Document of The World Bank FOR OFFICIAL USE ONLY Report No: 56516-DJ PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR 3.8 MILLION (US$5.83 MILLION EQUIVALENT) TO THE REPUBLIC OF DJIBOUTI FOR THE RURAL COMMUNITY DEVELOPMENT AND WATER MOBILIZATION PROJECT (PRODERMO) MAY 17, 2011 Sustainable Development Department Middle East and North Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective February 28, 2011) Currency Unit = Djibouti Franc (DJF) US$ 1 = SDR 0.6357 US$ 1 = DJF 177 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ADDS Agence Djiboutienne de Développement Social/Djiboutian Agency for Social Development AfDB African Development Bank AWF African Water Facility BGP Bureau de Gestion des Projets/Project Management Office CAS Country Assistance Strategy CDD Community-Driven Development CBO Community-Based Organization CERD Centre d’Etudes et de Recherche de Djibouti/Center for Studies and Research of Djibouti CGEP Comités de Gestion des Points d’Eau et des Pâturages/Water and Pasture User Association CCT Comité de Coordination Technique/Technical Coordination Committee CHW Community Health Worker CPL Comité de Pilotage Local/Local Development Committee CPN Comité de Pilotage National/National Steering Committee CPR Comité de Pilotage Régional/Regional Steering Committee DA Designated Account GDP Gross Domestic Product ESIA Environmental and Social Impact Assessment ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan EU European Union FAO Food and Agriculture Organization FFEM Fond Français pour l’Environnement Mondial/French Fund for the Global Environment FMS Financial Management Specialist GAFSP Global Agriculture and Food Security Program GIS Geographic Information System ICB International Competitive Bidding IDA International Development Association IFAD International Fund for Agricultural Development INDS Initiative Nationale pour le Développement Social/National Initiative for Social Development IUFR Interim Unaudited Financial Report JICA Japan International Cooperation Agency JSDF Japanese Social Development Fund MAEM-RH Ministère de l’Agriculture, de l’Elevage et de la Pêche, chargé des Ressources Hydrauliques/Ministry of Agriculture, Livestock and Fisheries in Charge of Water Resources ii MdS Ministère de la Santé/Ministry of Health M&E Monitoring and Evaluation MEFPP Ministère de l’Economie, des Finances et de la Planification, chargé de la Privatisation/ Ministry of Economy, Finance and Planning, in charge of Privatization MHUEAT Ministry of Housing, Urbanism, Environment and Planning NCB National Competitive Bidding NGO Non-Governmental Organization NPFS National Program for Food Security O&M Operations and Maintenance PDO Project Development Objective PFS Project Financial Statement PMU Project Management Unit / Unité de Gestion du Projet (UGP) PPM Procurement Plan PRODERMO Rural Community Development & Water Mobilization Project/Projet de Développement Rural Communautaire et Mobilisation des Eaux PROMES- Programme de la Mobilisation des Eaux de Surface et de Gestion Durables des GDT Terres/Program for Mobilization of Surface Water and Sustainable Land Management PTBA Plan de Travail et Budget Annuel/Annual Work Plan and Budget SAAHP Schéma Annuel d’Aménagement Hydraulique et Pastoral/Annual Hydraulic and Pastoral Planning Scheme SOE Statement of Expenses UNDP United Nations Development Program UNICEF United Nations Children’s Fund USAID United States Agency for International Development WFP World Food Program WHO World Health Organization Regional Vice President: Shamshad Akhtar Country Director: A. David Craig Sector Manager: Hoonae Kim Task Team Leader: Garry Charlier iii   Table of Contents I.  Strategic Context ..................................................................................................................... 1  A.  Country Context ............................................................................................................... 1  B.  Sectoral and Institutional Context .................................................................................... 3  C.  Higher Level Objectives to which the Project Contributes .............................................. 5  II.  Project Development Objective .............................................................................................. 5  A.  Project Development Objective ....................................................................................... 5  1.  Project Beneficiaries ..................................................................................................... 5  2.  PDO Level Results Indicators ...................................................................................... 6  III.  Project Description.................................................................................................................. 7  A.  Project Components ......................................................................................................... 7  B.  Project Financing.............................................................................................................. 8  1.  Lending Instrument....................................................................................................... 8  2.  Project Financing Table ................................................................................................ 9  C.  Lessons Learned and Reflected in the Project Design ..................................................... 9  D.  Grant Conditions and Covenants.................................................................................... 11  IV.  Implementation ..................................................................................................................... 13  A.  Institutional and Implementation Arrangements ........................................................ 13  B.  Results Monitoring and Evaluation ............................................................................ 17  C.  Sustainability .............................................................................................................. 18  V.  Key Risks and Mitigation Measures ..................................................................................... 18  A.  Economic and Financial Analysis .............................................................................. 19  B.  Technical Appraisal .................................................................................................... 20  C.  Financial Management ............................................................................................... 21  D.  Procurement ................................................................................................................ 22  E.  Social (including safeguards) ..................................................................................... 22  F.  Environment (including safeguards) .......................................................................... 24  Annex 1: Results Framework and Monitoring...................................................................... 26  Annex 2: Detailed Project Description ......................................................................................... 31  Annex 3: Implementation Arrangements ...................................................................................... 39  Annex 4: Operational Risk Assessment Framework (ORAF) ...................................................... 70  Annex 5: Implementation Support Plan ........................................................................................ 74  iv Annex 6: Team Composition ........................................................................................................ 78  Annex 7: Economic and Financial Analysis ................................................................................. 79  Annex 8: Water Resource Management Aspects.......................................................................... 97  List of Appendices Appendix 2.1: Summary of the PROMES-GDT .......................................................................... 35  Appendix 2.2: Areas of Intervention of Water Mobilization Programs in Djibouti ..................... 38  Appendix 3.1: MAEM-RH Organizational Chart ......................................................................... 69  List of Figures Figure 1: Institutional Arrangements under the PRODERMO ..................................................... 14  Figure 2.1: PROMES-GDT Intervention Areas............................................................................ 35  Figure 3.1: Institutional and Implementation Arrangements ........................................................ 40  Figure 3.2: Implementation Arrangements for Community Subprojects ..................................... 43  List of Tables Table 3.1: Existing PMU Staff and Incremental Staff Recruited under the PRODERMO .......... 41  Table 3.2: SAAHP Investment Financing Plan under the PRODERMO ..................................... 44  Table 3.3: Allocation of Grant Proceeds (in SDR million) .......................................................... 50  Table 3.4: Allocation of Grant Proceeds (in US$ million equivalent) ......................................... 50  Table 3.5: Thresholds by Method and Prior Review .................................................................... 53  Table 7.1: Value of time saved per cistern ................................................................................... 80  Table 7.2: Daily water needs for family livestock unit ................................................................. 81  Table 7.3.a: Additional animal and milk production per reservoir per year - Obock ................... 82  Table 7.3.b: Additional animal and milk production per reservoir per year -- Dikhil .................. 82  Table 7.3.c: Fodder production around reservoir per year............................................................ 83  Table 7.3.d: Project costs per reservoir ......................................................................................... 83  Table 7.4.a: Additional animal and milk production per borehole per year - Obock ................... 84  Table 7.4.b: Additional animal and milk production per borehole per year - Dikhil ................... 84  Table 7.4.c: Additional agricultural production per borehole per year......................................... 85  Table 7.4.d: Project costs per borehole ......................................................................................... 85  Table 7.5.a: Additional animal and milk production per well per year - Dikhil........................... 86  Table 7.5.b: Project costs per well per year .................................................................................. 86  Table 7.5.c: Agricultural production per well per year ................................................................. 86  Table 7.5.d: Project costs per well per year .................................................................................. 87  Table 7.6: Additional animal and milk production per grazing set-aside area per year ............... 88  Table 7.7: Income-Generating Activity - Fishing ......................................................................... 89  Table 7.8: Income-Generating Activity - Handicrafts .................................................................. 89  Table 7.9: Investments (quantities and benefits per unit) ............................................................. 91  Table 7.10: Value of labor days saved due to the water quality improvement ............................. 92  Table 7.11: Project benefits (DJF) ................................................................................................ 94  v PAD DATA SHEET Djibouti Rural Community Development & Water Mobilization / PRODERMO PROJECT APPRAISAL DOCUMENT MENA Agriculture Sector Date: May 17, 2011 Sector(s): Irrigation and drainage (30%); Country Director: A. David Craig Agricultural extension and research (30%); Animal Sector Manager: Hoonae Kim production (30%); Flood protection (10%) Team Leader(s): Garry Charlier Theme(s): Rural services and infrastructure (50%); Project ID: P117355 Water resource management (30%); Climate change Lending Instrument: Specific (20%) Investment Loan EA Category: B Project Financing Data: Proposed terms: [ ] Loan [ ] Credit [X] Grant [ ] Guarantee [ ] Other: Source Total Amount (US$M) Total Project Cost: 6.13 Cofinancing: Recipient: Local communities 0.30 Total Bank Financing: 5.83 IDA 5.83 New Recommitted Recipient: Republic of Djibouti Responsible Agency: Ministry of Agriculture, Livestock and Sea, in charge of Hydraulic Resources (MAEM-RH) Contact Person: Baragoïta Saïd Telephone No.: (253) 35 50 68/(253) 81 04 88 Fax No.: (253) 35 58 79 Email: maem_baragoita@hotmail.fr vi Estimated Disbursements (Bank FY/US$ m) FY 11 12 13 14 15 16 Annual 0.40 0.85 1.15 1.50 1.37 0.56 Cumulative 0.40 1.25 2.40 3.90 5.27 5.83 Project Implementation Period: Expected effectiveness date: 11/01/2011 Expected closing date: 05/31/2017 Does the project depart from the CAS in content or other No significant respects? If yes, please explain: N/A Does the project require any exceptions from Bank policies? No Have these been approved/endorsed (as appropriate by Bank N/A management? Is approval for any policy exception sought from the Board? No If yes, please explain: N/A Does the project meet the Regional criteria for readiness for Yes implementation? If no, please explain: N/A Project Development Objective The objective of the Project is to increase access of rural communities to water and enhance their capacity to manage water and agro-pastoral resources in the project areas using a participatory approach to community-based development. Project description Component 1: Priority Community Investment Subprojects. This component would finance priority community investments in the project areas contemplated in Annual Hydraulic and Pastoral Planning Schemes1, which are formulated and prioritized by the targeted communities through a participatory approach and in accordance with the project Operations Manual. Small- scale community investments are expected to include runoff water harvesting, soil and water conservation, small scale irrigated vegetable and fodder production, basic income-generating activities, etc. Component 2: Capacity Building and Provision of Technical Assistance. This component would finance capacity building and technical assistance to the Implementing Agency (the MAEM-RH) and its Project Management Unit (PMU), as well as to community development committees (CPLs) and grassroots organizations (water user associations, community groups, etc.) targeted by the project in order to support the formulation and implementation of participatory Annual Hydraulic and Pastoral Planning Schemes in the project areas. This would be accomplished through the provision of technical advisory services, basic equipment, training, study tours, and the carrying out of workshops and field visits : (i) for technical staff at the national and regional levels in the areas of participatory community-based development, 1 Schéma Annuel d’Aménagement Hydraulique et Pastoral (SAAHP) vii integrated water resource management, agronomy, and fisheries, among others; and (ii) to CPLs, beneficiary communities and grassroots organizations in the areas of operation and maintenance of water infrastructure, sustainable management of water and agro-pastoral resources, irrigation and crop production techniques, income-generating activities, and community organization. Component 3: Project Coordination and Management. This component would support the PMU through the provision of goods, works, consultant services, training and incremental operating costs associated with project management, implementation, monitoring and evaluation, and audits. Safeguard policies triggered? Environmental Assessment (OP/BP 4.01) Yes Natural Habitats (OP/BP 4.04) No Forests (OP/BP 4.36) No Pest Management (OP 4.09) No Physical Cultural Resources (OP/BP 4.11) No Indigenous Peoples (OP/BP 4.10) No Involuntary Resettlement (OP/BP 4.12) No Safety of Dams (OP/BP 4.37) No Projects on International Waters (OP/BP 7.50) No Projects in Disputed Areas (OP/BP 7.60) No Conditions and Legal Covenants: Financing Agreement Description of Condition/Covenant Date Due Reference 4.01.(a) - The Recipient has adopted an Date of Effectiveness Operations Manual, satisfactory to IDA. 4.01.(b) - The PMU has selected and engaged the services of a finance and administrative specialist for the PMU, a procurement specialist, and an accountant for the Project under terms of reference satisfactory to IDA. 4.01.(c) - The Project accounting system is in place, with adequate in-built controls and capable of tracking Project resources and expenditures and generating financial reports, including interim unaudited financial reports. 4.01.(d) - The National Steering Committee has been established by the Recipient in a manner satisfactory to IDA. 4.01.(e) - The PMU has been established by the Recipient within the MAEM-RH in a viii manner satisfactory to IDA. Schedule 2. Section I. A - The Recipient, through the MAEM- Covenant RH, shall carry out the Project in accordance with the following institutional and other arrangements: Schedule 2. Section I. A.1. * The National Steering Committee shall have overall responsibility for Project oversight, inter-agency coordination and policy guidance in accordance with the requirements, criteria, organizational arrangements and operational procedures set forth in the Project Operations Manual. Schedule 2. Section I. A.2. * The Recipient shall carry out the Project through the PMU, and the PMU’s regional offices in Obock and Dikhil, in accordance with the requirements, criteria, organizational arrangements and operational procedures set forth in the Project Operations Manual and shall not assign, amend, abrogate or waive any provisions of the Project Operations Manual without prior approval of IDA. The PMU will coordinate day-to-day Project activities, including responsibilities for reporting, auditing, procurement and financial management under the Project. Schedule 2. Section I. A.3. *The Local Development Committees shall prepare the Hydraulic and Pastoral Planning Schemes with support of the PMU in consultation with the Beneficiary Communities and the Beneficiary Communities Benefitting from a Community Subproject Grant. Schedule 2. Section I. A.4. *The Beneficiary Communities will participate in the identification, applicable co-financing, management, and maintenance of the Community Investment Subprojects. Schedule 2. Section I. A.5. *At all times during the implementation of the Project, the Recipient shall maintain the National Steering Committee, and the PMU with ix a composition, resources, and terms of reference satisfactory to IDA. Schedule 2. Section I. C.1. - The MAEM-RH, through the PMU, shall carry out the implementation of the non-income-generating and income-generating Community Investment Subprojects for the benefit of the Community Beneficiaries. Schedule 2. Section I. C.2. - For those Community Investment Subprojects that encompass income generation for the benefit of the Beneficiary Communities Benefitting from a Community Subproject Grant, the MAEM-RH, through the PMU, shall make Community Subproject Grants to Beneficiary Communities Benefitting from a Community Subproject Grant in accordance with eligibility criteria and procedures acceptable to IDA set forth in the Project Operations Manual, which shall include, inter alia, the following: Schedule 2. Section I. *No Community Investment C.2.(a) Subproject shall be eligible for financing out of the proceeds of the Financing unless the PMU has determined, on the basis of an appraisal conducted in accordance with the guidelines set forth in the Project Operations Manual that the Community Investment Subproject satisfies the eligibility criteria specified in the Project Operations Manual. Schedule 2. Section I. *The cumulative amount of C.2.(b) Community Subproject Grants made to each Beneficiary Community Benefitting from a Community Subproject Grant shall not, except with the prior approval of IDA, exceed the equivalent of USD 200,000. Schedule 2. Section I. *The Beneficiary Community C.2.(c) Benefitting from a Community Subproject Grant shall contribute in cash or kind at least 10% of the cost of the Community Investment Subproject. Schedule 2. Section I. C.3. - The MAEM-RH, through the PMU, x shall make each Community Subproject Grant under a Community Subproject Grant Agreement with the respective Beneficiary Community Benefitting from a Community Subproject Grant on terms and conditions approved by IDA. Schedule 2. Section I. D.1. - The Recipient shall carry out the Project in accordance with the provisions of the Project Operations Manual, the ESIA, the ESMP, and the ESMF, and wherever applicable, the Subproject EIAs, and the Subproject ESMPs, and shall not waive, amend, abrogate, or otherwise revise any provisions thereof without the prior approval of the Association. Schedule 2. Section I. D.2. - In case the MAEM-RH shall determine that any works under a specific Community Investment Subproject might entail any adverse environmental and social impacts, then prior to the commencement of such works under such Community Investment Subproject, the MAEM-RH shall carry out a Subproject EIA and a Subproject ESMP, as the case may be, satisfactory to IDA, in accordance with the provisions of the Project Operations Manual. Schedule 2. Section I. D.3. - The MAEM-RH shall ensure that adequate information on the implementation of the Subproject EIAs and the Subproject EMPs is suitably included in the Project Reports referred to in Section II.A of Schedule 2 of the Financing Agreement. Schedule 2. Section I. D.4. - The MAEM-RH shall ensure that all measures identified and described in the Subproject ESMPs are taken in a timely manner. xi I. Strategic Context A. Country Context 1. Djibouti is a small country of 23,200 square kilometers strategically located in the Horn of Africa at the southern entrance of the Red Sea. The country has a population of about 818,0002, with almost 30 percent of the population living in rural areas, some 12 percent in secondary cities and small towns, and the remaining 58 percent living in the capital city of Djibouti City and its immediate surroundings, which constitutes the center of the country’s economic activity. Djibouti is poorly endowed with natural resources. The sparsely populated hinterland is mainly an extension of the deserts of Ethiopia and Somalia. The country’s economy is based on rents derived from its strategic location: revenues generated directly or indirectly from the activities of international ports in Djibouti and related business (including the trade traffic transiting to and from landlocked Ethiopia), the financial sector, rents from the several foreign military bases hosted in the country, and foreign aid. 2. Djibouti’s socioeconomic indicators remain well below regional averages, despite improved economic performance in recent years. The country’s relatively high per capita GDP of US$ 1,1303 does not accurately reflect the living conditions that are prevalent in the country. Djibouti remains on the list of least developed countries, ranking 155th out of 182 countries on the United Nations Development Program (UNDP) Human Development Index in 2009. Poverty is widespread with about 75 percent of the population living in poverty, including 42 percent living in extreme poverty4. This is particular true in rural areas where more than 96 percent of the population is considered poor compared to 66 percent in small towns and 35 percent in Djibouti City. 3. Djibouti is extremely water-scarce, with conditions set to be exacerbated by population growth and climate change. Djibouti averages 150 mm of rainfall per year5 and has no perennial surface freshwater flow. Due to the climate, less than five percent of total rainfall reaches the water table, with the remainder lost to either evapotranspiration or flow to the sea due to flash floods. The country’s total annual water use is around 19 million cubic meters (Mm3), including 2.5 Mm3 for irrigation (13 percent) and 0.5 Mm3 for livestock (3 percent), with the remaining 84 percent for household and municipal uses.6 It is estimated that 20 percent of the population has no access to potable water and that more than 70 percent of the rural population and its herds do not have access to water within a reasonable distance. About 95 percent of total water use comes from groundwater aquifers, which are primarily recharged from rainwater runoff infiltration from seasonal streams (wadis or oueds). The sustainable water recharge rate of these aquifers is estimated at 10-20 Mm3 per year. However, due to demographic pressures, it is estimated that total water consumption will increase to about 29 Mm3 by 2015, thus putting additional pressure on groundwater resources. Furthermore, climate change impacts are projected to exacerbate these already precarious water resource challenges. Temperatures are projected to 2 2009 Census. 3 Atlas method, WDI, 2008. The Purchasing Power Parity (PPP) income was US$ 2,061 in 2007. 4 Poverty Reduction Strategy Paper (PRSP), 2004. 5 The Meigs classification system defines arid lands as follows: (i) extremely arid lands have at least 12 consecutive months without rainfall; (ii) arid lands have less than 250 mm of annual rainfall; and (iii) semi-arid lands have between 250-500 mm of rainfall. 6 Estimates for the year 2000 (FAO, AQUASTAT, 2005). 1 increase by 1.7-2.1°C by 2050, while precipitation is set to decrease by 4-11 percent7. This could lead to an increased severity of dry spells and an increased intensity of wet extremes, thus accelerating floods and erosion. Sea level rise is also projected to further exacerbate these impacts through saltwater intrusion of coastal aquifers (see Annex 8 on Water Resource Management Aspects for further details). 4. The country is highly dependent on imports and extremely vulnerable to variations in food prices, with most rural households in a state of extreme food insecurity. Overall food security conditions have deteriorated between 2004 and 2008. Erratic rains, drought and the increase in food and energy prices have affected up to 280,000 people during this period8. In 2007, the country’s global acute malnutrition rate was measured at 16.8 percent, with a 17.4 percent rate in rural areas, which is alarmingly above the 15 percent emergency threshold established by the World Health Organization (WHO). Two assessments carried out by the World Food Program (WFP) in 2008 estimated that about 80,000 people in rural areas were food insecure due to these shocks. Although the situation has improved due to more favorable rains, a WFP assessment in 2009 found that a significant number of households were still food insecure and in need of improvement of their nutrition. Moreover, around 90 percent of Djibouti’s food needs and 100 of its fuel needs are filled by imports, leaving the population to face precarious food security challenges. 5. The agricultural sector contribution to GDP, including agriculture, livestock and fisheries, is less than 4 percent, though 20 percent of the population depends on the sector for its livelihood. More than 80 percent of the rural population consists of nomadic and semi- nomadic herders who manage about 1 million heads of small ruminants (goats and sheep) as well as 50,000 heads of camels and 40,000 heads of cattle9. Livestock raising often represents the main source of subsistence for such households and contributes to 85 percent of the agricultural sector’s contribution to GDP. However, it is estimated that 63 percent of rangelands are already overgrazed, putting added pressure on livestock numbers that have already been decimated by 40 to 70 percent in the last few years due to severe and prolonged droughts10. 6. Sedentary farming remains very limited due to the general lack of water resources, soil salinity, and the pastoralist traditions among the rural population. Agriculture is marginally practiced in the country, and arable land is very limited, estimated at 10,000 ha, including 2,400 ha with a relatively easy access to irrigation. Given the country’s arid climate, farming can only be practiced under irrigation in the oases, along seasonal wadis and from wells. In 1999, it was estimated that 1,012 ha were cultivated under irrigation as fenced gardens, managed by about 1,300 farm households. The main cultivated crops include vegetables (with current production at 2,650 tons), fruits (2,920 tons) and date palms (118 tons), in addition to forage production for on-farm animals. The marine fisheries sector holds significant growth potential in terms of economic activity, though it remains largely artisanal with catches not exceeding 2,000 tons per year compared to an estimated potential of 47,000 tons11. 7 Djibouti: Initial Communication to the UNFCCC. December 2001. 8 WFP, 2009. 9 National Program for Food Security (NPFS), Ministry of Agriculture, Livestock and the Sea, 2009. 10 FAO, 2008. 11 NFPS (op.cit.) 2 B. Sectoral and Institutional Context 7. The National Initiative for Social Development (INDS)12 provides a comprehensive vision for economic growth and poverty reduction in Djibouti. Launched in 2007, the INDS is regarded as a reference framework for all development efforts in the country. It is built around four pillars: (i) ensuring macroeconomic stability and creating conditions for strong and sustainable economic growth; (ii) developing human resources and improving access to basic services, notably for women and youth; (iii) promoting the harmonious development of rural and urban areas by supporting investments in infrastructure and improving agriculture and livestock productivity, while preserving the environment; and (iv) improving governance and strengthening public sector management13. The Government is thus strongly committed to promoting rural development, particularly under the third pillar of the INDS. The Government is also committed to economic diversification in order to reduce dependency on the services sector. Livestock and fisheries are among the areas that offer the most promising opportunities for diversification14. 8. The Ministry of Agriculture, Livestock and the Sea, in Charge of Water Resources (MAEM-RH)15 is particularly committed to rural development and reducing rural poverty, guided by several strategic documents prepared in the last few years. Among these documents, the National Medium-Term Investment Plan16, prepared in 2005, constituted the basis for the Ministry’s contribution to the INDS formulation process. In 2010, a National Program for Food Security (NPFS) was finalized, constituting the Ministry’s plan of action for the implementation of the INDS during the 2010-20 period. The NFPS identifies thirteen priority projects grouped under six main themes: (i) water resource management; (ii) agricultural development in the oases; (iii) livestock development and improved health; (iv) fisheries development; (v) capacity building and human resource development; and (vi) studies. The implementation of the NFPS requires a total of US$ 109 million, with about 73 percent allocated to water-related projects. 9. The Government has already launched, in 2007, a major initiative for water mobilization under the Program for Mobilization of Surface Water and Sustainable Land Management (PROMES-GDT)17. This program is a response to the “Thirst Problem” that severely affects the rural and pastoral population during the dry season lasting about three to four months. During this period, the lack of access to water constitutes a major constraint to human and livestock mobility, and to the proper use of the limited and sparsely distributed agro-pastoral resources. Pastoral communities in Djibouti have historically developed agro-pastoral systems, allowing for the sustainable management of ecosystems characterized by high levels of aridity and relative scarcity of fodder resources. Through this system, based on the practice of transhumance, populations utilize pastures in different ecosystems and in different parts of the country based on a seasonal cycle, therefore allowing for greater flexibility in coping with seasonal droughts. However, this system is currently threatened by the progressive degradation of the natural resource base due mainly to overgrazing in areas where water is more easily 12 Initiative Nationale pour le Développement Social (INDS). 13 World Bank, Country Assistance Strategy (CAS), 2009. 14 Ibid. 15 Ministère de l’Agriculture, de l’Elevage et de la Pêche, chargé des Ressources Hydrauliques (MAEM-RH). 16 Prepared as part of the Comprehensive Africa Agriculture Development Program (CAADP) under the New Partnership for Africa’s Development (NEPAD) initiative. 17 Programme de la Mobilisation des Eaux de Surface et de Gestion Durables des Terres (PROMES-GDT). 3 accessible. As such, the main objective of the PROMES-GDT is to improve the living conditions of the pastoral communities while promoting the sustainable management of the natural resources. Its specific objectives are: (i) to implement a broad surface-water harvesting program in various regions of the country as a way to fight against human and animal thirst, and to improve agricultural production; and (ii) to strengthen institutional, technical and social capacities at the national level in the areas of organization and management. 10. The PROMES-GDT has adopted a participatory approach to water and agro-pastoral resource management in general, whereby beneficiary communities play an integral role in the identification, preparation, implementation, supervision, operation, and maintenance of community investments and subprojects, with technical assistance and training from the MAEM- RH Project Management Unit (PMU)18 central and regional office teams and with the involvement of local, sectoral, and administrative authorities. In terms of the planning of activities, this involves several key steps: (i) several informational meetings with communities, local and administrative authorities; (ii) the establishment of community-based structures such as local development committees, called Local Steering Committees (CPLs)19 within each parcours20, after consultation with the communities and the designation of CPL members by community leaders21; (iii) the reinforcement and/or establishment of water and pasture users associations (CGEPs)22 around each water point; (iv) the diagnostic and prioritization of needs in each of the parcours; (v) the preparation and validation of annual investment plans called Annual Hydraulic and Pastoral Planning Schemes (SAAHP)23 and related annual investment budgets or Annual Work Plan and Budget (PTBA)24; and (vi) the participatory implementation of adopted SAAHPs. 11. The total costs of the six-year PROMES-GDT are estimated at around US$ 13.6 million, to be funded by several donors including the International Fund for Agricultural Development (IFAD)25, WFP (through its Food-for-Work program) and the African Water Facility (AWF) of the African Development Bank (AfDB), as well as by Government funding. The PROMES-GDT is targeting three priority geographic areas: (i) the Day forest, in the northern region of Tadjourah; (ii) the “Petit Bara” and “Grand Bara” areas in the southern region of Arta; and (iii) the Gobaad region in the south-eastern region of Dikhil. However, other geographic areas with rural population facing similar needs and challenges remain unmet and require also attention and development investments. 12. The proposed PRODERMO project would aim to maximize synergies and complementarities with the PROMES-GDT and align its objectives and approaches with this Program, while targeting some of the geographic areas not yet benefiting from the PROMES- GDT. PRODERMO would also introduce innovative approaches, such as the emphasis on enhancing added-value of agricultural and livestock production (to increase the resilience, reduce the food insecurity, and improve the nutrition of households living in these areas), as well as 18 Unité de Gestion des Projets (UGP). 