Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Social Protection Unit South East/South AFTSE Africa Region Document of The World Bank FOR OFFICIAL USE ONLY RESTRUCTURING PAPER ON A PROPOSED RESTRUCTURING FOR A KENYA YOUTH EMPOWERMENT PROJECT CREDIT IDA 4697 (Board Approval Date: May 4, 2010) TO THE REPUBLIC OF KENYA October 18, 2012 Report No: 73215-KE This document has restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without the World Bank authorization.
ABBREVIATIONS AND ACRONYMS DYO ESMF FM GoK KKV KIA KEPSA KYEP MIS MOYAS OPM PCU PDO RSR TNA District Youth Officers Environmental and Social Management Framework Financial Management Government of Kenya Kazi Kwa Vijana Kenya Institute of Administration Kenya Private Sector Alliance Kenya Youth Empowerment Project Management Information System Ministry of Youth and Sports Office of the Prime Minister Project Coordination Unit Project Development Objectives Rapid Social Response Fund Training Needs Assessment Regional Vice President: Makhtar Diop Country Director: Johannes C.M. Zutt Sector Manager / Director: Lynne Sherburne-Benz/ Ritva Reinikka Task Team Leader: William David Wiseman 1
KENYA KENYA YOUTH EMPOWERMENT PROJECT P111546 CONTENTS Page A. SUMMARY... 4 B. PROJECT STATUS... 4 C. PROPOSED CHANGES... 6 D. APPRAISAL SUMMARY... 12 ANNEX 1: RESULTS FRAMEWORK AND MONITORING... 17 2
Restructuring Paper Data Sheet Restructuring Restructuring Type: Level one Last modified on date : 10/15/2012 1. Basic Information Project ID & Name Country Task Team Leader Sector Manager/Director Country Director Original Board Approval Date 05/04/2010 Original Closing Date: 02/28/2015 Current Closing Date 02/28/2015 Proposed Closing Date [if applicable] EA Category Revised EA Category EA Completion Date 01/13/2010 Revised EA Completion Date P111546: Kenya Youth Empowerment Project (FY10) Kenya William David Wiseman Lynne Sherburne-Benz Johannes C.M. Zutt N/A B-Partial Assessment C-Not required 2. Revised Financing Plan (US$m) Source Original Revised BORR 85.00 0.00 IDA 60.00 17.03 Total 145.00 17.03 3. Borrower Organization Department Location Ministry of Finance Kenya 4. Implementing Agency Organization Department Location Kenya Ministry of Youth and Kenya Sports and Kenya Private Sector Alliance 3
5. Disbursement Estimates (US$m) Actual amount disbursed as of 10/12/2012 4.37 Fiscal Year Annual Cumulative 2011 1.24 1.24 2012 3.13 4.37 2013 7.63 12.00 2014 3.03 15.03 2015 2.00 17.03 Total 17.03 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured project trigger any new safeguard policies? If yes, please select from the checklist below and update ISDS accordingly before submitting the package. N 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The original Project Development Objective (PDO) is: to support the Government of Kenya s efforts to increase access to youth-targeted temporary employment programs and to improve youth employability. 7b. Revised Project Development Objectives/Outcomes [if applicable] The proposed revised PDO is: to support the Government of Kenya s efforts to improve youth employability. 4
KENYA YOUTH EMPOWERMENT PROJECT RESTRUCTURING PAPER A. SUMMARY 1. This Restructuring Paper seeks the approval of the Executive Directors to restructure the Kenya Youth Empowerment Project (KYEP), (Credit No. 4697-KE). The proposed restructuring will cancel Component 1 of the project and modify the scope of Components 2 and 3. These proposed modifications to the project will result in the following changes: (i) a revision of the Project Development Objective (PDO); (ii) a revision of the results framework; (iii) retroactive financing of the operating costs in the amount of $650,000 incurred on or after January 1, 2012; and (iv) an adjustment to the project s implementation arrangements, including its financial management and procurement arrangements. As a result of the proposed restructuring, OP4.10 and OP4.01 will no longer be triggered and the environmental category for the project will change from B, partial assessment to C, not required as a result of cancelling Component 1, which comprised the funding of small-scale civil works that had environmental and social effects. B. PROJECT STATUS 2. The Project Development Objective is to support the Republic of Kenya s efforts to increase access to youth-targeted temporary employment programs and to improve youth employability. The PDO was originally designed to be achieved through three components: (i) Component 1 supporting Labor-intensive Works and Social Services (US$43 million equivalent); (ii) Component 2 supporting Private Sector Internships and Training (US$15.5 million equivalent); and (iii) Component 3 supporting Capacity Building and Policy Development (US$1.5 million equivalent). This project was also supported by two recipient-executed Rapid Social Response (RSR) grants, one for Component 1 (US$1.0 million) and the other for Component 2 (US$0.5 million). 