Document of The World Bank IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA 33610, IDA 33611) ON A CREDIT

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank Report No:ICR IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA 33610, IDA 33611) ON A CREDIT IN THE AMOUNT OF SDR 14 MILLION (US$ MILLION EQUIVALENT) TO THE REPUBLIC OF HONDURAS FOR A NATURAL DISASTER MITIGATION PROJECT Sustainable Development Department Central America Country Management Unit Latin America and Caribbean Region June 22, 2011

2 CURRENCY EQUIVALENTS (Exchange Rate Effective: June 22, 2011) Currency Unit = Honduran Lempira US$ 1.00 = HNL US$ 1.00 = SDR 0.62 FISCAL YEAR [January 1 December 31] ABBREVIATIONS AND ACRONYMS AF AMHON BNWPP CAPRA CAS CEPREDENAC COPECO CODEL CODEM COEN CPS DCA DRM DSS EA FEMA FHIS FMA GAAEX GAT GIC GIS GoH GDP ICR IDA IDB IPPF JSDF OFDA Additional Financing Asociación de Municipios de Honduras (Association of Honduran Municipalities) Bank-Netherlands Water Partnership Program Central American Probabilistic Risk Assessment Country Assistance Strategy Centro de Coordinación para la Prevención de Desastres Naturales (Central American Coordination Center for Disaster Prevention) Comisión Permanente de Contingencias (Honduran Disaster Emergency Preparedness and Reponse Agency) Local Committee for Emergency Response Comités de Emergencia Municipal (Municipal Committee for Emergency Response) Centro de Operaciones de Emergencia Nacional (National Emergency Response Center Country Partnership Strategy Development Credit Agreement Disaster Risk Management Decision Making Support System Environmental Analysis Federal Emergency Management Agency (U.S.) Fondo Hondureño de Inversión Social (Honduran Fund for Social Investment) Financial Management Assessment Grupo de Apoyo para la Asistencia Externa (Group for Assistance to External Aid) Technical Advisory Group Inter-institutional Coordination Group Geographic Information System Government of Honduras Gross Domestic Product Implementation Completion and Results Report International development Association Inter-American Development Bank Indigenous Peoples Planning Framework Japan Social Development Fund Office of Foreign Disaster Assistance

3 PAD PCU PDO PEM PHRD PMDN PMGR PMOT RMI SDR SERNA SEFIN SINAGER SINAP SINIA SINIT SIGRM SGJ SOPTRAVI TCU UNAH UMA UNISDR USGS Project Appraisal Document Project Coordination Unit Project Development Objective Plan de Emergencia Municipal (Municipal Emergency Plan) Policy and Human Resources Development Proyecto de Mitigación de Desastres Naturales (Natural Disaster Mitigation Project) Plan Municipal de Gestión de Riesgos (Municipal Risk Management Plan Plan Municipal de Ordenamiento Territorial (Municipal Territorial Development Plan Red Metropolitana Inalámbrica (Metropolitan Wireless Network) Special Drawing Rights Secretaría de Recursos Naturales y Ambiente (Ministry of Natural Resources and Environment) Secretaría de Finanzas (Ministry of Finance) Sistema Nacional de Gestión de Riesgos (National System for Risk Management) Sistema Nacional de Administración de la Propiedad (National Property Administration System). Sistema Nacional de Información Ambiental (National System of Environmental Information) Sistema Nacional de Información Territorial (National Territorial Information System) Sistema Integrado de Gestión de Riesgos Municipal (Integrated System for Municipal Risk Management) Secretaría de Gobernación y Justicia (Ministry of Interior) Secretaría de Obras Públicas, Transporte y Vivienda (Ministry of Public Works, Transport and Housing Technical Coordination Unit (for project implementation) Universidad Nacional Autónoma de Honduras (National Autonomous University of Honduras) Unidad Municipal Ambiental (Municipal Environmental Unit) United Nations International Strategy for Disaster Reduction United States Geological Survey Vice President: Pamela Cox Country Director: C. Felipe Jaramillo Sector Manager: Guang Zhe Chen Project Team Leader: Ellen Hamilton / Enrique Pantoja ICR Team Leader: Enrique Pantoja / Ellen Hamilton

4 HONDURAS Natural Disaster Mitigation Project CONTENTS Data Sheet A. Basic Information....i B. Key Dates...i C. Ratings Summary....i D. Sector and Theme Codes....ii E. Bank Staff. ii F. Results Framework Analysis...iii G. Ratings of Project Performance in ISRs..vi H. Restructuring..vii I. Disbursement Graph.viii 1. Project Context, Development Objectives and Design Key Factors Affecting Implementation and Outcomes Assessment of Outcomes Assessment of Risk to Development Outcome Assessment of Bank and Borrower Performance Lessons Learned Comments on Issues Raised by Borrower/Implementing Agencies/Partners Annex 1. Project Costs and Financing Annex 2. Outputs by Component Annex 3. Economic and Financial Analysis Annex 4. Bank Lending and Implementation Support/Supervision Processes Annex 5. Beneficiary Survey Results Annex 6. Stakeholder Workshop Report and Results Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Annex 9. List of Supporting Documents MAP IBRD 38520

