FOR OFFICIAL USE ONLY INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT PAPER ON A

Transcription

1 Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD1227 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT PAPER ON A PROPOSED ADDITIONAL FINANCING CREDIT IN THE AMOUNT OF (SDRXX/EURXX/OTHER) MILLION (US$ 3.8 MILLION EQUIVALENT) AND PROPOSED ADDITIONAL FINANCING GRANT IN THE AMOUNT OF (SDRXX/EURXX/OTHER) MILLION (US$ 5 MILLION EQUIVALENT) TO THE GOVERNMENT OF GRENADA FOR THE DISASTER VULNERABILITY REDUCTION PROJECT {RVP/CD CLEARANCE DATE - SAME AS ON MOP} Social, Urban, Rural and Resilience Global Practice Please insert one of the following boxes based on the PAD Guidelines section on disclosure. Box should be aligned to the bottom of page (insert blank lines here to lower the box) 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. OR This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank s policy on Access to Information.

2 CURRENCY EQUIVALENTS (Exchange Rate Effective {Date}) Currency Unit = = US$1 US$ = SDR 1 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS APL CAS CCRIF CIF DRM EA EC EIA EIRR FM FY GIS GRENLEC ICB IDA M&E NAWASA NPV OECS OP/BP PCU PDO PPCR RDVRP Adaptable Program Loan Country Assistance Strategy Caribbean Catastrophe Risk Insurance Facility Climate Investment Fund Disaster Risk Management Environmental Assessment Eastern Caribbean Environmental Impact Assessment Economic Internal Rate of Return Financial Management Fiscal Year Geographic Information System Grenada Electric Services, Ltd. International Competitive Bidding International Development Association Monitoring and Evaluation National Water and Sewage Authority Net Present Value Organization of Eastern Caribbean States Operational Policy/Bank Procedure Project Coordination Unit Project Development Objective Pilot Program for Climate Resilience Regional Disaster Vulnerability Reduction Program Vice President: Jorge Familiar Country Director: Sophie Sirtaine Country Manager: Senior Global Practice Director: Alessandro Legrottaglie Ede Jorge Ijjasz-Vasquez Practice Manager/Manager: Anna Wellenstein Task Team Leader: Gaetano Vivo 2

3 GRENADA DISASTER VULNERABILITY REDUCTION PROJECT CONTENTS Project Paper Data Sheet Project Paper I. Introduction II. Background and Rationale for Additional Financing III. Proposed Changes IV. Appraisal Summary Mandatory Annexes 1. Revised Results Framework and Monitoring Indicators 2. Systematic Operations Risk-rating Tool Optional Annexes (only if required to justify the additional loan) 3. Detailed Description of Modified or New Project Activities 4. Revised Estimate of Project Costs 5. Revised Implementation Arrangements and Support (this includes any changes to the procurement, FM, safeguards, etc.) 3

4 . ADDITIONAL FINANCING DATA SHEET Grenada Regional Disaster Vulnerability Reduction Project (Additional Finance) ( P ) LATIN AMERICA AND CARIBBEAN GSURR Basic Information Parent Parent Project ID: P Original EA Category: B - Partial Assessment Current Closing Date: Project ID: 31-Dec-2018 Basic Information Additional Financing (AF) P Additional Financing Type (from AUS): Scale Up Regional Vice President: Jorge Familiar Calderon Proposed EA Category: B - Partial Assessment Country Director: Senior Global Practice Director: Practice Manager/Manager: Sophie Sirtaine Team Leader: Gaetano Vivo Expected Effectiveness Date: Ede Jorge Ijjasz-Vasquez Expected Closing Date: Anna Wellenstein Report No: PAD1227 Borrower Organization Name Contact Title Telephone Government of Grenada Government of St. Vincent and the Grenadines Project Financing Data Parent ( Regional Disaster Vulnerability Reduction APL1 - Grenada and St. Vincent and the Grenadines-P ) Key Dates Project Ln/Cr/TF Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P IDA Effective 23-Jun Sep Nov Dec Dec-2016 P IDA Effective 23-Jun Sep Oct Dec Dec-2016 P IDA Not Effective 09-May Aug Nov Dec Dec Grenada-related financing is highlighted for easy reference. 4

5 P TF Effective 20-Sep Sep Nov Dec Dec-2016 P TF Effective 09-Sep Sep Oct Dec Dec-2016 P TF Effective 23-Jun Sep Nov Dec Dec-2016 P TF Effective 23-Jun Sep Oct Dec Dec-2016 Disbursements Project Ln/Cr/TF Status Currenc y Original Revised Cancelle d Disburse d Undisbur sed % Disburse d P IDA Effective USD P IDA Effective USD P IDA Not Effective USD P TF Effective USD P TF Effective USD P TF Effective USD P TF Effective USD Project Financing Data Additional Financing Regional Disaster Vulnerability Reduction Project (Additional Finance) ( P ) [ ] Loan [X] Grant [ ] IDA Grant [X] Credit [ ] Guarantee [ ] Other Total Project Cost: 8.80 Total Bank Financing: 0.00 Financing Gap: 0.00 Financing Source Additional Financing (AF) Amount BORROWER/RECIPIENT 0.00 International Development Association (IDA) 0.00 Strategic Climate Fund Credit 3.80 Strategic Climate Fund Grant 5.00 Total 8.80 Policy Waivers Does the project depart from the CAS in content or in other significant respects? Explanation No Does the project require any policy waiver(s)? No 5