19 Comité de Pilotage Local (CPL). 20 A parcours is a local communal grazing area and represents the unit of intervention of the project. 21 The establishment of the CPL is documented by meeting minutes, where at least local customary authorities and communities are gather. 22 Comités de Gestion des Points d’Eau et des Pâturages (CGEP). 23 Schémas d’aménagement hydraulique et pastoral (SAAHP). 24 Plan de Travail et Budget Annuel (PTBA). 25 The IFAD grant for US$ 3 million was approved in December 2007. 4 rural development in general. Without implying any commitment from the World Bank at this early stage, the proposed project could also be seen as an important building block of a larger package that could help mobilize in the future: (i) possible GEF funding to better address and mitigate the impacts of climate change on rural livelihoods and the adaptation measures needed; and (ii) a Japanese Social Development Fund (JSDF) grant to complement and to build capacities of communities in poor peri-urban neighborhoods around the city of Djibouti to increase their resilience to shocks affecting food security and nutrition. C. Higher Level Objectives to which the Project Contributes 13. Alignment with the CAS. The Djibouti Country Assistance Strategy (CAS) for the 2009-12 period (Report No. 47273-DJ, March 30, 2009) was prepared with the explicit objective of helping the implementation of the INDS. The CAS is articulated around three core themes: (i) supporting economic growth; (ii) supporting access to basic social services and human development; and (iii) supporting governance and public sector management. 14. A principal relevant outcome of the CAS is identified as “strengthen social protection and direct support to the poor” (Outcome 2.3). Promoting rural development as an instrument for reducing poverty and vulnerability of rural communities to external shocks is an important area of dialogue between Djibouti and the World Bank. Within this context, the Bank will continue its engagement during the CAS period to help Djibouti mitigate the vulnerability of the poor, including against recurrent floods, droughts, food insecurity, and other external shocks. In alignment with the INDS, the CAS thus proposes a “water and small-scale rural development” project to mobilize water resources for small-scale agriculture, livestock, and other community- based rural investments. The CAS has allocated US$ 5.0 million for this project from the IDA 15 Facility. II. Project Development Objective A. Project Development Objective 1. Project Beneficiaries 15. Scope of Intervention. The proposed PRODERMO would focus its interventions in two geographic regions: (i) the Khor Angar-Obock area in the northern region of Obock; and (ii) the Cheiketi-Hanlé area, in the southern region of Dikhil. The unit of intervention is based on traditionally recognized local communal grazing areas or parcours, shared by a particular group of villages and communities who possess traditional grazing rights over a common area of rangeland. In total, the project area will cover three parcours, one in Obock and two the Dikhil. In Obock, the targeted parcours covers a total area of around 40,000 hectares. In the Dikhil region, the two distinct parcours cover a total area of around 80,000 hectares. The selection of these areas was based on criteria that included: (i) poverty rate and national development priorities; (ii) population density; (iii) importance of potential surface water to be mobilized; (iv) agro-pastoral potential; (v) coverage by other ongoing projects or programs; (vi) accessibility for implementation (heavy machinery, transport of raw material, supervision, etc.); and (vii) potential for income-generating activities. It is important to note that the PRODERMO aims to complement and expand PROMES-GDT activities by intervening in areas that are not yet 5 covered by the Program, and that have been identified as priority areas by the Government based on the criteria stated above. 16. Beneficiaries. The direct beneficiaries at the local level would primarily be household members in poor rural communities in the areas targeted by the project. Beneficiaries include small herders with small livestock, their families, women, youth and fishermen (Obock). It is estimated that around 3,000 households (1,000 in Obock and 2,000 in Dikhil) would benefit directly from the PRODERMO. Taking into account the average size of 6.2 individuals per household, the total number of beneficiaries would consist of about 18,500 people, representing approximately 8 percent of the total rural population of 240,000 in Djibouti (including youth, estimated at 54 percent of the population). On a regional basis, the project would therefore benefit approximately 24 percent of the rural population in Obock and 19 percent in Dikhil (estimated at 26,000 and 64,000 people, respectively). It is believed that Obock is one of the poorest regions of the country, with about 80 percent of the population considered poor. 2. PDO Level Results Indicators 17. The Project Development Objective (PDO) is to increase access of rural communities to water and enhance their capacity to manage water and agro-pastoral resources in the project areas using a participatory approach to community-based development. 18. PDO Level Results Indicators. The Project’s key performance indicators for monitoring and evaluation are: (i) Increase in the number of rural households with access to drinking water within a reasonable travel time (two hours roundtrip) in the project areas. Within this context, access to water is defined as an adequate quantity (50 L/person/day) and acceptable quality26; (ii) Increase in the number of heads of livestock with access to water within a reasonable distance (20 km radius) in the project areas; (iii)Increase in available grazing biomass27 in the targeted rangelands in the project areas. Grazing biomass in rangelands represents a good indicator in terms of the improved sustainable use of water and agro-pastoral resources, as the biomass is expected to increase with a reduced grazing pressure thanks to access to additional water resources. This is especially relevant as Djibouti’s rural population is semi-nomadic and follows a relatively limited geographic zone of transhumance. (iv) Creation and/or reinforcement of community structures and/or organizations participating in the planning, implementation, and monitoring of the activities defined in the participatory community development plans, or local SAAHPs in the project areas. 26 As water harvesting is only practical when rain falls, improved access to water in this case is therefore dependent on rainfall availability. It should be noted that rainfall in Djibouti can be very erratic, particularly in the drier Obock region, where rainfall may not occur for several years in a row. That said, the project also supports some rehabilitation and selective drilling of new wells, which can improve access to water on continuous basis. 27 Biomass increase will be measured in the areas set aside and protected by project activities, compared to “non-treated areas.” Increased biomass will be measured over a whole year with measurements taken around the end of the rainy season. 6 III. Project Description A. Project Components 19. Project design and innovations. To achieve its PDO, the project will implement several actions aiming at: (i) mobilizing surface and groundwater for human consumption as well as for small-scale community agricultural and livestock production activities to enhance the resilience of rural households to climate uncertainty, particularly droughts; (ii) enhancing the production and added value of agricultural and livestock activities of rural communities around water points; and (iii) strengthening the organizational, technical, and management capacity at the community level as well as the capacity of the implementing entity and its central and regional staff. The project is based on a participatory planning and implementation approach, allowing beneficiary communities to select small investment subprojects based on their needs and implement them at their own pace, in consultation with local and regional authorities and partners. 20. Component 1: Priority Community Investment Subprojects (US$ 3.46 million or 56% of total project cost; IDA US$ 3.16 million). This component would finance priority community investments in the project areas that have been included in SAAHPs28, formulated and prioritized by the targeted communities through a participatory approach and in accordance with the project Operations Manual. The funding will cover consultant services for carrying out the detailed design and supervision of the selected community investments, as well as goods and civil works for the implementation and operation of these community subprojects. Community investments are expected to be demand-driven and in the following specific sub-categories: (i) Water mobilization and soil conservation subprojects: covering the rehabilitation or construction of small water harvesting or collection infrastructures (underground cisterns, open- air reservoirs, shallow wells and borehole wells) for drinking water, livestock and agriculture, as well as soil and water conservation activities to protect water structures and to enhance vegetation regeneration around these structures; (ii) Agriculture and livestock subprojects: including rangeland development (through set- aside, re-seeding and shrub planting), improving livestock production, and supporting small- scale irrigated vegetable and fodder production; and (iii) Income-generating activities: on a pilot basis, such as handicrafts, fisheries, etc. This support will be done through community subproject grants in accordance with eligibility criteria and procedures acceptable to IDA and set forth in the Project Operations Manual. 21. Component 2: Capacity Building and Provision of Technical Assistance (US$ 0.73 million or 12% of total project cost; IDA only). This component would finance capacity building and technical assistance to the Implementing Agency (the MAEM-RH) and its Project Management Unit (PMU), as well as the community development committees (CPL) and grassroots organizations (water users associations, and community groups, etc.) targeted by the project to support the formulation and implementation of participatory SAAHPs in the project areas, while fostering the application of a participatory approach to local and community-based 28 Since PRODERMO intends to promote a participatory approach to local and community development, it is understood that the final choice of investments to be supported by the project will be the one prioritized by the beneficiary communities and included in the annual Planning Schemes prepared by the communities represented by the Local Development Committees (CPLs) in consultation and close coordination with the national authorities and relevant staff at the local, regional, and central levels. 7 development. To this effect, this component will also support the sensitization and mobilization of beneficiary communities and other project stakeholders in order to facilitate and enhance their effective involvement in the participatory planning and project implementation process. This would be done through: (i) Enhancing the capacity of the MAEM-RH and PMU: the provision of technical advisory services, basic equipment, training and study tours, the carrying out of workshops and field visits for technical staff at the national and regional levels in the area of participatory community-based development, integrated water resource management, agronomy, and fisheries, among others. This component will also fund specific technical studies, including a hydro-geological study in the Obock region. (ii) Enhancing the capacity of the beneficiary communities: (a) the provision of technical advisory services, basic equipment, training, and the carrying out of workshops and field visits to CPLs; and (b) provision of technical advisory services, training, and the carrying out of workshops and field visits to beneficiary communities organized in grassroots organizations (local Water and Pasture User Associations (CGEPs), community groups, etc.). Technical assistance and training will focus primarily on the operation and maintenance of water infrastructure, sustainable management of water and agro-pastoral resources, irrigation and crop production techniques, income-generating activities, and community organization. 22. Component 3: Project Coordination and Management (US$ 1.40 million or 23% of total project cost; IDA only). This component would support the PMU through the provision of goods, works, consultant services, training and incremental operating costs associated with project management, implementation, monitoring and evaluation, and audits. Incremental costs to be financed include incremental contractual staff costs, office rehabilitation works (in particular for the PMU regional office in Obock), equipment and operations, transportation equipment and operations, domestic travel, etc. It will also cover the costs of establishing and operating an M&E system for the project and the preparation of regular audits. B. Project Financing 1. Lending Instrument 23. The project will be financed by an International Development Association (IDA) Grant of SDR 3.8 million (US$ 5.83 million equivalent) to be implemented over five years. The total project cost is estimated at US$ 6.13 million, with contributions from local beneficiary communities estimated at US$ 0.30 million (in cash or in kind). 8 2. Project Financing Table 24. Project Cost and Financing Project cost IDA Financing Beneficiary Contribution Project Components (US$ % of (US$ % (US$ % million) Total million) IDA million) Beneficiaries 1. Priority Community Investment 3.20 52 2.90 91 0.30 9 Subprojects 2. Capacity Building and 0.73 12 0.73 100 -- -- Provision of Technical Assistance 3. Project Coordination and 1.40 23 1.40 100 -- -- Management Total Baseline Costs 5.33 5.03 94 0.30 6 Physical contingencies 0.27 4 0.27 -- Price contingencies 0.53 9 0.53 -- Total Project Costs 6.13 100 5.83 95 0.30 5 25. In accordance with the Operations Manual, community counterpart contributions are expected to be primarily in kind (unskilled labor and some construction materials such as stones, gravel, etc.). Community counterpart contributions are also expected as part of the income- generating activities funded by the project, whereby beneficiaries will be expected to contribute at least 10 percent of the required investment (in kind and/or cash). C. Lessons Learned and Reflected in the Project Design 26. The design of the proposed project takes into account lessons learned from the ongoing IFAD-funded PROMES-GDT and other similar operations in Djibouti and elsewhere. These include: 27. Specific lessons learned from the PROMES-GDT: (i) Realism in project planning. There is a clear need for a realistic-to-conservative planning of project activities and related disbursements that would take into account the limitation in implementation capacity and human resources available in the MAEM-RH and in Djibouti in general. In particular, the PRODERMO implementation timetable takes into account realistic time frames for critical activities such as the selection, hiring, and training of the PMU incremental staff, the corresponding learning curve, and for the mobilisation and sensitization of beneficiary communities in project areas. (ii) Ensuring an adequate implementation capacity. The implementation arrangements adopted initially by the PROMES-GDT relied primarily on staff seconded to the PMU by the MAEM-RH. While an important benefit of this arrangement is to ensure proper transfer of expertise at the national level, it has been recognized that this has also been a major cause of significant start-up delays in the implementation phase of the PROMES- GDT. This is because seconded staff had to split their time between their regular duties at the MAEM-RH and the additional responsibilities of implementing a demanding project. Taking into account this finding, adequate resources would be allocated to strengthen the operational and implementation capacities of the MAEM-RH and the PMU at all levels, 9 and in particular the regional and local levels through the recruitment of incremental and contractual staff. Adequate budget provisions have been made under the proposed PRODERMO to allow for the recruitment of these needed incremental staff working full- time on the project to effectively complement the personnel seconded by the MAEM-RH and to ensure satisfactory implementation progress and reduce the risk of excessive implementation slippages and delays. The preparation and adoption of a detailed project Operations Manual from the onset of project implementation would also be a significant contribution to strengthening implementation capacity. (iii)Keeping the design of community subprojects simple as an effective way to mitigate implementation risks and ensure satisfactory results. Most community investments targeted under the PRODERMO (underground cisterns, open-air reservoirs, etc.) are relatively simple in their technical design and implementable in a reasonable timeframe (up to six months as opposed to several years). This will facilitate the participation and involvement of communities in the implementation phase of subprojects. It will also ensure that demonstrable results are achieved within the timeframe of the annual participatory planning as a way to maintain the interest of the communities and avoid frustration and credibility loss in a lengthy planning process with very little concrete actions. (iv) Community information and mobilization capability on the ground is critical. The lack of sufficient extension agents to do the groundwork of informing and mobilizing beneficiary communities has been identified as one of the start-up delay factors in PROMES-GDT implementation. Capacity building and operations budget provisions under the proposed PRODERMO would facilitate the hiring of needed extension agents to cover the new areas targeted by the project. 28. General lessons learned from CDD projects: (i) Poverty-targeting methods should be simple, straightforward, and easy to monitor. This is particularly true in rural Djibouti where the poverty rates are estimated to be as high as 96 percent. The participatory approach to be adopted under the PRODERMO, with its participation requirements, would in itself promote the self-targeting of beneficiary communities. (ii) Ensuring close coordination and collaboration with other partners and donors. Donor coordination remains a critical issue and a significant challenge in Djibouti given the many international development partners already involved in water supply and rural development in general in Djibouti. These partners include the United Nations Children’s Fund (UNICEF), the AWF/AfDB, IFAD, the Japan International Cooperation Agency (JICA), the United States Agency for International Development (USAID), and WFP. Nevertheless, given the size of the country and the limited capacity of the public administration, coordination among development partners to ensure better integration and synergy takes on a particular importance in Djibouti. As indicated above, the proposed PRODERMO would build upon and expand the Government efforts already supported by IFAD and the AfDB through the PROMES-GDT Program in new areas, using to the extent possible the same oversight, steering, coordination, and implementation structures. In addition, the proposed PRODERMO would also seek to strengthen the collaboration 10 with other relevant national and international stakeholders (MdS, CERD29, ADDS30, UNICEF, WFP, etc.). (iii)Need to strengthen operational guidance and oversight for the application of Bank safeguard and fiduciary compliance. The MAEM-RH, its PMU, the regional and local authorities involved, and beneficiary communities will receive ongoing training and supervision in social, environmental, and fiduciary safeguards. D. Grant Conditions and Covenants Board Presentation:  An audit report acceptable to IDA for the closed Avian Influenza and Human Pandemic Preparedness Project has been submitted by the Recipient no later than April 30, 2011. Effectiveness:  The Recipient has adopted an Operations Manual, satisfactory to IDA.  The PMU has selected and engaged the services of a finance and administrative specialist for the PMU, a procurement specialist, and an accountant for the Project under terms of reference satisfactory to IDA.  The Project accounting system is in place, with adequate in-built controls and capable of tracking Project resources and expenditures and generating financial reports, including interim unaudited financial reports.  The National Steering Committee has been established by the Recipient in a manner satisfactory to IDA.  The PMU has been established by the Recipient within the MAEM-RH in a manner satisfactory to IDA. Covenants:  The Recipient, through the MAEM-RH, shall carry out the Project in accordance with the following institutional and other arrangements: o The National Steering Committee shall have overall responsibility for Project oversight, inter-agency coordination and policy guidance in accordance with the requirements, criteria, organizational arrangements and operational procedures set forth in the Project Operations Manual. o The Recipient shall carry out the Project through the PMU, and the PMU’s regional offices in Obock and Dikhil, in accordance with the requirements, criteria, organizational arrangements and operational procedures set forth in the Project Operations Manual and shall not assign, amend, abrogate or waive any provisions of the Project Operations Manual without prior approval of IDA. The 29 Centre d’Etudes et de Recherche de Djibouti (CERD). 30 Agence Djiboutienne de Développement Social (ADDS). 11 PMU will coordinate day-to-day Project activities, including responsibilities for reporting, auditing, procurement and financial management under the Project. o The Local Development Committees shall prepare the Hydraulic and Pastoral Planning Schemes with support of the PMU in consultation with the Beneficiary Communities and the Beneficiary Communities Benefitting from a Community Subproject Grant. o The Beneficiary Communities will participate in the identification, applicable co- financing, management, and maintenance of the Community Investment Subprojects. o At all times during the implementation of the Project, the Recipient shall maintain the National Steering Committee, and the PMU with a composition, resources, and terms of reference satisfactory to IDA.  The MAEM-RH, through the PMU, shall carry out the implementation of the non- income-generating and income-generating Community Investment Subprojects for the benefit of the Community Beneficiaries.  For those Community Investment Subprojects that encompass income generation for the benefit of the Beneficiary Communities Benefitting from a Community Subproject Grant, the MAEM-RH, through the PMU, shall make Community Subproject Grants to Beneficiary Communities Benefitting from a Community Subproject Grant in accordance with eligibility criteria and procedures acceptable to IDA set forth in the Project Operations Manual, which shall include, inter alia, the following: o No Community Investment Subproject shall be eligible for financing out of the proceeds of the Financing unless the PMU has determined, on the basis of an appraisal conducted in accordance with the guidelines set forth in the Project Operations Manual that the Community Investment Subproject satisfies the eligibility criteria specified in the Project Operations Manual. o The cumulative amount of Community Subproject Grants made to each Beneficiary Community Benefitting from a Community Subproject Grant shall not, except with the prior approval of IDA, exceed the equivalent of USD200,000. o The Beneficiary Community Benefitting from a Community Subproject Grant shall contribute in cash or kind at least 10% of the cost of the Community Investment Subproject.  The MAEM-RH, through the PMU, shall make each Community Subproject Grant under a Community Subproject Grant Agreement with the respective Beneficiary Community Benefitting from a Community Subproject Grant on terms and conditions approved by IDA.  The Recipient shall carry out the Project in accordance with the provisions of the Project Operations Manual, the ESIA, the ESMP, and the ESMF, and wherever applicable, the Subproject EIAs, and the Subproject ESMPs, and shall not waive, amend, abrogate, or otherwise revise any provisions thereof without the prior approval of IDA.  In case the MAEM-RH shall determine that any works under a specific Community Investment Subproject might entail any adverse environmental and social impacts, then prior to the commencement of such works under such Community Investment Subproject, the MAEM-RH shall carry out a Subproject EIA and a Subproject ESMP, as the case may be, satisfactory to IDA, in accordance with the provisions of the Project Operations Manual. 12  The MAEM-RH shall ensure that adequate information on the implementation of the Subproject EIAs and the Subproject EMPs is suitably included in the Project Reports.  The MAEM-RH shall ensure that all measures identified and described in the Subproject ESMPs are taken in a timely manner. IV. Implementation A. Institutional and Implementation Arrangements 29. On behalf of the Government of Djibouti, the MAEM-RH, through its existing PMU, will be the Implementing Entity responsible for project implementation. The other entities involved in project implementation include the beneficiary communities organized into CGEPs, CPLs, and other community groups, as well as the existing National Steering Committee (CPN)31, which was established for the purpose of the PROMES-GDT and AWF/AfDB projects and chaired by the MAEM-RH, and which will also serve as the PRODERMO’s overall national steering committee. The existing Technical Coordination Committee (CCT)32 created within the MAEM-RH at the central level, and the Regional Coordination Committees (CPRs)33 at the level of the targeted regions, will support project implementation in an advisory capacity. These arrangements are the same as those being used both in PROMES-GDT and AWF/AfDB projects. The role and responsibility of each of these entities are described below (and in more detail in Annex 3). 30. National Steering Committee (CPN). The main function of the inter-agency CPN, under the chairmanship of the MAEM-RH Minister, is to oversee general project implementation, approve the SAAHPs and related PTBA, review regular project progress and evaluation reports, and ensures overall consistency and alignment with relevant Government programs and projects active in the sector. As such, the CPN will also facilitate project relations and coordination with other public and non-public institutions. 31. The CPN is chaired by the Secretary General of the MAEM-RH, and its membership includes beneficiary representatives as well as representatives from the main public institutions involved in project implementation, various Department Directors of the MAEM-RH, representatives from the Ministry of Habitat, Urbanism, Environment, and Territorial Planning (MHUEAT)34 and from the Ministry of Economy, Finance, and Planning, in charge of Privatization (MEFPP)35, the Technical Secretariat for Water, one representative from the CERD and ADDS, regional Prefects, three community representatives, as well as donor agency representatives (WFP, FFEM36, UNDP, and IFAD for the PROMES-GDT). The CPN is supported by the CCT established within the MAEM-RH and chaired by the Secretary General of the MAEM-RH. Members include all directors from the technical directorates of MAEM-RH. Specifically, the CCT will be responsible for ensuring that the work plans and annual budgets prepared are well integrated with other regional/local programs and investments. 31 Comité de Pilotage National (CPN). 32 Comité de Coordination Technique (CCT). 33 Comité de Pilotage Régional (CPR). 34 Ministère de l’Habitat, de l’Urbanisme, de l’Environnement et de l’Aménagement du Territoire (MHUEAT). 35 Ministère de l’Economie, des Finances, et de la Planification, chargé de la Privatisation (MEFPP). 36 Fond Français pour l’Environnement Mondial (FFEM). 13 32. Regional Coordination Committees (CPRs) - one in Dikhil and one in Obock. The CPRs are permanent territorial entities established by the Government as part of the regional administration to ensure coordination of all development activities in each geographic region of the country. The CPR acts as a regional forum for consultation between local representatives and development actors. CPR members include representatives from various Line Ministries, the regional Prefect, a representative from the Regional Directorate for Rural Development as well as representatives from the Regional Council and Regional Assembly. The PRODERMO, through the regional PMU offices, will work in close collaboration and regularly consult with the CPR to validate the proposal for SAAHPs in an advisory capacity, with the aim of avoiding duplications, and it will also inform the CPR on the status of activities as well as the progress of the work program. 33. Project Implementing Entity. MAEM-RH. The MAEM-RH, through its established PMU, will be the implementing entity for the PRODERMO and as such will be responsible for overall project coordination and oversight, ensuring that project activities remain in line with its objectives and in compliance with the project Operations Manual, legal agreements, and overall Government program. Figure 1: Institutional Arrangements under the PRODERMO Steering Implementation Advisory Technical Coordination Committee (CCT) of the National MAEM-RH National Steering Other Partners PMU Central Committee (CPN) e.g. MdS, Office MHUEAT,CERD Other ministries, donors and institutions Regional PMU Regional Regional Coordination Offices Committees (CPR) Local Steering Committees (CPL) Local Other Partners Local Steering Water and Pasture e.g. UNICEF Committees (CPL) User Associations community (CGEP) health workers Other Beneficiary Groups (IGAs, etc.) 34. Project Management Unit (PMU). The PMU37, through its already existing structure (a central office in Djibouti and two regional offices located in Obock and Dikhil) and 37 The PMU was established by a Ministerial order of the Ministry of Agriculture in 2008 for the purpose of the PROMES-GDT. It is established within the Water Directorate of the MAEM-RH. It is the MAEM-RH’s mid-to-long-term goal to make 14 complemented by incremental staff and equipment financed by the PRODERMO, will be responsible for day-to-day project management and implementation, including the carrying out of all selected community investments and subprojects. Specifically, the PMU’s main responsibilities include: (i) effective sensitization and mobilization of beneficiary communities; (ii) support communities to strengthen their organizational structures and ensure their active and effective participation in the preparation, execution, and M&E of the SAAHPs; (iii) support beneficiary community organizations in the implementation of selected investments and subprojects; (iv) project reporting, as needed to IDA; (v) overall project fiduciary (financial and procurement) and safeguard management of the project; and (vi) project M&E and auditing. The PMU will be solely responsible for handling all financial transactions and procurement activities. It will also be responsible for promoting partnerships at the regional and local levels and facilitating the integration of SAAHPs in other partners’ development programs and investment plans. 35. The PMU is headed by a Project Coordinator of the PROMES-GDT, who is a senior professional and who will also serve as Project Coordinator for the PRODERMO. Assisted by a Deputy Project Coordinator for the PRODERMO, the Project Coordinator will oversee project implementation and monitoring at the national level. Specifically, the Coordinator will be responsible for preparing periodic work programs, methodological tools for monitoring, and the various progress reports required by the CPN and the World Bank as co-financers. The Coordinator will also ensure efficient coordination with project partners, particularly on the exchange of information and organization of common activities. At the regional office level, the two Regional Project Coordinators, in Obock and Dikhil, respectively, will be in charge of coordinating project activities in the context of the preparation, validation, and implementation of SAAHPs covering their respective areas, including community mobilization and organization into CPLs. Regional Project Coordinators will report to the Project Coordinator at the central level and work in close collaboration with the technical specialists in the PMU. 36. As indicated above, the approach adopted by the PROMES-DGT is to empower communities to prioritize, plan, and implement community investment subprojects, jointly with the local, regional, and central authorities including the MAEM-RH, through a participatory process. The proposed PRODERMO would also support and adopt this participatory and inclusive approach to community and local development. 37. Beneficiary Communities and CGEPs. Beneficiary communities will be generally organized into water and pasture user associations (CGEPs). CGEPs are usually constituted of the direct beneficiaries of an infrastructure (i.e. a water point) and can also be in charge of other activities in their areas, such as agro-pastoral activities. Often, CGEPs are already established around existing customary structures, which the project will seek to reinforce as existing and valuable support. The project will seek to establish new CGEPs only when none exist. In the context of the PRODERMO, beneficiary communities will be called upon to play, through their respective CGEPs, an integral role in the implementation, supervision, and maintenance of community subprojects, with technical assistance and training from the PMU central and regional office teams. operational and fully functional a Project Management Office/Bureau de Gestion des Projects (BGP) that would centralize support to the implementation of all externally-funded projects and programs. Once this goal materializes, the MAEMH-RH may consider seeking IDA’s prior approval for the purpose of the PRODERMO to relocate the PMU under or within the BGP. 15 38. Community Development Committees (CPLs). Beneficiary communities will also participate in the project through the local development committees or CPLs mentioned above. The CPL is representative of a group of villages and communities possessing traditional grazing rights over a common area of rangeland (parcours). Each CPL will comprise about 12 members, representatives of communities living in the parcours, including at least two women and 2 youth members per CPL. One CPL will be created per communal grazing area or parcours, hence the establishment of three CPLs is anticipated throughout project execution, given that 3 grazing areas are being targeted. 39. Specific roles of the CPL include: (i) representing the beneficiary communities vis à vis the PMU; (ii) participating in participatory diagnostics and preparing the indicative list of needs and potential investments to be included in the preliminary SAAHPs; (iii) validating and signing the approved SAAHPs; and (iv) overseeing the work of the CGEPs. In addition, the CPLs (often in consultation with the CGEPs) will be responsible for: (a) the regular maintenance of water mobilization subprojects in terms of labor and tools directly undertaken by the water management committees; (b) the organization of the water supply for human and animal consumption; (c) the monitoring of water quality in water mobilization subprojects; (d) the maintenance of rangelands and set-aside areas; (e) the enforcement of set-aside rules; and (f) general mobilization of community participation. The CPLs will also participate in the organization and supervision of labor-intensive works and will be responsible for monitoring of the SAAHP in terms of water availability during the dry season and the estimation of the biomass available in rehabilitated rangelands. 