1 To date, the project has disbursed US$12.6 million from the credit and US$0.9million from the two grants. 2 3. Progress towards the Project Development Objective. Considerable progress has been made under all three components since the project was declared effective in August 2010. However, the project is currently rated moderately unsatisfactory because of challenges relating to its financial management and implementation progress 1 These two RSR grants were Trust Funds 97025 and 97301. 2 Of the two trust funds, Trust Fund 97301 has fully disbursed the allocated resources of US$ 0.5 million. This trust fund was closed on June 30, 2012. Trust Fund 97025 was cancelled, and the remaining balance was transferred into two new trust funds (Trust Fund 12919: Support for the Internship Program of the Kenya Private Sector Alliance Project, in the amount of US$585,000, signed August 30, 2012 and Trust Fund 12914: Support for the formulation of the Kenya National Safety Net Program, in the amount of US$392,000). 5
associated with Component 1 (see below). These have led the Government of Kenya (GoK) to request the restructuring of this project. The project s compliance with safeguards is currently rated as satisfactory. The rating for procurement is moderately satisfactory. It is anticipated that, as Components 2 and 3 are progressing well, the project s ratings will be upgraded following this restructuring. The progress being made in each of the three components is detailed below. 4. Progress with Component 1: Labor-intensive works and social services. This component aims to help the government to reduce the vulnerability of unemployed young women and men by expanding and enhancing the effectiveness of the Kazi Kwa Vijana (KKV) program. The component is implemented by six line ministries 3 in eight project districts 4 and is coordinated by the Office of the Prime Minister (OPM). Of the US$9.2 million disbursed by the World Bank for this component to date, US$8.5 million has been transferred to the project accounts of the six implementing line ministries and the OPM. Financing was allocated to the line ministries based on the 406 approved public works sub-projects. Sub-project activities were then started in some areas, mainly run by the Kenya Forestry Services, the Kenya Roads Authority, and some water boards. The OPM was in the process of finalizing the management information system (MIS) and the complaints handing system and of strengthening other safeguards, for example, geomapping data on all sub-projects. 5. In June 2011, the World Bank carried out a Financial Management Review of the project, which identified some weaknesses in the financial management of Component 1 related to the KKV program. In response to these findings and based on implementation experience to date, the OPM informed the World Bank that the decentralized nature of the component, working through six line ministries in eight districts in the first year, would make it difficult to strengthen systems sufficiently to ensure effective control over all sub-project activities. As a result, the GoK requested the World Bank to restructure the project by cancelling Component 1 and reallocating these funds to other activities in the World Bank Kenya portfolio. At the same time, the GoK repaid the World Bank all prior disbursements related to Component 1 of the project. 5 The World Bank confirmed that it will continue to support social protection in Kenya and is exploring the option of financing a new operation to provide more strategic engagement in this sector. 6. Progress with Component 2: Private Sector Internship and Training. The component aims to increase youth employability by providing young people with work experience and skills through training and work placements in the formal and informal sectors. The component is managed by the Kenya Private Sector Alliance (KEPSA) with the training provided by third-party providers and work placements offered by the private sector. The first of the eight internship cycles (cycle 1) was launched in June 2011 after some delays due to the difficulties involved in procuring training providers. A total of 1,057 interns completed the life skills training. Of these young people, 916 were subsequently selected for work placements with 205 employers. This was done through a 3 These are the Ministry of Water and Irrigation, the Ministry of Regional Development Authorities, the Ministry of Roads, the Ministry of Forestry and Wildlife, the Ministry of Environment and Mineral Resources, and the Ministry of Local Government. 4 Nairobi, Mombasa, Nakuru, Machakos, Kiambu, Wajir, Migori, and Kakamega. 5 The last related repayment was processed by the World Bank on September 4, 2012. There are no outstanding repayments related to prior disbursements for Component 1. 6
