR, appointing members of the board and chairperson(s). 2. Each institute submits a TOR, a list of members of the board to the decision-making body at its flagship TVET institutes for approval. 3. A decision making body at flagship TVET institutes approves a TOR, a list of members and chairpersons, and confirms the establishment of an Industry Advisory Board/Committee. Procedure 4. Each institute submits evidence of the establishment of an Industry Advisory Board/Committee to the RFU for verification of the results. An example of the evidences is for instance an approval letter from the decision-making body with attachments of TOR and a list of board/committee members. 5. The RFU reviews the evidence of the establishment of an Industry Advisory Board/Committee and verifies the results. 6. The RFU submits a short verification report to the World Bank for confirmation. Page 79 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 7. The World Bank reviews the verification report and confirms the achievement of the results. DLI_T BL_VERIFICATI ON 2 Access Description This DLI measures the improvement of access to regional flagship TVET Institutes. Data source/ Agency Regional Flagship TVET Institute Verification Entity Independent Verification Agency See description in DLR 2.1. Procedure DLI_T BL_VERIFICATI ON Number of student enrollments at regional flagship TVET institutes in programs aimed at meeting skills needs of priority 2.1 sectors Disbursement occurs when an additional student is enrolled in the programs aimed at meeting skills needs of priority Description sectors. Results are counted when students are enrolled at least six months in long-term programs, and when students complete training in short-term programs. Data source/ Agency Regional Flagship TVET Institute Verification Entity Independent Verification Agency 1. Each institute submits a record of students enrolled to the IVA through the Regional Facilitation Unit (RFU). A record of students’ enrollment should include the name of students, gender, program name, year of training, enrolled date for long term programs, and completion status for short term course, contact information (email/ telephone number, and so on). 2. The IVA reviews the record of students enrolled, and conducts a random-check by calling sample students or conducting site visits, and verifies the results. Procedure 3. The IVA submits a verification report to the RFU, and the RFU submits the report to the World Bank. 4. The World Bank reviews the verification report and confirms the achievement of the results. Note. Any enrollment that occurs in priority programs after June 8, 2018 (appraisal completion date) is counted toward the DLI in the first year. Page 80 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) DLI_T BL_VERIFICATI ON 3 Quality Description This DLI measures quality improvement at Regional Flagship TVET Institutes. Data source/ Agency Regional Flagship TVET Institute. Verification Entity Independent Verification Agency See description of each DLR under this DLI. Procedure DLI_T BL_VERIFICATI ON Number of demand-driven programs developed and accredited by national TVET accreditation agencies or certified by 3.1 industries Disbursement occurs when an additional student is enrolled in the programs aimed at meeting skills needs of priority Description sectors. Results are counted when students are enrolled at least six months in long-term programs, and when students complete training in short-term programs. Data source/ Agency Regional Flagship TVET Institute Verification Entity Independent Verification Agency [Programs for which national accreditation is required] 1. Each institute submits newly developed/revised demand-driven programs to national agencies for accreditation. 2. National agency reviews and accredits developed/revised programs. 3. Each institute submits the evidence of demand- driven programs accredited to the IVA. 4. The IVA reviews developed/ revised programs, and evidence of approval by a national accreditation agency and verifies the results. Procedure 5. The IVA submits a verification report to the Regional Facilitation Unit (RFU), and the RFU sends it to the World Bank. 6. The World Bank reviews the verification report and confirms the achievement of the results. [Programs for which national accreditation is not required] 1. Each institute submits developed/ revised programs, certified by industries, to the IVA. 2. The IVA reviews the developed/ revised programs and evidence of certification by industries, and verifies the results 3. The IVA submits a verification report to the RFU, and the RFU sends it to the World Bank Page 81 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 4. The World Bank reviews the verification report and confirms the achievement of the results. Note. Any new/revised demand-driven programs in priority areas after June 8, 2018 (appraisal completion date) is counted towards the DLI in the first year. DLI_T BL_VERIFICATI ON 3.2 Teaching staff in flagship TVET institutes who have industrial attachment Disbursement occurs when teaching staff in flagship TVET institutes complete relevant industrial attachment for at least one Description month. Staff needs to return to the institute and resume his/her duty. Data source/ Agency Regional Flagship TVET Institute Verification Entity Independent Verification Agency 1. Each institute submits the evidence of completion of industrial attachment programs to the IVA through the Regional Facilitation Unit (RFU). Evidences are for instance, a) industries’ certification of completion of the industrial attachment programs, and b) a report or letter from staff who complete and resume his/ her duty at the institute, and so on. Procedure 2. The IVA reviews a list of teaching staff who complete industrial attachment programs, evidence of completion of industrial attachment programs, and evidence of resumption of duty at TVET institutes, and verifies the results. 3. The IVA submits a verification report to the RFU, and the RFU submits it to the World Bank. 4. The World Bank reviews the verification report and confirms the achievement of the results. DLI_T BL_VERIFICATI ON 3.3 Teaching staff who undertake exchanges in TVET institutes in another country Disbursement occurs when teaching staff in flagship TVET institutes undertake exchanges in another country. Staff needs to Description return to the institutes and resume its duty. Data source/ Agency Regional Flagship TVET Institute Verification Entity Independent Verification Agency 1. Each institute submits the evidence of completion of exchange programs and resumption of the duties to the IVA through Procedure the Regional Facilitation Unit (RFU). Evidences of completion are for instance a) a completion certificate issued by partner institutions, and b) a report or letter Page 82 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) from staff who complete and resume his/ her duty at TVET institutes, and so on. 2. The IVA reviews a list of teaching staff who undertake exchanges, evidence of completion of exchange programs, and resumption of his/her duty at TVET institutes and verifies the results. 3. The IVA submits a verification report to the RFU, and the RFU submits it to the World Bank. 4. The World Bank reviews the verification report and confirms the achievement of the results. DLI_T BL_VERIFICATI ON 3.4 Number of MoUs signed with industries and partner institutions Disbursement occurs when the MoUs are signed with industries and partner institutions by flagship TVET institute. Description Agreements that outline at least a two-year partnership work program need to be attached to the signed MoUs. Data source/ Agency Regional Flagship TVET Institute Verification Entity Independent Verification Agency 1. Each institute submits the evidence of the signing of MoUs to the IVA through the Regional Facilitation Unit (RFU). Evidences are signed MoUs and agreements. 2. The IVA reviews the evidences, and verifies the results. Procedure 3. The IVA submits a verification report to the RFU, and the RFU submits it to the World Bank. 4. The World Bank reviews the verification report and confirms the achievement of the results. DLI_T BL_VERIFICATI ON 3.5 Tracer study conducted annually Disbursement occurs when institutes conduct an annual tracer study, publish it on-line, and hold consultations with key Description stakeholders, including industry on the findings of studies. Data source/ Agency Regional Flagship TVET Institute Verification Entity Independent Verification Agency 1. Each institute conducts a tracer study annually. 2. Each institute submits the evidence of a tracer study conducted. Procedure Evidences is for instance, published studies, URL, or screenshot of website where reports are published, and programs/ minutes of stakeholder consultations workshop through the Regional Facilitation Unit (RFU). Page 83 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 3. The IVA reviews the evidence and verifies the results. 4. The IVA submits a verification report to the RFU, and the RFU submits it to the World Bank. 5. The World Bank reviews the verification report and confirms the achievement of the results. DLI_T BL_VERIFICATI ON 4 Occupational standards Description Disbursement occurs when an occupational standard in the EASTRIP priority sectors is developed or updated Data source/ Agency National Project Coordination Unit Verification Entity Independent Verification Agency See description of DLR 4.1. Procedure DLI_T BL_VERIFICATI ON 4.1 Occupational standards in the EASTRIP priority sectors developed or updated Description Disbursement occurs when an occupational standard in the EASTRIP priority sectors is developed or updated. Data source/ Agency National Project Coordination Unit Verification Entity Independent Verification Agency 1. A National Project Coordination Unit (NPCU) submits a list of occupational standards developed or updated, some samples of occupational standards developed or updated, and the evidence of approval of the standards to the IVA through the Regional Facilitation Unit (RFU). 2. The IVA reviews a list of occupational standards developed or updated, and evidence of approval. The IVA also reviews Procedure some samples of occupational standards developed or updated and the process for the development or update. 3. The IVA submits a verification report to the RFU, and the RFU submits the report to the World Bank. 4. The World Bank reviews the verification report and confirms the achievement of the results. DLI_T BL_VERIFICATI ON 5 Model curricula Disbursement occurs when a model curriculum with modern IT is developed or reviewed and approved by national TVET Description curriculum agencies. Page 84 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Data source/ Agency National Project Coordination Unit Verification Entity Independent Verification Agency See description of DLR 5.1 Procedure DLI_T BL_VERIFICATI ON 5.1 Model curricula with modern IT in EASTRIP priority program developed or reviewed Disbursement occurs when a model curriculum with modern IT is developed or reviewed, and approved by national TVET Description curriculum agencies. Data source/ Agency NPCU Verification Entity Independent Verification Agency 1. A National Project Coordination Unit (NPCU) submits a list of model curricula with modern IT developed, developed model curricula, and the evidence of approval of developed model curricula to the IVA through the Regional Facilitation Unit (RFU). 2. The IVA reviews a list of model curricula developed, model curricula developed, and evidence of approval. The agency Procedure also reviews some samples of model curricula developed and the process for development. 3. The IVA submits a verification report to the RFU, and the RFU submits the report to the World Bank. 4. The World Bank reviews the verification report and confirms the achievement of the results. DLI_T BL_VERIFICATI ON 6 Mutual recognition of qualifications Mutual recognition of qualifications with other countries and/ or guideline on how to facilitate the regional students' Description enrollment in EASTRIP developed. Data source/ Agency National Project Coordination Unit Verification Entity Independent Verification Agency See description of each DLR under this DLI. Procedure Page 85 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) DLI_T BL_VERIFICATI ON 6.1 Mutual recognition of qualifications with other countries agreed Description Disbursement occurs per mutual recognition of qualifications agreed. Data source/ Agency National Project Coordination Unit Verification Entity Independent Verification Agency 1. A National Project Coordination Unit (NPCU) submits the evidence of mutual recognition of qualifications agreed. 2. The IVA reviews the evidence of mutual recognition of qualifications agreed and the process for it. 3. The IVA submits a verification report to the Regional Facilitation Unit (RFU), and the RFU submits the report to the World Procedure Bank. 4. The World Bank reviews the verification report and confirms the achievement of the results. DLI_T BL_VERIFICATI ON 6.2 Guideline on how to facilitate the regional students' enrollment in EASTRIP developed Description Disbursement occurs when a guideline on how to facilitate the regional students’ enrollment in EASTRIP is developed. Data source/ Agency National Project Coordination Unit Verification Entity Independent Verification Agency 1. A National Project Coordination Unit (NPCU) submits the evidence of the development of the guideline. 2. The IVA reviews the evidence of the development of the guideline and the process for it. 3. The IVA submits a verification report to the Regional Facilitation Unit (RFU), and the RFU submits the report to the World Procedure Bank. 4. The World Bank reviews the verification report and confirms the achievement of the results. DLI_T BL_VERIFICATI ON 7 National plans, policies, strategies, and authorities Description Disbursement occurs when a national plan, policy, strategy is developed, or enactment of an authority is completed. Data source/ Agency National Project Coordination Unit Page 86 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Verification Entity Independent Verification Agency See description of each DLR under this DLI. Procedure DLI_T BL_VERIFICATI ON Developing sustainable TVET financing strategy (ET); Establishing a national inter-institutional collaboration framework for 7.1 TVET (KE); Operationalizing National Qualifications Framework (TZ) Disbursement occurs when a sustainable TVET financing strategy is developed for Ethiopia; a national inter-institutional Description collaboration framework for TVET is established in Kenya; and the National Qualifications Framework is reviewed and operationalized in Tanzania. Data source/ Agency National Project Coordination Unit Verification Entity Independent Verification Agency 1. A National Project Coordination Unit (NPCU) submits a developed plan, policy, strategy, and the evidence of approval of the developed plan, policy or strategy, and the evidence of completion of enactment of the authority. The NPCU also submits the information of the process for development and enactment. In addition, the NPCU will submits the evidence of the implementation of the developed plan, policy or strategy, and operationalization of the authority. 2. The IVA reviews a developed plan, policy, strategy, the evidence of approval of the developed plan, policy, or strategy, Procedure and the evidence of implementation, or the evidence of completion of enactment of the authority, and the evidence of operationalization of the authority. The IVA also reviews the process of the development and enactment. 3. The IVA submits a verification report to the Regional Facilitation Unit (RFU), and the RFU submits the report to the World Bank. 4. The World Bank reviews the verification report and confirms the achievement of the result. DLI_T BL_VERIFICATI ON Establishment of a TVET quality assurance agency (ET); Development of a sustainable national financing strategy for TVET 7.2 (KE) Disbursement occurs when a TVET quality assurance agency is established in Ethiopia and a sustainable national financing Description strategy is developed for Kenya. Data source/ Agency National Project Coordination Unit Verification Entity Independent Verification Agency Page 87 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 1. A National Project Coordination Unit (NPCU) submits a developed plan, policy, strategy, and the evidence of approval of the developed plan, policy or strategy, and the evidence of completion of enactment of the authority. The NPCU also submits the information of the process for development and enactment. In addition, the NPCU will submits the evidence of the implementation of the developed plan, policy or strategy, and operationalization of the authority. 2. The IVA reviews a developed plan, policy, strategy, the evidence of approval of the developed plan, policy, or strategy, Procedure and the evidence of implementation, or the evidence of completion of enactment of the authority, and the evidence of operationalization of the authority. The IVA also reviews the process of the development and enactment. 3. The IVA submits a verification report to the Regional Facilitation Unit (RFU), and the RFU submits the report to the World Bank. 4. The World Bank reviews the verification report and confirms the achievement of the result. DLI_T BL_VERIFICATI ON 7.3 Conducting national TVET skills mapping (KE) Description Disbursement occurs when national TVET skills mapping is conducted for Ethiopia. Data source/ Agency National Project Coordination Unit Verification Entity Independent Verification Agency 1. A National Project Coordination Unit (NPCU) submits a developed plan, policy, or strategy, and the evidence of approval of the developed plan, policy or strategy, and the evidence of completion of enactment of the authority. The NPCU also submits the information of the process for development and enactment. In addition, the NPCU will submits the evidence of the implementation of the developed plan, policy or strategy, and operationalization of the authority. 2. The IVA reviews a developed plan, policy, strategy, the evidence of approval of the developed plan, policy, or strategy, Procedure and the evidence of implementation, or the evidence of completion of enactment of the authority, and the evidence of operationalization of the authority. The IVA also reviews the process of the development and enactment. 3. The IVA submits a verification report to the Regional Facilitation Unit (RFU), and the RFU submits the report to the World Bank. 4. The World Bank reviews the verification report and confirms the achievement of the result. Page 88 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) DLI_T BL_VERIFICATI ON 7.4 Developing a policy for regional TVET integration (KE) Description Disbursement occurs when a policy for regional TVET integration is developed for Kenya. Data source/ Agency National Project Implementation Unit Verification Entity Independent Verification Agency 1. A National Project Coordination Unit (NPCU) submits a developed plan, policy, strategy, and the evidence of approval of the developed plan, policy or strategy, and the evidence of completion of enactment of the authority. The NPCU also submits the information of the process for development and enactment. In addition, the NPCU will submits the evidence of the implementation of the developed plan, policy or strategy, and operationalization of the authority. 2. The IVA reviews a developed plan, policy, or strategy, the evidence of approval of the developed plan, policy, or strategy, Procedure and the evidence of implementation, or the evidence of completion of enactment of the authority, and the evidence of operationalization of the authority. The IVA also reviews the process of the development and enactment. 3. The IVA submits a verification report to the Regional Facilitation Unit (RFU), and the RFU submits the report to the World Bank. 4. The World Bank reviews the verification report and confirms the achievement of the result. Page 89 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Disbursement Amount for Component 1 (by country, US$ equivalent) By Country DLI DLR Ethiopia Kenya Tanzania DLI 1. Institutional DLR 1.1. Establishment of Project 6,097,500 2,700,000 3,500,000 readiness Implementation Unit DLR 1.2. Establishment of Industry 6,097,500 2,700,000 3,500,000 Advisory Board DLI 2. Access DLR 2.1. Number of student enrollment 18,292,500 8,100,000 10,500,000 DLI 3. Quality DLR 3.1. Number of demand-driven 18,292,500 8,100,000 10,500,000 programs DLR 3.2. Number of staff with industrial 18,292,500 8,100,000 10,500,000 attachment DLR 3.3. Number of staff with exchange 18,292,500 8,100,000 10,500,000 programs DLR 3.4. Signing of MoUs 18,292,500 8,100,000 10,500,000 DLR 3.5. Tracer study 18,292,500 8,100,000 10,500,000 Total for Component 1 121,950,000 54,000,000 70,000,000 Note: DLR = Disbursement-Linked Result. Disbursement Amount for Component 1 by Ethiopia TVET Institute (US$ equivalent) Meles DLR Wingate Hawassa Holeta Kombolcha ERA Federal TVET Zenawi DLR 1.1 742,500 992,500 1,092,500 642,500 742,500 642,500 1,242,500 DLR 1.2 742,500 992,500 1,092,500 642,500 742,500 642,500 1,242,500 DLR 2.1 2,227,500 2,977,500 3,277,500 1,927,500 2,227,500 1,927,500 3,727,500 DLR 3.1 2,227,500 2,977,500 3,277,500 1,927,500 2,227,500 1,927,500 3,727,500 DLR 3.2 2,227,500 2,977,500 3,277,500 1,927,500 2,227,500 1,927,500 3,727,500 DLR 3.3 2,227,500 2,977,500 3,277,500 1,927,500 2,227,500 1,927,500 3,727,500 DLR 3.4 2,227,500 2,977,500 3,277,500 1,927,500 2,227,500 1,927,500 3,727,500 DLR 3.5 2,227,500 2,977,500 3,277,500 1,927,500 2,227,500 1,927,500 3,727,500 Total 14,850,000 19,850,000 21,850,000 12,850,000 14,850,000 12,850,000 24,850,000 Disbursement Amount for Component 1 by Kenya TVET Institute (US$ equivalent) DLR KenGen Kenya Coast KIHBT Kisumu Meru DLR 1.1 540,000 540,000 540,000 540,000 540,000 DLR 1.2 540,000 540,000 540,000 540,000 540,000 DLR 2.1 1,620,000 1,620,000 1,620,000 1,620,000 1,620,000 DLR 3.1 1,620,000 1,620,000 1,620,000 1,620,000 1,620,000 DLR 3.2 1,620,000 1,620,000 1,620,000 1,620,000 1,620,000 DLR 3.3 1,620,000 1,620,000 1,620,000 1,620,000 1,620,000 DLR 3.4 1,620,000 1,620,000 1,620,000 1,620,000 1,620,000 DLR 3.5 1,620,000 1,620,000 1,620,000 1,620,000 1,620,000 Page 90 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) DLR KenGen Kenya Coast KIHBT Kisumu Meru Total 10,800,000 10,800,000 10,800,000 10,800,000 10,800,000 Disbursement Amount for Component 1 by Tanzania TVET Institute (US$ equivalent) DLR ATC DIT Dar DIT Mwanza NIT DLR 1.1 812,500 812,500 812,500 1,062,500 DLR 1.2 812,500 812,500 812,500 1,062,500 DLR 2.1 2,437,500 2,437,500 2,437,500 3,187,500 DLR 3.1 2,437,500 2,437,500 2,437,500 3,187,500 DLR 3.2 2,437,500 2,437,500 2,437,500 3,187,500 DLR 3.3 2,437,500 2,437,500 2,437,500 3,187,500 DLR 3.4 2,437,500 2,437,500 2,437,500 3,187,500 DLR 3.5 2,437,500 2,437,500 2,437,500 3,187,500 Total 16,250,000 16,250,000 16,250,000 21,250,000 Disbursement Amount for Component 2 (Ethiopia, US$ equivalent) DLI DLR Ethiopia DLI 4. Occupational DLR 4.1. Occupational standards in the EASTRIP priority 7,012,500 standards sectors developed or updated DLI 5. Model DLR 5.1. Model curricula with modern IT developed or 7,012,500 curricula reviewed DLI 6. Mutual DLR 6.1. Mutual recognition of qualifications with other 4,207,500 recognition of countries agreed qualifications DLR 6.2. Guideline on how to facilitate the regional students’ 2,805,000 enrollment in EASTRIP developed DLI 7. National DLR 7.1. Development of sustainable TVET financing strategy 3,506,250 plans, policies, DLR 7.2 Establishment of a TVET quality assurance agency 3,506,250 strategies, and authorities Total for Component 2 28,050,000 Disbursement Amount for Component 2 (Kenya, US$ equivalent) DLI DLR Kenya DLI 4. Occupational DLR 4.1. Occupational standards in the EASTRIP 1,500,000 standards priority sectors developed or updated DLI 5. Model DLR 5.1. Model curricula with modern IT 1,500,000 curricula developed or reviewed DLI 6. Mutual DLR 6.1. Mutual recognition of qualifications with 900,000 recognition of other countries agreed qualifications DLR 6.2. Guideline on how to facilitate the 600,000 regional students’ enrollment in EASTRIP developed Page 91 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) DLI DLR Kenya DLI 7. National DLR 7.1. Establishment of a national inter- 375,000 plans, policies, institutional collaboration framework for TVET strategies, and DLR 7.2. Development of a sustainable national 375,000 authorities financing strategy for TVET DLR 7.3. Conducting national TVET skills mapping 375,000 DLR 7.4. Developing a policy for regional TVET 375,000 integration Total for Component 2 6,000,000 Disbursement Amount for Component 2 (Tanzania, US$ equivalent) DLI DLR Tanzania DLI 4. Occupational DLR 4.1. Occupational standards in the EASTRIP 1,250,000 standards priority sectors developed or updated DLI 5. Model DLR 5.1. Model curricula with modern IT 1,250,000 curricula developed or reviewed DLI 6. Mutual DLR 6.1. Mutual recognition of qualifications with 750,000 recognition of other countries agreed qualifications DLR 6.2. Guideline on how to facilitate the 500,000 regional students’ enrollment in EASTRIP developed DLI 7. National DLR 7.1. Review and operationalization of 1,250,000 plans, policies, National Qualifications Framework strategies, and authorities Total for Component 2 5,000,000 Page 92 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) ANNEX 1: DETAILED PROJECT DESCRIPTION Eastern Africa East Africa Skills for Transformation and Regional Integration Project (EASTRIP) 1. The PDO is to increase the access and improve the quality of TVET programs in selected Regional Flagship TVET Institutes and to support regional integration in East Africa. The project supports the development of highly specialized TVET programs at the diploma and degree levels for training of technicians and TVET faculty, as well as industry-recognized short-term training, targeting regional priority sectors in transport, energy, manufacturing, and ICT. The PDO will be achieved through complementary interventions at three different levels—TVET institute, national, and regional. Figure 1.1. Project Components and Subcomponents COMPONENT 1: COMPONENT 2: COMPONENT 3: Strengthening selected Regional Creating national TVET enabling Enhancing regional collaboration in Flagship TVET Institutes for high- environments TVET and project coordination quality skills development in priority sectors SUBCOMPONENTS SUBCOMPONENTS SUBCOMPONENTS 1. Strengthening governance and 1. Strengthening national TVET 1. Harmonization of standards and management quality assurance and industrial mutual recognition of 2. Institutionalizing industry links partnership qualifications for priority 3. Developing market relevant 2. Capacity building for TVET policy occupations competency-based training development and 2. Facilitating student and staff mobility through exchange programs implementation programs 4. Training of TVET managers and 3. Promoting regional integration 3. Regional project coordination teachers/trainers 4. Facilitating national project and M&E 5. Provision of key training coordination, and M&E facilities and equipment 6. Outreach and support for non- project national TVET institutes Component 1: Strengthening selected Regional Flagship TVET Institutes for high-quality skills development in priority sectors (SDR 174.66 million, US$246 million equivalent) 2. The objectives of this component are to strengthen the capacity of the Regional Flagship TVET Institutes to produce high-quality skills for the regional sector markets in railway, highway, port management, energy, light manufacturing, and ICT. Training programs will be developed based on standards and qualifications recognized by the industries operating in the East Africa regional or international markets. Each flagship TVET institute will have a specific specialization with a set of training qualifications and enable students from countries across the East Africa region to join the programs. This will reduce the cost of provision through economies of scale. 