6 Explanation Bank Staff Team Composition Name Title Specialization Unit Carolina J. Cuba Senior Program GSURR Hammond Assistant Nicholas James Callender E T Consultant Disaster Risk Management Analyst Michael J. Darr Consultant Environmental Safeguards Tiguist Fisseha Disaster Risk Management Specialist David I Senior Financial Management Specialist GSURR GENDR GSURR GGODR Plamen Stoyanov Kirov Senior Procurement GGODR Specialist Gerald E. Meier Consultant Technical Specialist GSURR Daniel Thirion Consultant Civil Engineer GSURR Bishwa Pandey E T Consultant Sr. Data Specialist GSURR Edith Ruguru Mwenda Senior Counsel LEGAM M. Yaa Pokua Afriyie Oppong Senior Social Development Specialist GSURR Keren Carla Charles ET Consultant Economic Analysis GSURR Adam Shayne Lead Counsel LEGLE Vipasha Bansal ET Consultant LEGLE Tatiana De Abreu Finance Analyst CTRLN Gaetano Vivo Disaster Risk Management Specialist Team Leader GSURR Non Bank Staff Name Title City Institutional Data Parent ( Regional Disaster Vulnerability Reduction APL1 - Grenada and St. Vincent and the 6

7 Grenadines-P ) Practice Area / Cross Cutting Solution Area Social, Urban, Rural and Resilience Global Practice Cross Cutting Areas [ X ] Climate Change [ ] Fragile, Conflict & Violence [ ] Gender [ ] Jobs [ ] Public Private Partnership Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Co-benefits % Water, sanitation and flood protection Flood protection 68 Transportation Aviation 24 Public Administration, Law, and Justice Public administration- Water, sanitation and flood protection 8 Mitigation Cobenefits % Total 100 Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Social protection and risk management Natural disaster management 65 Environment and natural resources Water resource management 35 management Total 100 Additional Financing Regional Disaster Vulnerability Reduction Project (Additional Finance) ( P ) Practice Area / Cross Cutting Solution Area Social, Urban, Rural and Resilience Global Practice Cross Cutting Areas [ X ] Climate Change [ ] Fragile, Conflict & Violence 7

8 [ ] Gender [ ] Jobs [ ] Public Private Partnership Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Co-benefits % Agriculture, fishing, and forestry Forestry Water, sanitation and flood protection Flood protection Mitigation Cobenefits % Total 100 Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Environment and natural resources Climate change 60 management Social protection and risk management Natural disaster management 20 Urban development Other urban development 15 Environment and natural resources Land administration and management 5 management Total 100 I. Introduction This Project Paper seeks the approval of the Executive Directors to provide an Additional Financing (AF) in the amount of US$ 8.8 million equivalent to Grenada to help scale up the transformative impact of the Regional Disaster Vulnerability Reduction Project (RDVRP) (P117871). The closing date of the AF and the original Project will be extended to December 31, The Regional Disaster Vulnerability Reduction Project, financed up to 60% by the PPCR, is being used as the main financing instrument to deliver on Grenada s climate resilience goals and objectives as outlined in the country s Strategic Program for Climate Resilience (SPCR). A successful delivery of the RDVRP will build solid foundations for the Grenada SPCR. The AF would consolidate and scale up activities initiated under the RDVRP and contribute to institutional capacity improvements that will be fundamental for transformative change in Grenada s long-term climate resilience agenda, as endorsed by the PPCR Sub-Committee. 8