5 A. Basic Information Country: Honduras Project Name: NATURAL DISASTER MITIGATION Project ID: P L/C/TF Number(s): IDA-33610,IDA- 3361A,TF-26865,TF ,TF ICR Date: 06/22/2011 ICR Type: Core ICR Lending Instrument: TAL Borrower: Original Total Commitment: Revised Amount: XDR 13.6M Environmental Category: C REPUBLIC OF HONDURAS XDR 8.1M Disbursed Amount: XDR 13.6M Implementing Agencies: Disaster Emergency Preparedness and Response Agency (COPECO) -- Under the Additional Financing Ministry of Interior (SGJ) -- After 2004 Project Restructuring Ministry of Natural Resources and Environment (SERNA) -- Until 2004 along with: Association of Municipalities of Honduras (AMHON) Disaster Emergency Preparedness and Response Agency (COPECO) Cofinanciers and Other External Partners: B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 02/17/2000 Effectiveness: 02/02/2001 Appraisal: 03/28/2000 Restructuring(s): 06/18/2004 Approval: 05/30/2000 Mid-term Review: 06/04/2003 Closing: 04/15/ /30/2010 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Satisfactory Moderate Satisfactory Satisfactory i

6 C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Quality of Supervision: Satisfactory Implementing Agency/Agencies: Satisfactory Overall Bank Performance: Satisfactory Overall Borrower Performance: Satisfactory C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Performance (if any) Potential Problem Project No at any time (Yes/No): Problem Project at any time (Yes/No): DO rating before Closing/Inactive status: Yes Satisfactory Quality at Entry (QEA): Quality of Supervision (QSA): None Satisfactory Rating D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration Flood protection 20 Sub-national government administration Theme Code (as % of total Bank financing) Administrative and civil service reform Decentralization 10 Land administration and management Municipal governance and institution building Natural disaster management Participation and civic engagement 10 E. Bank Staff Positions At ICR At Approval Vice President: Pamela Cox David de Ferranti Country Director: Carlos Felipe Jaramillo Donna Dowsett-Coirolo Sector Manager: Guang Zhe Chen Danny M. Leipziger Project Team Leader: Ellen Hamilton Tova M. Solo ICR Team Leader: Enrique Pantoja ii

7 ICR Primary Author: Enrique Pantoja Mariana Orloff F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The original PDO was to improve the capacity to reduce vulnerability to natural disasters at the municipal level. Revised Project Development Objectives (as approved by original approving authority) The revised PDO was to improve the national capacity of the country to reduce its vulnerability to natural disasters at the municipal level. (a) PDO Indicator(s) Indicator Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years At least 81 municipalities have participated in vulnerability reduction programs; Indicator 1 : and at least 60 have introduced "preventive" municipal planning based on vulnerability reduction programs into municipal development ordinances Value quantitative or Qualitative) 0 81 (60) 81 (81) Date achieved 05/30/ /30/ /30/2010 Comments (incl. % achievement) Indicator 2 : Targets surpassed. All of the 81 municipalities that participated in vulnerability reduction programs have also approved territorial development plans (PMOTs) reflecting risk reduction measures. Prevention and mitigation themes mainstreamed into national primary education curriculum Value quantitative or Qualitative) Date achieved 05/30/ /30/ /30/2010 Comments (incl. % achievement) Indicator 3 : Value quantitative or Qualitative) Achieved. Although not formally evaluated, there is field evidence that the materials prepared on disaster risk management themes are being used in primary schools. Speed of emergency response among population in target municipalities increases by 75% and mistakes decrease by 50% as seen in simulation exercises 0 75% increase in speed of response / 50% decrease in mistakes Not measured as planned. Date achieved 05/30/ /30/ /30/2010 Comments Responses provided during recent disaster events indicate improvements in iii

8 (incl. % emergency response capacity. achievement) Indicator 4 : National flood forecasting system and community based early warning systems established under the Project functioning adequately Value quantitative or Qualitative) 0 1 / 5 1 / 5 Date achieved 05/30/ /30/ /30/2010 Comments (incl. % achievement) Indicator 5 : Achieved. The early warning system of the country is functioning effectively as evidenced by improved forecasting and dissemination of information; all 5 community-based early warning systems remained active at end of project. National Information Territorial System (SINIT) fully operational for disaster risk-related information Value quantitative or Qualitative) Date achieved 05/30/ /30/ /30/2010 Comments (incl. % achievement) Achieved. SINIT's development continues under a different Bank-financed operation, but the Project has transferred all the disaster risk information to ensure its integration under SINIT. (b) Intermediate Outcome Indicator(s) Indicator Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Indicator 1 : Component A: Hydro-meteorological network fully operational (including 60 telemetric stations calibrated and operational) Value (quantitative or Qualitative) 0 1 (60) 1 (60) Date achieved 05/30/ /30/ /30/2010 Comments (incl. % achievement) Indicator 2 : Value (quantitative or Qualitative) Achieved. Hydro-meteorological network is fully operational across the national territory. At least 8 municipalities have adequate early warning systems for landslides systems designed Date achieved 05/30/ /30/ /30/2010 Comments Partially achieved. Seven early warning systems for landslides were designed, (incl. % but their implementation has not yet started. achievement) Indicator 3 : Monitoring System for droughts established in at least 18 municipalities Value (quantitative or Qualitative) systems designed iv