3. Transformation of these flagship TVET institutes to serve the regional markets and corridors will require action along the following lines: (a) understanding the demand-side skills requirements of the Page 93 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) regional markets and identifying specific skills and qualifications the TVET institute will focus on; (b) understanding the capacity gaps in the TVET institute in terms of faculty, curriculum, provision of training facilities, and governance and management; (c) rallying the institutional and national support for the institute for its new role as the regional flagship TVET institute; and (d) developing and implementing SIP in close collaboration with industries that would ensure the provision of key inputs for institute transformation and delivery of skills. 4. Thus, the component will finance the development and implementation of institute-specific SIPs. Drawing on international ‘best practices’ of TVET institutional reform, SIP guidelines were developed to promote a virtuous and sustainable cycle of demand-driven TVET program development and implementation, along five interrelated subcomponents: (a) strengthening governance and management, (b) institutionalizing industrial linkages at TVET institute and program levels, (c) developing market- relevant and competency-based training programs (modularized if possible), (d) training managers and teachers/trainers to upgrade their technical knowledge and practical skills, as well as to promote student- centered pedagogy and ICT competency, (e) providing key training equipment and facilities, and finally (f) providing outreach and support for non-project national TVET institutes to maximize the spillover effects of the Project. Moreover, contents of the training as well as procurement of equipment will incorporate the potential impact of climate change such as droughts, flooding, and extreme precipitation through creating and teaching a disaster recovery plan and special protocol for the machine operation in case lack of water and flooding affect the training center as well as machines. It is worth highlighting that the Project will explicitly encourage innovation and use of technology in the delivery of training and in promoting innovation and in-house production. These include potentially the use of Fab Lab30 models, smart classrooms, project-based learning, virtual reality technology, and provision of simulation training facilities such as the simulation power transmission station to provide the students and faculty a work environment close to real life to maximize the training impact. Subcomponent 1.1: Strengthening governance and management (SDR 10.65 million) 5. This subcomponent is designed to finance institutional-level interventions to improve the governance and management, including leadership capacity-building programs for the senior management of the TVET institutes; consultation and development of institutional strategic plans; and study visits at national, regional, and international levels. Further, the subcomponent will finance technical capacity building related to management information system, institutional FM, procurement, and safeguards strengthening. When relevant, it will also finance the design and installation of an Electronic Management Information System and e-learning platforms as enabling conditions for the regional flagship TVET institutes. Subcomponent 1.2: Institutionalizing industrial links (SDR 4.97 million) 6. This subcomponent refers to interventions designed to develop, strengthen, and further institutionalize mechanisms to work with the industry. In each of the Regional Flagship TVET Institutes, a menu of mechanisms will be encouraged, including inviting local NCIP-related companies to be in the institute governance council bodies, engaging private companies in the development of curriculum and training programs in each faculty, piloting development of customer-ordered training programs and 30 http://fab.cba.mit.edu/about/faq/. Page 94 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) establishing ‘learning factories’, sharing technology and production equipment, arranging internships and workplace exposure for TVET instructors and students, piloting servicing of small and medium enterprises with research and development solutions among strong faculties and programs, signing MoUs with companies for graduate employment, and organizing alumni and industrial outreach programs. Subcomponent 1.3: Developing market relevant and competency-based training programs (SDR 9.94 million credit) 7. This subcomponent is designed to address the challenges related to the training standards and curriculum being not responding to industrial needs, overly theoretical, and not sufficiently reflecting the needs of the industry and the teaching methodology being predominantly teacher centered. Based on consultations with relevant industries and the niche focus of the TVET institutes, each institute will first identify specific occupations and qualifications toward which the training programs will be targeted. Then, the TVET institute will organize systematic consultations within the institute and with relevant stakeholders and partners to develop core curriculum standards, modular curricula, and other teaching- learning materials through a cycle of piloting, evaluating, and revising. Each TVET institute will also establish an institute-level teaching and learning resource e-learning bank that can be shared within and beyond the TVET institute. Subcomponent 1.4: Training of TVET managers and teachers/trainers (SDR 10.65 million) 8. This subcomponent is designed to address the challenges related to improving management and instructional capacity. For managers, the project will support domestic and overseas training of top- and middle-level managers related to (a) raising awareness of the importance and specific instruments to strengthen links with industry, (b) improving technical understanding of the process of developing competency-based training curriculum, and (c) improving evidence-based policy making and overall management capacity. For teachers/trainers, the project will support domestic and overseas training related to (a) the development and use of competency-based curriculum, (b) new student-centered pedagogy, and (c) skills training in relevant industries, pedagogy and digital skills toward achieving high levels of both skills and academic qualification among teachers/trainers. Subcomponent 1.5: Provision of key training facilities and equipment (SDR 131.35 million) 9. This subcomponent is designed to mitigate the shortage of training centers and key training equipment in the project institutes. The project will provide financing to (a) expand and upgrade facilities, including construction of training centers within the existing campuses of the selected institutes; (b) provide key training equipment needed for the revised training programs and consultancies related to the design and supervision of works and goods contracts; and (c) develop guidelines for the management of all training facilities and equipment. Subcomponent 1.6: Outreach and support for non-project national TVET institutes (SDR 7.1 million) 10. This subcomponent is designed to maximize the impact of the regional flagship TVET institutes and incentivize the TVET institutes to partner with non-project TVET institutes through both horizontal exchanges and vertical articulation of programs at different levels (such as from certificate to diploma and bachelor levels). Page 95 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 11. The cluster of the institutes at the national level is expected to exert a demonstration effect to the rest of the national TVET system. In addition, a specific subcomponent is designed to incentivize the institutes to partner with non-project institutes through both horizontal exchanges and vertical articulation of programs at different levels (such as from certificate to diploma and to bachelor levels). 12. At the regional level, the network of 16 TVET institutes, with each specializing in a specific sector and occupations with niche programs, will produce a collection of high-level technical skills that are much needed in the regional sector markets and economic corridors in railway, highway, port management, and energy. Industrial parks and special export zones in the three countries will further benefit from the skills produced in the agro-processing, textile, and light manufacturing sectors. For each of the participating countries, the project will help reduce the cost of training and allow them to specialize. Student and faculty mobility is encouraged and built into the Results Framework. The Project will also create a region- wide momentum on TVET reforms and deepen the harmonization of standards and qualifications across East Africa. Component 2: Creating national TVET enabling environments (SDR 25.56 million, US$39 million equivalent) 13. As described in the Strategic Context, an inadequate national enabling policy environment is a critical constraint to service delivery at the TVET institutes. An important lesson learned from the higher education ACE project is that national-level interventions can be critical to create an enabling environment for the ACEs and ensure regionality. For example, for the students and faculty to move across countries, ministries of education need to develop policies and guidelines on mutual recognition of qualifications. In addition, for the institutes to develop new programs, the capacity in the national TVET accreditation body will need to be strengthened so that national standards are available and efficient processes can be used to approve the programs. 14. Therefore, under this component, the project will finance the development of policy and guidelines to facilitate student, graduate, and faculty mobility and industrial partnership and strengthen the capacity of national agencies that are responsible for the approval of occupation standards, model curriculum, and accreditation of TVET programs. The project will finance interventions in four subcomponents: (a) strengthening national TVET quality assurance, as it relates to the regional flagship TVET institutes, (b) capacity building for TVET policy development and implementation, (c) promoting regional integration, and (d) facilitating national project coordination and M&E. In addition, countries implement annual regional skills competitions following the WorldSkills31 model. Subcomponent 2.1: Strengthening national TVET quality assurance (SDR 4.97 million) 15. To ensure timely development and approval of new programs for the regional TVET institutes, the quality assurance entities have committed to step up technical support to the Regional Flagship TVET Institutes through improved coordination/collaboration across the different government agencies concerned with curriculum development and program/institutional accreditation. In Kenya, this will require that the TVET Authority, Curriculum Development Assessment and Certification Council, and Kenya National Qualifications Framework Act constitute a joint Technical Working Group to support the 31 https://www.worldskills.org/. Page 96 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) regional TVET institutes in complying with national quality assurance and accreditation regulations, including the new principle on competency-based education and training for TVET. Given that the competency-based education and training process requires the engagement of industry stakeholders in determining the occupational standards for TVET programs, a key task for the Technical Working Group will be to work with the relevant sector committees, comprising primarily industry experts, to establish occupational standards (where they do not exist yet) and assess new programs developed by the TVET institutes against the established standards. In Ethiopia, this responsibility will fall under the proposed National TVET Council and regional/state TVET councils. For Tanzania, it is NACTE and Vocational Educational and Training Authority in Tanzania. The establishment and/or capacity building of such entities, together with improvement in their processes, are, therefore, critical interventions under this subcomponent. Progress in the implementation of an action plan, in each participating country, for improving institutional capacity and processes will be tracked as annual milestones (DLRs) leading to an improved national TVET quality assurance system (DLI 3). Subcomponent 2.2: Capacity building for TVET policy development and implementation (SDR 17.04 million) 16. The relevant TVET Authority of each participating country will undertake a needs assessment to underpin an action plan for strengthening TVET policy development and implementation capacity. The activities planned, responding to each country's specific needs, include (a) training of the management and technical staff; (b) establishment of a sustainable TVET management information system; (c) research and development (for example, analytical work/studies on equity and gender issues in the TVET subsector); (d) dissemination of tracer studies on TVET graduates; and (e) dissemination of best practices on TVET. Subcomponent 2.3: Promoting regional integration (SDR 2.84 million) 17. This subcomponent is complementary to Component 3, which aims to enhance regional collaborative capacity on TVET and project coordination across the participating countries. The national TVET Authority of each ‘host’ country for the regional flagship TVET institutes will facilitate a structured and efficient process for timely admission of students originating from another country in the region. Other subcomponent activities include (a) establishment of a national database to track the enrollment of regional students in regional TVET institutes; (b) survey of best practices on attracting regional students to TVET institutions; (c) preparation of national guidelines for admission of regional students based on survey findings; (d) posting of these guidelines and the relevant contacts for guidance and advice, on the websites of the MoE and regional TVET institutes; (e) research on harmonization of entry qualifications across countries for TVET; and (f) marketing of the programs offered by the regional TVET institutes at national- and regional-level meetings, as well as international conferences to increase awareness of the programs and explain the process for admission. The contribution of these activities to the regional integration agenda will be the DLRs associated with DLI 2 on increased enrollment in flagship TVET institutions of students coming from another country in the region. Subcomponent 2.4: Facilitating national project coordination and M&E (SDR 2.84 million) 18. While overall project coordination and M&E will be primarily conducted by the RFU, the national TVET Authorities of the participating countries are expected to provide oversight for the regional flagship institutions. In each of the three participating countries, the State Department for TVET within the MoE Page 97 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) will be responsible for addressing any emerging issues that may affect project implementation such as the capacity of the regional TVET institutes to comply with national budgeting processes and fiduciary and safeguards regulations and procedures. This subcomponent will, therefore, support the following set of interventions in the participating countries: (a) technical support to the flagship TVET institutes on compliance with the required procurement, FM, and safeguards procedures/regulations; (b) establishment of a NSC (comprising education, energy, transport, and the relevant private industry sectors) and support of biannual meetings of this committee; (c) establishment of an NPCU and support for its operations; and (d) convening of forums for the dissemination of good practices by the flagship TVET institutes to other non-project TVET institutes, including exchange visits for new/upcoming TVET institutions to the flagship TVET institutes. 19. National ministries of education will act as implementing agencies for this component. IDA funds will be channeled to the national implementing agencies through RBF. Specific DLIs for the quality assurance process, especially as it relates to the regional TVET institutes, regional integration, and capacity development, have been identified along with annual targets/results for each indicator. This component will finance EEPs of all expenditure categories of the national work plans, including works, goods, consulting services, and operation costs. Component 3: Enhancing regional collaboration in TVET and project coordination (SDR 5.68 million regional IDA grant, US$8 million equivalent) 20. A regional component is needed to coordinate and support project implementation at the 16 regional flagship institutes and the three national components. A regional platform is also critical for networking, knowledge sharing, and the development of regional public goods to promote the regional integration objective. Thus, under this component, with IDA grant financing, the project will support two specific subcomponents: (a) harmonization of standards and mutual recognition of qualifications for priority occupations, (b) facilitating staff and student mobility through exchange programs and (c) regional project coordination and M&E. 21. A RFU has been put in place to implement the component. The IUCEA expressed interest and was competitively selected to coordinate all centers of excellence or flagship projects in the region. The IUCEA Act 2009 further provides for a mandate over ‘tertiary colleges’ in addition to the core mandate of higher education. Due to the relative lack of experience in TVET matters, however, the IUCEA is required to establish a project management structure at the regional level, including an RSC and a TVET technical advisory body, and recruit the EASTRIP project team including a project coordinator with industry and frontline experience for having managed a TVET institute, a TVET technical adviser who serves as the deputy project coordinator, an M&E officer, and relevant staff complements in procurement, FM, and safeguards. 22. The regional component will produce a set of harmonized standards toward mutual recognition of qualifications for priority occupations supported by EASTRIP in project countries. The component will also support the dissemination of project lessons learned, networking, coordination, technical assistance, and capacity building of the 16-regional flagship TVET institutes and the three national TVET systems. In addition, the component will support technical assistance, including a governance study of the IUCEA with the aim of improving its efficiency and effectiveness and a study to develop TVET initiatives within the Page 98 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) PASET framework. An independent verifier to verify Components 1 and 2 DLIs will also be contracted by the IUCEA. 23. Implementation of this component will follow IPF, based on an agreed work plan and Procurement Plan. The EASTRIP Project Coordinator will have the designated authority to update the work plans and Procurement Plans in close consultation with the World Bank. He or she will also have the authority to sign the relevant project documents, including procurement documents with approval from the World Bank, and can communicate directly with the World Bank on behalf of the IUCEA. Table 1.1. Cost and Financing for Component 3 (US$, millions) Subcomponents Cost Harmonization of standards and mutual recognition of 1.6 qualifications for priority occupations Regional project coordination and M&Ea 6.4 Total 8.0 Note: a. This includes PPA. Page 99 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) ANNEX 2: IMPLEMENTATION ARRANGEMENTS Eastern Africa East Africa Skills for Transformation and Regional Integration Project (EASTRIP) Project Institutional and Implementation Arrangements 1. EASTRIP is designed to have three levels of intervention, at the TVET institute, national, and regional levels, as outlined in the project description. Correspondingly, a three-layered project implementation approach is followed. The proposed implementation arrangement follows the successful model for the ACE I and ACE II projects and their lessons. The following are the three tiers of the governance and implementation arrangement proposed for the project (Figure 2.1): (a) The regional Flagship TVET Institutes will be responsible for TVET institute-level project implementation. The TVET institutes will establish a project implementation unit (PIU) for strategic planning and implementation of the approved plans, based on core functions including management, technical, industry liaison officer, fiduciary, safeguards including a gender focal point, M&E, and other requirements as assessed and recommended by the World Bank and agreed with the counterparts. The institute level PIUs will work closely with the management of the host TVET institutions. In addition, an Industrial Advisory Board will be established to provide guidance on industry collaboration. (b) A National Project Coordination Unit (NPCU) will be established in each country’s Ministry of Education with key project functions. The NPCU will work closely with national TVET quality assurance agencies to execute the national component of the project and further provide national-level coordination, M&E, and dissemination of good practices from the TVET institutes. (c) The RFU, IUCEA, will support the TVET institutes and national agencies in their implementation of the project. Further, the RFU will implement the regional initiatives of the project. It will provide knowledge sharing and coordination of sector activities. The EASTRIP project will be led by a project coordinator, who will be responsible for overall project coordination and facilitation, and an adequate number of professional staff in key function areas, including a finance officer, a procurement officer, an M&E officer, and communications officer. In addition, a Technical Advisory Board (TAB) will be established to provide technical advice on the design and implementation of the project. 2. In addition, Project Steering Committees will be established at the national and regional levels with representation from relevant government agencies and industries to ensure political commitment and direction for the project. An NSC will comprise representatives from relevant sector ministries as well as industries. A RSC will comprise representatives of ministries of education and major regional industries from transport, energy, manufacturing, and ICT sectors. 