matching process that involved the young people being interviewed by prospective employers. After an initial six-week period of work experience, the interns completed core business skills training and, for those in the informal sector, entrepreneurship training before completing their final work placement. The payment system for youths was designed and is operational, and the MIS is up and running. Overall, despite some initial delays in procuring third-party training providers, this component is progressing well. 7. Progress with Component 3: Capacity Building and Policy Development. This component aims to enhance the capacity of the Ministry of Youth and Sports (MOYAS) to implement the national youth policy and increase the institutional capacity for youth policy planning. The carrying out of the Social Audit work to improve transparency and accountability in the project has progressed well, and Action Aid has submitted the draft training manual to project management. The Communication Strategy and Training Needs Assessment (TNA) have also been finalized. MOYAS anticipates that elections for the National Youth Council will resume late in the year. Overall, activities under this component are progressing well. 8. Restructuring Mission. The government and the World Bank carried out a Restructuring Mission in November 2011 to agree on the scope of the proposed restructuring of the project. In this Mission, it was agreed that, in addition to cancelling Component 1, the restructuring would: (i) enable Component 2 to provide further training to master craftsmen and strengthen KEPSA s implementation capacity and, (ii) provide additional resources to the policy-related activities under Component 3 to enhance MOYAS s leadership on youth employment issues. The Mission also agreed to revise the PDO and to shift overall project coordination from the OPM to MOYAS. 9. These agreements between the government and World Bank were detailed in the Mission Aide Memoire dated March 22, 2012 and are consistent with the description of the project restructuring that follows. C. PROPOSED CHANGES 10. Project Development Objective. The original PDO for the KYEP was to support the Government of Kenya s efforts to increase access to youth-targeted temporary employment programs and to improve youth employability. Given that the project restructuring will cancel Component One, which was designed to support the Government s efforts to increase access to youth-targeted temporary employment programs through the KKV, the PDO will be revised to support the Government of Kenya s efforts to improve youth employability. 11. The revised PDO will be achieved with two components: (i) Private Sector Internships and Training offered by KEPSA and (ii) Capacity Building and Policy Development for MOYAS. These two components include all activities in the original Components 2 and 3 of the KYEP as well as the enhancements proposed in this Restructuring Paper. 12. Results/Indicators. Progress towards the original PDO is measured through four indicators: (i) the number of additional KKV beneficiaries; (ii) the number of additional person days provided in KKV public works; (iii) the percentage of interns who complete 7
the internship and are immediately employed by their internship employer or who have found employment with a new employer or are starting a business (disaggregated by gender); and (iv) the percentage of interns employed or self-employed six months after they complete their internship (disaggregated by gender). The key performance indicators will be simplified by dropping the first two indicators (for the public works temporary employment provided by the KKV) and retaining the third and fourth indicators (measuring the percentage of interns who find employment or start a new business within six months of completing their internship). All other intermediate results indicators for Component 1 will be deleted. These detailed changes are described in Annex 1. 13. Components. This restructuring will involve cancelling Component 1 in its entirety and modifying Components 2 and 3. The restructuring will also slightly expand the scope of Components 2 and 3 in ways outlined in the paragraphs below. Most notably, the component numbers will be dropped. Component: Private Sector Internships and Training Program (formerly Component 2) 14. Enhanced Training for Master Craftsmen. The quality of internships and training offered to interns in the micro and small enterprise (MSE) sector depends heavily on the pedagogical and technical skills of the master craftsmen. The program currently offers initial training for the master craftsmen who provide work placements to interns. To improve the skills of the master craftsmen, this training will be expanded to a second round, the content and timing of which will be determined by KEPSA in consultation with KEPSA s MSE Sector Board. Approximately 500 master craftsmen are expected to benefit from this training. 