9 Specifically, the AF would: (i) ensure climate risk reduction outcomes for an important part of Grenada s population and economy, through improved drainage and flood prevention infrastructure in selected urban areas; (ii) contribute critical building blocks to the technical and institutional capacity to manage climate resilience. Funding arrangements. The proposed AF would include a US$3.8 million Strategic Climate Fund (SCF) credit and a US$5 million Strategic Climate Fund (SCF) grant from the Climate Investment Fund s (CIF s) Pilot Program for Climate Resilience (PPCR). II. Background and Rationale for Additional Financing Vulnerability Context. Grenada is exposed to meteorological (high wind/excess rainfall/hurricanes and drought) and geophysical (seismic/volcanic/tsunami) hazards, causing a high risk to its economic stability. These hazards often result in significant and recurrent damages to national infrastructure including housing, transport and telecommunication networks, schools, hospitals as well as water and electrical services. As is the case with most island states, a single hazard event can impact the entire population and economy of Grenada due to its small population and limited geographical area. For example, Hurricane Ivan (2004) resulted in national losses exceeding 200 percent of Grenada s annual GDP. Damages to government facilities virtually paralyzed the government and some 97 percent of Grenada s schools [74 out of 76] as well as 2/3 of the housing stock were either damaged or completely destroyed. Over the past 50 years, approximately US$3 billion in losses are attributed to the consequences of natural hazards in the Eastern Caribbean alone. If this trend continues, the Eastern Caribbean sub-region will face a potential annual loss of US$ million. Between , Grenada experienced average annual losses of 9.5 percent of GDP 2. The resulting fiscal losses from recurrent disasters, coupled with the ongoing effects of climate change, have greatly contributed to unsustainable budgetary deficits and imposed significant negative constraints to economic growth. Recognizing these impacts, disaster risk management and climate change adaptation have become top priorities for the Government of Grenada. Link between Additional Financing Activities and Parent RDVRP. The RDVRP finances a combination of priority risk reduction investments, and activities that contribute to build Grenada s capacity to better manage climate risks. Risk reduction investments were chosen based on a high risk of structural failure to the 10-year event (Category 1 hurricane or M7.0 earthquake) in the case of buildings and bridges, or where annual flooding occurs in the case of flood management and urban drainage. Capacity building activities focused on creating capacity to better manage spatial information and to use it for decision making for reducing climate vulnerability. The AF is a continuation of both processes by expanding the risk reduction investments compared to what would otherwise have been achievable, and through acquisition of complimentary data needed to assess potential climate impacts and through targeted capacity building efforts of select technical departments, including forestry, water resource management, and public works. 2 Global Climate Risk Index 2013, Germanwatch, November

10 Additional cost of resilient infrastructure. The original cost estimates for project activities under the RDVRP were made based on data available at the time and prior to the technical designs for the civil works. During the first three years of the project implementation additional technical studies were carried out to ensure construction standards would be more resilient. These studies, pre-engineering assessments, and some final designs, indicate that that the cost of building more resilient infrastructure in Grenada is almost 20% more expensive than the original budget estimates that were largely based on existing building practices at the time. 3 The higher costs are due to enhanced level of analysis and design, as well as higher performing civil works resilient to climate change. The re-appraised infrastructure costs based on improved design is estimated at US$4.5 million (approximately 17% of total project financing) over original project estimates for activities originally prioritized for financing under the RDVRP. Government Response to Financing Gap. The GoG is committed to increasing climate resilience and wants to ensure that the higher technical standards are built into the design of the infrastructure. The GoG explored various options to meet these additional resilience costs measures. First, due to Grenada s fiscal situation, the option for co-financing the Project was not achievable. Second, World Bank IDA-17 funds are committed to budgetary support to address Grenada s current financial position. Third, re-allocation or cancellation of other risk reduction sub-projects was not an option as these activities are critical for the resilience of vulnerable communities. These investments, currently at advanced implementation stage, include among others rehabilitation of social infrastructure (schools, public accommodation for the elderly), protection of bridges, and construction of roads for low-income relocated communities. Cancelling some of these investments would significantly hinder the socio-economic impact of the Project, whose successful delivery is seen as the foundation of Grenada s SPCR. Consolidating with the AF the work initiated by the RDVRP is critical to increase the country s commitment to the PDO and ensure long-term resilience. In order to maintain the momentum achieved with the Project while ensuring adherence to higher resilience standards, the Government covered the additional cost of enhanced infrastructure design within the RDVRP and postponed construction of St. John s River flood mitigation works (which had an equivalent cost of $4.5 million, nearly equivalent to the value of the financing gap) to the second phase of the RDVRP. As a result, the St Johns River sub-project will be re-appraised and proposed to be financed under this AF. Building transformative capacity. Beyond scaling up risk reduction investments initiated under the RDVRP, additional activities to be financed under the AF relate to building capacity that will enable better informed watershed management, forestry, and engineering. After a series of consultations with the GoG agencies including: Ministry of Agriculture (MOA), Forestry Department, Environment Department, National Water and Sewage Authority (NAWASA), Ministry of Works (MOW), National Land Planning office (MOW), National Meteorological Service, Ministry of Finance and others, a suite of investments were identified which are 3 This cost differential is in line with recent findings from the 2013 World Bank Report Building Resilience Integrating Climate and Disaster Risk into Development, which notes that recent disaster assessment experience suggests that the costs of building back better typically amount to between 10 50% more than the replacement cost of the original structures. 10

