Document of The World Bank FOR OFFICIAL USE ONLY Report No: 76083-NE RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF URBAN WATER AND SANITATION PROJECT CREDIT 4893 BOARD APPROVAL DATE: APRIL 26, 2011 TO THE REPUBLIC OF NIGER MAY 23, 2013 WATER AND URBAN COUNTRY DEPARTMENT AFCW3 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. 1 ABBREVIATIONS AND ACRONYMS SEEN Niger Water Operating company (Private) (Société d’exploitation des eaux du Niger) SPEN Water Assets Holding Company (Société de patrimoine de l’eau du Niger) Regional Vice President: Makhtar Diop Country Director: Ousmane Diagana Sector Manager: Alexander E. Bakalian Task Team Leader: Matar Fall 2 REPUBLIC OF NIGER URBAN WATER AND SANITATION PROJECT CONTENTS Page A. SUMMARY ........................................................................................................................................ 4 B. PROJECT STATUS .......................................................................................................................... 4 C. PROPOSED CHANGES .................................................................................................................. 5 ANNEX 1: RESULTS FRAMEWORK AND MONITORING........................................................... 8 ANNEX 2: REALLOCATION OF PROCEEDS ................................................................................ 10 3 Republic of Niger Urban Water and Sanitation Project RESTRUCTURING PAPER A. SUMMARY 1. This Level II Restructuring Paper seeks the approval of the Country Director to (i) amend Parts 2 (a) and (c) of the Financing Agreement to cancel the activity related to the construction of household latrines and washing and soakaway facilities and the recruitment of the delegated contract management services for its implementation, and to replace it by additional water supply activities. The Government has requested this change in a letter dated February 15, 2013. B. PROJECT STATUS 2. The Financing Agreement of the Niger Urban Water and Sanitation Project was signed on May 12, 2011 for an amount of US$90 million, and the project became effective on September 1, 2011. The objective of the project is to increase access to sustainable water supply services and to improved sanitation services in some urban areas in the Recipient’s territory. As of today, the overall project implementation status is satisfactory. As of May 22, 2013, the project has disbursed 12.4 percent of the Credit. The project has begun to have impact on access to improved water services with 96,000 additional people (20% of the end-of-project-target) benefitting from the social household water connections and the standpipe program launched in September 2012. Bidding documents for the urban water large civil works are being finalized. With regards to the urban water sector reform, there have been positive developments since project effectiveness: (i) the financial equilibrium of the sector has been restored, (ii) the affermage contract with the private operator (Société d’exploitation des eaux du Niger - SEEN) was successfully renegotiated and renewed for 10 years, and (iii) negotiations are underway between the Government and the Water Assets Holding Company (Société de Patrimoine de l’eau du Niger – SPEN) for the renewal of the concession contract. 3. However, the implementation of the onsite sanitation component encountered serious delays due to the difficulty in the recruitment of the Delegated Management firm (MOD) to facilitate the execution of the component. The difficulty was related to This situation has led the Borrower to request that the activities related to the onsite sanitation be cancelled and to reallocate the funds (US$7.75 million equivalent to 8.6 percent of the Credit) to new water supply activities in selected semi-urban towns. These activities have been reviewed by and agreed with the Bank. 4 C. PROPOSED CHANGES Component 2 (Urban Sanitation) will be modified to reflect the cancellation of the activity related to the construction of household latrines and washing and soakaway facilities and the recruitment of the delegated contract management services for its implementation, and to replace it by additional water supply activities as proposed by the Borrower. Component 1 (Urban Water Supply) will be modified to include the following urban water supply activities: (i) Tillabéry-Sakoira-Diambala-Namarigoungou and 8 neighboring villages: (a) accessing water from Tillabéry; (b) construction of a pumping station in Sakoira; (c) construction of one elevated water storage tank in Diambala; (d) laying water transmission pipes from Tillabéry to Namarigoungou; (e) extension of water distribution networks in Saloira, Diambala and Namarigoungou; and (f) construction of 30 standposts in the villages. These activities will be implemented by SPEN for an estimated cost of about US$2.2 million (or FCFA 1 billion). More than 7,500 people will benefit from these activities. (ii) Gothèye-Kakassi-Koulikoira and 2 neighboring villages: (a) accessing water from Gothèye water network; (b) construction of a pumping station in Gothèye; (c) construction of an elevated water storage tank in Kakassi; (d) laying of a water transmission pipes from