Mekong Integrated Water Resources Management Project Phase 1

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Project ID Total Project Cost: Mekong Integrated Water Resources Management Project Phase 1 Lao PDR: Components 2 and 3 Mid-Term Review Mission Aide Memoire December 7, 2015 to January 29, 2016 P US$ 26.0 million IDA Grant Amount: (Lao PDR) US$ 18.0 million (IDA-H6750): Components 2 and 3 IDA Grant Amount: (MRC) US$ 8.0 million (IDA-H7620): Component 1 Date of Effectiveness March 8, 2012 Closing Date March 31, 2018 Environmental Category: Category B Last Mission 29 January 2016 Date of Last Archived ISR 18 December 2015 Disbursement (as of Feb. 12, 2016) IDA-H6750: US$11,091,174 (61%) IDA-H7620: US$ 1,876,871 (23%) Table of Contents: A. Introduction B. Main Mission Findings C. Project Development Objectives and Indicators D. Project Implementation Status E. Financial Management F. Safeguards G. Action Plan Annexes: 1. List of People Met During the Mission 2. Revised Results Monitoring Framework 3. Sub-Component Mid-Term Reviews 4. Fiduciary Mid-Term Review 5. Safeguards Mid-Term Review

2 A. Introduction 1. A World Bank mid-term review mission took place from December 7 to December 11, 2015 and from January 18 to January 29, 2016 for the Mekong Integrated Water Resources Management Project Phase 1.1 The Mekong Integrated Water Resources Management Project has three phases: Phase 1 (Lao PDR and the Mekong River Commission, i.e. this Project); Phase 2 (Vietnam, approved in 2014); and Phase 3 (Cambodia, expected approval in mid-2016). Component 1 of the Project is implemented by the Mekong River Commission (MRC), while Components 2 and 3 are implemented by the Government of Lao PDR. This aide memoire covers Components 2 and 3, and will be sent to the Lao PDR Government. The aide memoire for Component 1 will be sent to the MRC. The mid-term review provides an opportunity for the Government and the World Bank to assess progress to-date, identify constraints, and consider adjustments to the project objectives, scope, financing, and performance indicators. The mission thanks the Department of Water Resources (DWR) and the sub-component management units (CMU) for their comprehensive mid-term review reports which served as the foundation for the World Bank s mid-term review. 2. The recommendations made in this aide memoire were discussed with the Government of Lao PDR at the wrap-up meeting on 29 January 2016 chaired by Mr. Chanthanet Boualapha, Director General Department of Water Resources, Ministry of Natural Resources and Environment (MONRE), and are subject to review and confirmation by the Bank management. The mission is grateful for the kind assistance and hospitality provided by the Lao officials engaged in the Project and for their outstanding organization of the field visits. In accordance with the World Bank s Access to Information Policy, this aide memoire will be publicly disclosed. B. Main Mid-Term Review Findings 3. Although the Project got off to a slow start, implementation has accelerated rapidly since 2014, and approximately US$11,091,174 (61%) of the IDA grant has been utilized (February 12, 2016). Overall project development objective status and implementation status is considered satisfactory; although as discussed below the status varies by sub-components. Project implementation arrangements include both MONRE (three departments/institutes) and the Ministry of Agriculture and Forestry (MAF) (two departments) as well as three provinces. This wide implementation span under a single Project helps to promote integrated water resources management and the Department of Water Resources is congratulated on its ability to oversee the 1 The mission members included: Greg Browder (Task Team Leader), Khamphet Chanvongnaraz (Procurement Specialist), Malarak Souksavat (Financial Management Analyst), Anita Soukhaseum (Program Assistant), Alina Phonvisay (Program Assistant), Juan Martinez (Social Specialist), Viengsamay Vongkhamsao (Water and Sanitation Specialist), Ashley Halls (Fisheries Management Specialist, Consultant), Nigel Hayball (Water Resources Management Specialist, Consultant), Zhijun Chen (FAO Irrigation Specialist), Daryl Fields Water Resources Specialist) and Vansa Chatikavanij (Water Resources Management Specialist, Consultant). Also, Kate Lazarus (Senior Operations Officer) from the IFC participated in discussions on Water Law. 2

3 project while allowing each sub-component to proceed independently. The Project is an important driver in helping Lao PDR establish a modern water resource management system. 4. A key constraint to successful finalization of the Project is a shortage of funds. The primary causes for the budget shortfall are: i) the depreciation of SDR versus the U.S dollar; ii) modification in Lao PDR tax regulations since Project approval originally there was no tax on World Bank financed contracts, but this has been modified to include a 5% tax on works and 25% tax on services; iii) rapidly escalating construction costs that exceeded original contingency allowances; and iv) clearer definition of some sub-components which resulted in higher than originally forecast costs. Without additional financing, it is unlikely that most sub-components will be able to fully achieve their original project development objective indicators. 5. An assessment was made of the financial status of each component, and three scenarios were developed: Scenario A involves no additional financing, which would result in most subcomponents unable to fully achieve their original development objectives; Scenario B involves providing additional financing (approximately US$6 million) so that all subcomponents can fully achieve their objectives within the original project scope; and Scenario C which involves providing more additional financing (approximately US$18 million in total) to both complete the original scope and expand into new geographical areas and related activities. Annex 2 provides more information on the different scenarios. It should be noted that additional financing would be provided through an IDA credit, which is a concessionary loan and not a grant. Comparison of Different Additional Financing (AF) Scenarios (US$) SUB-COMPONENT ORIGINAL BUDGET SCENARIO A SCENARIO B SCENARIO C No AF(Deficit) AF to complete scope (I) AF to expand the scope (II) Total AF (I) + (II) SC ,000 39, Water Law SC 2.2 1,239,000 (808,006) 808,006 1,300,000 2,108,006 Water Quality SC ,000 (199,341) 199, , ,341 Water Modelling SC 2.4 1,870,000 (1,290,158) 1,290,158 3,765,000 5,055,158 Hydromet SC 2.5 1,393,000 (361,300) 361, , ,300 Project Management SC ,079,000 (901,629) 901,629 3,000,000 3,891,629 River Basin Mgmt. SC ,289,000 (2,500,000) 2,500,000 2,500,000 5,000,000 Irrigation SC 3.2 4,912, , Fisheries Total 18,000,000 Additional Financing Requested 0 6,000,000 18,000,000 3

4 6. The decision to seek additional financing and closing date extension will require an agreement between that the Government of Lao PDR and the World Bank. The amounts presented in the above table are estimates and the final amounts, and allocation between the sub-components will depend on detailed preparation of the additional financing operation. The operation which will be subject to full but expedited project preparation cycle including a formal appraisal and the preparation of a Project Paper by the World Bank for presentation to the World Bank Board. It is estimated that additional financing could be processed by late 2016 provided an early decision made, preferably by April The mission reviewed the 2016 annual work plans and budgets for each sub-component and provided comments to the management teams. The PMU subsequently updated and sent the revised work plan and procurement plan, which was approved by the Bank task team leader on February 18, C. Project Development Objective and Indicators 8. The Project Development Objective (PDO) of the overall IWRMP program is to establish key examples of integrated water resource management practices in the Lower Mekong Basin at regional, national, and sub-national levels, thus contributing to more sustainable river basin development in the lower Mekong. The mid-term review has concluded that the original PDO remains valid and there is no need to adjust the text. 9. The results monitoring framework (RMF), however, has been reviewed and adjusted as shown in Annex 2. The Annex also contains the original RMF for comparison. Most of the indicators have remained essentially the same, although they have been defined with more precision and taking into account the current project status. Two new indicators related to the number of project beneficiaries, per current World Bank requirements, have been included in the RMF. If additional financing is provided, it is expected that all sub-components will reach their RMF targets; in the event there is no additional financing some of the original targets will only partially be achieved. The revised updated RMF has taken the conservative approach and assumed no additional financing will be made available and has taken the budget shortage into account when establishing the revised targets. D. Project Implementation Status 10. Annex 3 contains a detailed summary of the status of each sub-component and provides specific recommendations. The following table shows the rating for each sub-component. The overall disbursement rate of the IDA grant (as of February 12, 2016) is around 61% of the total $18 million. Most subcomponents however have outstanding contractual commitments and will utilize most their remaining budget in In general, the sub-components are proceeding well, but the fisheries sub-component (3.2) is confronting a number of challenges. The mission was pleased to see that the Department of Fisheries is devoting extra resources to accelerating implementation speed and quality, and significant progress is expected in

5 Summary Status of Sub-Components as of January 2016 (US$) Component (Agency) Budget (% Utilized) Rating Component (Agency) Budget (% Utilized) Rating 2. National WRM S 3. Floodplain/Aquatic Management S 2.1 Water Law 626,000 MS River Basin Mgmt 2,079,000 S (DWR) (58%) (DWR + Provinces) (59%) 2.2 Water Quality 1,239,000 S Irrigation 5,289,000 HS (NREI) (37%) (DOI + Provinces) (65%) 2.3 Water Modelling 592,000 S 3.2 Fisheries 4,912,000 MS (NREI) (36%) (DoF + Provinces) (19%) 2.4 Hydromet 1,870,000 HS (DMH) (35%) 2.5 Proj. Management (DWR) 1,393,000 (63%) S E. Financial Management and Procurement 11. Procurement: The overall procurement rating has recently been upgraded to moderately satisfactory. One of the challenges faced by the project is that primary procurement activities have been delegated to the five implementing agencies with oversight provided by the PMU. In addition, two national procurement consultants resigned in 2014 putting more stress on the PMU and the CMUs. Nevertheless, the project has successfully procured 159 works, goods, and service contracts. Since there are at least 75 more contracts to be procured under the project (excluding community infrastructure contracts), the PMU is advised to recruit a new national procurement specialist; if one is not available the consideration should be given to contracting an international consultant. 12. The procurement plan was updated and approved by the Bank task team leader on February 18, Most of individual consultant contracts that were subject to multiple prior review were converted to post review contracts; this has significantly reduced No Objection Letter (NOL) requests from the agencies. 13. Financial Management: Disbursement is US$11,091,174 (61%) as of February 12, 2016 (an increase from 53% since the November 2015 mission). The disbursement rate is considered on track and is expected to increase significantly in 2016 due to number of commitments under on-going construction contracts; as noted some sub-components may fully utilized their allocated budgets by end 2016/early The overall Financial Management performance remains at moderately satisfactory. A number of agreed actions still need to be addressed including the completion of the accounting data entry into the computerized accounting system and improvement of the IFR report format, and the PMU is requested to complete this by May 1, The PMU is in the process of contracting an external auditor for 2015, and is reminded to submit the auditor s report no later than June 30,

6 F. Safeguards 14. Annex 3 contains a section on safeguards for each sub-component. Annex 5 presents the PMU s summary safeguard report as well as the World Bank s social specialist s mission findings. In general, the environmental and social impacts associated with the project are of a small-scale and are being managed under the existing Environmental and Social Management Framework (ESMF), Ethnic Groups Development Framework (EGDF), and Compensation and Resettlement Policy Framework. The mission notes that the project has made extensive effort to consult with beneficiary communities, including ethnic minorities, however there is a need to more systematically document and report on the consultations. 15. Implementation of small-scale infrastructure works is accelerating for the fisheries (3.2) and river basin (3.1.1) sub-components, and the PMU/CMUs have been asked to prepare the following guidelines which cover procurement and safeguard issues: i) Community Infrastructure (3.1.1); ii) Community Infrastructure (3.2); ii) Alternative Livelihoods (3.2); and iii) Community Fisheries Management (3.2). The PMU agreed to send drafts of these guidelines to the Bank by March 1, 2016 with World Bank approvals by April 1, An Ethnic Minority Development Plan was also prepared under the Irrigation subcomponent (3.1.2). Almost all of the investments in the Irrigation sub-component have been completed, and in discussions with the sub-component management, it appears that the EMDP was implemented. The mission requested the PMU/CMU to provide an implementation report confirming adherence to the EMDP by May 1, Under the fisheries sub-component (3.2) a new fish hatchery is being constructed in Attapeu, and it was agreed that the PMU/CMU will prepare an Environmental Management Plan (EMP) for Bank review and no-objection by May 1, G. Action Plan 17. The following table summarizes the action items presented in the main text. Annex 3 contains more specific action items for each component. Action Date Responsible 1. Decision on Additional Financing and Amount 1 April 2016 MOF and MPI/WB 2. Submit and Clear 2016 Work Plan Completed PMU/WB 3. Submit and Clear Revised Procurement Plan 1 April 2016 PMU 4. Prepare and Finalize Guideline Manuals: Fisheries and RBM 1 April 2016 PMU-DoF (3.2) PMU-DWR (3.1) 5. Prepare and Finalize EMP for Hatchery 1 May 2016 PMU-DoF (3.2) 6. Prepare EMDP Summary Report for Irrigation 1 May 2016 PMU-DOI 7. Accounting System/IFR Upgrades 1 May 2016 PMU 8. Next Bank Implementation Support Mission May

