Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD3268 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT PAPER ON A PROPOSED FOURTH ADDITIONAL GRANT IN THE AMOUNT OF SDR 144.20 MILLION (US$200 MILLION EQUIVALENT) TO THE THE UNITED NATIONS DEVELOPMENT PROGRAMME (UNDP) AND THE UNITED NATIONS CHILDREN’S FUND (UNICEF) FOR THE YEMEN EMERGENCY CRISIS RESPONSE PROJECT April 16, 2019 Social Protection & Labor Global Practice Middle East And North 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 March 31, 2019) Currency Unit = US$1 = 249.70 YR US$1 = 0.72073135 SDR FISCAL YEAR January 1 - December 31 Regional Vice President: Ferid Belhaj Country Director: Marina Wes Senior Global Practice Director: Michal J. Rutkowski Practice Manager: Hana Brixi Task Team Leaders: Qaiser M. Khan, Afrah Alawi Al-Ahmadi ABBREVIATIONS AND ACRONYMS AF Additional Financing AI Artificial Intelligence APA Alternate Procurement Arrangements CBY Central Bank of Yemen CEN Country Engagement Note CFO Chief Financial Officer CT Cash Transfers DFID United Kingdom Department of International Development EA Environmental Assessment ECT Emergency Cash Transfer ECRP Emergency Crisis Response Project EHNP Emergency Health and Nutrition Project ESMF Environmental and Social Management Framework FCV Fragility, Conflict and Violence FM Financial Management FMFA Financial Management Framework Agreement FPA Fiduciary Principles Accord FSAC Food Security and Agriculture Sector GDP Gross Domestic Product GRM Grievance Redress Mechanism GRS Grievance Redress Service HFA Humanitarian Food Assistance IDA International Development Association IDP Internally Displaced Person IFC International Finance Corporation IFR Interim Unaudited Financial Report IP Implementing Partner IPC Integrated Food Security Classification System ISR Implementation Status and Results Report KfW Kreditanstalt für Wiederaufbau (German Development Bank) KSA Kingdom of Saudi Arabia LIWCS Labor Intensive Works and Community Services MD Managing Director MENA Middle East and North Africa Region MFI Micro Finance Institution MIS Management Information System MS Moderately Satisfactory OHS Occupational Health and Safety PDO Project Development Objective PMT Proxy Means Testing POM Project Operational Manual PWD People with Disabilities PWP Public Works Project SDR Special Drawing Rights SES Social and Environmental Safeguards SME Small and Micro Enterprise SMED Small and Micro Enterprise Development SMEPS Small and Micro Enterprise Promotion Services SWF Social Welfare Fund SFD Social Fund for Development TA Technical Assistance TOR Terms of Reference TPM Third Party Monitoring UN United Nations UNDP United Nations Development Programme UNICEF United Nations Children’s Fund USAID United States Agency for International Development USD/US$ United States Dollar WHO World Health Organization Yemen, Republic of Emergency Crisis Response Project Fourth Additional Financing TABLE OF CONTENTS I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ........................................ 7 II. DESCRIPTION OF ADDITIONAL FINANCING .................................................................... 14 III. KEY RISKS ..................................................................................................................... 21 IV. APPRAISAL SUMMARY .................................................................................................. 23 V. WORLD BANK GRIEVANCE REDRESS .............................................................................. 29 VI. SUMMARY TABLE OF CHANGES .................................................................................... 30 VII. DETAILED CHANGE(S) ................................................................................................... 30 VIII. RESULTS FRAMEWORK AND MONITORING ................................................................... 34 ANNEX 1: PROJECT COSTS .................................................................................................... 50 ANNEX 2: COMPONENT 3 - EMERGENCY CASH TRANSFERS .................................................. 51 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) BASIC INFORMATION – PARENT (Yemen Emergency Crisis Response Project - P159053) Country Product Line Team Leader(s) Yemen, Republic of IBRD/IDA Qaiser M. Khan Project ID Financing Instrument Resp CC Req CC Practice Area (Lead) P159053 Investment Project GSP05 (9344) MNC03 (1491) Social Protection & Labor Financing Implementing Agency: UNDP, UNICEF ADD_FIN_TBL1 Is this a regionally tagged project? Bank/IFC Collaboration No Original Environmental Approval Date Closing Date Current EA Category Assessment Category 19-Jul-2016 30-Sep-2019 Partial Assessment (B) Partial Assessment (B) Financing & Implementation Modalities Parent [ ] 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) Development Objective(s) April 16, 2019 Page 1 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) The Project Development Objective is to provide short-term employment and access to selected basic services to the most vulnerable; preserve existing implementation capacity of two service delivery programs; and provide emergency cash transfers to the poor and vulnerable in response to the food crisis. Ratings (from Parent ISR) RATING_DRAFT_ NO Implementation Latest ISR 26-Sep-2016 12-Jan-2017 19-Sep-2017 24-Apr-2018 05-Dec-2018 23-Jan-2019 Progress towards achievement of S S S S S S PDO Overall Implementation S S S S MS MS Progress (IP) Overall Safeguards Rating Overall Risk H H H H H H BASIC INFORMATION – ADDITIONAL FINANCING (Emergency Crisis Response Project Fourth Additional Financing - P170241) ADDFIN_TABLE Urgent Need or Capacity Project ID Project Name Additional Financing Type Constraints P170241 Emergency Crisis Response Restructuring, Scale Up Yes Project Fourth Additional Financing Financing instrument Product line Approval Date Investment Project IBRD/IDA 14-May-2019 Financing Projected Date of Full Bank/IFC Collaboration Disbursement 30-Sep-2021 No Is this a regionally tagged project? April 16, 2019 Page 2 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) No Financing & Implementation Modalities Child [ ] 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) [ ] Hands-on, Enhanced Implementation Support (HEIS) [ ] Contingent Emergency Response Component (CERC) Disbursement Summary (from Parent ISR) Net Source of Funds Total Disbursed Remaining Balance Disbursed Commitments IBRD % IDA 640.00 576.48 77.49 88 % Grants % PROJECT FINANCING DATA – ADDITIONAL FINANCING (Emergency Crisis Response Project Fourth Additional Financing - P170241) PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFi n1 SUMMARY (Total Financing) Proposed Additional Total Proposed Current Financing Financing Financing Total Project Cost 640.00 200.00 840.00 Total Financing 640.00 200.00 840.00 of which IBRD/IDA 640.00 200.00 840.00 Financing Gap 0.00 0.00 0.00 April 16, 2019 Page 3 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) DETAILS - Additional Financing NewFinEnh1 World Bank Group Financing International Development Association (IDA) 200.00 IDA Grant 200.00 IDA Resources (in US$, Millions) Credit Amount Grant Amount Guarantee Amount Total Amount National PBA 0.00 200.00 0.00 200.00 Total 0.00 200.00 0.00 200.00 COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [ ✔ ] No Does the project require any other Policy waiver(s)? [ ✔ ] Yes [ ] No Explanation The following policy waivers are sought: (i) waiver of the application of the Bank's Anti-Corruption Guidelines, in favor of relying on the fraud and corruption procedures of UNDP and UNICEF, as provided under the legal agreements; and (ii) waiver of any application of the IDA Commitment Charge to UNDP and UNICEF during the life of the project. The financial impact of the latter is expected to be negligible. Has the waiver(s) been endorsed or approved by Bank Management? Approved by Management [ ] Endorsed by Management for Board Approval [✔] No [ ] Explanation The policy waiver memorandum was endorsed by management for board approval. INSTITUTIONAL DATA Practice Area (Lead) Social Protection & Labor April 16, 2019 Page 4 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Contributing Practice Areas 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 country gaps identified through SCD and CPF Yes b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment Yes c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes PROJECT TEAM Bank Staff Name Role Specialization Unit Team Leader (ADM Qaiser M. Khan GSP01 Responsible) Afrah Alawi Al-Ahmadi Team Leader GSP01 Procurement Specialist (ADM Jamal Abdulla Abdulaziz GGOPM Responsible) Financial Management Moad M. Alrubaidi GGOMN Specialist (ADM Responsible) Amer Abdulwahab Ali Al- Environmental Specialist (ADM GENME Ghorbany Responsible) Ibrahim Ismail Mohammed Social Specialist (ADM GSU05 Basalamah Responsible) Ebrahim Mohammed Team Member MNAEC Yahya Al-Harazi Khalid Ahmed Ali Team Member GSP05 April 16, 2019 Page 5 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Moheyddeen Maya El-Azzazi Team Member GSP05 Randa G. El-Rashidi Team Member GSP08 Sami A Sofan Team Member GFCMW Uma Balasubramanian Team Member GSP05 Yashodhan Ghorpade Team Member GSP05 Extended Team Name Title Organization Location April 16, 2019 Page 6 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING 1. The proposed Additional Financing is being processed under paragraph 12 of the Bank Policy on Investment Project Financing (Projects in Situations of Urgent Need of Assistance or Capacity Constraints), given the instability and violence currently affecting the Republic of Yemen. Gross Domestic Product (GDP) is reported to have decreased by over 40 percent, underpinned by widespread disruptions of economic activity, with enterprises operating at half the capacity compared to prior to the conflict. An estimated eight million Yemenis have lost their livelihoods or are living in communities with minimal to no basic services, and civil service salaries are only being partially paid since September 2016. Fiscal revenues are only a fraction of what they were prior to the crisis, from 24 percent to 4.4 percent of GDP. Fiscal deficit financing is increasingly resorting to arrears build-up and money printing, undermining state functions, inciting inflation, and impairing the environment for private sector activities. The repeated and successive exposure to multiple shocks – protracted conflict, food insecurity, natural disasters such as cyclones, diseases including cholera outbreak, and institutional failures has made the Yemen crisis a formidable challenge that threatens to reverse human development for years to come. The rapid fall of the Yemeni Riyal during the third quarter of 2018 with its devasting adverse impact on household’s food consumption basket, could only be stopped and partly reversed (the Yemeni Riyal appreciated to YR 560 to one dollar at the end of January 2019 due in part to a US$2 billion deposit by the Kingdom of Saudi Arabia (KSA) to the Central Bank of Yemen (CBY), which the CBY used to import critical food imports thereby stabilizing the Yemeni Riyal, further supported by KSA oil grants which allowed domestic fuel prices to witness gradual reductions. 2. The situation in Yemen is worsening considerably despite humanitarian efforts and more people are suffering as a result of the ongoing conflict. According to the latest Integrated Food Security Phase Classification System (IPC)1 analysis, from December 2018 to January 2019, a total of 15.9 million people, (53 percent of the population) analyzed are severely food insecure, despite ongoing Humanitarian Food Assistance (HFA). This includes 17 percent of the population (about 5 million people) classified in IPC Phase 4 (Emergency) and 36 percent (about 10.8 million people) in IPC Phase 3 (Crisis). Of greatest concern are the additional 63,500 people in IPC Phase 5 (Catastrophe). Additional analysis conducted by the Yemen IPC Technical Working Group to estimate the severity and magnitude of food insecurity excluding the mitigating effects of the HFA delivered, shows that 20.1 million people (67 percent of the total population) would be in need of urgent action (IPC Phase 3 and above), including 238,000 people in IPC Phase 5 (Catastrophe) had HFA not been delivered. The 15.9 million figure describes the current food insecurity level considering the ongoing humanitarian food assistance in Yemen. The estimate of 20.1 million encompasses the total number of people in need of urgent action in the absence of humanitarian assistance and will be used by the Food Security and Agriculture Sector (FSAC) for the 2019 response planning purposes. When compared with the last IPC analysis (March 2017), this analysis shows an increase in the total number of people requiring urgent action from 17 million to 20.1 million which corresponds to an 18 percent increase. 3. The analysis identified conflict as the main driver of the food insecurity and that HFA alone will not prevent further deterioration if not accompanied by sustained actions addressing the key drivers of food insecurity. HFA has been critical in preventing further deterioration in 151 districts out of 333, representing 46 percent of the districts and 38 percent of the total population. The IPC recommends scaling acute malnutrition treatment and prevention activities with services aimed at the identification, prevention and treatment of malnourished children under the age of five, as well as pregnant and lactating women. The drivers of food insecurity and malnutrition are multi-faceted, and the humanitarian response should be integrated with livelihoods restoration and enhancement 1 Integrated Food Security Phase Classification System (IPC) Report, January 2019 April 16, 2019 Page 7 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) of the purchasing power of affected communities and households through sustained interventions on scale, given the enormity of challenges. 4. Development Approach to Emergencies. The overarching objective for the Emergency Crisis Response Project (ECRP) was to provide short-term employment and access to selected basic services to the most vulnerable and preserve existing implementation capacity of two national service delivery programs, namely the Social Fund for Development (SFD), and the Public Works Project (PWP). From the outset, it was evident that these two institutions could work effectively across a country divided by conflict, having retained capacity, neutrality and independence, and having earned the confidence of the wider population. It was thus important to continue maintaining the capacity of these two entities to preserve and provide existing services and programs. This is critical for: (i) ensuring income earning opportunities and assistance to the poorest; (ii) providing such support on scale – the ECRP’s coverage far outstrips the current combined reach of all humanitarian actors; and (iii) ensuring the critical institutional features that will be necessary for rebuilding Yemen once the conflict comes to an end. Table 1 below provides an overview of the evolution of the ECRP and its additional financings. Table 1: Yemen Emergency Crisis Response Project (ECRP)– Project Overview ECRP Effective Amount PDO Implementing Implementing Components (US$ mill) Agency Partners (IDA) Component 1: Component 2: Component 3: Labor Intensive Project Mgt & Emergency Works and Monitoring Cash Transfers Community (US$ mill) (US$ mill) Services (US$ mill) Parent Project 02-Aug-16 50.00 To provide short-term United Nations 45.00 5.00 NA SFD/PWP (P159053) employment and access to Development selected basic services to Program the most vulnerable and (UNDP) preserve existing Applies FPA implementation capacity of two service delivery programs. Additional 17-Jan-17 250.00 (No change) UNDP 240.40 9.60 NA SFD/PWP Financing To provide short-term Applies FPA (P161806) employment and access to selected basic services to the most vulnerable and preserve existing implementation capacity of two service delivery programs. Additional 01-Jun-17 200.00 (Revised) United Nations NA NA 200.00 NA Financing 2 To provide short-term Children's (P163729) employment and access to Fund (UNICEF) selected basic services to Applies FMFA the most vulnerable; preserve existing implementation capacity of two service delivery programs; and provide emergency cash transfers to the poor and vulnerable in response to the food crisis. April 16, 2019 Page 8 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Additional 20-Dec-18 140.00 (No change) United Nations NA NA 140.00* NA Financing 3 To provide short-term Children's (P164564) employment and access to Fund (UNICEF) selected basic services to Applies FMFA the most vulnerable; preserve existing implementation capacity of two service delivery programs; and provide emergency cash transfers to the poor and vulnerable in response to the food crisis. Total IDA Financing 640.00 285.40 14.60 340.00 *Excludes co-financing amount of approximately US$8.5 million from Yemen Emergency Multi Donor Trust Fund 5. The ECRP project has continually evolved in response to the dynamic needs and changing situation on the ground, while maintaining strong partnerships with national institutions over the course of implementation of the parent project and subsequent three Additional Financings. With the approval of the first Additional Financing, no changes to design were introduced, and SFD and PWP were able to effectively combine an emergency response with long-term development, paving the way forward for future Fragility, Conflict and Violent (FCV) interventions. The project also provides a good example of how an emergency response can incorporate climate change adaptation and mitigation measures, which in turn, can promote long-term development during a crisis response (see Box 1). 