3. The NSC at the country level will be streamlined with existing project steering structure of other relevant World Bank-supported projects in higher education and skills, to promote synergies and Page 100 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) efficiency. For example, the EASTRIP Tanzania NSC may be the same core steering committee as for the Eastern and Southern Africa Higher Education Centers of Excellence (ACE II), ESPJ and the proposed new higher education project. Figure 2.1 depicts the project implementation arrangements. Figure 2.1. Project Implementation Arrangements Financial Management and Disbursement Arrangements 4. FM assessments were carried out by the World Bank to evaluate the adequacy of FM arrangements to support project implementation. The assessments focused on implementing entities at the three levels of intervention, at TVET institute, national, and regional levels. The objective of the assessments was to determine whether the proposed FM arrangements (a) are capable of correctly and completely recording all transactions and balances relating to the project; (b) would facilitate the preparation of regular, accurate, reliable, and timely financial statements; (c) would safeguard the project’s assets; and (d) would be subject to acceptable auditing arrangements. The assessments build significantly on the World Bank’s knowledge of country FM systems and requirements, and experience and performance of national and regional level entities through its involvement in other World Bank- financed operations. 5. Based on the implementations arrangements defined for the Project, the assessment scope includes one regional entity, three national entities and 16 TVET institutes as detailed below. (a) Ethiopia: MoE, and seven TVET institutes: Hawassa, Meles Zenawi Memorial, General Wingate, Kombolcha, Holeta, and Railway Academy. (b) Kenya: MoE and five TVET institutes: KenGen Geothermal training center, Kenya Coast National Polytechnic; Kisumu National Polytechnic; Meru National Polytechnic, and the Kenya Institute of Buildings and Highways Technology (KIBHT). Page 101 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) (c) Tanzania: The MoEST and four TVET institutes—DIT ICT, DIT Mwanza, Arusha Technical College (ATC), and the National Institute of Transport (NIT). (d) Regional coordination. IUCEA. 6. Fiduciary risk is considered high, due to the following key risk factors: (a) The number of implementing entities at different levels, all with different levels of capacity, and different institutional arrangements, which would require strong supervision, coordination and monitoring mechanisms for the daily operation, which might be even more challenging for TVETs outside the capital cities. (b) In general, the TVETs are not autonomous or independent entities; they are units within or extensions of line ministries (not all from the education sector) or regional bureaus, which is the case of the regional TVETs in Ethiopia. Efforts have been made to design and agree on the most direct possible flow of funds; however, there are still some budget, accounting, and reporting arrangements that would be immersed within those institutional structures and require interventions of line or central units. The latter would in some cases translate into cumbersome procedures and delays, for instance, due to limited budget allocations and unpredictable funds release from the Ministry of Finance; or delays in transfer of funds from Ministry of Education to TVET Institutes. (c) The dynamics around the use of DLIs and eligible expenditures, although more common in the Africa Region, are still difficult to internalize within the implementing entities, that in addition need to operate within government requirements. Operationalizing the concept of DLIs, eligible expenditures, and advances will be extremely difficult in some TVETs (for example, Ethiopia) and will require technical assistance from the national level entities. (d) Securing the alignment in terms of the availability of funds, achievement of results, and availability of eligible expenditures to support each disbursement would require strengthened capacity to prepare reliable cash flow forecasts and close coordination between technical and financial teams, at the TVET level, and in their interaction with their mother entities. (e) TVETs have no experience with World Bank requirements, and, in some cases (for example, regional TVETs in Ethiopia), have very limited capacity and significant weaknesses in the operation of basic FM systems. (f) The level of investment envisioned under the SIPs, for some TVETs represents a significant increase in their regular level of spending, but also in terms of the type of expenditures they regularly manage (for example, a couple of regional TVETs in Ethiopia do not manage capital expenditure). The implementation of SIPs would require a larger and stronger capacity, which in some cases would take some time to develop. (g) In terms of specific FM arrangements, there are challenges related to (i) inadequate accounting systems leading to the use of manual processes for the preparation of financial Page 102 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) reports that may affect the timely availability of reliable information and (ii) weak internal audit and in some cases, severe internal control weaknesses that have raised serious questions on the reliability of financial information, as presented in their last available audited financial statements. 7. To address the challenges mentioned above, the following mitigating measures have been discussed and agreed: (a) Institutional arrangements have been clearly defined and MoUs or similar agreements will be signed. (b) When needed, the financing of fiduciary capacity building activities has been agreed as part of the SIPs; and technical assistance would be provided by the national level entities to accompany implementation at TVET level, or like in the case of Tanzania, the MoEST will enter into performance agreements with TVETs indicating KPIs. Still, close monitoring of those arrangements will be needed. (c) FM arrangements, including funds flow arrangements and reporting arrangements have been clearly defined in each country within the existing country requirement and institutional arrangements in which TVETs are operating. (d) Strengthening of internal controls and internal audit function, staffing needs within the TVET institutes and internal audit, reporting and audit arrangements have been discussed, and are reflected as part of the FM action plan. 8. Subject to the successful implementation of the FM action plan, and implementation and operation of the agreed mitigating measures described above, the proposed FM arrangements are considered adequate to support project implementation. The latter though will continue to require close monitoring from the World Bank side and a thorough assessment within the first year of implementation. Summary of Financial Arrangements 9. Country Public Financial Management (PFM) systems. Most countries are gradually and consistently working on the strengthening of PFM systems, and the World Bank has been supporting those efforts through different interventions. Progress made has also permitted the use of some elements of country FM systems, to the extent those are considered adequate. Consistent with current portfolio practices, project implementation in each country will follow country’s PFM regulations and systems (mainly budgeting, accounting, FMIS, and banking arrangements), as they are applicable to different types of entities, supplementing them where needed to make sure project needs and risks are adequately addressed, mainly as it relates to internal controls, financial reporting, and auditing. Within this framework, the following sections describe specific arrangements in different countries. A. Organization and Staffing 10. Each institute will be required to establish a small unit within the institute or the TVET institute, that would include an FM/accountant function. Such position may be financed as part of the SIP with clear Page 103 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) terms of references and contracts, as detailed in the PIM. In the case of TVET institutes that have proposed a secondment arrangement, a formal letter indicating the secondment and detailed terms of reference with responsibilities and deliverables will be required. The PIM will include an organogram of the institute project implementation unit, and its relationship with line units within their respective mother entities. Specific arrangement for each country are as follows: 11. Ethiopia: The MoE has a well-established FM function that is familiar with World Bank requirements. The TVETI is an autonomous higher education institution with its own legal personality that is accountable to the MoE. It has a managing board, director and the necessary staff. The Ethiopian Railway Academy is a department within the ERC, which is a government-owned public enterprise. The regional-level TVETs are budgetary institutions receiving their funds from the regional Bureau of Finance and Economic Development (BoFED) and technically being under the regional Bureau of Education. Each TVET institute will recruit at a minimum an accountant except for Holeta TVET which should be recruiting two. Furthermore, at the MoE, an additional finance officer will be recruited with a function of assisting the TVETs, providing on-the-job training and advisory services in FM. 12. Kenya. The Kisumu National Polytechnic, Meru Polytechnic, and Coast Polytechnic are TVETs under the MoE, and are operated independent of the ministry except for some financial support that they receive. KIBHT is a semi-independent TVET under the Ministry of Infrastructure, Housing, and Urban Development, and receives most of its financing from the ministry. The Geothermal training center is under the Research and Development Department of KenGen. The TVETs under the MoE are managed by a Polytechnic Council and operate under the Education Act and the TVET Act. 13. Tanzania. The TVETs are formed under Acts of Parliaments with full mandate of offering categorized trainings, contracting, acquisition and disposal of assets. The DIT operates both in Dar es Salaam (Main campus) and Mwanza campus. DIT and ATC are training institutions under MoEST while NIT is a training institution under Ministry of Works, Transport and Communication. B. Planning and Budgeting 14. Country budgetary regulations in terms of budget formulation, execution and monitoring will be followed. Accordingly, each TVET Institute will follow the procedures established by the respective parent Ministry or Bureau, which will require close coordination with line units. 15. Ethiopia. The MoE, the federal and regional level TVET institutes will follow the budget arrangement of the government32. The Railway Academy follows the procedures established by the ERC and its budget is prepared as part of the ERC annual budget and approved by the board of the corporation. 16. The budget for the project will be prepared annually and should be cleared and approved by the 32The recurrent and capital expenditure of MoE and TVETI are finally approved by the Ministry of Finance and Economic Cooperation (MoFEC) and proclaimed under the name of each institution. For the regional TVETs, the budget is approved by BoFEDs and endorsed by the regional councils. Accordingly, both the recurrent and capital budget of Hawassa TVET is proclaimed under the name of the TVET. At Kombolcha, and Holeta TVETs, only the recurrent budget is proclaimed and approved under the TVET name. Capital expenditure for Meles Zenawi and Holeta TVET institutes is managed by the regional TVET bureaus due to capacity constraints at the institute level. Kombolcha TVET did not have any capital budget for the last three years Page 104 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) World Bank. It should also follow the Government’s budget calendar to have the budget approved and proclaimed under the name of each of the implementing entities. It has been agreed and confirmed that the capital budget, which includes the civil works and goods, under the Holeta TVETs will be managed by the TVETs themselves. The capital budget will be included as part of the TVETs budget and approved accordingly. 17. Budget control and Monitoring practice of the MoE and TVETs will be recorded into the IBEX or Peachtree accounting software. Overall, there are fair budget control at all levels, although treatment of advance payment transactions would need to be strengthened. For project purposes, all implementing entities will be required to maintain up to date budget tracking records and budget versus actual expenditure variance analysis will be prepared by each institute and used as a management tool for decision making. 18. Kenya. At the TVET level, Project budget will follow the established review, and approval process in accordance with Government of Kenya’s procedures. For TVETs under MoE, the project Strategic Improvement Plan (SIP)33 will be included in the budget forwarded to the MoE for inclusion in the overall MoE budget and finally to National Treasury for onforwarding to parliament for approval. For KIHBT and Geothermal training center, their budgets will be under their respective ministries that will forward to NT for consolidation. 19. Tanzania. Budget process for the MoEST and TVETs are fully aligned with country systems. The projects are identifiable by project codes. At the TVET level, budgets formulation and execution are monitored by college Budget Committees. Respective college workers unions and governing boards review budget proposals before submission to the respective ministry for consolidation. Project budget will follow similar arrangements where the work plans will be compiled into the budget under each implementing entity. C. Accounting Systems, Policies, and Procedures 20. Ethiopia. The Government’s accounting policies and procedures (modified cash basis of accounting) and the ERC’s accounting policy (International Financial Reporting Standards) will largely be used for accounting of the project. Additionally, an FM Manual will be developed as part of the PIM. practices. The Manual will reflect the FM arrangements for the project mainly focusing on the areas of budget, accounting, internal control and internal audit, fund flow, auditing, transaction coding and reporting aspects, FM role and responsibilities of implementing entities, and so on. The FM Manual should receive the World Bank’s ‘no-objection’ before Project effectiveness. 21. Accounting systems used by different entities vary. For project purposes, the MoE and TVETI will use the country’s Integrated Financial Management Information System (IFMIS), the RA will use Peachtree accounting software and the rest of the TVETs (including Holeta TVET that currently uses manual records) will use IBEX, which is going to be set up on a standalone basis. The risk of using IBEX is in some cases it will not capture project financing unless due care is taken to ensure that the project is properly captured through the chart of accounts. Hence, all the TVETs should start working with their BoFEC IBEX desk to customize the software to be used for the Project. Any software applied in the project should be designed Page 105 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) carefully to meet the needs of the project reporting. The design of chart of account is crucial in this case. 22. Kenya. While some TVETs have established teams with qualified accountants, they will require an additional staff due to heavy work load. In general, TVET Institutes have an FM Manual with specific Instructions for secondary schools, colleges and polytechnics as well as procedures and work instructions from the ISO certification 9001: 2008 that are very current. In terms of information Accounting System, some TVETs use internally developed systems, sometimes complemented with manual records. In the case of Kisumu, the upgrade of its College Management Information System (Colemis) will be financed as part of the SIP, and the Geothermal training center will use SAP. Other TVETs, such as KIHBT use the IFMIS, which portal is within the institute. Under existing arrangements, requisition of goods and services are done in the system, but the payment voucher (PV) is manually prepared and forwarded to the Authority to Incur Expenditure officer (AIE) for signing before submission to the Head of Accounting Unit at the line Ministry for further processing in IFMIS. 23. Since the Project budget vote will be under the MoIHUD as per budgeting arrangements above, there needs to be a decision as to whether the HQ payment processing will be completed at the MoIHUD or the MoIHUD will give/transfer an advance to KIBHT to spend outside IFMIS and account as a one-line item expenditure. Details of this will be included under the FM section in the PIM. The KIHBT Headquarters in Nairobi will handle all the project payments and not the Ngong center of excellence whose capacity is lower than the HQ and must involve District Accountants thus lengthening the payment process. 24. Tanzania. The MoEST prepares annual financial statements using International Public-Sector Accounting Standards (IPSAS) accrual basis of accounting, which are also applicable at the TVET level. All the TVETs have accounting manuals and financial procedures tailored for the specific institution. Both, MoEST and TVETs have well established accounting units, staffed with qualified professionals DIT (16 staff), ATC (11 staff) and NIT (8 staff). It is expected that existing structures would have the capacity to undertake project FM tasks and fulfil fiduciary requirements, once staff is trained in World Bank requirements. 25. In terms of accounting systems, all the implementing entities have computerized accounting systems used to record accounting transactions, together with its own Chart of accounts. DIT (main campus and Mwanza) use Vote book accounting system, ATC uses Microsoft Dynamic Navision and NIT uses Pastel evolution. The MoEST uses IFMS - EPICOR for transaction processing and reporting to the ministry consolidated financial statements. However, none of these systems allow the preparation of Project financial statements. Therefore, accounting records will be maintained in the existing accounting systems which will be used to generate information required for financial reporting purpose. Internal controls required to ensure integrity of the information, such as periodic reconciliation will be detailed in the FM section of the Project Implementation Manual. D. Internal Controls and Internal Audit 26. Internal control. Internal control comprises the whole system of control, financial or otherwise, established by management to: (a) carry out project activities in an orderly and efficient manner; (b) ensure adherence to policies and procedures; (c) ensure maintenance of complete and accurate accounting records; and (d) safeguard the project’s assets. Page 106 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 27. Ethiopia. All implementing entities use the government’s internal control procedures except for RA which has its own manual. The reviewed internal control systems were found to be adequate. There is proper segregation of duties on payment cycle, except for Kombolcha TVET whereby the accountant signs bank checks, records transaction and performs monthly bank reconciliation. Other internal controls including bank reconciliation, cash count, and property management are in place. Project implementation would be subject to same rules, and they would be required to maintain a separate asset register for project assets or the project assets should be clearly identified in the asset register system of the entities with complete information. 28. Internal audit. The MoE and TVETI have established internal audit and inspection directorates that report to the MoFEC. Similarly, ERC has an internal audit directorate with adequate experience and qualifications. However, at the TVET level the internal audit function is severely understaffed, inexistent (Holeta) or non-functional because of staff rotation or lack of adequate training. Internal auditor units at Hawassa and Kombolcha are functioning well. It has been agreed that each TVET will communicate to their BoFEDs and get approval on the required number of positions for the internal audit function and fill out all the positions approved within one month of project effectiveness. The Internal Audit Unit should include the project in its Annual Work Plan and accordingly review the project accounts. Reports issued on the project accounts should be accessible to the World Bank for supervision and follow up of action taken. 29. Kenya. Internal audit function is present at TVET level (except the Geothermal training center that uses the internal audit of the Parastatal). Overall, the internal audit units are staffed with qualified staff, but with different levels of capacity. Other controls and procedures in place include: payment approval system, bank reconciliations, imprest management and fixed assets registers. For project purposes, it will be important to clarify the procedures for the MoE to disburse funds to the TVETs under the ministry. In the case of Kisumu National Polytechnic for instance, the procedure is cumbersome, requiring a senior officer to travel to the capital either because the budget allocation is not communicated in time or because of the uncertainty of funds release. 30. Tanzania. The system of internal controls in operations are defined in the accounting manuals and procedures of the institutions. The internal control systems will be enhanced with project specific control systems documented in the PIM. Based on the assessment, internal control weaknesses are related to (a) inadequately supported payments, (b) long outstanding staff advances, (c) long outstanding claims from suppliers, (d) inadequate records in stores management system, (e) fixed assets register not updated regularly and assets not coded, and (f) long outstanding receivables from Higher Education Loan Sector Board (HELSB). 31. The Internal Audit Unit within the MoEST has 10 staff and reports to the Audit Committee. The internal audit functions in the TVETs are understaffed to execute internal audit workload. (DIT 4 staff, ATC 2 staff, and NIT 2 staff). Internal audits reviews are conducted on quarterly basis and reports are submitted to the Audit Committees of the Governing Boards. The internal audit function will require increased staffing to enhance audit performance. The project may require internal audits at least on semiannual basis depending on the risks. Page 107 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) E. Financial Reporting 32. Each implementing agency will prepare semiannual unaudited interim financial reports (IFRs) and annual project audited financial statements. IFRs will be submitted to the World Bank within 45 days after the end of the period. In the case of IUCEA, IFRs will be prepared on a quarterly basis. The financial reports will be designed to provide quality and timely information to the project management, and mainly implementation of the SIPs. Specific formats and content have been agreed considering the final arrangement between TVETs and respective parent ministries. IFRs are expected to include as a minimum: (a) a statement of sources and uses of funds for the reporting and cumulative period (from project inception) reconciled to opening and closing bank balances and (b) a statement of uses of funds (expenditure) by project component/ sub-component comparing actual expenditure against the budget, with explanations for significant variances for both the period and cumulative period. Specific reporting practices are further explained below. 33. Ethiopia. At the federal level, the MoE and TVETI are required to prepare and submit to MoFEC monthly reports within 15 days after end of the relevant month as well as annual financial statements within three months after the end of a budget year, following a specific content. Similarly, ERC, prepares monthly and quarterly financial statements which are presented to the Board for revision. TVETs are required to report on regular monthly basis to the regional BoFED (Meles Zenawi, Hawassa and GWPC) or the city OFED (Holeta and Kombolcha). 34. Tanzania. At the TVET level financial performance reports are prepared on a quarterly basis. The reports are presented to the Finance and Planning Committee of the Board. 