7 Annex 1: Persons Met No Name and Surname Position Organization Contact No. Address Mr. Chanthanet Boualapha Director General DWR-MoNRE Financal Management Mr. Noel Roch 2 Consultant DWR-MoNRE noel.roch@gmail.com 3 Mr. Vic Macasaquit Consultant MoNRE mvicphi@gmail.com 4 Mr. Ounakkone Xayviliya Project Manager DWR onakone@gmail.com 5 Ms. Manida Unkulvasapaul IWRM advisor DWR manida25@gmail.com 6 Ms. Alisa Khounsombath Intern- NPMU katai_beam12@yahoo.com 7 Mr. Virasack Chundara DDG NREI NREI sack_4369@yahoo.com 8 Ms. Monenaly Keokhamdy Assistance C3.2 / DLF monenaly@outlook.com 9 Mr. Oulaphone Ongkeo Manager -C 2.3 NREI oulaphoneongkeo@gmail.com 10 Mr. Khamhoou Phanthavong Manager -C DOI khamhou_p@yahoo.com 11 Mr.Kingkham Manivong Manager - C2.1 DWR kingkham1974@gmail.com 0220 Mr. Somphan Vithaya National Consultant - C2.4 DMH somphanh_dmh@etllao.com 13 Mr. Bounteum Sysouphanthavong Manager- C2.4 DMH s.bounteum@hotmail.com 19 Mr Akhane Phomsouvanh Mamager- C3.2 DLF akhane@live.com DLFchampasack Mr. Lankeo Phengarun Mamager- C pengarun@yahoo.com 7

8 Annex 2A: Revised Results Framework and Monitoring Lao PDR: Mekong Integrated Water Resources Management Project Phase 1 Program Development Objective (for the M-IWRM): To establish key examples of integrated water resource management (IWRM) practices in the Lower Mekong Basin, at the regional, country and sub-national levels. PDO Level Results Indicators* Core Unit of Measure Base line Cumulative Target Values-End of Year Freque ncy Data Source Responsi bility Associated Component 1. Indicator One: Joint Action Plan prepared and endorsed to address the identified priority transboundary IWRM issues in the Mekong Basin, considering the regional impacts and contributing to improved management of shared resources. Number Annual Progress reports MRC Component 1 Current Status: Formulation of the Joint Action Plan for all three priority project has not started yet. The Joint Issues Paper (Indicator 6) and Joint Coordination Mechanism (Indicator 7) need to be prepared before the Joint Action Plan can be formulated. 2. Number of Lao PDR river basins located in the tributaries of the Mekong River where MoNRE has applied its management instruments. Number Annual Progress reports DWR (MONRE) Component Comment: Sector based Technical Working Groups have been established, and draft River Basin Profile Reports were prepared in 2015 for the XBF and XBH. A draft Flood Management Action Plan for the lower XBF river basin and a draft Wetland Management Action Plan for the Xe Champhone s RAMSAR listed wetland, located in the lower XBH river basin, have been prepared. 3. Number of beneficiaries of improved irrigation and drainage infrastructure in XBH and XBF basins (percent of which are women). Person ,000 (50%) 17,000 (50%) 20,000 (50%) Annual Progress reports DOI (MAF) Component

9 Note: Half of the flood gates have been completed (5,000 beneficiaries) and 28 of 44 irrigations schemes have been completed-63% (12,000 beneficiaries). Thus a total of around 17,000 beneficiaries have improved irrigation and drainage infrastructure. 4. Number of beneficiaries of improved fisheries management (percent of which are women) Person (50%) 15,000 (50%) 40,000 (50%) Annual Progress Reports DLF and PAFO (MAF) Component 3.2 Comment: To-date no FMC has management plans, and thus the number of beneficiaries is Fisheries Management Committees (FMCs) with management plans implemented. Number Annual Progress reports DLF and PAFO (MAF) Component 3.2 Comment: Achievement of PDO indicator is lagging for this subcomponent. Current status includes: formal registration (establishment) of six fisheries management committees (FMCs) including socio-economic baseline surveys, support for alternative livelihoods and rural infrastructure, training in fisheries management planning, staff recruitment and the preparation of designs for hatchery renovation and construction have been carried out. INTERMEDIATE RESULTS Component 1 General Objectives: Increased cooperation among the member countries to address trans-boundary issues in hotspot areas, including enhancing awareness and understanding of decision makers and local communities in countries on key issues and IWRM principles through various communication outreach activities. 6. Joint Issues Paper prepared and endorsed for identified priority transboundary IWRM issues in the Mekong Basin. Number Semiannual Progress reports MRC Component 1 Comment: All three transboundary projects are in the process of preparing Joint Review Papers. 7. Joint Coordination Mechanism prepared and endorsed to address the identified priority transboundary IWRM issues in the Mekong Basin, considering the regional impacts and contributing to improved management of shared resources. Number Semiannual Meeting records; progress report MRC Component 1 Comment: The Joint Coordination Mechanism will be prepared once the Joint Issues Papers are finalized. 9

10 8. Number of communication products produced and disseminated related to IWRM. Number Annual Progress report MRC Component 1 Comment: Two e-newsletters and 2 MRC web-page/social media posting have been completed (4 products in total) Component 2 General Results: Strengthened regulatory and technical capacity of the Ministry of Natural Resources and Environment (MONRE) in promoting river basin management approach and IWRM principles in Lao PDR. 9. Submission of the revised Water Law to the National Assembly. Yes/No - No No No No Yes Semiannual Progress reports DWR (MONRE) Component 2.1 Comment: A draft Water Law was submitted to the National Assembly in late 2012, but was returned to MONRE with a request for additional refinements. MONRE has revised the draft Water Law but must wait for the new Land Policy to be adopted before the National Assembly will accept the draft Water Law. 10. Number of the tributaries of the Mekong River where Natural Resources and Environment Institute (NREI) of MONRE conduct water quality monitoring. Tributaries Semiannual Progress reports NREI (MONRE) Component 2.2 Comment: In 2013, the rehabilitation /construction of water quality testing facilities was completed. In 2015, water quality monitoring took place in the Xekong river, the Xechamphone wetland, and the Lower Nam Ngum river. Water sampling monitoring in 3 additional rivers, consisting of XBF river, XBH river and Upper Nam Ngum rivers, are planned for 2016 (6 in total) if budget is sufficient. 11. National Environmental Laboratory constructed and obtains international accreditation. Yes/No Yes Semiannual Progress reports NREI (MONRE) Component 2.2 Comment: The construction of national environmental laboratory has reached 60% completion and the construction is expected to be completed in July Funding shortage may complicate international accreditation. 12. Number of river basins where MONRE has developed water resource model packages. Number Semiannual Progress reports MONRE Component

11 Comment: The hydraulic models (ISIS) are updated with current conditions in XBF and XBH. Rainfall run-off models (SWAT) are being developed in XBF, XBH, Xedong, and Xekong basins. A series of training courses related to basic modeling concept, data management and relevant tools were organized to provide basic knowledge for modelling for line agencies and provincial agencies. 13. Number of upgraded hydromet stations which are properly installed and operated. Number Semiannual Progress reports DMH (MONRE) Component 2.4 Comment: Site selection for the 25 upgraded and modernized stations in Sedon and Sekong River basins was carried out with the approval from the concerned agencies at provincial, district and village levels including National Land Management Authority. Civil works completed for 23 stations, out of 25 stations, and equipment has purchased but not yet installed. Result (Component Three): Key examples of IWRM practices focusing on flood management in Xebangfai (XBF) and Xebanghieng (XBH) and on trans-boundary fisheries management in the Mekong mainstream in southern Lao PDR 14. Number of functioning RBCCs. Number Semiannual Progress reports DWR (MONRE) Component Comment: For each of the XBF and XBH river basins, a sector based Technical Working Group has been established to initiate the establishment of a RBCC. Numerous meetings have been held resulting in the preparation of a draft RBCC ToR, detailing its composition and responsibilities, for each basin. The first RBCC meetings are planned for Area benefited from upgraded flood protection and drainage systems. Hectares ,100 6,000 6,000 Annual Progress reports DOI (MAF) Component Comment: Five floodgates have been upgraded to-date, providing enhanced flood protection for 5,113 ha. 16. Irrigation area benefited from improvement of irrigation schemes. Hectares ,900 3,000 3,000 Annual Progress reports DOI (MAF) Component Comment: 28 irrigation schemes out of 44 have been rehabilitated to-date, benefiting 2,900 ha of irrigation area. 17. Number of FMCs fishery management plan formulated, approved and announced. Number Semiannual Progress reports DLF Component 3.2 Comment: The formal registration (establishment) of six fisheries management committees (FMCs) have been completed. 11

12 18. Number of Villages receiving alternative livelihood (AL) support. Number Semiannual Progress reports DLF Component 3.2 Comment: The AL program is just getting started. 19. Number of fully functioning hatcheries producing fingerlings. Number Semiannual Progress reports DLF Component 3.2 Comment: Engineering design of the hatchery is currently underway; need to prepare EMP for new hatchery. 12

13 Definitions: No. Indicator Definition PDO Results Indicator 1. Joint Action Plan prepared and endorsed to address the identified priority transboundary IWRM issues in the Mekong Basin, considering the regional impacts and contributing to improved management of shared resources. Joint Action Plan provides a guide to implement coordination and management activities of the priority issues that promote transboundary water resources management. The three core transboundary project identified include (a) Lao- Cambodia: Mekong Mainstream and Sekong Fisheries Management, (b) Cambodia- Vietnam: WRM in Sesan & Srepok Basins, and (c) Cambodia- Vietnam: WRM in Mekong Delta. 2. Number of Lao PDR river basins located in the tributaries of the Mekong where MoNRE has applied its management instruments. Management instruments are the following River Basin Coordinating Committee (RBCC) endorsed Reports: River Basin Profile Reports in both XBH and XBF; Flood Management Action Plan for Lower XBF Basin, and Wetland Management Plan for Xe Champhone in XBF basin. 3. Number of beneficiaries of improved irrigation and drainage infrastructure in XBH and XBF basins. It is estimated that there are 5,450 rural households in the project irrigation/drainage areas (2,250 in drainage areas and 3,200 in irrigation areas). Assuming average of 5 people per household, the total benefitted population is 27,000. However, given the shortage of funds the updated targets are 25% lower (20,000) unless there is additional financing. 4. Number of beneficiaries of improved fisheries management (percent of which are women). The project plans to develop approximately 15 FMCs with functioning management plans, each of which will have approximately 1,000 households. Assuming a 2/3 success rate there will be 10 fully functioning FMCs with for a total of 10,000 households. Assuming each household has 5 people, the total estimated beneficiaries are around 50,000 people. However, given potential shortage of funding the updated target is 8 fully functioning FMCs, with 8,000 households and 40,000 people. 13

14 5. Fisheries Management Committees (FMCs) with management plans implemented. A total of 15 FMCs plan to be established. Assuming a 2/3 success rate in terms of functioning FMCs, the target is 10. However, given potential shortage of funding the updated target is 8 fully functioning FMCs. Implementation is defined as management plan developed in a participatory manner through a citizen engagement process. Management measures (e.g. demarcation of fishing grounds, gear or mesh size restrictions, minimum fish landing size, closed seasons, closed areas (FCZ) etc.) specified in the plan (FMC Registration) are enforced and the fishery has been monitored for at least one year. Intermediate Results Indicator 6. Joint Issues Paper prepared and endorsed for identified priority transboundary IWRM issues in the Mekong Basin. Joint transboundary issues paper for each of the three transboundary projects include: priority trans-boundary issues identified, and joint papers to outline common challenges, information and data sharing needs, and coordination requirements related to transboundary management. 7. Joint Coordination Mechanism prepared and endorsed to address the identified priority transboundary IWRM issues in the Mekong Basin, considering the regional impacts and contributing to improved management of shared resources. Joint transboundary issues paper for each of the three transboundary projects including: Formal or informal mechanisms for cooperation, joint management, information exchange, etc. that persist beyond the life of the MRC-funded transboundary project. 8. Number of communication products produced and disseminated related to IWRM. Communication products include, but are not limited to: i) Publication of quarterly e- newsletter Mekong Transboundary Dialogue (10 publications from ); ii) new communication platforms (MRC webpage, Facebook page, etc.) and new information materials (eg. brochures, leaflets, infographics, video clips, photo essays, etc.) (17 new platforms & products from ) 9. Submission of the revised Water Law to the National Assembly (NA). The Water Law must first be submitted to the Ministry of Justice for comments and review. Upon clearance by the Ministry of Justice, the Law will be submitted to the NA. The indicator 14

15 does not require that the NA approve the law, only that it is submitted to the NA for their approval. 10. Number of the tributaries of the Mekong River where Natural Resources and Environment Institute (NREI) of MONRE conduct water quality monitoring. These are sites where NREI conducts water quality sampling at pre-established sites/stations on a consistent basis. The goal is to conduct water quality monitoring in the i) Xekong river, 2) Xechamphone wetland, 3) the Lower Nam Ngum river, 4) XBF, 5) XBH, and 6) Upper Nam Ngum rivers. However given potential budget shortages, the target has been reduced from 6 to National Environmental Laboratory constructed, with international accreditation. Laboratory will be ISO accredited (by Ministry of Science and Technology in Thailand) and will be the first national lab with accreditation. 12. Number of river basins where MONRE has developed water resource model packages. Water resource model package include the following: i) Rain-Fall Runoff model; ii) Basin Water Balance model (flows) and iii) Basin Hydraulic model (floods). The target is to have these models operational in: i) XBF, ii) XBH, iii) Xedong, and iv) Xekong basins. However, due to potential shortage of funds, the target has been reduced to three basins. 13. Number of upgraded hydromet stations which are properly installed, operated, and shared with other LMB countries. The number of monitoring stations include 6 weather stations (synoptic), 10 climate stations, 9 hydrological stations (water level/automatic), and 5 rainfall stations (automatic). 14. Number of functioning RBCCs. RBCCs must be formally established either the provincial level with a clear mandate and terms of reference. 15. Area benefited from upgraded flood protection and drainage systems. This is the drainage area behind the new ten new flood gates which have upgraded flood protection. The original target was 7,000 ha but this has been reduced to 6,000 due to shortage of funds. 15

