The World Bank Implementation Status & Results Report Brasil Pernambuco Sustainable Water (P108654) Brasil Pernambuco Sustainable Water (P108654) LATIN AMERICA AND CARIBBEAN | Brazil | Water Global Practice | IBRD/IDA | Investment Project Financing | FY 2010 | Seq No: 17 | ARCHIVED on 12-Apr-2019 | ISR36108 | Implementing Agencies: State of Pernambuco, State Government of Pernambuco, State Secretariat of Planning and Management of Pernambuco - SEPLAG Key Dates Key Project Dates Bank Approval Date: 14-Jan-2010 Effectiveness Date: 15-Jun-2010 Planned Mid Term Review Date: 01-Aug-2013 Actual Mid-Term Review Date: 08-Apr-2013 Original Closing Date: 30-Nov-2015 Revised Closing Date: 30-Mar-2020 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project development objective is to improve sustainable water supply and sanitation services for the population residing in theCapibaribe river basin and MRR. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name 1 - Water Sector Management and Institutional Development:(Cost $29.00 M) 2 - Improving Efficiency in the Provision of Water Supply and Sanitation Services:(Cost $52.00 M) 3 - Water Supply and Sanitation Service Expansion:(Cost $320.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions To date, 89 percent of the loan proceeds have been disbursed and all the funds have been committed. Additional 7 percent of the loan proceeds are expected to be disbursed before end June 2019. The Project has been able to produce results on the ground in all three components. Works associated with the wastewater system for the City of Surubim are nearly completed. Installation of equipment has also been completed and the sewerage systems are being tested before final commissioning. Household connections are facing delays. Works associated with the wastewater system for the City of Santa Cruz do Capibaribe are advancing and expected to be completed by November 2019. The performance-based contract to reduce non-revenue water in the City of Olinda is almost 75 percent executed. Works in the historical center of Olinde, a UNESCO World Heritage Site, are progressing slower than expected given the need for much closer oversight and more advanced installation techniques. A 4/12/2019 Page 1 of 7 The World Bank Implementation Status & Results Report Brasil Pernambuco Sustainable Water (P108654) consultancy contract to conduct the engineering design of wastewater systems in 11 municipalities is progressing well and is expected to be completed by October 2019. Remaining challenges relate to the completion of activities aiming at operating the infrastructure developed by the project. COMPESA needs to perform sound implementation of these interventions and a close monitoring of contractors’ performance. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Moderate Moderate Macroeconomic -- Moderate Moderate Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Moderate Moderate Institutional Capacity for Implementation and Sustainability -- Moderate Moderate Fiduciary -- Moderate Moderate Environment and Social -- Substantial Substantial Stakeholders -- Low Low Other -- -- -- Overall -- Moderate Moderate Results PDO Indicators by Objectives / Outcomes Improve sustainable water supply for the population residing in the Recife Metropolitan Region IN00673418 ►Reduction in the percentage of population subject to water rationing in the MRR from 88% in 2008 to 35% in 2019 (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 88.00 43.00 49.00 35.00 Date 31-Dec-2009 29-Dec-2017 31-Dec-2018 31-Dec-2019 Increasing in water rationing was a result of the drought affecting the northern water supply systems of the RMR, partticulalry the Botagofo reservoir. Hydrological Deterioration of the major water suply reservoir following four consecutives years of drought resulted in the increase of water rationing in 2018. With a better hydrologaical scenario from 2019 and with the completion of ongoing works (NRW in Olinda, Comments: automation of the Botafogo Water Sypply system and new water amin connectying the Northern Hills of the city) COMPESA expects targets to me be met. This indicator was reviewed in the Project Restructuring processed in January 2019. IN00673420 4/12/2019 Page 2 of 7 The World Bank Implementation Status & Results Report Brasil Pernambuco Sustainable Water (P108654) ►State water regulatory agency (APAC) is fully