40. The PMU will seek to formalize and reinforce the role of these community-based structures (CPLs and CGEPs). It will seek to facilitate the formal recognition of the CPL and have this status recognized and signed by the Government representative at the local level, namely the Prefect. Assistance will be provided to the CPL to adopt by-laws, indicating the role of its members, the quorum needed, the numbers of meetings planned, the minutes to be taken during each meeting, and the criteria for member replacement. 41. Participation of women. Women would be consulted at all stages, including during the participatory diagnostic, to determine activities for water and agro-pastoral subprojects, during the formulation of the SAAHPs, and on the choices of structures to build and rehabilitate. Women will be members of the community-based structures and as mentioned, membership of CPLs is expected to include at least two women per CPL. 42. Other partners. The PRODERMO will also ensure close collaboration with national and international organizations/institutions already involved in water resource management and rural development in general in Djibouti. For instance, in terms of monitoring of water quality in water mobilization subprojects, UNICEF, in coordination with the Ministry of Health (MdS)38, recently trained around 100 community health workers (CHWs) across Djibouti on community mobilization and awareness regarding hygiene, sanitation, and water quality. 43. Operational procedures. The proposed project would be implemented according to detailed procedures defined in the Operations Manual. The Manual will include clear subproject cycles and rules. 38 Ministère de la Santé (MdS) 16 B. Results Monitoring and Evaluation Monitoring 44. The PMU will be responsible for the M&E of the project, including analysis of M&E data and the finalization of project progress reports. To this end, it will work in close collaboration with the relevant unit and staff of the MAEM-RH with M&E responsibilities. To address the current lack of capacity in this area, the PMU will be strengthened under the PRODERMO with a Deputy Project Coordinator with extensive experience in M&E who will assume the responsibility for all M&E activities, analyses, and reporting. The PMU will also monitor the project’s intermediate result indicators (see Annex 1) and provide a bi-annual update of these indicators to be included in the project’s bi-annual reports. Data collection, verification, and initial analyses will be the responsibility of the regional offices, specifically the regional Project Coordinators. The project will also fund the recruitment of four community/extension workers (two in each regional PMU), who will be responsible for community mobilization as well as regular field visits to follow up on project activities. These community workers will also play a critical role for the M&E system, particularly with data collection. In addition to the community workers, technical staff of the PMU will carry out surveys on the results of water investments under the project as well as perform critical analyses. At the end of each year, the results of the SAAHPs will be assessed jointly by the communities and the relevant regional PMU. The results will be consolidated on a yearly basis at the regional and national levels to provide an initial assessment of project results, as well as inform the activities to be included in the subsequent year’s updated SAAHP. 45. The PMU already has a well-functioning Geographic Information System (GIS), which will be used to integrate the M&E database to allow better spatial monitoring of project activities. Moreover, the M&E activities of the PRODERMO and PROMES-GDT will be integrated in a single system which would serve as a nucleus for the overall M&E system at MAEM-RH and which would continue to operate beyond the completion dates of the these projects. 46. It is also proposed that the PMU coordinate closely with the CERD for the monitoring of the hydrological aspects of water investments and with the CHWs trained by UNICEF for water quality monitoring. The PMU technical staff will further benefit from the international and national expertise of experts in the field of water resource management, agronomy, and others to be financed under the project. Evaluation 47. An independent consultant will be recruited to carry out the baseline study for the PRODERMO, with close supervision by the PMU, within six months of project effectiveness. Baseline surveys, including an assessment of the socioeconomic conditions and an agro-pastoral and water resource diagnostic will be completed for the project areas. Similarly, the PMU will also contract independent consultants to prepare the mid-term and end-of-project evaluations, including updated surveys of the socioeconomic conditions and agro-pastoral and water resources in the project areas. The mid-term evaluation will assess the operational aspects of the project, namely progress in the completion of activities and the achievement of the PDO. The mid-term evaluation will also include recommendations for corrective measures, if needed, for project implementation to remain on track. The end-of-project evaluation will have the same 17 scope as the mid-term review but will focus particularly on project outcomes and results at the local, regional, and national level. The end-of-project evaluation will also provide recommendations in terms of M&E and replication of best practices, especially for the sustainable mobilization of water and agro-pastoral resources for better access by rural households and their herds. Terms of reference for the mid-term and end-of-project reviews will be agreed upon with IDA and included in the Project Operations Manual. C. Sustainability 48. The Government of Djibouti is committed to rural development and poverty reduction as demonstrated by the priority axes of the INDS, the level of national resources allocated, and by the launch of major initiatives to mobilize water resources such as the PROMES-GDT, among other donor-funded initiatives. At the project level, the MAEM-RH/PMU has demonstrated a high level of commitment to the project through accelerated project preparation and already has an established operational capacity through the PROMES-GDT, which will be complemented by PRODERMO resources for interventions in the new project areas. Sustainability of the proposed project will ultimately depend on the successful integration of the participatory approach in local and regional development plans and the continuing maintenance of water mobilization and agro- pastoral resource subprojects, and at project level by the proper implementation and operation of the proposed project. The active participation of the local communities in the selection and prioritization of investment subprojects will ensure a buy-in by the communities and their commitment to provide the necessary in-kind contribution in the construction as well as the operation and maintenance of structures. The creation and/or re-enforcement of the CGEPs will ensure the long-term sustainability of these investments. The enhanced capacity of the local communities, as well as of the MAEM-RH, in participatory planning and development would empower local communities to actively pursue community-based development activities with the support of the Government and development partners. 49. The sustainability of PRODERMO achievements will be enhanced given the prospects for scaling up of project activities to other geographic areas of the country, particularly if the results are encouraging. Funding for scaling up could be mobilized from donors who are already active in the rural areas (such as IFAD and AfDB), as well as from other donors who have shown interest in supporting the rural and water sectors in Djibouti. The Global Agriculture and Food Security Program (GAFSP) and JSDF could also be potential sources for additional financing to the PRODERMO that could allow scaling up project activities. Such scaling up would benefit from the administrative structure set up by the PRODERMO (as well as the PROMES-GDT), resulting in substantial reduction of overall overhead costs. V. Key Risks and Mitigation Measures 50. Potential risks are summarized in the Operational Risk Assessment Framework (ORAF) in Annex 4. Although the project will be implemented by an established Government implementing entity with experience in a similar operation under the PROMES-GDT, and while most proposed project activities and anticipated community investments are expected to be fairly simple technically, the community-based development nature of the project as well as the weak institutional context will add substantial challenges to the implementation process. Moreover, the very arid and unpredictable climate introduces a very high level of weather-related risk to the 18 project. The overall project risks are rated high. Identified risks are manageable and mitigation measures have been determined. VI. Appraisal Summary A. Economic and Financial Analysis 51. The project includes a group of investment subprojects with impacts that can be quantified with reasonable accuracy, and another group with impacts that would be much more difficult to quantify without lengthy/costly surveys. The first group is composed of the following (refer to Annex 7 for further details): (i) The construction of underground cisterns. The cisterns have a capacity of 100 m3 each and will improve the households' access to potable water over a three-month period during the dry season. This will reduce drudgery and the travel distance to fetch water, particularly for women. It is estimated that the 26 cisterns to be constructed in Obock and Dikhil will supply quality water to 312 families (1,872 persons) daily over a three-month period. It is further estimated that around two hours of travel time (half the current average time) will be saved daily per family, with a total saving value for all the families and cisterns of US$ 20,624 (DJF 3.65 million) every three months. (ii) The construction of open-air water reservoirs, with planting of fodder shrubs around the edges. The reservoirs have a capacity of 10,000 m3 and will improve the livestock's access to water, particularly during the dry season. When combined with the improvements of pastures, this will enhance the overall health and nutritional status of the flock. This will result in lower mortality rates and higher meat/milk productivity. It is estimated that the five reservoirs in both Obock and Dikhil will supply water to 4,304 heads of small ruminants, camels, and cattle. The additional meat and milk production, with all the reservoirs in both project areas, is estimated at US$ 153,581 (DJF 23.3 million) per year. (iii) The construction or rehabilitation of boreholes. The boreholes are more than 10 meters deep, and the water supplied is mainly for animal consumption but also some for agriculture. It is estimated that the seven boreholes in both Obock and Dikhil will supply water to 3,472 heads of small ruminants, camels, and cattle. Moreover, each borehole will provide water for irrigating slightly more than one third of a hectare in Obock and half a hectare in Dikhil. The value of the additional meat, milk, and fodder production with all the boreholes in both project areas is estimated at US$ 157,004 (DJF 27.7 million) per year. (iv)The construction of shallow wells. These wells will be constructed only in Dikhil; they will be up to 10 meters deep. There are three planned wells for livestock use and 15 wells for agriculture. It is estimated that the three wells will supply water to 1,984 heads of animals, whereas the 15 wells will provide water for irrigating 1.2 hectare each. The value of the additional meat, milk, and horticultural production from all the wells is estimated at US$ 95,725 (DJF 16.9 million) per year. (v) The establishment of grazing set-aside areas, with partial reseeding. These areas are meant to provide more productive and more secure pastures for the livestock, 19 particularly in times of droughts. Each set-side area is around 400 ha and will be closed off during a period of two years, coupled with partial reseeding, then reopened for controlled grazing. It is estimated that the 11 set-aside areas in both Obock and Dikhil will accommodate 4,851 small ruminants (the overwhelming component of all family flocks), with additional meat and milk production valued at about US$ 12,737 (DJF 2.2 million) per year. (vi) The promotion of income-generating activities. The PRODERMO will fund, on a pilot basis, a portfolio of small income-generating activities in the project areas to complement the benefits gained from the community subprojects. These activities, mainly for handicrafts and fishing (in Obock), will complement the households' incomes. Indicative budgets show that both fishing and handicrafts are financially attractive. 52. The combined amounts of all of the above-mentioned benefits do not include several unquantifiable benefits that certainly amount to substantial socio-economic values. Among those are the following: (i) Improved health conditions due to access to potable water of better quality, translated into savings in the part of the Ministry of Health's budget related to combating these diseases. (ii) The soil/water conservation works will serve mainly to reduce the erosion threatening water mobilization structures but will also improve soil productivity in specific sites, which will bring additional benefits depending on the use made of these sites. (iii) In the case of income-generating activities, some of the net benefits from these activities will likely be re-invested and generate additional benefits. (iv)The institutional strengthening of the communities and of the MAEM-RH resulting in and better planning of development activities and better care by the communities of the various water mobilization and agro-pastoral structures put into place for their benefit. 53. Based on the estimates of the quantified benefits, calculations suggest that the project ERR over 20 years could be at the level of around 12 percent, which can be considered acceptable, given the community development nature of the project and the subsistence-nature of economic conditions in the rural areas of Djibouti. 54. Finally, with the project being about rural community development, the ultimate objective is to improve the socioeconomic and living conditions of target groups. The direct benefits in the two project area will have a multiplier effect difficult to evaluate without lengthy/costly surveys. Moreover, although of limited magnitude for the country as a whole, all these benefits could be crucial for the vulnerable households and rural communities involved. B. Technical Appraisal 55. The final make-up of each SAAHP will depend on beneficiary community development constraints, needs, and expectations. SAAHPs are expected to be typically composed of physical outputs (small-scale surface water harvesting structures, including underground cisterns (of 100 m3 capacity), excavation ponds (of 10,000 m3 capacity), pastoral and agricultural borehole wells, and the rehabilitation and/or construction of drilled wells, soil and water conservation works 20 around surface water collection structures and/or upland watershed sections, and income- generating activities that include rangeland development (through set-aside, re-seeding and shrub planting), improved livestock husbandry, crop production, handicrafts, fisheries, women organizations, etc. These activities are aligned with some of the most basic needs of the communities. They are expected to be modest in size with simple and conventional designs, without the need for major, complex civil works, and well within the technical reach of the staff and beneficiaries involved, as evidenced by the experience of the ongoing PROMES-GDT. In addition, lessons learned regarding the need for technical improvements (e.g. allowing greater time for subproject execution and inclusion of Operation and Maintenance [O&M] arrangements) have also been incorporated the design of the proposed project. 56. However, the decision on the drilling of wells will depend on the findings of hydrological assessments to ensure that the capacity of the proposed wells does not exceed the sustainable recharge rates of the very limited and fragile aquifers in the project areas, particularly in Obock. The rehabilitation and/or expansion of existing drilled wells will also depend on similar assessments. Similarly, the possible support to the reinforcement of the small desalination plant recently installed in the fishing village of Khor Angar in the Obock region will require a successful and strong community mobilization and organization to ensure the sustainability of plant operation. In the case of income-generation activities, each of these subprojects will be subject to technical and financial feasibility assessments before funding is approved. 57. Estimates of investment costs, physical contingencies, and price of inputs and outputs are based on actual data from the MAEM-RH specialized directorates and from the ongoing PROMES-GDT, and are considered accurate. Proper technical standards for the specific community investments planned will be ensured through standardized designs (including engineering aspects, technical, financial and economic feasibility, O&M, simple environmental guidelines, and cost parameters). All subprojects will be screened by qualified MAEM-RH and PMU staff, and technical assistance will be made available to community organizations to assist in subproject identification, implementation and O&M. C. Financial Management 58. An evaluation of the financial management capacities of the PMU, responsible for managing the PRODERMO, was conducted as part of the preparation for the project through: (i) a series of meetings held with the Project Coordinator and the PMU Financial Management Consultant; (ii) field visit; and (iii) a review of PMU project financial reporting and documentation. 59. The PRODERMO would be the first experience of an IDA-funded operation with the MAEM-RH. Furthermore, the current PMU staff has limited experience with donor project financial management and controls (IFAD, AfDB). 60. The PMU financial management capacity is weak, and the PMU’s previous experience with IFAD shows that the PMU was unable to produce, within acceptable deadlines, reliable accounting and financial reporting. 61. The main identified risks are the following: (i) The lack of capacity of PMU staff to manage the project, notably a large number of activities in scattered locations. Lack of capacity of community groups; 21 (ii) Misuse of Per Diem allocation; (iii)The commingling of funds from different donors. 62. In view of the risks identified and the weaknesses observed, the overall financial management risk is deemed to be high at this stage. 63. In order to mitigate the risks listed above, the following terms have been agreed: the PMU will satisfy the recommendations listed in the action plan (see Annex 3) in order to establish and maintain an acceptable financial management system. The main recommendations are: (i) design and implement an Operations Manual for the PMU for the purpose of the PRODERMO; (ii) hire a Financial Management Specialist for the PMU and recruit an accountant for the proposed PRODERMO project; and (iii) operationalize the accounting software. D. Procurement 64. The PMU, under the MAEM-RH, is responsible for drafting bidding documents for the procurement and selection of consultants, particularly with regard to the technical specifications and the Terms of Reference, respectively, for implementing the procurement process, and for managing contracts later on. 65. Overall, the new Djiboutian procurement Manual of Procedures for goods, works, and employment of consultants is in line with the Bank's procedures. The country has, since May 2010, adequate standard bidding documents and requests for proposals similar to the Bank’s ones. The PMU has had previous experience with other donor projects such as IFAD, AfDB, and the French Global Environment Facility (FFEM), but has not yet implemented an IDA-financed operation. Furthermore, the PMU does not actually have sufficient space in furnished offices to keep records in an adequate manner. However, this capacity could be improved, provided that the recommended mitigation actions set in the action plan are taken before the project’s effectiveness. The Procurement Plan is ready and was approved by the Bank on March 30, 2011, at the time of negotiations, and is attached to the Minutes of Negotiations (see Annex 3 for more details). E. Social (including safeguards) 66. Social aspects. The PRODERMO proposes to target around 3,000 vulnerable households, in particular small herders and their families, women and youth, and fishermen (Obock), mostly of vulnerable economic status (further detailed in Annex 3). 67. PRODERMO entails a participatory approach (as detailed in section IV on implementation arrangements), which should enable communities, including women, to take part in the decision- and design-making process of the activities to be implemented in their communities. Capacity building of staff and of communities is planned for. In particular, it is noteworthy that there will be extension workers based in each region to work closely with the communities. The PMU may seek to establish a partnership (convention of activities) with the Unit for Decentralized Management of Water Points (Directorate for Water - MAEM-RH) in terms of community mobilization in particular, establishing, training, and monitoring the water management committees and CPLs. This unit is involved in the mobilization and monitoring of community structures. 22 68. Beneficiary communities will be generally organized into water and pasture user associations (CGEPs). CGEPs are usually constituted of the direct beneficiaries of an infrastructure (i.e. a water point) and can also be in charge of other activities in their areas, such as agro-pastoral activities. In the context of the PRODERMO, beneficiary communities will be called upon to play, through their respective CGEPs, an integral role in the implementation, supervision and maintenance of community subprojects, with technical assistance and training from the PMU central and regional office teams. Beneficiary communities will also participate in the project through the local development committees or CPLs mentioned above. The CPL is representative of a group of villages and communities possessing traditional grazing rights over a common area of rangeland (parcours). Each CPL will comprise about 12 members, representatives of communities living in the parcours, including at least two women and two youth members per CPL. 69. Social Safeguards. Involuntary physical resettlement of populations is not foreseen in the context of the project. Involuntary land acquisition (expropriation) is not foreseen either. Accordingly, OP 4.12 will not be triggered. It has been discussed with the counterparts that subprojects requiring either expropriation or involuntary resettlement of populations would not be eligible for financing under the proposed project. 70. An Environmental and Social Impact Assessment (ESIA) was prepared by the counterparts, including a consultation process with local administrative and traditional authorities, community representatives, and community based organizations. The ESIA was disclosed in Djibouti on January 29, 2011, at the MAEM-RH central office and regional offices in Obock and Dikhil as well as on the PROMES-GDT and ministry websites. The ESIA was disclosed at the Infoshop on February 1, 2011. 71. In the context of the PRODERMO, some activities under Component 1 will require the use of land. The determination of land areas to be used without compensation, and the decision to allocate these areas for the implementation of project activities, will be done in a participatory manner, on the basis of: (a) consultation meetings with administrative and customary authorities, and (b) local steering committees which represent communities. The decision to use these designated areas of land will be documented in the SAAHP, which is prepared by the local steering committee, with the support of the PMU and which lists: (a) the activities chosen by the communities of the specific locality, and (b) the land areas designated in common, without compensation, to implement those activities. The SAAHP will be signed by various authorities including the community leader (chef de village), members of the CPL, the representative of the administrative authority (sous-prefecture), and the representative of the PMU and will constitute a formal agreement between the customary and administrative authorities regarding the voluntary use of specific parcels for the implementation of activities. The PMU (central and regional) will retain copies of all signed SAAHPs. It has been discussed with the counterparts that a copy of the SAAHP will also be available at community level (CPL) and at local administrative level. 72. Institutional arrangements for safeguards. The MAEM-RH will be the responsible Government implementing agency with day-to-day management of the project handled through the PMU. Consultation and agreement of voluntary land use by the communities and authorities should be monitored and documented by the field extension workers (animateurs), under the supervision of the regional PMU coordinators. Reporting on these matters will be performed at regional and central level. 23 F. Environment (including safeguards) 73. Environmental aspects. One of the objectives of the project is to provide rural households with better access to water for human and animal consumption. In a water-scarce country that also lacks permanent surface sources of freshwater, the project will enable communities to better manage and use water and agro-pastoral resources in a participatory and integrated manner. Based on environmental implications of its interventions, the project is classified as an environmental Category B. The safeguard operational policy for Environmental Assessment (OP 4.01) is triggered. As such, the recipient of the IDA grant prepared an Environmental and Social Impact Assessment (ESIA), including an Environmental and Social Management Plan (ESMP). 74. Main impacts and proposed mitigation measures.39 The ESIA reviews the environmental and social aspects of the project according to both Djibouti’s legal framework and to the World Bank rules and procedures. It identified measures to be taken and described the procedure to be implemented to ensure that potential risks to the environment are adequately assessed and managed. The objective of this analysis is to help ensure the quality and sustainability of investment projects by assessing the potential impacts of the proposed project on physical, biological, socioeconomic, and cultural as well as on health and human security. 75. The PRODERMO is a participatory project designed to meet the social, environmental, and economic needs of beneficiaries. Overall, project activities (subprojects) will result in positive impacts on the environment and living conditions of affected populations. However, it is expected that construction and operation activities under Component 1 could have some negative impacts. The environmental assessment established that the project will not create significant or irreversible negative impacts on the environment. Most potential negative environmental impacts are expected to be minor, temporary, and site-specific in nature and could be mitigated by implementation and compliance with the ESMP. Additionally, the reinforcement of the existing 200 m3/day capacity desalination plant40 in the Khor Angar area in the Obock region could be a possible subproject under the PRODERMO. In that case, the project will first undertake a feasibility study by reviewing the water supply system in Khor Angar. Furthermore, the project will prepare a separate environmental assessment and management/monitoring plan for the desalination plant which will need to be reviewed and cleared by IDA before the implementation can begin. 76. Environmental assessment process. The Environmental and Social Management Framework (ESMF), Chapter 7 of the ESIA, will be translated into the operations manual used to guide the implementation of the project from day to day. The approach to the environmental and social analysis of subprojects is integrated into the design, review, and approval process of subprojects by local authorities. The extent of mitigation required will depend on the level of impact of a subproject. A screening checklist was specifically designed to help communities avoid or minimize environmental and social impacts while developing their subprojects. Officials of the PMU and local authorities who will review applications will then determine whether further studies or detailed plans for managing impacts are required before approval of a subproject. 39 See Annex 8 on Environmental Safeguards for the ESMP for further details. 40 See Annex 2, Component 1.1, for further details on the Desalination Plant. 24 77. Public Consultation and Disclosure of ESIA. Stakeholder consultations were carried out during preparation of the ESIA. The report includes a summary of the outcome of these discussions. The ESIA was prepared in French. In accordance with World Bank disclosure policy and guidelines, the executive summary of the ESIA was translated into English, and both versions were disclosed at the World Bank’s Infoshop before project appraisal. They were also disclosed in-country in easily accessible places to the public, including the website of MAEM- RH and its regional offices. The disclosure date in Djibouti was January 29th, 2011. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X 25 REPUBLIC OF DJIBOUTI RURAL COMMUNITY DEVELOPMENT & WATER MOBILIZATION PROJECT (PRODERMO) Annex 1: Results Framework and Monitoring Project Development Objective (PDO): To increase access of rural communities to water and enhance their capacity to manage water and agro-pastoral resources in the project areas using a participatory approach to community-based development. Cumulative Target Values** Resp. for Description Core PDO Level Results Unit of Data Source/ (indicator definition Baseline YR YR YR Freq. Data Indicators* Measure YR3 YR5 Meth. etc.) 1 2 4 Collection Indicator One: # of No later 500 1,350 Mid-term Reports Consultants/ “More secure access” Increase in the number of households than 6 and end of PMU is defined as an rural households with months project adequate quantity (50 more secure access to after L/person/day) and drinking water within a effective- acceptable quality reasonable travel time ness ensured through Y (two hours roundtrip) in water monitoring, the project areas during the dry period. The amount of water harvested in water structures is dependent on rainfall. Indicator Two: # of heads of No later Mid-term Reports Consultants/ “More secure access” Increase in the number of livestock: than 6 and end of PMU is defined as an heads of livestock with - small months 8,100 20,400 project adequate quantity (50 more secure access to ruminants after L/day for large water within a reasonable effective- ruminants and 3 distance (20 km radius) in - large ness 1,300 3,400 L/day for small N the project areas ruminants ruminants), during the dry period. The amount of water harvested in water structures is dependent on rainfall. Indicator Three: - # of forage No later 84,560 377,300 Mid-term Reports Consultants/ Biomass productivity Increase in available N units than 6 and end of PMU is dependent on grazing biomass in the months project rainfall. 26 targeted rangelands in the after project areas effective- ness Indicator Four: # of 4 19 39 Mid-term Reports Consultants/ Communities in the community- and end of PMU project areas are based project organized in community- N structures based structures (CPLs, (CPLs, CGEPs and CGEPs, women/fishermen women/ associations) that actively fishermen prepare and implement associations) SAAHPs INTERMEDIATE RESULTS Intermediate Results (Component One): Priority Community Investment Subprojects 1.1. Water mobilization and soil conservation subprojects Rural households in project areas have better access to water for human and animal consumption, and rangelands are protected against further degradation by soil and water conservation works. 1.2. Agriculture and livestock subprojects Rural households in project areas benefit from an improvement in the management and use of agro-pastoral resources. 2.3 Income generating activities Rural households in project areas benefit from support for the creation/reinforcement of income-generating activities. PDO Level Results Unit of Measure Base Cumulative Target Values** Freq. Data Resp. Description Core Indicators* line Source/ for (indicator YR 1 YR 2 YR 3 YR 4 YR 5 Meth. Data definition etc.) Coll. Intermediate Result - # of cisterns and 0/0 0/0 4/390 10/1,040 18/1,820 26/2,600 Annual Surveys PMU The indicator Indicator One: total capacity (m3) measures Increase in the number - # of open 0/0 0/0 1/10,000 2/20,000 4/40,000 5/50,000 incremental and total capacity of reservoirs and total increase in constructed/rehabilitated capacity (m3) capacity of water structures supported - # of drilled wells 0/0 0/0 0/0 2/43,800 5/109,500 7/116,800 water structures. Y by the project and total capacity (m3) - # of pastoral 0/0 0/0 0/0 1/9,125 2/18,250 3/27,375 wells and total capacity (m3) - # of agricultural 27 wells and total 0/0 0/0 2/73,000 6/219,000 11/401,500 15/547,500 capacity (m3) - # desalination 0/0 0/0 0/0 1/36,500 1/36,500 1/36,500 plant and total capacity (m3) Intermediate Result ha of treated 0 1,600 3,200 4,400 4,400 4,400 Annual Surveys PMU Indicator Two: grazing areas Area of grazing areas set N aside and/or rehabilitated by soil and water conservation works Intermediate Result ha 59.25 59.25 62 70 81 89 Annual Surveys PMU Indicator Three: Rehabilitated/new N irrigated areas valorized - # of income- 0 0 7 23 38 50 Annual Surveys PMU generating N activities Intermediate Result created/reinforced Indicator Four: - # of women 0 0 3 11 19 25 Number of functional income-generating income-generating activities activities supported by the created/reinforced project - # of functional 0 0 0 11 19 25 income-generating activities (1 year after their creation) Intermediate Results (Component Two): Capacity Building and Provision of Technical Assistance (TA) 2.1Enhancing the capacity of the MAEM-RH and PMU Capacities of MAEM-RH staff at the central and regional levels are reinforced, including in participatory community development, water and agro-pastoral resource management, and fiduciary and safeguard procedures. 