9 Date achieved 06/18/ /30/ /30/2010 Comments Partially achieved. 25 systems were designed, but their implementation has not (incl. % yet started. achievement) Indicator 4 : Community-based early warning systems established under the Project are sustainable Value (quantitative or Qualitative) Date achieved 05/30/ /30/ /30/2010 Comments (incl. % achievement) Indicator 5 : Achieved. Five community-based early warning systems have been established, and are operating with support from the communities and the municipal emergency committee. Component B: At least 75 municipal Disaster Emergency Committees (CODEMs) organized, equipped and trained Value (quantitative or Qualitative) Date achieved 05/30/ /30/ /30/2010 Comments (incl. % achievement) Indicator 6 : Value (quantitative or Qualitative) Target surpassed. 95 CODEMs were organized, equipped and trained (although not all the minor equipment could be supplied). At least 75 municipal emergency plans prepared Date achieved 05/30/ /30/ /30/2010 Comments (incl. % Target surpassed. 81 municipal emergency plans were prepared. achievement) Indicator 7 : Diagnostic of emergency and communications equipment needs finalized Value (quantitative or Qualitative) Date achieved 05/30/ /30/ /30/2010 Comments Achieved. The diagnostic was completed and equipment acquired as (incl. % recommended. achievement) Indicator 8 : National Plan for Disaster Awareness Raising designed Value (quantitative or Qualitative) Date achieved 05/30/ /30/ /30/2010 Comments (incl. % achievement) Indicator 9 : Achieved. National Plan prepared, including design of radio and TV spots, posters and other materials. Program for disaster awareness raising implemented in 60 municipalities Value v

10 (quantitative or Qualitative) Date achieved 05/30/ /30/ /30/2010 Comments (incl. % achievement) Target surpassed. Program implemented in 61 municipalities, including the capital city. Indicator 10 : Component C: At least 81 municipalities have vulnerability analyses and priority mitigation measures identified Value (quantitative or Qualitative) Date achieved 05/30/ /30/ /30/2010 Comments (incl. % Achieved in all 81 municipalities. achievement) Indicator 11 : At least 66 municipalities have engineering designs for priority mitigation and at least 53 have carried out mitigation measures Value (quantitative or Qualitative) 0 / 0 66 / / 57 Date achieved 05/30/ /30/ /30/2010 Comments (incl. % achievement) Target surpassed. A total of 155 designs completed for 61 municipalities, and 59 mitigation works completed in 57 municipalities. Indicator 12 : At least 15 municipalities have carried out drought mitigation measures Value (quantitative or Qualitative) Date achieved 06/18/ /30/ /30/2010 Comments Partially achieved. Drought mitigation measures implemented in 8 municipalities (incl. % in Choluteca department. achievement) G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 08/02/2000 Satisfactory Satisfactory /20/2001 Satisfactory Satisfactory /20/2001 Satisfactory Satisfactory /15/2002 Satisfactory Satisfactory /23/2002 Satisfactory Highly Satisfactory /23/2002 Satisfactory Highly Satisfactory /23/2002 Satisfactory Highly Satisfactory /03/2003 Satisfactory Satisfactory /27/2003 Satisfactory Unsatisfactory 3.38 vi

11 10 12/09/2003 Satisfactory Unsatisfactory /14/2004 Satisfactory Satisfactory /24/2004 Satisfactory Satisfactory /21/2004 Satisfactory Satisfactory /13/2005 Satisfactory Satisfactory /05/2005 Satisfactory Satisfactory /18/2005 Satisfactory Satisfactory /01/2006 Satisfactory Satisfactory /27/2006 Satisfactory Moderately Satisfactory /02/2006 Satisfactory Moderately Satisfactory /27/2006 Satisfactory Satisfactory /11/2007 Satisfactory Satisfactory /11/2007 Satisfactory Satisfactory /06/2008 Satisfactory Satisfactory /08/2008 Satisfactory Satisfactory /09/2009 Moderately Satisfactory Moderately Satisfactory /02/2009 Satisfactory Satisfactory /13/2010 Satisfactory Moderately Satisfactory /08/2010 Satisfactory Satisfactory H. Restructuring (if any) Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO IP Amount Disbursed at Restructuring in USD millions 06/18/2004 Y S S 4.08 Reason for Restructuring & Key Changes Made If PDO and/or Key Outcome Targets were formally revised (approved by the original approving body) enter ratings below: Outcome Ratings Against Original PDO/Targets Moderately Unsatisfactory Against Formally Revised PDO/Targets Satisfactory Overall (weighted) rating Satisfactory vii