6. Emergency Cash Transfers (ECT). Prior to the conflict, Yemen had a well-targeted and large-scale national cash transfer (CT) program administered by the Social Welfare Fund (SWF) which provided 1.5 million households with quarterly cash benefits. The SWF targeted the poorest and most vulnerable households in the country through a combination of proxy means testing (PMT) and categorical targeting (for groups such as the disabled). The Ministry of Social Welfare that oversees the SWF had become bifurcated during the conflict, and the SWF thus discontinued the CT program. SWF beneficiaries were bearing the brunt of the suffering and there was emerging evidence showing a growing need to receive their transfers which provided critical supplemental income. The Second Additional Financing, which was approved by the World Bank Board of Executive Directors on May 19, 2017, for a total amount of US$200 million equivalent, was prepared as a direct response to the dire needs of the poorest households in Yemen. The project sought to revive and sustain the largest and most critical social protection program in the country. AF2 added a third component to the ECRP - the ECT component to renew CT payments to SWF beneficiary households. This was done with a view to: (i) extend social protection to the poorest 30 percent of the population following the collapse of the national system; and (ii) retain key program features such as targeting criteria, coverage, and benefit amount to enable a smooth transition in a post war and state-led social protection landscape. UNICEF was the implementing agency selected to execute this component under AF2, as well as AF3, which was approved later in December 2018 for an additional US$140 million. Cash transfers are key to famine response. According to most research, famines are generally due to vulnerable households’ inability to purchase or acquire food. Cash transfers are therefore spent mostly on food and help the households coping mechanisms during famine-like situations. April 16, 2019 Page 9 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Box 1: A Development Approach to Emergency Response: Climate Change and ECRP The ECRP experience illustrates that an emergency response can also address longer term development challenges such as climate change, despite a conflict environment. Climate change disproportionately impacts Yemen’s poor and aggravates the ongoing emergency situation. Low income groups lack the resources to withstand higher temperatures, sea level rise, erratic rainfall, and increasingly frequent and severe weather such as floods, droughts, and storms (Hallegatte, World Bank 2016). Climate-induced shocks, which reduce food security, water supply, and income levels, are catastrophic for Yemen’s poor. Because they lack savings, low income populations have little or no adaptive capacity and are thus extraordinarily vulnerable to climate change shocks. In the Middle East and North Africa (MENA) region, the bottom 40 percent suffers the highest economic losses from extreme weather (Wooden, World Bank 2014). Yemen’s economy will be 24 percent lower than it could be by 2050 as a result of climate cha nge (Verner, World Bank 2013). Drought-induced crop failure, as recently witnessed in Yemen, means starvation for subsidence farmers, and deeper food insecurity for rural and urban residents. As supply drops, food prices rise further impairing the ability of the poor to adapt to drought. The United Nations (UN) describes “the devastating food insecurity” in Yemen “the worst humanitarian crisis since the UN was founded in 1945” (Financial Times 2018). Ensuring that climate adaptation measures are incorporated into community level ECRP subprojects implemented by the SFD is critical to their sustainability and to the Government of Yemen’s ability to sustainably deliver services to its citiz ens. The targeting methodology of the project involves reaching out to the most deprived communities that hold a substantial number of people for the program to reap economies of scale. The candidate indicators for the level of provision of basic services include factors such as electrification rate, percent of households served by safe drinking water, school enrolment rate of school age children, percentage of households with access to health services, community connectivity to paved roads and irrigation networks, and availability of job opportunities in the area. This is critical as poor and vulnerable households are often the most at risk to the effects of climate change, and subprojects that enhance climate resilience can enhance economic and social inclusion and help prevent poor and vulnerable households from falling deeper into poverty, reduce their overall exposure to risk, and contribute to long-term adaptation to climate change. Subprojects supported by the ECRP AF4 will include activities that contribute to climate mitigation and adaptation including, among others-rainwater harvesting structures for domestic, livestock, irrigation and groundwater recharging; watershed management; improved access to appropriate sanitation and reduction of pollution of water resources; and cash for social services may include activities that will help diversify income opportunities including supporting veterinary services, bee keeping, introducing water saving crops and irrigation techniques. The emergency cash transfer program (ECT) will contribute to climate change mitigation by providing emergency CTs to the poor and thus establishes an adaptive safety net system that enables highly vulnerable, food insecure households to cope with current and future climate-induced shocks. The beneficiary information contained in social safety net rolls created by this project could easily evolve into a hydro-met early warning communication network for Yemen’s most vulnerable populations. (More details are provided under Section II, Project Components section of this document). 7. Sector Context. The Bank and other regional, bilateral, and international development agencies have funded and supported the SFD and PWP since their inception in 1996. To date, SFD has supported subprojects in over 13,000 villages and 3,700 urban neighborhoods across the poorest districts of Yemen’s 22 governorates. SFD has been implementing community-based interventions through multiple programs including: cash-for-work, rain- fed agriculture, nutrition-sensitive CT, and Small and Medium Enterprise Development (SMED). Additionally, SFD emphasizes the provision of technical assistance (TA) and capacity building for local government, civil society organizations, and small and medium private sector. SFD has a proven track record of political neutrality, credibility and effective delivery of results. These projects have over the years improved the quality of life for millions of Yemenis and created employment for many of the poorest. SFD has developed a “Crisis Response Plan 2018-2020” which provides a programmatic framework for coordinated donor support to SFD’s efforts in responding to the ongoing crisis with the aim of building resilience of households, communities and the private sector. SFD receives funding from the United Kingdom Department for International Development (DFID), the Government of The April 16, 2019 Page 10 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Netherlands, Kreditanstalt für Wiederaufbau (KfW, German Development Bank), the Islamic Development Bank, the Saudi Fund for Development, the Government of the United Arab Emirates, and the United Nations Development Programme (UNDP), in addition to World Bank financing. 8. IDA’s role in maintaining institutional continuity has been beyond financing. IDA has historically supported SFD build its institutional strength and as such, its continued engagement is essential to maintain and help preserve SFD as a key agency for future rebuilding and rehabilitation. Funding from other agencies to SFD is sector (or at times region) specific – thus IDA financing is key for the future of SFD as an institution. All development partners recognize that SFD is one of the few politically neutral, credible and effective national institutions, despite the ongoing conflict, as well as the need to preserve this capacity in the long-term. This is borne out of the continued support for SFD for over two decades. Engagement with and support to SFD’s programs will help maintain a key, trusted Yemeni development institution, important not only for the current emergency activities, but also for continued institutional capacity to support post-conflict recovery. Moreover, while the SWF is currently divided, its main CT program is being supported through the IDA-financed ECT component under the ECRP, implemented by UNICEF with a view to a smooth transition back to the SWF in the future. The beneficiary list, benefit level and targeting formulae used by the SWF list are being maintained in the ECT for alignment with the national program. 9. Donor Coordination. For over two decades, SFD has had a successful donor coordination team which organizes meetings on a regular basis. The SFD and other partners have requested the World Bank to chair the donor meetings which are held virtually bi-monthly and twice a year on a face to face basis. The SWF in contrast, had historically been financed by the budget and did not have a formal donor coordination structure. With the SWF currently divided, donors (World Bank, US State Department and DFID) are financing the ECT implemented by UNICEF and have periodic virtual as well as face-to-face meetings, including during Technical Review Missions for coordination. Coordination with humanitarian CT programs within Yemen is done by UNICEF. 10. Project Development Objective (PDO). The PDO, which was revised with the approval of the AF2 to include the emergency CT component, is “to provide short-term employment and access to selected basic services to the most vulnerable; preserve existing implementation capacity of two service delivery programs and provide emergency cash transfers to the poor and vulnerable in response to the food crisis.” 11. The project establishes a clear linkage to the World Bank Group’s twin goals of ending extreme poverty and promoting shared prosperity in a sustainable manner. The project will also contribute to the World Bank Group’s expanded MENA Regional Strategy (March 2019) including: renewing the social contract; and resilience to IDP/refugee shocks. Finally, the project is fully aligned with the World Bank Group’s Country Engagement Note (CEN) for Yemen (FY17-18) (Report No. 106118-YE, discussed by the Board of Executive Directors on July 19, 2016) which aims to provide emergency support to conflict-affected families and communities in close collaboration with UN institutions. The proposed project, as with the parent operation and additional financings, contributes to the CEN’s first objective of “providing emergency support to preserve local service delivery capacity to support conflict- affected families and communities.” The project is also fully aligned with the World Bank Group’s proposed CEN for Yemen (FY20-21), to be discussed by the Board of Executive Directors on May 14, 2019, through contributing to its two objectives: (a) continued support for basic service delivery and institutional preservation; and (b) extending support to livelihoods, human capital, and basic economic recovery. April 16, 2019 Page 11 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) 12. Implementation Capacity of UNDP and UNICEF. UNDP and UNICEF have proven to be effective partners for the World Bank in Yemen. UNDP is mandated to focus on longer-term development impact and capacity across sectors. Given the strong capacity of SFD and PWP, UNDP has played a critical role of protecting the independence of these two entities. In terms of challenges, the implementation capacity of UNDP required some strengthening with regards to safeguards and communications. However, over time and through regular monitoring and collaboration, UNDP’s performance has significantly improved in these two areas. UNDP has shown flexibility in learning from the evolving situation and adapting accordingly. Similarly, UNICEF has quickly built a system to respond to the needs of the program working on improving their capacity in a responsive manner. UNICEF has successfully protected the SWF list of beneficiaries from any external pressures. For example, through the project, UNICEF has established a Grievance Redress Mechanism (GRM) system which includes a functional call center in Yemen to receive incoming grievance calls. This is complemented by a case management system staffed with Yemeni nationals living in Jordan, supported by mobile case management assistants throughout Yemen to address grievances received. This has resulted in quick resolutions and response to issues. Box 2 demonstrates how UNDP and UNICEF are utilizing modern communications technology to operate in a conflict environment. Diagram 1 below reflects the project’s scope of interventions. Diagram 1: Scope of ECRP Interventions *The dotted line reflects implementation arrangements under the ongoing project until the closing date of September 2019 but will discontinue under the proposed AF4. 13. Project Implementation Status. The last project Implementation Status and Results Report (ISR) (December 2018) rated Progress towards Achievement of PDO Satisfactory, and overall Implementation Progress (IP) Moderately Satisfactory. The Moderately Satisfactory rating was largely due to safeguards issues and the gaps observed in Occupational Health and Safety (OHS) compliance which are discussed in further detail under Sections April 16, 2019 Page 12 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) III and IV of this document. Project disbursements, as of March 30, 2019, stand at US$576 million equivalent out of a total Grant amount of US$640 million equivalent (88 percent). 