2.2 Enhancing the capacity of the beneficiary communities CPLs, CGEPs and other groups are established and/or benefit from a reinforcement of their capacities, including in participatory water and agro-pastoral resource management. PDO Level Results Unit of Measure Base YR 1 YR 2 YR 3 YR 4 YR 5 Freq. Data Resp. Description Core Indicators* line Source/ for (indicator Meth. Data definition etc.) Collect. Intermediate Result - # of SAAHPs 0 3 6 9 12 5 Annual Surveys PMU Indicator One: prepared and being Number of functional implemented 28 community-based N structures - # of meetings of CPLs and CGEPs 0 45 110 200 335 510 held - # of training sessions attended 0 6 12 18 24 30 - # of functional subprojects 1 year 0 0 6 8 29 44 after their completion Intermediate Result # of persons trained 0 65 (30) 130 (30) 195 (30) 260 (30) 325 (30) Annual Surveys PMU Indicator Two: (% women) Number of persons trained in: (i) water resource management, (ii) agro-pastoral resource N management, (iii) participatory planning and development, and (iv) income-generating activities Intermediate Result # of staff trained 0 6 11 17 17 17 Annual Surveys PMU Indicator Three: Number of MAEM-RH staff trained in (i) participatory community development, (ii) agro- pastoral resource management, (iii) animal N health, (iv) fisheries, (v) Bank fiduciary and safeguard procedures, and (vi) M&E 29 Intermediate Results (Component Three): Project Coordination and Management Project components are coordinated and implemented in an effective manner and project activities are monitored and evaluated in an efficient manner. PDO Level Results Unit of Measure Base YR 1 YR 2 YR 3 YR 4 YR 5 Freq. Data Resp. Description(ind Core Indicators* line Source/ for icator Meth. Data definition etc.) Coll. - # of adequate 0 17 17 17 17 17 Annual Reports PMU Intermediate Result N incremental staff Indicator One: recruited Reinforcement of the - % completion 0 80 80 90 90 90 Non-cumulative Project Management Unit annual Program of (PMU) Works and Budget (PWB) Intermediate Result - Baseline study 0 1 1 1 1 1 Annual Reports PMU Indicator Two: N - Mid-term 0 0 0 1 1 1 Monitoring and evaluation evaluation system in place - End of project 0 0 0 0 0 1 and operational evaluation Intermediate Result # of progress 0 7 14 21 28 35 Annual/ Reports PMU Indicator Three: N reports submitted Semeste Progress reports are (technical, r submitted in a timely fiduciary, and manner safeguards) *Please indicate whether the indicator is a Core Sector Indicator (see further http://coreindicators) **Target values should be entered for the years data will be available, not necessarily annually. 30 REPUBLIC OF DJIBOUTI RURAL COMMUNITY DEVELOPMENT & WATER MOBILIZATION PROJECT (PRODERMO) Annex 2: Detailed Project Description 1. Project area. The Project area consists of three parcours (or traditionally recognized communal grazing areas, shared by a particular group of villages and communities who possess traditional grazing rights over a Box 2.1. Territorial subdivisions and Administration in Djibouti common area of rangeland) pertaining one to the Khor Administrative Function Angar-Obock area in the Obock subdivision Executive Legislative and/or administrative region in the Consultative north, and two in the Cheiketi- 1. City of Djibouti - Mayor a - Municipal Council a Hanlé area located in the Dikhil divided in 6 districts or administrative region in the arrondissements South. The selection of these 2. Regions (5): Arta, - Prefect b - Regional Council a areas was based on criteria that Ali Sabieh, Dikhil, - President Obock and Tadjourah of the include: (i) poverty rate and Regional national development priorities; Council a (ii) population density; (iii) 4. Campements c Village Council of Elders, etc.b importance of potential surface Chief b water to be mobilized; (iv) agro- (a) : elected officials pastoral potential; (v) coverage (b) : appointed officials by other ongoing projects or (c) : not formal administrative subdivisions programs; (vi) accessibility for implementation (heavy machinery, transport of raw material, supervision, etc.); and (vii) potential for income-generating activities. With the targeted areas, PRODERMO aims to complement and to expand the activities of the ongoing IFAD-funded PROMES-GDT project by intervening in areas that are not yet covered by this program, and that have been identified as priority areas by the Government based on the criteria stated above (see sketch in Appendix 2.2). 2. Component 1: Priority Community Investment Subprojects (US$ 3.46 million or 56% of total project cost; IDA US$ 3.16 million). This component would finance priority community investments in the project areas that have been included in SAAHPs, formulated and prioritized by the targeted communities through a participatory approach and in accordance with the project Operations Manual. The funding will cover consultant services for carrying out the detailed design and supervision of the selected community investments, as well as goods and civil works for the implementation and operation of these community subprojects. Community investments are expected to be demand-driven and in line with the following sub-components: 3. Sub-component 1.1: Water Mobilization and Soil Conservation Subprojects. The overall objective of this sub-component is to provide rural households with better access to water for human and animal consumption, and to protect lands against erosion and degradation through soil and water conservation works. This supports the overall premise of the proposed project to invest in appropriate small-scale water mobilization infrastructure (both surface and groundwater) in order to bridge the three-month long dry season and long drought years by providing communities in the project areas with adequate water and pasture for grazing. This 31 also helps distribute the grazing pressure over larger areas by making water available during the dry season in areas where pasture is available. Water is indeed very scarce in Djibouti, and even during normal years, surface waters and seasonal springs dry out during the dry season for about three months every year. As a result, agro-pastoral communities move with their herds to far places, in search of water (springs and wells), leading to the degradation of the natural resource base, namely pasture and water, in areas around water points. This situation becomes worse during drought years, and people can end up travelling over 50 km in search of water and forage. Given the fragile nature of the balance between water resources and the ecosystem as a whole, maintaining such a balance is very critical in order to sustain the socioeconomic development of communities, especially the agro-pastoral ones that entirely depend on such a fragile ecosystem for their survival. Recurrent droughts also threaten this ecosystems balance. 4. Activities to be financed under this sub-component include: (i) the construction of small- scale surface water harvesting structures, including underground cisterns (100 m3 capacity), open-air reservoirs (10,000 m3 capacity), shallow wells for pastoral and agricultural purposes, as well as the rehabilitation and/or construction of borehole wells wherever feasible; and (ii) the construction of soil and water conservation works, mainly stone sills and plantings around surface water collection structures and/or upland from watersheds where land is susceptible to degradation and to erosion from flash floods. 5. In general, the rehabilitation/expansion and construction of borehole wells should only be done after at least a simple hydrological balance calculation is performed, involving overall monthly rainfall, evapotranspiration, and runoff. Most of such information can be accessed from public domains, within and from outside the country (CERD datasets and previous studies, Tropical Rainfall Monitoring Mission (TRMM)41 datasets, AQUASTAT42, etc). The use of scarce groundwater (especially from deep wells) for irrigation is not sustainable, and as such, the plan under the PRODERMO is to only focus on renewable shallow aquifers, and design subprojects taking into account the overall sustainability of the aquifers. In addition, the number of wells planned under the PRODERMO is very limited and the impacts on aquifer sustainability are thus expected to be manageable. 6. Sub-component 1.2: Agriculture and Livestock Subprojects. The overall objective of this sub-component is for rural households to further benefit from an improvement in the sustainable management and use of agro-pastoral resources by diversifying their income opportunities. These could include rangeland development (through set-aside, re-seeding and shrub planting), improved livestock production, and supporting small-scale irrigated vegetable and fodder production. 7. Another activity to be financed under this sub-component will be the review of the whole water supply system in the Khor Angar area with a subsequent decision as to whether or not to support the reinforcement of the desalination plant currently installed, including replacing the current diesel-operated generator with solar (to reduce its operational cost), as well as community mobilization and organization to ensure sustainability of the plant. If successful, 41 TRMM is a joint mission between the U.S National Aeronautics and Space Administration (NASA) and the Japan Aerospace Exploration Agency (JAXA) designed to monitor and study tropical rainfall. 42 AQUASTAT is the Food and Agriculture Organization (FAO) global information system on water and agriculture, developed by the Land and Water Division. The main mandate of the program is to collect, analyze, and disseminate information on water resources, water uses, and agricultural water management with an emphasis on countries in Africa, Asia, Latin America, and the Caribbean. 32 some of the additional water produced could also be used for nearby villages as a water point where water could be supplied to new beneficiaries by water trucks. 8. Sub-component 1.3: Income-Generating Activities. The project will support income- generating activities on a pilot basis, including handicrafts and artisanal fisheries. This support will be done through community subproject grants in accordance with eligibility criteria and procedures acceptable to IDA and set forth in the Project Operations Manual. 9. Component 2: Capacity Building and Provision of Technical Assistance (US$ 0.73 million or 12% of total project cost; IDA only). This component would finance capacity building and technical assistance to the Implementing Agency (the MAEM-RH) and its Project Management Unit (PMU), as well as the community development committees (CPL) and grassroots organizations (water users associations, community groups, etc.) targeted by the project to support the formulation and implementation of participatory SAAHPs in the project areas, while fostering the application of a participatory approach to local and community-based development. To this effect, this component will also support the sensitization and mobilization of beneficiary communities and other project stakeholders in order to facilitate and enhance their effective involvement in the participatory planning and project implementation process. This would be done through three sub-components: 10. Sub-component 2.1: Enhancing the Capacity of the MAEM-RH and PMU. The overall objective of this sub-component is to reinforce the methodological and technical capacity of the MAEM-RH at the national and regional office levels in order to promote a participatory rural community development approach. This sub-component will fund: (i) the provision of technical advisory services, including in the areas of integrated water and agro-pastoral resource management, agronomy, fisheries, and community-based development; (ii) basic equipment; (iii) training, study tours, and the carrying out of workshops and field visits for technical staff at the national and regional levels in the areas water and agro-pastoral resource management, and participatory community-based development, among others. This component will also fund specific technical studies, including a hydro-geological study in the Obock area. 11. Sub-component 2.2: Enhancing the Capacity of Beneficiary Communities. The overall objective of this sub-component is to build and reinforce the competencies of local actors and broaden their vision of an integrated development of rural areas. A participatory approach will ensure the exchange of experiences and knowledge between communities and project technicians, thus enabling communities to participate in the decision-making process for project investments and securing ownership and durability of these investments. The sub-component will finance: (i) the provision of technical advisory services, basic equipment, training, and the carrying out of workshops and field visits to CPLs; and (ii) the provision of technical advisory services, training, and the carrying out of workshops and field visits to beneficiary communities organized in grassroots organizations (local CGEPs, community groups, etc.). Technical assistance and training will focus primarily on the operation and maintenance of water infrastructure, sustainable management of water and agro-pastoral resources, irrigation and crop production techniques, income-generating activities, and on community organization. 12. Component 3: Project Coordination and Management (US$ 1.40 million or 23% of total project cost; IDA only). The overall objective of this component is to ensure that project components are coordinated and implemented in an effective manner and that project activities are efficiently monitored and evaluated. This component would support the PMU through the 33 provision of goods, works, consultant services, training and incremental operating costs associated with project management, implementation, monitoring and evaluation, and audits. More specifically, incremental costs to be financed include: contractual staff, office rehabilitation works (in particular for the PMU regional office in Obock), office equipment and operations, transportation equipment and operations, domestic travel, project monitoring and evaluation and audits, including the establishment and operation of an M&E system, the completion of a baseline, mid-term, and final evaluation, as well as the preparation of regular audits for the project. 34 Appendix 2.1: Summary of the PROMES-GDT Box 2.1 The PROMES-GDT Introduction. The Program for Mobilization of Surface Water and Sustainable Land Management (PROMES-GDT) was developed following a request from the Government of the Republic of Djibouti in November 2005. The Program is aligned with the Strategic Framework for Poverty Reduction of the INDS and the MAEM-RH’s Action Plan. The Program is also aligned with the strategic framework of IFAD interventions, particularly the strategic objective aiming to ensure a secure access of the rural poor to land and water and to provide them with the capacity to apply improved natural resource conservation and management practices. Program Strategy and Objectives. The Program is responsive to the issue of thirst faced by the pastoral population during the dry seasons. The lack of water represents a constraint to the mobility of animals and the utilization of the highest quality rangelands. Djibouti’s pastoral communities have historically developed pastoral systems, enabling them to sustainably use highly arid ecosystems and a relatively rare forage resource. This system, based on the practice of transhumance, enables them to use pastures within the country’s different ecosystems depending on the season. Despite this great flexibility, which enables a certain buffer against drought situations, this system is today threatened by the progressive degradation of natural resources. It is estimated that the number of animals currently exceeds the carrying capacity of rangelands in use by over 63 percent. The main objective of the PROMES-GDT is to improve the living conditions of pastoral communities by promoting a sustainable management of natural resources. Specific objectives are: (i) implement a program for the mobilization of surface waters for human and animal consumption in order to prevent the thirst of populations and enable an improvement in agricultural production; and (ii) reinforce national organizational and management capacities at the institutional, technical, and social levels. Program areas and target groups. In order to maximize Program impacts, three priority areas were defined: (i) the Day Forest and its surroundings; (ii) the areas around the petit Bara and grand Bara; and (iii) the Gobaad area. The Program directly or indirectly benefits around 6,000 households (or around 36,000 people). Activities related to water supply for livestock raising and rangeland and forest management address all socioeconomic groups. Individual, family-centered, or collective activities, such as stocking potable water in cisterns, professional training relating to the transformation of forest products, and food-for-work- type programs, involve the poorest households with less than 100 heads of livestock, which live mainly from the sale of these animals and depend on food aid. Program Approach. The Program approach is based on the four following general principles: (i) participatory planning enables communities to choose, depending on their needs, the investments to implement, their location, and the rhythm of installation, through the preparation of a SAAHP; (ii) an integrated approach to natural resource management in the context of pastoral activities favors the movement of pastoralists in order to distribute the number of animals over a wider area and thus Figure 2.1: PROMES-GDT Intervention Areas reduces the pressure on fragile areas due to Source: PROMES-GDT Pre-Appraisal Report (2007) overgrazing; (iii) the pilot character of the Program, both for innovations introduced and for the limited areas of intervention of certain components, implies a future replication with new financing through a capacity building strategy of the MAEM-RH; and (iv) a gender approach takes into account the socioeconomic situation of women and values their role in natural resource management, by involving them in the decision-making process of the Program. 35 Program Components. The Program has three components: Component 1: Mobilization of surface water and sustainable management of lands. This component encompasses four main sub-components: (i) water management, regrouping the rehabilitation and construction of cisterns and earth reservoirs for animal and human consumption, as well as the construction of small dams on an experimental basis; (ii) sustainable management of lands, encompassing water and soil conservation with a view to protecting water structures and regenerating the surrounding vegetation cover, as well as developing rangelands through their set-aside, reseeding, and reforesting; (iii) improvement of animal production, including a livestock census, training of pastoralists, and support from veterinarians to improve animal health; (iv) protection and conservation, concerning degraded forest areas, in particular the Day Forest and its surroundings. Immediate results of this component include the mobilization of 234,000 m3 of surface water, thus meeting the needs of 6,000 households (or 20 percent of the rural population) during the dry season. Through pastoral and soil and water conservation works, it is estimated that forage biomass will increase by over 1 million forage units, thus improving animal performance, in particular milk production for auto consumption and subsequent sale. Component 2: National Capacity Building. The objective of this component is to develop the capacities of local communities, which are organized into committees, in terms of natural resource management. Committee members are being trained with regard to the analysis, planning, management, and monitoring of the valorization of collective natural resources. In addition, the technical staff of the MAEM-RH (in particular those from the Directorates for Water, Agriculture, and Forests, and Animal Resources, as well as the staff of decentralized MAEM-RH units at the regional level) are being trained in the area of integrated and participatory management of natural resources. Immediate results of this component include a better capacity within the MAEM-RH to implement the strategy for mobilization of surface waters, the physical works taking into account environmental aspects, and the more efficient prevention of thirst in rural areas. Component 3: Coordination and Management of the Program. A Project Management Unit (PMU) has been created within the MAEM-RH. Given the multidisciplinary and integrated nature of the Program, the PMU is supported with full-time staff, through the secondment of qualified staff from the Directorates of Water, Agriculture, Forests, and Animal Resources. Presence in the field and near the communities is fulfilled by the sub-regional directorates for rural development. Program Organization and Management. The MAEM-RH is the main Agent of the PROMES-GDT and is responsible for ensuring the alignment of Program interventions with its objective and implementation directions, and the replication of the Program approach for future hydraulic and pastoral investments. At the central level, the PMU within the MAEM-RH is responsible for Program management, namely the planning, implementation, and monitoring of Program activities. At the regional level, Program implementation is the responsibility of two regional coordinators. These are based in Tadjourah and Dikhil, respectively. The Tadjourah regional coordinator is responsible for the Northern Program intervention area, namely the Day, Mak’arassou, and Dorra Forests. The Dikhil regional coordinator is responsible for the Southern Program intervention area, namely the Gobaad, As Eyla, petit and grand Barra. The sub-regional directorates for rural development, given their proximity to the communities, are responsible for the mobilization and organization of populations. At the community level, the Program is establishing Water and Rangeland User Associations. These develop, with the sub-regional teams and the PMU, concerted hydraulic and agro-sylvo-pastoral schemes, which determine activities to be undertaken by the Program, as well as the respective roles of committees and governmental administrations. The Program is coordinated at three levels: (i) at the national level a Steering Committee has been established by the MAEM-RH. It is chaired by the MAEM-RH with the participation of the Secretary General of the MAEM-RH, the director of the Water Directorate of the MAEM-RH, representatives from the MHUEAT, MEFPP, Technical Water Secretariat, a representative from the CERD and ADDS, regional prefects, community representatives, and donor representatives. The Steering Committee directs the orientation of Program activities, a posteri monitoring of interventions, the facilitation of program relations with other public and private institutions, and the organization of additional funds to finance the surface water mobilization strategy of the Government; (ii) within the MAEM-RH, a Technical Coordination Committee has been established with the objective to ensure a good integration and synergy between work plans and budgets of different stakeholders in Program intervention areas; (iii) at the regional level, a steering committee integrates representatives from all stakeholders (beneficiary communities, regional prefect, sub-regional directorate for rural development representative and Regional Assembly representatives), with a view to defining priorities in the allocation of resources at the local level and acting as forum for consultation between different Program stakeholders. 36 Program Costs and Financing. Total Program costs are US$ 11.637 million over a six-year period. The Program is financed by: (i) an IFAD grant of US$ 3 million or 25.8 percent of total costs; (ii) a FFEM grant of US$ 1.3 million or 11.2 percent of total costs; (iii) a UNDP and GEF grant of US$ 1.07 million or 9.2 percent of total costs; (iv) a WFP grant of US$ 3.5 million or 30.2 percent of total costs, which will finance the unskilled labor needed for the different works undertaken in the context the WFP Food for Work Program; (v) community contributions of US$ 0.30 million or 2.6% of total costs; and (vi) a AWF/AfDB grant of 0.28 million or 2.4 percent for part of the studies and technical assistance. The Government contribution is US$ 2.14 million or 18.5 percent of total costs. Beneficiaries and Justification. Two types of benefits are anticipated from the Program: benefits for target populations and benefits in terms of institutional reinforcement, particularly for the MAEM-RH. In terms of beneficiaries, benefits are as follows: (i) Easier and more continuous access to potable water, better water quality and better living conditions for rural women; (ii) Better control by communities of interventions concerning them; (iii) Improvements in the economic and nutritional conditions of populations; (iv) Reinforcement of community organization capacities; (v) Reduced inter-community conflicts; and (vi) Enhanced local capacity to manage and maintain works. For the MAEM-RH, benefits are as follows: (i) Better knowledge of the hydrology and technical potential for the construction of small dams; (ii) Capacity to negotiate Ministry interventions with populations; (iii) Capacity to take into account the role of women in the rural economy; (iv) Development of competencies in the area of surface water mobilization; (v) Development of technical competencies in the area of pastoralism. The Program closing date is December 31, 2014. Source: IFAD Pre-appraisal report No. 1972 dated December 2007 (translation from French). 37 Appendix 2.2: Areas of Intervention of Water Mobilization Programs in Djibouti (IFAD-AWF/AfDB-funded PROMES-GDT and proposed IDA-funded PRODERMO) 38 REPUBLIC OF DJIBOUTI RURAL COMMUNITY DEVELOPMENT & WATER MOBILIZATION PROJECT (PRODERMO) Annex 3: Implementation Arrangements A. Project institutional and implementation arrangements 1. Implementation Period: Five Years. 2. Institutional and Implementation Arrangements. On behalf of the Government of Djibouti, the MAEM-RH, through its existing PMU, will be the Implementing Entity responsible for project implementation. The other entities involved in project implementation include the beneficiary communities organized into CGEPs, CPLs, and other community groups, as well as the existing National Steering Committee (CPN)43, which was established for the purpose of the PROMES-GDT and AWF/AfDB projects and chaired by the MAEM-RH, and will also serve as the PRODERMO’s overall national steering committee. The existing Technical Coordination Committee (CCT)44 created within the MAEM-RH at the central level, and the Regional Coordination Committees (CPR)45 at the level of the targeted regions, will support project implementation in an advisory capacity. These arrangements are the same as those being used in both PROMES-GDT and AWF/AfDB projects. The role and responsibility of each of these entities are described below. 3. National Steering Committee (CPN). The main function of the inter-agency CPN, under the chairmanship of the MAEM-RH Minister, is to oversee general project implementation, approve the SAAHPs and related Annual Work Programs and Budgets (PTBA), review regular project progress reports and evaluation, and ensure overall consistency and alignment with relevant Government programs and projects active in the sector. As such, the CPN will also facilitate project relations and coordination with other public and non-public institutions. 4. The CPN is chaired by the Secretary General of the MAEM-RH, and its membership includes beneficiary representatives as well as representatives from the main public institutions involved in project implementation, various department Directors of the MAEM-RH, representatives from the MHUEAT and MEFPP, the Technical Secretariat for Water, one representative from the CERD and ADDS, regional Prefects, three community representatives, as well as donor agency representatives (WFP, FFEM46, UNDP, and IFAD for the PROMES-GDT). The CPN is supported in an advisory capacity by the Technical Coordination Committee (CCT) established within the MAEM-RH and chaired by the Secretary General of the MAEM-RH. Members include all technical MAEM-RH directorates. Specifically, the CCT will be responsible for ensuring that the work plans and annual budgets prepared are well integrated with other regional/local programs and investments. 5. Regional Coordination Committees (CPR) - one in Dikhil and one in Obock. The CPRs are permanent territorial entities established by the Government as part of the territorial 43 Comité de Pilotage National (CPN). 44 Comité de Coordination Technique (CCT). 45 Comité de Pilotage Régional (CPR). 46 Fond Français pour l’Environnement Mondial (FFEM). 39 administration to ensure coordination of all development activities in each geographic region of the country. The CPR acts as a regional forum for consultation between local representatives and development actors. CPR members include representatives from various Line Ministries, the regional Prefect, a representative from the Regional Directorate for Rural Development as well as representatives from the Regional Council and Regional Assembly. The PRODERMO, through the regional PMU offices, will work in close collaboration and regularly consult with the CPR to validate the proposal for SAAHPs in an advisory capacity, with the aim of avoiding duplications, and will also inform the CPR on the status of activities, as well as the progress of the work program. 6. Project Implementing Entity: MAEM-RH. The MAEM-RH, through its established PMU, will be the implementing entity for the PRODERMO and as such will be responsible for overall project coordination and oversight, ensuring that project activities remain in line with its objectives and in compliance with the project Operations Manual, legal agreements, and overall Government program. Figure 3.1: Institutional and Implementation Arrangements MAEM-RH Project Steering Committee (CPN) Technical Advisory Committee (CCT) Agr/Forest Dir. Livestock Dir. Water Directorate Civil Works Dir. Fisheries Dir. PMU-Central Office PMU regional PMU regional antenna Dikhil antenna Obock Regional Steering Regional Steering Committee (CPR) Committee (CPR) Dikhil Obock Local Development Local Development Committee (CPL) Committee (CPL) CGEP CGEP CBOs CGEP CGEP CBOs 40 7. Project Management Unit (PMU). The PMU47, through its already existing structure (a central office in Djibouti and two regional offices located in Obock and Dikhil) and complemented by incremental staff and equipment financed by the PRODERMO, will be responsible for day-to-day project management and implementation, including the carrying out of all selected community investments and subprojects. Specifically, the PMU’s main responsibilities include: (i) effective sensitization and mobilization of beneficiary communities; (ii) support communities to strengthen their organizational structures and ensure their active and effective participation in the preparation, execution, and M&E of the SAAHPs; (iii) support beneficiary community organizations in the implementation of selected investments and subprojects; (iv) project reporting, as needed to IDA; (v) overall project fiduciary (financial and procurement) and safeguard management of the project; and (vi) project M&E and auditing. The PMU will be solely responsible for handling all financial transactions and procurement activities. It will also be responsible for promoting partnerships at the regional and local levels and facilitating the integration of SAAHPs in other partners’ development programs and investment plans (see Table 3.1 below for a list of new incremental staff recruited under the PRODERMO). Table 3.1: Existing PMU Staff and Incremental Staff Recruited under the PRODERMO Existing Staff (PROMES-GDT) Incremental Staff Recruited (PRODERMO) PMU Central Office - Project Coordinator - Deputy Project Coordinator and M&E - Water Resource Specialist Specialist - Agro-pastoral Resource Specialist - Procurement Specialist - Forestry Specialist - Accountant - Financial and Administrative Specialist - Secretary, Driver - Secretary, Driver PMU Regional Antennas (Obock and Dikhil) - Sub-regional coordinators (Dikhil, Day - 2 Regional Coordinators (Dikhil and Forest) Obock) - 4 Extension Workers - 2 Secretaries - 2 Drivers - 2 Maintenance Personnel 8. The PMU is headed by a Project Coordinator for the PROMES-GDT, who is a senior professional and who will also serve as project coordinator for the PRODERMO. Assisted by a Deputy Project Coordinator for the PRODERMO, the Project Coordinator will oversee project implementation and monitoring at the national level. Specifically, the Coordinator will be responsible for preparing periodic work programs, methodological tools for monitoring, and the various progress reports required by the CPN and the World Bank as co-financers. The Coordinator will also ensure efficient coordination with project partners, particularly on the exchange of information and organization of common activities. At the regional office level, the two Regional Project Coordinators, in Obock and Dikhil, will be in charge of coordinating 47 The PMU was established by a Ministerial order of the Ministry of Agriculture in 2008 for the purpose of the PROMES-GDT. It is established within the Water Directorate of the MAEM-RH. It is the MAEM-RH’s mid-to-long-term goal to make operational and fully functional a Project Management Office/Bureau de Gestion des Projects (BGP) that would centralize support to the implementation of all externally-funded projects and programs. Once this goal materializes, the MAEH-RH may consider seeking IDA’s prior approval for the purpose of the PRODERMO to relocate the PMU under or within the BGP. 41 project activities in the context of the preparation, validation, and implementation of SAAHPs covering their respective areas, including community mobilization and organization into CPLs. Regional Project Coordinators will report to the Project Coordinator at the central level and work in close collaboration with the technical specialists in the PMU. 9. As indicated above, the approach adopted by the PROMES-DGT is to empower communities to prioritize, plan, and implement community investment subprojects, jointly with the local, regional, and central authorities including the MAEM-RH, through a participatory process. The proposed PRODERMO would also support and adopt this participatory and inclusive approach to community and local development (see Figure 3.2 below for the PRODERMO subproject cycle and implementation). 10. More specifically, a SAAHP is prepared by the local CPL, with support from the PMU central and regional office teams. CPLs define priority interventions and identify, in a consultation with the communities, those subprojects, including water mobilization works, which are to be implemented in the context of the project. The SAAHP typically includes the role and responsibilities of the CPL, a socioeconomic diagnostic of the area, its physical and climatic parameters, water resources, and geographical delimitations, and the activities selected by the community. In addition to listing planned activities, the SAAHP indicates the land areas where activities will be implemented. These areas are designated in consultation with the traditional and administrative authorities. Each SAAHP also includes the list of those who contributed to its preparation (CPL members, administrative authorities and PMU staff). A meeting is held to validate the SAAHP, attended by CPL members, local authorities, and representatives of the community. The SAAHP is signed by the CPL members, administrative and traditional authorities, and the PMU coordinator. The PMU (central and regional offices) and the CPL will retain copies of all signed SAAHPs, which constitute a formal agreement between communities, the administration, and the PMU. SAAHPs are reviewed and updated on an annual basis by the beneficiary communities with support of the PMU staff. The proposed PRODERMO would adopt this participatory and inclusive approach to community-based development. 11. Beneficiary Communities and CGEPs. Beneficiary communities will generally be organized into water and pasture user associations (CGEPs). CGEPs are usually constituted of the direct beneficiaries of an infrastructure (i.e. a water point) and can also be in charge of other activities in their areas such as agro-pastoral activities. Often, CGEPs are already established around existing customary structures, which the project will seek to reinforce as existing and valuable support. The project will seek to establish new CGEPs only when none exist. In the context of the PRODERMO, beneficiary communities will be called upon to play, through their respective CGEPs, an integral role in the implementation, supervision, and maintenance of community subprojects, with technical assistance and training from the PMU central and regional office teams. 