12 I. Disbursement Profile viii

13 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. Country Context. Honduras growth and poverty reduction efforts have been hindered by natural disasters, especially hurricanes and tropical storms and associated events such as flooding and landslides. 1 The national economy had been performing relatively well GDP growth in 1997 had reached 4.9 percent, and was projected for 1998 and 1999 at 5.0 to 6.0 percent when, in October 1998, Hurricane Mitch struck the country. Mitch, considered the worst natural disaster experienced by Honduras in recent times, was an exceptional event. It remained stationed for several days over the national territory, bringing high winds, rains and floods that resulted in over 5,700 dead and 8,000 reported missing, nearly half a million displaced persons, agricultural losses of 70 to 80 percent of production, and damage amounting to nearly 40 percent of GDP. Environmental degradation, rapid population growth, inadequate infrastructure, and high poverty levels made the country particularly vulnerable to Mitch s effects. 2. Government Strategy. Hurricane Mitch showed the need to strengthen the country s disaster risk management (DRM) capacity. 2 At the same time, Mitch highlighted the important role in DRM of local governments and communities, which proved pivotal in responding rapidly to the catastrophe. Accordingly, the Government of Honduras (GoH) request to the Consultative Group of International Donors established after Mitch to coordinate recovery assistance emphasized support for local disaster mitigation and prevention, in addition to emergency management, monitoring for early warning, risk and vulnerability mapping, flood mitigation works, and long term watershed management. 3. Bank Strategy. Responding to Government priorities, the Natural Disaster Mitigation Project (PMDN) was a pioneering element in the three-pronged strategy developed by the Bank to help Honduras recover from Hurricane Mitch while dealing with its disaster vulnerability. The strategy included: (a) emergency financing, macroeconomic assistance and debt relief, provided through the quick disbursing Hurricane Emergency Project (P064083, US$200 million), which financed much-needed imports; the Bank-administered Central America Emergency Trust Fund (CAETF) established to support Honduras and other affected 1 Between 1965 and 1995, for instance, seven hurricanes and tropical storms impacted Honduras, including Hurricane Fifí in 1974, a major national disaster that caused 8,000 deaths. 2 Disaster risk is a function of the characteristics and frequency of hazards experienced in a specific location, the nature of the elements at risk, and their inherent degree of vulnerability or resilience. Disaster Risk Management represents a comprehensive approach including preparedness and response, prevention and mitigation. In this context, (a) preparedness is defined as the knowledge and capacities developed to effectively anticipate, respond to and recover from the impacts of a hazard event; (b) prevention would be the avoidance of adverse impacts of hazards and related disasters; and (c) mitigation would be the lessening or limitation of the adverse impacts of hazards and related disasters. (UNISDR Terminology on Disaster Risk Reduction, 2009). 1

14 countries cover multilateral debt service payments; and inclusion of Honduras in the Highly Indebted Poor Country (HIPC) initiative. (b) Short to medium-term rehabilitation of damaged social and economic infrastructure, through restructuring of the Bank's portfolio and processing of supplemental financing totaling US$110 million. (c) Longer-term disaster risk management. The Bank and GoH were preparing a new Country Assistance Strategy (CAS) when Hurricane Mitch struck Honduras. Taking into account the disaster s impact, the CAS was reformulated and presented to the Board in December While the initial objectives were considered relevant, the CAS also emphasized DRM strengthening and listed the Project as the main instrument to start supporting this effort. 4. At appraisal, the Bank had substantial experience in financing post-disaster recovery operations, some of which included disaster risk reduction activities. Although investing in mitigation and prevention was not yet central to development policy and strategy, the Bank and other agencies were starting to recognize its importance. The Bank had established a central Disaster Management Facility and in early 2000 launched a major global consortium (ProVention) towards this end. In this context, the heightened awareness brought about by Mitch provided an opportunity for the Bank to support for the first time efforts focusing exclusively on DRM, including the Project and the Nicaragua Natural Disaster Vulnerability Reduction Project (P064916, US$16.05 million; effective ). 5. When an additional financing (AF) credit for the Project was appraised in 2007, it reflected the further mainstreaming of DRM issues to which the Project itself had already contributed substantially into the Bank s agenda, and also crucially into Honduras Poverty Reduction Strategy (PRS). The AF was consistent with the FY CAS, which included a specific pillar on environmental protection and risk management and an annex on disaster risks and DRM needs. 4 In the Bank s Latin America and Caribbean Region, the DRM portfolio had grown over the years and included, for instance, operations in several eastern Caribbean countries, Mexico and Colombia, and had become more comprehensive by including risk insurance. 1.2 Original Project Development Objectives (PDO) and Key Indicators 6. The Project was originally designed as a technical assistance operation (TAL) for DRM. Its PDO, according to the Project Appraisal Document (PAD), was to improve the capacity to reduce vulnerability to natural disasters at the municipal level. 5 To achieve this PDO, the Project would promote DRM in highly vulnerable municipalities while ensuring adequate capacity in relevant central agencies expected to assist these municipalities in such effort. Expected outcomes included increased DRM capacity and 3 Country Assistance Strategy for Honduras. World Bank Report No HO, November 19, Country Assistance Strategy for Honduras. World Bank Report No HN, November 30, The PDO is stated slightly differently in the Development Credit Agreement (DCA) as to improve the capacity of Eligible Municipalities to reduce vulnerability to natural disasters. 2