16 16. Irrigation area benefited from improvement of irrigation schemes. This is the command area where the irrigation pump intake facilities and main canals have been upgraded to provide more reliable service. The original target was 3,500 has, but this has been reduced to 3,000 has due to shortage of funds. 17. FMCs fishery management plan formulated, approved and announced. The goal is to establish 15 FMCs. If 12 FMCs can actually develop approved management plans, then this indicator target will be achieved. Note that the PDO is to have 10 FMCs actually implementing their management plans. Due to shortage of funds, the number of FMC management plans has been reduced to Village receiving alternative livelihood (AL) support. Number of villages receiving AL support following the AL guidelines. The original target was 100, but due to funding shortage the target has been reduced to Fully functioning hatcheries (producing fingerlings for stocking) This includes the rehabilitation of three existing hatcheries and the construction a new hatchery. 16

17 Annex 2B: Original Results Framework and Monitoring Lao PDR: Mekong Integrated Water Resources Management Project Phase 1 Program Development Objective (for the M-IWRM): To establish key examples of integrated water resource management (IWRM) practices in the Lower Mekong Basin, at the regional, country and sub-national levels. PDO Level Results Indicators* Core Unit of Measur e Baselin e Cumulative Target Values Freque ncy Data Source/ Methodolog y Responsibilit y for Data Collection Description (indicator definition etc.) YR 2 YR 3 YR4 YR5 YR6 Indicator One: Joint Action Plan prepared and implemented to improve the identified priority transboundary IWRM issues along the Mekong mainstream, considering the regional impacts and contributing to improved management of shared resources x Joint Action Plan imple mented By respect ive countri es Not existent Yearly -Semiannual report prepared by MRC. -Bank s missions MRC program departments with country focal point and line agencies At appraisal, the following priority transboundary issues have been defined: wetland/biodiversity conservation, fisheries management, flood/drought risk management, and water pollution. Additional issues would be identified during implementation period. Indicator Two: Number of river basins in the tributaries of the Mekong located in Lao PDR where the MONRE applies its management instruments to promote river basin planning approach river basin Yearly -Semiannual report prepared by MRC. - Bank s missions The Cabinet Office in close coordination with Department of Water Resource Currently, 3 River Basins are covered by different projects (2 by Bank, and 1 by ADB). The proposed project will provide similar support to two additional River Basins. 17

18 Indicator Three: 75% of command area covered by the existing water resources infrastructure in the two priority river basins (XBF, XBH) in Lao PDR would benefit from the rehabilitation and modification for enhanced regional environmental benefits Indicator Four: Fisheries management plan developed and implemented at approximately 40% of fishing villages (300 village) in priority water bodies of regional importance. % (out of 30,000 ha) Village 0 5 (1,50 0) 10 (3,00 0) 20 (8,0 00) 35(10,500) 50 (15,0 00) INTERMEDIATE RESULTS Annual Annual -Semiannual report prepared by MRC. -Bank s missions -Semiannual report prepared by MRC. -Bank s missions (DWR) of MONRE Department of Irrigation (DOI) and the provincial offices of the Ministry of Agriculture and Forest (MAF): i.e. PAFO or DAFO of Khammouane And Savannakhet -Lao PDR: the Department of Livestock and Fisheries (DLF) and respective PAFO of MAF in Lao PDR Result (Component 1): Increased cooperation among the member countries to address trans-boundary issues in hotspot areas, including enhancing awareness and understanding of decision makers and local communities in countries on key issues and IWRM principles through various communication outreach activities Intermediate Result indicator One: Number of approved proposals (action plans) that can mitigate the trans-boundary issues in the propos al Not existing Annual -Update with MRC. -Bank s missions MRC program departments with country focal point and line agencies Within command area of the existing water resources investment infrastructure, of about 30,000 ha (XBF and XBH), the Project would rehabilitate about 10 flood gates (benefiting about 14,000 ha of flood area) and 40 villagebased irrigation schemes (benefiting about 8,500 ha). Approximately 300 villages in the Project Area. The Project would support (not more than four years for each village) about 15 Kum Banh comprising some 100 villages) in three provinces (Champasak, Xekong, Attapeu) of Lao PDR Agreement on priority issues and trans-boundary hotspots is expected to be reached and 18

19 identified transboundary IWRM issues Intermediate Result indicator Two: Number of workshops and other outreach activities undertaken by the MRC to disseminate IWRM information and knowledge at the subnational level in the LMB countries. Time Semian nually -Update with MRC. -Bank s missions MRC communicat ions department with feedback from country stakeholders proposals submitted for approved in year one so that the implementation of priority activities could be initiated in year two. Consensus reached for: a) Mekong Delta WRM (Cambodia- VN) and b) Fishery Management (Cambodia Lao). The respective MOU has been signed but not active. The workshop and outreach activities would describe the nature and number of participants or target groups and type of materials, media, and/or other instruments, including action research carried out by Civil Society or Communities. Intermediate Result (Component 2): Strengthened regulatory and technical capacity of the Ministry of Natural Resources and Environment (MONRE) in promoting river basin management approach and IWRM principles in Lao PDR Intermediate Result indicator One: Submission to the National Parliament of Lao PDR of the revised water law consistent with the IWRM principles revised draft water law submitte d Comp leted consu ltatio n, Subm itt ed to NP Semian nually -Update with DWR. -Bank s missions Department of Water Resources (DWR) of MONRE The draft water law will be prepared and consulted with concerned agencies and stakeholders before submitting to 19

20 Intermediate Result indicator Two: Number of the tributaries of the Mekong River where Natural Resources and Environment Institute (NREI) of MONRE conduct water quality monitoring Intermediate Result indicator Three: Number of the tributaries of the Mekong with appropriate hydrological models that could be applied by MONRE staff for water resources planning to the NP river basin river basin 0 (Not yet identi fied) Not exist Drafti ng Comp leted rehabi litatio n /const ructio Semiannuall y Semian nually Update with NREI. -Bank s missions Rapid assessment. -Bank s missions NREI of MONRE MONRE the Government and the Party, respectively. -River basins include High priority river basin with hot-spots may defined by the existing or potential level of water pollution or the need for maintaining good water quality for water supply to towns/communities. -Training and equipment will be provided by the Government of Finland under a separate project. The project will provide with training and necessary equipment for hydrological modeling. Intermediate Result indicator Four: Number of tributaries where new hydromet stations are properly installed, operated, data used., and shared with other LMB countries. river basin Semian nually Rapid assessment. -Bank s missions Department of Meteorolog y and Hydrology (DMH) of MONRE -Experts will be hired to assist in the development of specification, procurement, installation, and analysis of data. - The project will cover 30% of river basin (Among ten 20

21 river basins, the project will cover two of them). Result (Component Three): Key examples of IWRM practices focusing on flood management in Xebangfai (XBF) and Xebanghieng (XBH) and on trans-boundary fisheries management in the Mekong mainstream in southern Lao PDR Intermediate Result indicator One: Number of River Basin Committee (RBC), including its secretariat, established and operational according to the IWRM principles Intermediate Result indicator Two: Number of flood gates rehabilitated and modified in XBF and XBH for RBC Not exist Gates Semiannuall y Semian nually -Update with DWR. -Bank s missions -Update with the responsible DWR and the provincial MONREs of Khammouane and Savannakhet DOI and the PAFO/DAFO of Khammouane RBC will be a responsible for making decision regarding the water uses, priority investment, needs to mitigate the potential negative impacts (especially cumulative), and other aspect of water resource management while ensuring close consultation and active participation 63 of key agencies, local community, and other stakeholders. Key activities will include development of a river basin management plan and/or specific studies. The flood gates will be designed to also facilitate fish passage. All the

22 environmental benefits Intermediate Result indicator Three: Number of fisheries management committee in the target areas in Lao PDR established, regulated, and monitored with support on demonstration livelihood activities and rural infrastructure. Intermediate Result indicator Four: Number of hatchery facilities in Lao PDR that were rehabilitated, up-scaling, or constructed, and research activities have been initiated. Village Establish ed/functi onal hatchery 0 5/0 15/5 distric t 30/1 5 50/30 50/ Semian nually unit of DOI of MAF. -Bank s missions --Update with the responsible unit of DLF of MAF. - Bank s missions and Savannakhet DLF in Champasak, Xekong, and Attapeu provinces existing (ten) gates will be rehabilitated. Small civil works such as building of water supply system, renovation and/or construction of water treatment ponds, office equipment and vehicles as necessary. Three small old facilities exist in Champasak (at Pakse and Khong district) and Xekong (Laman district) and a new hatchery is needed for Attapeu (Sanamxai) The project will rehabilitate three hatcheries, and create one 22

23 Annex 3: Sub-Component Mid-Term Reviews Summary of Sub-component 2.1 (Water Law) A. Financial Status (End of 2015) The total initial budget allocated to this sub-component was US$ 626,000, with US$ 382,418 disbursed (December 2015). The remaining balance is US$ 243,582 (FX adjusted US$ 220,233). In FY 2016 the sub-component budget is US$ 180,266. The project is urged to spend the remaining funds efficiently as project is more than half way through the budget, while the timeline of the submission of the Law is unclear. B. Component Objectives This sub-component provides support for refining a legal framework enabling integrated water resources management including reviewing the current Water Resources Law, drafting a revised Water Resources Law, and supporting its implementation. Activities focus on technical input to update and more clearly define of the Water and Water Resources Law, and placing the water resources agenda in Lao PDR into a larger reginal context. C. Progress to Date (End of 2015) In 1996, Ministry of Agriculture and Forestry originated Water and Water Resources Law. However, in 2011, Ministry of Natural Resources and Environment (MONRE) was created with the mandate to oversee the management of water resources. Based on this change, along with increased development and population growth, there is a need for MONRE to revise the Law in order to reflect current conditions. The first revision of the Law was submitted to the National Assembly (NA) in December However, MONRE was requested to make revisions. Currently, the revised Law has to wait for the passage of the new Constitution and National Land Policy. Once the Land Policy is approved, the revised Law will be submitted to the Ministry of Justice to get agreement on the structure and content. The revised Law will then be transmitted for the government s consideration including the NA where it will be remanded to the relevant committee such as the Law Committee or Socioeconomic Committee. It was noted that the Law in its current state is not final, some updating is needed to reflect the vision of the new leadership within MONRE. Upon approval in the NA session, the subordinate regulations which will include implementation decree, agreement of ministry, among others, will be submitted. The subcomponent has prioritized subordinate legislations based on national priority, relative complexity to implement the subordinate legislation, investment requirements, existence of preparatory work, and relationships (sequencing) to other legislations. Based on this the priorities include: 1. Decree on water resources data information & system 2. Regulations on planning, permitting & exemptions & decree on permit register 3. Regulations on reservoir management and guidelines on reservoir coordination 4. Service charge regulation and Fees for water use regulation 5. Guidelines on minimum flow requirements 6. Regulations on protected areas & wetlands 7. Natural water quality standards & wastewater discharge standards 8. Regulations on groundwater regulation & management 9. Flood & drought guidelines (DWR)

24 E. Activities to Project Closing (March 2018) The 2016 work plan and budget is approved. Focus on getting the Water Law passed by end of the second quarter of Six of the priority subordinate regulations will be drafted by the end of The mission noted the current project planning is ambitious. It was recommended the sub-component seek international consultancy support drafting of the subordinate regulations either through recruitment of individual consultants (which should then be added to the procurement plan) or through arrangements with international organizations such as IWMI or IUCN. Remainder tasks to be carried out in 2016 include: (a) workshop on implementation of the approved Law, (b) establishment of 6 working groups to draft the priority draft the subordinate regulations instrument/guidelines, (c) submission of the priority subordinate regulations to MONRE for internal approval prior to formal adoption by the Minister, (d) preparations of the budget for publication and dissemination of the approved Law and subordinate regulations, (e) capacity building and training for MoNRE, PoNRE, DoNRE to implement the Law and subordinate regulations, and (f) launching of public multimedia campaign. In 2017, the sub-component plans to establish additional 3 working groups to draft the remainder 3 regulations instrument/guidelines. F. Safeguard Issues Not application G. Component Challenges and Issues The approval of the Water and Water Resources Law is dependent the pending National Assembly approval of the Land Policy. Timeline for the approval of Land Policy, and subsequently the submission and approval of the Law, is unclear. In addition, the work plan is entirely dependent upon the approval of the Law. Thus, the World Bank had suggested the subcomponent to suspend non priority activities until the approval of the Land Policy (e.g. have a trigger point). It was noted that this has not been adequately reflected in the work plan. The sub-component risks running out of budget prior to the approval of the Land Policy. H. Additional Financing Not application Summary of Component 2.2 Water Quality and Aquatic Ecosystem Health A. Financial Status (End of 2015) The original total budget allocated for this sub-component was US$ 1.23 million. To date US$ 452,195 have been disbursed, equal to 36.5 % of the total budget. The expenditures up to 2015 were spent on construction of the national environmental laboratory in Vientiane and water quality testing at 11 sites. Overall, 29 water quality parameters are tested at an interval of 4 times a year. Basic parameters, such as ph, Dissolved Oxygen (DO), and temperature are obtained at the sampling sites while other parameters are sent to the laboratory for testing. B. Component Objectives This sub-component aims to build capacity on water quality and aquatic ecosystem (river) health monitoring of the Natural Resources and Environment Institute (NREI), under the 2