14. The Project has delivered significant results. Under Component 1 (Labor-Intensive-Works and Community Services -LIWCS), the project has created short-term income opportunities for approximately 344,550 beneficiaries against a target of 400,000 (86 percent achievement), of which 28 percent are female and 20 percent internally displaced people (IDPs)/returnees2 and 50 percent youth. Approximately, 8.7 million work days were created against a target of 9 million (96.5 percent achievement). This component benefited 328,579 direct beneficiaries (225,550 by SFD and 103,029 by PWP) and around 2.07 million household members benefited indirectly through wage employment. Further, 3.4 million community members now have access to project rehabilitated community assets supported by this component. IDPs and returnees and returnees constituted approximately 27.3 percent of wage employment beneficiaries through community assets rehabilitation, and 13 percent of the cash-for-work subprojects. The completed sub-projects also developed 735,205 cubic meters of water reservoirs (147 percent of the total target), improved 269 kilometers of roads (108 percent of the total project target), repaired 16,417 hectares of agriculture terraces (185 percent of the total target) and rehabilitated 2,347 school classrooms (representing 286 percent of the total project target). 15. Through this component’s nutrition sensitive interventions, 296,142 beneficiaries (120,339 women and 175,803 children) were reached with nutrition services. Of the women beneficiaries, 84,794 benefited from health education sessions and received cash assistance. About 2,953 displaced beneficiaries continue to receive support from SFD nutrition interventions. 16. Under the small and micro enterprises (SME) revitalization and employment generation sub-component, US$1.8 million was disbursed to targeted Micro Finance Institutions (MFIs) as grants to recover losses resulting from the crisis and help sustain their financial services. Through support to MFIs, the project indirectly benefited 11,775 SMEs and directly provided grants to 3,819 SMEs (95 percent of the total target of 4,000). Under the farmers' livelihood and fisheries activities - implemented by Small and Micro-Enterprise Promotion Service (SMEPS) – a total of 4,826 beneficiaries (3,346 farmers, 880 livestock owners, and 600 fishermen) received grants to revive their livelihoods. With this, the total target was exceeded by 20.7 percent. The supported beneficiaries created 56,634 additional jobs (19 percent for females). 17. Under the ECT component (Component 3) and despite an increasingly volatile security environment, the project has delivered four payment cycles of ECTs to existing beneficiaries of the SWF. These cycles have on average, reached approximately 1.4 million beneficiary households across all districts and governorates with 45 percent of the direct recipients being women. Among all beneficiary households, 53 percent of the members are female. The latest data from Third Party Monitoring (December 2018) shows that 99 percent of beneficiaries received the correct amount of cash, and that beneficiaries spend most of their cash on food (86 percent), medicine (5 percent), utilities (5 percent rent/electricity/gas/fuel) and 2 percent on clothes. 2 Low progress against the IDP target is due to SFD’s stricter definition of returnees (which differs from what is followed by other agencies). April 16, 2019 Page 13 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Box 2: Use of Technology to Support Development in an FCV Environment Real-time progress monitoring of payments and grievances. UNICEF tracks and monitors payments and grievances in real time through an online dashboard updated from the field (payment agencies, beneficiaries, UNICEF staff, etc.) which allows for immediate and timely implementation of corrective measures as needed. This has proven to be a fundamental element of the monitoring mechanism implemented by UNICEF. Real-time end-user (beneficiaries) monitoring of project implementation through mobile technology . UNICEF launched the use of RapidPro technology in Yemen to enable two-way communication with beneficiaries which has proven to be a strong tool for receiving feedback from beneficiaries as well as providing guidance and information to beneficiaries to help them collect their benefits. In addition, UNICEF piloted the monitoring of social media to track public response to the project. This pilot concluded with identifying social media as an important additional source of information for reporting on suspected cases of non-compliance by staff of service providers and implementation weaknesses. Enhanced payment mechanism. The Project has explored several options to enhance the payment mechanism including the use of mobile banking. While the technology is already used by some financial institutions, the scalability of the use of technology is uncertain. Alternatively, the project is exploring the use of bank cards to be issued by the payment agencies engaged by the project. This would ensure financial inclusion for beneficiaries, ease payment procedures for future payment cycles, and strengthen the project’s ability to track payments to ensure that the benefits effectively reach the eligible beneficiaries. Geo-tagging - Real time monitoring of physical implementation . SFD has developed a remote monitoring system that uses geodata, pictures, and information on the status of subprojects. The system allows field staff and consultants to collect data and pictures on smart phones, which are then sent to a Cloud server. They are then used for monitoring, quality assurance and management decisions. The system has only been used by the Cash for Work program and is currently being scaled up. This system reflects the innovative measures undertaken by SFD that support “smart fiduciary”, transparency and accountability. Use of social media information. This allows users to submit complaints and other categorized data and have a system to respond to inquiries. The World Bank, in coordination with UNDP, developed an implementation plan for using social media intelligence - which is the application of social media in conjunction with artificial intelligence (AI) - to enhance communication and project goals. Leveraging common platforms, such as WhatsApp, and a chatbot enhanced by AI will enhance remote and real-time monitoring. Implementation of this technology will increase transparency, provide insights into trends, and enhance communication. It will also allow users to submit complaints and other data and have a system to respond to inquiries, as it learns the types of requests over time. This initiative will be explored under AF4. II. DESCRIPTION OF ADDITIONAL FINANCING 18. Rationale for the Scope of AF4. The proposed AF4 is financed by a US$200 million equivalent grant from an exceptional IDA allocation for Yemen, which aims to address the potential risk of famine and increasing rates of malnutrition. AF focuses on improving consumption levels of the poor, while simultaneously retaining the overall development focus and maintaining the capacity of SFD for the future. AF4 thus allocates US$100 million to Components 1 and 2, implemented by UNDP through SFD, to allow activities to continue beyond September 2019; while US$100 million is allocated to Component 3 - the ECT program to enable beneficiaries to receive predictable transfers through the end of IDA 18. Among the UNDP implemented activities, priority was given to those which were the most labor intensive and could potentially address the famine risk best, while also maintaining a development focus. Given the limited available funding, the proposed project would move away from SFD’s larger infrastructure activities as well as subprojects implemented by PWP due to their lower labor intensity. These activities however, are critical to the project, and should more funds become available in the April 16, 2019 Page 14 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) future, a new operation could potentially continue financing these activities given their importance for the future reconstruction of the country. 19. The proposed AF4 will finance the SFD’s 2018-2020 Crisis Response Plan which includes several scenarios, with the lowest scenario requiring US$510 million in financing. It would also finance ECT through June 2020. SFD’s financing planning reflecting other development partner contributions as well as ECT financing plan are reflected in Tables 2A and 2B, respectively. The anticipated financing gap under the ECT is minimal and can potentially be addressed by leveraging additional commitments from other donors. 20. Project Description. AF4 aims to provide resources to further scale up the impact of the project through: (i) expanding the coverage of the wage employment and livelihood support interventions; and (ii) continuing the CT program to the existing beneficiaries of the CT program for about two additional payment cycles to provide them with relative income stability and predictability. This would allow the payments to be maintained until June 2020. Through Component 1, AF4 will continue expanding the scope and impact of the ongoing project with an expanded menu of sector activities within each of the original components. The selection of sector activities will prioritize those that contribute to the protection of human capital and livelihoods of vulnerable households and respond to emerging crises such as the cholera outbreak, food insecurity and the impacts of climate related shocks. This will allow coverage of more districts and communities. Additionally, AF4 will continue to support preserving the implementation capacity of Yemen’s flagship social protection and community development program – the SFD. Table 2A: Financing Plan for 2019-2020 (UNDP) (US$ million) Low Scenario Costs of SFD 2019-2020 Crisis Response Program 510.0 Proposed IDA through UNDP under Additional Financing 4 100 German Government/ KFW 49.2 DFID 44.2 Kingdom of Saudi Arabia3 86.0 USAID 10.0 UNDP own funds 2.5 UN Women, UNESCO 0.5 Committed Financing 292.4 Funding Gap for SFD through June 2020 217.6 21. Through Component 3, implemented by UNICEF, AF4 is expected to enhance the purchasing power of beneficiary households to meet their food and other basic needs. This component will expand the social assistance to a total of eight payment cycles, covering beneficiaries to June 2020. The component will also help lay the foundation for enhancing the delivery system and processes of the CT program which would subsequently be transferred to the national CT program. No major changes are envisioned under Component 3 of the project. Financing under AF4 will be utilized to cover 1-2 additional payment cycles depending on exchange rate gains to cover the period January to June 2020. 3 Tentative funding. April 16, 2019 Page 15 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Table 2B: Financing Plan - Emergency Cash Transfers (UNICEF) Cost of quarterly payments (January 2019 - June 2020) 320.0 Proposed IDA under Additional Financing 4 100.0 Approved IDA under Additional Financing 3 140.0 Remaining balance from Additional Financing 2 40.0 MDTF Grant (DFID) Co-financing 8.5 US State Bureau for Near Eastern Affairs (AF3) Parallel Financing 4.9 Committed Financing 293.4 Funding Gap for ECT through June 2020 26.6 22. The following changes will be introduced under the proposed AF4: (i) under Component 1 (LIWCS), sub- component 1.2 (Small Community Infrastructure) implemented by the PWP will be discontinued to the limited financing envelope under the project; the PDO will thus be slightly revised to remove the reference to “preserve existing implementation capacity of two service delivery programs” to “preserve existing implementation capacity of service delivery programs”; (ii) the closing date will be extended by two years, from September 30, 2019 to September 30, 2021, to allow for the implementation and completion of additional activities; (iii) the results framework will be revised to increase indicator targets in line with the extended implementation period of the project as well as the addition of disaggregated PDO and intermediate level indicators to measure the inclusion of beneficiaries with disabilities; and (iv) the additional amount of US$200 million will be added across the various project components (Components 1, 2, and 3). The breakdown of cost by activity is shown in Table 3. Other changes to be introduced under AF4 will be the discontinuation of application of the Fiduciary Principles Accord (FPA) to the components implemented by UNDP, and applying instead, the Financial Management Framework Agreement (FMFA) which is currently being applied to Component 3 of the project, implemented by UNICEF. Table 3: Resource Allocation under AF4 US$M Component 1: Labor Intensive Works and Community Services (for UNDP) 90.10 Sub-component 1.1 Cash-for-Work and Youth-Targeted Community Services 80.10 Sub-component 1.2 Small Community Infrastructure 0.00 Sub-component 1.3 SME Revitalization and Employment Generation 10.00 Component 2: Project Management & Monitoring (for UNDP) 9.90 Component 3: Emergency Cash Transfers (UNICEF) 100.00 Sub-component 3.1 Cash Transfers (CTs) 88.99 Sub-component 3.2 Project Management & Monitoring (for UNICEF) 11.01 23. Component 1: Labor Intensive Works and Community Services (US$90.10 million equivalent to UNDP). The objectives of this component are to: (a) provide income support to targeted communities through temporary employment opportunities; (b) increase the productive assets and means of livelihood of beneficiary households and communities and improve access to community and social services; and (c) preserve the implementation capacity of the SFD as a key national service delivery program. Under AF4, sub-component 1.2 (Small Community Infrastructure) which is implemented by PWP, will be discontinued as described in paragraph 18 and 22 above. Component 1 is implemented by UNDP through SFD and will include the following subcomponents: April 16, 2019 Page 16 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Subcomponent 1.1: Cash-for-Work and Youth-Targeted Community Services (US$80.1 million equivalent). This subcomponent will be implemented through a contractual arrangement and grant provision, acceptable to the World Bank, from UNDP to SFD, whereby SFD delivers subprojects with the direct involvement of community and civil society groups. This subcomponent will finance: (i) the provision of cash-for-work transfer to eligible beneficiaries to carry out labor-intensive works (subprojects) including, but not limited to irrigation, water harvesting, educational projects, cleaning services, agricultural rehabilitation4 and road maintenance; and (ii) the provision of conditional cash transfers to eligible beneficiaries (based on conditionality and criteria included in the Project Operational Manual (POM), which will not exceed US$500 equivalent, annually for each eligible beneficiary) for education, nutrition and health needs. Subcomponent 1.1 will continue to finance community grants, wages, training of youth and communities, consultants’ services, goods, non-consultant services, and operating costs of SFD. Under AF4, this subcomponent is expected to create approximately 2.4 million additional work days, of which 30 percent will be targeted to women. This figure includes about 400,000 work days created through Youth-targeted Community Services (of which 50 percent are women). Under the Youth-Targeted Community Services, the subcomponent will include cash for social service activities which will help diversify income opportunities including supporting veterinary services, bee keeping, introducing water saving crops and irrigation techniques. This subcomponent is guided by the general framework of SFDs policy of targeting poor communities and groups at greatest risk. In view of the alarming rates and severity of malnutrition, similar to the first AF, AF4 through this