35. Kenya. The MoE will prepare a consolidated semiannual IFR for itself and its three TVETS but ensuring figures for each entity are clearly identified. KIHBT and Geothermal will each prepare a semiannual IFR. These three IFRs will be submitted to the World Bank 45 days after the end of the half year period. At the end of each fiscal year, three project audit reports will be prepared by KIHBT, Geothermal and a consolidated one by MoE and its three TVETS and submitted to the World Bank 6 months after the end of the fiscal year period. F. External Audit 36. In accordance with World Bank policy, implementing entities are required to submit annual project financial statements audited in accordance with international standards of auditing (ISAs), by an acceptable external auditor and following terms of references approved by the World Bank. For Ethiopia, the audit firm recruitment will be made by the MoE. The auditor will conduct audit on all national and regional institutes and issue separate audit reports for each. The audit firm to be used by the MoE will be in consultation with the Office of Federal Auditor General (OFAG) and based on the list of audit firms which are acceptable to IDA. For Kenya, the Office of the Auditor General is mandated by the Constitution to audit all public funds, but in case of KenGen, the OAG has been outsourcing to private auditors but still retaining the overall responsibility of issuing the audit opinion. In Tanzania, the Controller and Auditor General (CAG) has exclusive powers to audit public funds as granted by the Constitution and Public Audit Act no 11 of 2008. CAG conducts audits either directly or subcontract to private auditors but retain the overall responsibility of issuing the audit opinion. The auditor will also provide a Management Letter, which will inter alia outline deficiencies or weakness in systems and controls, make recommendations for Page 108 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) their improvement, and report on compliance with key financial covenants. All the institutes have the responsibility to prepare audit action plan and status report of implementation of action plan on the audit findings. The action plan and the status report of implementation must address all the findings in detail. 37. Such audit should also include a review of the EEPs under Component 1 and Component 2. Table 2.1. External Audit Country Implementing Audit Type Auditor Due Date Entity Ethiopia MoE Project financial statements Auditor General or by an Six months TVETI Management Letter auditor designated by after the end of ERC-RA Hawassa, EEPs Auditor General each fiscal year Meles Zenawi Memorial, General Wingate, Kombolcha, Holeta Tanzania MoEST Project Financial statements Six months Management Letter Controller and Auditor after the end of EEPs General (CAG) (who can each fiscal year. DIT Project Financial statements discharge this ATC Management Letter responsibility either NIT EEPs directly or through private auditors contracted as agents.) Kenya (MoE Project Financial statements Office of the Auditor Six months TKNP, MNP, CNP) Management Letter General or by an Auditor after the end of KIBHT, EEPs contracted by the Auditor each fiscal Geothermal General year). training center Regional IUCEA Project financial statements Audit Commission Six months Management Letter after the end of each fiscal year. 38. Disclosure of Audit Report. In accordance with the World Bank’s policies, the World Bank requires the recipient to disclose the audited financial statements in a manner acceptable to the World Bank; following the World Bank’s formal receipt of these statements from the borrower, the World Bank makes them available to the public in accordance with the World Bank Policy on Access to Information. Funds Flow and Disbursement Arrangements 39. Components 1 and 2 will use RBF with DLIs and defined eligible expenditures. Eligible expenditures have been defined as civil works, goods, consulting services and training under SIPs for Component 1. Eligible expenditures under Component 2 would be expenditures of the national work plans in works, goods, consultancies, and operating costs. 40. To secure timely availability of funds for project implementation, an advance of up to an agreed Page 109 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) percent of the amount allocated to each entity as indicated in each country’s Disbursement and Financial Information Letter (DFIL) would be approved by the World Bank, based on a cash forecast. 41. Table 2.2 summarizes banking arrangements and supporting documents required under the advance method. Table 2.2. Banking Arrangements and Supporting Documents Country Imp. Entity Designated Account Other Project Bank Supporting documents (to be (US$) Accounts further detailed in DL) Ethiopia ERA DA-A Local currency Project Semiannual IFR format with MoE DA-B Accounts to be opened EEP statement and FTI DA-C in a Commercial Bank achievement of DLIs. Kombolcha DA-D of Ethiopia Dire Dawa DA-E General DA-F Wyngate DA-G Holeta DA-H Hawassa (All at National Bank of Ethiopia Kenya MoE DA-A Project Accounts in Semiannual IFR format with (includes DA-B Kenyan shillings (KES) EEP statement and the 3 TVETS DA-C in CBK or commercial achievement of DLIs under MoE) (All in the Central bank for each entity for KenGen Bank of Kenya-CBK) each of the 5 TVETs and KIBHT an additional one for MoE Tanzania MoEST DA-A Local currency accounts Semiannual IFR format with DIT DA-B in Tanzanian shillings in EEP statement and ATC DA-C a commercial bank for achievement of DLIs NIT DA-D each entity (All in Bank of Tanzania) Regional IUCEA DA in a commercial Local currency account Quarterly IFRs Bank acceptable to in Uganda Shillings in a the World Bank commercial Bank acceptable to IDA Note: DA = Designated Account. 42. Fund flow and banking arrangements for Ethiopia. The MoE will sign a performance and financing agreement with all implementing entities. MoE, TVETI and all regional TVETs will each open segregated DA at the National Bank of Ethiopia nominated in US$. Each will also open local currency accounts to make payments in that currency. The Project Account will be opened at a commercial bank of Ethiopia or the National Bank of Ethiopia. This account will also serve as the depository for government counterpart fund contributions were applicable. Funds sent to the Project Accounts will be used for eligible investments. The signatories who will be responsible for managing the DA will be communicated to the IDA together with the bank account details after the signing of the project but before the project’s effectiveness. The funds from both bank accounts must be used only for eligible expenditures. IDA will directly deposit into Page 110 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) the US$ nominated accounts opened for each implementing agency, based on achievement of DLIs and submission of EEP statements. Figure 2.2. Funds Flow and Disbursement Arrangements – Ethiopia Payment to eligible project activities 43. Flow of funds and banking arrangements for Kenya. The National Treasury (Kenya) will be required to open three DAs denominated in United States Dollars for EASTRIP at Central Bank of Kenya for KIHBT, Geothermal training center and MoE. The DA under MoE will serve MoE and the 3 TVETs under MoE. MoE will open a Project Account denominated in Kenyan Shillings (KES) in Central Bank of Kenya to receive funds from the US$ Account for its use and for disbursing to the education TVETS that will be required to open KES project accounts in commercial banks acceptable to IDA. KIHBT and Geothermal training center will also open KES Project accounts in commercial banks acceptable to IDA to receive funds from the US$ Account via the Ministerial Development Accounts of their respective line ministries. 44. Funds will flow from the World Bank to the DAs and to the Project Accounts in MoE and the TVETS using the government exchequer requests system where payments for the eligible project activities can be made. Details of these accounts once opened, and the signatories are to be submitted to the World Bank to facilitate disbursements once project is declared effective. Page 111 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Figure 2.3. Funds Flow and Disbursement Arrangements – Kenya IDA US$ DA @ Central Bank of Geothermal KIHBT USD Kenya(CBK) for MoE Institute US$ DA DA @CBK @CBK MoE MoEnergy MoIHUD Development Development Development Account KES Account KES Account KES MoE Project KES @CBK @CBK @CBK Account @CBK KenGen Kisumu Geothermal KIBHT Coast training center KES KES Account in Meru Polytechnic KES Account Account in a Polytechnic KES In a a commercial KES Account in Account in a commercial commercial Bank a commercial commercial Bank Bank Bank Bank Payment to Eligible Projects Activities 45. Funds flow and banking arrangements for Tanzania. The MoEST and TVET institutes will be required to open designated bank accounts at Bank of Tanzania (BOT). Four designated bank accounts will be opened at BOT (three for TVET institutes implementing component 1 of the project and MoEST implementing component 2 of the project). DIT will operate one account at BOT tracking disbursement for both DSM and Mwanza campuses, which will require to have in place adequate controls and separate accounting records. Funds from IDA will be transferred in these DAs. Each TVET institute will have ring- fenced local currency bank account at commercial bank for project activities. Funds will be transferred from these accounts to ring-fenced local currency accounts of MoEST and TVET institutes to finance EEPs. Page 112 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Figure 2.4. Funds Flow and Disbursement Arrangements – Tanzania World bank (IDA) MoF Designated account in USD Performance agreement between TVETs and MoEST MoEST -USD NIT -USD ATC -USD DIT - USD designated account at BOT account at BOT account at BOT account at BOT MoEST -TZS NIT -TZS ATC -TZS DIT DSM -TZS DIT MWANZA account in account in account in account in -TZS account commercial commercial commercial commercial in commercial bank bank bank bank bank Payment for eligible project activities Regional Level: Inter-University Council for East Africa 46. IUCEA FM practices and procedures are mainstreamed into the EAC Institutional framework. The IUCEA has experience with managing donor funds and has relationships with the expected implementing partners. 47. Budgeting and budgetary control arrangement. The IUCEA planning process operates on a 5-year strategic plan. IUCEA follows an orderly process for budget preparation and approval, IUCEA budget is consolidated within EAC budget, later considered by EAC Council of Ministers and finally approved by the Assembly (EALA) Budgetary control is through the Budget Management System that manages the budget execution, monitoring and reporting. Project budget will be subject to same process. 48. Accounting and reporting arrangements. The entity has four (4) IUCEA finance staff (Head of Finance, Senior Accountant, Accountant and Cashier). EASTRIP will also be mainstreamed in the IUCEA finance operations headed by the Head of Finance. An Accountant will be recruited to handle the financial management aspects of the EASTRIP. The recruitment will be a dated covenant 30 day after the effectiveness. FM reports to the World Bank will be reviewed by Head of Finance before submission through usual channels. The IUCEA staff rules require a performance contract for each staff for each year. 49. IUCEA uses the SUN accounting software. The software is appropriately designed to capture transactions of various parameters including Accounts code and analysis (source of funds, cost center and MTEF activity code). The system also has Budget Management System (BMS) that manages the budget execution, monitoring and reporting. 50. The entity is obliged to provide progress reports within EAC deadlines and M & E arrangements. Page 113 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) IUCEA provides quarterly financial reports to the Board. These include budget vs. actual with explanations for variances. The IUCEA will be submitting quarterly interim financial reports within 45 days after each quarter in the form and content acceptable to the World Bank. 51. Internal audit arrangements. The internal audit function has 2 staff including a Principal Internal Auditor & Internal Audit Officer. These are supplemented by a Temporary staff. Internal audit function has been limited due to the lack of staff. The assessment also noted that management response and implementation of key internal audit recommendations is low and delayed. The audit committee will monitor the implementation of both external and internal audit recommendations through quarterly committee meetings and World Bank updated through the semiannual internal audit reports submitted to the World Bank within 45 days after end of semester. The internal audit unit needs to be strengthened, through the hiring of an additional professional expected to be on board by project effectiveness and will also support the EASTRIP. 52. External audit and oversight arrangements. IUCEA is audited by the Audit Commission of the EAC which is composed of the OAG of the member countries. IUCEA shall be subjected to an annual audit of its books of accounts. 53. The annual accounts will be completed within ninety days after closure of the financial year and submitted to the Audit Commission to undertake the audit exercise within thirty (30) days of receipt of the draft financial statements. The World Bank expects the final Audit report within 6 months after the year end. 54. Oversight by East African Legislative Assembly provides a degree of public scrutiny and adequate segregation of duties between Finance & Operations functions exist. 55. Funds and banking arrangements. The IUCEA is familiar with World Bank disbursement requirements. The report-based system of disbursement will be used for IUCEA as it has reliable accounting systems that generate reliable reports for the ongoing World Bank-funded project. A DA would be opened to handle the credit proceeds in a commercial bank acceptable to the World Bank. 56. The Banking signatories is guided by Regulation 40 of the FRR that provides for two (2) categories of signatories which also guides the signing process; Panel A made of Executive Secretary and Deputy Executive Secretary and Panel B made of Head of Finance and Senior Accountant. Page 114 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Figure 2. 5. Flow of Funds for IUCEA Financial Management Action Plan Action Date Due by Responsible 1. Prepare, agree and sign the required subsidiary agreements and/or Ministries of MoUs (or similar type of agreements) between respective ministries Project Finance of education and TVETs, all with Bank’s non-objection. effectiveness National Implementing Entities GENERAL ASPECTS TVETs 2. Provide training to FM staff and Internal Auditors operating at Within 3 different levels on World Bank procedures and project operational months of WB team arrangements effectiveness 3. Prepare a draft FM section of the Project Implementation Manual IUCEA - Project National effectiveness Implementing entities-TVETs 4. Prepare and agree on terms of references for external audit review Within 2 Implementing months after entities with effectiveness the WB Support Holeta TVET As part of the Holeta TVET 5. Finalize the setup officially mandated finance unit and performance and MoE establishment of internal audit unit and funding ETHIOPIA agreement to be signed with the MoE and a dated covenant on the Page 115 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Action Date Due by Responsible financing agreement 6. IBEX Accounting software selected for the project will be configured Within one TVETs with to report on project component, sub-component, activity & category month of project MoFEC of project expenditures in addition to the government code. effectiveness 7. Fill out all vacant positions and assign or recruit an accountant for Within one All the project (1 for each implementer and 2 for Holeta) month of project implementers effectiveness and continually thereon 8. Provide annual training to all accountants and internal auditors Annually All implementers 9. Recruit TA at MoE to provide oversight and capacity building to all Within one TVETs month of MoE project effectiveness 10. Internal Audit: • Fill out vacant positions of internal audit During All • Provide training to internal auditors implementation implementers • Internal audit to include the project in the annual audit plan and provide the required review service; PS MoE; PS 11. MoU with Ministry of Energy and Ministry of Infrastructure, By Ministry of Transport and Urban Development on budgeting and funds flow. effectiveness Energy; and PS Ministry of Infrastructure KENYA Transport and Urban development 12. Share updated FAR November 30, Institute Leader 2018 13. Revise the FM Manual 2006 to harmonize with PFM 2015 By MoE regulations effectiveness 14. Appointment of Governing Board for ATC. By MoEST effectiveness 15. Development of structured complains handling mechanism. By TVET institutes effectiveness TANZANIA 16. Recruitment of Chief Accountant at NIT Within 3 TVET months of project effectiveness 17. Project budget allocation to strengthen the internal audit by project TVETs/ departments. effectiveness MoEST Page 116 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Action Date Due by Responsible 18. Notify National Audit Office of this new project. Immediately TVETs Submission of institution audit reports within nine months. upon signing of MoEST financing agreement. 19. Recruitment of Accountant for EASTRIP January 15, IUCEA IUCEA 2019 20. Recruitment of International Auditor January 15, IUCEA 2019 Implementation Support and Supervision Plan 57. The World Bank’s FM team will provide implementation support over the project’s lifetime. The project will be supervised on a risk-based approach. Supervision will cover but not be limited to the review of audit reports and IFRs and advice to the task team on all FM issues. Based on the current assessed risks, and on a preliminary basis, the project will be supervised at least twice a year and may be adjusted when the need arises. Table 2.3. Implementation Support Plan FM Activity Frequency Desk reviews IFR review Semiannual (Kenya, Tanzania, Ethiopia) Quarterly (Uganda for IUCEA) Audit report review of the program Annually. Review of other relevant information such as interim Continuous as they become available. internal control systems reports On-site visits Review of overall operation of the FM system Semiannually (implementation support mission) Monitoring of actions taken on issues highlighted in As needed, but at least during each implementation audit reports, auditors’ management letters, internal support mission. audit, and other reports Transaction reviews (if needed). As needed. Capacity-building support FM training sessions by World Bank FM team. Following the project transition and thereafter as needed. Procurement 58. Procurement under the proposed project will be carried out in accordance with the following World Bank procedures: (a) the World Bank Procurement Regulations for IPF Borrowers, dated July 2016 and revised in November 2017) (“Regulations”), and (b) “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15 , 2006 and revised in January, 2011 (“Anti-Corruption Guidelines”) and as of July 1, 2016, and other provisions stipulated in the Financing Agreements. Page 117 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 59. PPSD and Procurement Plan: As per the requirement of the Regulations, each of the implementing agencies has prepared a PPSD, based on which the Procurement Plan (PP) for at least the first 18 months of project implementation has been developed. The initial PPs have been confirmed and agreed during the negotiations and will be disclosed on the World Bank’s external website. Going forward, the PPs will be updated in agreement with the World Bank annually or as required to reflect the project’s actual implementation needs and improvements in institutional capacity. 60. Systematic Tracking of Exchanges in Procurement (STEP). The World Bank’s STEP approach will be used to prepare, clear, and update Procurement Plans and conduct all procurement transactions for all implementing agencies of the Project. Procurement staff of all 20 agencies have been trained in STEP, during appraisal. 61. Procurement Templates. For international competitive procurement, the borrower shall use the World Bank’s Standard Procurement Documents (SPDs). For procurement involving national competitive Procurement, the Borrower may use its own Procurement Documents, acceptable to the World Bank, subject to country specific exceptions / conditions that may be stipulated in individual textual part of Procurement Plans. 62. National Open Competitive Procedures (NOCP). NOCP may also be used, provided that such procedures are consistent with the following requirements as provided in paragraph 5.4 of the Procurement Regulations: (a) open advertising of the procurement opportunity at the national level; (b) the procurement is open to eligible firms from any country; (c) the request for bids/request for proposals document shall require that bidders/proposers submitting bids/proposals present a signed acceptance at the time of bidding, to be incorporated in any resulting contracts, confirming application of, and compliance with, the World Bank’s Anticorruption Guidelines, including without limitation the World Bank’s right to sanction and the World Bank’s inspection and audit rights; (d) contracts with an appropriate allocation of responsibilities, risks, and liabilities; (e) publication of contract award information; (f) rights for the World Bank to review procurement documentation and activities; (g) an effective complaints handling mechanism; and (h) maintenance of records of the procurement process. If necessary, the World Bank’s SPDs may be used for NOCP, with agreement by the World Bank. 63. Other national procurement arrangements (other than NOCP) that may be applied by the borrower (such as limited/restricted competitive bidding, request for quotation/shopping, direct contracting), shall be consistent with the World Bank’s core procurement principles set out in paragraph 5.3 of the Regulations and ensure that the World Bank’s Anticorruption Guidelines and Sanctions Framework and contractual remedies set out in its Legal Agreement apply. 64. Publication (Advertising). The borrower is required to prepare and submit to the World Bank a General Procurement Notice (GPN). The World Bank will arrange for its publication in United Nations Development Business online (UNDB online) and on the World Bank’s external website. Specific Procurement Notices (SPN) for all procurement under International Competitive Procedures and Requests for Expressions of Interest for all consultancies estimated to cost not less than US$300,000 shall be published in UNDB online and the World Bank’s external website and at least one newspaper of national circulation in the borrower’s country, or in the official gazette, or on a widely used website or electronic portal with free national and international access. Page 118 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 65. Each component will have its own procurement arrangement. Component 1 will be implemented by 16 Flagship TVET Institutes in Ethiopia (7 institutes), Kenya (5 institutes) and Tanzania (4 institutes). Funds under this component will be disbursed against DLIs to finance the expenditures as defined under EEPs of the Project, which will be procured together with the institutions’ other operating requirements / needs. All procurable items in the EEPs to be financed under the Project shall be procured following World Bank Procurement Regulations. The appropriate selection method for each consulting and goods contract would be established in the Procurement Plan. 66. Component 2 will be implemented by national level institutions: MoE in Ethiopia, State department of Vocational and Technical Education under the MoE in Kenya and MoEST in Tanzania. Funds under this component will be disbursed against DLIs to finance the expenditures as defined under EEPs of the Project, which will be procured together with the institutions’ other operating requirements / needs. All procurable items in the EEPs to be financed under the project shall be procured following World Bank Procurement Regulations. 67. Component 3 will be implemented by Inter-University Council for East Africa (IUCEA), for regional activities. The categories of procurement activities for this component consist mainly of consulting services, development of a baseline and progress indicators to monitor implementation of mutually agreed results and strengthening implementing capacity of the IUCEA. Small contracts for supply of goods may also be procured. The World Bank’s Procurement Regulations shall be followed in the implementation of these activities. Procurement Assessment of Implementing Agencies 68. IUCEA. An assessment of IUCEA’s procurement capacity was undertaken to review the legal aspects and procurement practices in the Institution. The assessment also considered the organisational structure, staffing responsible for procurement, procurement cycle management, record keeping, planning, and the general procurement environment. Lessons were also drawn from the ACE II Project under implementation by the Agency. In 2009 the East Africa Legislative Assembly enacted the IUCEA Act 2009 and integrated IUCEA into the EAC operational framework. The assessment established presence of a Procurement Policies and Procedures Manual (dated June 2014) which provides guidance in carrying out public procurement. Since IUCEA is an institution of the EAC, the Procurement Manual is aligned to that of the EAC Secretariat. The Manual gives the Executive Secretary (ES) full responsibility and accountability for all aspects of IUCEA procurement, including but not limited to ensuring preparation of procurement plans, managing all procurement activities, confirming availability of funds, advertising procurement activities, signing all contracts, communicating awards, overseeing contract management, appointing all committees defined in the Manual and is the authority for issuing and initiating revisions to the Manual. The Manual in the current state gives excessive authority to the ES and does not promote independence of functions in procurement activities The Manual further stipulates community preference for partner states for procurement thresholds provided there is sufficient competition. 