15 coordination from the central to the local levels, and through improved forecasting capacity and disaster risk knowledge, and better dissemination of information and early warnings, the consolidation of a culture of prevention in Honduras. At the municipal level, it was expected that preventive planning would be institutionalized and that preparedness and response capacity would increase. 7. Accordingly, the Project s original key performance indicators were: At least 60 Municipalities have participated in vulnerability reduction programs (including production of vulnerability maps, and prioritization of mitigation measures) Prevention and mitigation themes mainstreamed into national primary education curriculum Through simulation of hydro-meteorological emergencies, speed of emergency response among population in target municipalities increases by 75% and mistakes decrease by 50% National Flood Forecasting System functioning adequately National building code revised to include seismic and wind hazards 1.3 Revised PDO and Key Indicators, and reasons/justification 8. A Project restructuring, approved by the Bank s Board in June 2004, expanded the PDO to include improvement of the national capacity of the country to reduce its vulnerability to natural disasters at the municipal level. 6 The revision of the PDO aimed to strengthen the sustainability of Project outcomes by balancing local capacity building with the institutionalization of DRM at the national level. To strengthen sustainability further, support to the process to design the national DRM system and its legal framework was added to the Project. 9. The restructuring also expanded the Project s original scope beyond technical assistance to include financing of small structural and non-structural mitigation works (e.g., retaining walls, storm drainage systems, and reforestation.) This change responded to a Government request made at appraisal for the Bank to consider within two years of Project implementation financing of mitigation works through either the Project or a follow-on operation, in case that funds from other sources could not be found. Moreover, many municipalities were facing a critical situation since due to the lingering effects of Hurricane Mitch normal rains were causing damaging floods and landslides. 10. The revised PDO was reiterated with the 2007 AF, but key performance indicators were updated. Specifically, as described in Annex 3 of the AF Project Paper, two indicators were revised, a new one was added, and one was eliminated: At least 81 municipalities have participated in vulnerability reduction programs (including production of vulnerability maps, and prioritization of mitigation measures), and further, at least 60 have introduced preventive 6 The PDO was restated in the legal amendment as to improve the capacity of the Borrower to reduce its vulnerability to natural disasters at the municipal level. 3

16 municipal planning based on the vulnerability reduction programs into municipal development ordinances (Revised) National Flood Forecasting System and community-based early warning systems established under the Project functioning adequately (Revised) National Information Territorial System (SINIT) fully operational for disasterrelated information (New) National building code revised to include seismic and wind hazards. (Eliminated) Main Beneficiaries 11. The Project s direct beneficiaries include: (a) Local, mainly poor communities from participating municipalities, which would benefit from training and equipment for emergency preparedness and response, knowledge on local risks, emergency and risk mitigation plans, and mitigation investments. (b) Participating municipalities, which would receive support for disaster preparedness and response, risk and vulnerability mapping, preparation of preventive land use plans, identification and prioritization of mitigation measures, and feasibility studies and design of mitigation works; and after the 2004 restructuring, financing of selected mitigation works. (c) National agencies dealing with disaster risk management including the National Disaster Emergency Preparedness and Response Agency (COPECO) and the Ministry of Natural Resources and Environment (SERNA), which would benefit from technical assistance, equipment, and training. (d) Group for Assistance to Foreign Aid (GAAEX), established after Mitch under the Ministry of Finance (SEFIN), which would benefit from fiduciary capacity building. 12. More indirectly, the Project was expected to benefit the population of the participating municipalities, and to some extent of the country, through the establishment of the national communications and early warning system, and the overall strengthening and institutionalization of DRM. 1.5 Original Components 13. The Project had four original components: A. Monitoring, Forecasting, Early Warning and GIS-based Information Management (US$ 4.84 million or 40.3% of total project cost). This component would assist SERNA to develop capacity for hydrological, meteorological and geophysical monitoring, as well as for forecasting floods and landslide hazards. Main activities included the design and implementation of an improved National Flood Forecasting 7 This indicator was eliminated since the Government had partnered with the National College of Engineers to carry out the revision of the code on their own. 4