12. Community Development Committees (CPLs). Beneficiary communities will also participate in the project through the local development committees or CPLs mentioned above. The CPL is representative of a group of villages and communities possessing traditional grazing rights over a common area of rangeland (parcours). Each CPL will comprise about 12 members, representatives of communities living in the parcours, including at least two women and two youth members. One CPL will be created per communal grazing area or parcours, hence the establishment of three CPLs is anticipated throughout project execution, given that 3 grazing 42 areas are being targeted (see Table 3.2 below for the administrative and traditional territorial organization of Djibouti). Figure 3.2: Implementation Arrangements for Community Subprojects Subproject Implementation Supervise overall MAEM-RH project implementation Approve annual Other Actors Project Steering investment plans and ”on the Committee (CPN) budgets ground”: ADDS, CERD etc. Appraise subprojects Implement subprojects PMU Operate Project Mobilization/Training/ (Central office and Designated Account TA regional antennas) CPR Representatives of GoD Line Ministries Evaluate & implement Subproject implementation subprojects Inform Participate in Prioritize and CPL Other Donors/ subproject Approve Projects implementation Investments where suitable within SAAHP AfDB IFAD Present Prioritize WFP subproject investment UNICEF Identify, Cofinance, CGEP / Manage, CBOs Maintain subprojects 13. Specific roles of the CPL include: (i) representing the beneficiary communities vis à vis the PMU; (ii) participating in participatory diagnostics and preparing the indicative list of needs and potential investments to be included in the preliminary SAAHPs; (iii) validating and signing the approved SAAHPs; and (iv) overseeing the work of the CGEPs. In addition, the CPLs (often in consultation with the CGEPs) will be responsible for: (a) the regular maintenance of water mobilization subprojects in terms of labor and tools directly undertaken by the water management committees; (b) the organization of the water supply for human and animal consumption; (c) the monitoring of water quality in water mobilization subprojects; (d) the maintenance of rangelands and set-aside areas; (e) the enforcement of set-aside rules; and (f) general mobilization of community participation. The CPLs will also participate in the organization and supervision of labor-intensive works and will be responsible for monitoring of the SAAHP in terms of water availability during the dry season and the estimation of the biomass available in rehabilitated rangelands. 43 14. The PMU will seek to formalize and reinforce the role of these community-based structures (CPLs and CGEPs). The PMU will seek to establish a formal recognition of the CPL and have the status recognized and signed by the Government representative at the local level, namely the Prefect. Assistance will be provided to the CPL to adopt by-laws, indicating the role of its members, the quorum needed, the numbers of meetings planned, the minutes to be taken during each meeting, and the criteria for replacing a member. 15. Participation of women. Women would be consulted at all stages, including during the participatory diagnostic to determine activities for water and agro-pastoral subprojects, during the formulation of the SAAHPs, and on the choices of structures to build and rehabilitate. Women will be members of the community-based structures, and as mentioned, CPLs are expected to include at least two women per CPL. 16. Other partners. The PRODERMO will also ensure close collaboration with national and international organizations/institutions already involved in water resource management and rural development in general in Djibouti. For instance, in terms of monitoring of water quality in water mobilization subprojects, UNICEF, in coordination with the Ministry of Health (MdS)48, recently trained around 100 community health workers (CHWs) across Djibouti on community mobilization and awareness regarding hygiene, sanitation, and water quality. Table 3.2: SAAHP Investment Financing Plan under the PRODERMO Co-financing * Parallel Financing (not (included in PRODERMO included in the PRODERMO financing plan) financing plan) MAEM-RH/ Beneficiary GOD Partner entities PRODERMO Communities (WFP, etc.) 1. SAAHP/PTBA Preparation X -- -- -- 2. SAAHP/PTBA Implementation: - Agriculture and Rural Development Investments: X X -- X . Cisterns/wells, etc. . Soil conservation, re-seeding X X -- X . Income-generating activities X X -- X . etc. X X -- X - Other Sector Investments: X X -- X . Education sector investments -- -- X X . Health sector investments -- -- X X . etc. -- -- X X -- -- X X * PRODERMO co-financing of community subprojects identified and approved in SAAHPs/PTBAs does not entail a direct transfer of funds to beneficiary organizations, as the PMU/MAEM-RH has the sole responsibility of centrally procuring goods, works, and consultant services. 17. Community subproject financing scheme. The project will support the preparation of participatory SAAHPs and corresponding Annual Work program and budget (PTBAs) in consultation with communities, local/regional authorities, and other partners (see Table 3.3). Activities and investments prioritized that are beyond the scope of the PRODERMO will be presented for funding considerations directly to the relevant sector ministries or other partner agencies from their own budgets (for instance health centers by the Ministry of Health, schools 48 Ministère de la Santé (MdS). 44 by the Ministry of Education, etc.). The PRODERMO, for its part, will only finance relevant activities included in the SAAHPs/PTBAs in the areas of water mobilization, agricultural and pastoral production, related income-generating activities, consolidation, protection, and sustainable management of natural resources. Funding by the partner agencies mentioned above are not counted as project co-financing (as these are still to be determined depending on which investment subprojects are selected in the SAAHPs). 18. Income-generating activities. In terms of the implementation modality for income- generating activities under Component 1 of the project, the PMU can transfer corresponding grants to respective community associations requesting support for such activities, as identified in the SAAHPs. The communities or beneficiary associations will contribute in cash or in kind to at least 10 percent of the cost of the activity. The eligibility criteria and M&E procedures for income-generating activities will be specified in the project Operations Manual. 19. Operational procedures. The proposed project would be implemented according to detailed procedures defined in the Operations Manual. The Manual will include clear subproject cycles and rules. B. Financial Management, Disbursements and Procurement a. Financial Management 20. The Republic of Djibouti has a body of complete and sufficient texts for a sound management of its public finances. The legal framework of Djibouti includes notably: (i) the Constitution of September 4, 1992; and (ii) the law n° 107/AN/00 relating to the finance laws which fix the rules relating to the determination of the resources and expenses, the preparation and the vote on annual budget, the execution, and the management of the budget. 21. The institutional framework contains the structures necessary for public financial management. The institutional framework meets the needs as regards to preparation as well execution and control of the budget. However, some practices affect the reach of the texts. This is the case in particular for: (i) the use of the dispensatory procedures of public expenditure; and (ii) the significant gaps between actual levels of expenditures compared to the planned amounts in the budget. 22. The PRODERMO will be implemented in Djibouti using the World Bank guidelines and through the human resources of the PMU. Disbursements will be based on traditional methods of Statement of Expenditures, Designated Account replenishment, and Direct Payment. Interim Unaudited Financial Reports and Annual Financial Statements will be used as a financial reporting mechanism and not for disbursement purposes. 23. The project will be carried out by the PMU, created by a decision of MAEM-RH dated February 14th, 2008. The PMU is attached to the Directorate of Water; it is considered as an autonomous unit in charge of planning, executing, monitoring, and evaluation of project activities. The PMU acts under the supervision of a National Steering Committee (CPN) which is responsible for the surface water mobilization program. 45 24. The PMU will be responsible for project financial management and accounting in compliance with generally accepted accounting principles. It will be responsible for preparing periodic reports on project implementation progress and on both physical and financial achievements (by component and by expenditure category). 25. The PMU will maintain the project bookkeeping and will produce annual Project Financial Statements (PFS) and quarterly Interim Unaudited Financial Reports (IUFR) within 45 days of the end of each calendar quarter. 26. Overall, the PMU will be responsible for maintaining a financial management system that is acceptable to the World Bank. 1. The main identified risks are the following: (i) The lack of capacity of PMU staff to manage the project, notably a large number of activities in scattered locations. Lack of capacity of community groups; (ii) Misuse of Per Diem allocation; (iii)The commingling of funds from different donors. 2. In order to mitigate the risks listed above, the following terms have been agreed on: (i) The PMU will recruit an Administrative and Financial Management Specialist, as well as an Accountant assigned to the project in accordance with the terms of reference agreed with IDA; (ii) Build capacity of local communities and MAEM-RH: CPLs for subproject supervision, and technical staff of the MAEM-RH for regular field visits; (iii)The PMU will use subproject financing agreements for the income-generating activities as well as for community subprojects. A simplified version of this financing agreement should be included in the project Operations Manual; (iv) The conditions and terms of financing subprojects should be defined in the project Operations Manual; (v) The work assigned to communities will be materialized by a simplified contract between the concerned parties (PMU/CGEP/CPL/local authorities). The Per Diem allocation will be described in a procedure included in the Operations Manual; (vi) Beneficiary contributions will be defined in the subproject financing agreement and will be accounted for based on: (i) the budget prepared by the PMU; and (ii) the work delivered or the contribution in kind. The terms of contributions will be defined in the Operations Manual. (vii) The PMU will implement sound internal controls that will be described in the Operations Manual (including financial and technical supervision). Budgeting 27. The PMU prepares an annual budget for the financial commitments (PTBA) based on the SAAHPs and in consultation with the CPL. The overall budget includes contributions from the 46 National Government as well as other donor-financed projects managed by the PMU. The budget is submitted to the CPN for approval. Project accounting system 28. All transactions will be recorded at the central level by the PMU on the software accounting system by the Accountant and checked by the Financial Management Specialist. The Project Financial Management Specialist (FMS) is responsible for preparing the IUFRs before their transmission to the project coordinator for approval. Periodic reconciliation between accounting statements and IUFRs is also done by the FMS. 29. The general accounting principles for the Project are as follows: (i) Project accounting will cover all sources and all uses of Project funds, including payments made and expenses incurred. All transactions related to the Project will be entered into the accrual accounting system and the appropriate reports. Disbursements made from the project Designated Account (DA) will also be recorded in the Project accounting system; (ii) Project transactions and activities will be distinguished from the other activities undertaken by the PMU. IUFRs summarizing the commitments, receipts, and expenditures made under the Project should be produced every quarter, using the templates established for this purpose and sent to the PMU; and (iii) The Project chart of accounts will be compliant with the classification of expenditures and sources of funds indicated in the Project documents (Project Appraisal Document, COSTAB) and the general budget breakdown. The chart of accounts should allow for data entry to facilitate the financial monitoring of project expenditures by component and sub-component, expenditure classification, and disbursement category. 30. The accounting and financial management software purchased by the PMU is not yet operational. The system should be operational by effectiveness. Financial Reporting 31. IUFRs will include data on the financial situation of the project. These reports should include: (i) a statement of funding sources and uses for the period covered and a cumulative figures, including a statement of the bank project account balances; (ii) a statement of use of funds by component and by expenditure category; (iii) a reconciliation statement for the DA; and (iv) a budget analysis statement indicating forecasts and discrepancies relative to the actual budget. The PMU will produce the IUFRs every quarter and send them to the World Bank within 45 days from the end of each quarter. 32. The PFS should be produced annually. The PFS should include: (i) a cash flow statement; (ii) a closing statement of financial position; (iii) a statement of ongoing commitments; and (iv) an analysis of payments and withdrawals from the grant account. 33. IUFRs and PFSs should be produced based on the accounting system. 34. Flow of funds. Payment will be made by the double signatures of the Secretary General at the MAEM-RH and the Directorate of External Financing at Ministry of Finance, and in order to facilitate the management of funds and disbursements for eligible expenses, a segregated DA in US Dollars will be opened at a commercial bank acceptable to IDA. Each Ministry will appoint a person authorized to jointly sign the payment requests. MAEM-RH authorized 47 payment requests will be sent to the External Finance Directorate of the MEFPP, which should verify the supporting documents and the eligibility, according to procedures and agreements with the Bank. The PMU will file the original supporting documents. Audits of the project financial statements 35. An annual external audit of the project accounts will cover all aspects of the project and all uses of funds and all committed expenditures of the Project. It will also cover the financial operations, internal control, financial management systems, the management of the Designated Account, and would also include a comprehensive review of statements of expenses (SOEs). 36. An external auditor will be appointed according to terms of references acceptable to the Bank and should conduct the audit in accordance with international auditing standards. The auditor should produce: (i) an annual audit report including his opinion on the project's annual financial statements; and (ii) a management letter on the project internal controls. These reports should be submitted to the World Bank within six months from the closure of each fiscal year. 37. The selection of the same auditor for all projects managed by the PMU and financed by different donors can be considered if all donors agree. 38. The terms of reference of audit engagement should include certain specific controls: (i) Review of interim financial reports; (ii) Review of the subprojects selection; (iii) Review of the implementation of financing agreements; (iv) Participation in sampling inventories of project assets; and (v) Site visits to the subprojects. Pending issues on the portfolio 39. The Portfolio performance in Djibouti is negatively impacted by an 8-months overdue audit report for the Avian Influenza and Human Pandemic Preparedness Project. 40. The Government of Djibouti has committed to send the overdue audit report by April 30, 2011. The negotiations of the PRODERMO project are authorized based on this agreed action plan with the MEFPP. 41. In accordance with the Bank’s overall operational framework (OP.BP 10.02) with respect to non-compliance with FM requirements, submission of an acceptable audit for the above- mentioned project will be a condition for Board presentation. Summary of actions to be implemented 42. Project implementation support actions are summarized below: Actions Deadline Design and implement an Operational Manual acceptable for the Bank Effectiveness Hire a Financial Management Specialist for the PMU Effectiveness Hire an Accountant for the project Effectiveness Operationalize the accounting software Effectiveness 48 Supervisory Schedule 43. The frequency and scope of World Bank supervisory missions will be adapted to the needs of this project and will be delivered both at central and regional levels. Supervisory frequency will be half-yearly, though this may be increased if needed. b. Disbursement 44. The proceeds of the IDA Grant would be disbursed in accordance with the traditional disbursement procedures of the Bank and will be used to finance project activities through the disbursement procedures currently used, i.e. Advances, Direct Payment, Reimbursement, and Special Commitment accompanied by appropriate supporting documentation (Summary Sheets with records and/or Statement of Expenditures (SOEs)) in accordance with the procedures described in the Disbursement Letter and the Bank's "Disbursement Guidelines". The minimum application size for direct payment, reimbursement, and special commitment will be the equivalent of 20 percent of the Advance ceiling amount. 45. The Bank will honor eligible expenditures for works completed, services rendered and goods delivered by the Project closing date. A four-month grace period will be granted to allow for the payment of any eligible expenditure incurred before the grant closing date. 46. Designated Account (DA). The PMU will open a segregated Designated Account at a commercial bank acceptable to IDA in US Dollars to cover the Grant's shares of eligible project expenditures. The Ceiling of the Designated Account would be 10 percent of the Grant's amount. The PMU will be responsible for submitting monthly replenishment applications with appropriate supporting documentation. 47. Payments of eligible expenses will be made from the Designated Account based on the instruction signed by both the MAEM-RH and of the MEFPP. 48. Statement expenditure. Necessary supporting documents will be sent to the Bank in connection with contract that are above the prior review threshold, except for expenditures under contracts with an estimated value of: (a) US$ 300,000 or less for works; (b) US$ 150,000 or less for goods; (c) US$ 100,000 or less for consulting firms; (d) US$ 50,000 or less for individual consultants, as well as all operating costs, training and community grants49, which will be claimed on the basis of SOEs. The documentation supporting expenditures will be retained at the PMU and will be readily accessible for review by the external auditors and periodic Bank supervision missions. All disbursements will be subject to the conditions of the Financing Agreement and disbursement procedures as defined in the Disbursement Letter. 49 Based on the breakdown of Categories. 49 Allocation of Grant Proceeds Table 3.3: Allocation of Grant Proceeds (in SDR million) Percentage of Amount of the Expenditures to be Financing Allocated Financed Expenditure Category (SDR million) (inclusive of Taxes) (1) Goods, works, non-consulting services, and consultants’ 2.10 100 services under Community Investment Subprojects for Part 1 of the Project (2) Goods, non-consulting services, consultants’ services, 0.40 100 and Training for Part 2 of the Project (3) Goods, works, non-consulting services, consultants’ 0.90 100 services, Project Incremental Operating Costs, and Training for Part 3 of the Project (4) Unallocated 0.26 (5) Refund of Preparation Advance 0.14 Total 3.80 Table 3.4: Allocation of Grant Proceeds (in US$ million equivalent) Percentage of Amount of the Expenditures to be Financing Allocated Financed Expenditure Category (US$ million) (inclusive of Taxes) (1) Goods, works, non-consulting services, and consultants’ 3.16 100 services under Community Investment Subprojects for Part 1 of the Project (2) Goods, non-consulting services, consultants’ services, 0.60 100 and Training for Part 2 of the Project (3) Goods, works, non-consulting services, consultants’ 1.34 100 services, Project Incremental Operating Costs, and Training for Part 3 of the Project (4) Unallocated 0.53 (5) Refund of Preparation Advance 0.20 Total 5.83 c. Procurement General 49. Procurement for the proposed Project will be carried out in accordance with the World Bank’s “Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits and Grants” by World Bank Borrowers, published by the World Bank in January 2011 (“Procurement Guidelines”) in the case of goods and non-consulting services, and the “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” published by the World Bank in January 2011 50 (“Consultant Guidelines”) in the case of consultants services, and the provisions stipulated in the Grant Agreement. The methods to be used for the procurement under this Project, and the estimated amounts for each method, as well as the threshold contract values for the use of each method, are set in Table A. National Competitive Bidding (NCB) will be carried out with procedures acceptable to IDA. 50. Overall, the new Djiboutian procurement Manual of Procedures for goods, works, and employment of consultants is in line with the Bank's procedures. The country has, since May 2010, adequate standard bidding documents and requests for proposals similar to the Bank’s ones. Project Management 51. A PMU will be established within MAEM-RH with a central office in Djibouti and two regional offices located in the cities of Obock and Dikhil. The PMU is responsible for the overall supervision and coordination of the project, monitoring the project’s progress, and that the outputs and outcomes are consistent with the planned indicators and for the dissemination of the project’s information and results. The PMU will be supported by the relevant technical services inside the Ministry as well as the external partners for bidding documents preparation. The PMU will be the interlocutor with the World Bank during the supervision and appraisal missions. Procurement of Works 52. Works procured under this project would include: rehabilitation/construction of small- scale water collection infrastructure; rehabilitation and/or development of groundwater resources, soil and water conservation works (e.g. construction of stone sills acting to slow down runoff and trap sediments, construction of small basins, etc.); a possible reinforcement of the existing desalination plant; and rangeland development. Foreseen procurement methods are: National Competitive Bidding (NCB), Shopping, and Direct Contracting. The procurement will be carried out using the National Standard Bidding Documents (SBDs) agreed with and satisfactory to the Bank. Procurement of Goods 53. Goods procured under this project would include: (i) office equipment (computers and other); (ii) sensitization and field information/training equipment; (iii) vehicles (for use in regional areas); (iv) solar equipment for water wells; (v) equipment/materials and other supplies for handicrafts, (vi) various animals for livestock husbandry; (vii) veterinary products for livestock husbandry; and (viii) various tree species. Foreseen procurement methods are: International Competitive Bidding (ICB), National Competitive Bidding (NCB), Shopping, and Direct Contracting. The procurement will be carried out using the Bank’s Standard Bidding Documents (SBDs) for all ICB and National SBDs agreed with and satisfactory to the Bank. 54. Community Participation in Procurement. It has been found that, for Component 1 of the project, it is most desirable to call for the participation of local communities and/or NGOs in the delivery of services. The activities would cover: (1.1) water mobilization and soil conservation subprojects, which would cover the rehabilitation or construction of small water harvesting or collection infrastructures (underground cisterns, open-air reservoirs, shallow wells and borehole wells) for drinking water, livestock and agriculture, as well as soil and water 51 conservation activities to protect water structures and to enhance vegetation regeneration around these structures; (1.2) agriculture and livestock subprojects, which could include rangeland development (through set-aside, re-seeding and shrub planting), improving livestock production, and supporting small-scale irrigated vegetable and fodder production; and (1.3) on a pilot basis income-generating activities such as handicrafts, fisheries, etc. The Credit Agreement will list Community Participation in Procurement among the procurement methods, and procedures shall be further elaborated in the project Operations Manual approved by the Bank, to ensure these are efficient and acceptable. The Procurement Plan will also list the activities to be undertaken by communities. Consultants’ Services 55. Consultancy services financed under this project will mainly include: (i) technical assistance on establishment of a participatory process for community development, including the composition of CPLs and the preparation and approval of SAAHPs; (ii) technical training in the maintenance of water mobilization works, sustainable management of water and agro-pastoral resources, irrigation and crop production techniques, and in community organization; (iii) organization of information/sensitization seminars and training workshops for MAEM-RH staff; (iv) organization of field days and training workshops; (v) carrying out of specialized training in the area of participatory community-based development, integrated water resource management, agronomy, and fisheries; and (vi) studies (hydro-geological studies, socioeconomic assessment of targeted areas, intervention plan, etc). Shortlists of consultants for services estimated to cost less than US$ 50,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultancy Guidelines. Assessment of MAEM-RH’s capacity to execute the project procurement activities 56. The PMU’s capacity to execute procurement activities in the framework of this project has been assessed, and the report is filed in the Procurement Risk Assessment Management System (P-RAMS). The PMU’s capacity to oversee the procurement management has been judged weak. However, this capacity could be improved, provided that the recommended actions are taken before project’s effectiveness. This does not apply to the Procurement Plan, which was provided before the approval of the financing. The risk has been rated as High. The frequency of procurement supervision including PPR/Audit will be every 6 months. 57. The methods to be used for the procurement under this project, and the estimated amounts for each method, as well as the threshold contract values for the use of each method, are set in Table A below. 52 Table 3.5: Thresholds by Method and Prior Review Threshold of Contracts Procurement or Contract Subject to Bank Prior Category of Cost Estimate Selection Review Expenditures (‘000 US$) Method 1. WORKS > 1,000 ICB All contracts ≥100 & ≤ 1,000 NCB First 2 contracts < 100 Shopping First 2 contracts (3 quotations) According to the 3.6 clause Direct Contracting All contracts regardless of value of the Guidelines 2. GOODS > 150 ICB All contracts ≥25& ≤ 150 NCB First 2 contracts < 25 Shopping First 2 contracts (3 quotations) According to the 3.6 clause Direct Contracting All contracts regardless of value of the Guidelines > 100 QCBS All contracts Firms 50< &≤ 100 CQS/LCS/FBS All contracts ≤ 50 CQS/LCS/FBS First 2 contracts 3.CONSULTANT SERVICES NA SSS All contracts regardless of value > 30 Consultants All contracts (Evaluation report Individual Consultants Guidelines comparison of CVs, TORs, and Section V draft contracts) ≤ 30 Consultants First contract as above Guidelines Section V NA SSS All contracts regardless of value QCBS = Quality and cost based selection LCS = Least cost selection SSS = Single-source selection CQS = Selection based on consultant’s qualifications FBS = Selection under a fixed budget Procurement Planning 58. A Project Operation Manual will be prepared and will include the description of applicable procurement procedures, as well as the detailed Procurement Plan for the first 18 months of activity, which was approved on March 30, 2011 at the time of negotiations. 53 Works/Goods/Non-consulting Services a) List of contract packages to be procured following ICB and direct contracting: Cost P- Domestic Expected Comments Description Procurement Q Preference Bank Date Ref. Est. Bid of the review Contract No. (‘000 Opening Assignment Method (prior/post) Signing US$) Date Purchase of No utility 4*4 81,000 ICB vehicle Consultants’ Services b) List of consulting assignments with shortlist of international firms: Bank Date Date Ref. Description of the Cost Est. Selection review Submission of Contract No. Assignment (‘000 US$) Method (prior/ Proposals Signing post) Section V of International Consultant 54,000 Consultants Prior (Water and other) Guidelines Hydro-geological study for one 100,000 QCBS Prior priority area - Obock C. Environmental and Social (including safeguards) a. Environmental 59. The project is classified as environmental category B according to the World Bank’s Operational Policy on Environmental Assessment (OP 4.01). Implementation of the project is expected to generate significant positive environmental impacts and minor negative ones. An Environmental and Social Impact Assessment (ESIA) report, including an Environmental and Social Management Plan (ESMP), was prepared by an independent third-party consultant, according to Terms of Reference approved by the Bank. The ESIA includes an assessment of potential impacts of the proposed project (mainly resulting from interventions under Component 1) and the likely significance of such impacts and recommended mitigation measures. The ESIA also includes an ESMP and good-practice measures and guidelines relevant to these interventions, which will be used as a guide during the preparation of subproject ESMPs, as necessary. The ESIA was reviewed and cleared by the Bank. 54 60. Main impacts and proposed mitigation measures. The ESIA presents an analysis of the potential positive and negative impacts of the proposed project activities. It reviews the environmental and social aspects of the project according to both Djibouti’s legal framework and the World Bank rules and procedures. It identifies measures to be taken and describes the procedure to be implemented to ensure that potential risks to the environment are adequately assessed and managed. The objective of this analysis is to help ensure the quality and sustainability of investment projects, by assessing the potential impacts of the proposed project on physical, biological, socioeconomic, cultural as well as on health and human security. 61. The PRODERMO is a participatory project designed to meet the social, environmental, and economic needs of beneficiaries. Overall, project activities (subprojects) will result in positive impacts on the environment and living conditions of affected populations. 62. However, some activities under Component 1 of the Project could have a negative impact if adequate mitigation measures were not implemented. This component includes subproject investments of two types: (i) Subprojects involving water mobilization: a. rehabilitation or construction of small infrastructure to capture water for human use, for livestock or agriculture (underground cisterns, open-air reservoirs, shallow wells, boreholes [manual or solar]); b.activities of soil and water conservation to protect and promote the regeneration of the vegetation around these structures; c. possibility of reinforcing the desalination plant at Khor Angar. (ii) Subprojects involving agriculture and livestock: a. rangeland development (through set-aside, re-seeding and shrub planting); b.improving livestock production; c. seed production (nurseries). (iii)Subprojects involving income generating activities: a. assistance in developing income-generating activities such as fisheries, handicrafts 63. However, the environmental assessment established that the project will not create significant or irreversible potential negative impacts on the environment. Most potential negative environmental impacts are expected to be minor, temporary, and site-specific in nature and could be expected during the construction phase, if the contractor/community does not comply at all times with the ESMP. The most important impacts will require the implementation of appropriate mitigation actions covering: (i) The hydrological functioning of watersheds (ii) The availability of water resources (iii)The monitoring of groundwater quality (iv) The monitoring and improvement of water quality in the infrastructures created (especially in tanks intended for human consumption) (v) A breakdown of hydraulic infrastructures (vi) The risk of overgrazing and degradation of vegetation cover (vii) The modality of use and access to land 55 (viii) The reinforcement of the desalination plant at Khor Angar 64. The design of the subprojects that involve construction of hydraulic structures will include the necessary studies and engineering measures as well as good-practice environmental measures and guidelines to ensure proper construction and operation. 65. The Environmental and Social Management Framework (ESMF) will be translated into the Operations Manual used to guide the implementation of the project from day to day. It aims to: (i) ensure that the project complies with national legal requirements and environmental and social World Bank procedures; (ii) specify the criteria for environmental and social analysis of activities (subprojects) financed under the PRODERMO; (iii)provide options to prevent, minimize or mitigate the risks and potential negative impacts during project construction and operation phases or increase the positive impacts of subprojects financed; (iv) provide an assessment of training needs and capacity building for various stakeholders in the project; (v) describe the procedures and responsibilities for monitoring the impacts of the project, reporting to the World Bank and implementing the ESMF. 66. The approach to the environmental and social analysis of subprojects is integrated into the design, review, and approval process of subprojects by local authorities. The extent of mitigation required will depend on the level of impact of a subproject. Subprojects will be screened by applying the environmental and social screening checklist (fiche d’évaluation environnementale et sociale des sous-projets), and individual subproject ESMPs will be prepared as necessary and implemented. This screening checklist was specifically designed to help communities avoid or minimize environmental and social impacts while developing their subprojects. Officials of the PMU and local authorities who will review applications will then determine whether further studies or detailed plans for managing impacts are required before approval of a subproject. 