69. Defined procurement structures were in place but management of the procurement cycle was characterized by delays attributed to internal bureaucracies and evident limited rights to persons delegated to perform roles in the absence of the ES. All procurement records/files are kept in one pool which doubles as the working place for the procurement officer and administration staff. The space for keeping the procurement documents was noted to be insufficient and the documents susceptible to loss Page 119 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) and unauthorized access. Procurement files were not regularly updated with records relating to deliveries and payments. 70. It was established that IUCEA had one Procurement Officer (PO) who possessed relevant academic procurement qualifications and procurement experience of more than 10 years. The procurement officer’s prior experience includes processing procurements under the World Bank funding, and procurement training in STEP, IDA consultancy bid evaluation procedures and other courses in procurement risk management. The recruitment process for a procurement assistant was in process but delayed due to work overload on the Procurement Officer. The PO handled both the ACE II project procurements in addition to the regular IUCEA procurements. Major risks identified include (a) Lack of knowledge of the World Bank’s New Procurement Framework (NPF); (b) internal bureaucracies that delay progression of procurement activities; (c) limited procurement knowledge among IUCEA’s internal stakeholders; (d) heavy workload on the procurement officer; (e) significant authority to the ES in the procurement cycle which could hinder implementation of the delegation provision contained in the same Procurement Manual; and (f) limited competition for bidding opportunities in some instances due to discrimination against non- member states. The assessment rated the procurement risk level to be Substantial. 71. In mitigating the procurement risks IUCEA should: (a) ensure the procurement staff attend IDA training in the NPF; (b) expedite hiring of the procurement assistant to assist handle project specific procurement matters; (c) train internal stakeholders in their respective roles in the procurement cycle; (d) increase delegation thresholds with corresponding empowerment to members in delegated positions for faster progression of project procurements; (e) allow participation of non-member states in bidding opportunities; and (f) devise an internal system that tracks duration of procurement activities between the various stages for enhanced accountability in the procurement process. After the above measures have been implemented the residual procurement risk is expected to be lowered to Moderate. 72. Ethiopia: Ethiopia will have 8 implementing agencies including the MoE (for national level activities) and 7 Flagship TVET Institutes (TVET – manufacturing technology; Hawassa TVET Polytechnic College; Meles Zenawi Memorial Polytechnic College; General Wingate Polytechnic College; Kombolcha TVET Polytechnic College; Holeta TVET Polytechnic College and Railway Academy). 73. Procurement under EASTRIP in Ethiopia shall be carried out at the MoE and the seven TVET institutes which are responsible for the implementation of the project. The MOE will carry out procurement of limited amount of goods and the selection and employment of consultants related with the development of policy and guidelines and for strengthening of the national agencies. All the seven TVET institutes, which are implementing the proposed EASTRIP project, will carry out procurement of equipment, and the selection and employment of consultants for limited assignments. In addition, all TVET institutes, except the Railway Academy, will carry out works contracts for the construction of classrooms, dormitories, workshops etc. 74. To better understand the procurement environment under which the EASTRIP is to operate, a procurement capacity assessment was carried out in April 2018 in the MoE and the seven TVET institutes, which are the implementing agencies of the proposed EASTRIP project. The assessment has investigated the implementing agencies’ procurement organization and staffing, procurement planning and procurement processing procedures, including the governing procurement laws, internal and external Page 120 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) review arrangements, and contract management. It also included assessment of the procurement oversight mechanism and procurement record and information management systems within the Institutes. 75. According to the findings of the assessment at the national level, in the MOE, procurement processes are carried out by and large in accordance with the agreed procedures. However, all the TVET Institutes have only experience of procurement activities which are related to their operational requirements which are limited, and which are mostly of low value contracts procured through RFQ procedures. Moreover, most of the TVET institutes have no experience in implementing donor supported projects. According to the assessment, most of the TVET institutes do not have the experience in procurement of equipment of such a value and complexity expected under the proposed project. And none of the entities have experience in the selection and employment of consultancy services and the procurement processing of high value national and international open bids. Out of the six entities planned to carry out procurement of works under EASTRIP, only one entity has experience in the procurement of works. In addition to the limitations noted above poor procurement information and record management system, weak internal control and inadequate procurement oversight by regulatory bodies and capacity limitations in procurement staffing and system are noted in the assessment. 76. In terms of procurement planning two of the seven entities do not have procurement planning experience. The other five Institutes prepare procurement plans because of requirements from budgetary bodies but do not regularly update the procurement plans and do not use the procurement plans as monitoring and management decision making tools. Two of the seven entities do not have experience in the use of Standard Bidding Documents (SBDs) even for national open bids. The procurement staff in all the TVET Institutes have limited experience in procurement planning, processing and the existing procurement staff are not procurement proficient and are not provided with basic procurement capacity building trainings. Contract administration is done by the procurement staff who do not have the required training or experience. In addition, there is no regular external oversight by a competent procurement regulatory body. Though there are internal control mechanisms in place such bodies within the institutes are weak and their capacity to carry out a procurement oversight function is limited with more emphasis on financial controls. Procurement record keeping system is weak and in all the entities there is no digital or manual document tracking system. It was not possible to find monthly or annual or any aggregated procurement reporting system and how the top management controls procurement activities is not clear. 77. The capacity limitations in the Institutes for executing the procurement of high value goods and works contracts and the selection and employment of consultants will have a direct impact on the EASTRIP project. Most importantly the fact that the TVET institutes are not familiar with the procurement procedures of the World Bank is also another major challenge. The procurement process involved, including the standard documents used for the procurement, contracts terms, payment provisions and the contracts administration in procurements under EASTRIP shall be significantly different from the procurement activities which are currently being carried out in the TVET Institutes. Hence limitations in procurement capacity and lack of experience in all the TVET Institutes call for appropriate mitigation measure to be put in place to carry out an efficient and effective procurement as per the agreed procedures. 78. The procurement capacity in the TVET Institutes in Ethiopia appears to be weak. Based on the findings of the procurement capacity assessment, risk rating for the Institutes is HIGH. For the MoE, the Page 121 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) procurement risk rating is Substantial. Overall risk rating is HIGH. 79. Based on the procurement risks identified risk mitigation measures are recommended in detail in the following table. 80. Key issues and associated mitigation measures shall be discussed and agreed as follows: Table 2.4. Summary of Findings and Actions (Risk Mitigation Matrix) for Ethiopia Severity Responsible and Time Frame I/No and (all actions to be taken Issue/Risk Mitigation Measures Impact on within the first three months Project of the loan approval) Lack of qualified 1. Employment of one qualified and and procurement procurement proficient consultant proficient staff to acceptable to the Association in the carry out MOE and each of the Seven TVET procurement Institutes activities of the 2. Provide procurement staff at the 1 High MOE/ TVET Institutes/WB MOE and TVETs MOE and TVET Institutes with the under EASTRIP necessary facilities to create conducive working environment including mobility to enable them to support procurement activities in the TVET Institutes. 2 Lack of Experience High 1. Procurement staffs should be MOE/TVET Institutes/WB in World Bank provided with basic procurement procurement training offered at the Ethiopian procedures (NPF) Management Institute (EMI) in the procurement of goods and equipment, works and consultancy services as necessary. 2. Staff involved in the implementation of procurement activities such as tender committee members and Tender Endorsing Committee members shall be provided procurement clinics on procurement procedures under World Bank-financed projects. 3. Lack of experience High 1. Make procurement planning a MOE/TVET Institutes/WB in the use of requirement as part of the Systematic Tracking preparation of work plans and budget of Exchanges in in the TVET Institutes. Procurement for 2. Train procurement staff in the procurement preparation and use of procurement planning plans in the TVET Institutes; 3. Train procurement staff in the use of STEP Page 122 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Severity Responsible and Time Frame I/No and (all actions to be taken Issue/Risk Mitigation Measures Impact on within the first three months Project of the loan approval) 4 Lack of capacity in High 1. Provide procurement clinic on MOE/ TVET Institutes/WB procurement data procurement records keeping to management and procurement staff of TVET Institutes maintenance of 2. Establish satisfactory procurement procurement audit data management system; trail and 3. Provide adequate facility for safe inadequate facility keeping and storage of procurement for safe keeping of records. procurement records 5 Lack of experience High 1. Establish a CM system in the TVET MOE/ TVET Institutes/WB and lack of Institutes qualified staff in 2. Recruit and employ contract contract management staff in each TVET administration and Centre management 3. Provide training to staff in contract management at EMI. 6 Weak internal High Government shall select and appoint MOE/TVET Centres control and lack of an independent procurement auditor, oversight bodies to acceptable to IDA, to carry out an monitor and audit Independent Procurement Audit of procurement the project annually activities in the TVET Institutes and MOE 7 Tender Endorsing High Arrange procurement clinics on World MOE and the TVET Institutes Committees and Bank procurement procedures to procurement Tender Endorsing Committees and decision makers procurement decision makers not familiar with World Bank’s procurement procedures 81. Kenya: Kenya will have 6 implementing agencies including State department of Vocational and Technical Education under the MoE (for national level activities) and 5 Flagship TVET Institutes (KenGen Geothermal Training Center Nakuru County, Kenya Coast National Polytechnic- Mombasa County, Kisumu National Polytechnic- Kisumu County, National Polytechnic for Building Infrastructure – Meru County, and Kenya Institute of Building and Highway Technology- Nairobi County). 82. Public Procurement in Kenya is governed by the Public Procurement and Assets Disposal Act (PPDA) 2015 which came into effect in January 2016. The Act sets out the rules, procedures and institutional arrangements that the public entities should follow in the management of public procurement. The Public Procurement Regulations for the New Act, however are not finalized and Page 123 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) therefore the Public Procurement Regulations 2006 are currently in use. The Public Procurement Regulatory Authority (PPRA) provides oversight function in monitoring compliance with rules and procedures spelt out in the Act. Approvals will be conducted in accordance with the procurement law. 83. A Procurement Plan is developed based on the work plan and in line with the approved budget. The procurement team in liaison with the technical team review specifications and prepare bidding documents as per the format prescribed by PPRA where all requirements are clearly outlined. Tender advertisements are run on the ‘my government portal’ as is required for all public entities. An ad hoc Tender opening committee is appointed by the CEO (Accounting Officer) to oversee the Tender opening process. A technical team is thereafter appointed by the CEO to carry out the evaluation process and the team is required to sign a code of ethics before commencement of evaluation. The evaluation process is usually completed within thirty days and the evaluation reports prepared have a clear analysis of the technical and financial aspects of bids. The current law stipulates that a professional opinion on the Technical Evaluation report is provided by the Head of procurement unit and awards are made by the Accounting officer. 84. After approval by the CEO, the winning and unsuccessful bidders are notified at the same time and rejected bidders are given reasons why they were unsuccessful. This system seems to be working well. 85. As per provisions of the Act, records are maintained for a period of six years. 86. Procurement assessment for all 6 entities has been carried out. The results are as follows: Table 2.5. Summary of Findings and Actions (Risk Mitigation Matrix) for Kenya Item Targeted Major Findings/Risks Proposed Mitigation Measure Responsibility No Date State department of Vocational and Technical Education under the Ministry of Education: State department of Vocational and Technical Education is one of the government departments under the MoE in Kenya located in Nairobi City. The department is headed by the Principal Secretary who is the approved Accounting officer. The Directorate of TVET (DTVET) is charged with the responsibility of coordinating national skills training. It is responsible for policy, curriculum development, registration and supervision of TVET institutions in the Country. The IA consists of a Procurement Unit which reports to the Principal who is the accounting officer of the department. The Procurement unit is headed by the Assistant Director Supply Chain Management and has 22 years of Procurement experience to date. He is a holder of a master’s de gree in Procurement and Logistics. There is one (1) Supply Chain Officer in charge of buying with Seven years’ experience and holds a master’s degree in Procurement and Logistics. There are two (2) Supply Chain Assistants and one of them has been designated to handle the EASTRIP projects day to day operations under the guidance of the two senior officers. The procurement staff have been trained on the PPAD Act 2015 and are familiar with the procurement procedures as provided in the Act but do not possess previous experience in implementing contracts using World Bank procurement guidelines. The procurement risk is assessed to be Substantial. In view of mitigation measures, it is reduced to Moderate Lack of procurement 1. The World Bank will provide close State Before 1 proficient personnel with support to State department of department of project Page 124 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) experience in World Bank Vocational and Technical Education Vocational and effectiveness financed projects during implementation Technical 2. Procurement staffs will be Education/WB provided with procurement training on procurement procedures under World Bank financed projects. 3. Procurement staffs to be trained on preparation and evaluations of bids/proposals using World Bank’s SBDs and RFP Documents including use of STEP Kisumu National Polytechnic: Kisumu Polytechnic is one of the government polytechnics in Kenya located in Kisumu city. It offers a variety of academic programmes and specializes in applied sciences, technology and engineering. There are over 3000 students in Kisumu polytechnic which are enrolled through annual intake. It also has over 300 staff working in the polytechnic. The IA consists of a Procurement Unit which reports to the Principal who is the accounting officer of the Polytechnic. The Procurement unit is headed by a Supply Chain Manager who oversees Procurement and Stores and has over fifteen years of experience to date. There is one (1) Assistant Procurement Officer in charge of buying and Two (2) Assistant officers under the stores section who oversee receiving and issuing materials. The positions of Procurement officers are vacant, and the three Procurement assistants report directly to the Supply Chain Manager. The procurement staff have been trained on the PPAD Act 2015 and are familiar with the procurement procedures as provided in the Act but do not possess previous experience in implementing contracts using World Bank procurement guidelines. The procurement team has vast experience in handling procurement of goods and works but have limited experience in procurement of consultant services. The Supply Chain Manager will oversee the project as the organization seeks to find a qualified and competent officer to be assigned to the project. The procurement risk is assessed to be High. In view of mitigation measures, it is reduced to Moderate 1. The World Bank will provide close Kisumu Before support to Kisumu Polytechnic Polytechnic project during implementation. effectiveness Lack of procurement 2. Procurement staffs should be Kisumu Before proficient personnel with provided with procurement training Polytechnic project 1 on procurement procedures under /WB effectiveness experience in World Bank financed projects World Bank financed projects. 3. Procurement staffs to be trained Kisumu Before on preparation and evaluations of Polytechnic project bids/proposals using World Bank’s /WB effectiveness SBDs and RFP Documents Page 125 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) KenGen Geothermal training center: Geothermal Training Institute is an in-house training facility founded as a response to an existing regional skills gap in the geothermal energy subsector and falls under KenGen. All procurements are centralized under KenGen and this is where all project procurements will be undertaken. The Procurement unit is headed by a Procurement Director who reports to the Managing Director. There are two procurement managers in charge of Tenders & Contracts and Logistics & Inventory, two assistant managers, ten (10) chief officers, two (2) principal officers and procurement officers. Procurement at KenGen is undertaken using the SAP system starting from the requisition process to delivery of goods and finally payment. Plans are underway to roll out an e-tendering system where suppliers will interact with the organization in the submission of tenders and training for a few suppliers has already commenced The procurement team has vast experience in handling procurement of goods, works and consultancy services under World Bank funding and there are currently several running projects funded by the World Bank, AfDB, Japan International Cooperation Agency (JICA) and other financiers. The assessment revealed that the overall procurement risk of the project is Moderate. The risk is lowered to Low, taking into consideration mitigation measures. Delay in processing Conduct STEP training for project Before project Bank / PIU 1 procurement requests coordinator and designated Effectiveness through the STEP system. procurement officers. Kenya Coast National Polytechnic: Kenya Coast National Polytechnic formerly Mombasa Technical Training Institute (Mombasa TTI) is in the Coastal town of Mombasa. It was established in 1950 as a Technical High School. Upon the introduction of the 8-4-4 system of education, it was elevated to a middle level technical college in 1984 to provide technical training for the middle level man power for both the private and public sectors of the economy. The trainees in the Polytechnic are drawn from fresh secondary school leavers, graduates from other tertiary institutions, employees on part-time release basis and the informal (Jua Kali) sector. The IA consists of a Procurement Unit which reports to the Principal who is the accounting officer of the Polytechnic. The Procurement unit is headed by a Senior Procurement Officer who oversees Procurement and Stores and has two months procurement practicing experience to date. There is one Procurement Officer in charge of buying who has been in the polytechnic for three years. There are also two (2) Assistant Procurement Officers who oversee receiving and issuing materials. The procurement staff have been trained on the PPAD Act 2015 and are familiar with the procurement procedures as provided in the Act but do not possess previous experience in implementing contracts using World Bank procurement guidelines. The procurement risk is assessed to be High. In view of mitigation measures proposed, it is reduced to Substantial. Kenya Coast National 1. The World Bank will provide close Polytechnic support to Meru Polytechnic during implementation. 2. Procurement staffs should be Kenya Coast Lack of procurement provided with procurement training National Before proficient personnel with 1 on procurement procedures under Polytechnic project experience in World Bank World Bank financed projects. /WB effectiveness financed projects 3. Procurement staffs to be trained on preparation and evaluations of Kenya Coast bids/proposals using World Bank’s National SBDs and RFP Documents Polytechnic /WB Page 126 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 1. Revision and improvement of the procurement filling system to ensure the records are consolidated per procurement Kenya Coast Before activity, are up to date and easily 2 Inadequate record Keeping National project retrievable. Polytechnic effectiveness 2. Provision of the procurement files in soft copies as backup and ease of access and referencing National Polytechnic for Building Infrastructure: Meru polytechnic is one of the government polytechnics in Kenya located in Meru town which headquarters Meru county. It offers a variety of academic programmes and specializes in applied sciences, technology and engineering. The IA consists of a Procurement Unit which reports to the Principal who is the accounting officer of the Polytechnic. The Procurement unit is headed by a Procurement Officer who oversees Procurement and Stores and has four years of experience to date. The procurement staff have been trained on the PPAD Act 2015 and are familiar with the procurement procedures as provided in the Act but do not possess any previous experience in implementing contracts using World Bank procurement guidelines. The procurement team has vast experience in handling procurement of goods and works but have limited experience in procurement of consultant services. The Procurement Officer will be the designated Procurement Specialist for the project. The procurement risk is assessed to be High. In view of mitigation measures proposed, it is reduced to Substantial. 1. The World Bank will provide close support to Meru Polytechnic during implementation. 