17 and Decision Support System, a study of the changes in fluvial geomorphology caused by Hurricane Mitch, establishment of community-based flood early warning systems, development of database management and GIS, and preparation of maps. B. Strengthening of National Capacity to Support Emergency Response at Municipal Level (US$ 2.14 million or 17.8% of total project cost). Under this component, the Project would strengthen the emergency preparedness and response capacity of participating municipalities and COPECO so that it could assist these municipalities effectively. Main activities included the identification of equipment needed for local emergency response, design of a National Plan for Disaster Awareness and implementation of a municipal disaster awareness campaign, training in disaster risk management, design and implementation of an emergency assistance management information system, and review of a draft building code and improvement of capacity to monitor and mitigate seismic risk. C. Building Capacity in Disaster Mitigation at the Local Government Level (US$ 4.00 million or 33.3% of total project cost). This component was the core program for the selected municipalities. It was to be implemented by the Association of Honduran Municipalities (AMHON) and included key activities such as development of a local vulnerability management database, disaster risk and vulnerability analyses, preventive planning, and feasibility and engineering studies and final design of mitigation works. D. Project Management (US$ 1.02 million or 8.5% of total project cost). This component would strengthen GAAEX to fulfill its role as the Project's fiduciary unit. 1.6 Revised Components 14. While the four components were maintained throughout Project implementation, the 2004 restructuring and 2007 AF introduced the following changes to each of them: A. Monitoring, Forecasting, Early Warning and GIS based Information Management (US$ 0.72 million under the AF, for a total of $5.56 million or 26.5% of total project costs). After the 2004 Project restructuring, the original study on the changes of fluvial geomorphology caused by Hurricane Mitch was replaced by support to drought management. The Government considered the latter a priority, while experts confirmed that a study of this nature was not longer relevant, especially since localized analyses had been carried out with other donors support. Under the 2007 AF, the development of database management and GIS was replaced by specific support to updating disaster risk information in a more comprehensive national system (SINIT). B. Strengthening of National Capacity to Support Emergency Response at the Municipal Level (US$ 0.81 million under the AF, for a total of $2.95 million or 14.2% of total project costs). As a result of the 2004 restructuring, activities related to seismic risk were dropped, and support to the design and implementation of the national system 5

18 for disaster risk management was added. Complementing original training and awareness raising activities, the AF introduced the identification and acquisition of the equipment needed for the establishment of a national emergency communications system and for emergency response by municipalities and volunteer groups. 8 C. Building Capacity in Disaster Mitigation at the Municipal Level (US$ 6.57 million under the AF, for a total of US$10.57 million or 50.3% of total project costs). The Project restructuring incorporated the financing of small mitigation works (subprojects) in participating municipalities. This change was further emphasized in 2007 by allocating over 50 percent of the AF credit funds to mitigation works. D. Project Management (US$ 0.90 million under the AF, for a total of US$1.92 million or 9.0% of total project costs). The AF included project management costs for COPECO as the new implementing agency (see below). 1.7 Other significant changes Project Restructuring. After the Mid-Term Review (MTR), the Bank and the Government agreed on the need to make several critical changes to the Project. In addition to the expansion of the PDO, introduction of the financing of mitigation works, and adjustments to components, project implementation was centralized and the Credit closing date extended by 18 months. This restructuring required approval by the Bank s Board because of the proposed changes to the PDO and outcome indicators, and the change of the Project s environmental category (from C to B) which resulted in the triggering of two safeguards policies, Environmental Assessment (OP 4.01) and Cultural Property (then OPN 11.03) Additional Financing. With the additional financing of SDR 5.9 million approved by the Bank in June 2007, total credit funds more than doubled to SDR 14 million (US$19.8 million equivalent). Originally, the Bank was financing 94 percent of total project costs. Under the AF Credit, the Bank agreed to finance 100 percent of eligible expenditures in line with the new Country Financing Parameters. Implementation arrangements were also modified and project implementation extended three years. The environmental category B of the Project remained unchanged, but an additional safeguard policy (OP4.10 Indigenous Peoples) was triggered. 17. Implementation arrangements. During the 11 years of Project life, implementation arrangements experienced three significant changes reflecting the evolution of the country s institutional framework for DRM, Government priorities, and efforts to strengthen implementation arrangements: (a) Project implementation was initially decentralized, with each component under the purview of a different agency (SERNA, COPECO and AMHON). A high level Inter- 8 It was originally expected that the equipment would be financed by other donors, but the needs proved larger than available funds. 6

19 Agency Coordinating Group (GIC) was established to facilitate project implementation and the evolution of DRM policy and strategy. A Technical Coordination Unit (TCU) integrated by project managers and key technical team members of each agency was responsible for promoting the Project among municipalities and coordinating day-to-day technical and operational aspects. Procurement and financial management was assigned to GAAEX. (b) Project restructuring in 2004 formally centralized implementation to improve management effectiveness and to reflect the Government s decision to establish a multi-project coordination unit that could promote synergies across three related, cross-sectoral Bank-financed operations. 9 The Ministry of Interior (SGJ) was made the Project s implementing agency to reflect its new leadership role for DRM in the country. 10 (c) With the approval of the AF Credit in 2007, COPECO became the Project s implementing agency. This change reflected the Government s decision to institutionalize Project activities within COPECO in order to consolidate further the country s DRM system. The TCU was integrated into COPECO s organizational structure. GAAEX was transferred to COPECO and remained as fiduciary unit to the end of the Project. 18. Inclusion of Tegucigalpa. Originally, the Project excluded Tegucigalpa, Honduras highly vulnerable capital city, from the list of eligible municipalities. Tegucigalpa had large financing needs that would have made it difficult to allocate adequate resources to other municipalities, and other donors were expected to address these needs. The funds did not materialize, and in 2004, thanks to a US$1.95 million grant from the Japan Social Development Fund (JSDF), assistance to Tegucigalpa was included under the Project. 11 This support, coupled with the decision to have the TCU and GAAEX implementing the grant, allowed to apply Project methodologies in a large urban setting and to enhance Project impact. 19. Reallocation of Credit Proceeds. Two reallocations were approved under the original Credit. First, as part of the 2004 restructuring, a reallocation of SDR 750,000 was done to establish a new category (subprojects) to allow for the financing of mitigation works. These funds were taken mostly from the Unallocated Category. A second, minor reallocation of SDR 53,700 (from Goods to Consultant Services) was approved by the Country Director in June Extension of Closing Dates. The Project ended in December 2010 after three closing date extensions of the original credit and one exceptional extension of the AF credit. The original credit closing date was extended with the 2004 restructuring from 9 In addition to the Project, this PCU oversaw the Forest and Rural Productivity Project (PBPR, P064914, ) and the Land Administration Program (PATH, P055991, ). 10 The Government that took office in January 2006 dismantled the multi-project PCU. Since the implementing agency (SGJ) and basic technical (under a centralized TCU) and fiduciary functions (under GAAEX) were maintained, a formal restructuring was not deemed necessary. 11 See Community Disaster Management Project (TF52879, effective ). With the JSDF grant, Tegucigalpa was formally added to the list of municipalities included in the Project s Operations Manual. 7