67. Environmental screening process. The proposed process for analyzing subprojects proposed under the Project includes the following steps (integrated into the regular cycle of development of subprojects from initial idea to operation). Step Description Responsible 1 - Identification of Communities identify a participatory potential intervention (from a list Local Steering subprojects through of eligible ones) with the help of authorities and leaders of the PMU. Committee the development of The final choice of investments to be funded by the PRODERMO is SAAHPs prioritized by the beneficiary communities and retained in the Annual Development Scheme prepared by the local steering committee with support from regional coordinators of the PMU and the competent authorities at local, regional, and national levels. 2 - Development of Regional coordinators of the PMU (skilled and trained) assist Regional proposition of communities in the review of environmental and social impacts of Coordinator of the subprojects and subprojects. They fill the form for evaluating applications; suggest PMU in relation to preparation of the good practices, preventive actions or mitigation of impacts. communities and 56 Step Description Responsible environmental and When mitigation measures are required, an Environmental local authorities social assessment Management Plan (EMP) is established (included in the evaluation form form). For many small-scale projects, it is limited to a few simple actions. These measures should be incorporated into the design of subprojects. For some more complex projects a thorough review of the environmental issues is needed (e.g. hydrological studies or environmental impact assessment). Forms filled and signed by a representative of the community and local authorities are attached to the project application submitted for review to the PMU in Djibouti. 3 - Obtaining the In case the subproject requires the use or setting off a plot, the Local Local Steering agreement to use a Steering Committee shall ensure to obtain official approval from the Committee plot, if necessary. owner, customary, and administrative authorities. This written agreement must be attached to the funding request and stored in the offices of the PMU in Djibouti. 4 - Review of the The environmental evaluation form is reviewed by the PMU officer in PMU in Djibouti environmental and charge of environmental and social issues. He will ensure that impacts social assessment of proposed activities have been properly assessed and that proposed form at the central mitigation measures are adequate and properly incorporated into the level subproject. He will determine if the subproject may be recommended for approval or if further evaluation is needed. When the evaluation criteria triggers that further assistance may be requested from the department concerned of MAEM-HR to ensure that appropriate procedures are followed, the Project will provide resources for it. The PMU will ensure the archiving of records in regional offices MAEM- RH or in Djibouti town. 5 - Approval of the Once reviewed by the PMU, the form is attached to the subproject Regional Steering subproject by application forwarded to Regional Steering Committee for approval. Committee with relevant authorities the support of the sub-directorate of rural development MAEM HR. 6 - Execution of It is the PMU’s responsibility to monitor the implementation of all PMU subprojects PRODERMO’s activities and ensure that environmental and social considerations are taken into account. The PMU shall ensure that appropriate practices and recommended mitigation measures are incorporated into the design of the subproject (e.g. in specifications and contracts with companies) and implemented in its construction phase and operations (e.g. by the Committees for Water Management). 7- Monitoring report The PMU must document and report to the World Bank on the PMU implementation process of environmental analysis of subprojects. It should also periodically check the compliance of subprojects with environmental requirements and incorporate the results in regular reports on progress of the project submitted to the World Bank. The PMU will also ensure the quality and maintenance of works constructed or rehabilitated (reservoirs, tanks, etc.). 68. Khor Angar desalination plant. The PRODERMO is designed to be a participatory project where communities will be enabled to identify subprojects and activities in a community 57 development plan or SAAHP. The reinforcement of an existing 200 m3/day capacity desalination plant50 in the Khor Angar area of the Obock region could be a possible subproject. In case this is identified in a community development plan, the project will first need to undertake a review of the entire water supply system in Khor Angar and decide whether it will be feasible to support this reinforcement. If the review concludes that it is feasible and beneficial for the project to support this, then the grant recipient will be required to prepare a separate environmental assessment and management/monitoring plan for the desalination plant which will need to be reviewed and cleared by IDA before the implementation can begin. 69. Capacity Building and Provision of Technical Assistance. Component 2 of the project is devoted entirely to capacity building and technical assistance. The capacities of local communities will be enhanced in organization, analysis, planning, management, and implementation of investments approved by the project. This component has the following three sub-components: (i) building the capacity of the MAEM-RH and PMU, including training of its technical staff and of its regional representations in the areas of participatory community-based development, integrated management, and advisory services, as well as specific technical studies, and (ii) building the capacity of beneficiary communities in terms of construction, operation, and maintenance of community-based water mobilization infrastructure, water quality protection and hygiene, income-generating activities, and animal husbandry. This last component also includes detailed social and environmental assessment studies related to some activities that are planned for implementation under the project and related capacity-building activities. 70. Institutional Setup for Implementation and Monitoring of ESMP. The ESMP lists potential environmental and social impacts, mitigation measures, and institutional responsibility for implementation and monitoring. Within the project’s context, the MAEM-RH will be the implementing agency, specifically the PMU. Additionally, an assistant project coordinator will be hired as part of the PMU, one of whose tasks will be to address the environmental and social safeguards issues related to the project and oversee the implementation of the ESMP. He/she will also be responsible for ESMP reporting within the PMU. The project has budgeted for the hiring of a consultant to undertake independent monitoring and reporting to the PMU on ESMP implementation. The need for capacity building and training for various stakeholders at different levels in order to adequately address potential environmental issues (implementation and monitoring) is also outlined in the ESIA. The prepared ESMP will be included in the project Operations Manual. 71. Disclosure of information on subprojects. The PMU will comply with World Bank policy on disclosure of information. This policy requires that when a subproject is approved, any Environmental Management Plan must be made available to the public in a place accessible to the local population (e.g. in the regional offices of the PMU in Obock and Dikhil or at the offices of the Regional Council), in a form and in a language they can understand. They must also be communicated to the Bank for disclosure at the local office, if any, and through the Bank Infoshop. 50 See Annex 2, Component 1.1 for more details on the desalination plant. 58 72. Reporting on ESMP. The PMU will be responsible for environmental and social reporting on implementation of the ESMP. Inputs will be included in the bi-annual progress reports that the PMU will prepare and submit to the Bank. 73. Stakeholder Consultation and Disclosure of ESIA. Stakeholder consultations were carried out during project preparation. To protect the interests of potential affected communities, the ESIA process included consultation and disclosure of information to key stakeholders involved in, and/or affected by, the project. As per the objectives of consultation and disclosure, various stakeholders and interested parties were consulted and informed of the proposed project. They were given the opportunity to express their views and opinions regarding the potential impacts that might affect their livelihood. The ESIA report includes a summary of the outcome from these discussions, including key issues raised and how they will be addressed by the project. 74. In accordance with World Bank disclosure policy and guidelines, the executive summary of the ESIA (in French) was translated into English and both versions were disclosed at the World Bank’s Infoshop before project appraisal. They were also disclosed in-country in easily accessible places to the public, in the MAEM-RH central office, the regional offices in Obock and Dikhil, as well as on the PROMES-GDT and ministry websites. b. Social 75. An Environmental and Social Impact Assessment (ESIA) has been completed and enabled to gather additional social and economic data on the project areas and communities targeted by the project, including constraints and economic opportunities for development, existing development activities, and existing community and non-governmental organizations. The ESIA was disclosed in Djibouti on January 29, 2011, at the MAEM-RH central office, the regional offices in Obock and Dikhil, as well as on the PROMES-GDT and ministry websites. The ESIA was disclosed at the Infoshop on February 1, 2011. 76. Poverty dimensions in the region of Obock and Dikhil.51 The PRODERMO will intervene in Obock and Dikhil, targeting about 3000 households. The Obock region occupies 24 percent of the territory with an area of 5,700 square kilometers. The total population is estimated at 37,800 inhabitants (11,700 people as urban population, 9,800 as rural sedentary population, and 16,300 as nomadic population), hence about 4.6 percent of the total Djiboutian population and about 11 percent of the total population outside of the capital. It is estimated that 54 percent of the Obock population is aged 25 years or younger. In terms of households, there are about 6,000 family units in Obock52. The region of Dikhil constitutes about 30 percent of the national territory with a total area of about 6,800 square kilometers. The population of the region can be estimated at around 88,900 inhabitants (24,900 as urban population, 22,500 as rural sedentary population, and 41,552 as nomadic population), hence about 10.87 percent of the total Djiboutian population or 25.9 percent of the total national population living outside of the City of Djibouti. In terms of households, there are about 14,000 family units in Dikhil53. 51 Plan de Développement Régional – Collectivité Régionale de Obock, Octobre 2009. 52 With an average of 6.2 persons per household. 53 Ibid. 59 77. It is believed that Obock is one of the poorest regions of the country, with about 80 percent of the population considered poor. In Dikhil, it is considered that 86 percent of the population lives under the poverty threshold. 78. Social constraints. In both regions there are social constraints which include a limited number of civil society organizations, a weak organizational and management capacity and availability of skills, a lack of access to capacity building, as well the rarity of community, women, and youth associations. Women and young girls are burdened by work, the lack of equipment to ease their daily chores, and limited access to basic services. 79. In the region of Obock (North), there is: (i) At Khor Hangar, a women’s association (20 members) which is active in the environment sector (cleaning of the village, plantation, and care of trees). The association is interested in agriculture. The members have already taken part in the building of a fence for the water desalinization plant with their own savings (100 DJF/member). (ii) A representative of the fishermen association has indicated the difficulties to sell fish in Djibouti. They lack trucks with icing equipment to transport the fish. The fish are sold in Yemen which is closer even if the exchange rate is not very favorable. The association, constituted mainly of youth, wishes to receive support from the PRODERMO in terms of selling their fish in Djibouti City. 80. In Dikhil (south), the PRODERMO may rely on existing community structures. There exists an agricultural cooperative in As Eyla and a women association (over 100 women) which works in the area of education, health, and environment. The association is also involved in making and selling art craft, there exists also a youth association which manages a community center. In Hanleh 1 (Kori-Koma) there is an association of farmers (32 members). The financial resources of the association are constituted by the membership fees per family. 81. Economic opportunities. Revenues in both project-targeted regions come mainly from cattle raising, trade, small informal activities, and to a lesser extent from fruit production/gardening. In Obock, there have been a few successful microcredit experiences with women54. There is also a cooperative of fishermen, the oldest association of the city of Obock, yet the catch of fish is increasingly diminishing to satisfy the needs of the population. In Dikhil, economic opportunities are enhanced by women’s know-how in handicrafts, the alignment on the Ethiopia-Djibouti border allowing for commercial opportunities, a know-how in gardening, and diversification of cultures, among others. However, overall, the physical and climate-related constraints have reduced the farming areas and the agricultural areas as well as cattle raising. 82. Promotion of women. In each region, the Ministry of the Promotion of Women has a local office with a mandate to implement and follow up activities and programs of the ministry, and to collect information on specific needs of women. Most regional activities are inspired from the national strategy of integration of women in development and from some guidelines of a 2003-2012 action plan. The main initiatives include literacy programs, care centers for children, support to vulnerable women, construction of wells, data collection on women, capacity building on human rights targeting civil society. During project preparation, the communities met by the 54 Plan de Développement Régional – Collectivité Régionale de Obock, Octobre 2009. 60 Bank team indicated their desire to benefit from capacity building in order to multiply their access to more income-generating activities. It has not been determined if the project stakeholders would partner with the existing structures and programs set up for women by the Ministry. 83. Socio-anthropological context. It is important to understand the ethnographic context of the Djiboutian population. Limited sociologic data exist, in particular in rural areas. Overall, two ethnic groups structure the rural population of Djibouti, the Afars and the Issas: the communities in the North (including Obock) and South-West (including most of Dikhil) are mostly Afar, whereas the Issas are concentrated in the southern region of Ali Sabieh and in the City of Djibouti. The traditional social organization in Djibouti plays an important role in preserving social cohesion in rural areas and notably in the northern regions. Social organization is hierarchical. 84. The Afar communities. The socio-political organization of the Afar is a hierarchy. The chefferies, or sultanates, territorial and political units are headed by a supreme chief or sultan designated for life. He is seconded by a vizir, his potential heir. In charge of protecting his territory and the people he governs, the sultan decides of peace and war. Though the sultan has at his disposal, in principle, the territory under his influence and of which he considers himself to be owner, he often concedes its uses and sometimes its ownership (against remuneration) by allowing the different groups (lignages) of the tribe, some grazing areas which might be for them some areas of gathering and residence. On these territories managed collectively and considered as common patrimoine, the beneficiary groups have, in normal times, exclusive rights of exploitation. In normal times (non-drought), the use of the parcours is strictly regulated in order to preserve its sustainability. In times of crisis, the space is open to all in order to safeguard the cattle; however, the neighbors’ cattle is admitted only in terms of reciprocity agreements. 85. The Issa communities. Usually considered as a pastoral democracy, the Issa are presented as a confederation of tribes, and a limited hierarchy. Two main instances are invested of social regulation powers: the Gandé and the Guddi. The first constitutes an assembly of 44 members representing all the tribes of the confederation. The second is a sort of group (cour) with overall competency. The tribes of the Issa confederation are tied by the Xeer, a type of social contract which serves as a constitution. The basic unit or Reer materialized by a village (campement) corresponds to the nuclear or extended family or sometimes the clan. In principle, for the Issas, land and its resources are collectively owned. Grazing areas and water are considered as common goods; the respective usage seems to follow the first come, first served rule. 86. Participatory approach and planning. Building on the PROMES-GDT, the PRODERMO will promote and enhance a participatory approach to water and agro-pastoral resource management and rural development in general, whereby beneficiary communities will play an integral role in the identification, preparation, implementation, supervision, operation, and maintenance of community subprojects, with technical assistance and training from the PMU central and regional office teams and with the involvement of local, sectoral, and administrative authorities. In terms of planning of activities, this involves several key steps: (i) several information meetings with the communities, local and administrative authorities; (ii) the establishment of community-based structures such as local steering committees (CPLs) within 61 each parcours after consultation of the communities and designation of its members by the community leaders55; (iii) the diagnostic and prioritization of needs in each parcours; and (iv) the elaboration and validation of SAAHPs (schémas d’aménagement). 87. The SAAHP, prepared by the CPL with support from the PMU, typically includes the role and responsibilities of the local steering committee, a socio-economic diagnostic of the area, its physical and climate parameters, hydraulic resources, geographical delimitation and the activities selected by the community. In addition to listing the planned activities, the SAAHP indicates the land areas where activities will be implemented. These areas are designated in consultation with the traditional and administrative authorities. Each SAAHP also includes the list of those who contributed to preparing it (CPL members, administrative authorities, and PMU staff). A validation meeting is held to validate the SAAHP and is attended by the members of the CPL, local authorities, and representatives of the community. The SAAHP is signed by the CPL members, the administrative and traditional authorities, and the PMU coordinator. The PMU (central and regional offices) and the CPL will retain copies of all signed SAAHPs, which can constitute a formal agreement between communities, the administration, and the PMU. A copy of the CPL will also be published at the local administrative office. Schemes will be reviewed and updated on an annual basis by the beneficiary communities with support of the PMU staff. 88. Beneficiary communities. These will generally be organized in committees managing water and rangeland areas, referred to as CGEPs. CGEPs are usually constituted of direct beneficiaries of a structure, e.g. a water point, and can also be in charge of other activities in their zones such as agro-pastoral activities. Often, the CGEPs are already established around existing customary structures, which the project will respect as existing and valuable support. The project will seek to establish new structures only when none exist. In the context of the PRODERMO, beneficiary communities can play, through their respective CGEPs, an integral role in the implementation, supervision, and maintenance of community subprojects, with technical assistance and training from the PMU central and regional office teams. 89. Beneficiaries communities will also participate in the project through local steering committees (CPLs) as described above. The CPL is representative of a group of villages and communities possessing traditional grazing rights over a common area of rangeland (parcours). Each CPL will comprise about 12 members, representatives of communities living in the parcours, including at least two women and two youth members per CPL. One CPL will be created per communal grazing area or parcours, hence three CPLs should be created throughout the project, given that three grazing areas (parcours) are planned to be targeted. 90. Specific roles of the CPL. The CPL represents the beneficiary communities of the project areas vis à vis the PMU. The CPL oversees also the work of the water/rangeland management committees (CGEPs). The CPLs (often in consultation with the CGEPs) will be responsible for: (i) the regular maintenance of water mobilization subprojects in terms of labor and tools directly undertaken by the water management committees; (ii) the organization of the water supply for human and animal consumption; (iii) the monitoring of water quality in water mobilization subprojects; (iv) the maintenance of rangelands and set-aside areas; (v) the 55 The establishment of the CPL is documented by minutes of the meeting, gathering at least local customary authorities and communities. 62 enforcement of set-aside rules; and (vi) general mobilization of community participation. The CPLs will also participate in the organization and supervision of highly labor-intensive works and will be responsible for the monitoring of the SAAHP in terms of water availability during the dry season and the estimation of the biomass available in rehabilitated rangelands. 91. Participation of women. Women would be consulted at all stages, including during the participatory diagnostic, to determine activities for water and agro-pastoral subprojects, during the formulation of the SAAHPs, and on the choices of structures to build and rehabilitate. Women will be members of the community-based structures and at least 2 in the CPLs. This would require adequate sensitizing and training activities of MAEM-RH staff. During project preparation, the PMU staff indicated that the traditional organizational structures differ between ethnic groups, indicating that the hierarchy system of the Northern region seemed to contribute to the success of the local steering committees, whereas in the southern region, it would be pertinent to support the committees with continuous monitoring, organizational capacity building, and eventually with material motivation in order to motivate continuously the CPLs. 92. Capacity building of staff. An IFAD report56 indicates that the planning and implementation capacities of the PMU are limited. The following reasons are suggested: (i) the technical staff is often involved in tasks other than those related to the PROMES-GDT; (ii) there is no clear allocation of activities contained in the annual budget and work plan of the technical staff; and (iii) the multiplicity of donors. Consequently, the planning of implementation of activities is not respected. 93. The project will invest in a regional coordination office, based in Obock (north), and reinforce the staff capacity of the existing regional office based in Dikhil (south). Hence, there will be two regional coordination offices in charge of implementing the project at regional levels, while the central office, based in the capital, plays an overall coordination role. Both regional offices will report to the central project management unit. To relate to social development and the proposed participatory approach, capacity building is planned and budgeted both for the MAEM-RH staff and communities, in areas including community-based development, management of agro-pastoral and water resources, etc. 94. In terms of staffing, four extension workers (two in each region) would play a fundamental role in liaising with communities in particular and supporting the daily implementation of the PRODERMO in general. They would have similar tasks to those hired for the PROMES-GDT, including periodic interaction with communities, monitoring of activities led by communities, providing support to the CPLs and CGEPs, including possibly on training, and contributing to the elaboration of the SAAHPs. 95. Capacity building of community-based organizations, namely the CPLs and CGEPs. This will also be undertaken under the project. As indicated in the main text, the PMU may partner with the Unit for Decentralized Management of Water Points which has developed a community management strategic plan (methodology and manuals) for the purpose of setting up and strengthening water management committees. This strategic plan has been elaborated with support from UNICEF. 56 Prepared for the additional financing of the PROMES-GDT. 63 96. Social safeguards. The MAEM-RH will be the responsible government implementing agency with daily management of the project handled through the PMU. Issues related to safeguards monitoring and reporting will be done by the PMU at the central level in coordination with its regional offices. 97. OP 4.12 is not triggered. It has been discussed with the counterparts that subprojects requiring involuntary resettlement of people or involuntary land acquisition would not be eligible for financing under the proposed project. This matter has been reiterated in the ESIA including in the questionnaire evaluating the project’s potential impacts (Questionnaire d’évaluation des impacts potentiels du projet) and will be indicated in the Operations Manual. 98. The ESIA prepared by the counterparts, included a consultation process with local administrative and traditional authorities, community representatives, community-based organizations. The ESIA findings indicate that land belongs to the state and that its attribution is under the responsibility of the administrative authorities. In reality, as the PMU states in the ESIA, most of the domain and land activities of the state are limited to the capital, to the urban areas of the main regional cities, and to the main areas (chefs lieux) of communes where administrative authorities (sous préfets) reside. The state is involved mainly in terms of housing operations, commercial, and industrial-related activities. 99. In rural areas, the ESIA indicates that the management of rural land, in particular of the parcours (grazing zones) and forests has been attributed to local customary authorities. It is the pastoral usage that overpowers (préséance) other activities considered as “modern” (irrigated cultures and other industrial and/or commercial activities). Hence, state representatives ask customary authorities for the authorization to use/obtain land when it comes to building schools, health centers, etc. 100. In the context of the PRODERMO, some activities under Component 1, and determined in a participatory manner including the communities themselves, will require the use of land. Given the role that both the administrative and customary authorities play, the counterpart team has indicated that the MAERH seeks to include all relevant parties beginning with the formulation stage. Land areas will be determined and their voluntary usage decided in a participatory manner, on the basis of: (1) consultation meetings with administrative and customary authorities and local steering committees which represent communities, and (2) documentation in the SAAHP, which is prepared by the local steering committee with the support of the PMU and which lists: (a) the activities chosen by the communities of a specific locality, and (b) the land areas designated in common, without compensation, to implement those activities. The SAAHP will be signed by the CPL members, the administrative and traditional authorities and the PMU coordinator. It can constitute a formal agreement between the customary and administrative authorities regarding the non-compensatory use of specific parcels for the implementation of activities. It has been discussed with the counterpart team that a copy of the SAAHP will be available at community level (with CPL), at the local administrative level, and at the PMU (regional and central office). 101. Institutional arrangements. Consultation and agreement of voluntary land use by the communities and authorities will be monitored and documented by the local PMU field staff 64 (animateurs), under the supervision of the regional PMU coordinators. Reporting on these matters will be performed at regional and central levels. 102. Capacity building. Field and central staff have never been involved in implementing World Bank-financed projects. Information on monitoring and reporting on social safeguards- related issues will be integrated in the launch information seminars of the project. Some capacity building has been planned for central and field staff including the recruitment of a consultant, who can provide support to the PMU (4 months/year during 5 years). D. Monitoring & Evaluation a. Monitoring 103. The PMU, specifically the national Project Coordinator, will responsible for the M&E of the project, as well as the analysis of M&E data and the finalization of project progress reports. To this end, the PMU will work in close collaboration with the relevant unit and staff of the MAEM-RH with M&E responsibilities. To address the current lack of capacity in this area, the PMU will be strengthened under the PRODERMO with a Deputy Project Coordinator with extensive experience in M&E who will assume the responsibility for all M&E activities, analyses and reporting. The PMU will also monitor the project’s intermediate result indicators (see Annex 1) and provide bi-annual updates of these indicators to be included in the project’s annual reports. Data collection, verification, and initial analyses will be the responsibility of the regional offices, specifically the regional Project Coordinators. The project will also fund the recruitment of 4 community/extension workers (2 in each regional PMU), who will be responsible for community mobilization as well as regular field visits to follow up on project activities. These community workers will also play a critical role in the M&E system, particularly data collection. In addition to the community workers, technical staff of the PMU will carry out surveys on the results of water investments under the project, as well as perform critical analyses. At the end of each year, the results of the SAAHPs will be assessed jointly by the communities and the technicians involved. The results will be consolidated on a yearly basis at the regional and national levels to provide an initial assessment of project results as well as to inform the activities to be included in the subsequent year’s updated SAAHP. 104. The PMU already has a well-functioning Geographic Information System (GIS), which will be used to integrate the M&E database to allow better spatial monitoring of project activities. Moreover, the M&E activities of the PRODERMO and PROMES-GDT will be integrated into a single system which would serve as a nucleus for the overall M&E system at MAEM-RH where it would continue to operate beyond the completion dates of the these projects. 105. It is also proposed that the PMU coordinate closely with the CERD for the monitoring of hydrological aspects water investments and with the CHWs trained by UNICEF for monitoring of water quality. The PMU technical staff will further benefit from the international and national expertise of experts in the field of water resource management, agronomy, and others to be financed by the project. 65 106. Bi-annual progress reports. Progress reports will be required on a bi-annual basis and contain the following elements: (i) project description; (ii) summary table presenting estimated targets at the appraisal stage, the cumulative targets as estimated from SAAHPs, cumulative achievements thus far, and the previsions and actual results for the current year, as well as the ratio of achievements; (iii) financial progress per component and by expenditure category; (iv) a qualitative description of the progress for each component and any constraints encountered; (v) recommendations; and (vi) implementation of recommendations from the supervision mission. Each year, the PMU will proceed to perform a participatory monitoring of SAAHPs during which the CPLs, with PMU support, will hold discussions with groups of men, women, and young people, on the relevance, effectiveness, and preliminary impacts of the activities in the SAAHPs. The PMU will complement the information associated with the monitoring of SAAHPs with the results from the hydraulic works operational monitoring and water quality monitoring. b. Evaluation 107. An independent consultant will be recruited to carry out the baseline study for the PRODERMO, with close supervision by the PMU, within six months of project effectiveness. The baseline study will represent the reference for the project and will include surveys to be completed for the project area. The surveys will collect data on the socioeconomic conditions of households and inventory of water points in order to determine the volume of water currently being mobilized, actual needs in terms of construction or rehabilitation, as well as the current access of populations to a potable water source. Ecological reference data will be gathered through an inventory of livestock in the project areas and an agro-pastoral resource diagnostic, which will complement the preparation of SAAHPs. Demographic and anthropometric data will also be collected during the surveys. 108. The PMU will also contract independent consultants to prepare the mid-term and end-of- project evaluations, including rapid appraisals to provide updates on the socioeconomic conditions and agro-pastoral and water resources in project areas. The mid-term evaluation will assess the operational aspects of project, namely the progress in the completion of activities and the achievement of the PDOs. The mid-term evaluation will also include recommendations for project implementation to remain on track. 109. The end-of-project evaluation will have the same scope as the mid-term review but will focus particularly on project outcomes and results at the local, regional and national levels, impacts on poor households and on gender balance, achievement of PDOs and anticipated impacts, as well as reproducibility potentials and project impact durability. The end of project evaluation will also provide recommendations in terms of M&E and replication of best practices, especially for a sustainable mobilization of water and agro-pastoral resources for better access by rural households and their herds. Terms of reference of the mid-term and end-of-project reviews will be agreed with IDA and included in the Operations Manual. 110. The mid-term and end-of-project evaluations will need to measure the progress against the PDO Level Results Indicators (see Annex 1). This should be kept in mind for the baseline study, which will need to collect baseline data for these indicators. The list of these PDO Level 66 Results Indicators will need to be included in the TORs for the baseline study. Baseline information will also need to be collected for Intermediate Results Indicators. 