2. Procurement staffs should be provided with procurement Lack of procurement training on procurement Meru Before proficient personnel with procedures under World Bank Polytechnic/WB project experience in World Bank financed projects. effectiveness financed projects 3. Procurement staffs to be trained on preparation and evaluations of bids/proposals using World Bank’s SBDs, RFP Documents and use of STEP Kenya Institute of Building and Highway Technology: Kenya Institute of Highways & Building Technology (KIHBT)was established as a training division within the Public Works department in May 1948. The purpose was to cater for skills improvement which had become necessary in the country. (KIHBT) is a public institution that trains Ministry of Roads staff, other Government employees, private sector trainees and foreigners in various technical fields. The school offers higher diploma courses in highway, building, civil, electrical, electronic, mechanical and structural engineering and building economics. Diploma courses are in land survey, computer studies, architecture and quantity survey, while certificate studies are in road construction, electrical installation, vehicle mechanics, plumbing, pipe fitting refrigeration and air conditioning, among others. Page 127 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) The IA consists of a Procurement Unit which reports to the Principal who is the accounting officer at the Kenya Institute of Highways & Building Technology. The Procurement unit is headed by a Chief Supply Chain officer who reports to the Head of Supply chain at the Ministry of Transport and Infrastructure headquarters. There are 2 (2) Assistant Procurement Officers one in charge of the Ngong Campus and the other assisting the Procurement Officer at the institute headquarters. The procurement staff do not possess adequate previous experience in implementing contracts using World Bank procurement guidelines. The procurement team has vast experience in handling procurement of goods and works but have limited experience in procurement of consultant services. The designated Supply Chain officer of the institute will oversee the project. He has some experience in the World Bank’s procurement procedures gained from previous agency five years ago. The sampled procurement files indicated incomplete record keeping system. This is a major risk identified which needs to be addressed with urgency. Since all the staff in the procurement section do not have any training or experience in the application of international procurement using Bank Procurement regulations, and unsatisfactory procurement record keeping, the assessment of the procurement risk under the forthcoming project is High. The risk is lowered to Substantial, taking into consideration mitigation measures. Lack of procurement 1. Procurement staffs should KIHBT/World Before proficient personnel with be provided with Bank project experience in World Bank procurement training on effectiveness financed projects procurement procedures under World Bank-financed projects. 1 2. Procurement staffs to be trained on preparation and evaluations of bids/proposals using World Bank’s SBDs and RFP documents Inadequate Record Keeping The institute to ensure that proper Before practice record keeping systems are put in KIHBT project 2. place to address the weaknesses effectiveness identified Inadequate skills in contract Conduct training to address KIHBT/World Before 3. management. weakness in Contract Management Bank project to the designated procurement staff effectiveness 87. Tanzania: Tanzania will have 5 implementing agencies including the MoEST (for national level activities) and 4 Flagship TVET Institutes (DIT Dar es Salaam Main Campus, DIT Mwanza Campus, ATC, and NIT). 88. Public procurement in Tanzania is governed by the Public Procurement Act, Cap 410 (as amended) and the Public Procurement Regulations, 2013 GN No. 446 of 2013 (as amended in 2016). The procurement functions are decentralized to procuring entities and Public Procurement Regulatory Authority (PPRA) provides oversight functions in Public Procurement. In addition, the Public Procurement Act provides the definitions of fraud and corruption regarding coercive practices, collusive practices, and obstructive practices. The Public Procurement Act emphasizes submitting details, and not just a list of procurement contracts awarded and the use of Procurement Management Information Systems (PMIS). Page 128 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) The Public Procurement Act protects local content and firms. The Procurement Regulations requires contracts exceeding Tanzania Shillings one billion to be vetted by the Attorney General’s Office prior to signing. The Public Procurement Act also provides for a cool-off period of 7 days during which an intention to contract award is sent to all bidders, giving them opportunity to submit a complaint, if any, on the proposed award. Furthermore, the procurement complaint review process is two tiered, which involves settlement of complaints by Accounting Officer of the procuring entity or Public Procurement Appeals Authority (PPAA). 89. In line with the Procurement Regulations, various documents as working tools, have been issued including Standard Bidding Documents, Standard Request for Proposals and Guidelines on the Tender and Proposals Evaluation and Report Preparation. All these documents are accessible on the PPRA’s website free of charge. 90. The procurement assessment of all five (5) implementing entities has been carried out with the results summarized as follows: Table 2.6. Summary of Findings and Actions (Risk Mitigation Matrix) for Tanzania Item Proposed Mitigation Major Findings/Risks Targeted Date Responsibility No Measure MoEST: The Procurement Management Unit (PMU) for MoEST has a total of eight (8) staff including the Director. MoEST currently has several World Bank-financed projects but they are all Programs-for-Results. Although one of the staff members is competed in carrying out procurement under African Development Fund, she would not be involved in the activities of the proposed World Bank-financed Project. Challenges identified through a review of PPRA audit reports and assessed carried out in January 2018 are outlined below The procurement risk is assessed to be Substantial. In view of mitigation measures below, the risk is reduced to Moderate. There are a few procurement staff with experience in carrying out procurement of goods and works under International Competitive Deploy/recruit two 1. procedures and selection and qualified and Within 3 months employment of consultants using experienced staff or after Project MoEST World Bank Procurement Guidelines consultants to work on effectiveness and Procedures; the proposed Project Inadequate number of staff delegated 2 to the procurement activities for the Ministry and all the 8 projects Inefficiencies in processing procurement activities in terms of Conduct tailor made preparing terms of references, training courses Within 6 months specifications, bidding documents, 3 specifically to address after Project MoEST request for proposals and weakness identified in effectiveness bids/proposals evaluations due to areas of procurement delays from user/technical departments; Page 129 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Item Proposed Mitigation Major Findings/Risks Targeted Date Responsibility No Measure Adherence to the start dates for initiation of procurement processes Inefficiencies in adjudicating and Throughout (including preparation of 4 approving procurement transactions project MoEST Specifications and terms by the Tender Boards; implementation; of references) and observance of standard processing times Provide basic training to the staff responsible for Within 3 months Weak procurement filing and record procurement in 5 after Project MoEST management system; procurement records effectiveness keeping and set up a proper record system. Conduct tailored training Initially within 6 specific to address months after Inadequate knowledge and experience weakness in Contract Project 6 MoEST in contract management. Management to effectiveness procurement and User and throughout Department staff the project DIT Dar es Salaam Main Campus and DIT Mwanza Campus: DIT was established by an Act of Parliament No.6 of 1997 as a high technical training institution in Tanzania. Among others, the mission of DIT is to provide the development and usage of appropriate technology that meets national, regional, and international needs and standards through skills and practical-oriented training, research, and consultancy. For both the main campus and Mwanza campus, which are the selected institutes in the current Project, procurement is mainly carried out by the Project Management Unit of the main campus in Dar es Salaam, with only minor procurement carried out at Mwanza Campus, but Tender Board approvals are provided in Dar es Salaam. All procurement records are kept in the main Campus in Dar es Salaam. DIT has a total of 9 staff, with 8 located in Dar es Salaam and 1 in Mwanza. The staff have some experience in procurement of works using the national system, but none of the staff have experience in World Bank procurement procedures. Record keeping in Dar es Salaam was found to be Satisfactory, although it can be improved. Major challenges are outlined below. The procurement risk is assessed to be Substantial. In view of mitigation measures below, the risk is reduced to Moderate. Conduct tailored training Within 6 months Inadequate experience in using World in World Bank 1. of Project DIT Bank procurement procedures; procurement procedures, effectiveness particularly the NPF Conduct tailored training specific to address Within 6 months In adequate skills in evaluation of bids 2. weakness in evaluation of Project DIT and proposals skills to procurement and effectiveness User Department staff Page 130 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Item Proposed Mitigation Major Findings/Risks Targeted Date Responsibility No Measure Conduct tailored training Initially within 6 specific to address months after Inadequate knowledge and experience weakness in Contract Project 3. DIT in contract management. Management to effectiveness procurement and User and throughout Department staff the project Arusha Technical College (ATC). The ATC in Arusha, Tanzania is a public higher tertiary education institution, which was jointly established in 1978 by the Governments of the United Republic of Tanzania and Germany, as the Technical College Arusha. The college is registered as a Procuring Entity with the PPRA. The PMU has a total of 5 members of staff including the Acting Head of Procurement. The staff have some experience in Works procurement using government procedures but have no experience with World Bank procurement procedures. The procurement risk is assessed to be High. In view of mitigation measures below, the risk is reduced to Substantial Conduct tailored training Within 6 months Inadequate experience in using World in World Bank ATC/World 1. of Project Bank procurement procedures; procurement procedures, Bank effectiveness particularly the NPF Conduct tailored training specific to address Within 6 months In adequate skills in evaluation of bids 2. weakness in evaluation of Project ATC and proposals skills to procurement and effectiveness User Department staff Conduct tailored training Initially within 6 specific to address months after Inadequate knowledge and experience weakness in Contract Project 3. ATC in contract management. Management to effectiveness procurement and User and throughout Department staff the project Ensure funds are Delays in payments to service available for major Throughout the 4. providers due to unavailability of procurement contracts, ATC Project life funds particularly Works contracts Page 131 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Item Proposed Mitigation Major Findings/Risks Targeted Date Responsibility No Measure National Institute of Transport (NIT). NIT was established in 1975 as a training wing of the then National Transport Corporation. NIT was charged with the responsibility of strengthening human resource capabilities of transport operatives and middle-level managers of subsidiary companies of the National Transport Corporation. In 1982, it was realized that there was need to have an Institute that will cover all modes of transport. The Institute expanded its area of activities and responsibilities. As a result, NIT was re-established through NIT Act No. 24 of 1982 as an autonomous Higher Learning Institution under the then Ministry of Communications and Works. It came into operation on July 1, 1983 through the Government Notice No. 91. NIT is registered with PPRA as a Procuring Entity. The assessment carried out in March 2018 revealed that NIT has no experience in World Bank-financed operations. Procurement activities at NIT are are mainstreamed in the government system. The assessment also revealed that NIT has the requisite structures and systems for undertaking procurement activities as per the PPA and its Regulations. The PMU at NIT has three staff, including a Head of PMU. PMUs’ staff have experience with government procurement, the majority of which uses framework agreements for the Common Use Items and Services through GPSA and few activities involving Shopping or National Competitive Bidding. The procurement risk is assessed to be High. In view of mitigation measures below, the risk is reduced to Substantial Recruit a Procurement Consultant to provide Staff lack experience in carrying out technical support in the Within 6 months procurement of high value goods and implementation of of Project NIT works under International Competitive procurement activities effectiveness Procedures and selection and 1. and building capacity of employment of consultants using the NIT World Bank Procurement Conduct tailored training Guidelines/Regulations and Within 6 months in World Bank NIT/World Procedures of Project procurement procedures, Bank effectiveness particularly the NPF Standard biding documents issued by Ensure adherence to use Throughout the 2. PPRA were not used in various tenders NIT of standard templates Project life for government tenders Inadequate working environment, Ensure adequate space is Within 3 months 3. including limited space for staff and provided for staff and of Project NIT for record keeping/filing; record keeping effectiveness Establish a procurement Within 3 months Weak procurement filing and record 4. filing system acceptable of Project NIT management system; to the World Bank effectiveness Inadequate knowledge and experience Conduct tailored training Initially within 6 in contract management (works specific to address months after contracts are not completed on time; weakness in Contract Project 5. contractors are not paid on time; site NIT Management to effectiveness meetings are conducted as per the procurement and User and throughout terms of the contract; delays in site Department staff the project possession). 91. Frequency of procurement supervision. In addition to the prior review supervision to be carried out from the World Bank offices, the capacity assessment of the implementing agencies recommends one supervision mission every six months to visit the field to carry out post review of procurement actions. In Page 132 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) line with the regulations, post reviews/audits may be carried out by National Audit Institutions, with agreement by the World Bank. Environmental and Social (including safeguards) 92. Environmental and social impacts of rehabilitating academic/research institutions are expected to be Low to Moderate. The Environmental Assessment category is B (Partial Assessment), and Environmental Assessment (OP/BP 4.01 and OP/BP 4.11) is triggered. Under Subcomponent 1.5, the project will expand and upgrade facilities, including construction of training centers within the existing campus of the selected institutes. There will be no new land acquisition for the targeted Flagship TVET Institutes; the project will work with existing institutions. Each of the target institutes has developed a SIP to specify the goals, targets, and detailed investment. Five sectors are selected including transport, energy, agro-processing, manufacturing, and ICT. 93. To guide implementation of Subcomponent 1.5, ESMFs were prepared for Ethiopia, Kenya, and Tanzania. A framework approach was taken as no designs for TVET rehabilitation/expansion activities were developed during the project preparation. The ESMFs’ preparation included a set of public consultations in each country and disclosure at the country level and at the World Bank website. Each of the ESMFs describes environmental and social risks from types of activities proposed for the project candidate institutions and described the measures to manage these potential environmental and social impacts. During implementation of the project, as the designs become available, each institution will use the national ESMF to prepare an ESIA or ESMP (according to the country’s requirements and OP 4.01). During design stage, subprojects will be screened to ensure exclusion of investments that lead to land acquisition, loss of livelihood or restriction of access to resources. Each institute-specific ESIA or ESMP will be reviewed and approved by relevant government agencies responsible for ensuring proper oversight of the adherence of selected institutions to safeguards requirements set forth in the ESIAs/ESMPs. Upon completion of the ESIA/ESMP, each center will undergo a training on ESMP application and review of relevant safeguards implementation arrangements. 94. Although labor influx is anticipated to be low or moderate and over short periods, the planned civil works will attract both external and local labor to the selected institutions and the neighboring communities. Such labor influx has been found to exacerbate sexual exploitation and abuse of women and girls. The ESMF provides guidance for prevention and response to this and other potential social risks. The inclusion of social risk management clauses in all bidding documents and mitigation measures in the contractor’s ESMP such as workers codes of conduct will be key. The relevant government agencies will be responsible for institutional capacity strengthening on overall social risk management. Monitoring and Evaluation 95. Project monitoring indicators. The project will monitor and report on progress on the PDO-level indicators, sub-PDO-level indicators, and intermediate results indicators in three results areas: (a) increasing access to TVET programs, (b) improving quality and relevance of TVET programs, and (c) supporting regional integration and regional economic corridors. These indicators are listed in the Results Framework and Monitoring table (section VII). The flagship TVET institutes will be responsible for data collection for Component 1. At each TVET institute, an M&E expert will be responsible for data collection and reporting. An NPCU in each country will collect data for the national component and consolidate the Page 133 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) data from all the flagship TVET institutes in that country. Further, the RFU will be responsible for data collection from all flagship institutes and national components to provide consolidated monitoring and evaluation report for the EASTRIP project at the regional level. 96. Monitoring project implementation. For each component, different stakeholders will be responsible for monitoring the progress. For Component 1, while each flagship TVET institute with a designated M&E expert will be primarily responsible for the progress of its activities and for reporting its annual progress and challenges to a NSC through annual progress reports, the NSC will oversee overall progress of activities and provide guidance for smooth implementation of the activities defined in the SIPs. For Component 2, the NPCU will be responsible for monitoring the progress, and reporting it to the NSC. The NSC will report the progress of Components 1 and 2 to an RSC. 97. At regional level, the RFU will be responsible for monitoring implementation progress for the entire project and reporting it to the RSC. The Technical Advisory Board will provide technical advice when needed. Twice a year, the RFU will organize a dissemination workshop of project progress on Components 1, 2, and 3 where all regional TVET flagship institutes, NSCs, and RSCs will share the progress and challenges with each other and network with each other to enhance collaboration. Role of Partners 98. The EASTRIP concept and framework was incubated under the PASET umbrella and hence benefited from the PASET governance, financing, and partnership. The KWPF and CWPF both provided initial funding for the team to develop the EASTRIP concept, evaluate, and select the Regional Flagship TVET Institutes. Capacity building and knowledge sharing for the participating countries and selected TVET institutes were carried out in Ethiopia, Korea, India, and China. 99. For industrial partnership, the EASTRIP institutes were selected based on a rigorous set of criteria, including industry links, leadership and technical capacity, innovation, and alignment with national and regional development priorities. Industry partnership was given extra weightage in the selection. Hence, the existing 16 institutes already have a network of industrial partners they work with. For example, the Ethiopia Railway Academy works closely with the ERC. The KenGen Geothermal training center is an offshoot of the Kenya Geothermal Cooperation. Under EASTRIP, the project will support and cultivate more and stronger partnership with industries. 100. EASTRIP will also finance the institutes to partner with experienced TVET institutional partners to develop curriculum, train faculty, and implement the training programs. Currently, such institutional partners from Korea, China, and other countries are being sought. Page 134 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) ANNEX 3: IMPLEMENTATION SUPPORT PLAN Eastern Africa East Africa Skills for Transformation and Regional Integration Project (EASTRIP) Strategy and Approach for Implementation Support 1. The Strategy for Implementation Support has been developed based on the nature of the project and its risk profile. The strategy aims to provide flexible, efficient, and effective implementation support to the implementing agencies. It focuses mainly on the implementation of risk mitigation measures. 2. The World Bank’s approach to implementation support emphasizes open and regular communication with all implementing agencies including the regional flagship TVET institutes, the ministries of education and the relevant TVET agencies in each of the three countries, and the IUCEA as the RFU. 3. The Implementation Strategy is also based on the Governments’ and the World Bank’s requirement for supervision and monitoring of the development projects. The strategy thus comprises (a) joint implementation support missions by the World Bank, IUCEA, NSCs, and relevant partners and technical experts; (b) semiannual EASTRIP technical meetings organized by the IUCEA; and (c) regular videoconferences with the implementing agencies, IUCEA, and the relevant World Bank teams to provide ad hoc ‘solutions’ to implementation. Table 3.1. Implementation Support Plan and Resource Requirements Time Focus Skills Needed Resource Estimate Partner Role First 12 Technical review of SIPs, support TVET program US$300,000 Partners will months to establish implementation development; provide technical units, and procurement and FM industry experts, advice as training procurement and FM relevant specialists 12–48 Technical review and support, TVET program US$200,000 annually Partners will months procurement and FM training, development; provide technical environmental and social industry experts, advice as safeguards training, M&E, procurement and FM relevant verification of DLIs, and specialists, M&E leadership and management specialists, training safeguards specialists Other Infrastructure design, Architects and US$100,000 annually n.a. procurement of ICT equipment, industrial specialists during the intense and specification of modern procurement period training facilities Page 135 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Table 3.2. Skills Mix Required Skills Needed Number of Staff Weeks Number of Trips Comments Technical expertise on 8 annually Field trip as needed International, regional, and TVET local consultants Operations 8 annually Field trip as needed Mainly country offices M&E 4 annually Field trip as needed HQ and country offices Procurement 6 annually Field trip as needed Mainly country offices Environment and social 4 annually Field trip as needed Mainly country offices safeguards Infrastructure and 4 annually Field trip as needed International, regional, and training equipment local consultants FM 4 annually Field trip as needed HQ and country offices Task team leaders 15 in the first year; then 12 Field trip as needed HQ and country offices annually Page 136 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) ANNEX 4: ECONOMIC AND FINANCIAL ANALYSIS 1. This annex aims to address four key questions: (a) what is the project’s development impact, (b) is public sector provision and financing the appropriate vehicle, (c) why is a regional approach important, and (d) what is the World Bank’s value added? A. Expected Project’s Development Impact Project Scope and Overall Benefits 2. Project objective. The PDO is to increase the access and improve the quality of TVET programs in selected regional flagship TVET institutes and to support regional integration in East Africa. As a regional project, the benefits are expected to emerge from the realization of economies of scale in training design and delivery for the countries who are involved in regional projects. Regional harmonization of training standards and assessment instruments as part of the project will lead to a more efficient regional labor market serving the regional project with a mobile workforce whose skills are recognized by employers in all partner countries. 