25 MONRE. The expected outcome is improvement in national approach to aquatic ecosystem health monitoring, environmental flows management and water quality monitoring, which in turns result in good and sustainable ecological health of aquatic ecosystems including in-stream conditions, river banks and wetlands. This component include the establishment of water quality networks in different water resources such as Xekong, Xachamphone, Nam Ngum, XBF, XBH river basins and etc.. This subcomponent also supports the construction of national laboratory, equipment and strengthening capacity of national laboratory staffs on water quality monitoring, helping country to establish water monitoring procedure within the river basins and strengthening national water quality analytical services. C. Progress to Date (End of 2015) The construction of national environmental laboratory has reached 60% completion and the construction is expected to be completed in July Water quality samplings are being carried out at 11 sites in 5 basins, including Xekong, Xechamphone and Lowe Nam Ngum. Sampling sites are selected at upstream and downstream of pollution sources and areas which are exposed to pollution, such as Vientiane water supply and fish conservation areas. In January 2016, five (5) heavy metal parameters and the Chemical Oxygen Demand (COD) parameter are ISO accredited. E. Activities to Project Closing (March 2018) To continue the works under existing budget $808,006 (scenario A), the achievement of the activities are summarized below; Completion of the national environment laboratory in Vientiane without equipment and facility Expanding water sampling monitoring to other 3 basins consisting of XBF, XBH and Upper Nam Ngum Carrying out water quality sampling for 25 sites in 6 basins (Xekong, Xechamphone, Lower Nam Ngum, XBF, XBH and Upper Nam Ngum) with 29 parameters tested at each sampling site F. Safeguard Issues: The only infrastructure constructed under the project is the new water quality laboratory which is constructed on the NREI land. The works contract included the standard construction environmental management requirements. G. Component Challenges and Issues The establishment of the national environmental laboratory was initially supported by M- IWRMP and Government of Finland. The construction of the national environmental laboratory is under the World Bank s support, while the equipment and facility were under the Finnish government s support. Recent withdrawal of support from Finnish government has led to difficulty in having the national environmental laboratory operated due to lacking of laboratory equipment and facility. High expenditures for water sampling monitoring are observed in the budget estimate and it will be challenging how the agency will maintain the system after the project life. Twenty nine (29) parameters are tested for each water sampling. Cost estimate for each water quality parameter at each sampling site is necessary to help design water sampling parameters including prioritizing the most critical water quality parameters to reduce monitoring costs. 3

26 H. Component Indicators and Status: Current and Proposed Modifications In 2015, the sub-component have installed water monitoring stations in the Xekong basin, Xechamphone wetland, Lower Nam Ngum river basin, and achieved 60% of NEL construction. Water sampling monitoring in 3 additional river basins, consisting of XBF, XBH and Upper Nam Ngum, are planned for 2016 (6 in total). The proposed modification of the indicators are such: Intermediate Result Indicator Number of the tributaries of the Mekong River where Natural Resources and Environment Institute (NREI) of MONRE conduct water quality monitoring. National Environmental Laboratory constructed and obtains international accreditation. Unit of Measure Baseline tributaries NA Yes/No Yes I. Additional Financing I.1 Additional Financing to Complete Existing Scope AF of $808,006 is required to complete the existing scope. Without AF the sub-component will have shortage of funds to provide the initial stocking of laboratory equipment and chemical, and facility management to ensure full function of the national environmental laboratory. In addition, AF will enable the sub-component to expand sampling to 14 more sites in XBF, XBH and Upper Nam Ngum (25 sampling points in 6 basins including XK, Xechamphone, XBF, XBH, Lower Nam Ngum and Upper Nam Ngum) as originally envisioned. I.2 Potential Expansion of Scope The expanded scopes of works under this component include (a) maintaining the water quality sampling at 25 sites in 6 basins during period, and (b) integrating the water quality monitoring data into IWRM of Xekong, Xechamphone, XBF and XBH River Basins through application of hydrological model and Global Information System (GIS). I.3 Additional Financing for Expanded Scope The additional financing to complete the original scope as well as to expand the scope is US$2.11million. Summary of Component 2.3 Water Resources Modelling A. Financial Status (End of 2015) The total budget allocated to this sub-component was US$ 592,000. As at the 31 December 2015 total expenditure was US$ 235,000, representing 39% of the total budget. The remaining FX adjusted balance was US$ 322,000, representing 54% of the unadjusted total budget. The expenditures in 2015 mainly focused on upgrading hydraulic model for Xe Bang Fai (XBF) and Xe Bang Hiang (XBH) basins, and conducting trainings related to basic modelling concept and data management. 4

27 B. Component Objectives To build hydrological modelling capacity within Lao PDR to effectively support IWRM decision-making. C. Progress to Date (End of 2015) Three types of models, consisting of rainfall-runoff (SWAT) model, basin simulation (IQQM) model and hydrodynamic (ISIS) model, were developed for targeted 4 basins (Xe Bang Fai, Xe Bang Hiang, Xedon and Xekong) under National Modelling Case Studies supported by MRC in The models were developed and calibrated based on long-termed data of in such a way as to reproduce the average long term behavior of the river basin for planning purposes and not specifically to reproduce individual daily flow behavior in any particular year. The hydrodynamic models (ISIS) are updated with current conditions in XBF and XBH. NREI has capacity to update the ISIS but the updating of ISIS models for XD and XK have been on hold due to lacking of resources (e.g. human resources and elevation data). The Digital Elevation Model (DEM) data with spatial resolution of 12.5m from the National Geographic Department were purchased to update the ISIS models for the floodplain areas of the 4 target basins. The Finnish consultant supported NREI by developing the IWRM model for XBF consisting of coupled hydrological and hydrodynamic models and other specific modules, such as sedimentation, water quality, 2-dimensional flood and etc. The Finnish model is an IWRM modelling system coupling different aspects of water resources management into an integrated model. However, there was no training/expertise on how to run/modify this model. The 3 IQQM licenses, purchased by MRC in 2000s, have expired and as such the model cannot be operated by NREI. There are also incompatibility issues with the NREI s existing ISIS software under the operation of Windows 7 onwards. The progress of the model set up is summarized below. Basin Rainfall-Runoff (SWAT) Basin simulation or water Hydrodynamic model balance model (IQQM) (ISIS) Xe Bang Fai Updating License expired Updated to current condition of 2015 Xe Bang Hiang Updating License expired Updated to current condition of 2015 Xedone Updating License expired Updating Xekong Updating License expired Updating A series of training courses related to basic modeling concept, data management and relevant tools were organized to provide basic knowledge for modelling for line agencies and provincial agencies. Each training course took 4-5 days with engagement from NREI, other national line agencies and provincial agencies. Site visits to hydro-met stations and floodplain were included during the trainings to enhance participants understanding on the importance of data collection and floodplain mechanism. Below list summarizes theme of training courses organized. Basic Flood Modeling Basic Hydrology for modeling Basic GIS for modeling Basic SWAT model application Basic Hydrodynamic model 5

28 Data Generation and management using GIS and Modeling tools Basic Concept of modeling Organizations which were invited to training courses include NREI, DRW, DMH, DEPP, DOI, DDMCC, NUOL and PONRE. Consultation workshops and site visits to XBF, XBH, XD and XK were conducted during period to collect the data for models. A modeling advisor was recruited from July 2014 to March 2015 to assist in preparing modeling strategy, modeling needs assessment and a capacity building plan. An international modeling consultant (Finnish consultant) was recruited from June 2014 to October 2015 to develop XBF flood model and to provide the capacity building to Lao modeling team. A national modeling consultant was recruited in October 2015 to assist in implementing modeling works with main focus on SWAT model. An international modeling consultant for Xekong basin SWAT model development was planned to recruit and will start the works in December E. Activities to Project Closing (March 2018) Activities under the existing sub-component scope that can be completed within the remaining budget are: Updated SWAT models for XBF, XBH, XD and XK. Updated ISIS models for XD and XK. Consultation meetings and workshops at sub-basin levels to engage local stakeholders and to report the findings of the modelling results Trainings for NREI, other national line agencies and provincial agencies on below courses o Hydrological model or rainfall-runoff model (SWAT) with the components of climate change and land-use change assessment o Basin simulation model or water balance model (ewater Source or HEC- ResSim) o Hydrodynamic model for flood model (HEC-RAS) Recruitment of international consultants to support works under the basin simulation model (ewater Source or HEC-ResSim) and hydrodynamic model (HEC-Ras) on model set up and capacity building to Lao team. F. Safeguard Issues Not applicable. G. Component Challenges and Issues Current modelling capacities at NREI cover SWAT, IQQM and ISIS models. IQQM licenses are expired while ISIS licenses have problem on incompatibility with Windows 7 onwards. The component manager is in consultation process with ewater on possibility of applying ewater Source for basin simulation in the 4 priority basins. HEC-ResSim is another option for basin simulation. NREI also has a plan to use HEC-Ras as a replacement of the ISIS software since HEC-Ras is free and compatible with recent Windows. 6

29 Building technical capacity of NREI on a new basin simulation model (ewater Source or HEC- ResSim) and a new hydrodynamic model (HEC-Ras) will require a large amount of resources, both in term of technical knowledge and times to learn. In addition, lacking of national consultants for modelling work in Lao PDR is another constraint for implementing the activities under this component. At present, international and national consultants have been recruited to mainly support works of SWAT model, not basin simulation and hydrodynamic model. The current hydrological (SWAT) and basin simulation models were set up and calibrated to reproduce the average long term behavior of the river basin ( ) for planning purposes and not specifically to reproduce individual daily flow in any particular year. The flood model (ISIS) was also developed in the same approach by calibrating over long time series of hydrological data to represent the long-term flood mechanism, not specific years. In general, flood models are used to simulate river flow conditions by considering the impacts of intervention to river system, such as increasing the height of flood embankment, constructing flood gates, inserting box culvert along river bank and etc., which is considered as a response to specific events. Recalibration of flood model is needed to ensure the flood model could represent the current river and floodplain conditions. Efforts on model upgrading are isolated. Updating the models without appropriate targets could drain resources, both in term of budget and times. How model results will be used to address water related issues in each priority basin should be assessed and identified to lay out the scope of water modelling. Clear and logical modelling strategy should be defined to help design the work plan and set the acceptable model results. When series of trainings were organized, representatives from relevant agencies at national and provincial levels were invited. Trainings were planned to be organized in order, starting from basic data processing and data management to basic model set up. Same group of participants were expected to participate in the trainings while different group of participants from agencies attended the trainings due to their engagement with other routine works. Mechanism to set up technical network is important to build technical capacity of regional agencies. Setting up technical working group at provincial level through the assignment from the department might help maintaining the same group of participants. H. Component Indicators and Status: Current and Proposed Modifications It was agreed during the mid-term review that the intermediate indication needs more precise description and realistic adjustment. The proposed revised include: Intermediate Result Indicator Number of river basins where MONRE has developed water resource model packages. Unit of Baselin measurement e Number I. Additional Financing I.1 Additional Financing to Complete Existing Scope Additional financing of US$199,341 is required to complete the existing scope. Without this additional support NREI may risk not being able to complete all planned new basin simulation models (ewater Source or HEC-ResSim) and new hydrodynamic models (HEC-Ras) for XBF, XBH, XD and XK. The AF will also provide funds to complete consultations and conduct training workshops with related agencies in the basin are also included to build their technical 7

30 capacities on applying the water modelling. Field visit and geographical surveys (river cross section surveys) will also be covered under AF to collect information which could improve the model accuracy. I.2 Potential Expansion of Scope Potential expansion scopes of sub-component 2.3 are summarized below: Develop water balance models (ewater Source) for the XBF, XBH, XD and XK river basins. Expanding the modelling works into 2 more basins comprising Nam Ou and Nam Ngum Building capacity of relevant agencies in Nam Ou and Nam Ngum to apply the IWRM modelling system Integrating groundwater and water quality modules into the IWRM model Upgrading the model database and impact assessment tool (MRC toolbox) to support decision making processes Carrying out river cross section surveys along Nam Ou and Nam Ngum to be used as input for flood model for improved model results I.3 Additional Financing for Expanded Scope The additional financing to complete the original scope and to expand the scope is US$ 999,341. Summary of Component 2.4 Hydro-Meteorological Network Upgrading A. Financial Status (End of 2015) The total budget allocated to this sub-component was US$ 1.87 million. As at the 31 December 2015 total expenditure was US$1.029 million, representing 55% of the total budget. The remaining FX adjusted balance was US$0.76 million, representing 41% of the unadjusted total budget. The expenditures in 2015 were mainly on the field site civil works for the hydro-met stations and construction of National Early Warning Center (NEWC) in Vientiane and the Hydro-met provincial office in Savannakhet, and awarding the tenders for equipment installation at field site and installation of central database system. B. Component Objectives The goals and objectives of Component 2.4 of the M-IWRM project in Lao PDR are: To support water resources planning and management by providing necessary and reliable hydro-meteorological information. To enhance early warning system for floods and droughts by strengthening hydrometeorological monitoring system at the basin and national levels. To build the technical capability of DMH for improved flood, drought, and extreme weather event forecasting as well as for seasonal climate prediction at the basin and national levels. To increase awareness and responsiveness to floods, droughts, and other extreme weather events for selected provinces, districts, and communities. To strengthen information dissemination with the National Disaster Management Office and related agencies. 8