subcomponent, will continue to support demand side nutrition interventions. Activities supported by this subcomponent will complement those of the ongoing Emergency Health and Nutrition Project (EHNP) (P161809) and Additional Financings. The EHNP supports an integrated package of supply-side of nutrition interventions (provision of vitamins and minerals, micronutrients, therapeutic treatment and medicine, awareness and promoting behavioral change, specialized health staff, etc.). These are being delivered through a coordinated facility-based, outreach and community-based service delivery models. While the supply of these services is being provided, accessing these services remains a challenge for the poorest and most vulnerable households living in remote areas, because outreach facilities may be expensive in remote areas, or because such households may have a high opportunity cost for the time and effort it may take to access facilities. The proposed AF4 will therefore continue to complement the EHNP by reaching out and identifying the hard-to-reach affected women and children, provide the poorest families with cash assistance (mothers are the recipients) necessary for purchasing nutritious food; assign community health promoters (beneficiaries of youth employment) for case management, including facilitating the affected families’ access to nutrition services; and perform nutrition and health education sessions to promote behavioral change. The targeting and implementation of these activities will be closely coordinated with the EHNP. SFD has been coordinating with EHNP’s implementation agency – UNICEF - to ensure that these activities are complementary and well-coordinated at the 4 Water supply and sanitation (WASH) and agricultural interventions are currently being supported by other development partners including KfW, The Netherlands, and USAID. AF4 interventions in these sectors will therefore focus on geographical areas not covered by other donor support. SFD follows the in-country guidelines on WASH interventions as relevant. April 16, 2019 Page 17 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) community level. The number of people (women and children) who will benefit from the nutrition services will increase under the AF4 from a targeted 85,000 to approximately 216,191. The health-related conditional cash transfers complement the support provided through health outposts and health workers and focus primarily on the demand side. In the event that no health system workers offering nutrition services are available - temporary workers are required under the cash for services component to support those communities receiving demand side benefits. These workers are trained in official health curricula and will provide reports to MOH in addition to reporting to the SFD. Furthermore, labor intensive subprojects under this sub component will include activities which will have environmental benefits and include climate change adaptation measures including, among others: rainwater harvesting structures for domestic, livestock, irrigation and groundwater recharging; watershed management; improving access to appropriate sanitation; improving rural feeder roads and utilizing biogas units for cooking and lighting. Box 3: Increasing demand for Nutrition Services during Crisis: A Scientific Impact Evaluation The nutrition sensitive cash transfers under Component 1 of the ECRP have successfully implemented 12 sub- projects targeting 21 high-priority districts in six governorates prioritized by the Nutrition Cluster and completed the interventions financed by the Emergency Health operation. The SFD had begun nutrition sensitive cash transfers prior to the current conflict, and these were designed to increase the demand for nutrition services (of the type being funded EHNP) through improved purchasing power of households to buy sufficient nutritive food, and improved knowledge and practices for better nutrition. The Impact Evaluation of the Cash for Nutrition Services program used a cluster-Randomized Controlled Trial design to estimate causal impact of the program on key food insecurity and nutrition indicators between 2015 and 2017. The study found that despite declining trends in household food security and nutrition, the program made a significant impact on increasing household food consumption and dietary diversity, nutritional knowledge and practices, women’s mobility and aspirations, as well as children’s nutrition status. • On average, 63 percent of the cash was used for food purchases, which led to an improved diet diversity score by 0.8 food item groups (out of 8) in a setting where average dietary diversity declined by 1.3 food groups. The impact was driven by higher consumption of milk, fruits, vegetables, and eggs. • Decrease in number of children reported to be diagnosed with malnutrition over the past 2 years by 7 – 10 percent. • Program effects were largest among the poorest 33 percent of treatment households, indicating a strong pro- poor orientation of the program. Among the poorest tercile of households, the impacts of the program on anthropometric outcomes were the most visible: between 0.24 to 0.35 on height-for-age z-scores (HAZ), and 0.30 to 0.35 on weight-for-height-scores. • Noticeable improvement in women’s knowledge and practices related to initiation of breastfeeding, treatment of water, dangers of khat usage, and treatment of children when they are sick. • The Nutrition CCT was also found to be complementary to ongoing food assistance programs operated by humanitarian agencies. These findings provide strong evidence in favor of the effectiveness of the Cash for Nutrition program in extending social protection among the poorest in the context of a heightened famine risk. April 16, 2019 Page 18 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Subcomponent 1.2: Small Community Infrastructure. This sub-component will not be financed under AF4. Subcomponent 1.3: SME Revitalization and Employment Generation (US$10.0 million equivalent). This subcomponent will finance activities for revitalizing SMEs and generating employment. UNDP, through SFD, will enter into a subgrant agreement, acceptable to the World Bank, with each of the selected MFIs, including: (i) a subgrant to the selected MFI to relieve targeted SMEs of outstanding debts (each grant not to exceed US$1500); and/or (ii) a subgrant to reimburse the selected MFI for operating deficits costs (each not to exceed US$200,000) as outlined in the POM. Subcomponent 1.3 will include the following activities: supporting the recovery of conflict-affected farmers, fishermen and livestock owners through the provision of: essential seeds, crops, irrigation systems and required farming, fishing and agriculture inputs and equipment. Criteria for the selection of MFIs and SMEs will be in accordance with eligibility criteria and terms included in the POM. This sub-component will directly support an additional 3000 beneficiaries (farmers, fishermen, and livestock owners) (35 percent females) with grants to revive their livelihoods activities. Such support will enable beneficiaries to restore their ability to generate income that increases their purchasing power, create wage employment, and contribute to the food security of their communities. It is expected that over 20,100 individuals (20 percent females) would benefit from wage employment generated by the support targeted at farmers, fishermen and livestock owners. An additional 2000 SME clients of microfinance will be supported by relieving them from their current outstanding loans and by supporting the rehabilitation of their enterprises to revitalize the source of income of which the SME owner and household depended on. The repayment of the outstanding loan will provide relief to the SME from the on-going repayments and enables the SME to continue to have clean credit history making it eligible for new credit. The program is not meant to support normal business losses. The SMEs supported would only be those that had their enterprises directly affected by the conflict or by a natural disaster from 2017 onward. Verification of eligibility will be carried out by a third-party agency hired by SFD which would verify, rehabilitate and pay-off the outstanding dept. Additionally, MFIs will be supported to cover their operational deficit and improve their operational self-sufficiency which will enable these institutions to continue to operate and provide financial services to their clients. The eligibility of MFIs for such support would be based on their ability to show progressive operational self-sufficiency (OSS) of not less than five percent annually, verified by audited annual financial reports, small enterprise evaluation project reports, as well as field verifications conducted by SFD. The continuity of these activities ensures the resilience and sustainability of the microfinance industry in the country which, without such support, would have been drastically diminished, and livelihoods of many clients of the microfinance industry would have been negatively impacted. 24. Component 2: Project Management and Monitoring (for Component 1) (US$9.9 million equivalent). This component will continue supporting project management and monitoring and evaluation costs, including Third Party Monitoring (TPM) to ensure that the project is successfully and efficiently implemented. Under AF4, project costs for project management and monitoring will increase to cover costs of strengthening of the safeguards function, including OHS as well as developing and adopting a scaled up and enhanced communications function for ECRP. April 16, 2019 Page 19 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) 25. Component 3: Emergency Cash Transfer (US$100 million equivalent). Component 3 will continue to be implemented by UNICEF and includes two subcomponents as follows: Subcomponent 3.1 – Cash Transfers (US$88.99 million equivalent): This entails the provision of cash assistance to reduce the vulnerability of eligible beneficiaries, and to enable targeted households to purchase food and necessities for an additional 1-2 quarters. Subcomponent 3.1 will also finance hiring of payment agencies to deliver cash and administer the cash transfers within Yemen and the provision by these agencies of bank cards to beneficiaries. This subcomponent will continue financing CTs to a targeted 1.5 million households (equivalent to an estimated 8 million individuals) with an average benefit amount of YR 5,000 per household, per month, delivered on a quarterly basis and fixed in Yemeni Rials. The design parameters (targeting, benefit calculation formula, frequency of delivery, coverage, etc.) of the CTs build on those of the national CT program - Social Welfare Fund - as of Q4 of 2014. Subcomponent 3.2 - Project Management and Monitoring (US$11.01 million equivalent): This subcomponent will continue to support the implementation of the proposed CT program, administration, management and monitoring and evaluation (M&E) to ensure that the program is successfully and efficiently implemented in conformity with the design. This subcomponent will finance: (a) UNICEF’s direct costs, including staffing and operating expenses; (b) UNICEF’s indirect cost and general management; (c) provision of consultancy services required for technical assistance and implementation support; and (d) UNICEF’s Third-Party Monitoring. 26. Component 3 will contribute to climate change mitigation by providing ECTs to the poor, and thus establishing an adaptive safety net system that enables highly vulnerable, food insecure households to cope with current and future climate-induced shocks. The beneficiary information contained in social safety net rolls created by this project could easily evolve into a hydro-met early warning communication network for Yemen’s most vulnerable populations. 27. Communication Plan. The project intends to use strategic communications tools to support the creation of an enabling environment for the implementation of AF4. Effective and frequent communication and outreach are essential to this project as raising awareness about the program among existing and potential beneficiaries is key for the success of the program. It will also encourage accountability by enhancing overall transparency and openness and promote citizen engagement by ensuring beneficiaries understand how to utilize available GRMs. Communication will improve the accessibility of information encourage active participation of different segments of the population. A well-planned and executed communications strategy will help identify ECRP obstacles and opportunities and develop tactics for mitigating the former and leveraging the latter. For the CT component: the communication strategy will promote widespread understanding of project objectives and procedures, particularly at local levels, through a clearly articulated and communicated, regular public awareness campaign. This will be designed to build awareness for citizens about their rights, eligibility and the services they can access and will include a special emphasis on vulnerable groups. The ECT program has also been successfully monitoring social media and this has helped real time flagging of problems or responses to misapprehension. This successful social media-based effort will be extended to other components. April 16, 2019 Page 20 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) III. KEY RISKS 28. As with the parent project and additional financings, the overall risk rating of the proposed AF4 is maintained as High. The main risks which are rated as either high or substantial include: political and governance, macroeconomic, sector strategies and policies, technical design of project or program, institutional capacity for implementation and sustainability, fiduciary, environment and social, stakeholder and other risks. These risks were identified under the parent project, and additional financings, and remain valid for the proposed AF4 (key risks and their proposed mitigations measures are discussed in detail in the approved Project Appraisal Document and Project Papers - Reports No. PAD1797, PAD2154 and PAD2402). Mitigation measures were built into the project design and both UNDP and UNICEF continue to monitor and manage the identified risks using a working matrix which is shared with the World Bank on a regular basis and closely reviewed during technical review missions. The World Bank will continue carrying out reverse missions, two to three times a year, to review project implementation progress with UNDP, UNICEF and the local service delivery institution. Further, as the political and security situation continued to deteriorate, and risks have escalated in both nature and scope since December 20175, the World Bank’s country management unit has established a portfolio-wide risk-monitoring mechanism, to ensure timely identification of risks, and real-time mitigation actions, through which risks are reviewed and reported to management on a bi-weekly basis. 29. Of the risks that were identified under the parent project and additional financings, a number of risks have materialized during implementation (Political and Governance, Environment and Social, Fiduciary and Other Risks) and the associated mitigation measures that were previously identified were applied to address these risks as well as additional mitigation measures which were introduced by UNDP and UNICEF in consultation with the World Bank. These risks are discussed in the following paragraphs. 