3. Project focus areas and activities. The project focuses on three areas: (a) increasing access to TVET programs, (b) improving quality and relevance of TVET programs, and (c) supporting regional integration. The project implements several activities in these three areas at the institute, national, and regional level. At the institute level, 16 institutes will implement activities based on their SIPs in their respective priority sectors. Among the 16 institutes, 7 institutes fall in various transport and infrastructure industries from three countries. Three institutes focus on power/energy-related industries. Moreover, the priority area of five areas is manufacturing, including light manufacturing. One institute from Tanzania will work in the ICT sector. These institutes plan to develop new or revise training programs relevant to the priority industries and offer both short- and long-term courses. 4. Project’s benefits. To assess the project’s development impact, this section first examines the expected benefits of the project, in consideration of counterfactuals (if EASTRIP does not exist). Table 4.1. Expected Project’s Benefits Versus Counterfactuals Project’s Benefit Counterfactuals (no project) Note 1. Increasing number of Number of graduates may increase, At the end of the project, annual student graduates in the but not significantly. In future, the enrollment will be at least doubled from the programs relevant to number may even decrease due to baseline (both short- and long-term priority sectors deteriorated training facilities. programs). The regional students will contribute to this target. 2. Increasing of Status quo; no change After completion of competency-based employment likelihood training and industrial experience during the after graduation project, it becomes easier to obtain jobs. This applies to both foreign and domestic students. 3. Higher annual wage No additional training provided by The project will give additional training for for training completers the project. individuals. (wage premium) Page 137 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Project’s Benefit Counterfactuals (no project) Note 4. Productivity increase No productivity increase for Upgrading employee’s skills by industry (particularly short-term additional students due to lack of oriented short-term training. training completers) training opportunities for them. Yes, but for baseline level. 5. More qualified No increase of share of qualified The project will provide industrial training, teachers/trainers teachers/trainers due to lack of academic qualification, and pedagogy training. available training opportunities. Possibly Mobility of teachers/trainers will be even decrease of the share due to facilitated. retirement of well-experienced senior staff 6. More qualified No additional training provided by The project will support increasing management staff the project to strengthen management capacity for efficient project available management capacity. management. 7. More students’ and Not realized much The project will facilitate signing of trainers’ mobility across agreements of mutual recognition of countries qualifications and/or developing guidelines for students/trainers to cross-enroll in the programs in EASTRIP countries. 8. More investment in Maybe no investment due to the The project will attract more foreign investors training from the cost to invest in one specific with awareness of the importance of TVET and private sector country in relation to regional-level more involvement in training. market 9. Reduction of cost for More cost with individual country- The project will demonstrate economies of training (both trainers focused project, not regional scale. and students) project 10. Enhancing policy Limited coordination by each The project will help coordination at the coordination at the country-level effort regional level. country and regional level 11. Increasing Yes, by individual’s country effort, Learning opportunities bring awareness and awareness of TVET at but limited to country level attract more students (that is, regular the regional level knowledge-sharing workshops and skills competitions in the region). 12. Increasing peer- Yes, but limited using existing The project will help facilitate learning learning opportunities framework opportunities. 13. Technology transfer Yes, but may be limited within the The project will facilitate exchanges of (spillover) country and at the present level trainers/teachers at the regional level. More industries’ involvement in training programs. 14. Benefits beyond No benefit due to no project Skills needs are beyond three countries. project countries a activity 15. Benefits beyond No benefit due to no project The project will create indirect job project priority areas activity opportunities (for instance, airline industry to hospitality) 16. Externality/social No benefit due to no project For instance, saving expenses for social benefit activity benefit (unemployment), increasing tax income, improving health condition, and so on. Source: Created by the team. Page 138 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Note: a. The regional benefits will be beyond these three participating countries. For instance, road expansion is for Rwanda, Burundi. In Rwanda, the ICT establishments in the private sector have skills gaps of 940 labor units (34.5 percent ICT managers, 8.9 percent ICT scientist professionals, 7.7 percent ICT technicians, 18.3 percent liberal professionals, and 30.4 percent artisans). Training in soft (qualitative) skills such as leadership, business communication, public relations, and innovation is also needed.34 In the Ugandan transport sector, for instance, about 24,000 maintenance technicians and truck mechanics will be available for roadways in 2030 versus 3,900 in 2015 as baseline (World Bank 2016). Also, Tanzania students/teachers are trained to develop the port of Zanzibar (one of the EAC’s flagship projects). Students in these countries may benefit from the regional project. 5. The project will benefit beyond the 16-selected flagship TVET institutes (trainees, trainers, and management) because all institutes are expected to find partner TVET institutions (non-project TVET institution) and build capacity in the TVET programs relevant to selected industries. 6. Project’s cost. The main costs associated with the EASTRIP intervention include project direct costs (IDA credit and grant), education and training costs for individuals, and foregone income (indirect cost) for individuals during training. The additional recurrent maintenance cost for construction and additional academic and administration staff according to the expansion of programs at the TVET institutions are anticipated. Moreover, because EASTRIP supports institutes in staff development, salary increase due to additional qualification/training experience for some staff could be expected. Project’s Benefits and Costs for Component 1 7. The project consists of three components, and this section assesses the costs and benefits associated with Component 1 of the project. It uses the approach of comparing net values of cost with net value of benefit. The cost-benefit analysis of this project focuses on economic costs and benefits. 8. For Component 1, cost items include direct project cost and private cost, including private contribution to education and opportunity cost of forgone income during training. Benefits of the project are estimated by increase in the number of graduates from selected flagship TVET institutions and by higher productivity and lifetime earnings. 9. Limitation. The project supports TVET institutions in specific priority areas such as railways and agro-processing. The data currently available do not permit the analysis of economic returns-specific disciplines such as engineering and agro-processing, which are relevant to such priority areas. Therefore, although the project focuses on specific priority areas, the cost-benefit analysis includes data on programs that are outside the project scope because it is difficult to differentiate between EASTRIP priority areas and others. 10. Key assumptions for cost-benefit analysis: (a) Project cost and allocation over the project period. For Component 1, the project allocates US$122 million for Ethiopia, US$54 million for Kenya, and US$70 million for Tanzania. Component 1 applies RBF modality partially, and the funds will be disbursed only when the agreed targets are met. This section assumes that the project will achieve the targets fully 34 Rwanda Development Board. 2013. Rwanda Skills Survey 2012. ICT Sector Report. Page 139 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) and all the funds will be disbursed. (b) Breakdown of expenditures. The project assumes that (a) each institute will use 80 percent of the funds allocated under Component 1, which will go for construction activities; (b) the maintenance cost of the constructed building will be 1.5 percent of the building cost; and (c) the building will last for 40 years after construction. The project expects that the construction will be completed and used by the third year of the project. (c) Additional recurrent cost. Along with the expected expansion of access to TVET programs under the project, additional recurrent cost, including new staff to be hired, is expected at each institute, but due to data unavailability, this cost is not included in the analysis. (d) Private cost for individuals. Private cost includes direct and opportunity cost. Direct cost covers student fees, books, travel, and so on. The opportunity cost represents a loss of productive capacity measured as a loss of earning for the individual who enrolled for TVET programs. It assumes that a student would otherwise not be idle or unemployed.35 (e) Duration of training programs. The project assumes that an individual who attends a long- term training program takes two years, and a short-term program is less than six months although the actual duration varies across selected institutions and countries. (f) Wage. The salary of the graduates does not vary during the year. The difference in the life- stream of both the treatment and comparison group is only attributable to attending TVET programs. The wage levels are projected to account for inflation for future years. The project assumes that the salary of graduates increases by 1.5 percent annually for all three countries. For short-term completers, the project assumes the salary increase as 15 percent from the level before the short-term training. (g) Employment of graduates. The percentage of individuals who completed long-term programs and are employed immediately after graduation for Ethiopia, Kenya, and Tanzania is 90, 70, and 70, respectively (team estimation based on data from institutes). (h) Retirement age. The project assumes that the retirement age is 60 and no unemployment period between graduation from TVET and retirement. (i) Exchange rate. US$1 = ETB 27, TZS 2,200, and KES 100. (j) Inflation rate. The assumed inflation rates are 7.3 percent for Ethiopia, 5.2 percent for Tanzania, and 6.1 percent for Kenya. 11. The net present values (NPVs) of benefits, costs, and IRR. Based on the discount rates of 7 percent for Ethiopia (March 2018), 8 percent for Tanzania (March 2018), and 12 percent for Kenya (March 2018) for the benefits and cost stream mentioned earlier, the NPV is ETB 3,376 million for Ethiopia, KES 35The team used data from Tanzania National Panel Survey 2014 –2015 Wave 4, Tanzania Integrated Labor Force Survey 2015, Ethiopia Socioeconomic Survey 2015-2016 Wave 3, and Kenya Integrated Household Budget Survey 2015–2016 for annual average education expenditure and wage by education level. Page 140 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 17,814.5 million for Kenya, and TZS 868,711.8 million for Tanzania. The IRR associated with this NPV is 8.0 percent for Ethiopia, 30.9 percent for Kenya, and 26.9 percent for Tanzania. The IRR for Ethiopia is lower than the ones in other two countries. This lower rate may be attributed in part to higher investment per beneficiary in Ethiopia. However, it is still higher than the benchmarking interest rate of 7 percent. 12. Sensitivity analysis. The team also conducted a sensitivity analysis with different scenarios. The results of the analysis are presented in table 4.3. Table 4.2. Sensitivity Analysis, IRR (%) Indicator Ethiopia Kenya Tanzania Base Scenario 8.0 30.9 26.9 More graduates for employment (increased in 5%) 8.3 32.1 27.8 Fewer graduates for employment (reduced in 5%) 7.7 29.8 25.9 Source: Calculated by the World Bank team. Projects’ Benefits and Costs for Components 2 and 3 13. Benefits from capacity development activities. Component 2 aims to create national TVET enabling environments in three countries, focusing on (a) strengthening of the national quality assurance system; (b) capacity building for TVET policy, planning, and research; (c) support for regional integration; and (d) project management and M&E. The project beneficiaries include sectoral ministries as well as relevant government agencies on quality assurance and curriculum development. The project will bring to three countries not only IDA funding but also the World Bank’s global knowledge (best practice, international experts, and lessons learned from other projects) and contributions from partner countries such as China and Korea. Moreover, an RFU through Component 3 3 will facilitate capacity building of the TVET institutes during implementation. Fiscal Analysis 14. This section analyzes the fiscal sustainability of each of the components of EASTRIP. Component 1 15. The project investment to each flagship TVET institute is significant in terms of the investment amount, considering its budget level in the latest year. An estimated investment amount per institute is US$10 to US$25 million for five years (US$2 to US$5 million per year on average). According to the data provided by the selected 16 institutes, the annual recurrent budget for 4 institutes is less than US$1 million, while ten are between US$1 and US$5 million, only two are over US$5 million. In terms of capital budget, all institutions are below the US$5 million level and more than half of them are below US$1 million. 16. Expected increase of recurrent cost. As new buildings are constructed, or existing facilities are rehabilitated during the project period, additional operational costs, including maintenance costs, will be incurred during and after the project period. In addition, as more trainees are absorbed due to expansion of facilities in the TVET institutions, additional teaching and administrative staff are required. Each institution needs to make sure to secure budgets for these additional, recurrent costs to sustain their Page 141 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) programs. Furthermore, most of the institutes plan to hire project staff by the project funds. If institutes aim to deliver the same or even expanded services due to labor market demands, to manage and implement their programs, the TVET institutes also need to secure budget to hire such project staff (or absorb them within the existing budget structure). 17. However, during the implementation of the SIP, the budget level for each institute is expected to increase by self-income generation (with an assumption that the budget level of other budget sources, including the Government, continues to be the same or increases), and the institute’s capacity to manage projects, including budget planning, has been enhanced through capacity-building activities provided to the management and technical staff. Component 2 18. For Component 2, the estimated investment for each country to support strengthening the national TVET system is a maximum of US$28 million, US$6 million, and US$5 million for Ethiopia, Kenya, and Tanzania, respectively. According to the latest data available, the total government education expenditure is US$1.5 billion for Tanzania, US$3.2 billion for Kenya, and US$1.9 billion for Ethiopia.36 While specific expenditure data for the TVET subsector are not available, it is easily estimated that the project investment is a very small portion of the total government expenditure for the TVET subsector, and thus it is assumed that the fiscal impact is not significant. The Government is expected to fully use the project investment for the intended purpose of strengthening its TVET system. IDA’s share for Component 2 against a total expenditure on education in each country is less than 2 percent and, thus, it will not significantly affect the budget level. Also, under Component 2, the existing structure in the ministry such as the directorate of TVET in the MoE is expected to manage activities (Table 4.4). Table 4.3. Education Expenditure and Investment for Component 2 Tanzania Kenya Ethiopia Expenditure on education % of total government expenditure (%) 17.3 16.7 27.0 Total expenditure on education (US$, millions) 1,543 3,239 1,948 IDA investment to Component 2 (US$, millions) 5 6 28 Share of IDA for Component 2 against total expenditure on 0.32 0.19 1.44 education (%) Source: Created by the team based on expenditure data retrieved from the UIS Statistics database. Component 3 19. For Component 3, US$8 million from IDA will support enhancing the regional collaborative capacity in TVET and project coordination. The project will help create a regional platform where high- level government officials and technical staff will meet and discuss issues in the TVET areas. B. Rationale for Public Sector Provision and Financing 20. There is limited analysis of the rate of returns to TVET in Africa. However, the existing pool of studies support the fact that acquiring a TVET qualification leads to improved future streams of income. 36Retrieved from UNESCO Institute of Statistics (UIS) database. Year of expenditure data is 2014 for Tanzania, 2015 for Kenya, 2013 for Ethiopia. Page 142 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Based on empirical experience, investment to the TVET sector helps improve worker productivity. For instance, according to World Bank’s Public Expenditure Review in Ethiopia, those with TVET earn more than 250 percent higher than that of workers with no education in Ethiopia. The findings of other reports also support the argument. Although the returns are lower than general secondary or tertiary education, there are positive returns for TVET programs in some African countries.37 21. Additionally, it has been observed globally that TVET can be an attractive option for those with lower earning potential and poor chances of continuing higher education. Public sector provision or financing of TVET and skills training is justified on numerous grounds motivated by potential market failures. 22. First, imperfections in the labor market can lead to underinvestment in training. For example, employers may not use private resources to provide training for transferable skills, fearing that their trained employees may be recruited by other firms. Similarly, in contexts where immediate returns to training or fair compensation from increasing productivity are not evident, employees will continue to underinvest in their own training. EASTRIP will help institutes develop training programs relevant to labor market needs, in consultation with industries, and help institutes implement such training programs for additional number of trainees through long- and short-term training programs. 23. Second, the lack of necessary information and decision-making failures can result in underinvestment. From an employer perspective, the lack of sufficient information about the skills of workers could lead employers to misjudge the need for investment in training. Public provision of TVET responds to such market failures, not only in developing sound information and assessment systems but also in making up for the insufficiency of employer investment in training while continually working to improve employer engagement. 24. Third, externalities exist, and thus public financing for the training can be justified. Positive externalities exist where the social benefits of training are higher than the private benefits realized by trainees and firms.38 The benefits from the intervention will be beyond the direct benefit of an individual’s increase of wage, employability, and productivity. It will bring benefits to the society. The strategic intervention of governments in the priority economic sectors with potential growth opportunities will lead to national development. On the other hand, if resources are not properly and strategically allocated for the intervention, it may impede national development. Therefore, it is important that policies and institutional mechanism are set to remedy externalities.39 EASTRIP will not only support the selected specific institutes but also support to build capacity at the national level. 25. In addition, equity issues need to be addressed in gender and socioeconomic situations. It is evident that female enrollment in science and engineering programs is low. This is partially due to a gender-biased labor division. For instance, Johanson and Adams (2004) mention that women TVET students tend to select programs that lead to jobs that women are typically employed, giving garment manufacture as one of the examples40. This tendency is apparent for the case of selected institutes for the 37 World Bank. 2017. The Skills Balancing Act in Sub-Saharan Africa: Investing in Skills for Productivity, Inclusion, and Adaptability. 38 Ziderman, Adrian. 2003. Financing Vocational Training in Sub-Saharan Africa. Washington, DC: World Bank. 39 UNIDO (United Nations Industrial Development Organization). 2008. Public Goods for Economic Development. Vienna. 40 Johanson, Richard K., and Arvil V. Adams. 2004. Skills Development in Sub-Saharan Africa. Washington, DC: World Bank. Page 143 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) EASTRIP intervention according to the baseline data collected from the selected 16 institutes. The share of women students for three countries is about 23 percent and only 10 percent for Kenya. Ethiopia’s ratio is relatively high, but this is because there are more women students enrolled in textiles and garments technology-related programs. C. Rationale for Regional Approach 26. A regional approach to skills development serves as a complementary regional solution to enhance the scope and success of ongoing regional integration initiatives to develop larger markets, diversify the economy, scale up the use of modern technology, drive-down cost, and create new jobs and skills. In 2011, the World Bank published its Africa’s regional strategy, which recognized the importance of collaborative actions and regional approaches for trade stimulation and economic infrastructure development in a cost-effective manner.41 27. In the case of Asia, through the Great Mekong Sub-Region Cooperation Program, it has been long recognized that economic cooperation in the region contributes to creating larger markets for national producers and consumers and realizing scale economies by reducing obstacles to trade, capital, and labor. Landlocked countries have access to/and will be integrated with external markets.42 28. Skills challenge exists across countries and needs to be addressed both at the country and regional level. A broad set of traditional and emerging arguments have been considered to develop the rationale for the regional approach of this project. 29. Economies of scale. Over two-thirds of Sub-Saharan African countries have a population of less than 20 million, and about half the countries had a GDP of less than US$10 billion in 2016 (nominal terms). About a third of the countries are either landlocked or sea-locked, making them distant from global and regional markets, and their resource endowments vary widely from one another. Together, they pull down the economic potential for the region. The various ongoing efforts to expand exports and integrate regional markets and physically connect resources rest on this premise. The skills challenge is a regional agenda, and the demand for skilled labors is both at the country and regional level. To avoid the duplication of efforts and share the cost, a regional approach, complementing the existing efforts at the country level, will benefit the region from an economic perspective. 30. For EASTRIP, creating a cluster of Regional Flagship TVET Institutes (receiving both national and regional students) serving regional corridors, sector markets, and industrial parks can spread the cost of what would otherwise be costly training investments for each country. Each TVET institute will specialize in specific sectors and occupations with highly specialized TVET diploma and degree as well as industry- recognized training programs. Mobility of students, graduates, and faculty will facilitate a healthy exchange of skilled labor within the region so that each country does not have to produce all the skills at once. The sharing of the standards, curriculum, and state-of-the-art training facilities will help reduce costs. 