15. KEPSA s Implementation Capacity. KEPSA s experience in implementing cycle 1 of the internship program has demonstrated the need for additional capacity within the project coordination unit (PCU, also called the KYEP Department). This additional capacity will be provided by the project and will consist of: (i) a project officer to manage the project in Kisumu once the expansion takes place and (ii) an office assistant and an internship assistant. Component: Capacity Building and Policy Development (formerly Component 3) 16. Communication Strategy. The KYEP Communication Strategy has been completed. The budget for the strategy is currently managed by MOYAS, but after the restructuring, it will be reallocated between MOYAS and KEPSA as follows: (i) the portion of the budget for those activities to be carried out by KEPSA related to Component 2 will be shifted from MOYAS to KEPSA; (ii) the budget for communication activities implemented by MOYAS as defined in the strategy will remain with MOYAS; and (iii) MOYAS will assume responsibility for those communication activities related to the overall project that would have been carried out by the OPM prior to the restructuring. Finally, those activities related to Component 1 will be dropped. 17. Social Audit. While the Social Audit was originally included to review the implementation of both Components 1 and 2, its application was more important to the oversight of Component 1 than Component 2. This is because Component 2 has a number of additional monitoring and evaluation mechanisms, including an impact evaluation and regular process evaluations, which will continuously assess project implementation and 8
results even in the absence of the social audit. Because of this, the contract with Action Aid to carry out the social audit will be canceled. 18. National Youth Council and MOYAS Policy Development. The lessons drawn from the internship and training program are intended to inform the development of youth employment policies by MOYAS and deepen the understanding of youth issues on the part of the ministry s staff members. The project includes a budget to support the National Youth Council and to fund policy studies of youth issues. As part of the restructuring, the ability of MOYAS to develop policy will be strengthened by increasing the resources set aside to fund policy studies. The added resources will enable MOYAS to synthesize the large body of research on youth issues both within and outside Kenya, to carry out other smaller policy studies needed to inform Kenya s youth policies, and to integrate the lessons learned from the KYEP into the design of future youth programs and policies. The goal of these activities is to ensure that lessons from the KYEP Internship and Training Program are fully incorporated into the design of future youth programs and policies. 19. These proposed changes to these components will enhance the achievement of the revised PDO. The other elements of Components 2 and 3 will continue as detailed in the Project Appraisal Document. 20. Safeguards. The Environmental Assessment rated the project as Category B, partial assessment since Component 1 was expected to fund small-scale civil works with limited and reversible adverse environmental and social effects on human populations or environmentally important areas that will be site-specific and in most cases can be relatively easily mitigated. The project triggers two safeguards OP 4.01 (Environmental Assessment) and OP 4.10 (Indigenous Peoples). As explained in the Project Appraisal Document, these two safeguards were triggered only in response to the proposed activities under Component 1. This is evident from the fact that the Environmental and Social Management Framework (ESMF) for the project was designed and put into operation for Component 1 only, as was the Indigenous People s Policy Framework. The proposed restructuring eliminates any civil works that may have adverse environmental and social effects as all remaining activities will take place in urban centers. As a result, the Environmental Assessment rating of the Project is modified to Category C, not required and the OP 4.10 and 4.01 are no longer triggered. An Environmental and Social Safeguards Completion Report for Component 1 was prepared in November 2011 that found the implementation of safeguards to be satisfactory up to that point. 