11 designed to provide GoG with additional data and capacity needed to integrate climate risks in watershed management and forestry. The same new data will also be useful for development planning purposes of entities already being supported under the RDVRP, including the Ministry of Works, the National Disaster Management Agency (NADMA), and the National Land Planning office. Most of the potential of the project to catalyze national level resilience building relies on these agencies generating an ability to do climate risk informed planning, which has proven to be one of the most important, transformative and long-lasting adaptation strategies in Small Island States. Timing of the Additional Finance. The proposed AF is critical to reduce vulnerability to hazards in the short term and, through enhanced information basis and strengthen ability to over time achieve resilience to climate change. The phasing of the investments under the RDVRP has allowed Grenada to address critical infrastructure needs as well as lay the foundations for the utilization and integration of scientific planning and analysis in decision making. The AF is particularly needed at a time when RDVRP designs and plans are ready and nearing implementation. The systems are in place to manage core data collected and facilitate training and practical application in engineering and planning processes. The combination of successful RDVRP outcomes coupled with planned AF investments set Grenada on track towards both understanding their climate challenges and having the tools in place to plan and adapt to them. Links to the Strategic Program for Climate Resilience. The proposed AF would significantly contribute to the implementation of the Grenada s Strategic Program for Climate Resilience (SPCR) 4 dated March 2, More specifically, it directly contributes to four of the five SPCR expected outcomes, namely: (i) improved resilience of infrastructure; (ii) restored and improved forestry resources; (iii) improved government capacity for assessment and management of Grenada s water supply; and (iv) improved use of data and geospatial analysis for climate change adaptation. Additionally, the activities proposed under the AF are closely linked with the objectives of the Grenada National Strategic Development Plan ( ) 5. Furthermore, increasing capacity to manage risk from natural hazards and climate change is a core outcome of the Organization of Eastern Caribbean States (OECS) Regional Partnership Strategy (RPS) FY15-FY19. It directly contributes to one of the three areas of engagement ( Resilience ) and, ultimately, to the overall strategic goal of supporting the OECS in laying foundations for sustainable inclusive growth. Grenada uses the RDVRP is one of its principle financial vehicles to deliver on its overall climate resilience goals. In order to minimize transaction costs on the Government, and to address climate resilience in a comprehensive and integrated manner in Grenada, the additional PPCR financing will be channeled as an AF to the RDVRP. 4 Grenada Strategic Programme for Climate Resilience. Available at: 020apr2011.pdf 5 The proposed project would particularly contribute to Goal #7 of the National Strategic Development Plan: Sustainable Environment and Physical Development and to the following specific objectives: (i) To promote awareness of and commitment to environmental considerations; (ii) To promote and provide for disaster risk reduction, hazard mitigation and climate adaptation; (iii) To promote the efficient allocation of land among competing uses. Available at: 11

12 Coordination with other country investments. Activities planned under the scaling up of the project position the GoG to leverage project activities with other donor initiatives. Among others, the ongoing GIZ-funded Integrated Climate Change Adaptation Strategies in Grenada offers potential synergies with the proposed scale-up activities. For instance, data and analysis provided through the AF could address gaps currently faced by community-based watershed management interventions and would support a more robust outcome of these efforts. Activities planned under the proposed AF would lay the technical foundation needed to effectively design and implement future climate resilience investment strategies supported by the GoG and its development partners. The recently re-activated National Climate Change Committee (NCCC) will play a critical role in ensuring overall coordination and guidance for the implementation of climate adaptation investments in Grenada. Links to Poverty Reduction and Shared Prosperity Goals. The 2008 Country Poverty Assessment (CPA) showed that 37.7% of Grenada s population is living below the poverty line; in addition, a further 14.6% is vulnerable and likely to fall into poverty in the event of an external shock such as that typically brought on by hurricanes or external traumatic events. Grenada has acknowledged the implications of climate change especially in terms of expected changes in weather patterns and increased frequency and intensity of tropical cyclones. This susceptibility makes resilience building a required cornerstone of any development and poverty reduction strategy. The AF activities contribute to the Grenada Growth and Poverty Reduction Strategy particularly with respect to the Strategic Orientation Pillar 4: Environmental Protection and Comprehensive Disaster Risk Management. The AF activities will directly support all four strategic objectives within the pillar, namely: (i) natural resources sustainably managed; (ii) environmental management; (iii) comprehensive DRM practices adopted and; (iv) climate change adaptation mainstreamed. The Project would contribute to the Bank s dual objectives of ending extreme poverty and promoting shared prosperity. Investments will help reduce both physical and socio-economic vulnerabilities of individuals, business and communities to climate-related disasters. Planned disaster mitigation activities such as river defense works and drainage infrastructure design would ensure continued access to markets, schools, and hospitals in the aftermath of an adverse natural event. Science-based hazard modeling will enhance early warning systems, emergency response plans and protection of livelihoods. Status of Original Project Project Financing. The RDVRP was approved in June 23, 2011 and became effective in October The lending instrument was an Adaptable Program Loan (APL) and is being implemented in Dominica, Grenada, Saint Lucia, and Saint Vincent and the Grenadines (SVG); Under new World Bank operational policies, the AF follows Investment Project Financing (IPF) guidelines. Projects in Grenada and SVG form IPF1 (P117871) with total financing of US$87.7 million, broken down as follows: (Grenada: US$10.0 million in IDA credits, US$8.0 million in PPCR grants and US$8.2 million in PPCR concessional loans; SVG: US$46.5 million in IDA credits, US$12.0 million in PPCR grants and US$3.0 million in PPCR concessional loans). Project Objectives and Description. The project development objective (PDO) is to measurably reduce vulnerability to natural hazards and climate change impacts in Grenada and in the Eastern Caribbean sub-region. Project components include: Component 1 - prevention and 12