111. Evaluation Schedule. (i) Baseline of outcome indicators: a. The baseline information on the PDO Level Indicators will be established through surveys completed by an independent consultant; b. Baseline information on Intermediate Results Indicators will be established through surveys completed by an independent consultant. (ii) Mid-term evaluation: a. The PMU will recruit a consultant (firm) to prepare, under terms of reference agreed with IDA, a mid-term evaluation report including a review of progress achieved in all components (results evaluation), and review the effectiveness of the project, cost-effectiveness, implementation of the participatory methodology, alignment of the project with actual government policies, Bank project supervision performance, as well as all intermediate outcome monitoring indicators; b. The mid-term evaluation will also include a limited beneficiary assessment (project beneficiaries, partners, Government) through a rapid appraisal survey or using focus groups; and c. The evaluation report will make recommendations for further project implementation. (iii) End-of-project evaluation a. As is the case for the mid-term evaluation, the PMU will recruit a consultant (firm) to prepare, under terms of reference agreed with IDA, an end-of-project evaluation report including: i.A review of the achievements in all components (results evaluation); ii.A review of the effectiveness of the project; iii.An evaluation of the cost-effectiveness of the project; iv. An evaluation of the implementation of the participatory methodology; v. An evaluation of the project impact on the basis of the outcome indicators and other relevant results; and vi. An evaluation of the relevance of the Project within the government economic and social policies. b. The independent evaluator will make an estimate of the economic and financial internal rate of return of the Project on the basis of the Bank’s financial and economic evaluation in the PAD; c. The independent evaluator will carry out a full beneficiary assessment of the project (by participants, partners, local, and central government) as well as an 67 evaluation of the Bank’s performance during preparation and implementation; and d. The evaluator will also present lessons learned at the technical, financial, institutional, and natural resource management level. 112. Communication strategy. The PMU will need to define, from the project start, the communication strategy in terms of information to be provided to different partner institutions involved in project implementation, in particular the Regional Steering Committee. The PMU will need to establish a detailed list of all information recipients as well as their information needs. In addition to written reports, M&E results can be communicated during the workshops and meetings organized for project implementation and supervision. 113. Budget. Component 3 has allocated the following budget for M&E: (i) US$ 25,000 for the baseline study; (ii) US$ 30,000 for the mid-term evaluation; (iii) US$ 30,000 for the end of project evaluation; (iv) US$ 50,000 for annual financial audits of the project; (v) US$ 25,000 for the social assessment; and (vi) US$ 42,000 for the preparation of the Operations Manual. The M&E capacity of the MAEM-RH at the national level is also being reinforced through the recruitment of a Procurement Specialist and an adjunct Financial Manager, as well as technical expertise in the form of national and international consultants specializing in water and agro- pastoral resource management, agronomy, and fisheries, among others. 68 Appendix 3.1: MAEM-RH Organizational Chart           MINISTER CNRE ONEAD    Technical  Directorate Fishing Port    Advisors Secretariat Center for the Regional Livestock Raising SECRETARY GENERAL            Programming, Monitoring and Communication Service             General Administration Directorate          IT Service     Project Management *Programming, Monitoring and Statistics Subdivision *Administration and Personel Management Service *Network Subdivision            Office (BGP) *Communication and Documentation Subdivision *Finances and Legal Affairs Service *Database Subdivision * Monitoring with Financial Institutions Subdivision              Water Directorate * Water Resource Service             Agriculture and Forest          Livestock and Veterinary *Engineering and Works Service            Civil Works Directorate           Fisheries Directorate                      Directorate            Services Directorate *Support for Decentralized Water * Design and Monitoring Service * Fisheries Development Service  *Vegetation Production Service *Livestock Raising Service Management Service *Management and Maintenance of  *Marine Resources Management *Forest and Desertification *Veterinarian and Food * Sanitation Service Heritage and Materials Service  Prevention Service Controls Service * UGP * Technical Service Sub‐Regional Directorate       Sub‐Regional Directorate Sub‐Regional Directorate     Sub‐Regional Directorate Sub‐Regional Directorate of Ali Sabieh       of Arta of Dikhil                    of Obock of Tadjourah * Water Sudivision (maintenance  * Water Sudivision (maintenance  * Water Sudivision (maintenance  * Water Sudivision (maintenance  * Water Sudivision (maintenance  of works and support to water  of works and support to water  of works and support to water  of works and support to water  of works and support to water  point management point management point management point management point management * Rural Development and Food  * Rural Development and Food  * Rural Development and Food  * Rural Development and Food  * Rural Development and Food  Security Subdivision (Livestock Security Subdivision (Livestock, Security Subdivision (Livestock Security Subdivision (Livestock, Security Subdivision (Livestock, and Agriculture) Agriculture and Fisheries) and Agriculture) Agriculture and Fisheries) Agriculture and Fisheries) 69 REPUBLIC OF DJIBOUTI RURAL COMMUNITY DEVELOPMENT & WATER MOBILIZATION PROJECT (PRODERMO) Annex 4: Operational Risk Assessment Framework (ORAF) Project Development Objective(s)    To increase access of rural communities to water and enhance their capacity to manage water and agro‐pastoral resources in the project areas  using a participatory approach to community‐based development.     PDO Level Results  1. Increase in the number of rural households with access to drinking water within a reasonable travel time (two hours  Indicators:  roundtrip) in the project areas.  2. Increase in the number of heads of livestock with access to water within a reasonable distance (20 km radius) in the  project areas  3. Increase in available grazing biomass in the targeted rangelands in the project areas 4. Creation and/or reinforcement of community committees participating in the planning, implementation and  monitoring of the activities defined in the participatory community development plans, or local SAAHPs in the project  areas     Risk Category Risk Rating Risk Description Proposed Mitigation Measures Alignment of country and Bank interests The Bank’s program is very selective, focuses on a L few sectors and builds on co-financing partnerships and trust funds to leverage the Bank’s influence. Project Stakeholder Risks Recipient commitment to the Project objective may Project preparation has involved broad discussions change with stakeholders and technical level staff of the L counterpart Ministry. This will continue during the next stages of negotiations, approval and implementation. Beneficiary Communities’ willingness to embrace a Provisions for adequate resources and plans for proper MI change of attitude and mindset toward more community awareness, mobilization, education and proactive involvement and self-empowerment capacity building have been included in the project design and would be put in place during implementation. Implementing Agency Risks Capacity: Lessons from the IFAD and AfDB-funded operations (excessive start-up delays in particular) have been Lack of prior experience with IDA-funded projects adopted in the final design of PRODERMO. These 70 include: Weak implementation capacity and limited staffing A realistic implementation timetable has been worked may generate significant delays in project out with the MAEM-RH and the Djiboutian implementation. authorities. The project includes adequate provisions for capacity Lack of adequate coordination between various building and institutional strengthening under relevant directorates of MAEM-RH might affect Component 2 (planning, implementation, monitoring Project execution, including causing delays and and evaluation, fiduciary and safeguards, etc.). In misunderstandings addition, the Task Team would provide close technical support to the PMU during supervision for sound project implementation. H Provisions are also included in the Project to recruit additional contractual staff to complement the PMU personnel already in place. These include additional consultants with experience with IDA procurement and financial management processes and to be fully dedicated to support the proposed project activities. The IDA team will also provide a training workshop on IDA procedures and guidelines and assist with procurement planning, implementation, and record keeping. Specific financial management processes and procedures under design would ensure that project funds are use efficiently, and these processes will be reflected in the Operations Manual. The PMU will also hire needed persons and operationalize the accounting software. Governance: IDA will continue its work with the Government to Weak inter-institutional coordination capacity strengthen its capacity, including on procurement and ML National Steering Committee not functioning financial management. effectively Fraud & Corruption: New Anti-Corruption Guidelines would apply. The IDA team would continue to provide technical Relatively weak anti-fraud and corruption ML assistance under the Governance and Anti-Corruption environment and effort to tackle the issue may (GAC) program. Technical assistance would be delay project preparation and implementation provided in the areas of procurement, budgeting, financial management and auditing. 71 Project Risks  Design Excessive delays and slippages in ensuring full This risk would be mitigated through proper ML compliance with Board presentation requirements coordination and consultation with the MEFPP on may prevent meeting IDA 15 timetable. these issues.  Social and Environmental Recipient not able to implement the project under The Client has completed the preparation of the agreed safeguards policies project environmental and social impact assessments following IDA guidelines. Key procedures and recommendations of the ESIA will be included in the Project Operations Manual to be prepared before effectiveness. Staff and budget provisions have been made to ensure proper implementation of these procedures and recommendations. The IDA team will also provide support to the client in the implementation phase to ensure compliance with IDA requirements. Reputational risk related to poor water quality The overall project design and design of specific water community subprojects includes proper arrangements (training, guidelines, awareness campaign, public outreach activities, monitoring, etc.) to adequately address the water quality aspect, and also to ensure that proper mechanisms for maintenance are also part H of the initial design and are put in place during implementation and in the operation phase of this infrastructures. Furthermore, these issues will be addressed in the Project’s Operational Manual to be prepared. Climate variability may affect results and pace of Increased focus has been put on rehabilitating and/or implementation constructing groundwater wells, and at the same time implementing effective watershed management in order to facilitate groundwater recharge. This will be complemented by water resource assessments and monitoring in priority areas. Alternative income- generating activities proposed for the project also intend to reduce vulnerability of poor rural communities to climate impacts and to diversify the local economy. Relevant sections on safeguards monitoring will be included in the regular progress report to facilitate 72 supervision. Remedial measures in case of inadequate compliance could include withholding final approval of the SAAHPs for the relevant specific region or sub- region.  Program and Donor Project success may be adversely affected by an The IDA team would ensure that close monitoring and inconsistent performance of the parallel PROMES- a sufficient level of coordination is taking place with GTD project. the other donors involved during implementation. In MI addition PRODERMO has been designed as a fairly stand alone project with relative implementation autonomy.  Delivery Quality Inadequate and ineffective coordination with other The project design is careful to coordinate and build donors/partners may overwhelm the limited on the work of other donors, namely the IFAD national implementation capacity and undermine PROMES-GDT project and others, along with a built- MI performance and results. in allocation of resources (financial and staff). The existing steering committees are being used for the project purposes to enhance the opportunities for cross-project coordination and to limit the burden on limited capacities and human resources. Lack of sustainability of the works supported by the Assessment of community subprojects would include Project. an operations and maintenance plan (including training) as selection criteria. This will be reflected in the Operations Manual. Close supervision of implementation will be needed and is planned. If the risk of implementation capacity being overwhelmed during implementation does appear to be materializing, supervision missions and the MTR would be used to seek and to agree upon needed corrective changes on a case-by-case basis  Other Costs of implementing community subprojects Other donors already involved in the sector rely on though private contractors might prove prohibitive private contractors. Realistic cost estimates have been ML in remote rural areas, especially with limited private prepared on that basis. Close unit cost monitoring will company presence in such areas. be needed during implementation. Overall Risk Rating at  Overall Risk Rating During  Comments  Preparation  Implementation      High  High    73 REPUBLIC OF DJIBOUTI RURAL COMMUNITY DEVELOPMENT & WATER MOBILIZATION PROJECT (PRODERMO) Annex 5: Implementation Support Plan Strategy and approach for Implementation Support 1. The strategy for implementation support (IS) has been developed based on the nature of the project and its risk profile. It aims at making implementation support to the client more flexible and efficient, and will focus on implementation of the risk mitigation measures defined in the ORAF. 2. Procurement. Implementation support will include: (a) providing sufficient training to members of the procurement-related staff of the PMU (central and regional offices); (b) reviewing procurement documents and providing timely feedback to the PMU; (c) providing detailed guidance on Bank Procurement Guidelines to the PMU; and (d) monitoring procurement progress against the detailed Procurement Plan. 3. Financial management. Supervision will review the project’s financial management system, including, but not limited to, accounting, reporting, and internal controls. Supervision will also cover subprojects on a random sample basis. IDA team will also work with the PMU to assist in improving coordination among different Directorates and units for financial management and reporting. 4. Environmental and Social Safeguards. The IDA team will supervise the implementation of the agreed-upon Environmental and Social Management Plan and provide guidance to the PMU to address any issues. 5. Anti-Corruption. The IDA team will supervise the implementation of the agreed Governance and Accountability Framework, and provide guidance in resolving any issues identified. 6. Other Issues. Sector-level risks, such as proper coordination, will be addressed through dialogue with the Government and PMU. Implementation Support Plan 7. Most of the IDA team members will be based in the headquarters office and other country offices in the region (Cairo, Rabat, Tunis) to ensure timely, efficient, and effective implementation support to the client. Formal supervision and field visits will be carried out semi- annually. Detailed inputs from the Bank team are outlined below: (i) Technical inputs. Water resource management, agro-pastoral, and community-based development inputs are required to review the SAAHPs for the selected subprojects through proper technical specifications and the adequate implementation of the participatory process. Technical supervision is required to ensure technical contractual obligations are met. The team’s Water Management Specialist will conduct site visits on a semi-annual basis throughout project implementation. 74 (ii) Fiduciary requirements and inputs. Training will be provided by the Bank’s Financial Management Specialist and the Procurement Specialist before the commencement of project implementation. The team will also help the MAEM-RH/PMU identify capacity building needs to strengthen its financial management capacity and to improve procurement management efficiency. Both the Financial Management and the Procurement Specialist will be based in country offices (Cairo, Rabat, Tunis) to provide timely support. Formal supervision of financial management will be carried out semi- annually, while procurement supervision will be carried out on a timely basis as required by the client. (iii)Safeguards. Inputs from an Environment Specialist and a Social Specialist are required. On one hand, this is the first IDA-financed project in which the MAEM-RH is involved, hence the PMU lacks familiarity with World Bank safeguards operational policies; on the other hand, the project relies on a community-based and participatory approach. Training is required on environment and social safeguards-related monitoring and reporting. Field visits are required on a semi-annual basis. The Social and Environmental Specialists are both based at headquarters. (iv) Operation. The TTL, based at headquarters, will provide day-to-day supervision of all operational aspects, as well as coordination with the client and among IDA team members. The main focus of implementation support is summarized below. 75 I. Implementation Support Summary Time Focus Skills Needed Resource Estimate Partner Role Technical and Technical and procurement Procurement Specialist 4 SWs1/ Procurement review of the TORs and contracting documents Financial Financial management training Financial Management Specialist Management and supervision 4 SWs Environment Environmental training and Environmental Specialist 4 SWs First supervision twelve Institutional Institutional arrangement and Operations Officer 8 SWs N/A months Arrangements project supervision coordination Team Project task team TTL 5 SWs Leadership Agricultural Specialist 5 SWs Water Resource Management Specialist 5 SWs SAAHPs Implementation of the first Procurement Specialist 2 SWs SAAHP Environment Environmental and social Environment Specialist 2 SWs and Social monitoring and reporting Social Specialist 2 SWs Financial Financial management and Financial Management Specialist 12-48 Management disbursement reporting 2 SWs N/A months Operations Officer 8 SWs Task Project task team TTL 5 SWs Leadership Agricultural Specialist 5 SWs Water Resource Management Specialist 5 SWs 1/ SW=Staff Week 76 II. Skills Mix Required Skills Needed Number of Staff Weeks Number of Trips Comments Agricultural Specialist 6 SWs first year, then 2 Four, field trips are Headquarters-based SWs annually in the required following years Water Resource 3 SWs first year, then 2 Two field trips are Headquarters-based Management Specialist SWs annually in the required following years Procurement 4 SWs annually Four, field trips are Country office-based required Environmental 2 SWs annually Four, field trips are Headquarters-based Specialist required Social Specialist 2 SWs annually Four, field trips are Headquarters-based required Financial Management 2 SWs annually Four, field trips are Country office-based specialist required Task Team Leader 4 SWs annually Eight, field trips are Headquarters-based required III. Partners Name Institution/Country Role General Director CERD/Djibouti Technical research resource General Director ADDS / Djibouti CPN member Country Program Manager FFEM-AFD/Paris CPN member / Financier PROMES-GDT Country Program Manager IFAD/Italy Financier PROMES-GDT Country Program Manager AWF-AfDB / Tunisia Financier PROMES-GDT Country Representative UNICEF/Djibouti CPN member/Water quality Country Representative WFP/Djibouti CPN member / Financier PROMES-GDT Program Specialist UNDP/Djibouti CPN member 77 REPUBLIC OF DJIBOUTI RURAL COMMUNITY DEVELOPMENT & WATER MOBILIZATION PROJECT (PRODERMO) Annex 6: Team Composition World Bank staff and consultants who worked on the project: Name Title Unit Garry Charlier Task Team Leader MNSAR Bekele Debele Negewo Water Resources Specialist MNSWA Fatou Fall Social Development Specialist MNSSO Banu Setlur Environmental Specialist MNSEN Guillaume Meyssonier Junior Professional Officer MNSEN Marie A.F. How Yew Kin Language Program Assistant MNSSD Maurice Saade Senior Agricultural Economist MNSAR Jean-Marc Bisson Sr. Agr. Economist, Consultant MNSAR Walid Dhouibi Procurement Specialist MNAPR Viviane Clement Junior Professional Associate MNSEN Hassine Hedda Finance Officer CTRFC Anas Abou El Mikias Sr. Financial Management Specialist MNAFM Abdellah El Bitar Financial Management, Consultant MNAFM Wassim Turki Financial Management, Consultant International Ignacio Jauregui Counsel LEGEM Jacques Blaas Economist, Consultant FAO-CP Alexandra Sokolova Economist, Consultant FAO-CP 78 REPUBLIC OF DJIBOUTI RURAL COMMUNITY DEVELOPMENT & WATER MOBILIZATION PROJECT (PRODERMO) Annex 7: Economic and Financial Analysis 1. The present analysis is aimed at evaluating the financial and economic viability of the project. Due to the scarcity of relevant/reliable data on the project areas (North - Obock; South - Dikhil), the analysis is based on the very limited information available in the Ministry of Agriculture, Livestock and Sea, plus several extensive discussions with the staff, as well as experiences and lessons drawn from comparable developmental activities in Djibouti and elsewhere. 2. The project includes a number of investment subprojects for which the concrete impacts can be quantified but also subprojects that have impacts which are extremely difficult to quantify without lengthy/costly surveys. The approach adopted here is first to quantify what is possible for now. The second part of the analysis attempts to discuss in qualitative terms these unquantifiable benefits. 3. Three broad types of subprojects – from Component 1 “Priority Community Investment Subprojects” – lend themselves to a simple (while still reliable and meaningful) quantification of their benefits. They are: (i) the construction of underground cisterns and open-air water reservoirs (with planting of fodder trees around the edges) as well as the construction or rehabilitation of boreholes (more than 10 meters deep) plus the construction of shallow wells (up to 10 meters deep); (ii) the installation of grazing set-aside areas, with partial reseeding; (iii) the promotion of income-generating activities, mainly for fishing and handicrafts. 4. Construction of underground cisterns. The cisterns will improve the access of rural households to potable water. This will reduce drudgery and the travel distance to fetch water, particularly for women, thereby providing them with additional time that could be used for household or animal husbandry activities. 5. Each cistern has a capacity of 100 m3 which is equivalent to 100,000 liters of potable water. Assuming that an average family of five persons needs 90 liters of water per day and that the content of the cistern normally lasts three months (90 days), this cistern would then supply 12 families per day (100,000 / 90 / 90). It is understood that a woman can take up to four hours to fetch water for drinking, and the objective is to reduce this time at least by half. The two hours saved per day can then be valued, using the actual hourly wage of unskilled labor (DJF 100), after shadow pricing to take into account the estimated underemployment in Obock and Dikhil. Table 7.1 shows the calculations. For each cistern, the total economic value of the time saved would be equal to DJF 129,600 for three months in Obock and DJF 151,200 in Dikhil. These savings do not include the benefits related to reductions in water-borne diseases due to better quality water and therefore the improvements in the health conditions of the beneficiaries (see below a discussion of such benefits). 6. The sustainability of the cistern and its benefits can be evaluated as follows. Table 7.1 shows that the replacement costs (in cash - i.e. before unskilled labor) would be around DJF 79 352,000 each five years (DJF 440,000 - 88,000). The economic value of the time saved over a five-year period is almost double of this in Obock and more than double in Dikhil, which means that the beneficiaries can easily afford the replacement if they use the time saved to take up some income-generating and/or expense-saving activities (promoted by the project or otherwise). Moreover, the remaining part of the replacement costs, as well as the annual maintenance of the cistern, consists of unskilled labor which the beneficiaries can provide over the year. (N.B.: For the evaluation of the sustainability of all types of subprojects, the investment costs are considered “sunk” because the beneficiaries are not expected to repay these costs.) Table 7.1: Value of time saved per cistern Capacity: 100,000 liters Family needs: 90 liters (6 persons x 15 liters) Length of time: 3 months (or 90 days) 100,000 / 90 / 90 = 12 family/days Labor time saved daily: 2 hours (4 hours of water collection halved) Hourly value of unskilled labor: DJF 1000 per day /10 hrs = 100 DJF: Obock Dikhil (DJF) (shadow pricing) 60% 70% Economic value of unskilled labor 60 70 Economic value of time saved daily 120 140 Economic value of time saved over 90 days 10,800 12,600 Economic value of time saved for all families 129,600 151,200 Costs including physical contingencies (DJF): Investment (total) 4,945,985 - of which 20% unskilled labor 989,197 Replacement (each 5 years) 440,000 - of which 20% unskilled labor 88,000 Annual maintenance (all unskilled labor) : 494,599 7. Construction of open-air water reservoirs. The reservoirs will improve the livestock's access to water which, when combined with improvements in pastures, will enhance the overall health and nutritional status of the flock. This will result in lower mortality rates and better productivity (more meat and milk production). Moreover, this will strengthen the household's food security and resilience during the droughts. 8. Each reservoir has a capacity of 10,000 m3, which is equivalent to 10 million liters of water for animal consumption. Given a normal evaporation level of 20%, an average of eight million liters of water would be available each year or almost 22,000 liters per day over the whole year. Table 7.2 shows the size and composition of a typical family livestock unit in Obock and Dikhil as well as their daily needs of water. Given a unit's overall daily need of 638 liters in Obock (for an average of 50 heads) and 774 liters in Dikhil (for an average of 62 heads), the reservoir could supply 34 (1,700 heads) and 42 units (2,604 heads), respectively, in each of the two project areas. Based on recent analytical work carried out in the context of the preparation of the PROMES-GDT by IFAD, it is conservatively estimated that the unit's meat and milk production could increase by 10% over time, following substantially better water supply, due to 80 the reservoir. Tables 7.3, 7.3a, and 7.3b show the estimated value of this increase per reservoir for Obock (DJF 3.8 million per year) and Dikhil (DJF 5.8 million per year). 9. Furthermore, an average of 60 ha of fodder trees will be planted around the edges of each reservoir. These trees serve a dual purpose; they help protect the reservoir from siltation but they also produce some forage for animals. Table 7.3.c shows that the corresponding fodder production per reservoir could be some 8,400 kg of dry matter per year, enough to feed 61 small ruminants daily. The corresponding additional meat and milk production would then be of around DJF 28,350 per year. 10. All replacement and maintenance costs consist of unskilled labor which the beneficiaries can provide over the course of a year. The sustainability of the reservoirs is therefore quite likely. Table 7.2: Daily water needs for family livestock unit Water Water needs per Water needs per needs per Number of Number of Family livestock unit unit in Obock unit in Dikhil head heads in Obock heads in Dikhil (l/day) (l/day) (l/day) Small ruminants 4 40 160 50 200 Camels 50 8 403 10 484 Cattle 50 2 75 2 90 Total 638 774 N.B.: See worksheets for calculation of size and composition of family livestock units. Base data drawn from "Etude IEMVT, Développement de l'élevage dans la République de Djibouti". 81 Table 7.3.a: Additional animal and milk production per reservoir per year - Obock Number Animal and milk production Additional in a Number of Market value per family units per without with value additional reservoir livestock reservoir reservoir reservoir (DJF) (DJF) unit Small ruminants Heads 40 34 1,428 1,571 143 2,300 328,440 milk (liters) 9,639 11,663 2,024 150 303,629 Camels Heads 8 34 286 314 29 65,000 1,856,400 milk (liters) 14,851 17,970 3,119 300 935,626 Cattle Heads 2 34 71 79 7 50,000 357,000 milk (liters) 1,571 1,901 330 250 82,467 Grand total 3,863,561 N.B.: It is assumed that 45% of the small ruminants are females; their milk production is estimated at15 liters over the year at 150 DJF/liter. The proportion of females for camels is 65%, and their milk production is 80 liters at 300 DJF/liter. Cows constitute 55% of the herd, their milk production is 40 liters at 250 DJF/liter. It is conservatively assumed that the animal and milk production would increase by 10% over time following substantially better water supply. Moreover, an additional 5% has been added in the case of animal production (heads used as proxy) to reflect the natural gain in weight of the animals. Table 7.3.b: Additional animal and milk production per reservoir per year -- Dikhil Number Animal and milk production Additional Number of Market in a value per units per without with value family additional reservoir reservoir reservoir reservoir (DJF) livestock (DJF) Small ruminants Heads 50 42 2,205 2,426 221 2,300 507,150 milk (liters) 14,884 18,009 3,126 150 468,838 Camels Heads 10 42 441 485 44 65,000 2,866,500 milk (liters) 22,932 27,748 4,816 300 1,444,716 Cattle Heads 2 42 88 97 9 50,000 441,000 milk (liters) 1,940 2,348 407 250 101,871 Grand total 5,830,075 N.B.: It is assumed that 45% of the small ruminants are females; their milk production is estimated at15 litres over the year at 150 DJF/liter. The proportion of females for camels is 65%, and their milk production is 80 liters at 300 DJF/liter. Cows constitute 55% of the herd, their milk production is 40 liters at 250 DJF/liter. It is conservatively assumed that the animal and milk production would increase by 10% over time following substantially better water supply. Moreover, an additional 5% has been added for animal production (heads is proxy used) to reflect the natural gain in weight of the animals. 82 Table 7.3.c: Fodder production around reservoir per year Yield is 140 kg of dry matter per ha x 60 ha (300 ha / 5 reservoirs) = 8,400 kg of dry matter 8,400 kg / 365 / 0.375 = 61 small ruminants Additional animal and milk production around one reservoir Animal and milk production Additional Market Number of heads per value per without with value area around reservoir additional reservoir area area (DJF) (DJF) Small ruminants Heads 61 64 70 6 2,300 14,732 milk (liters) 432 523 91 150 13,619 Total 28,350 N.B.: 140 kg of dry matter is equivalent to 49 forage units (conversion rate is 0.35). 0.375 kg of dry matter is the daily need of a small ruminant. Table 7.3.d: Project costs per reservoir Costs including physical contingencies (DJF): Investment : 12,834,316 - of which 25% unskilled labor 3,208,579 Replacement (all unskilled labor): 531,000 Maintenance (all unskilled labor) : 1,150,500 11. Construction/rehabilitation of borehole wells. The boreholes are meant to provide water principally for animal consumption but also some for agriculture. Each borehole has a debit of 33 m3 of water per day in Obock and 80 m3 per day in Dikhil. In Obock, it is assumed that 60% of this water is for animals and the remaining 40% for agriculture. In Dikhil, the percentages are: 30% for human consumption, 30% for animals, and 40% for agriculture. There would therefore be 19,800 liters available per borehole in Obock, enough to provide daily water to 31 family livestock units (1,551 heads); and 24,000 liters in Dikhil, enough to provide daily water to 31 units (1,922 heads). Similarly to the reservoirs, it is conservatively estimated that the unit's meat and milk production could increase by 10% over time following substantially better water supply. Using the base data in Tables 7.2 and 7.3, Table 7.4 (a and b) shows the estimated value of this increase per borehole, for Obock (DJF 3.5 million per year) and Dikhil (DJF 4.3 million per year). 12. There would then be 13 m3 available per borehole in Obock for agriculture and 32 m3 in Dikhil. Since the typical cropping pattern is essentially composed of forage, which is reported to require a minimum of 10,000 m3 per ha over about six months (average of 56 m3 per day), 7.4.c shows that the borehole could supply water to slightly more than one third of a hectare in Obock and half a hectare in Dikhil. The value of the additional agricultural production would therefore be of DJF 5,059 per year in Obock and DJF 12,264 in Dikhil. 13. Table 7.4.d shows that the replacement costs (in cash - i.e. before unskilled labor) would be around DJF 813,846 each four years (DJF 1,017,308 – 203,462), obviously much less than the value of the additional production over a five-year period (for instance: DJF 5.6 million X 4 in 83 the case of Obock). The beneficiaries can therefore afford the replacement. Moreover, the remaining part of the replacement costs, as well as the annual maintenance of the cistern, consists of unskilled labor which the beneficiaries can provide over the year. Table 7.4.a: Additional animal and milk production per borehole per year - Obock Animal and milk production Additional Number in a Number of Market value per family units per without with value additional reservoir livestock unit reservoir reservoir reservoir (DJF) (DJF) Small ruminants heads 40 31 1,303 1,434 130 2,300 299,793 milk (liters) 8,798 10,646 1,848 150 277,146 Camels heads 8 31 261 287 26 65,000 1,694,483 milk (liters) 13,556 16,403 2,847 300 854,019 Cattle heads 2 31 65 72 7 50,000 325,862 milk (liters) 1,434 1,735 301 250 75,274 Grand total 3,526,577 N.B.: See tables 7.2 and 7.3. The borehole has a debit of 33,000 liters of water per day. It is assumed that 60% is available for animals in Obock (19,800 liters / 638 liters = 31 family livestock units). Table 7.4.b: Additional animal and milk production per borehole per year - Dikhil Animal and milk production Additional Number in a Number of Market value per family units per without with value additional reservoir livestock reservoir reservoir reservoir (DJF) (DJF) Small ruminants heads 50 31 1,628 1,791 163 2,300 374,419 milk (liters) 10,988 13,296 2,308 150 346,134 Camels heads 10 31 326 358 33 65,000 2,116,279 milk (liters) 16,930 20,486 3,555 300 1,066,605 Cattle heads 2 31 65 72 7 50,000 325,581 milk (liters) 1,433 1,733 301 250 75,209 Grand total 4,304,227 N.B.: See tables 7.2 and 7.3. The borehole has a debit of 80,000 liters of water per day. It is assumed that 30% is available for animals in Dikhil (24,000 liters / 774 liters = 31 family livestock units). 