20 April 2005 to January 2007 to allow for the completion of activities (as detailed later, the Project experienced delays during its initial years); and in December 2006 and March 2007 to April and September 2007 to allow for the preparation of the additional financing and an orderly closing of the original credit, respectively. With the approval of the AF Credit, the project implementation period was extended to September In August 2010 an extension to December 2010 was approved on an exceptional basis by the Regional Vice-President to give the Project an opportunity to recover from the effects of the political crisis experienced by Honduras during the second half of Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 21. Soundness of Background Analysis. Project design was based on a thorough analysis. During project preparation, there was a growing body of knowledge and lessons learned on disaster risk management within and outside the Bank. Moreover, starting soon after Hurricane Mitch, the Bank and specialized agencies assisted Honduras in carrying out studies of the social, economic and environmental consequences of the disaster and underlying factors contributing to the country s vulnerability. Project design, advanced with funding from a Bank-executed Japanese Policy and Human Resources Development (PHRD) grant, 12 also benefited from specific institutional, economic and gender analyses, and early drafting of local risk assessment methods. These studies provided a solid basis to define the PDO and components, and particularly to help decide on the studies, training and assistance to be provided. Importantly, an assessment was carried out to develop the list of eligible municipalities. 13 The design of the AF took advantage of information and studies generated earlier on in the Project, and the latest DRM knowledge. On the other hand, there were initial shortcomings in the institutional analysis, which overestimated the capacity of some of the implementing agencies; and after Project restructuring and especially the AF, the economic analysis fell short regarding the mitigation works. 22. Assessment of Project Design. The original Project Development Objective (PDO) focused mainly on an outcome (increased capacity for disaster vulnerability reduction in selected municipalities) that seemed achievable in a five year period. The objective was clear and important for the country as indicated by the Government to the donors and in the CAS prepared right after Hurricane Mitch. The Project was prepared following an intensive consultation process with national and local stakeholders and in coordination with donors. The MTR showed the need to expand the PDO to ensure further the sustainability of Project activities by focusing simultaneously on institutionalizing DRM capacity at the national level while reducing local disaster vulnerability. 12 TF (Total amount disbursed of US$393,000). 13 Through a rigorous methodology, the International Center for Tropical Agriculture (CIAT) helped to establish vulnerability indices of the country s municipalities using GIS analysis based on a wide range of environmental, demographic, social and infrastructure indicators. 8

21 23. The strategic choices underlying the original Project design reflect lessons learned and ground reality. The first and more fundamental choice was to focus on disaster risk reduction instead of post-disaster reconstruction, and mainstreaming this into a regular technical assistance operation. On this basis, project design emphasized: (a) support to local capacity development taking into account the Bank s competitive advantage and other donors plans to assist central DRM agencies; (b) assistance to a selected number of vulnerable municipalities, especially those that Hurricane Mitch had left most at risk rather than assuming a general program (while also excluding the two largest cities); and (c) reliance on existing agencies in a post-disaster situation rather than creating new ones under the Project. 24. To manage safeguard risks, an additional strategic choice was made when adding the financing of mitigation works under the 2004 Project restructuring by limiting the eligibility of these works to those which would not cause physical or economic resettlement (as defined in the Bank s involuntary resettlement safeguard policy, OP 4.12). A negative list was included in the legal amendment to minimize the possibility of resettlement as well as adverse environmental impacts. Given the substantial need for a wide variety of mitigation investments, it may be concluded that the menu of eligible works remained relevant for Project design. Moreover, given its experience and performance at the time, collaboration of the Honduran Fund for Social Investment (FHIS) was added to the project to ensure adequate construction of the mitigation works and environmental safeguard compliance. 25. Project components were clearly formulated and conducive to PDO achievement. Project design was flexible, including almost US$1.0 million dollars equivalent in unallocated funds to respond effectively to the highly dynamic Post-Mitch situation and implementation lessons. This allowed for relatively quick adjustments to the components after the PDO was revised as circumstances changed. The set of natural hazards initially considered floods and landslides was also broadened to include droughts and forest fires as they emerged as critical issues in certain municipalities. 26. Risk Assessment. Overall Project risk was assessed as Moderate at appraisal. This rating, in retrospect, seems to have underestimated the challenges of the project related to the critical Post-Mitch situation, institutional weaknesses, and the innovative nature of the Project. Most of the risks identified in the matrix materialized at some point during Project implementation. One of these risks the possibility of coordination problems between implementing agencies under a decentralized arrangement and rated as Moderate, turned real early on. The mitigation measure included in the Project design of establishing a high level Inter-institutional Coordination Group proved ineffective, although an effective solution was identified (see below). Another risk that was difficult to mitigate and that affected especially the capacity building activities was the turnover of staff in some of the implementing agencies and municipalities due to government changes after elections. 2.2 Implementation 9