30. Political and Governance Risk is High. These specifically include security risks which remain relevant under the project and will continue under the proposed AF4. The greatest security risks associated with the ongoing conflict in many locations are the threat of airstrikes on project sites, or physical violence for individuals involved in the implementation of the project such as payment agents, beneficiaries (at payment and work sites or while traveling to payment locations) contractors and their workers; potential damage to property of implementing agencies and contractors, and the risk of forced expropriation of CT/wage funds from beneficiaries and payment agents. The project is currently implementing a series of measures to mitigate these risks, including: (a) UNICEF and UNDP have established a clear mechanism to identify security threats to the project and to communicate changes in threat levels to the various parties involved in project implementation; and (b) the project has established communication and facilitation arrangements that enlist the support of all relevant political and community actors at the national, governorate, and local levels to promote safe and politically neutral implementation of the project. 31. At the national and governorate level, these arrangements include regular interactions between relevant political actors and UNDP/UNICEF and the implementing partners (IPs) project leadership and liaison officers, while at the local level, facilitation groups are formed comprised of local community leaders and village councils to raise the acceptance of project activities, diffuse potential tensions, and foster a general acceptance of the 5Escalation of violence and political dynamics that followed the killing of former president Saleh and the breakdown of the Saleh- Houthis Alliance. April 16, 2019 Page 21 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) project. These communication and facilitation arrangements serve as information channels for the timely monitoring of the security situation. Furthermore, the use of independent entities to distribute payments is helping de-politicize transfer distribution and reduce the likelihood of politically motivated violence against recipients. 32. Apart from the risk of violence, insecurity can hinder the ability of project staff or the designated TPM agencies to supervise and monitor project activities in certain locations. To maintain the integrity of supervision arrangements, the entities involved in monitoring are included in the communications on security threats. Furthermore, a protocol has been established to inform the decision to suspend implementation in locations that may be deemed inaccessible to the implementation entities and/or TPM agencies. The project is also engaging local social workers and consultants for facilitation functions – which allows adjustment of project activities to the shifting security situation on the ground based on local knowledge. 33. Environment and Social Risk under AF4 is High. One of the key risks which has materialized during the implementation of Component 1 under the Project, are environmental related risks. Significant gaps on compliance OHS measures were identified and have led to a number of work-related fatalities under the ongoing project. UNDP and the implementing partners have since taken immediate and significant measures to address these gaps (including undertaking a comprehensive audit to review and enhance the OHS system, guidelines and practices under the project). It is anticipated that this risk will be further mitigated under the proposed AF4 by applying World Bank safeguards policies. Furthermore, UNDP has developed a project-specific Environmental and Social Management Framework (ESMF); Framework for Actions on Occupational Health and Safety under ECRP and Toolkit for OHS Framework Implementation Support; all of which will be implemented under the ongoing project and will continue under the proposed AF4. 34. The proposed AF4 will apply World Bank safeguard policies in accordance with the World Bank guideline issued on December 20, 2018, extending the application of safeguards policies rather than applying the new ESMF to additional financing to December 31, 2019. The proposed AF4 meets the criteria for applying these policies including: (i) the magnitude and scope of the proposed AF4 covers the additional activities that can be accommodated in the context of the ongoing project by relying on UNDP’s existing implementation capacity and implementation arrangements relating to all aspects of the project, including fiduciary and safeguards; (ii) the proposed AF4 will not trigger any new safeguard risks or policies; the project will maintain an environmental category of B (similar to the parent project and AF) and the risk is maintained as High. 35. Fiduciary Risks are High, and particularly under Component 3 (ECT) based on the implementation experience of the ongoing project (AF2 and AF3). The nature of the ECT program renders it high risk due to the delivery of cash to a targeted 1.5 million households every payment cycle, over a large geographical area, with several entities involved in implementation. The risk is further compounded due to the ongoing conflict and the volatile political situation. These factors thus pose significant fiduciary challenges and increase the risk of errors and leakages. The project’s design includes internal controls and accountability mechanisms to help mitigate key fiduciary risks and to ensure that the full amount of eligible cash benefits is delivered to the eligible beneficiaries in a timely manner. These mechanisms include: (a) analysis and control of the database of beneficiaries and list of payments; (b) independent payment agencies with transparent procedures and robust accounting and internal control practices; (c) defined financial management arrangements for transfer of funds and required financial reports for payment; (d) use of TPM; and (e) GRM and leveraging social media to analyze community perception and feedback on a real-time basis and identify red flags for fraud to complement the GRM. April 16, 2019 Page 22 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) 36. Major fiduciary risk factors, some of which have materialized during the implementation of AF2, are related to fraud and corruption, and data discrepancies. UNICEF has since taken additional measures to reduce and manage these risks, including: (a) integrating mitigating measures into the contractual provisions with all service providers to prevent loss of project funds, refund beneficiaries or the project in situations of confirmed fraud and corruption, as well as circumstances of noncompliance with project protocols and standards; (b) strengthening the data replication process; and (c) reinforcing communication to beneficiaries on zero tolerance for fraud. TPM arrangements and grievance redress and case management support mechanisms which the project currently employs will also continue contributing to enhanced accountability and transparency and help control potential fraud and corruption. Experience under AF2 has shown that these controls have adequately mitigated these risks and have allowed UNICEF to identify and address issues as they arise. 37. Other Risks (Operational) Other risks is rated as High. Insufficient Liquidity: A risk that emerged is the availability of sufficient liquidity for the distribution of cash payments. UNICEF has addressed this risk by engaging multiple banking institutions and payment agencies with adequate capacity to secure and distribute cash through a wide network of nationwide local agents, as well as by expanding the payment delivery period to a full month to allow time to mobilize the needed cash. Limited capacity of consultancy firms: The risk of limited capacity of local consultancies, particularly the GRM under the emergency CT component has also materialized during implementation and slowed down the roll out of the first quarter payment. UNICEF expanded its own central and local capacity to undertake the grievance redressal function while utilizing technology and social media platforms to enhance accessibility to the GRM mechanism and timely and quality implementation. IV. APPRAISAL SUMMARY A. Economic and Financial Analysis 38. The proposed AF aims to halt the human capital decapitalization in the country as an unwanted fall out of the war and resulting forced displacement. This is being targeted both by supporting CTs for the poorest 1.5 million households to support their consumption and pay for services to maintain their health which is a key driver of human capital. The labor-intensive works supports income earning opportunities and rebuilding community assets, as well as water harvesting and clean water systems. The augmented financing is estimated to yield a substantial return overall, given its response to an emergency. Further, the synergy effect created by other World Bank funded emergency activities under this project and the health and nutrition projects, which are being implemented in parallel, are not calculated. In addition, there are long-term benefits from the investment in community assets. These assets also include restoration of aquifers through check dams and tree planting which slows water wastage during the rainy and recharges aquifers. These investments also contribute to climate change mitigation and adaptation. SFD has continuously applied rigorous impact assessments (refer to Box 4). B. Technical 39. The program would prioritize cash for work and nutrition sensitive CTs due to the need to address food insecurity and preserve human capital. The CT program similarly responds to the same critical food insecurity challenge. April 16, 2019 Page 23 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) 40. Design. The proposed AF4 does not introduce any major changes to the technical design or implementation arrangements of the project. The design of the proposed AF4 considered lessons learned from project implementation to date and from World Bank-wide experience with emergency response operations. These include emphasizing higher impact interventions and the responsiveness to emerging challenges as well as enhancing coordination with other World Bank operations in Yemen and those of humanitarian agencies. This arrangement is working well and has contributed to the reactivation of SFD and PWP activities and maintaining their core staff, and to the enhancement of the delivery systems of the CT program which will ultimately be transferred back to the national CT program – the SWF when peace ensues in Yemen. 41. Scaling up. The proposed AF4 will provide resources to scale up the impact of the project by expanding the LIWCS Component to expand coverage to an additional 70,700 direct beneficiaries of wage employment (including 30 percent women, 15 percent IDPs/returnees, 30 percent youth, and about 3 percent persons with disabilities) bringing the total target of this component to 470,700. Furthermore, Component 1 will provide an additional 260,400 people with access to key services (50 percent female); and 131,191 additional people (women and children) will benefit from nutrition services. The Emergency CT component targets 1.5 million poor and vulnerable households across Yemen who are currently receiving cash benefits through AF2 and AF3. The proposed AF4 will expand the coverage duration to up to about eight payment cycles. Similar to the parent project and additional financings, AF4 will target all of Yemen’s 22 governorates and 333 districts. The continuation of wage and direct CTs will provide beneficiary households with relative income stability and predictability and will therefore maximize the project’s impact on the protection of human capital and provision of economic opportunities. 42. Under Component 1, AF4 will emphasize nutrition-sensitive interventions in response to the significant deterioration of the nutrition situation in many districts across Yemen and will prioritize livelihood-related interventions. Community works subprojects will prioritize interventions that contribute to livelihood restoration and food production, such as support to fishermen and farmers, livestock production, irrigation, rehabilitation of fishing harbors, and community markets, among others, as identified by the local communities. The youth employment and youth initiatives will prioritize interventions supporting health and nutrition, community alternative schooling (i.e. multi-grade classrooms), tutoring and mentoring support to school children, among others as defined by the youth groups and communities. C. Financial Management 43. Under the LIWCS component, implemented by UNDP through SFD, the financial management and disbursement arrangements will shift from applying the FPA to applying the FMFA. The project design relies on leveraging the capacities of national partners with well-established and a solid track record of delivery and fiduciary performance. Flow of funds and disbursement arrangements are designed to be simplified to ensure timely availability of funds. Disbursement under the parent project and AF1 to UNDP was processed smoothly and flow of funds from UNDP to the national partners was done efficiently and in a timely manner. Under AF4, UNDP will prepare and submit to the World Bank quarterly Interim Unaudited Financial Reports (IFRs)6 and an annual financial statement of account certified by the UNDP’s Chief Financial Officer, showing receipts and expenditures as of December 31 each year. Third-party monitoring arrangements will continue under the proposed AF4 as well as efforts to leverage technology to enhance remote and real-time monitoring, including 6 Narrative progress reports will continue being submitted bi-annually by UNDP to the World Bank. April 16, 2019 Page 24 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) the use of geo-tagging and social media. Overall, the FM and disbursement arrangements are working well and are deemed adequate. 44. Similarly, under the Emergency CT component, implemented by UNICEF, arrangements are and will continue to be governed by the FMFA. The design of the proposed AF4 will be similar to AF2 and AF3 and will include controls and accountability mechanisms to help mitigate key fiduciary risks to ensure that the full amount of eligible cash benefits is delivered to the eligible beneficiaries in a timely manner. Risks and mitigating measures are reflected in the fiduciary risks section of this document. TPM arrangements will continue under AF4 as well as efforts to leverage technology to enhance remote and real-time monitoring including enhanced payment mechanism and use of social media (refer to Box 2). Overall, the FM and disbursement arrangements are working well and deemed adequate and will continue during AF4. 