84 Table 7.4.c: Additional agricultural production per borehole per year Obock Dikhil 3 Water available daily (m ): 13 32 3 Water needs daily (m ): 27 27 Area covered (ha): 0.4818 1.2 Additional production (forage units) 34 82 Value of additional production (DJF) 5,059 12,264 N.B.: 1 forage unit is equivalent in nutritive value to 1 kg of sorghum (price is 150 DJF). Yield is assumed to be 70 forage units per ha. Table 7.4.d: Project costs per borehole Costs including physical contingencies (DJF): Investment (new) 35,200,000 - of which 20% unskilled labor 4,800,000 Investment (rehabilitation) 4,069,230 - of which 20% unskilled labor 813,846 Replacement (each four years) 1,017,308 - of which 20% unskilled labor 203,462 Maintenance (all unskilled labor) : 500,000 14. Construction of shallow wells. There are two types of shallow wells, and constructed only in Dikhil: those for livestock use and those for agriculture. The wells for livestock use have a debit of 25 m3 or 25,000 liters of water per day. Using the base data in Table 7.2 concerning the daily water needs of family livestock units in Dikhil, it is estimated that a well could supply 32 units (2,003 heads). Using the base data in Table 7.3, Table 7.5.a shows that the estimated value per well of the increase in a unit's meat and milk production would be of around DJF 4.4 million per year. 15. The wells for agricultural use would have a debit of 100 m3 of water per day and the water needs for two horticulture crops over the year are 9 liters/day/m2. Table 7.5.c shows that the value of the agricultural production per well would be around DJF 232,834 per year. 16. The lower parts of Tables 7.5.b and 7.5.d show that the replacement costs (in cash - i.e. before unskilled labor) of both the wells for livestock and agricultural use are estimated at DJF 165,200 each three years. These costs are easily covered by the additional benefits in both cases (for instance: DJF 116,417 X 3 in the case of Obock). The annual maintenance consists essentially of unskilled labor which the beneficiaries can provide over the year. 85 Table 7.5.a: Additional animal and milk production per well per year - Dikhil Number in Number Animal and milk production Market Additional a family of units without value value per livestock per well with well additional (DJF) well (DJF) well Small ruminants heads 50 32 1,696 1,865 170 2,300 390,019 milk (liters) 11,446 13,850 2,404 150 360,556 Camels heads 10 32 339 373 34 65,000 2,204,457 milk (liters) 17,636 21,339 3,703 300 1,111,047 Cattle heads 2 32 68 75 7 50,000 339,147 milk (liters) 1,492 1,806 313 250 78,343 Grand total 4,483,570 N.B.: See tables 7.2 and 7.3. The shallow well has a debit of 25,000 liters of water per day (25,000 liters / 774 liters = 32 family livestock units). Table 7.5.b: Project costs per well per year Costs including physical contingencies (DJF): Investment 5,175,697 - of which 20% unskilled labor 1,035,139 Replacement (each 3 years) 236,000 - of which 30% unskilled labor 70,800 Maintenance (all unskilled labor) : 289,100 Table 7.5.c: Agricultural production per well per year 3 3 Debit: 100 m per day or 36,500 m per year or 36,500,000 liters per year. 2 Water needs for two horticultural seasons over one year = 3285 liters/year /m 2 36,500,000 liters / 3,285 = 11,111 m or 1.2 ha (rounded) Average net revenue from horticulture in similar agro-ecological conditions in Djibouti: DJF 104,880 per year for 2 5,000 m (see sources). Net revenue from horticulture = DJF 232,834 / year for 1.2 ha Sources: "De l'eau pour le maraichage", GRET - Institut de recherche français; Statistiques agricoles 2009, FAO. 86 Table 7.5.d: Project costs per well per year Costs including physical contingencies (DJF): Investment 4,535,314 - of which 20% unskilled labor 907,063 Replacement (each 3 years) 236,000 - of which 30% unskilled labor 70,800 Maintenance (all unskilled labor) : 289,100 17. Installation of grazing set-aside areas. These areas are meant to provide richer and more secure pastures for the livestock, particularly in times of droughts. Each area spreads over 400 ha and would be closed off for resting during a period of two years, and then reopened for controlled grazing. Reseeding will take place in each area over an average of 27 ha (project's target of 300 ha of reseeding / project's target of 11 set-aside areas). On the basis of the recent analytical work carried out for the preparation of the "Projet de développement agropastoral du Grand Bara", controlled grazing would double the actual yield of 35 forage unit per ha and reseeding would increase the yield to a minimum of 150. Assuming for the sake of simplicity that the areas are used for small ruminants, Table 7.6 shows that 441 of them could be accommodated by each set-aside area. Assuming further that the meat and milk production could increase by 10% over time following substantially better feeding, the value of the additional meat and milk production would then be an estimated DJF 204,958 per year. 18. Table 7.6 also shows that the annual maintenance of the set-aside area consists essentially of unskilled labor which the beneficiaries can provide over the year. There are practically no replacement costs involved. 87 Table 7.6: Additional animal and milk production per grazing set-aside area per year Additional yield in dry matter: 100 kg/ha over 373 ha 328 kg/ha over 27 ha (reseeding) Average: 151 kg/ha over 400 ha (total area) -------------------------------- 60,400kg over 400 ha Daily average forage need of one small ruminant: 0.375 kg of dry matter 60,400 / 365 = 165 kg daily / 0.375 = 441 small ruminants Number Animal and milk production Additional Market Small ruminants of heads without value per with area additional value (DJF) per area area area (DJF) Heads 441 463 509 46 2,300 106,502 milk (liters) 3,126 3,782 656 150 98,456 Total 204,958 N.B.: One kg of dry matter is 0.35 of a forage unit. Small ruminants will constitute an overwhelming majority of animals grazing on the area. It is assumed that 45% of the small ruminants are females; their milk production is estimated at15 liters over the year at 150 DJF/liter. Costs including physical contingencies (DJF): Investment 3,010,593 of which reseeding: 247,800 Maintenance (all unskilled labor) : 467,280 19. Promotion of income-generating activities. These activities will help the targeted rural communities improve their incomes and therefore livelihoods. When combined with the previous subprojects, they will provide the targeted households with financial resources useful for the financing of the operation and maintenance necessary for the sustainability of the subprojects. 20. Tables 7.7 and 7.8 show typical financial budgets for specific activities in fishing and handicrafts, respectively. The tables are relatively detailed and self-explanatory. The budgets were prepared with the direct participation of micro-entrepreneurs already carrying out similar activities as well as with the relevant staff of the MAEM-RH. Given the financial amounts allocated in the project, it is estimated that a minimum of 20 income-generating activities could be set up in Obock (including 5 for fisheries) and 30 activities in Dikhil. The results demonstrate that under normal circumstances, both activities are financially attractive. 88 Table 7.7: Income-Generating Activity - Fishing Investment costs : (DJF) Boat and engine 1,500,000 1 power generator 100,000 8 halogen lights 80,000 1 camping stove 15,000 Fishing tackle 7,000 Cooler 90,000 2 card boards 5,000 Mini lighthouse 3,000 Total 1,800,000 Operating costs and revenues per outing (3-4 days): Food 10,000 Petrol 25,000 Oil for the engine 5,100 Ice 5,000 Total 45,100 Revenue/sales : 4 outings per month during 10 months 2 outings / month during 2 months ----------------------------------------------------- Average of 44 outings per 12 months or average 3.7 outings per month 300-400 kg of catches per outing (merou, dorade, tuna, etc.) Value of catches per outing = 90,000 DJF Net revenue per outing (DJF) = 90,000 - 45,100 = 44, 900 Table 7.8: Income-Generating Activity - Handicrafts Investment costs : (DJF) 3 large coloring pans 360,000 Working tools 200 Total 360,200 Operating costs and revenues per four mats (4 women over 1 month): 4 types of colorants 8,000 8 bundles of firewood 2,000 10 bags of straw 8,000 Total 18,000 Revenue/sales (DJF) Four mats 80,000 Net revenue for four mats 62,000 89 21. Tables 7.9 and 7.10 show a summary of the quantified benefits for each of the subprojects discussed. The totals do not include several unquantifiable benefits that certainly amount to substantial socio-economic values. Among those are the following: (i) Improved health conditions due to access to potable water of better quality, translated into savings in the part of the Ministry of Health's budget related to combating these diseases. (ii) The soil and water conservation works – other than planting fodder trees and reseeding, but including such structures as stony embankments – will serve mainly to reduce the erosion threatening the water mobilization structures constructed or rehabilitated, and therefore to preserve the sustainability of these structures. The works will also improve the soil composition and productive potential in limited areas, which will bring additional benefits depending on the use made of such areas. (iii) In the case of the income-generating activities, some of the net benefits from these activities will likely be re-invested, thus generating additional benefits. Loan repayments made by beneficiaries will most probably be used to extend additional loans, so that the total net benefits from such activities could add up to much more than indicated in Tables 7.7 and 7.8. Thus, the final quantities of activities promoted could be substantially higher than those indicated in Table 7.9, with the total of the quantified benefits from such activities rising in proportion. (iv) The carrying out of the planned hydro-geological survey will allow for a better knowledge of the technical possibilities in terms of water mobilization in the project areas. (v) The planned socioeconomic surveys will provide a more extensive and much deeper understanding of these areas, which will allow for better targeting of the investment subprojects, within the context of the project but also afterward. (vi) Finally, with the project being (by definition) about rural community development, the ultimate objective is to improve the socioeconomic and living conditions of the target groups. This goes well beyond calculating their time saved and additional agricultural (including livestock) production. The direct benefits in the project areas (unquantifiable as well as quantified) will have a multiplier effect – i.e. the generated incomes and/or savings will be spent within the communities and then create a second generation of benefits obviously difficult to evaluate without lengthy/costly surveys. Moreover, although of limited magnitude for the country as a whole, all these benefits could be crucial for the vulnerable households involved. 90 Table 7.9: Investments (quantities and benefits per unit) Benefits per investment at full Investments Quantities development (DJF) PY1 PY2 PY3 PY4 PY5 Total Obock Cisterns 2 3 4 4 13 129,600 Reservoirs 1 1 3,891,911 Boreholes 1 1 1 3 3,531,636 Grazing set-aside areas 2 2 1 5 204,958 IGA - Fishing 2 1 2 5 166,130 IGA – Handicrafts 3 3 6 3 15 62,000 Dikhil Cisterns 2 3 4 4 13 151,200 Reservoirs 1 2 1 4 5,858,425 Boreholes 1 2 1 4 4,316,491 Wells for animal use 1 1 1 3 4,483,570 Wells for agricultural use 2 4 5 4 15 232,834 Grazing set-aside areas 2 2 2 6 204,958 IGA – Handicrafts 4 8 12 6 30 62,000 N.B.: See tables 7.1 to 7.8. 22. Table 7.10 shows the totals of the quantified benefits include the benefits from improved health conditions due to access to potable water of better quality. As indicated by a senior officials from the Ministry of Health met during a pre-appraisal mission, an individual can lose up to 14 days of work per year because of water-borne diseases in communities with no access to clean water. It has been assumed by the mission that better access to potable water of higher quality would translate into less occurrence of water-borne diseases related to poor quality water and less sick days due to these diseases, which would contribute to reduce this time lost to 5 days per person and per year. 91 Table 7.10: Value of labor days saved due to the water quality improvement Obock Dikhil Number of households benefiting from improved water 669 715 access and quality over five years of project Without project With project Number of work days lost per year due to the water-borne 14 5 diseases Value of labor lost over five years due to the water-borne 18,732,000 7,150,000 diseases(DJF) Incremental Number of work days lost per year due to the water-borne 9 diseases Value of labor saved due to the water quality improvement 11,582,000 (DJF) 23. For the purpose of calculating an indicative project Economic Rates of Return (ERR), Table 7.11 shows the project costs used over 20 years (including investment, replacement, and recurrent) and after shadow pricing the unskilled labor. Included are the costs of Component 1 plus the part of those in Component 3 “Project Coordination and Management” that are related to the implementation of Component 1. Those are the costs that can be compared to the benefits discussed so far. The benefits of component 2 “Capacity Building and Provision of Technical Assistance " are discussed subsequently. 24. Table 7.12 illustrates potential ERRs for the project. The base ERR includes only the benefits quantified previously57. The ERR rate of 12% can be considered acceptable, given the community-development nature of the project and the subsistence-nature of economic conditions and harsh environment in the rural areas of Djibouti. 25. Furthermore, the main benefits of Component 2 will be as follows: (i) The institutional strengthening of the communities, coupled with the adoption of participatory approaches for local planning, will result in more ownership and better control by these communities of the various water mobilization and pastoral structures put into place for their benefit. It should also result in less social conflicts and better relations with the local authorities. (ii) The closer involvement of women in community decision-making will facilitate taking into account their potential, needs, and interests in the formulation and implementation of developmental activities, which should result ultimately in better living conditions for them. (iii)The institutional strengthening of the MAEM-RH will bring the following two main benefits: 57 Only the unskilled labor is shadow priced. Trade in Obock and Dikhil with neighboring countries is intense and free. Financial prices are therefore used as acceptable proxies for economic values. 92 a. an in-house capacity for better dealing, negotiating, and planning developmental activities with the communities, and b. the improvement of the Ministry's technical capabilities in the specific fields of water mobilization and pasture development (staffing as well as knowledge). 93 Table 7.11: Project benefits (DJF) PY1 PY2 PY3 PY4 PY5 PY 6-PY 20 Obock Cisterns 0 129,600 453,600 907,200 1,166,400 1,166,400 Reservoirs 0 0 0 1,945,956 3,891,911 3,891,911 Boreholes 0 0 1,765,818 7,063,272 10,594,908 10,594,908 Grazing set-aside areas 204,958 1,024,788 1,127,266 1,024,788 1,024,788 1,024,788 IGA 0 870,390 1,740,780 3,481,560 3,481,560 3,481,560 Value of labor saved due to the water quality improvement 5,400,000 7,200,000 9,000,000 10,800,000 12,042,000 12,042,000 Benefits Obock 5,604,958 9,224,778 14,087,464 25,222,775 32,201,567 32,201,567 Cisterns 0 151,200 529,200 1,058,400 1,360,800 1,360,800 Reservoirs 0 2,929,213 11,716,851 20,504,488 23,433,701 23,433,701 Boreholes 0 0 2,158,245 8,632,981 12,949,472 12,949,472 Shallow wells for animals 0 2,241,785 11,208,924 13,450,709 13,450,709 13,450,709 Shallow wells for agriculture 0 232,834 931,336 1,979,089 2,561,174 2,561,174 Grazing set-aside areas 0 0 204,958 614,873 1,024,788 1,229,745 IGA 0 496,000 1,488,000 2,976,000 3,720,000 3,720,000 Value of labor saved due to the water quality improvement 0 3,600,000 9,000,000 12,600,000 12,870,000 12,870,000 Benefits Dikhil 0 9,651,031 37,237,513 61,816,540 71,370,643 71,575,601 Total benefits 5,604,958 18,875,809 51,324,977 87,039,315 103,572,210 103,777,168 N.B.: See Table 7.9. Only half the benefits per investment, as shown in previous tables, is computed in the year in which each investment takes place, and the full benefits each year afterwards. For grazing set-aside areas, the benefits start two years after the installation. 94 Table 12. Project costs (FDj) PY1 PY2 PY3 PY4 PY5 PY6 PY7 PY8 PY9 PY10 PY11 PY12 PY13 PY14 PY15 PY16 PY17 PY18 PY19 PY20 Component 1. Community 27,017,471 77,131,884 169,836,014 208,630,162 126,489,914 Investment Component 3. Project Coordination and 33,966,129 17,738,236 20,227,813 17,738,236 20,227,813 Management Investment Costs 60,983,599 77,131,884 169,836,014 208,630,162 126,489,914 Replacement Costs 4,516,019 6,846,059 4,688,589 395,489 13,542,452 5,420,616 3,914,984 4,774,045 2,270,597 3,307,023 2,311,337 3,849,069 6,695,527 3,326,564 11,799,174 Recurrent Costs 13,748,338 15,433,737 15,003,220 13,194,952 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 Total Costs 74,731,937 92,565,621 184,839,233 221,825,114 140,754,015 18,780,121 21,110,160 18,952,691 14,659,590 27,806,554 19,684,717 18,179,085 19,038,146 16,534,698 17,571,124 16,575,439 18,113,171 20,959,628 17,590,665 26,063,276 N.B.: The calculations of the costs (investments, replacement, recurrent) includes those of component 1 plus the part of those in component 3 that are related to the implementation of the component 1. Those costs are calculated after shadow pricing the unskil ed labor (see tables 1 to 9). 95 Table 13. Base ERR (FDj) PY1 PY2 PY3 PY4 PY5 PY6 PY7 PY8 PY9 PY10 PY11 PY12 PY13 PY14 PY15 PY16 PY17 PY18 PY19 PY20 Benefits 5,604,958 18,875,809 51,324,977 87,039,315 103,572,210 103,777,168 103,777,168 103,777,168 103,777,168 103,777,168 103,777,168 103,777,168 103,777,168 103,777,168 103,777,168 103,777,168 103,777,168 103,777,168 103,777,168 103,777,168 Obock 5,604,958 9,224,778 14,087,464 25,222,775 32,201,567 32,201,567 32,201,567 32,201,567 32,201,567 32,201,567 32,201,567 32,201,567 32,201,567 32,201,567 32,201,567 32,201,567 32,201,567 32,201,567 32,201,567 32,201,567 Dikhil 0 9,651,031 37,237,513 61,816,540 71,370,643 71,575,601 71,575,601 71,575,601 71,575,601 71,575,601 71,575,601 71,575,601 71,575,601 71,575,601 71,575,601 71,575,601 71,575,601 71,575,601 71,575,601 71,575,601 Costs 74,731,937 92,565,621 184,839,233 221,825,114 140,754,015 18,780,121 21,110,160 18,952,691 14,659,590 27,806,554 19,684,717 18,179,085 19,038,146 16,534,698 17,571,124 16,575,439 18,113,171 20,959,628 17,590,665 26,063,276 Investment 60,983,599 77,131,884 169,836,014 208,630,162 126,489,914 Replacement 4,516,019 6,846,059 4,688,589 395,489 13,542,452 5,420,616 3,914,984 4,774,045 2,270,597 3,307,023 2,311,337 3,849,069 6,695,527 3,326,564 11,799,174 Recurrent 13,748,338 15,433,737 15,003,220 13,194,952 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 14,264,102 Cash flow -69,126,980 -73,689,812 -133,514,256 -134,785,799 -37,181,805 84,997,047 82,667,007 84,824,477 89,117,577 75,970,614 84,092,450 85,598,082 84,739,021 87,242,469 86,206,043 87,201,729 85,663,997 82,817,539 86,186,502 77,713,892 Base ERR 12% With benefits +10% 15% Sensitivity analysis : ERR +20% 17% Benefits +30% 19% - 10% 10% ' +40% 22% Costs + 10% 10% N.B.: See tables 11 and 12. 96 REPUBLIC OF DJIBOUTI RURAL COMMUNITY DEVELOPMENT & WATER MOBILIZATION PROJECT (PRODERMO) Annex 8: Water Resource Management Aspects 1. Water resources and their use in Djibouti. With only about 150 mm annual rainfall per year and no perennial surface freshwater flow in the country, Djibouti faces extreme water scarcity. More than 95 percent of water used in Djibouti comes from groundwater, which is fast depleting. Agriculture is marginally practiced in the country (only on about 1,000 ha of area), and most of the water is used for municipal and industrial uses. In addition, recurrent droughts and sometimes flash floods cause devastating impacts on the communities. The impacts of droughts are especially significant on the pastoral community, which has already lost a significant portion of its herd due to drought over the last few years. Pastoral communities are generally also vulnerable to seasonal dry periods, usually for about three months, where there is no water in the area to sustain their herds. Under such circumstances, even if there is enough forage in the area, the pastoralists have to move far away with their herds in search for water (from springs and wells). As a result, big herds concentrate only in areas where water is available during the dry season (usually more than the carrying capacity of the area). This in turn leads to overexploitation of the available resources -- both water and forage, and hence desertification. 2. Water management and use in Djibouti suffers from significant inefficiencies. Due to the scarcity of rainfall, agriculture is impossible without irrigation. However, various management measures could be taken in order to improve water management and use, thereby reducing inefficiencies in the system and ensuring a beneficial use of water resources. Similarly, in the water supply system, water is not being utilized appropriately, and public water supply systems suffer from inefficient organization and a flawed institutional environment. The level of unaccounted water in water supply systems is significant, in the range of over 40 percent in Djibouti-Ville, for example. Similarly, very little effort is made to explore options of using alternative sources of water, such as wastewater reuse and desalination. In addition, roles and responsibilities of agencies that deal with water seem to overlap and create a level of confusion or lack of direct line of responsibility. This is especially true regarding the water quality monitoring and provision of kits (filters, disinfectants, etc.) to communities. 3. Two main regions for intervention under the PRODERMO. The project intervention areas will be located in two distinct geographic regions: (i) the Khor Angar-Obock area in the northern region of Obock; and (ii) the Cheiketi-Hanlé area, in the southern region of Dikhil. The Dikhil region has better potential for water mobilization because of relatively higher rainfall in Dikhil and because of indications that the Hanlé aquifer is recharged by the flow from the Awash River in Ethiopia58, many interventions have taken place or are being considered by other development partners in this area. However, it is still an area where water scarcity is prevalent and the need for intervention in terms of extra water production and storage would make a significant difference. The Khor Angar-Obock area in the Obock region has poor water mobilization potential, with rainfall varying between 50 mm to 100 mm, and the potential aquifer in the area is along the coast where extreme care needs to be taken to avoid salinity intrusion 58 However, there are indications that groundwater from some locations in the area have large nitrate concentration. 97 from the sea due to overexploitation of the groundwater as the environmental impacts may be devastating. 4. Water mobilization in rural Djibouti and the PRODERMO. Given the fragile nature of the balance between water resources and the ecosystem as a whole, maintaining such balance is very critical in order to sustain the socio-economic development of the agro-pastoral community. One way of doing that is by making adequate water available to agro-pastoralists wherever there is pasture. It is also equally important to be mindful that groundwater use should be maintained at a sustainable level. As such, the utmost attention should be paid to maintaining a healthy water balance in the areas of intervention through the PRODERMO. This is especially important in Djibouti today as many development partners are involved in supporting drilling wells, thus further exploiting the scarce groundwater resource. For the purpose of PRODERMO, it was agreed that most of the interventions should focus on mobilization of surface water, and that the Project should support further drilling on a limited basis only in areas where detailed hydro-geological studies have confirmed the sustainability of groundwater resources. 5. Water resource mobilization in the Dikhil area under the PRODERMO. The Cheiketi-Hanlé area located in the Dikhil region. The PRODERMO is estimated to benefit about 3,000 people and their livestock (including camels, small ruminants, and cows). Small-scale irrigated agriculture is also practiced in the area where mostly fruits, vegetables, and forage are grown. It was agreed that the PRODERMO will finance small-scale water storage infrastructure to help sustain the agro-pastoralist communities during the dry season lasting around three months. Such infrastructure would include: (i) Underground cisterns (citerne) of 100 to 200 m3 capacity. These are underground storage reservoirs, mainly fed by runoff from nearby catchments. Commonly, storage reservoirs of 100 to 200 m3 capacity are constructed to sustain families with their water supply needs for the dry season, lasting from June to August, based on location; (ii) Open-air reservoirs (retenue) of 10,000 m3 capacity. These are deep ponds of up to 6 meters in depth for animal use. These structures are commonly constructed on plain lands; (iii)Shallow wells (puit). These are groundwater collection structures dug usually between 10 to 20 meters in depth. These could be connected to manual pumps to draw water, or use a bucket. Such structures are usually viable in areas where the water table is found at shallower depths; and (iv) Borehole wells (forage). These are combined with submersible pumps to pump water. These are usually used in high permeability aquifer formations with a good amount of water content. Drilled wells may vary in depth: a. Shallower wells at 100 to 150 meters in depth b. Deeper wells of more than 200 meters in depth. 6. Water Quality. Water quality is an issue especially for surface water collections, including cisterns, open-air reservoirs, and boreholes. This is so because water is directly fed into these structures from surface runoff; therefore, ensuring the health of the catchment is paramount. Areas that directly contribute runoff to these structures should be well protected, and defecation in such protected areas should be prohibited. In Djibouti, UNICEF, in coordination with the MdS, plays a big role in water quality-related issues. They also work with the IFAD- 98 funded PROMES-GDT project. UNICEF has also built some capacity within MAEM-RH Water Quality Directorate by training 1-3 individuals on water quality testing and providing them with mobile testing kits. Additionally, UNICEF has recently trained about 100-120 community health workers (CHW-MdS staff) across the five regions in Djibouti on community mobilization and awareness raising regarding hygiene (hand washing), sanitation (impacts of open defecation and construction of simple pit latrines), and water quality and water borne diseases. These workers provide the communities with awareness and training, and also undertake minimal water quality testing. Currently there are 6 established health units in the Obock region with 2 CHWs, and it is understood that eventually there will be 16 CHWs in the Obock region where PRODERMO will be implemented. However, the current system of water quality testing or distribution of purification kits by either the MdS workers or MAEM-RH is ad hoc. Therefore, greater coordination between MEAM-RH and MdS/UNICEF will be beneficial to PRODERMO on the issue of water quality. 7. Water resource mobilization in the Obock region under the PRODERMO. The Khor Angar-Obock area is located along the coast of the Red Sea in the Obock region and serves agro- pastoralist communities in the surrounding area. Given the level of need and lack of active support in the area by other development partners, it was agreed that the PRODERMO support the needy community in the Khor Angar-Obock area. The PRODERMO will support rehabilitation/construction of three wells. One of the wells needing rehabilitation/expansion is the water production well at Oulma. It was agreed that the PRODERMO would support rehabilitation/expansion of this well, provided that there is enough water to support the planned additional abstraction (if confirmed by a study prior to construction/rehabilitation of the well). Currently, the well is equipped with a solar powered pump (8 m3/day) and a reservoir, and it had been previously equipped with a diesel pump with a 60 m3/day capacity. After the initial pump failed due to high operational costs (fuel), the MAEM-RH decided to replace the pump with a smaller solar pump. The water table has already dropped by about three meters between 1989 (when the well was first drilled) and 2007 (when the well was rehabilitated and powered by solar), showing a manageable impact of the withdrawal on the overall water balance. Based on this foregoing preliminary information, it was agreed to first conduct a detailed water balance study and, only if the study concludes that the aquifer would be sustainable under the additional production level, would upgrading the system be supported through the PRODERMO. 8. The PRODERMO could also finance the reinforcement of the desalination plant (RO) in Khor Angar, contingent upon a review of the whole water supply system in Khor Angar. The desalination plant (RO) has a capacity of 200 m3/day, providing water to about 2,500 people, mainly fishermen. The plant currently runs only two half days (8 to 9 hrs/day) per week, producing about 100 m3/week as opposed to the 200 m3/day capacity. The plant was acquired on Government funds with the support of the Japanese Government and UNICEF for the acquisition of accessories. Currently, the water is provided to the community free of charge, and there is no plan in place for O&M, accompanied by necessary funding. In addition, the pipe that discharges brine to a nearby evaporation pond is broken, and brine is being discharged on land, with potential adverse impacts on the environment. The operator of the plant has not received any training on the management and servicing of the plant. If the status quo persists, the plant will most likely be out of use very soon, along with the expensive rehabilitation cost. Reinforcement of the desalination plant under the PRODERMO would include replacing the diesel operated generator by solar (to reduce its operation costs), as well as community mobilization and organization to ensure sustainability of the plant. If successful, some of the additional water 99 produced could also be used for nearby villages as a water point where water could be supplied to new beneficiaries by water trucks. 9. In addition, it was agreed that small-scale water production and/or storage infrastructure would also be supported by the PRODERMO, including rehabilitation and/or construction of underground cisterns (citerne) of 100 m3 capacity and excavation ponds (retenue) of 10,000 m3 capacity. 10. Studies and technical assistance. Systematically compiled and long-term water-related data is scant in Djibouti. The collection and profiling of water-related data is thus crucial in order to better understand the water resource availability in the country. Two kinds of studies are proposed for consideration under the PRODERMO: (i) Feasibility study for activities planned under the PRODERMO, mainly concerning wells. Groundwater availability in Djibouti is very limited. Even in areas where there is reasonable groundwater resource available, the quality of the water is poor with high salinity, boron, and nitrate contents. As such, at a minimum, a basic water balance analysis should be done wherever rehabilitation of existing wells is envisaged. In addition, prior to implementing any rehabilitation and/or construction of new wells of significant capacity (e.g. more than 20 m3/day), a detailed hydro-geological study should be done, including assessing the aquifer’s water production potential, its rate of recharge and sustainability. (ii) Study for a better understanding of water resources availability and future project implementation. Water resources availability, especially in the Obock region, is less studied in terms of surface and groundwater availability for future interventions. As such, a comprehensive hydro-geological study would be supported by the Project in one or two priority areas in the Obock region as well as in the Dikhil region. 11. In addition, the CERD has already conducted various water-related studies in the water sector, including hydro-geological, geophysical and water resource management studies. CERD also leads the hydro-meteorological-related data collection, processing, and model development for the water sector in Djibouti. A wealth of capacity is thus present at CERD, and the PRODERMO will make use of these resources to the extent possible, especially in terms of studies, data collection, and analyses. Institutional Capacity Analysis. Institutional strengthening and capacity building is critical in order to maintain sustainable management and use of the water resources. The water sector in Djibouti is managed centrally, with only one representative positioned in regional offices. The same person is usually responsible for livestock, water and fisheries, and is generally ill-equipped to deal with most of the problems that the communities face. As such, the PRODERMO would support capacity building at all levels (national, regional, and local/community level). In terms of water resource management, the PRODERMO would support training and technical assistance with respect to best practices in water resource management and use, sanitation and hygiene, water quality monitoring and treatment, and O&M of built water infrastructure. In addition, community-based water management (including monitoring of water) is also very critical for the sustainability of the project. 100 IBRD 38373 Red 42°30' 43°00' REP. OF Sea REPUBLIC OF e YEMEN im ERITREA YEMEN ERITREA We Bab El Mandeb DJIBOUTI Gulf of Djibouti Aden 12°30' 12°30' ETHIOPIA 2022 m ali Sept Freres Is. Boss SOMALIA Daddato This map was produced by 42°00' the Map Design Unit of The World Bank. The boundaries, OBOCK colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Khor Angar-Obock Group, any judgment on the legal status of any territory, or any endorsement or Sartai acceptance of such Malah boundaries. RN 8 RN 1 1 ETHIOPIA TA DJ O U R A 12°00' 12°00' Bol OBOCK li 1318 m Do Randa u 1694 m RN 1 0 bie RN 8 RN 9 Day RN 7 1783 m TADJOURA GULF OF 155 m Maskali I. Galafi below sea level Moucha Is. ADEN Ardoukoba Lake GULF OF TADJOURA Assal Volcano Sagallou 1388 m RN 7 RN 4 RN 3 PLA IN O F Ambado Dorale GA GA DE RN 7 DJIBOUTI RN 1 DJIBOUTI RN 5 RN 1 Ghoubet- ul Kharab Arta Ambo 11°30' Yoboki Chabelley 11°30' PLAI N O F H ANLE Loyada RN 7 Ch eik D I K H I L eti PE T I T B AR A Hol Hol Cheiketi-Hanlé Hol Hol RN 1 ade RN 1 GRA ND B AR A A L I Bey SOMALIA PLATEAU SABIEH LAKE OF DAKKA Mouloua RN 6 ALI SABIEH ABBÉ DIKHIL 1287 m Ali Adda PLAI N O F To Addis GOB AA D As Ela Ababa Modahtou 0 10 20 30 Kilometers 11°00' G obaad ETHIOPIA 0 10 20 Miles 42°00' 42°30' DJIBOUTI RURAL COMMUNITY DEVELOPMENT AND WATER MOBILIZATION PROJECT (PRODERMO) Elevations in Meters: Project Areas (Simplified Contours) Paved Roads International Airport Greater than 1,000 Watershed Boundaries Improved Earth Roads Airfields and Airstrips 800 - 1,000 Selected Villages and Towns 600 - 800 District Capitals Main Tracks (National) Seasonal Rivers (Wadis) 400 - 600 National Capital Other Tracks Salt Flat 200 - 400 District Boundaries Railroad Drinking Water 0 - 200 International Boundaries 1287 m Spot Elevations in Meters APRIL 2011 The original had problem with text extraction. pdftotext Unable to extract text.