13 adaptation investments; Component 2 - regional platform for hazard and risk evaluation, and applications for improved decision making; Component 3 - natural disaster response investments; Component 4 - project management and implementation support and; Component 5 payment of CCRIF insurance premium. Cross-cutting themes, such as gender, knowledge management and monitoring and evaluation (M&E), are addressed in detail under the original project (RDVRP). The Project has funded supporting studies and pre-engineering investigations (e.g. hydraulic/hydrologic studies, geotechnical investigations) and associated engineering activities to support design and safeguard compliance. Designs and construction are subject to hazard/risk and climate impact analysis in order to advance the design and construction of resilient infrastructure. Project works include bridge construction, rehabilitation of schools, homes for the elderly, landslide risk reduction, flood mitigation works, improvements to the water storage supply and specific improvement works for two low income relocated communities. The RDVRP has supported capacity building activities within the National Disaster Management Agency (NaDMA) and has acquired fire trucks, rescue boats and equipment allowing the national airport to comply with the International Civil Aviation Organization (ICAO) regulations. The RDVRP has laid the groundwork for data sharing, collaboration and analysis among Government agencies. To cover residual risk, the program has also prepared an emergency recovery mechanism that complements existing post-disaster financing options that could be activated in the event of an adverse natural event, following declaration of national emergency. Implementation Status. Project implementation is rated Moderately Satisfactory and the achievement of the PDO is rated Satisfactory. The Project is on track to be completed by its closing date. All design and supervision contracts for infrastructure-related works sub-projects are under contract or nearing the contract stage. Currently the Project has disbursed US$5.9 million (23%). Disbursement trends are within expectations given large construction component under the project. As previously mentioned, both designs and technical studies were advanced during Project implementation. Disbursements will increase significantly (early to mid-2015) as construction of civil works commences. The financing gap based on revised estimates for civil works was determined during the MTR mission carried out in May 2014 to be US$4.5 million 6. Finally, the project is fully compliant with all conditions and legal covenants. III. The Additional Financing Changes from project concept as presented to PPCR Subcommittee in February The financing shortfall value includes both actual shortfalls from executed Project activities as well as anticipated shortfalls based on revised estimates with built in contingencies that were reviewed following the design phase commissioned under the Project. The US$4.5 million value is therefore reflective of both actual overruns based on executed activities as well as overruns expected for the remainder of the Project. 13

14 Re-scoped Forestry Component. The originally endorsed PPCR Concept Note for the AF included the rehabilitation of the Grand Etang Forest nursery, reforestation of 100 hectares of forest areas (about 2% of the total watershed area that is 4,000 hectares), and preparation of 55,000 seedlings consisting of commercial and mixed natural forest species and land preparation and enrichment planning. During the project preparation it became clear that there were important pre-requisites to ensure that such investment would be effective and sustained. In particular, strengthening the Forestry Department s institutional capacity to manage geo-spatial data and make evidence-based decisions is essential to undertaking any activity to preserve/restore forest resources. For instance, forest management planning requires baseline datasets such as topography, soil types, forest cover mapping and rainfall regimes. To use forest resources as a tool for climate resilience, it is necessary to model the impact of potential reforestation activities to optimize investments for mitigating runoff and sediment discharge, enhance slope stability, and ensure ecological compatibility of the species composition. Without this data in place the GoG realized the impact of forestry investments would be small and potentially ineffective and opted for shifting the focus of the forestry component to build in long term capacity for forest management and resilience. With the development of the core data and analytical tools, the AF will support investments in capacity building and training within the Forestry Department to prepare them to use this technology in developing their long-term forest management program with emphasis on ecological sustainability, watershed management, risk reduction, and coastal zone protection. Component 1: Prevention and Adaptation Investments (Increase by US$5,200,000). The proposed AF would permit the completion of priority investments for flood protection and improved drainage in urban areas. These investments include: (a) pre-engineering studies and design for a flood mitigation system in Morne Rouge area; (b) river training works for the St. Johns River flood mitigation sub-project, including complementary vegetative reinforcement; (c) investments in fiber optic upgrades to assist agencies with participating in a national data sharing platform (i.e. GeoNode, national hydromet network). The design of investments under Component 1 will, to the extent possible, integrate data collected and analyzed under Component 2. Analytics and tools developed by Component 2 will also complement priority flood mitigation works carried out under the project. For instance, digital elevation models, soil maps, and hydromet data will provide the basis for modelling floods, informing upstream watershed management (e.g. through forest restoration) and increasing long term resilience of the works. Component 2: Regional Platforms for Hazard and Risk Evaluation, and Applications for Improved decision making (Increase by US$3,200,000). This component finances critical building blocks to Grenada s technical and institutional capacity to manage climate resilience in forest and water resource management departments, with additional applications for Ministry of Works, NADMA, and the National Planning Office, which could contribute to a transformative impact on Grenada s capacity to build climate resilience. Activities to be financed include: high resolution topography and bathymetry models, high resolution forest cover mapping, high resolution soils mapping, modernization of the national hydromet network, capacity building for watershed analysis and modeling, and institutional strengthening and capacity building in forest resources management. Developing/consolidating data resources and improving the analytical capability of select institutions will provide a platform for informed risk reduction decisions in the sectors prioritized under the SPCR, including water resource management, disaster 14