Gothèye to Koulikoira and in the 2 villages; (e) extension of water distribution networks in Kakassi and Koulikoira; and (f) construction of 20 standposts in the villages. These activities will be implemented by SPEN and the estimated cost is about US$1.1 million (or FCFA 500 million). More than 5,000 people will benefit from these activities. (iii) Rehabilitation of the water distribution network of Galmi and extension of the system to neighboring villages: (a) construction of an elevated water storage tank; (b) laying of a 15-km transmission pipes; (c) supply of a water pump; and (d) construction of 10 standposts. These activities will be implemented by SPEN for an estimated cost of US$1.1 million (or FCFA 500 million). About 2,500 people will benefit from these activities. (iv) Famalé: (a) water access from the river and construction of a water treatment unit; (b) construction of a reservoir and an elevated water storage tank; (c) laying of water transmission pipes; (d) construction of 20 additional standposts. 5 These activities will be implemented by SPEN and the estimated cost is about US$1.3 million (or FCFA 600 million). About 5,000 people will benefit from these activities. Gabou (displaced villages along the Niger River): (a) water access from the river and construction of a water treatment unit; (b) construction of a reservoir and an elevated water storage tank; (c) laying of transmission pipes; (d) construction of 20 additional standposts. These activities will be implemented by SPEN and the estimated cost is about US$1.6 million (or FCFA 700 million). About 5,000 people mostly displaced from the site of the Kandaji dam) will benefit from these activities. (v) Detailed technical study of the proposed investment program will be carried out and the bidding documents will be prepared. This is estimated to cost about US$450,000 (or FCFA 200 million).  Results/indicators (refer to Annex 1) The results framework and monitoring table will also be revised to reflect the change in end-of-project targets due to above proposed changes.  Safeguards Additional proposed activities are of the same nature as the urban water works included in the initial project. The target cities have been identified, but the exact location of the works will be defined in the technical studies to be carried out. The environmental and social aspects which result from the implementation of additional activities will be dealt with in the same manner as for the works originally planned in the project through the existing ESMF and RPF.  Financing o Project Costs Beneficiaries were expected to finance US$0.80 million for their 10 percent share of the cost of onsite sanitation facilities. Since these activities are proposed to be dropped, the need for beneficiaries’ contribution is no longer required. The total project cost therefore US$90.0 million. The table below shows the new allocations to the project components. 6 Current Proposed Project cost by component and/ or activity US$ million US$ million A. Urban Water Supply 1. Niamey 19.81 19.81 2. 3 Regional and mining towns 31.41 31.41 3. 18 Secondary Centers 15.46 15.46 4. Tillabéry-Sakoira-Diambala-Namarigoungou and 8 other villages 2.20 5. Gothèye-Kakassi-Koulikoira and 2 other villages 1.10 6. Galmi and extension to neighboring villages 1.10 7. Famalé and Gabou 2.90 8. Water quality improvement 2.02 9. Feasibility studies and preparation of bidding documents 0.45 Subtotal 68.70 76.45 B. Urban Sanitation 1. Onsite sanitation infrastructure 13.59* 5.04 2. Information, Education and Communication (IEC) 3.01 3.01 3. Consultant services 1.40 1.40 Subtotal 18.00 9.45 C. Institutional Strengthening and Capacity Building 1. Urban water reform 1.43 1.43 2. Ministerial departments 0.39 0.39 3. Environmental and social management 0.55 0.55 4. Coordination and project management 1.73 1.73 Subtotal 4.10 4.10 Total Project Costs 90.80 90.00 Total Financing Required 90.80 90.00 *included US$0.8 million as beneficiaries’ contribution to onsite sanitation facilities. This amount is no longer required since this activity is being proposed for cancellation. o Financing Plan The financing plan was revised in the portal to remove beneficiaries’ contribution amounting to US$0.80 million for their 10 percent share of the cost of onsite sanitation facilities that is no longer required. o Reallocations (see also Annex 2) With the cancellation of construction of household latrines and washing and soakaway facilities under component 2 (Urban Sanitation), the amount allocated to that component has been reduced by US$7.75 million and is being transferred to component 1 (Urban Water Supply) to fund the new proposed activities. Current Revised Category of expenditure Amount Revised Amount (US$ million (US$ million equivalent) equivalent) 1. Urban Water Supply 67.85 75.60 2. Urban Sanitation 17.20 9.45 3. Institutional Strengthening & Capacity Building 4.10 4.10 4. Refund of Preparation Advance 0.85 0.85 Total 90.00 90.00 7 o Amendment to the Subsidiary Agreement The new activities to be carried out under Part 1 of the Project will be implemented by SPEN (the Project Implementing Entity) meaning that the Recipient will transfer the additional funds allocated to said activities to SPEN. Therefore, the Subsidiary Agreement will be amended to: (i) acknowledge the amendment of the FA including the change of activities under Part 1 of the Project and the new amount allocated to Category 1; (ii) confirm that all activities under Part 1 of the Project will be implemented by the Project Implementing Entity under terms and conditions stated in the Subsidiary Agreement; and (iii) increase the amount of the funds transferred by the Recipient from SDR 43.5 million to SDR 48.55 million. The execution of the amended Subsidiary Agreement will therefore constitute an effectiveness condition of the Amendment Letter. 