31 C. Progress to Date (End of 2015) Site selection for the 25 upgraded and modernized stations in Sedon and Sekong River basins was carried out with the approval from the concerned agencies at provincial, district and village levels including National Land Management Authority. Different hydro-met parameters can be recorded at each hydro-met station depending on the type of equipment installed. The 25 upgraded and modernized stations include 6 synoptic types, 10 climate types, 9 hydrometric types. Civil works for field sites were completed for 23 stations, out of 25 stations. Other 2 station sites (1 hydrometric station in Sekong and 1 synoptic station in Attapeu) are located near private areas which are approved for civil works by the relevant agencies. Recent private land development near those 2 stations prohibited the civil works and relocation is needed. The construction of the Hydro-Met Provincial Office in Savannakhet was 100% completed in November The construction of NEWC at the DMH head quarter has reached 65% completion. Main building structure, bricklaying and electric power cable installation were fully completed while ceiling works have recently been started. The contracts for installation of hydro-met equipment at field sites and installation of database system of NEWC were awarded in Equipment for 25 stations will be shipped and installed at the field sites by April E. Activities to Project Closing (March 2018) To continue the works under existing budget US$760,317 (scenario A), the achievement of the activities are summarized below; The 75% completion of the NEWC construction at DMH, Vientiane. Completion of civil works for 23 hydro-met stations, out of 25 stations. Installation of the hydro-met equipment for 23 stations, out of 25 stations. The hydromet equipment at a station in Sekong and a station in Attapeu cannot be installed due to the problem on private landuse change near those 2 stations. Installation of database system including software and server at the NEWC of DMH in Vientiane New locations for the 2 hydro-met stations that have problem on civil works in Sekong and Attapeu are agreed and approved by the concerned authorities. Organizing two trainings on the equipment installation and maintenance. These two trainings are agreed under the contract of equipment supplier. One training is planned to be organized at Attapeu in Mar 2016 and another training is scheduled in May 2016 at DMH, Vientiane. The Standard Operating Procedures (SOPs) for early warning system will be approve by the Prime Minister in the second quarter of 2016 and the approved SOPs will be used to test the early warning system in Sedon and Sekong in Campaign to raise public awareness on hydro-met in accordance with the WMO theme (e.g. climate for youth in 2015) WMO and World Water Day. F. Safeguard Issues The activities under this component 2.4, which may have potential risks and impacts, include construction of NEWC and provincial office at Savannakhet, and civil work construction for those 25 hydro-met stations. The constructions followed safeguard guidelines. The checklists and consultation meetings with stakeholders have been completed before construction works. 9

32 Site selection for the hydro-met stations engaged all stakeholders at all levels. No land acquisition and no resettlement took place for this component. The approval letters from the National Land Management Authority on civil works for the 25 stations were issued with the endorsement of local authorities. These practices on approval processes are planned to be mainstreamed into hydro-met station installation processes of DMH. There are 2 stations (1 station at Sekong and 1 station at Attapeu) which face problem on civil construction work due to its close proximity to private land development. Relocation of these 2 stations is needed and new locations have been agreed and approved by local authorities. G. Component Challenges and Issues There are other 2 ongoing projects (ADB and JICA projects) related to strengthening hydromet network and modelling works implemented by DMH. The ADB project is at early stage and has focused areas in the central region (Khammouane and Savannakhet) while the JICA project focuses throughout the country. Site selection of 10 hydrological stations and 6 climate stations of ADB project was agreed. It is expected that the installation of ADB stations will be completed by The JICA project supports the station upgrading and the progress is approximately at 80%. With different implementation progresses of these 3 hydro-met strengthening projects under DMH, it is challenging to have consistency in project implementation among 3 projects. Cooperative efforts among 3 projects (M-IWRM, ADB and JICA) have been partially achieved by coordinating in the equipment specifications, early warning framework, and data sharing. However, improved coordination is needed to ensure the effective and consistent early warning system. For instance, the each ongoing project has a plan to establish its own database system and data sever at NEWC in Vientiane. Combining the database systems once they are established will be challenging. The progresses of this component mainly focus on the tendering process, contracts and construction works. Additional supports to DMH are needed to achieve the component objects on enhancing the early warning system, building technical capacity of DMH and raising awareness for flood and drought response. The activities to support capacity building are planned after installation of hydro-met stations, which is planned to be completed by May Existing budgets could not cover the activities on enhancing the DMH capacities on the early warning system (e.g. training workshops to interpret early warning information for regional and local authorities, drill on early warning system to assess the SOPs and dissemination mechanism and etc). There is large coordination gaps between national DMH and provincial agencies. Engagement and close communication is necessary to reduce the gaps and increase the ownership. H. Component Indicators and Status: Current and Proposed Modifications The intermediate indicator in the PAD is number of tributaries which is general. It is agreed during last mission to change the intermediate indicator to number of stations installed and upgraded. The revised indicators are summarized below. Intermediate Result Indicator Unit of Measure Baseline Number of upgraded hydromet stations which are properly installed and operated. Number

33 I. Additional Financing I.1 Additional Financing to Complete Existing Scope AF of US$1,290,158 is required to complete the existing scope. Without AF, the subcomponent is not expected to have funds to support activities which strengthen operation of the hydro-met stations, provide technical capacity building of DMH through trainings, enhance the early warning system for flood and drought through trainings and workshops, and raise awareness and responsiveness to hydro-met hazards of provincial and local authorities through trainings, workshops and early warning dissemination drills in collaboration with DMH officers from Vientiane. Presently, civil works for 2 hydro-met stations that are now facing problem with private land development are planned to be completed by New locations for these 2 hydro-met stations have been agreed and approved by the Government. The AF will support pilot demonstration of end-to-end early warning system in Sedon and Sekong will be established to test the existing Standard Operating Procedures (SOPs) on flood early warning and to improve coordination between DMH and National Disaster Management Office (NDMO) and other relevant agencies including vulnerable communities. Funds for campaigns to raise public awareness on hydro-met information are planned in accordance with the WMO theme (e.g. climate for youth in 2015) and World Water Day will also be provided. Discharge measurement at 8 hydrometric stations will be carried out to update the water level and discharge relationship (rating curve). The discharge will be measured 1 time per month during dry season and 2 times per month during wet season. I.2 Potential Expansion of Scope The potential expansion of scope include: Upgrading and modernizing 20 hydro-met stations (10 climate and 10 agro-climate) in the middle and northern regions which include Nam Ou, Nam Suang, Nam Ngum and Nam Khane River Basins. Refurbishing one provincial office and three local offices and upgrading facilities in the offices. Building and strengthening technical capacity of DMH on the operation and maintenance of the hydro-met network in Nam Ou, Nam Suang, Nam Ngum and Nam Khane River Basins through series of trainings. Organizing workshops, forums and simulation exercise (drill) to increase awareness on early warning system and enhance coordination among relevant agencies in Nam Ou, Nam Suang, Nam Ngum and Nam Khane River Basins. Developing the hydro-met apprentice program for DMH to train new recruited DMH staff at national and regional levels on the hydro-met knowledge and technology. Developing curriculum for Meteorology and Hydrology in collaboration with Lao National University. Setting up studio to support media broadcasting at DMH in Vientiane and organizing training for media. Developing new web portal for hydro-met information dissemination. Enhancing awareness of the provincial and local authorities on end-to-end early warning system based on new web portal through pilot demonstration projects. 11

34 I.3 Additional Financing for Expanded Scope The additional financing for completing the original project scope and for expanding the scope is US$5.05 million. Summary of Sub-component C Strengthening Management in Priority River Basins and Floodplains A. Financial Status (End of 2015) The total budget allocated to this sub-component was US$2.08 million. As at the 31 December 2015 actual expenditure was US$1.52 million, representing 72% of the total budget. The remaining FX adjusted balance was US$0.50 million of which US$0.33 million is committed expenditure, to be paid early The remaining balance is US$0.17 million, representing 8% of the unadjusted total budget. Expenditure reports have been submitted for all activities undertaken. However, Activity Output Reports, documenting what occurred and the outcomes, for many consultation activities have yet to be submitted. B. Component Objectives To: Support the development of river basin organizations for the Xe Bang Fai (XBF) and Xe Bang Hieng (XBH) river basins, Prepare flood management plans for the lower regions of XBF and XBH river basin, Complement other river basin management initiatives underway in other basins of the Mekong tributaries, and Provide institutional and administrative support for PoNREs and DoNREs that will have the responsibility for implementing the flood management plans. C. Progress to Date (End of 2015) Establishment of River Basin Coordinating Committees (RBCC): For each of the XBF and XBH river basins, a sector based Technical Working Group has been established to initiate the establishment of a RBCC. Numerous meetings have been held resulting in the preparation of a draft RBCC ToR, detailing its composition and responsibilities, for each basin. The first RBCC meetings are planned for River Basin Profile Reports: Draft River Basin Profile Reports were prepared for the XBF and XBH river basin in This has required the collection and analysis of a wide range of water sector technical information. These reports are to be reviewed by IWRM specialist in early 2016 to improve quality. Basin-wide water resources assessments (e.g. surface water balance, status of monitoring and assessment programs) are to be prepared in 2016 and key findings to be incorporated in the River Basin Profile Reports. Basin-wide Stakeholder Engagement Plans (SEP) are also to be prepared and implemented to disseminate findings of the draft River Basin Profile Reports and to help identify water related issues and concerns of key stakeholders of the basins. Flood Management and Action Plans: A draft Flood Management and Action Plan for the lower XBF river basin and a draft Wetland Management and Action Plan for the Xe Champhone RAMSAR listed wetland, located in the lower XBH river basin, have been prepared. Some stakeholder consultation has been undertaken to prepare the plans and to identify community investment opportunities. For both draft plans a SEP will be prepared and implemented during 12

35 2016 to ensure a more comprehensive, transparent and accountable engagement process, and to build stakeholders confidence in the planning process. A number of specific management activities have already been implemented such as the preparation and endorsement (village level) of flood plain and wetland demarcation areas, and flood protection zone management regulations. These activities will need to be appropriately accounted for in the Management and Action Plans to enable a methodical planning process to be implemented. Community investments projects: Rural water supply systems have been constructed for two villages in KHM Khammoune Province (KHM) and for two villages in Savannakhet Province (SVK). Six more water supply systems are to be constructed in each province. Endorsed and operationalized National Guideline on River Basin Planning Management: The draft National Guidelines on River Basin Planning Management were prepared in 2015 under ADB s TA project. Under this sub-component the guidelines have been submitted to key Ministry departments, both at central and provincial levels, for consideration. Revision and endorsement of guideline is to be completed by the end of Endorsed National Guidelines on Groundwater Management: Draft National Guidelines on Groundwater Management have been prepared and preliminary consultation has commenced with key Ministry departments. A TWG has been established to oversee its preparation. Initiate groundwater management in Savannakhet Province: A questionnaire on groundwater use in SVK has been prepared. An assessment framework has been prepared to determine pilot areas and 32 villages (pilot areas) within two Districts have been selected. Surveying of groundwater use in pilot areas will commence in A draft SVK Groundwater Management and Action Plan has been prepared. Consultation of the plan is to commence in Component management: Construction of the KHM PoNRE Office (Water Resources Division) has commenced and is due for completion in May All renovations of DoNRE offices have been completed. Vehicle and office equipment has been purchased. The National Coordinator Consultant resigned in late Recruitment to refill the position will commence in early Contract negotiations are underway for the Community Engagement Consultant. The two Local Technical Coordinator positions have been changed to a Groundwater Specialist Consultant and an Administration Support position for the Project team. Positions have yet to be advertised. The international consultant for project implementation and procurement support has been removed from C work plan and added to the PMU s work plan. 1 TA 7780-LAO: National Integrated Water Resources Management Support Project. 13