45. Flow of Funds and Disbursement Arrangements. Withdrawals from the Grant will continue to be made based on IFRs and withdrawal applications submitted by the designated officials of UNDP and UNICEF to the World Bank. UNDP and UNICEF will prepare and submit quarterly IFRs in accordance with the format and periodicity agreed with the World Bank. The IFR is designed to provide meaningful information to facilitate project monitoring. In addition to the expenditure categories, the IFR will provide pertinent information on household profiles, geographical distribution (as applicable), etc. and will be fully reconciled against the lists of payments made by the payment agencies. The first notice of withdrawal will cover projected expenditures for activities for the first six months of implementation. D. Procurement 46. The proposed project is being processed under paragraph 12 of the World Bank Policy on Investment Project Financing (Projects in Situations of Urgent Need of Assistance and Capacity Constraints ). Given the ongoing violence and instability, the proposed project is also prepared within the context of OP 2.30 (Development Cooperation and Conflict). Since there is no official government counterpart to sign the financing agreement, UNDP and UNICEF will be the grant recipients and implementing agencies for the proposed AF4. UNDP and UNICEF will continue to follow their own procurement procedures as Alternative Procurement Arrangements (APA) allowed by the Procurement Policy. This is in line with the World Bank’s new procurement framework, given that UNDP and UNICEF procurement procedures were assessed and found acceptable to the World Bank as allowed by the New Procurement Framework Policy Section III. F. UNDP and UNICEF will implement AF4, given their solid experience and proven track record and satisfactory performance in implementing the ongoing parent project and additional financings. This experience along with their capacity, field presence and social protection mandate, make both agencies the most suitable partners for the World Bank to continue implementing the proposed AF4. The main activities supported under the AF4 are cash for work and youth targeted community services under Component 1 of the project, in addition to a number of consultancy services to support project implementation under Component 2 of the project. Under Component 3 of the project, activities include the CT program which does not involve procurement activities that would require additional or external capacity. Under the AF4, UNDP and UNICEF will continue contracting a number of consultancy services, including TPM agents as part of the monitoring activities to follow up on implementation and ensure that the agreed upon procedures are followed and to report on any deviations. April 16, 2019 Page 25 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) 47. UNDP and UNICEF will follow their own procurement rules and procedures; no contracts will therefore be subject to prior or post review. The use of the World Bank’s Systematic Tracking of Exchanges in Procurement tool will not be required under this project. However, UNDP and UNICEF are using their own tracking system and generate procurement related reports on a regular basis. E. Social (including Safeguards) 48. Gender and Social Inclusion. With persistent gender gaps existing even prior to the conflict (i.e., in education, legal restrictions on mobility and decision-making, barriers to female participation in the labor force7 and in political life, and few opportunities for voice, paid work and entrepreneurial activity), women are more vulnerable to the economic, social and security challenges that result from the conflict and should thus be proactively reached for access to cash to improve their purchasing power for food and basic necessities. The stark gender gaps are influenced by and set within the context of conservative and strict gender norms. As in the parent project, the AF introduces specific actions and design parameters to ensure the inclusion and participation of women. Such design parameters will ensure women are provided an equal opportunity to benefit from the employment opportunities (for example, targeting female-headed households, allowing flexibility in work hours, and providing on-site child care). 49. The proposed AF4 is expected to have a positive impact on participating poor and vulnerable communities, through the implementation of Component 1 –LIWCS, households, and IDPs and in contributing to the inclusion agenda by actively seeking to restore livelihoods, enhance resilience, support social cohesion, and foster a role for non-state actors. Consideration for IDPs, women (including pregnant and lactating women) and youth as specific vulnerable groups are included in the targeting as well as type of intervention. 50. AF4 will also continue providing through the implementation of Component 3- ECT, relative income stability to nearly eight million individuals of which 50 percent are females. The CT program is designed to target the chronically poor, orphans, vulnerable children, widows, persons with disabilities, the elderly and female- headed households. Field facilitation will be supported by social workers, to ensure reaching out to female beneficiaries; and the TPM agency will include female workers to also reach women and ensure that they are able to voice any potential concerns or complaints. Finally, efforts will be made to improve the coordination between the CT program and UNICEF’s nutrition interventions (under the ongoing World Bank-financed Emergency Health and Nutrition Project and Additional Financing) to link CT beneficiary households with health and nutrition supply interventions. 51. Social Safeguards. OP 4.12 was not triggered under the parent project and AF given that all activities under Component 1: LIWCS (Cash-for-Work) do not involve involuntary land acquisition; livelihood impacts; relocation of illegal occupants and/or restriction of access to asset. For certain activities such as the construction of water harvesting tanks, land is obtained voluntarily through community land and is endorsed by legal authorities (local council). Activities under Component 2 (Project Management and Monitoring) and Component 3 Emergency Cash Transfer (ECT) do not involve any resettlement. The proposed AF4 would continue expanding the scope and positive impact of the ongoing project - accordingly OP 4.12 will not be triggered. TPM will capture 7 Female labor force participation rate is 5.8 percent, which is significantly lower than the male labor force participation rate of 69.7 percent. World Bank World Development Indicators/Gender Statistics (2018). April 16, 2019 Page 26 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) the beneficiaries’ experiences with project interventions. In addition, UNDP and UNICEF have developed and are implementing a GRM system where complaints are being received through several channels. 52. Possible key social risks and impacts under Components 1 and 3 may include: the conflict context may produce social tensions during project implementation, concerning prioritization of subprojects, locations, and selection of poor and vulnerable groups. Additionally, the control of geographical areas of the country by different political factions could lead to interference and inappropriate targeting and selection of subprojects and/or elite capture. 53. GRM. UNDP and UNICEF have well-established GRM systems where complaints are being received through several channels. The GRM systems are intended to react to all complaints received and ensure that all grievances are addressed efficiently and effectively. Additionally, the two TPM agencies under UNDP and UNICEF will capture the beneficiaries’ experiences with project interventions under components 1 and 3. 54. Investing in persons with disability is central to poverty reduction and achieving the sustainable development goals. It can contribute to greater social equity, inclusion, cohesion, and human capital formation in Yemen, all of which are critical to breaking the cycle of poverty, deprivation, and social exclusion. The Yemen ECRP has been instrumental in introducing adaptive and shock responsive safety net responses. The proposed AF4 will build upon existing services and pilot new approaches to improve the quality of targeted social care services and economic opportunities for people with disabilities (PWDs). Under AF4, it is estimated that approximately 18,000 PWDs will benefit from a multi-sectoral package of services under Component 1 of AF4 to empower and foster inclusion through: (i) nutrition sensitive activities - beneficiaries (lactating and pregnant women and malnourished children) will continue to receive cash and attend awareness sessions on post and anti-natal care; (ii) cash for community-based rehabilitation under selected households will receive cash for medical supplies and equipment, tailored in-home education and treatment provided by trained youth8 to families with PWDs up to the of 18 years; and cash for work. 55. Social Accountability. Social accountability under the proposed project will follow the same approach as the parent project and will be taken into account through: (a) community participation in the selection of subprojects; (b) the ability of beneficiaries to voice complaints and provide feedback through well-established GRMs; (c) public information on the availability of employment opportunities created by the project and dissemination of information about the resumption of the CT program to the intended beneficiaries and to relevant communities; (d) independent verification through the TPM agency; and (e) UNDP and UNICEF’s regular field monitoring activities. F. Environment (including Safeguards) 56. Unlike the parent project and additional financing (implemented by UNDP), the proposed AF4 will not apply the FPA, and will apply World Bank safeguard policies going forward under the FMFA. AF4 is thus categorized ‘B’ in accordance with OP 4.01 on Environmental Assessment. Triggering this policy is justified as the project will support implementing labor intensive works and community services (Cash-for-Work) under Component 1, which will be implemented by UNDP in partnership with the Social Fund for Development (SFD). Based on the implementation experience of the ongoing project, significant OHS gaps were identified, which have led to multiple fatalities under the project. There is thus a high risk of fatal incidents or serious injuries 8 Trained youth who will sensitize family members on daily coping mechanisms. April 16, 2019 Page 27 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) occurring under the proposed AF4, particularly, under Component 1 (Labor Intensive Works and Community Services). To mitigate potential environmental safeguards risks and impacts, including those related to OHS, UNDP has developed an Environmental and Social Management Framework (ESMF) which includes checklists for subproject screening. Activities classified under environmental category ‘A’ will not be financed. Subprojects will be screened for potential environmental impacts to determine if a subproject’s ESMP is needed or mitigation measures included in the ESMF are sufficient. The ESMF sets out responsibilities for both implementation and monitoring of mitigation measures. The ESMF was translated into Arabic and disclosed in English and Arabic by UNDP in-country, on March 29, 2019, and on the World Bank website on March 31 and April 1, 2019. To mitigate potential risks and impacts related to OHS, UNDP has developed a ‘Framework for Actions on OHS under ECRP ’and a ‘Toolkit for OHS Framework Implementation Support' which will be applied under the project. Furthermore, capacity building programs were developed targeting different groups, particularly senior managers and officials of implementation and monitoring agencies on ESMF and OHS Framework. Other measures have been taken to enhance the institutional structure for managing environmental risks and impacts, including OHS. 57. Under the ongoing project, UNDP has reviewed and strengthened OHS aspects under the project to ensure adequate measures are in place for the proposed project. In this regard, UNDP deployed a national expert at the central level to provide support and supervision on OHS aspects. Another specialist was also recruited to supervise environmental and social safeguard aspects of the project. At the IP level, and as immediate actions to address OHS-related gaps, SFD has taken the following actions and measures: (a) set up an OHS Unit since January 2018 with two staff reporting to the Head of the Technical Division; (b) undertaken a classification of all subprojects to identify high risk subprojects to ensure the application of proper OHS measures that are proportionate to the level of risk - a list of identified high-risk subprojects was shared with the World Bank; (c) strictly enforcing the ban on the use of explosives under the project; and (d) strengthening on-site monitoring by site supervisors and through TPM, and enhancing reporting arrangements. 58. Furthermore, UNDP and SFD have conducted a comprehensive audit of the existing OHS system. Three consultants were hired by UNDP to review and enhance OHS frameworks, guidelines and practices under the project, and the audit was concluded on December 31, 2018. Prior to this audit, SFD commissioned a consultancy to review OHS policies and practices based on which tailored training manuals, first aid booklets and subproject- level guidance materials were prepared. Additionally, key contractual and service documents were revised to enhance OHS aspects. Monitoring arrangements have been strengthened based on the findings of the review. UNDP has also developed a Safeguards Action Plan to further improve and strengthen safeguards aspects under the project. As part of the outputs of this plan, a project-specific ESMF has been developed and disclosed in country and on the World Bank website. Capacity building programs were also developed targeting different groups and identified areas, including capacity building of senior managers and officials of implementation and monitoring agencies on ESMF and OHS Framework and capacity building program for project managers and supervisors on OHS tools and their application in field. Finally, UNDP has further strengthened the safeguard function by allocating a dedicated international environmental and social safeguards expert based in Amman, supported by two national experts to be based in Sana’a. 59. SFD has also strengthened their OHS management system and nominated a central team to coordinate information and responses in an effort to significantly reduce reporting delays as experienced under the parent project and additional financing. SFD currently has insurance to cover OHS risks in its own executed projects April 16, 2019 Page 28 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) where contractors are not utilized. For projects implemented by contractors, SFD has developed a new standard contract with built-in provisions for insurance by the contractors. 