15 prevention and emergency planning, and forestry. These investments are transformational in nature and provide the basic backbone for climate resilient development over the long-term based on sound scientific principles. End-users of Climate Resilience Data. A series of consultations carried out with all national stakeholders 7 involved in the Grenada SPCR allowed a prioritization of the data-based applications and highlighted critical capacity gaps. The SPCR counterparts in Grenada are also main end users of hydro-meteorological and climate data. From the outset of AF preparation they have been engaged to provide feedback on their information needs and their specific requirements for the data to be collected through the Project. This is expected to enhance the development and uptake of information, products and services for resilience. In the identification of the activities, priority was given to the acquisition of critical baseline data and the development of analytical capacity designed to advance multi-sector applications in climate adaptation. Building this capacity in-country is a long-term transformative process. As such the AF activities seek to build the foundation and develop institutional capacity to apply this technology beyond the life of the project. Public Works. Forward looking design and construction is key to long-term resilience. To accomplish this, local scale climate modeling is required to provide criteria as a foundation for improved resilient design. Activities under the AF support this concept by building the foundation for analyzing design conditions by providing baseline data and building capacity to improve design analysis. Applications include modeling the return periods for rainfall events and runoff produced on a local scale, which will allow for the development of resilient engineering designs with respect to expected conditions (e.g. 1:25 year storm, 1:50 year storm). In island settings, these events are highly localized often associated with thunderstorms that are generated by atmospheric interactions with island topography. This requires multiple years of observations. The modernization of the hydromet network is designed to capture that variability. Coupled with improved topographic, soils, land cover data, and training in analytical applications, GoG will have the basic tools required improve the resilience of future designs. Land planning. Landslip and rainfall runoff are significant parameters needed to inform Grenada s national land use plan (National Development Order) and Local Area Plans, a responsibility of the Physical Planning Unit. Physical modeling of the impacts of proposed development plans to the landscape is needed to avoid generating damaging runoff to downstream communities e.g. increased flooding or destabilization of downstream slopes promoting landslide or damaging drinking water resources. Coastal risks from storm surge, storm waves, and tsunami cannot be evaluated properly without bathymetric information. Tourism resources as well as coastal (typically lower income) fishing villages are particularly vulnerable. Coupled with high resolution topography, these data will permit the future evaluation of coastal risks to hazard events and longerterm sea level rise at the community level. 7 Agencies benefiting from the tools and data to be introduced include, among others, Ministry of Agriculture and Forestry, Ministry of Works (including Land Planning), Ministry of Education, Ministry of Health, National Agency for Disaster Management, Ministry of Housing, National Water and Sewage Authority (NAWASA), National Meteorological Service. 15

16 Disaster Risk Management. For flood early warning, stream gauges are not adequate to producing adequate early warning. With an East-West diameter of approximately 8 miles and a central North-South mountain range, surface runoff has only a 4 mile transit from mountain top to sea. Watershed calibration and modeling rainfall input with respect to stream rise will allow future early warning systems to be based on a rainfall trigger providing additional alert time to affected populations. Disaster Risk Financing. New data acquired with the AF are important inputs to improve modeling of storm surge, flood risk, and landslide risk, which could lead to the development of disaster risk financing strategies and instruments that covers these hazards and therefore compliments other existing risk financing instruments, which are particularly critical given Grenada s current fiscal constraints. Forestry. Forest management is a major tool for improving water resources (quantity and quality), protecting coastal ecosystems and reducing hazard vulnerability among others. Forest management planning cannot be successful without critical data such as topography, soil types, forest cover mapping, rainfall regimes, etc. To use forest resources as a mitigation tool, it is necessary to model the impact of potential reforestation activities to optimize investments for mitigating runoff and sediment discharge, enhance slope stability and ensure ecological compatibility of the species composition. Scaled up activities are designed to advance Grenada s ability to develop this level of analysis. With the development of the core data and analytical tools, the project will support investments in capacity building and training within the forestry department to prepare them to use this technology in developing their long-term forest management program with emphasis on ecological sustainability, watershed management and risk reduction, and coastal zone protection. Component 2 activities are divided into four sub-components: (i) (ii) (iii) (iv) Acquisition of baseline data (e.g. high accuracy digital elevation topographic datasets, bathymetry, soil map, etc.) providing the foundation for analysis of the physical environment; Optimization and modernization of the hydro-meteorological data collection network (i.e. rain and stream flow gauges) and data management system; Watershed modeling training for flood and drought hazard mapping and calculation of hydraulic parameters (e.g. water runoff) for climate-proofing infrastructure design; Forest management capacity building. A more detail presentation of the activities of component is provided in Annex 3. Component 3 Natural Disaster Response Investments (No change from Parent). Grenada has a high risk of exposure to natural disasters which have the potential to impact this operation by severely affecting the productive sectors of the economy, adding pressure on the fiscal position, and redirecting public resources away from long-term development plans. Despite the vulnerability reduction investments under the RDVRP, residual risk across vulnerable public infrastructure in Grenada remains. 16