36 E. Activities to Project Closing (March 2018) There would be very limited scope to finish activities if there was no additional financing as there is only 8% of the allocated budget remaining. With no additional funds, focus is to be on finalizing high quality XBF and XBH River Basin Profile Reports that included findings from basin-wide water resources assessments. These reports would then provide the foundation for preparing river basin plans and establishing RBCCs. F. Safeguard Issues The Sub-component implementation activities during the initial period focused mainly on consultation meetings, focused-group discussion with the Provincial Natural Resource Environment offices (PONRE) and the District Natural Resource and Environment (DONRE) in the provinces of Khammouane and Savannakhet. These consultation meetings gained broad consensus and community support to the project activities. Consultation meetings, focusedgroup discussion and planning for the community-investments was properly documented and recorded which were signed and stamped by the respective village leaders and PONRE/DONRE. The consultation, planning processes and selection of small community investment in the targeted villages for implementation of small civil works generally followed the Social and Environmental Safeguard checklist. All civil construction works (e.g. rural water supply systems, latrines) have followed the Engineering Code of Practice (e.g. reduce dust, keeping nearby communities informed), which has been included into all construction contracts. In order apply a more structured process to the development of future small community investments, the PMU agreed to prepare Community Infrastructure Investment Guidelines which lay out the steps for procurement, consultation, documentation, and monitoring, as well addressing ethnic minority and gender issues. For the construction of the KHM PoNRE Office, the MIWRMP Implementation Support Consultant and PoNRE Coordinator visited the site prior to construction. A Social and Environmental Screening Checklist was conducted and found no negative impacts. There are no resettlement issues as the site is a vacant lot owned by the government. G. Component Challenges and Issues During 2015 over $0.45 million was spent on consultation. However, very little stakeholder engagement planning has been undertaken, including documentation and reporting of the consultation processes and outcomes. As such it is often not clear who was consulted, why, when and how it help to build on the IWRM process. Material used for consultation has not been made available (e.g. training material, meeting agendas and minutes). The consultation processes (e.g. awareness raising, training, meetings, workshops) are fundamental IWRM tools for building stakeholders confidence and support for river basin planning. Success is dependent on setting out clear consultation processes to allow key stakeholders to be appropriately engaged, and documenting and making publicly available the outcomes. Immediate attention is needed to establish Stakeholder Engagement Plans (SEP) for all consultation activities. 14

37 A key output of this sub-component is the establishment and operationalization of the XBF and XBH RBCCs. The sub-component also supports the preparation of river basin profile reports for the two river basins. However, no funds have been set aside for preparing XBF and XBH River Basin Management and Action Plans. Without these plan there is limited need for establishing RBCC as their main responsibility is to oversee the preparation and implementation of these plans. Efforts place into establishing RBCC will be wasted unless the sub-component scope is expanded to include their preparation of these plans. Many of the community investment projects identified are not directly related to the subcomponent objectives. For example, the construction of rural water supply systems. While these systems have direct benefits to livelihoods they do not assist flood and wetland management and are not the responsibility of RBCCs. They are generally a major activity under a rural water supply strategy. It is also unclear why MoNRE, via PoNREs and DoNREs, are overseeing their construction, as rural water supply has the responsibility of the Ministry of Public Health. The remaining small-scale investment projects need to be assessed to make sure they are assisting the delivery of the flood and wetland management plans objectives (& be included as actions in the plans). A number of groundwater management activities were introduced to the 2015 work plan. These activities are not directly related to the initial sub-component objectives, although are important IWRM tools. Focus is at the administrative level (e.g. SVK). However, as an IWRM demonstration tool, however, focus should be at the natural water system scale (as water movement is not constrained by administrative boundaries). As such groundwater planning and management should start at the river (surface) basin scale until information comes available to better understand the characteristics of the groundwater systems. Early drafts of XBF and XBH River Basin Profile reports, and the Xe Champhone Wetland Management have been translated into English. However, the draft Flood Management and Action Plan, the draft Groundwater Management and Action for SVK, the draft National Guidelines on Groundwater Management and various water management draft regulations prepared under this sub-component have yet to be translated. Although initial reviewing processes have commenced for some draft documents, all major outputs need to be translated into English to allow for a comprehensive review process and ensure high quality outputs are produced. Allocated funds do not provide for road construction from the main road to the new KHM PoNRE office under-construction, nor discharge from building site and for landscaping (e.g. for car/motorbike car parks). Construction managers noted that if these issues are not addressed it will impact access to the site, especially during the wet season, and the building structure, due to erosion of the foundations. Activities under the Annual Work Plan and Budgets are too general and non-sequential and as such it is not clear how objectives will be delivered, and does not allow for effective monitoring and assessment of implementation. SMART based principles are to be applied for the 2016 and 2017 work plan. The IWRM approach is new for Lao and as such there is limited government capacity to enable successful implementation. Immediate attention is needed to build the Project and provincial Coordination Team s understanding key IWRM processes, including the reasons for why activities are being undertaken, how they are linked to each other and how they will support long-term sustainable water resources management of the river basins. 15

38 H. Component Indicators and Status: Current and Proposed Modifications The proposed modifications of the results monitoring framework include: PDO Result Indicator Unit of Measure Baselin e Number of Lao PDR river basins Number located in the tributaries of the Mekong River where MoNRE has applied its management instruments. Intermediate Result Indicator Number of functioning RBCCs. Number H. Additional Financing Additional Financing to Complete Existing Scope An additional US$901,629 is required to properly complete the original scope of activities and to fund the new groundwater activities added in the 2015 work plan. IWRM is complex and AF will enable the sub-component to further improve the quality of its activities and outputs which are fundamental to building strong IWRM base in Lao PDR. Potential Expansion of Scope (activities) New activities to be undertaken are: Preparation of XBF and XBH River Basin Management and Action Plans Operational support to the XBF and XBH RBCC for at least 2 years Implementation support for key PoNRE and DoNRE activities under XBF and XBH River Basin Management and Action Plans (key areas: monitoring and assessment programs, storage operation rules and basin-wide allocation processes, flood management) Additional Financing for Expanded Scope The minimum amount required to cover the expanded scope is US$3.89 million. Summary of Sub-component Irrigation and Drainage A. Financial Status (End of 2015) Disbursement rate of C3.1.2 is on schedule. Total budget allocation for this sub-component was US$ 5.28 million. Planned budget for was US$ 3.68 million. As of Dec 2015, total expenditure reached US$ 3.63 million, accounting for 70% of the total budget allocation and 100% of the amount planned for The remaining budget for the rest of the project duration is US$ 1.65 million. During the MTR mission, the NPMU proposed to adjust the remaining budget to US$ 1.49 million considering the U.S. Dollar (USD) loss due to the raise of exchange rate of SDR against USD. Of which, a total of US$ 921,250 have already been committed to the on-going construction and procurement contracts, which are expected to be completed by the end of March B. Sub-component Objective Major objective of Sub-component is to improve and enhance existing water resources infrastructure in XBF and XBH river basins in order to improve local livelihoods through restoration of the original scope of the irrigation and flood protection and facilitation of 16

39 operation and maintenance, and to yield environmental benefits such as reducing water usage, increasing return flows and facilitating fish migration onto the floodplain. In order to achieve this objective, four major activities were included in the project design, including: (i) upgrading of floodgates; (ii) rehabilitation of village-based small irrigation schemes; (iii) provision of technical assistances, which include establishment and training of users groups (UGs) for upgraded floodgates and water users associations (WUAs) for rehabilitated irrigation schemes, extension of agriculture techniques especially System for Rice Intensification (SRI), and promotion of Pest Management Plan (PMP); and (iv) support to sub-component management. Detailed activities and expected outputs of C3.1.2 include: Table 1. Activities and Expected Outputs of C3.1.2 (as per PAD 1 ) Activities Expected Outputs 1. Rehabilitation of flood gates 10 floodgates in XBF River Basin rehabilitated and modified to enhance flood protection and facilitate fish migration, benefiting 10,000 hectares in total 2. Rehabilitation of irrigation scheme 40 village-based irrigation schemes rehabilitated, covering 5,000 hectares of command areas 3. Provision of technical assistance UGs and WUAs responsible for O&M of floodgates and irrigation facilities established and strengthened Training on agriculture techniques organized, including promotion of SRI Pest Management Plan (PMP) promoted 4. Sub-component management Effective management and smooth implementation of the subcomponent C. Progress to Date (End of 2015) Overall progress of C3.1.2 is on schedule. The end target of the command area of exiting water resources infrastructure in the XBF and XBH river basins benefited from rehabilitation and improvement work is 15,000 ha, and the target for is 8,000 ha (including both flood protection area and irrigation area). As of 31 December 2015, 5 floodgates were upgraded and 28 irrigation schemes were rehabilitated, benefited 5,113 ha flood protection area and 2,900 ha irrigation command area respectively, constituting a total of 8,013 ha benefitting area, accounts for 100% of the target and 53.4% of the end target. Rehabilitation of another 5 floodgates and 16 irrigation schemes has already been commenced and is expected to be completed by the end of March Five UGs and thirty-five WUAs have been established and training for the upgraded floodgates and rehabilitated irrigation schemes. A total of 40 farmers production groups were formulated 1 There is a discrepancy on the definition of the target of PDO level Indicator 3. In the project Results Framework on page 59 of the PAD, the target of the indicator was described as 75% of the 30,000 ha command area covered by the existing water resources infrastructure in the two priority river basins (XBF, XBH) would benefit from the rehabilitation and modification for enhanced regional environmental benefits (22,500 ha, of which 14,000 ha benefit from rehabilitation of floodgates and 8,500 ha benefit from rehabilitation of irrigation schemes). However, the end target values in the same table was defined as 50% of the total command area (15,000 ha). As both the main text of the PAD (page 11) and the Financing Agreement (page 13) defined the end target of this indicator as 50% of the command area (15,000 ha), progress and performance evaluation in this report is based on this definition. Consequently, the end targets of the flood protection area and irrigation area are converted to 10,000 ha and 5,000 ha proportionally. 17

40 within the project area. Various training and demonstration on agriculture techniques have been organized, including demonstration of the System for Rice Intensification (SRI) at 45 households. Two project offices in Khammouane and Savannakhet Provinces are constructed and renovated. Relevant office equipments and transportation tools are procured and project staff and consultants are recruited. The details of sub-component progress and outputs are shown in Table 2 and Table 3. Table 2. Progress and Outputs (As of 31 Dec 2015) Activities Completion as of 31 Dec Rehabilitation of flood gates Upgrading of 5 floodgates with fish passes included, benefiting a total of 5,113 ha flood protection area 2. Rehabilitation of irrigation scheme Rehabilitation of 28 irrigation schemes, covering a total of 2,900 ha command area 3. Provision of technical assistance Establishment and strengthening of 5 UGs and 35 WUAs Formation of farmer production groups at 40 pilot schemes Piloting of SRI at 45 households, covering a total of 2.45 ha rice field 4. Sub-component management Construction and renovation of two provincial project offices Procurement of 4 vehicles, 14 motor cycles and survey equipment Recruitment of project staffs Table 3. Progress of Infrastructure Rehabilitation (As of 31 Dec 2015) District Floodgate Irrigation Scheme Total Completed On-going Total Completed On-going Khammouane Province Nongbok Mahaxai 3 3 Xebangfai 3 3 Sub-total Savannakhet Province Xaibouly Champhone Songkhone Xonbouly Sub-total Total Improvement of water resources infrastructure so far have benefited a total of 5,450 rural households (2,250 through floodgates updating and 3,200 through irrigation rehabilitation) and 30,500 population (11,500 through floodgates updating and 19,000 through irrigation rehabilitation). Based on the findings of the field visit to selected project sites by the MTR mission team, the construction quality of infrastructure is acceptable in general, and the UGs and WUAs are functional. Beneficiary farmers were actively involved in project implementation through the village consultation and planning process and their direct involvement in irrigation rehabilitation. Implementation of the Sub-component benefited from close collaboration with the on-going Bank funded Khammouane Development Project II, good coordination and management by DOI and a qualified and dedicative project team. 18

41 D. Activities to Project Closing (March 2018) The remaining activities under C3.1.2 are mainly to complete the on-going improvement of water resources infrastructure in the XBF and XBH river basins and to continuously provide technical assistances. Upgrading of the remaining 5 floodgates and rehabilitation of the remaining 16 irrigation schemes are expected to be completed by the end of March 2016, bringing the total benefited flood protection area to 7,000 ha and benefited irrigation command area to 3,500 ha. Establishment and or-organization of 5 more UGs for floodgates and 9 more WUAs for irrigation schemes are expected to be completed by the end of Training for all UGs and WUAs, and agriculture extension activities, especially dissemination of SRI, will be continued in Disbursement rate of the Sub-component is expected to reach 100% by the end of Detailed plan for 2016 is shown in Table 4. Table 4. Work Plan (1 Jan-31 Dec 2016) Activities Work Plan 1. Rehabilitation of flood gates Complete upgrading of 5 floodgates by the end of Mar Rehabilitation of irrigation scheme Complete rehabilitation of 16 irrigation scheme by the end of Mar Provision of technical assistance Establishment and re-organization of 5 UGs and 9 WUAs Training for all UGs and WUAs established/re-organized under the project Continue agriculture extension activities, especially promotion of SRI 4. Sub-component management Continue to support sub-component management D. Safeguard Issues Overall, implementation of activities under this Sub-component followed the guidelines of project safeguard documents. Relevant requirements and actions defined in the project Environmental and Social Management Framework (ESMF) were followed and implemented. No major negative social and environment impact is observed so far. Intensive social consultations were conducted with PAFO, DAFO, local communities and beneficiary farmers during the first year of Sub-component implementation on preparation for Sub-component activities in the Xebangfai and Xebanghian River Basins in Khammouane and Savanakhet Provinces, which gained broad consensus and community support to the project activities. Consultation was followed by community planning that included women and ethnic groups in the project villages. Special attention was paid to women s participation, who were encourage to actively participate in consultation meetings, focused-group discussions, planning and membership in the Water Users Associations in their respective villages. The consultation and planning processes in the targeted villages selected for implementation of civil works generally followed the Social and Environmental Safeguard checklist. During the implementation of civil construction works, actions have been taken to minimized possible negative impacts, especially application of Engineering Code of Practice (ECOP)/housekeeping that reduced dust, noise, and waste generations as well as by keeping nearby communities informed. This ECOP has been included into all the construction contracts. No resettlement or large are of land acquisition occurred under this Sub-component, as resettlement or demolition of houses or business is not allowed, which has been included in the negative list as stated in the ESMF. 19