8 ANNEX 1 Revised Results Framework and Monitoring Project Development Objective (PDO): The objective of the project is to increase access to sustainable water supply services and to improved sanitation services in some urban areas in the Recipient’s territory. PDO Level D=Dropped Unit of Baseline Cumulative Target Values* Frequency Data Source/ Responsibility Description (indicator Core Results C=Continue Measure (2010) YR 1 YR 2 YR3 YR 4 YR5 Methodology for Data definition etc.) Indicators N= New Collection R=Revised Indicator One: People provided Number of new social with access to Progress reports connections x 10 plus Revised Number 0 0 61,000 187,000 335,000 509,000 Annual SPEN “Improved Water from SPEN number of new Sources� under standposts x 250 the project Indicator Two: People provided with access to Progress reports Number of new Dropped Number 0 0 25,000 80,000 160,000 235,000 Annual MOD “Improved from DAB household latrines x 10 Sanitation� under the project Indicator Three: Students provided with access to appropriate Progress reports Number of new schools Number 0 0 9,000 24,000 48,000 60,000 Annual DAB sanitation from DAB latrines x 30 facilities in their schools under the project Indicator Four: Sum of above target Direct project 95,000 291,000 535,000 569,000 Above progress Revised Number 0 0 Annual PCU values; percentage of beneficiaries, of (52 %) (52 %) (52 %) (52 %) reports females:_50_% which female (%) Net cash balance Indicator Five: (previous year plus net Restoration of cash flow from Annual review of financial SPEN and operations minus debt Yes/No No No Yes Yes Yes Yes Annual ARM’s financial equilibrium ARM service and variation of model of the urban water working capital supply sector requirements) positive or equal to zero 9 INTERMEDIATE RESULTS Intermediate Result (Component One): Expansion of access to water supply services in Niamey, 3 cities, and 18 secondary urban centers and improvement of water quality in 5 secondary urban centers Intermediate Result indicator One: Number of new Improved community Progress reports standposts water points Revised Number 0 0 45 150 300 553 Annual SEEN from SPEN constructed under the constructed or project rehabilitated under the project Intermediate Result indicator Two: New Number of new piped household water Progress reports social water Number 0 0 5,000 15,000 25,000 37,100 Annual SEEN connections that are from SPEN connections installed resulting from the by SEEN project intervention Intermediate Result Population from indicator Three: Water quality targeted centers People benefiting Number 0 85,000 Annual reports from SEEN where water quality from improved water SEEN and ARM comply with quality under the standards project Intermediate Result (Component Two): Expansion of access to sanitation services in Niamey and Dosso Intermediate Result Number of indicator One: Progress reports household latrines Improved latrines Dropped Number 0 0 2,500 8,000 16,000 23,500 Annual MOD from DAB constructed under the constructed under the project project Intermediate Result indicator Two: New Progress reports Number of latrine school latrines Number 0 0 300 800 1,600 2,000 Annual DAB from DAB blocks x 4 constructed under the project Intermediate Result indicator Three: Number of public Progress reports Public sanitation Number 0 0 5 15 20 20 Annual DAB toilets constructed from DAB facilities constructed under the project under the project Intermediate Result Number of washing indicator Four: On- Progress reports facilities with site greywater Dropped Number 0 0 750 2,000 4,000 5,000 Annual MOD from DAB soakaway pits facilities constructed installed under the project . 10 ANNEX 2 Reallocation of Proceeds 1. Proceeds for Niger Urban Water and Sanitation Project, Credit No. 4893-NE will be reallocated as follows: Category Allocation of the Percentage of Financing Allocated Expenditures to be (expressed in SDR) financed (inclusive of Taxes) Current Revised Current Revised (1) Goods, works and consultants’ services, including Training for 43,500,000 48,550,000 100% 100% Part 1 of the Project (2) Goods, works and consultants’ services, including Training for 11,050,000 6,000,000 100% 100% Part 2 of the Project (3) Goods, works and consultants’ services, including Operating 2,600,000 2,600,000 100% 100% costs, Training and audits, for Part 3 of the Project (4) Refund of Preparation Advance Amount Amount payable payable pursuant to pursuant 550,000 550,000 Section to Section 2.07 of the 2.07 of the General General Conditions Conditions TOTAL AMOUNT 57,700,000 57,700,000 11