60. Given the nature of activities under the AF4 involving cash for works implemented by UNDP through SFD and cash transfers implemented by UNICEF in a political and security sensitive environment, communication and consultation with the relevant stakeholders and intended beneficiaries will be critical under the current environment. Therefore, two separate TPM agencies were hired to monitor and report on non-compliance issues for UNDP and UNICEF. The TPMs will capture beneficiaries’ experiences with the cash for work and cash transfer activities and overall compliance with implementation procedures. In addition, UNDP and UNICEF have comprehensive GRM systems in place where complaints are received through several channels. All complaints received by the implementing agencies will be recorded and documented for future verifications when needed. G. Other Safeguard Policies (if applicable) 61. No other safeguard policies are applicable to this project. V. WORLD BANK GRIEVANCE REDRESS 62. Communities and individuals who believe that they are adversely affected by a World Bank supported project may submit complaints to existing project-level grievance redress mechanisms or the World Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the World Bank’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of World Bank 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 the World Bank Management has been given an opportunity to respond. For information on how to submit complaints to t he World Bank’s corporate 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 April 16, 2019 Page 29 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) VI SUMMARY TABLE OF CHANGES Changed Not Changed Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Safeguard Policies Triggered ✔ Implementing Agency ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ VII DETAILED CHANGE(S) PROJECT DEVELOPMENT OBJECTIVE Current PDO The Project Development Objective is to provide short-term employment and access to selected basic services to the most vulnerable; preserve existing implementation capacity of two service delivery programs; and provide emergency cash transfers to the poor and vulnerable in response to the food crisis. Proposed New PDO The Project Development Objective is to provide short-term employment and access to selected basic services to the most vulnerable; preserve existing implementation capacity of service delivery programs; and provide April 16, 2019 Page 30 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) emergency cash transfers to the poor and vulnerable in response to the food crisis. COMPONENTS Current Component Name Current Cost Action Proposed Component Proposed Cost (US$, (US$, millions) Name millions) Labor Intensive Works and 285.40 Revised Labor Intensive Works 375.50 Community Services and Community Services Project Management and 14.60 Revised Project Management 24.50 Monitoring and Monitoring Emergency Cash Transfer 348.63 Revised Emergency Cash 448.63 Transfer TOTAL 648.63 848.63 LOAN CLOSING DATE(S) Ln/Cr/Tf Status Original Closing Current Proposed Proposed Deadline Closing(s) Closing for Withdrawal Applications IDA-D1320 Effective 31-Aug-2018 30-Sep-2019 30-Sep-2021 30-Jan-2022 IDA-D1620 Effective 30-Jun-2019 30-Sep-2019 30-Sep-2021 30-Jan-2022 IDA-D1970 Effective 30-Jun-2019 30-Jun-2019 30-Sep-2021 30-Jan-2022 IDA-D4180 Effective 30-Sep-2019 30-Sep-2019 30-Sep-2021 30-Jan-2022 Expected Disbursements (in US$) DISBURSTBL Fiscal Year Annual Cumulative 2017 110,271,759.26 110,271,759.26 2018 325,906,204.53 436,177,963.79 2019 78,185,522.02 514,363,485.81 2020 170,133,257.08 684,496,742.89 2021 160,133,257.11 844,630,000.00 2022 4,000,000.00 848,630,000.00 April 16, 2019 Page 31 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Latest ISR Rating Current Rating Political and Governance ⚫ High ⚫ High Macroeconomic ⚫ High ⚫ High Sector Strategies and Policies ⚫ High ⚫ High Technical Design of Project or Program ⚫ High ⚫ High Institutional Capacity for Implementation and ⚫ High ⚫ High Sustainability Fiduciary ⚫ High ⚫ High Environment and Social ⚫ Substantial ⚫ High Stakeholders ⚫ High ⚫ High Other ⚫ High Overall ⚫ High ⚫ High Safguard_Table COMPLIANCE Change in Safeguard Policies Triggered Yes Safeguard Policies Triggered Current Proposed Environmental Assessment OP/BP No Yes 4.01 Performance Standards for Private No No Sector Activities OP/BP 4.03 Natural Habitats OP/BP 4.04 No No Forests OP/BP 4.36 No No Pest Management OP 4.09 No No Physical Cultural Resources OP/BP No No 4.11 Indigenous Peoples OP/BP 4.10 No No April 16, 2019 Page 32 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Involuntary Resettlement OP/BP 4.12 No No Safety of Dams OP/BP 4.37 No No Projects on International Waterways No No OP/BP 7.50 Projects in Disputed Areas OP/BP 7.60 No No LEGAL COVENANTS2 LEGAL COVENANTS – Emergency Crisis Response Project Fourth Additional Financing (P170241) Sections and Description OPS_LEGAL_CONVENANT_CHILD_NODATA No information available Conditions April 16, 2019 Page 33 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) VIII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Yemen, Republic of RESULT_NO_PDO Emergency Crisis Response Project Fourth Additional Financing Project Development Objective(s) The Project Development Objective is to provide short-term employment and access to selected basic services to the most vulnerable; preserve existing implementation capacity of service delivery programs; and provide emergency cash transfers to the poor and vulnerable in response to the food crisis. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 Provide short-term employment and access to selected basic services to the most vulnerable The number of direct beneficiaries of wage employment (core indicator: # of beneficiaries of 0.00 80,000.00 240,000.00 400,000.00 470,700.00 safety net programs) (Number) Rationale: Action: This indicator has been End target revised to add 70,700 beneficiaries under AF4. Revised Share of female beneficiaries 0.00 30.00 30.00 30.00 30.00 (Percentage) Action: This indicator has been Revised Share of IDPs/Returnees (Percentage) 0.00 20.00 20.00 20.00 15.00 April 16, 2019 Page 34 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 Action: This indicator has been Revised Share of Youth beneficiaries (age 16-35) (Percentage) 0.00 35.00 35.00 35.00 30.00 Action: This indicator has been Revised Persons with disabilities 0.00 3.00 (Percentage) Rationale: Action: This indicator is New New sub indicator added under AF4 to measure number of persons with disabilities provided with short-term employment. The number of people provided with access to key services 0.00 600,000.00 1,500,000.00 2,500,000.00 2,760,400.00 (Number) Rationale: Action: This indicator has been Revised End target revised to add 260,400 people provided with access to key services under AF4. Share of female (Percentage) 40.00 40.00 40.00 40.00 50.00 Action: This indicator has been Revised Persons with disabilities 0.00 8.00 (Percentage) Rationale: Action: This indicator is New New sub indicator added to measure number of persons with disabilities provided with access to key services. Number of people (women and children) who benefitted from the 0.00 15,000.00 60,000.00 85,000.00 216,191.00 nutrition services (total) (Number) April 16, 2019 Page 35 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 Rationale: Action: This indicator has been End target revised to add 131,191 people who will benefit from nutrition services under AF4. Revised Of which, women (Number) 0.00 10,000.00 40,000.00 50,000.00 101,060.00 Rationale: Action: This indicator has been End target revised to add 51,060 women to benefit from nutrition services. Revised Of which, children (Number) 0.00 5,000.00 20,000.00 35,000.00 111,590.00 Rationale: Action: This indicator has been End target revised to add 76,590 children to benefit from nutrition services. Revised Persons with disabilities (Percentage) 0.00 3.50 Rationale: Action: This indicator is New Sub-indicator added to measure number of persons with disabilities to benefit from nutrition services. Preserve existing implementation capacity of service delivery programs (Action: This Objective has been Revised) The percentage of core staff positions (Percentage) 100.00 100.00 100.00 100.00 100.00 Rationale: Action: This indicator has been End target date revised in line with new project closing date. Revised SFD (Number) 185.00 185.00 185.00 185.00 185.00 April 16, 2019 Page 36 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 PWP (Number) 53.00 53.00 53.00 53.00 53.00 Provide emergency cash transfers to the poor and vulnerable in response to the food crisis. Beneficiary households of cash 0.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 transfers (Number) Rationale: Action: This indicator has been End target date revised in line with project new closing date. Revised Female (Percentage) 0.00 40.00 40.00 40.00 40.00 Action: This indicator has been Revised Beneficiaries of social safety net 0.00 8,000,000.00 8,000,000.00 8,000,000.00 8,000,000.00 programs (CRI, Number) Rationale: Action: This indicator has been End target date revised in line with project new closing date. Revised Beneficiaries of Safety Nets programs - Unconditional cash 0.00 8,000,000.00 8,000,000.00 8,000,000.00 8,000,000.00 transfers (number) (CRI, Number) Rationale: Action: This indicator has been End target date revised in line with project new closing date. Revised Beneficiaries of social safety net programs - Female (CRI, 0.00 4,000,000.00 4,000,000.00 4,000,000.00 4,000,000.00 Number) April 16, 2019 Page 37 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 Rationale: Action: This indicator has been End target date revised in line with project new closing date. Revised PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 Labor Intensive Works and Community Services Number of working days created 0.00 600,000.00 4,380,000.00 7,000,000.00 9,365,600.00 (Number) Rationale: Action: This indicator has been End target revised to add 2,365,600 working days under AF4. Revised Share of Youth (Percentage) 0.00 35.00 35.00 35.00 40.00 Rationale: Action: This indicator has been End target revised from 35% to 40% under AF4. Revised IDPs/Returnees (Percentage) 0.00 20.00 20.00 20.00 15.00 Rationale: Action: This indicator has been End target revised from 20% to 15% under AF4. Revised Female (Percentage) 0.00 30.00 30.00 30.00 30.00 April 16, 2019 Page 38 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 Rationale: Action: This indicator has been No change to end target. Revised Indirect beneficiaries from the income support (family members of 0.00 100,000.00 800,000.00 1,000,000.00 1,155,000.00 the workers) (Subcomponent 1.1) (Number) Rationale: Action: This indicator has been Revised End target revised to add 155,000 indirect beneficiaries from income support. Cubic meters of water schemes constructed /rehabilitated 0.00 40,800.00 232,000.00 300,000.00 402,000.00 (Subcomponent 1.1) (Cubic Meter(m3)) Rationale: Action: This indicator has been End target revised to add 102,000 cubic meters of water schemes constructed. Revised Area of agriculture land and terraces rehabilitated 0.00 320.00 1,400.00 1,900.00 3,530.00 (Subcomponent 1.1) (Hectare(Ha)) Rationale: Action: This indicator has been Revised End target revised to add 1,630 hectares of agricultural land and terraces rehabilitated. Length of roads improved (Subcomponent 1.1) (Kilometers) 0.00 40.00 160.00 200.00 290.00 Rationale: Action: This indicator has been Revised End target revised to add 90 km of roads improved. April 16, 2019 Page 39 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 Number of working days created (Subcomponent 1.2) (Number) 0.00 160,000.00 1,000,000.00 2,000,000.00 2,000,000.00 Share of IDPs/Returnees 0.00 30.00 (Percentage) Indirect beneficiaries from the income support (family members of the workers) (Subcomponent 1.2) 0.00 80,000.00 300,000.00 700,000.00 700,000.00 (Number) Cubic meters of water schemes constructed/rehabilitated 0.00 20,000.00 100,000.00 200,000.00 200,000.00 (Subcomponent 1.2) (Cubic Meter(m3)) Area of agriculture land protected 0.00 600.00 3,000.00 7,000.00 7,000.00 (Subcomponent 1.2) (Hectare(Ha)) Number of classrooms rehabilitated (Subcomponent 1.2) 0.00 200.00 650.00 820.00 820.00 (Number) Number of microfinance clients (SMEs) supported (Subcomponent 0.00 1,600.00 2,800.00 4,000.00 6,000.00 1.3) (Number) Rationale: Action: This indicator has been Revised End target revised to add 2000 SME clients supported. Female (Percentage) 0.00 50.00 50.00 50.00 50.00 Action: This indicator has been Revised Number of individuals who benefited from farm, fishery and animal production-based wage 0.00 8,000.00 20,000.00 26,000.00 46,100.00 employment (short or long term, April 16, 2019 Page 40 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 including informal) (Subcomponent 1.3) (Number) Rationale: Action: This indicator has been Revised End target revised to add 20,100 beneficiaries. Female (Percentage) 0.00 20.00 20.00 20.00 20.00 Rationale: Action: This indicator has been No change to end target. Revised Number of micro-finance institutions that benefited from the 0.00 9.00 9.00 9.00 9.00 project (Subcomponent 1.3) (Number) Rationale: Action: This indicator has been Under AF4, 6 of the 9 MFIs will continue to be supported. Revised Project Management and Monitoring Percentage of registered grievances that are addressed within the timeframe specified in the project 0.00 60.00 75.00 90.00 90.00 implementation manual (Percentage) Rationale: Action: This indicator has been End target date revised in line with project new closing date. Revised Percent of surveyed beneficiaries who expressed satisfaction with 0.00 70.00 70.00 70.00 70.00 the project participatory approach April 16, 2019 Page 41 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 (Percentage) Action: This indicator has been Revised Emergency Cash Transfer Number of surveyed beneficiaries who report receiving full amount of 0.00 0.00 100.00 100.00 100.00 benefit (Percentage) Rationale: Action: This indicator has been End target date revised in line with project new closing date. Revised IO Table SPACE Monitoring & Evaluation Plan: PDO Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Administrative Sub project data The number of direct beneficiaries of Aggregate number of all Every six data and collection by IP and UNDP wage employment (core indicator: # of subcomponents under 1.1., months. progress TPM. beneficiaries of safety net programs) 1.2., and 1.3. reports. Administrative Sub project data Share of female Every six data and collection by IP and UNDP Share of female beneficiaries beneficiaries of wage months. progress TPM. employment. reports. April 16, 2019 Page 42 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Administrative Every six Sub project data Share of IDPs/returnees of data and UNDP Share of IDPs/Returnees months. collection by IP and TPM wage employment. Progress Reports Administrative Sub project data Every six data and Share of Youth beneficiaries (age 16- Share of youth of wage collection by IP and UNDP months. Progress 35) employment. TPM. reports. Administrative Sub project data Share of persons with Every six data and collection by IP and UNDP Persons with disabilities disabilities of wage months. Progress TPM. employment. reports. Administrative Aggregate of SFD&PWP of Subproject data Every six data and The number of people provided with people who have collection by IP and UNDP months. Progress access to key services potentially access to a TPM. reports. specific basic service. Administrative Sub project data Every six data and Share of females provided collection by IP and UNDP Share of female months. Progress with access to key services. TPM. reports. Administrative Share of persons with Every six data and Sub project data UNDP Persons with disabilities disabilities provided with months. Progress collection by IP and TPM access to key services. reports. Number of people (women and children) Verification of attendance Every six Administrative Subproject data UNDP who benefitted from the nutrition and compliance with months. data and collection by IP and services (total) referrals /follow up action. Progress TPM. April 16, 2019 Page 43 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) reports. Administrative Sub project data Share of women Every six data and collection by IP and UNDP Of which, women benefitting from nutrition months. Progress TPM. services. reports. Administrative Sub project data Share of children Every six data and collection by IP and UNDP Of which, children benefitting from nutrition months. Progress TPM. services. reports. Administrative Share of people with Sub project data Every six data and disabilities (women or collection by IP and UNDP Persons with disabilities months. Progress children) benefitting from TPM. reports. nutrition services. Number of core staff of Administrative SFD and PWP pre- Every six data and Data collection by IPs UNDP The percentage of core staff positions crisis/number of current months. Progress and TPM. core staff of SFD and PWP reports. by 100. Administrative Every six data and UNDP SFD Current core SFD staff months. Progress reports Administrative Every six Current number of core data and UNDP PWP months. PWP staff Progress reports Beneficiary households Every six Administrative Data collection by UNICEF Beneficiary households of cash transfers receiving cash transfers. months. data and implementing agency April 16, 2019 Page 44 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Progress through payment agents reports. and TPM after each payment cycle. Data collection by Administrative implementing agency Share of female Every six data and through payment agents UNICEF Female beneficiaries of cash months. Progress and TPM after each transfers. reports. payment cycle. Data collection by Administrative implementing agency Every six data and through payment agents UNICEF Beneficiaries of social safety net programs months. Progress and TPM after each reports. payment cycle. Data collection by Administrative implementing agency Beneficiaries of Safety Nets programs Every six data and through payment