42 For the purpose of safeguard policy implementation and monitoring, the Sub-component assigned Safeguard focal person in each DAFO, under the close supervision and coordination of the Senior Irrigation Management Consultant and the Community Development Specialist. For resolution of possible grievance from beneficiary farmers, the Sub-component established a grievance mechanism through Water User s Association in which women and ethnic groups are represented. Agriculture extension activities under this Sub-component followed and complied with the Simplified Pest Management Plan indicated in the ESMF. No pesticides was procured or distributed under this Sub-component. Further, the Sub-component, in close coordination with PAFO and DAFO, organized continuous information campaign for farmers on the list of banned pesticides and controlled use of pesticides. The Sub-component introduced and demonstrated the new cultivation technique called System for Rice Intensification (SRI) based on organic agriculture, which would reduce the use of water resources and chemical inputs. In addition, the Sub-component also prepared the Ethnic Group Development Plan (EGDP), which was submitted to the Bank on 27 January The PMU reported that the EGDP was applied during the course of the project implementation. The mission requested the PMU/CMU to prepare a report documenting, which supporting information, how the EGDP was implemented by May 1, F. Challenges and Issues Major challenge faced with the sub-component implementation is budget limitation, due to underestimation of construction cost during the project design and other reasons emerging during implementation. Current budget availability for flood protection is about US$83 per ha, which only covers updating of floodgates and installation of fish passes. Other associated works, like embankment protection and drainage improvement are not included, which hampered full functioning of the protected area. Current budget availability for irrigation rehabilitation is about US$ 680 per ha, while the actual average cost occurred so far under the project and the on-going Bank funded Khammouane Development Project Phase II (KDP2) in the same area was about US$ 1,000 per ha. During the past years, good prices on the local market increased by 5-10%. The project was expected to get exemption from government taxes. When the project became effective, the tax policy was changed. Now the project construction and consultancy contracts are subject to 12% and 24% government tax respectively. Due to the raise of SDR against US Dollar, the NPMU estimated during the MTR mission that C3.1.2 is going to loss US$158,400. The mission team and DOI jointly estimated that with the current budget availability, the sub-component would only be able to cover 7,000 ha flood protection area and 3,500 ha irrigation command area, constituting a total of 10,500 ha of benefiting area, accounting for only 70% of the original target. Other issues identified during the mission include: (i) Prioritization of irrigation interventions. While some main canals and key structures yet to be rehabilitated, the current intervention showed a major focus on downstream canal improvement and lining. It would be better to set up clear selection criteria for irrigation interventions, to give priority to rehabilitation of water source structures and equipment, then main canals and structures, and then downstream canals. (ii) Design of canal systems. Due to the small size of the irrigation schemes targeted under the project, standard canal design was adopted from KDP. As one size may not fit to all systems, it would be better to prepare several typical designs, to better fit the requirements of different category of systems. (iii) Monitoring and operation of the fish passes. There is a need to monitor 20

43 and analyze the impacts and benefits of the fish-passes. It would be good if proper monitoring activity could be design and implemented, to better inform the operation of floodgates and further scaling-up of the fish-passes. As there might be conflicts between the purposes of fishes pass, flood protection and irrigation water use, proper gate operation strategy needs to be developed for combined fishery, irrigation and flood management. (iv) Scaling-up SRI dissemination. Currently SRI intervention remained as individual demonstration at household level, needs to be scaled-up to larger area. The mission discussed and agreed with the project team needed options for addressing the above issues. The details are described in Annex 1 and Annex 2. G. Indicators and Status: Current and Proposed Modifications The original PDO level result indicator could not properly reflect the project outcome on infrastructure improvement, as improvement of flood protection area and irrigation area are two distinctive things. The end target of 15,000 ha is not achievable with the current budget allocation, based on the real expenditure during the past project years and the investment level of another similar Bank project in the same project area. In addition, the intermediate result indicators could not reflect the scope of combined flood protection and drainage improvement. Considering improvement of irrigation area is a major output of the project, it would need a dedicated indicator to monitor. Due to the small size of irrigation schemes in the project area, the total number of targeted irrigation schemes needs to be adjusted from 40 to 44. PDO Result Indicator Unit of Measure Baseline Number of beneficiaries of improved irrigation and drainage infrastructure in XBH and XBF basins (percent of which are women). Number of beneficiaries of improved fisheries management (percent of which are women). Intermediate Result Indicator Area benefited from upgraded flood protection and drainage systems. Irrigation area benefited from improvement of irrigation schemes. Person ,000 (50%) Person (50%) 17,000 (50%) 15,000 (50%) 20,000 (50%) 40,000 (50%) Hectares 0 0 5,1000 5,100 6,000 6,000 Hectares 0 0 2,900 3,500 2,900 3,500 3,000 3, 500 H. Additional Financing H.1 Additional Financing to Complete Existing Scope Additional financing to complete the existing scope is US$ 2.5 million. This includes further upgrading of the 10 floodgates (11,148 ha flood protection area) and the 44 irrigation schemes (5,363 ha irrigation command area). With the current budget availability, the project will only be able to cover 7,000 ha flood protection area and 3,500 ha irrigation command area respectively. As the major system and the key structure of these systems have already been rehabilitated through previous project implementation, a moderate additional financing could easily cover another 3,000 ha of flood protection area and 1,500 ha irrigation command area to fully realize the potential of these systems, and to achieve the original project targets. Continuous provision of technical assistance, including training and capacity development of the 10 UGs and 44 WUAs, dissemination of agriculture techniques, especially SRI at larger 21

44 scale, and monitoring of fish passes and facilitation of combined fishery, irrigation and flood management. H.2 Potential Expansion of Scope The XBF and XBH river basins in Khammouane and Savannakhet Provinces are major food production area in Lao PDR. As the area is vulnerable to water disasters and climate change impacts, improved water infrastructure system together with sustainable water management and efficient water use is important to secure agriculture production and local livelihoods. It is also important to Mekong Basin IWRM and environmental conservation considering the major role of agriculture in water resources use and its close linkage with fishery production and conservation. Large numbers of small scale irrigation systems exist in the area, which were developed several decades ago, and are in deteriorated situation, need rehabilitation and improvement. The Agriculture Development Strategy to 2025 and Vision to the Year 2030 issued by the Ministry of Agriculture and Forestry in May 2015 highlighted the importance of irrigation infrastructure development and irrigated agro-irrigation focal area development. It planned to expand national wide dry season irrigation areas from 173,300 ha in 2014 to 216,000 ha by 2020 and to 240,000 ha by 2025, and gave priority to rehabilitation of existing schemes. The on-going Bank funded KDP and the current M-IWRMP1 created a good momentum in government departments and local communities on participatory irrigation development and management, efficient agriculture water use and sustainable water resources management. There is a good opportunity to expand the current project scope to scale-up updating of flood protection and drainage systems and rehabilitation of irrigation schemes in the same project area through additional financing. Expansion of scope include 12 additional village-based small irrigation schemes and 5 additional flood protection and drainage systems in the XBF and XBH flood plain, which shall be in the government designated production focus zones. This expanded scope of work would benefit a total of 4,000 ha flood protection and drainage area, and 1,500 ha irrigation command area. There will also be provision of technical assistance, including establishment and training of UGs for upgraded floodgates and WUAs for rehabilitated irrigation schemes, and dissemination of agriculture techniques, especially SRI. H.3 Additional Financing for Expanded Scope The proposed AF to complete the originally designed scope and to further expand is US$ 5 million. Summary of Component 3.2 Fisheries Management in Southern Lao PDR A. Financial Status (End of 2015) As of 31 December 2015 the Component had disbursed US$1.02 million or 21 % of the US$4.91 million allocated amount. This compares with 10 % reported in the fifth supervision mission in March Operating costs during 2015 were approximately US$86,000 equivalent to more than US$12,000 per month. A detailed procurement plan for 2015 was prepared and approved in May This was updated in November 2015 to reflect the planned activities and expenditure during

45 B. Component Objectives This sub-component provides support for improved management of aquatic resources in the mainstream Mekong and the Xekong River (located in southern Lao PDR). It aime to establish effective community-based fisheries co-management in the regionally significant habitats through: (a) support to the fishing communities, including establishing Fishery Management Committees (FMC) at the community level, mainstreaming fisheries management in community (Kum Banh) development planning processes, and providing fishing communities with alternative livelihood opportunities; and (b) supporting the public sector, particularly Provincial and District level fishery agencies, to ensure adequate public sector capacity for control and surveillance, fish catch monitoring, the promotion of aquaculture, and restocking of key indigenous species. C. Progress to Date (End of 2015) Component 3.2 is being implemented by the Department of Livestock and Fisheries (DLF) under MAF. A Component Management Unit (CMU) was established in Pakse, Champasak Province, in Southern Lao. Funds became available for during the first quarter of The Component has made modest progress towards implementing planned activities. This appears to have been the consequence of the slow recruitment of national and international consultants, and the relative inexperience of the Component Manager to manage large and complex projects of this type. Project activities appear, in most cases, to be between 12 and 24 months behind schedule. Activities during 2013 and 2014 were limited to recruitment, procurement and office renovation. Project activities began in January 2015 with an Inception Workshop, held in Pakse. An Inception Workshop Report was prepared in Laos. During the last 12 months, activities have focused upon procurement of vehicles; the formal registration (establishment) of six fisheries management committees (FMCs) including socio-economic baseline surveys, support for alternative livelihoods and rural infrastructure, training in fisheries management planning, staff recruitment and the preparation of designs for hatchery renovation and construction. A more detailed description of implementation progress for each sub-component can be found in Annex A. Annex C contains a list of persons met during the MTR. E. Activities to Project Closing (March 2018) (Including Priority Action) Support for establishing community-managed fisheries management organizations (i) Establishment of Fishery Management Committees (FMC) including the formulation and implementation of a fishery Management Plan; and support for alternative livelihoods Establishment of Fishery Management Committees (FMC): Six Fishery Management Committees (FMCs) have been established in six Communes. Official approval from the District Governor was granted for each Kum Banh (KB). The certification also describes FMC member s roles and responsibilities. Ethnic Groups are common in three of the six kum banhs established. Draft socio-economic baseline surveys reports have been completed for five of the six KBs. Documentation remains outstanding describing the procedures adopted to establish these FMCs. The documentation should be prepared to include baseline survey results; descriptions of community engagement activities (including details of activities, who participated, how, when); meeting agendas; minutes of meetings; and potential impacts of the project on livelihoods (both positive and negative) on the project participants and other individuals. In 23

46 effect, the report should detail the free, prior and informed consultation process that led to the agreement through a series of meetings, including separate group meetings for: ethnic village chiefs; ethnic men; and ethnic women, especially those who live in the zone of influence of the Commune. The completion of this documentation for the 6 FMCs already established should be regarded as a priority for the Component. Establishing the remaining 9 FMCs as the foundation for the management planning process is also a priority for the Component to be completed during Fisheries management planning: Management plan formulation with established FMCs should begin next month. It is recommended that the IC and the National Fisheries Management Specialist prepare draft management plans, initially with two FMCs, one should represent an Ethnic Minorities KB. Preparation of Guidelines for Establishing Community-based Fisheries Management in Lao PDR: It is recommended that the Component prepare simple guidelines for these and future management planning activities, and for the establishment of further FMCs. Guidance for management planning should seek to combine the existing WWF Fisheries Co-Management Guidelines and the Management Planning Guidelines prepared by the International Consultant (IC). Importantly these guidelines should include the necessary procedures to ensure compliance with relevant WB safeguards policies including those covering ethnic minority and gender issues. In effects this document will provide simple and effective guidance for establishing community-based fisheries management in Lao PDR which are compliant with WB safeguards. The CMU agreed to prepare these Guidelines by 01 March It is suggested that the IC prepare these guidelines and that they be approved by the WB safeguards team, and translated into Lao, ahead of the first phase of management planning activities described above and scheduled to be implemented this month (February). The WB will provide Ethnic Minority Safeguard Procedures to support the preparation of these Management Guidelines. The preparation of maps to be included in the management plan documentation (illustrating the location of villages; KB and FCZ boundaries, potentially impacted communities; critical habitats, and other key features) will be a priority task for the GIS/Database Specialist. The Component should also explore means by which the fishery management planning process can be effectively integrated (internalised) into the kum banh development planning process to ensure that the management process is sustainable thereby ultimately supporting the project exit strategy. In the meantime, opportunities should be sought by the FMC to engage with the KB development planning process. To facilitate this, the component should seek to determine the timing of the next review of each KB development plan. It may be possible to create an institutional obligation or responsibility of the KB to formally integrate the fisheries management planning process into the development planning and review process. Alternative livelihood (AL) support: It appears that participatory and equitable procedures already exist or are exercised by villages and/or KB to identify the most vulnerable members of the community, including the elderly, women and youth, for targeting alternative livelihoods (AL) support. 24