operational. (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 31-Jul-2009 31-Dec-2018 31-Dec-2018 31-Dec-2018 This indicator was upgraded from Intermediate Results to PDO indicators in the Project Restructuring processed in January 2019, to improve the measurement of the sustainability aspects in the PDO and d to insert one indicator linked to Component 1 of the Project. Comments: APAC was created during the preparation of the project and as part of the policy dialogue between the State and the Bank, and became fully operational with support from the project. Reduction in the pollution load discharged the municipalities targeted by the project IN00673419 ►Reduction of pollution load discharged by the municipalities targeted by the project’s wastewater investments from 0,0 tons in 2008 to 2.949,78 tons of BOD/year in 2019 (Metric ton, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 2,949.78 Date 12-Jul-2011 29-Dec-2017 31-Dec-2018 31-Dec-2019 Wastewater works for the cities of Surubim and Santa Cruz do Capibaribe are still ongoing, the first to be operastional by March 2019 and the later by December 2019.. Comments: This indicator was reviewed in the Project Restructuring processed in January 2019. Overall Comments PDO The Project Restructuring processed in January 2019 comprised the extension of the closing date by 12 months - from March 30, 2019 to March 30, 2020 - to allow for the satisfactory completion of important activities essential for achieving the Project Development Objective (PDO). The Restructuring also included minor adjustments in the Results Framework to reflect changes in project scope and expected results. Intermediate Results Indicators by Components Water Sector Management and Institutional Development IN00673423 ►Bulk water charges implemented (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 12-Jul-2011 30-May-2018 31-Dec-2018 30-Mar-2020 Studies for charging for the use of water were completed in June 2018. The following instruments were Comments: prepared: the Draft Law, Draft Decree, Resolution (technical part with the methodology to be approved by the Board), and a document formulated for the adjustment of values (approved by the COBHs). The 4/12/2019 Page 3 of 7 The World Bank Implementation Status & Results Report Brasil Pernambuco Sustainable Water (P108654) methodology is designed to be discussed and encouraged by the COBHs to follow to the Legislative Assembly Committee. IN00673426 ►Users committees for water reservoirs are implemented (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 11.00 11.00 11.00 Date 31-Dec-2008 29-Dec-2017 31-Dec-2018 30-Mar-2020 Improving Efficiency in the Provision of Water Supply and Sanitation Services IN00673421 ►Water losses in the areas targeted by the project's non-revenue water program are reduced from 975 l/connection/d in 2008 to 650l/connection/day in 2019. (Cubic Meter(m3), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 975.00 678.00 691.00 650.00 Date 31-Dec-2009 29-Dec-2017 31-Dec-2018 31-Dec-2019 There are still need to further expand the water losses program beyond the project actions. Te project is working in the northern area of the MRR, and fincanced pressure control in central and south areas. However, COMPESA needs to advance further on installing the DMA and pressure control zones, advance on both real and apparent losses. These actions requires investments not available at the moment. Despite of several action being implemented, the actual level of water losses remain very high and the project financed actions will not be suffciient to improve further NRW management in the MRR. For that reason, the Bank and the UK prosperity Fund signed a EFO agreement to support COMPESA improving NRW management in the RMR. This EFO is the first stage of implememtation, comprising a Comments: detailed assessment of the actions carried out and results and a proposals for further actions, including the increase of private sector particicaption in results-based contracts for NRW reduction. The EFO will also prepare a the biding documents for a seconf generation of results-based contracting followng the Olinda experience, financed by the project. The Babk and the UKPF are still negotiating a second phase of the cooperation through the setting of a TF, replacing the EFO, with a longer implementation period and larger resources available. This indicator was reviewed in the Project Restructuring processed in