17 Project design was developed bearing in mind the country s hazard risk. In order to cover residual risk and provide quick liquidity in the event of an emergency, US$1 million is available on retainer under this component to complement existing post-disaster financing options. The component would become operational following declaration of a national emergency and submission of a recovery action plan describing sub-projects and activities to be financed. This component strengthens the RDVRP and additional finance program, managing the risk of exogenous shocks on the project at large, allowing the Government quick access to funds to finance emergency recovery sub-projects in the event of a disaster. Access to these funds in conjunction with other post-disaster financial protection instruments would minimize compromising the long term transformative change in climate adaptation and enhanced resilience against natural hazards in the occurrence of a disaster event. Component 4: Project Management and Implementation Support (Increase by US$400,000). The AF would support strengthening the institutional capacity for project management and coordination of SPCR implementation. This will be accomplished through the provision of technical advisory services, training, operating costs and acquisition of goods. In particular, this Component will strengthen: (i) capacity of the PCU and relevant government agencies in project management, implementation support, and coordination with other climate resilience investments in Grenada; (ii) capacity of the PCU and relevant government agencies to monitor the delivery of the SPCR (including climate resilience activities supported by other development partners), monitor and report on the PPCR core indicators, and generate knowledge for the other participating countries. The detailed description of all Project activities can be found in Annex 3. Project Cost and Financing. The table below summarizes the project cost and financing by Component. Activity Parent Project Additional Finance Total Component 1 - Prevention US$10,620,000 US$5,200,000 US$15,820,000 and Adaptation Investments Component 2 - Regional US$10,580,000 US$3,200,000 US$13,780,000 Platforms for Hazard and Risk Evaluation, and Applications for Improved decision making Component 3 - Natural US$1,000,000 - US$1,000,000 Disaster Response Investment Component 4 Project US$2,000,000 $400,000 US$2,400,000 Management and Implementation Support Component 5 Payment of US$2,000,000 - US$2,000,000 the CCRIF insurance premium TOTAL US$26,200,000 US$8,800,000 US$35,000,000 Expected Outcomes. The AF would have the same expected outcomes as the RDVRP, but at a greater scale, which include: (i) greater capacity built to identify and monitor climate risk at the 17

18 national level; (ii) reduced risk of Grenada s population to potable water shortage due to natural hazards or climate change impacts; (iii) reduced vulnerability of select public infrastructure to flooding. Consistency with PDO. Activities identified under the proposed AF are consistent with the current PDO. The AF would support the scaling of up of key project activities and close the financing gap for current project activities. Key outcomes resulting from AF activities would be improved infrastructure resilience and strengthened disaster planning capacity both in the short and long term. Project Risks. The overall implementation risk rating for the RDVRP is moderate. Given the size of the country, implementation capacity to handle a large number of contracts is limited. Inter-institutional coordination, quality control, and information sharing among various agencies are also limited. In order to mitigate these risks, the RDVRP has supported targeted training for project staff to manage Bank-supported projects specifically as it relates to procurement, financial management and safeguards. During the Mid-Term Review, carried out in May 2014, procurement, safeguards and financial management capacity was rated as Satisfactory. Moreover, the RDVRP includes a provision of technical assistance designed to improve the technical capacity of relevant government institutions. Added Value of the Additional Financing. The RDVRP has supported capacity building activities to improve climate resilience and DRM capacity. A large focus of the additional activities will be on acquiring datasets, improving data management systems, building national capacity in the use of these data to produce analysis required to identify and evaluate appropriate interventions with respect to climate change adaptation. Addressing the conditions that contribute to recurrent infrastructure failure requires data that presently do not exist in Grenada. Under the AF basic datasets and collection systems are to be developed that will permit the analysis of these factors on a watershed scale. The applications of this analysis are wide ranging and improve hazard and vulnerability assessment, engineering designs, land planning and land use allocation. Implementation Arrangements. The AF implementation, institutional and internal quality control arrangements would remain the same as the arrangements established under the RDVRP. The additional activities under the AF are within Grenada s current capacity to execute. The Project Coordination Unit is reasonably staffed and targeted training has facilitated capacity development to manage Bank-supported projects. The Social Specialist and Engineer will supervise safeguards for most activities, particularly for spot field inspections during construction. An external environmental consultant will be contracted to provide support for specialized tasks and for more frequent inspection of intensive construction efforts. The Operations Manual will be updated to reference the new Environmental Management Framework. The proposed AF would also scale up technical assistance provided under the RDVRP to support improved project management capacity and financial management systems. Additionally, a project Steering Committee oversees the implementation and coordination of the RDVRP, will also support the execution of the AF activities as well as monitor its implementation. The Grenada National Climate Change Committee (NCCC) was reactivated in July 2014 with 18