21. Institutional Arrangements. The institutional arrangements for the project will be modified to eliminate those related directly to the implementation of Component 1. The institutional arrangements for Components 2 and 3 remain unchanged. 22. Responsibility for overall project coordination will shift from the OPM to MOYAS. This is because: (i) there is an existing subsidiary agreement between MOYAS and KEPSA that governs the flow of funds for Component 2 and (ii) the project fits naturally within MOYAS mandate to support youth skills development. 23. As the project s institutional coordinator, MOYAS will monitor all KYEP activities as needed, coordinate all other government bodies, review KEPSA s progress reports and evaluation studies, help to disseminate lessons learned about increasing youth 9
employability, and provide the Minister of MOYAS with the information needed to inform Parliament and other government and external bodies about progress in implementing the KYEP. Additionally, in line with the KYEP Project Appraisal Document (PAD), MOYAS will prepare a consolidated work plan for the project before the start of each fiscal year and submit it to the World Bank for review and clearance. As an input to this consolidated work plan, KEPSA will submit to MOYAS an annual work plan (and budget) that will detail the activities planned for the Training and Internship Component. 24. Although the PAD for the KYEP assessed the implementation capacity of MOYAS as weak, MOYAS s existing capacity is deemed to be sufficient to carry out these activities effectively. Additionally, the revised project budget includes new activities under Component 3 to support this new mandate of MOYAS. 25. Financing. The following table details the current and proposed credit allocations to the project. As noted above, these resources are complemented by financing from two RSR grants. Components/Activities (in US$ millions) Current Proposed Component 1: Labor-intensive Works and Social Services Training (Life skills and construction-related skills) 4.00 0.00 Cash to youth 23.47 0.00 Public works tools, materials etc. 12.53 0.00 Impact evaluation 0.47 0.00 Vehicles PCU 0.10 0.00 Office equipment and furniture 0.14 0.00 Operating costs 0.49 0.00 International consultants 0.24 0.00 Local consultants 0.18 0.00 OPM PCU consultants 0.40 0.00 Technical audit 0.08 0.00 Total excluding contingencies 42.10 0.00 Contingencies 0.90 0.00 Total 43.00 0.00 Component 2: Private Sector Internships and Training Internship (stipends to interns and employers) 1/ 7.78 7.19 Training 2/ 5.29 5.33 Impact evaluation and beneficiary assessment 3/ 0.32 0.20 KEPSA operating costs 4/ 0.26 0.20 PCU operating costs 5/ 0.20 0.16 PCU staff 6/ 1.08 1.00 Capacity building 0.05 0.007 Office equipment and furniture 0.04 0.004 Communications strategy 7/ 0.00 0.12 Total excluding contingencies 15.00 14.21 10
Contingencies 0.50 1.41 Total 15.50 15.62 Component 3: Capacity Building and Policy Development Training 0.68 0.68 Social audit 8/ 0.25 0.09 Communication activities 9/ 0.30 0.15 National Youth Council and MOYAS policy development 0.14 0.28 Office equipment and furniture 0.00 0.00 Monitoring and coordination 0.00 0.05 Operating costs 0.08 0.08 Total excluding contingencies 1.45 1.33 Contingencies 10/ 0.05 0.08 Total 1.50 1.41 Grand Total 60.00 17.03 Notes: 1/ The credit resources for internships have been decreased to account for an increase to this budget line from the RSR grant. 2/ The increase in the training budget is due to the additional training to be provided to master craftsmen (an increase of US$40,000). 3/ The credit resources for the impact evaluation and beneficiary assessment have been decreased to account for an increase to this budget line from the RSR grant. 4/ This budget line item did not appear in the original PAD budget and was subsumed under KEPSA PCU staff and operational costs. This new budget line was calculated but was combined with those costs that were specific to KEPSA and that were previously listed under KEPSA PCU staff and operational costs. The revised budget figure is calculated as 1.3 percent of the total budget for this component over four years. This is only an estimate and, as per the agreements in the Aide Memoire, KEPSA will develop an annual budget and work plan that will be approved annually. 5/ This budget line has been increased by less than $13,000 to accommodate the cost of MIS licenses and training for the three new staff, together with the cost of their office equipment. 6/ The PCU staff costs have been increased to reflect the decision to add three new staff positions to the PCU at an estimated cost of $179,653. This budget line includes $65,000 for the PCU to procure the services of individual consultants. This was in the original budget in the PAD. 7/ Transfer from original budget for Component 3 of the KYEP. 8/ This is an estimated reduction based on the decision to cancel the contract. The exact amounts will be determined in reference to terms and conditions of contract. 