47 These procedures and the recipients of AL support to date should be clearly documented for each KB by the Component. During future AL planning activities, the village or KB should be encouraged to target support to fishers whose livelihoods or food security may be impacted by the fishery management plan, particularly in cases where fishers are denied access to the resource following the implementation of fish conservation zones (FCZ). The CMU will procure all the necessary goods and services in support of the AL on behalf of the KB or village. To effect this, the Component is in the process of finalising documentation describing the required procedures for AL support activities in accordance with WB safeguards, and which will also describe procedures for procurement and administration. This documentation should be submitted to the WB for approval by 01 March AL support should be identified during the management planning activities, and administered without delay. Note that there is a risk of community disengagement from the project unless the AL support identified by the project to date is met soon. (ii) and (iii) Preparation and Implementation of Kum Banh Development Plans Documentation (Guidelines) describing the procedures to be followed for identifying rural infrastructure (RI) investments in accordance with WB safeguards and the KB development planning process have been prepared by the CMU. The Guidelines include procedures for procurement and administration. The Guidelines should be submitted for approval (formal No Objection) by the WB Social safeguards specialist by 01 March These Guidelines will serve as a useful model for the equivalent documentation (guidelines) required/in preparation for the AL support described above. The Component should begin implementing the RI projects as soon as possible Support for Public Sector Fishery Management (i) Baseline and Routine Monitoring Procedures During Phase II of this MTR FMCs and fishers expressed interest to monitor the performance of their fisheries management plans using the MRC Fisher Catch Logbook approach developed by the MRC. These monitoring activities should be supported by the Component including fisher training shortly after the management plan has been formulated with the FMC. Further guidance and materials to support this this monitoring will be provided by the Component s National Fisheries Monitoring Specialist, the WB Fisheries Specialist, and the MRC Fisheries Programme. The design and development of a database to store and process the fisheries monitoring (and baseline) data should be a priority activity for the GIS/Database Specialist. (ii) Support for Aquaculture and Stocking Complete the required safeguards activities for the new hatchery site. It will be necessary for a WB environmental safeguards specialist to visit the new site selected for the new hatchery in Attapeu to review possible environmental impacts. Consideration will need to be given to the presence of any threatened species, traditional uses of ecosystem services by local community and whether claims over the forest exist. To meet the social safeguards, consultation and participation meetings should be held with villagers; meeting minutes should be documented with clear indication that there are no land use claims in that particular site. Broad community support for the construction should also be sought. Further guidance can be found in the resettlement policy framework (RPF). 25

48 Documentation is also required that demonstrates that the WB resettlement policy framework has been adhered to with respect to the land donation from the District authority to the DAFO for the proposed site for the new fish hatchery in Attapeu Province. A full Environmental Management Plan (EMP) will need to be prepared before the new hatchery construction can begin. The WB provided the PMU/CMU with an example EMP prepared for a similar hatchery in Cambodia. It is recommended that the project recruit a specialist environmental consultant to prepare the EMP. Public consultation and disclosure of the proposed works will be necessary. The PMU will prepare the EMP by 01 April In addition, MONRE should be consulted to identify any national requirements with respect to procedures to be followed or documents that should be prepared. Contract the hatchery design specialist and approve the detailed rehabilitation and construction designs. Begin the renovations and construction work. Recruit the regional fishery hatchery expert. (iii) Local Government Capacity Building These activities are designed to build local Government fisheries line agency (PAFO and DAFO) capacity to support the co-management process and include strengthening capacity in MCS, fisheries management and planning, fisheries law and monitoring and evaluation. Planned Component activities to deliver this strengthened capacity (with accompanying budget allocations) need to be clearly described and included in the Component work plan, the budget and procurement plan. Activities should begin as soon as possible. It was suggested that the proposed CTA could help with these tasks Sub-Component Management and Administration Prepare and implement a 90 day (3 month) work plan for the priority activities described above and to complete the recruitment of component staff (see 26

49 Table 1 below). Work plans for the remainder of 2016 and 2017 should also be prepared to ensure that planned activities are efficiently sequenced and achievable. Prepare a detailed component budget for both Prepare am updated Procurement Plan for NB: Separate Procurement plans are required for both AL support and RI projects. 27

50 Table 1 Status and required action to recruit remaining Component staff. Position Status Action Responsible Expected Start Finalise ToR. PMU/CMU Formal approval of ToR by WB WB Chief Technical Advisor (CTA) Draft ToR prepared Advertise internationally PMU Review cvs and make recommendations PMU/CMU Jun-16 Approval of 1st and 2nd choice candidates WB Appoint PMU Finalise ToR. PMU/CMU Hatchery Design Expert ( to approve Single source contract has also been Formal approval of ToR and preferred candidate WB hatchery designs) prepared by PMU Appoint (by means of single source contract?) PMU Finalise contract PMU/CMU Regional Hatchery Management Candidate selected (SI), contract under Review Contract WB Consultant negotiation Appoint PMU Finalise contract PMU/CMU National Fishery Management Candidate selected (SV), Contract under Review Contract WB Consultant negotiation Appoint PMU 15-Feb Jun Feb Prepare ToR PMU/CMU/ASH 01-Mar National Fishery Monitoring and Candidate cvs reviewed and preferred Formal approval of ToR WB Evaluation Specialist candidate identified (KP). Appoint (by means of single source contract?) WB Appoint PMU 01-May Prepare ToR PMU/CMU/ASH 01-Mar Formal approval of ToR WB GIS/database Specialist (national) No progress Advertise nationally PMU Review cvs and make recommendations PMU/CMU/ASH Approval of 1st and 2nd choice candidates WB Appoint PMU 01-May Review cvs and make recommendations PMU/CMU Vic to report? Engineers (x2) to support infrastructure CV s sent to PMU for review. Approval of 1st and 2nd choice candidates WB projects Appoint PMU 15-Feb F. Safeguard Issues An Environmental and Social Management Framework (ESMF) has been prepared to ensure that the potential negative impacts of the project activities to be identified are properly assessed and mitigated. It is recommended that the CMU become more familiar with the social and environmental safeguard instruments, in particular the Resettlement Policy Framework (RPF) (mainly relevant to access restrictions arising from management control measures such as fish conservation zones (FCZ)); Indigenous Peoples Planning Framework (IPPF) (procedures when Ethnic Groups are present in the project area) and the Environment and Social Management Framework (ESMF) (for environmental screening and mitigation measures). Hatchery: Construction of one (1) New Hatchery in Attapeu and the Rehabilitation of two (2) hatcheries in Champasack and one (1) in Sekong. During the project preparation, the Ministry of Natural Resource and Environment (MONRE), has prepared an Initial Environmental and Social Examination (IESE) for the MIWRMP, which included the proposed construction and rehabilitation of hatcheries of Component 3.2, however, during the course of project implementation, the Department of Livestock and Fisheries changed the location for the hatchery for Attapeu. The Terms of Reference for engineering design of the hatcheries includes detailed design of the proposed hatcheries as well as the task to conduct social and environmental screening of the location of hatcheries using MIWRMP ESMF. With this change in the location of the proposed new hatchery in Attapeu, Component 3.2 is required by the Project to prepare an Environmental Management Plan and submit to the Bank for its no-objection prior to construction contract award. Community Fisheries Management Guidelines: Component 3.2 will prepare a guideline document which will provide guidance on formation of FMCs, and development and implementation of fishery management plans. The guidelines will also ensure the active participation of target beneficiaries, ethnic groups and women. 28

51 Community Rural Infrastructure Investments: Component 3.2 hired one (1) Rural Infrastructure Engineer and with the assistance from DAFO, was able to ensure that the fifty (52) proposed locations for the rural infrastructures comply or follow the ESMF. Together with the target communities, Component 3.2 prepared and accomplished fifty-two (52) Safeguard Screening Checklist using the Poverty Reduction Fund (PRF) format. Although, there is not much difference in the format, Component 3.2 management decided to revise the checklist using the MIWRMP format. No major issues or negative impacts related to social and environmental aspects were raised. Component 3.2 will prepare a Rural Infrastructure Investment Guidelines that would incorporate safeguard procedures to ensure compliance to the ESMF during implementation of civil works, which would particularly involve participation of ethnic groups and women. Provision of Alternative Livelihood: Component 3.2 will also prepare Guidelines on Alternative Livelihood to ensure active participation of target beneficiaries, ethnic groups and women. This is also to mitigate possible negative impacts on the resource restrictions related to the enforcement of Fishery Conversation Zone by the Department of Livestock and Fisheries in the target areas. Component 3.2 also re-organized and established the Fishery Management Committee to ensure compliance with the implementation of safeguards and increase awareness of the target villages and Project Affected Persons on the project s grievance mechanism. The procedures that have been adopted by the Component are largely already compliant with WB safeguards policy. The required action relates mainly to improving the documentation describing the procedures used by the Component to establish the FMC, prepare the management plans; support alternative livelihoods (AL) and to identify, and disburse funds for, rural infrastructure (RI) projects. G. Component Challenges and Issues Component 3.2 has made modest progress towards implementing its planned activities. This appears to have been largely the consequence of the slow recruitment of national and international consultants, and the relative inexperience of the Component Manager. To achieve the Component objectives it will be necessary to rapidly strengthen the capacity of the Component by recruiting a team of highly experienced consultants as described above including a Chief Technical Advisor (CTA). This advisor must have considerable experience of community-based fisheries management gained in Lao under projects of a similar scale and complexity; be capable of advising on all the component activities; and be a proficient and proactive project manager. Recruiting the team of consultants is therefore a priority for the PMU and CMU. Priority activities for this recruitment and for each sub-component are described in Section E above. H. Component Indicators and Status: Current and Proposed Modifications Progress measured against the existing Component Performance Indicators contained in the PAD is zero in all cases. Some progress has been made with respect to the achievement of Intermediate Indicator since six FMC have been formally established (registered) in the project area. No management plans have yet been completed or implemented, and no functioning hatcheries have been established. However, some good progress has been achieved in support of the planned management planning activities. The six FMCs established to date have begun identifying key management issues to be addressed; control measures such as fish sanctuaries 29

52 and controls over illegal fishing gears; and penalties (sanctions) for non-compliance. Draft socio-economic baseline surveys reports have been completed for five of the six kum banhs. Detailed designs for hatchery renovation and construction works have been prepared and await technical approval before works can begin. The proposed revised indicator include: PDO Result Indicator Unit of Baseline Measure Fisheries Management Committees (FMCs) with management plans Number implemented. Intermediate Result Indicator Number of FMCs fishery management plan formulated, approved and Number announced. Number of Villages receiving Number alternative livelihood (AL) support Number of fully functioning hatcheries Number producing fingerlings. 3 4 I. Additional Financing Given the modest progress and expenditure made by Component 3.2 to date, no additional financing for the Component is expected, in which case, only Scenario A is relevant. However, the CMU has requested that the budget to support alternative livelihoods be increased from $215,000 to $325,000. The proposal to increase the AL support budget was endorsed by the WB Social Safeguards Specialist during Phase II of this MTR who considered the current support to be inadequate. If additional financing is made available, the required increase in the budget to support alternative livelihoods may be met. A no-cost extension may be proposed mid-way through 2017 depending upon Component progress and achievements. The PMU is requested to prepare forecasted expenditure in 2016 and 2017 by Sub-Component activity. 30

53 Annex 4: Fiduciary Financial Management input to MTR mission January 25 to 29, 2016 Financial Management: Little progress has been made since the last FM mission conducted in November Hence, the overall Financial Management performance remains at Moderately Satisfactory. A number of agreed actions still need to be addressed ie the completion of the accounting data entry into the accounting system, improvement of the IFR report and timely submission of the audit report for fiscal year Disbursement: Disbursement as of February 12, 2016 is at 61% (an increase from 53% in the November 2015 mission). The disbursement rate is considered on track since the project has about two more years of implementation remaining. In order to keep the disbursement rate realistic, the project is advised to process withdrawal application for documentation of the expenditures incurred more frequently ie more than once a month. Exchange Rate: 1 XDR = USD as of 03-Feb-2016 Today s exchange rate is 1 XDR = USD. This means that the signed grant amount of XDR 11.8 million at today s exchange rate is equivalent to USD 16,310,904 and not USD 18 million as at the time of the grant agreement signing. In preparation of the annual budget for the fiscal year 2016, the project is advised to take into account the actual undisbursed balance as per the Bank s client connection system including the exchange rate fluctuation (XDR against USD) when revising the budget in order to have sufficient fund to carry out the important activities. Annual Work Plan and Budget: It was agreed that the annual aggregated budget for the fiscal year 2016 will be finalized and sent to the task team leader for review and clearance during this mission. Staffing: Following the recent transactions review of payment document under sub-component 3.2, the project is advised to ensure that the FM staffing arrangement, payment verification and approval process under sub-component 3.2 follow the procedures as set in the approved Financial Management Manual. Financial Reporting: The submitted IFR report for quarter ended September 30, 2015 needs further improvement. Please refer to our acknowledgement letter dated December 24, The next quarter IFR for the period ending December 31, 2015 is due for submission by February 15, External Audit: The mission was informed that the project is currently under contract negotiation with the auditor. The project is reminded that the audit report for fiscal year