22 27. Implementation was satisfactory for most of the Project s life, underpinned by strong Government commitment. In addition, several factors helped implementation positively: 28. Continuous engagement of local officials and communities. Project activities at the local level were advanced through close consultation and participation, including almost yearly workshops with mayors and officials from participating municipalities. The Project s methodology for local risk and vulnerability analysis and prioritization of mitigation measures helped to bring together specialized technical expertise and local knowledge, while building beneficiaries commitment and ownership of results. 29. Addition of financing of mitigation works. This decision, starting in 2004, not only enhanced Project impact, but facilitated implementation by providing additional incentives to local governments and communities to participate more actively in the Project. 30. Establishment of strong fiduciary and TCU teams. Over the years, the development of GAAEX as a strong fiduciary unit and of the TCU as a key technical arm helped project implementation. At times, the marked separation of the fiduciary and technical functions caused friction, especially when Project leadership was weak. Nevertheless, performance of the fiduciary and technical teams remained strong throughout implementation, helped by continuity of staff and capacity building. 31. Provision of additional international expertise through grant funding. Project implementation benefited from the provision of specialized technical assistance financed by (a) two Bank-executed trust funds from the Bank-Netherlands Water Partnership Program (BNWPP) totaling over US$1.11 million, and (b) two Country-executed PHRD grants from the Government of Japan totaling US$821, Additional technical expertise included issues related to, inter alia, watershed management, flood risk analysis and management, environmental planning for disaster risk reduction, and the design of the DRM national system. 32. Nevertheless, several factors some outside the control of government and implementing agencies but some within their control affected implementation. As a result, the Project experienced delays that required an extension of the original closing date by 18 months and of the AF by three months. 33. The factors outside of Government or implementing agencies control include: 34. Initially, the Project was slowed down by delayed credit effectiveness and the start of the election cycle. Weaknesses in Project readiness made it difficult for the Government to meet several of the effectiveness conditions of the original Credit (in 14 The PHRD grants were TF26865 (US$313,193, ) and TF55127 (US$508,529, ); the BNWPP grants were TF (US$469,557, ) and TF (US$644,092, ). 10

23 addition to the fact that in Honduras a credit needs to go to Congress twice, first for approval of its signing and then for ratification). 15 In the end, eight months passed between Bank s approval in May 2000 and declaration of effectiveness in February It would prove difficult by then to accelerate Project activities since 2001 was an election year, and several agencies were facing difficulties in finalizing terms of reference and technical specifications for key activities. 35. The political crisis in the country in the second half of 2009 slowed down activities and disbursement pace in the last year of the Project. The Bank paused disbursements and implementation of all projects for almost six months and missions could only be restarted after the elections of November Most of the time lost was recovered thanks to COPECO s pro-activity and the Bank s agreement to allow for the direct implementation of the validation of the remaining risk and vulnerability analyses. 36. Evolution of the legal and institutional framework for DRM affected at times the relationship between co-implementing agencies. It took most of the Project implementation period for the final approval of the law creating the National System for Risk Management (2009 SINAGER Law). The role of key agencies under the Project evolved over the years, which at times resulted in turf battles. Over time these roles were clarified and COPECO s mandate initially envisaged merely as emergency response expanded to include prevention and mitigation. 37. Several disasters hindered Project implementation, including Hurricane Stan in 2005 and Tropical Storm Agatha in These disasters, albeit unfortunate, helped to corroborate the country s progress in disaster preparedness and response and effectiveness of mitigation efforts. 38. Falling exchange value of SDRs made it difficult to plan final activities. During the last year of the project, the Credit s equivalent amount in dollars fell down substantially and several activities were cancelled, including purchasing of additional equipment for local emergency committees. When the SDR value recovered there was not enough time to start procurement processes, and about five percent of the AF credit funds were cancelled. 39. The factors within Government or implementing agencies control that affected implementation include: 40. Weak leadership under the original decentralized arrangements and unmet operational demands led, three years into implementation, to the major crisis experienced by the Project. As indicated in the Mid-Term Review conducted in June 2003, the Project was facing problems of poorly prepared technical teams, exacerbated by weaknesses in project management. The main weaknesses included: (i) lack of 15 Average for declaration of effectiveness in Honduras was then about five months. Following operational practice at the time, effectiveness conditions included, in addition to the signing of agreements by the implementing agencies, establishment of the financial management system, staffing of the TCU, and completion of the Operational Manual. 11