9/ $117,085 was transferred to KEPSA and $39,102 was moved to contingencies. 10/ MOYAS retains the 25 percent share of the Component 1 budget for the KKV as part of contingencies. 26. Financing Plan. Financing Plan (US$ million) Original Revised Source Local Foreign Total Local Foreign Total Borrower/Recipient 85.0 0.0 85.0 0.0 0.0 0.0 IDA 58.0 2.0 60.0 16.30 0.73 17.03 Total 143.0 2.0 145.0 16.30 0.73 17.03 27. Disbursement Arrangements. There are no changes to the disbursement arrangements, other than to cancel the designated account for Component 1. 11
28. Reallocations. Category 12 Amount of the Financing Allocated (SRD m.) Percentage of Expenditure to be Financed (inclusive of taxes) Current Revised Current Revised Current Revised Component 1: Goods, works, consultant services, and cash for youths for Component 1. 27.7 0.00 100% 0.00 Component 2: Goods, works, consultant services and stipends (for youth and employers) for Component 2. Component 3: Goods, works, and consultant services for Component 3. Component 2: Goods, works, consultant services, internship stipends, and operating costs for Part 2 of the project. 10.0 10.08 100% 100% Component 3: Goods, works, consultant services, and operating costs for Part 3 of the project. 1.0 0.94 100% 100% Total Amount 38.7 11.02 29. Cancellations. This restructuring will cancel Component 1 of the KYEP. The cancelled amount includes the full value of Component 1 at the time of Board approval, given that the prior disbursements made for activities under this component have been repaid in full by the GoK. A small amount of funds will be reallocated from Component 3 to Component 2 (US$0.12 million). The remaining funds (US$42.97 million equivalent) will be cancelled. The rationale for this is detailed in paragraphs 4 and 5. 30. Financial Management. The financial management (FM) arrangements for the project, as detailed in the FM Annex in the PAD, remain unchanged except that all FMrelated activities that pertain exclusively to Component 1 will be cancelled. 31. Procurement. There are no changes to the procurement arrangements and assessment, other than to delete those related to Component 1. As the institutional project coordinator, MOYAS will be responsible for submitting the revised consolidated procurement plan to the Bank. A procurement plan for the internship program and for the capacity building and policy development component was approved by the World Bank as part of the Restructuring Mission in November 2011. 32. Closing Date. There is no change to the closing date, which is February 28, 2015. 33. RSR Grant: Republic of Kenya Support to the Kenya Youth Empowerment Project Grant No. TF97025. Component 1 of the KYEP was supported through a RSR
grant of US$1.0 million in addition to the credit (see paragraph 2). These RSR resources were reallocated to two new trust funds that will: a. Support the formulation of a National Safety Net Program: This portion of the RSR grant resources will be allocated to the OPM, which the OPM intends to use: (i) to support the Social Protection Secretariat to enable it to effectively manage the reform of the safety net sector into a consolidated national safety net program and (ii) to finance a mapping study on youth employment. It is estimated that this will cost $0.392 million. b. Support the Internship and Training Component of the KYEP: This portion of the RSR grant resources will be allocated to KEPSA to finance stipends to interns and employers, the training of the interns, and the operating costs of the internship program. This cycle is scheduled to run from July 2012 to March 2013 and will cover 1,300 interns. The total estimated budget is $0.585 million. 34. This reallocation of the RSR grant resources is fully consistent with the development objectives of the RSR grant and the activities identified in the legal agreement. The revised budget for the RSR grant is presented in the table below. Resources to the Office of the Prime Minister RSR Grant (TF97025) (in US$ millions) Support for the formulation of the National Safety Net Program 0.392 Resources to KEPSA for the KYEP Training and Internship program Support for the KEPSA internship program 0.585 Grand total 0.977 D. APPRAISAL SUMMARY 35. Economic and Financial Analysis. There is no change to the economic and financial rationale for investing in Kenya young people. The detailed economic and financial rationale for Components 2 and 3 remain, while that for Component 1 is no longer applicable. While the proposed cancellation of Component 1 will reduce the overall number