PROGRAM INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: 91346 Operation Name MA-SOLID WASTE SECTOR DPL4 Region Middle East and North Africa Country Kingdom of Morocco Sector Urban: solid waste management (75%); Sub- national government administration (25%) Operation ID P148642 Lending Instrument Development Policy Loan Borrower(s) Kingdom of Morocco Implementing Agency Ministry of Economy and Finance, Ministry of Interior, and Ministry of Energy, Mines, Water and Environment Date PID Prepared September 13, 2014 Estimated Date of Appraisal November 24, 2014 Estimated Date of Board Approval February 12, 2015 Concept Review Decision Following the concept review, the decision was taken to proceed with the preparation of the operation. I. Country and Sector Background Problems associated with municipal solid waste (MSW) have increasingly been recognized as barriers to a more harmonious urbanization and the overall socioeconomic development in Morocco. The growing rate of waste generation is putting significant pressure on municipal services, particularly from financial, managerial, environmental and social perspectives. Currently, the country generates about 5.5 million tons of municipal solid waste per year. This amount is expected to reach 6.2 million by 2020. With increasing public awareness on quality of life, environmental protection and sustainable development, the municipal solid waste agenda has become a national priority in the Kingdom. Since 2008, a three-phase 15-year national municipal solid waste program (PNDM) has been implemented aiming at supporting municipalities to cope with the requirements of the 2006 solid waste law, including the modernization of their MSW systems. The reform of the MSW sector, which was triggered by the enactment of the first SWM law 28-00 in December 2006 and the launch of the 15-year PNDM in 2008, has been reconfirmed as a national priority. The PNDM quantitative targets in term of service delivery and environmental performance include: by 2021, 90 percent of urban population has access to modern MSW collection service; 100 percent of MSW collected in urban areas is disposed in sanitary landfills; and 20 percent of MSW collected is recycled. Over the last five years, with the support of the Bank and other partners, Morocco has made good progress in providing the necessary framework for establishing the foundation for an integrated and affordable MSW management system. Key results include: a) Morocco is benefiting from a firm legislation to establish integrated solid waste management and support the use of waste as a resource to achieve broader environmental, social and economic benefits; b) more than 15 million people have access to better MSW services; c) more than 100 cities have contracted private operators to provide street cleaning and waste collection services; d) transparency and citizen engagement in the solid waste sector has been enhanced; and e) an effective instrument is in place to promote waste recycling and improve the socio-economic performance of the sector with a special attention paid to vulnerable groups. Substantial progress has also been made towards PNDM objectives in terms of sanitary disposal practices and closing/rehabilitation of open dumpsites. More than 37 percent of MSW collected is being disposed in sanitary landfills compared to less than 10 percent in 2008; and 32 dumpsites have been closed, out of 220 in operation. II. Key development issues and rationale for Bank involvement These are significant results achieved under the first Phase of the PNDM, which is overall on track when compared to the set targets, but continued and steady progress is needed to achieve the objectives set for 2021. Key emerging challenges and opportunities include: a) Citizen engagement and transparency practices are not yet systematic and need sustained commitment of and support to Local Governments (LG); b) Small and medium municipalities are still experiencing weak capacity to plan, develop and supervise private service contracts; c) Opportunities to improve the medium-term sustainability of the MSW services through better management of municipal revenues and fiscal potential exist but have yet to be fully tapped; d) Continued enhancement of mediation and conciliation mechanisms as well as awareness rising of local authorities and private sector service providers are required to further improve mutual trust between the parties and private sector participation contract management; e) Modest progress has been made towards systematic and professional monitoring and control of MSW facilities and their compliance with environmental regulations, standards and norms; f) The PNDM has set a goal of 20 percent recycling by 2022 but no substantial progress toward achieving this result has been observed. The proposed DPL4 will contribute to the World Bank’s vision of Reducing Poverty and Boosting Shared Prosperity. Concretely, the supported policy measures and the PNDM will: a) create opportunities for vulnerable groups (waste pickers), in particular women, to improve