agents UNICEF - Unconditional cash transfers months. Progress and TPM after each (number) reports. payment cycle. Data collection by Administrative implementing agency Every six data and Beneficiaries of social safety net through payment agents UNICEF months. Progress programs - Female and TPM after each reports. payment cycle. ME PDO Table SPACE April 16, 2019 Page 45 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Monitoring & Evaluation Plan: Intermediate Results Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Total of working days for all Administrative Every six Data collection by IP and beneficiaries aggregating data and UNDP Number of working days created months. TPM. data for Female/Male; progress IDPs/Returnees; and Youth reports Administrative Every six data and Data collection by IP and UNDP Share of Youth Percentage of youth. months. progress TPM. reports. Administrative Every six data and Data collection by IP and Number of internally UNDP IDPs/Returnees months. progress TPM. displaced people. reports. Administrative Every six data and Data collection by IP and Percentage of female UNDP Female months. progress TPM. beneficiaries. reports. Total #of individuals of Administrative Indirect beneficiaries from the income participating families in the Every six data and Data collection by IP and UNDP support (family members of the workers) cash for work activities, months. progress TPM. (Subcomponent 1.1) cash for services and reports. nutrition. Administrative Cubic meters of water schemes Every six Data collection by IP and Capacity of water schemes data Progress UNDP constructed /rehabilitated months. TPM. constructed/rehabilitated. reports. (Subcomponent 1.1) April 16, 2019 Page 46 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Administrative Every six data and Data collection by IP and Area of agriculture land and terraces Area of agriculture land UNDP months. Progress TPM. rehabilitated (Subcomponent 1.1) and terraces rehabilitated. reports. Administrative Every six data and Data collection by IP and Length of roads improved (Subcomponent UNDP Roads paved or improved. months. progress TPM. 1.1) reports. Administrative Number of working days created data and UNDP Every six months (Subcomponent 1.2) Progress reports Administrative data and Share of IDPs/Returnees UNDP Every six months Progress reports Administrative Indirect beneficiaries from the income data and support (family members of the workers) UNDP Every six months progress (Subcomponent 1.2) reports Administrative Cubic meters of water schemes Volume of water schemes data and constructed/rehabilitated (Subcomponent UNDP Every six months constructed/rehabilitated Progress 1.2) reports Area of agriculture land protected Area of agriculture land (Subcomponent 1.2) protected Administrative Number of classrooms rehabilitated Number of classrooms data and UNDP Every six months (Subcomponent 1.2) rehabilitated progress reports April 16, 2019 Page 47 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Administrative Total #of SMEs receiving in- Every six data and Data collection by IP and Number of microfinance clients (SMEs) UNDP kind support through the months. Progress TPM. supported (Subcomponent 1.3) Takaful Fund. reports. Administrative Sub project data Every six data and Share of female collection by IP and UNDP Female months. progress microfinance clients. TPM. reports. Aggregation of all Number of individuals who benefited Administrative individuals benefiting from from farm, fishery and animal production- Every six data and Data collection by IP and wage employment created UNDP based wage employment (short or long months. Progress TPM. by SMEs and farmers term, including informal) (Subcomponent reports. receiving support through 1.3) the project. Administrative Sub project data Share of female who Every six data and collection by IP and UNDP Female benefited from the farm- months. progress TPM. wage based employment. reports. Number of micro-finance institutions that Number of MFIs Every six Progress Data collection by IP and UNDP benefited from the project benefitting from the months. Reports. TPM. (Subcomponent 1.3) project. Administrative # of grievances received/ of data and Percentage of registered grievances that grievances addressed by Every six Progress Surveys by TPM every six are addressed within the timeframe UNDP and/or its months. reports; and months/GRM Data. Every six months specified in the project implementation implementing partners By verified by manual UNDP and/or its TPM agency. implementing partners. April 16, 2019 Page 48 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Technical Percent of surveyed beneficiaries who # of beneficiaries surveyed Every six review Surveys by TPM every six UNDP expressed satisfaction with the project in the TPM/# reported months. missions and months. participatory approach satisfaction. TPM reports. Number of surveyed Progress Surveys by TPM Every six Number of surveyed beneficiaries who beneficiaries who report reports and following each payment UNICEF months. report receiving full amount of benefit receiving full amount of TPM reports. cycle. benefit. ME IO Table SPACE April 16, 2019 Page 49 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Annex 1: Project Costs Parent AF AF2 AF3 AF4 Total Project (US$ (US$ (US$ (US$ Project Component (US$ million) million)9 million)10 million) Cost (US$ million) million) Component 1: Labor Intensive Works and Community 45.00 240.40 - - 90.10 375.5 Services 1.1 Cash-for-Work and Youth Targeted Community 25.00 155.40 - - 80.10 260.50 Services 1.2 Small Community Infrastructure (discontinued under 15.00 70.00 - - - 85.00 AF4) 1.3 SME Revitalization and Employment Generation 5.00 15.00 - - 10.00 30.00 Component 2: Project Management and Monitoring 5.00 9.60 - - 9.90 24.5 2.1 UNDP Indirect Cost (3%) 2.38 7.28 - - 2.90 12.56 2.2 UNDP Direct Cost11 2.27 1.97 - - 6.20 10.44 2.3 TPM and Evaluation 0.35 0.35 - - 0.80 1.5 Component 3: Emergency Cash Transfer - - 200.00 140.00 100.00 440.00 3.1 Cash Transfers - - 191.10 131.04 88.99 411.13 • Cash transfers - - 185.50 128.60 83.61 397.71 • Payment Agency Fees and Services - - 5.68 2.44 1.53 9.65 • Bank card costs - - - - 3.85 3.85 3.2 Project Management and Monitoring (PMM) - - 8.90 8.96 11.01 28.87 ➢ Consultancy services - - 0.00 0.85 3.39 4.24 • CT Systems, Technical and Operational Support - - 0.00 0.85 0.85 1.7 • Grievance Redress Mechanism (GRM) - - 0.00 0.00 0.80 0.80 • Communication and facilitation - - 0.00 0.00 0.74 0.74 • Beneficiary Verification12 - - 0.00 0.00 0.00 0.00 • Social Welfare Fund (SWF) delivery systems - - - - 1.00 1.00 capacity building13 ➢ Third Party Monitoring - - 1.55 1.00 1.20 3.75 ➢ UNICEF Cost - - 7.27 7.11 6.42 20.8 • Direct Cost14 - - 3.35 3.00 4.46 10.81 • Indirect Costs (2%) - - 3.92 4.1115 1.96 9.99 Total Project Cost 50.00 250.00 200 140 200 840.00 9 Excludes parallel financing from the US State Bureau for Near Eastern Affairs of approximately US$4.6 million. 10 Excludes co-financing amount from Multi Donor Trust Fund (MDTF) of approximately US$8.5 million; and parallel financing from the US State Bureau for Near Eastern Affairs of approximately US$4.9 million. 11 Includes UNDP staffing and operating costs. 12 Under AF3 and after, the Beneficiary Verification function has been subsumed under the GRM function. 13 Assessment and capacity building of institutions in Yemen providing social protection support. 14 Includes UNICEF staffing and operating costs. 15 Retroactive application of 2% indirect cost will be applied through a formal project restructuring of AF3. April 16, 2019 Page 50 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) Annex 2: Component 3 - Emergency Cash Transfers 1. Under Component 3: Emergency CT (US$100 million). The project will support emergency CTs to a targeted 1.5 million households (approximately 8 million individuals) for an additional 1-2 payment cycles. Component 3 will generally remain unchanged under AF4. Component 3 will continue to be implemented by UNICEF and includes two subcomponents as follows: Subcomponent 3.1 (US$88.99 million equivalent): Emergency Cash Transfers. This entails the provision of cash assistance to beneficiaries for an additional 1-2 quarters. Subcomponent 3.1 will also finance hiring of payment agencies to deliver cash and administer the cash transfers within Yemen. This subcomponent will continue financing CTs to a targeted 1.5 million households (equivalent to an estimated 8 million individuals) with an average benefit amount of YR 5,000 per household, per month, delivered on a quarterly basis and fixed in Yemeni Rials. The design parameters (targeting, benefit calculation formula, frequency of delivery, coverage, etc.) of the CTs build on those of the national CT program - Social Welfare Fund - as of Q4 of 2014. Subcomponent 3.2 (US$11.01 million equivalent): Project Management and Monitoring. This subcomponent will continue to support the implementation of the proposed CT program, management and M&E to ensure that the program is successfully and efficiently implemented in conformity with the design. This subcomponent will finance: (a) UNICEF’s direct costs, including staffing and operating expenses; (b) UNICEF’s indirect cost and general management; (c) consultancy services required for technical assistance and implementation support; and (d) Third-Party Monitoring. 2. Component 3 will contribute to climate change mitigation by providing emergency cash transfers to the poor, and thus establishes an adaptive safety net system that enables highly vulnerable, food insecure households to cope with current and future climate-induced shocks. The beneficiary information contained in social safety net rolls created by this project could easily evolve into a hydro-met early warning communication network for Yemen’s most vulnerable populations. 3. AF4 offers an opportunity to examine and revise the benefit amount paid to beneficiary households. The experience of high inflation over the last few months has eroded the purchasing power of the benefit amount (currently at an average of YR 5,000 per recipient household). Further, volatility of the exchange rate of the YR poses challenges for the certainty of budget planning. 4. The real value of the ECT benefit is declining due to consistently high inflation over the duration of the conflict. The current average monthly benefit amount of YR 5000 was equal to only 22 percent of the WFP’s FSAC Minimum/Survival Food Basket16 for a family of five in January 2019, compared to 42 percent pre-conflict and 33 percent at AF2 (August 2017). This steep decline underscores the reduction of support offered to poor and vulnerable households in Yemen by the ECT. However, in the context of a limited IDA funding envelope for the ECT until the end of June 2020, an upward revision of the benefit amount would involve a trade-off with the duration of coverage and therefore, the regularity of payments. 16WFP – January 2019: FSAC Revised Minimum/ Survival Food Basket. Accessed Online at: https://www1.wfp.org/publications/yemen-monthly-market-watch-2019 April 16, 2019 Page 51 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) While the reduced real value of the transfer remains a cause for concern, the regularity and predictability of ECT transfers is also critical for households. Beneficiaries view these transfers as entitlements and base food and other purchases on shop credit, with the expectation of being able to repay debts with the recurring ECT transfers. The reliance on shop credit for basic purchases is particularly high among poor rural households in Yemen. 5. In a survey conducted by the Labor-Intensive Works Program in Yemen in 2013, 73 percent of households that reported any debt said that debt was owed to a shopkeeper (Christian 2015).17 It is therefore critical to ensure regularity of ECT payments to avoid the risk of households falling into debt traps and being unable to access shops for future food purchases. The regularity of cash transfers in Yemen also helps mitigate the effects of conflict on household wellbeing (Ecker, Maystadt and Guo, 2019).18 Given the high need to maintain regularity of payments, benefit amount increases may not be possible until additional funds are assured. This decision may be revisited if continued and high inflation reduces the real value of the transfer below extremely critical levels, subject to funds available. 6. CT delivery system. Under the ongoing AF2 and AF3, UNICEF has engaged a number of private sector consultancy firms to support the development and implementation of delivery systems and processes for an effective and secure delivery of CTs. These systems will be transferred to the national program (SWF) to support its readiness at the recovery phase and include the following: (i) Verification of beneficiary identity: The payment process under AF2 required a thorough process for identity verification whereby beneficiaries were required to provide one additional document of identification (such as a national ID card, electoral card, passport, student ID, or disability ID - in addition to the SWF beneficiary card). It was determined that cross-checking identity verification was required as the SWF beneficiary card does not include adequate security features. This process helped establish credibility of the SWF list. Given that about 95 percent of beneficiaries were verified during Q1 and Q2 payments under AF2, this process step was no longer required at a full scale during Q3 and under the proposed AF. Any cases that may require identity verification will be addressed through the case management mechanism. (ii) Capacity enhancement of the SWF: During AF2, UNICEF’s collaboration with SWF included: engaging the volunteer social workers in the field facilitation process, information sharing and collaboration in resolving access challenges to UNICEF and its service providers. This collaboration will continue under the proposed AF4. UNICEF will assess the capacity of the SWF with a view of transferring specific functions in the future and will support training on the improved CT delivery processes. This approach aims to ensure the readiness of SWF capacity for the recovery phase. (iii) The role of social media in enhancing project monitoring: Apart from the agreed arrangement for project monitoring under AF2 and AF3 (field monitoring through UNICEF’s regional offices, TPM, implementation support missions), UNICEF piloted the monitoring of social media and other media to track public response to the project. The pilot has proven to be effective and concluded with 17 Christian (2015) Store Credit as Informal Insurance in Rural Yemen. Accessed online at: https://editorialexpress.com/cgi- bin/conference/download.cgi?db_name=CSAE2016&paper_id=1112 18 Ecker, O., J.F. Maystadt, and Z. Guo (2019) Can Unconditional Cash Transfers Mitigate the Impact of Civil Conflict on Acute Child Malnutrition in Yemen? Evidence from the National Social Protection Monitoring Survey. IFPRI Middle East and North Africa Regional Program. Working Paper 17. January 2019. April 16, 2019 Page 52 of 53 The World Bank Emergency Crisis Response Project Fourth Additional Financing (P170241) identifying social media as an important additional source of information for reporting on suspected cases of non-compliance by staff of service providers and implementation weaknesses. Therefore, monitoring of social media will be added as a monitoring activity, in addition to the TPM, GRM and UNICEF’s field visits. (iv) Enhanced payment mechanism. The project, under AF4 is exploring the use of bank cards to be issued by the payment agencies engaged by the project. This would ensure financial inclusion for beneficiaries, ease payment procedures for future payment cycles, and strengthen the project’s ability to track payments to ensure that the benefits effectively reach the eligible beneficiaries. April 16, 2019 Page 53 of 53