41World Bank. 2011. Africa’s Future and the World Bank’s Support to It. World Bank. 42ADB (Asian Development Bank). 2010. “The Greater Mekong Subregion Economic Cooperation Program Strategic Framework 2012–2022.” Background Paper. Page 1. Page 144 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) 31. The ongoing ACE projects demonstrate that such economies of scale can be achieved. Several ACEs have already reached the 20 percent target of regional enrollment in postgraduate programs. Granted that the TVET sector generally has lower capacity than higher education, it is expected that the more specialized programs, such as those certified by industries, can attract regional or even institutional students. Baseline and target data from the selected Regional Flagship TVET Institutes show at least 7.5 percent regional enrollment may be achieved (6.6 percent for short-term programs and 8.5 percent for long-term programs). The project targets more than 1,200 regional students’ enrollment in the TVET institutes by the end of the project. In some industries such as geothermal energy, students are already studying across countries (that is, foreigners are under training at KenGen Geothermal Training Center in Kenya). 32. Diversification and specialization in the creation of jobs. The project aims to promote specialization in skills among a group of countries in their priority sectors and facilitate collaboration between them so that collectively they can shift their production function. The recent experience with the commodity-driven growth points to the need for economic diversification and improvements in productivity. Greater integration will be an important part of this solution, especially to provide short- and medium-term benefits in priority sectors. The countries need to act collectively for the good of everyone and align their skills development strategies to the ongoing regional initiatives to diversify markets, increase growth, and improve productivity. Efforts are warranted to promote specialization in skills among a group of countries in their priority sectors and facilitate collaboration between them so that collectively they can shift their production function. 33. Leveraging private capital for national and regional development. Given the small size of markets and fragmentation of resources and services, African countries continue to face challenges in attracting private investments. Thus, countries find it difficult to engage the private sector effectively to develop their sectors and a skilled workforce. By exploring ways of operating regionally, African countries could address this constraint and strengthen deeper and more comprehensive links with the private sector for broad sectoral and institutional development. 34. Toward free labor mobility in the region and mutual recognition of qualifications. The RECs promote free labor mobility in the regions as part of their efforts toward regional integration. Moreover, RECs further enhance regional integration beyond their communities by signing the agreement of the Tripartite Free Trade Area between the SADC, EAC, and COMESA. More workers are expected to move across countries. The EAC highlights the mobility of high- and medium-skilled workers in the community for regional integration.43 In this regard, mutual recognition of qualifications will be critical, and harmonization of qualifications will help mutual recognition. 35. Harmonization of skills and qualifications. Harmonization in education and skills development will enable the consolidation of African systems of education and ensure the quality of educational provision against locally, regionally, and eventually internally agreed benchmarks of excellence, ultimately leading to effective regional integration. In the interest of economic regional integration, harmonization of skills training standards and qualifications will facilitate mobility of students and faculty, institute a greater sense of professionalism, and make it easier to expand reforms across the region. As part of its efforts, the EAC, through the IUCEA, developed EAQFHE in 2015, which covers basic to higher education, 43 EAC. 2009. The East African Community Common Market (Free Movement of Workers) Regulations Annex II. Page 145 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) including TVET. Currently, in the TVET subsector, there is not much labor mobility across countries, partially due to demand in their own countries. Currently, only 40 out of about 9,000 students enrolled in selected TVET institutes are foreign students. The project would help facilitate more students’ mobility by harmonizing skills and qualifications, which eventually meets the labor market demands. The share of foreign teachers or trainers is also very small. In a total of 16 institutes, the share of foreign students is less than 1 percent. Moreover, the project supports the establishment of a regional TVET Council to help this effort. 36. Technology transfer/peer learning/capacity development. Also, as spillover effects of regional projects, technology transfer is expected at the regional level in addition to within each country. In addition, a regional approach will help facilitate the communication of institutes with each other and learning from each other across countries not only on teaching practices but also management practices. Moreover, each institute can share the facilities and trainers as needed. For instance, Kiplimo and Ikua (2017) suggest that the EAC should use national and regional collaboration to optimize technological investment in education and training programs in the maritime sector and enhance global maritime standards and encourages the sharing of training facilities within the region.44 D. World Bank Value Addition 37. The World Bank brings substantial value added in supporting this project through its ability to draw from extensive knowledge and operational experience in TVET reforms globally. Between FY2001 and FY2016 alone, the World Bank Education Global Practice had over 40 operations with a PDO of improving TVET. More than half of these projects are in the Africa Region. The World Bank has been developing innovative diagnostic tools such as SABER45 Workforce Development and STEP46 Skills Measurement Surveys that provide further opportunities for cross-country learning. 38. Moreover, the World Bank has been supporting Africa’s skills development by a regional approach through ACE I, ACE II, and PASET.47 Furthermore, given the focus of EASTRIP, knowledge and experience from other relevant global practices in the World Bank will be mobilized such as Energy, Trade and Competitiveness, Social Protection, and Labor. The World Bank currently has a strong engagement in skills-related projects in the region. Additionally, there is substantial ongoing engagement in advisory and technical projects in participating countries, relevant to priority economic sectors of EASTRIP, especially transport and energy. 44 Kiplimo, R., and B. W. Ikua. 2017. “Maritime Education Training in East Africa Region: Current Status.” 10th International Conference on Maritime Technology, MARTEC 2016, Proceedia Engineering 194: 351–355. 45 Systems Approach for Better Education Results (SABER), http://saber.worldbank.org/index.cfm. 46 The Skills Towards Employability and Productivity. 47 http://www.worldbank.org/en/programs/paset. Page 146 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) ANNEX 5: COUNTRY-SPECIFIC PROJECT DESCRIPTION I. Ethiopia 1. The objective of the Ethiopia part of EASTRIP is to increase the access and improve the quality and relevance of TVET programs in the seven Ethiopia Regional Flagship TVET Institutes and to support regional integration in East Africa (Table 5.1). The project supports the development of highly specialized TVET programs in railway, automotive, power/energy, tool making/leather, textile/garment, and agro- processing for training of technicians and TVET faculty. The objectives will be achieved through a US$150 million IDA financing of activities grouped in Component 1 and Component 2. Table 5.1. Regional Flagship TVET Institutes Selected from Ethiopia Sector Focus Regional Flagship TVET Institute Transport/infrastructure Railway Meles Zenawi Memorial TVET Polytechnic College Railway Ethiopia Railway Academy Road Kombolcha TVET Polytechnic College Power/energy Power/energy General Wingate Polytechnic College Manufacturing Tool TVET Institute making/leather Textile/garment Hawassa TVET Polytechnic College Agro- Holeta TVET Polytechnic College processing Component 1: Strengthening the 7 Regional Flagship TVET Institutes in Ethiopia for high-quality skills development in priority sectors (SDR 86.62 million, US$122 million equivalent) 2. This component will finance the development and delivery of training programs in railway, automotive, power/energy, tool making/leather, textile/garment, and agro-processing, based on standards and qualifications recognize by the relevant industries in these sectors. 3. The component will provide funding directly to the 7 Ethiopian Regional Flagship TVET Institutes to finance activities agreed upon in the Strategic Investment Plans (SIP) for each of the seven institutes. The SIPs are structured along six interrelated subcomponents: (a) strengthening governance and management; (b) institutionalizing industrial linkages at institute and program levels; (c) developing market-relevant and competency-based training programs; (d) training managers and teachers to upgrade their technical knowledge and practical skills, as well as to promote student-centered pedagogy and ICT competency; (e) providing key training equipment and facilities; and finally (f) providing outreach and support for non-project national TVET institutes to maximize the spillover effects of the Project. 4. Each TVET institute will establish a Project Implementation Unit with required functions and capacity and receive funding per fulfillment of disbursement linked indicators designed to promote results in access, quality and relevance, as well we regional integration (Table 5.2). Page 147 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Table 5.2. Disbursement Amount for Component 1 by Ethiopia TVET Institute (US$ equivalent) Meles Federal DLR Wingate Hawassa Holeta Kombolcha ERA Zenawi TVET DLR 1.1. Approval of Strategic 742,500 992,500 1,092,500 642,500 742,500 642,500 1,242,500 Investment Plan DLR 1.2. Establishment of 742,500 992,500 1,092,500 642,500 742,500 642,500 1,242,500 Industry Advisory Board DLR 2.1. Number of student 2,227,500 2,977,500 3,277,500 1,927,500 2,227,500 1,927,500 3,727,500 enrollment at regional flagship TVET institutes in programs aimed at meeting skills needs of priority sectors DLR 3.1. Number of demand- 2,227,500 2,977,500 3,277,500 1,927,500 2,227,500 1,927,500 3,727,500 driven programs developed and accredited by national TVET accreditation agencies or certified by industry DLR 3.2. Teaching staff in 2,227,500 2,977,500 3,277,500 1,927,500 2,227,500 1,927,500 3,727,500 flagship TVET institutes who have industrial attachment DLR 3.3. Teaching staff who 2,227,500 2,977,500 3,277,500 1,927,500 2,227,500 1,927,500 3,727,500 undertake exchanges in TVET institutes in another country DLR 3.4. Income generation 2,227,500 2,977,500 3,277,500 1,927,500 2,227,500 1,927,500 3,727,500 by regional flagship TVET institutes DLR 3.5. Tracer study 2,227,500 2,977,500 3,277,500 1,927,500 2,227,500 1,927,500 3,727,500 conducted annually Total 14,850,000 19,850,000 21,850,000 12,850,000 14,850,000 12,850,000 24,850,000 Component 2: Creating national TVET enabling environment in Ethiopia (SDR 19.88 million, US$28 million equivalent) 5. Under this component, the project aims to create a more conducive national TVET environment by financing interventions agreed upon in the national work plan in four subcomponents: (a) strengthening national TVET quality assurance, as it relates to the four-regional flagship TVET institutes, (b) capacity building for TVET policy development and implementation, (c) promoting regional integration, and (d) facilitating national project coordination and M&E. 6. The State Department of TVET in the Ethiopia Ministry of Education (MOE) will be the implementing agency for this component under the leadership of the National Steering Committee. The MOE will establish a National Project Coordination Unit. Disbursement of funds under this component will be linked with the following results: the development of occupational standards, model curricula with modern ICT provision, mutual recognition of qualifications with other countries, development of sustainable TVET financing strategy, and establishment of a TVET quality assurance body (Table 5.3). Page 148 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Table 5.3. Disbursement Amount for Component 2 (Ethiopia, US$ equivalent) DLI DLR Ethiopia DLI 4. Occupational DLR 4.1. Occupational standards in the EASTRIP priority 7,012,500 standards sectors developed or updated DLI 5. Model DLR 5.1. Model curricula with modern IT developed or 7,012,500 curricula reviewed DLI 6. Mutual DLR 6.1. Mutual recognition of qualifications with other 4,207,500 recognition of countries agreed qualifications DLR 6.2. Guideline on how to facilitate the regional students’ 2,805,000 enrollment in EASTRIP developed DLI 7. National DLR 7.1. Development of sustainable TVET financing strategy 3,506,250 plans, policies, DLR 7.2 Establishment of a TVET quality assurance agency 3,506,250 strategies, and authorities Total for Component 2 28,050,000 II. Kenya 7. The Development Objective of the Tanzania part of EASTRIP is to increase the access and improve the quality and relevance of TVET programs in the five Kenya Regional Flagship TVET Institutes and to support regional integration in East Africa (Table 5.4). The Kenya EASTRIP project supports the development of highly specialized TVET programs in marine and port logistics, building and highway infrastructure, geothermal and textile sectors for training of technicians and TVET faculty. The objectives will be achieved through a US$60 million IDA financing of activities grouped in Component 1 and Component 2. Table 5.4. Regional Flagship TVET Institutes Selected from Kenya Sector Focus Regional Flagship TVET Institute Country Transport/infrastructure Marine Kenya Coast National Polytechnic Kenya Building Meru National Polytechnic Kenya infrastructure Highway Kenya Institute of Highway and Building Kenya infrastructure Technology Energy/Power Geothermal KenGen Geothermal Training Center Kenya Manufacturing Textile Kisumu National Polytechnic Kenya Component 1: Strengthening the 5 Regional Flagship TVET Institutes in Kenya for high-quality skills development in priority sectors (SDR 38.34 million, US$54 million equivalent) 8. This component will finance the development and delivery of training programs in marine and port logistics, building infrastructure, highway infrastructure, geothermal, and textile, based on standards and qualifications recognized by the industries operating in the East Africa regional or international markets. 9. As in Ethiopia, the component will finance the development and implementation of TVET institute-specific Strategic Investment Plans (SIPs) for each of the five institutes., along six interrelated Page 149 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) subcomponents: (a) strengthening governance and management; (b) institutionalizing industrial linkages at institute and program levels; (c) developing market-relevant and competency-based training programs (modularized if possible); (d) training managers and teachers to upgrade their technical knowledge and practical skills, as well as to promote student-centered pedagogy and ICT competency; (e) providing key training equipment and facilities; and finally (f) providing outreach and support for non-project national TVET institutes to maximize the spillover effects of the Project. 10. Each of the Kenya TVET institute will establish a Project Implementation Unit with core project functions and receive funding per fulfillment of the agreed upon disbursement linked indicators below (Table 5.5): Table 5.5. Disbursement Amount for Component 1 by Kenya TVET Institute (US$ equivalent) DLR KenGen Kenya Coast KIHBT Kisumu Meru DLR 1.1. Approval of Strategic Investment Plan 540,000 540,000 540,000 540,000 540,000 DLR 1.2. Establishment of Industry Advisory 540,000 540,000 540,000 540,000 540,000 Board DLR 2.1. Number of student enrollment at 1,620,000 1,620,000 1,620,000 1,620,000 1,620,000 regional flagship TVET institutes in programs aimed at meeting skills needs of priority sectors DLR 3.1. Number of demand-driven programs 1,620,000 1,620,000 1,620,000 1,620,000 1,620,000 developed and accredited by national TVET accreditation agencies or certified by industry DLR 3.2. Teaching staff in flagship TVET 1,620,000 1,620,000 1,620,000 1,620,000 1,620,000 institutes who have industrial attachment DLR 3.3. Teaching staff who undertake 1,620,000 1,620,000 1,620,000 1,620,000 1,620,000 exchanges in TVET institutes in another country DLR 3.4. Income generation by regional flagship 1,620,000 1,620,000 1,620,000 1,620,000 1,620,000 TVET institutes DLR 3.5. Tracer study conducted annually 1,620,000 1,620,000 1,620,000 1,620,000 1,620,000 Total 10,800,000 10,800,000 10,800,000 10,800,000 10,800,000 Component 2: Creating national TVET enabling environment in Kenya (SDR 4.26 million, US$6 million equivalent) 11. Under this component, the project aims to improve the Kenya national TVET policy and coordination environment by financing interventions agreed upon in the national work plan, structured in four subcomponents: (a) strengthening national TVET quality assurance, as it relates to the four- regional flagship TVET institutes, (b) capacity building for TVET policy development and implementation, (c) promoting regional integration, and (d) facilitating national project coordination and M&E. 12. The Ministry of Education is the implementing agency for this component and will establish a National Project Coordination Unit. Disbursement will be linked with specific indicators, including the development of occupational standards and model curricula by the Kenya Curriculum Development Assessment and Certification Council (CDACC), development of policy on the mutual recognition of qualifications with other African countries, establishment of national inter-institutional collaboration framework for TVET, conducting national skills mapping in EASTRIP priority sectors, and developing a policy for regional TVET integration. (Table 5.6) Page 150 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Table 5.6 Disbursement Amount for Component 2 (Kenya, US$ equivalent) DLI DLR Kenya DLI 4. Occupational DLR 4.1. Occupational standards in the EASTRIP 1,500,000 standards priority sectors developed or updated DLI 5. Model DLR 5.1. Model curricula with modern IT 1,500,000 curricula developed or reviewed DLI 6. Mutual DLR 6.1. Mutual recognition of qualifications with 900,000 recognition of other countries agreed qualifications DLR 6.2. Guideline on how to facilitate the 600,000 regional students’ enrollment in EASTRIP developed DLI 7. National DLR 7.1. Establishment of a national inter- 375,000 plans, policies, institutional collaboration framework for TVET strategies, and DLR 7.2. Development of a sustainable national 375,000 authorities financing strategy for TVET DLR 7.3. Conducting national TVET skills mapping 375,000 DLR 7.4. Developing a policy for regional TVET 375,000 integration Total for Component 2 6,000,000 III. Tanzania 13. The Development Objective of the Tanzania part of EASTRIP is to increase the access and improve the quality and relevance of TVET programs in the four Tanzania Regional Flagship TVET Institutes and to support regional integration in East Africa (Table 5.7). The Tanzania ESTRIP project supports the development of highly specialized TVET programs in aviation, renewable energy, leather processing, and ICT digital skills for training of technicians and TVET faculty. The objectives will be achieved through a $75 million IDA financing of activities grouped in Component 1 and Component 2. Table 5.7. Regional Flagship TVET Institutes Selected from Tanzania Sector Focus Regional Flagship TVET Institute Transport/infrastructure Air National Institute of Transport Power/energy Hydro Arusha Technical College Manufacturing Leather DIT Mwanza Campus ICT ICT DIT Dar es Salaam Campus Note: DIT = Dar es Salaam Institute of Technology Component 1: Strengthening the 4 Regional Flagship TVET Institutes in Tanzania for high-quality skills development in priority sectors (SDR 46.14 million, US$65million equivalent) 14. The component in Tanzania will finance the development and delivery of training programs in aviation, renewable energy, leather processing, and ICT digital skills, based on standards and qualifications recognized by the relevant industries. 15. As in Ethiopia and Kenya, the component will finance the development and implementation of TVET institute-specific Strategic Investment Plans (SIPs) for each of the four institutes, along six Page 151 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) interrelated subcomponents: (a) strengthening governance and management; (b) institutionalizing industrial linkages at institute and program levels; (c) developing market-relevant and competency-based training programs (modularized if possible); (d) training managers and teachers to upgrade their technical knowledge and practical skills, as well as to promote student-centered pedagogy and ICT competency; (e) providing key training equipment and facilities; and finally (f) providing outreach and support for non- project national TVET institutes to maximize the spillover effects of the Project. 16. Each of the four Tanzania TVET institutes will establish a Project Implementation Unit (PIU) as per requirement of the project and will receive funding based on fulfillment of disbursement linked indicators designed to promote results in access, quality, and regional integration: Table 5.8. Disbursement Amount for Component 1 by Tanzania TVET Institute (US$ equivalent) DLR ATC DIT Dar DIT Mwanza NIT DLR 1.1. Approval of Strategic Investment Plan 812,500 812,500 812,500 1,062,500 DLR 1.2. Establishment of Industry Advisory Board 812,500 812,500 812,500 1,062,500 DLR 2.1. Number of student enrollment at regional 2,437,500 2,437,500 2,437,500 3,187,500 flagship TVET institutes in programs aimed at meeting skills needs of priority sectors DLR 3.1. Number of demand-driven programs 2,437,500 2,437,500 2,437,500 3,187,500 developed and accredited by national TVET accreditation agencies or certified by industry DLR 3.2. Teaching staff in flagship TVET institutes who 2,437,500 2,437,500 2,437,500 3,187,500 have industrial attachment DLR 3.3. Teaching staff who undertake exchanges in 2,437,500 2,437,500 2,437,500 3,187,500 TVET institutes in another country DLR 3.4. Income generation by regional flagship TVET 2,437,500 2,437,500 2,437,500 3,187,500 institutes DLR 3.5. Tracer study conducted annually 2,437,500 2,437,500 2,437,500 3,187,500 Total 16,250,000 16,250,000 16,250,000 21,250,000 Component 2: Creating national TVET enabling environment in Tanzania (SDR 3.55 million, US$5 million equivalent) 17. Under this component, the project will aim to improve the national level capacity, coordination and advocacy in TVET for Tanzania. Since there is an ongoing national Education and Skills for Productive Jobs (ESPJ), the design of the component will complement ESPJ and focus on (a) review and operationalizing the National Qualifications Framework by developing occupational standards and model curriculum for EASTRIP priority sectors, (b) developing policies to promote regional students mobility, (c) fiduciary and technical capacity building of the Tanzania flagship TVET institutes, and (d) facilitating national project coordination and M&E including the dissemination of lessons learned. 18. The Tanzania Ministry of Education, Science, and Technology (MoEST) will be the implementing agency for this component, working closely with the quality assurance bodies including the National Council for Technical Education (NACTE), Vocational Education and Training Authority (VETA), and Tanzania Commission for Universities (TCU) in Tanzania. A National Steering Committee will provide overall leadership for the Project, with members from relevant government agencies and industries. Page 152 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Disbursement of funds for this component will be based on fulfillment of the following agreed upon DLIs (Table 5.9). Table 5.9. Disbursement Amount for Component 2 (Tanzania, US$ equivalent) DLI DLR Tanzania DLI 4. Occupational DLR 4.1. Occupational standards in the EASTRIP 1,250,000 standards priority sectors developed or updated DLI 5. Model DLR 5.1. Model curricula with modern IT 1,250,000 curricula developed or reviewed DLI 6. Mutual DLR 6.1. Mutual recognition of qualifications with 750,000 recognition of other countries agreed qualifications DLR 6.2. Guideline on how to facilitate the 500,000 regional students’ enrollment in EASTRIP developed DLI 7. National DLR 7.1. Review and operationalization of 1,250,000 plans, policies, National Qualifications Framework strategies, and authorities Total for Component 2 5,000,000 Page 153 of 154 The World Bank East Africa Skills for Transformation and Regional Integration Project (EASTRIP) (P163399) Page 154 of 154