their revenues and working conditions; b) foster job creation through the development of a vibrant solid waste recycling value chains; and c) control and mitigate adverse environmental impacts of existing dumpsites, thus improving the living conditions of the nearby populations, most of whom are marginalized and poor. Bank support to the municipal solid waste sector in Morocco is among the core activities of the Bank’s Country Partnership Strategy (2014-17). It will contribute to its Result Area 1 “Promoting Competitive and Inclusive Growth� and Result Area 2 “Building a Green and Resilient Future. It will also support its Result Area 3: “Strengthening Governance and Institutions for Improved Service Delivery to All Citizens�. III. Proposed Objective(s) The proposed DPL4 will continue to support the Second Phase of National Solid Waste Management Program (PNDM – Phase II) under implementation by the Government. DPL4 will be the second and last in a programmatic series of two development policy lending operations which supports the Government’s policy reform in the solid waste sector. The development objective of the second programmatic series (DPL3 and DPL4) is to support the Government’s efforts to improve the economic, environmental, and social performance of the Municipal Solid Waste sector. Expected benefits and impacts of the DPL program, including DPL4, would include: 2  Transparency and Citizen engagement: a) improved public access to accurate and reliable information on provision, access to and quality of service; and b) citizen and service users are able to express their opinion on the quality and adequacy of service;  Service delivery sustainability: a) municipalities continue to benefit from the Government’s support to plan, develop, and manage MSW infrastructures and delegate services to private sector; b) urban population has access to professionalized integrated MSW services; and c) potential local sources of revenues to support the professionalization of MSW systems are mobilized.  Environmental and social performance of the sector: a) the environmental impacts of MSW facilities are reduced as they are environmentally controlled and inspected regularly according to international good practices; b) new recycling and valorization programs are developed fostering a successful collaboration between producers, informal sector and municipalities; c) sustainable stream of revenues is generated to support recycling activities, social inclusion and formal jobs and SMEs creation. IV. Preliminary Description The proposed operation will support the Government’s program which focuses on four areas: a) strengthening governance, and particularly demand-side governance, by improving accountability of service providers, transparency, access to information, and providing citizens and civil society with new and effective opportunities for engagement and voice; b) improving institutional and financial sustainability of the sector by professionalizing Integrated Municipal Solid Waste planning and service delivery and diversifying municipal sources of revenues; c) upgrading the country’s environmental monitoring and control system; and d) developing financially viable and socially inclusive waste recycling value chains. V. Poverty and Social Impacts and Environment Aspects Poverty and Social Impacts The DPL program's design will take into account the results of the Poverty and Social Impact Assessments done during the first phase (PSIA 1 and 2) as well as the addendum to the PSIA 2 which assessed the potential impacts of the introduction of the proposed eco-tax on vulnerable groups such as waste pickers who are predominantly women and youth. Environment Aspects An assessment of the potential impacts of supported policies on the environment and natural resources was carried out, and concluded that the measures supported by the proposed program are likely to have a significant positive effect on the country’s environment, forests and other natural resources. The proposed operation (and the Program of DPLs) has been specifically designed to address environmental issues and builds on the progress of the previous two operations to enhance their positive effect on the environment. The implementation of the first phase of the reform program has already allowed significant improvements in the country’s environmental regulatory and institutional framework. The proposed operation aims at enhancing the positive effects on the environment by establishing the existing environmental monitoring and control system which will allow a systematic supervision of the implementation of EIA recommendations and help monitoring compliance of facilities (including, inter alia, in the solid waste sector) with national environmental norms and standards. 3 VI. Tentative financing Source IBRD Borrower Kingdom of Morocco Amount EUR 100 millions (eq. USD 130 millions) VII. Contact point Contact: Jaafar Sadok Friaa Title: Lead Urban Specialist Tel: +1-202-473-7124 Email: jsfriaa@worldbank.org VIII. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop 4