January 2019. IN00673424 ►COMPESA’s index of cash flow sufficiency improves from 103.8% in2008 to <105.0% in 2019. (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 103.80 102.00 104.00 105.00 Date 31-Dec-2008 29-Dec-2017 31-Dec-2018 31-Dec-2019 Revenues are affected by both the economic crisis and the drought that resulted in water rationing, with lower revenues and higher costs, affecting the company's financial performance. Comments: This indicator was reviewed in the Project Restructuring processed in January 2019. IN00673427 ►Number of water utilities that the project is supporting (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.00 1.00 1.00 1.00 4/12/2019 Page 4 of 7 The World Bank Implementation Status & Results Report Brasil Pernambuco Sustainable Water (P108654) Date 31-Dec-2009 29-Dec-2017 31-Dec-2018 30-Mar-2020 Water Supply and Sanitation Service Expansion IN00673422 ►Increase the number of residential connections to wastewater collection services from 8169 in 2008 to 52580 in 2019 in the municipalities of the Capibaribe river basin targeted by the project. (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 8,169.00 8,169.00 8,169.00 52,580.00 Date 31-Dec-2008 29-Dec-2017 31-Dec-2018 31-Dec-2019 Works for the wastewater systems of Surubim and Santa Cruz do Capibaribe are still ongoing. This indicator was reviewed in the Project Restructuring processed in January 2019. The new end target was calculated as follows: 37.994 residential connections in Santa Cruz do Capibaribe and 6.417 residential connections in Surubim. Comments: 52,580 new WW connections are expected to be reached in December 2019. With the approach of works completion and start of the operation of SES Surubim the project we add 11,135 new WW connections by April 2019. With the operation start of the SES Santa Cruz operation, 33,276 new WW connections will be incorporated by december 2019. IN00673425 ►Number of engineering designs for water supply and for wastewater municipal systems (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 25.00 12.00 21.00 Date 31-Dec-2008 29-Dec-2017 31-Dec-2018 30-Mar-2020 According to the IFR of February 2019: - In 2016: 02 SAA projects were completed (Jaboatão and PROIP); - In 2017: 01 project was completed (Olinda); - In 2019: it is expected to complete 07 SAA projects (Abreu e Lima, Itamaracá, Igarassú, Itapessuma, Comments: Paulista, Goiana, São Lourenço da Mata) e 15 projetos SES (Bom Conselho, Bonito, Brejo da Madre de Deus, Carpina, Feira Nova, Pesqueira, Pombos, Ribeirão, São Bento do Una, Serra Talhada, Toritama, Paudalho, Limoeiro, Salgadinho e Vitória de Santo Antão). IN00673428 designs for water supply municipal systems (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 9.00 6.00 7.00 Date 30-Sep-2015 29-Dec-2017 31-Dec-2018 30-Mar-2020 IN00673429 designs for wastewater municipal systems (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 15.00 5.00 14.00 Date 30-Sep-2015 29-Dec-2017 31-Dec-2018 30-Mar-2020 IN00673430 ►An additional 5.13 m3/s are supplied to the MRR from the Pirapama Water Supply System by the end of 2011. (Cubic Meter(m3), Custom) Baseline Actual (Previous) Actual (Current) End Target 4/12/2019 Page 5 of 7 The World Bank Implementation Status & Results Report Brasil Pernambuco Sustainable Water (P108654) Value 0.00 5.13 5.13 5.13 Date 31-Dec-2009 29-Dec-2017 29-Dec-2017 30-Mar-2020 Overall Comments IR The Project Restructuring processed in January 2019 comprised the extension of the closing date by 12 months - from March 30, 2019 to March 30, 2020 - to allow for the satisfactory completion of important activities essential for achieving the Project Development Objective (PDO). The Restructuring also included these minor adjustments in the Results Framework to reflect changes in project scope and expected results. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P108654 IBRD-77780 Effective USD 190.00 190.00 0.00 168.23 21.77 89% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P108654 IBRD-77780 Effective 14-Jan-2010 18-Mar-2010 15-Jun-2010 30-Nov-2015 30-Mar-2020 Cumulative Disbursements 4/12/2019 Page 6 of 7 The World Bank Implementation Status & Results Report Brasil Pernambuco Sustainable Water (P108654) Restructuring History Level 2 Approved on 17-Sep-2015 ,Level 2 Approved on 05-Sep-2017 ,Level 2 Approved on 14-Feb-2019 Related Project(s) There are no related projects. 4/12/2019 Page 7 of 7