19 support from GIZ and will be meeting with frequency; this is invaluable for ensuring long term climate planning in the country and the transformational success of the RDVRP in regards to disaster risk and climate adaptation. Change in Disbursement Arrangement. The disbursement arrangement for the AF will be the same as the original operation, except that the expenditures will no longer be split by the various sources of funding. Rather, there will be sequencing on the usage of the sources of funding where the SCF grant funds will be utilized fully first followed subsequently by the SCF loan. This revision was requested by the Government of Grenada and will also apply to the original operation. The relevant legal documents and disbursement letter for the original operation will need to be revised to reflect this change. Expected Benefits. The proposed activities to be financed under the AF would result in increased capacity for analysis and assessment of risks from natural hazards and climate change, increased capacity for the integration of this analysis in the development decision making process and further reduction in disaster and climate change risk over the long term. Safeguards. Compliance with safeguards under the parent Project has been satisfactory to date. As the type and location of investments proposed under the AF are similar to those of the parent project, the Environmental Category of the proposed AF project would be the same as the parent project - Category B. An Environmental Management Framework (EMF) is therefore the appropriate safeguards instrument to be used, based on an (i) update of the project portfolio, (ii) update of the assessment of environmental effects of interventions, (iii) update of the standard mitigation measures to include Pest Management; and (iv) update of the scoping and screening criteria for additional assessment included in the Operations Manual. The EMF will be prepared prior to appraisal and will be adapted readily from the existing Environmental Assessment document prepared for the Grenada DVRP. For the more complex works at St. John River, an Environmental Impact Assessment had been conducted previously and included an Environmental Management Plan which was found to meet Bank standards. The Involuntary Resettlement Safeguard (OP 4.12) was triggered by the parent project and a Resettlement Policy Framework (RPF) developed and disclosed at appraisal. The RPF remains valid and will be updated, to reflect AF subprojects, and disclosed prior to AF appraisal. A discrete amount of land acquisition has occurred under the parent which served to build the capacity of the PIU to screen for and implement OP 4.12 for the anticipated land acquisition under the AF. Safeguard implementation arrangements are expected to remain the same, except for the triggering of Pest Management (OP 4.09) as a precautionary measure to assist planning efforts. The overall social and environmental impacts of the proposed AF would be positive. Monitoring and Evaluation (M&E). M&E mechanisms would remain the same as the original Project. Targets in the Results Framework were revised to reflect the newly introduced activities as well as changes in the scope of activities within the Parent project. New indicators have been proposed to capture results from the additional finance investments. Annex 1 highlights the changes to the results framework. 19

20 IV. Proposed Changes Summary of Proposed Changes The activities under the proposed Additional Finance (AF) include investments for flood protection and improved drainage in urban areas, acquisition of baseline data (e.g. high accuracy digital elevation topographic datasets, bathymetry, soil map, etc.), optimization and modernization of the hydrometeorological data collection network and data management system, watershed modeling training for flood and drought hazard mapping and calculation of hydraulic parameters for climate-proofing infrastructure design and forest management capacity building. AF proceeds would also be allocated to meet a financing gap and cover project management expenses for an additional 2 years. Collectively, these activities would aim to increase national resilience to the impact of climate change and improve the capacity of government ministries to identify and manage the impacts associated with natural hazards and climate variability. Change in Implementing Agency Yes [ ] No [ X ] Change in Project's Development Objectives Yes [ ] No [ X ] Change in Results Framework Yes [ X ] No [ ] Change in Safeguard Policies Triggered Yes [ X ] No [ ] Change of EA category Yes [ ] No [ X ] Other Changes to Safeguards Yes [ ] No [ X ] Change in Legal Covenants Yes [ ] No [ X ] Change in Loan Closing Date(s) Yes [ X ] No [ ] Cancellations Proposed Yes [ ] No [ X ] Change in Disbursement Arrangements Yes [ ] No [ X ] Reallocation between Disbursement Categories Yes [ ] No [ X ] Change in Disbursement Estimates Yes [ ] No [ X ] Change to Components and Cost Yes [ X ] No [ ] Change in Institutional Arrangements Yes [ ] No [ X ] Change in Financial Management Yes [ ] No [ X ] Change in Procurement Yes [ ] No [ X ] Change in Implementation Schedule Yes [ ] No [ X ] Other Change(s) Yes [ ] No [ X ] Development Objective/Results PHHHDO Project s Development Objectives Original PDO The Program aims at measurably reducing vulnerability to natural hazards and climate change impacts in 20