of young people who will benefit directly from the project, there continues to be a strong economic and financial rationale for the restructured project. The internship program is testing methods to increase youth employability in Kenya (for example, involving the private sector in designing training programs and using internships to help young people learn about the jobs market). This pilot will provide a much needed evidence base from which the government can draw lessons to guide its policies and services to promote youth employment in Kenya. In addition, the project is helping the government to test alternative ways to deliver these employment services to young people youth and is building the capacity of MOYAS to manage these processes. 36. Technical. The initial technical analysis for Components 2 and 3 is still relevant, but the proposed cancellation of Component 1 means that the technical analysis related to this component is no longer applicable. The operations manuals for Components 2 and 3 will be revised to reflect the changes laid out in this Restructuring Paper. 13
37. Social. The changes to the KYEP discussed above will change the social impact of the project. Specifically, the possible adverse environmental impacts, the triggering of OP 4.10, and the potential benefits to young indigenous people related to Component 1 are no longer applicable. As a result, the safeguards ratings for the project have been revised (see paragraph 20). 38. Environment. The proposed changes to the project will result in a change in the environmental assessment of the project from Category B, partial assessment to C, not required and OP 4.01 will no longer be triggered. This is because, with the cancellation of Component 1, there will be no civil works with any potential environmental and social effects. 39. Exceptions to Bank Policy. This restructuring does not require any exceptions to IDA policies. 14
40. Risk. The country-level risks remain unchanged. A number of the risks that were identified in the PAD related only to Component 1 and are thus no longer relevant. Based on the revised risk matrix, the overall risk rating is downgraded from substantial to moderate. Project-level Risks Lack of adequate implementation capacity the OPM has successfully implemented the KKV to date, but they have no previous experience of implementing an IDA-supported project. Weak social accountability and governance environment this may be a risk to the implementation of the KYEP. Failure to target the intended beneficiary group this may affect the main objective of the project. Proposed Change Delete Continue and modify risk mitigation activities to apply to Component 2 and 3 only. Continue, applied to Component 2 only Risk Mitigation Activities The project includes support to strengthen OPM, KEPSA, and MOYAS. The members of the project coordinating unit (PCU) were carefully assessed to assure that they had competent and adequate skills and experience. Original: There is specific support to build capacity on governance and accountability within OPM, KEPSA and MoYAS. Transparent, participatory and social accountability arrangements will be utilized and a communications strategy will be developed. In addition, social audits and a new payments mechanism will be included in the KKV. There will also be a close collaboration with key development partners and key national stakeholders, with public dissemination of the work being done and disclosure and transparency is enhanced, including through the Project website. Operation Manuals for each component establish clear rules for project operation and promote transparency. Revised: There is specific support in the project to build capacity on the areas of governance and accountability within KEPSA and MOYAS. For Component 2, KEPSA has put into operation a complaints handling mechanism that is designed to receive real-time feedback from interns and employers. This complements the suite of monitoring and evaluation instruments that are in place to assess the performance of this component. The communication strategy will increase awareness of both Components 2 and 3. The activities added to Component 3 aim to enhance the public dissemination of the work being done under the project. Operation manuals for each component establish clear rules for project operation and promote transparency. Original: Clear targeting criteria have been developed for all project components, and efforts will be made at the intake stage to ensure that the youth participants meet these criteria. Revised: Clear targeting criteria have been developed for the internship program, and efforts will be made at the intake stage to ensure that youth Risk Rating with Mitigation M M L
Project-level Risks Limited Financial Management capacity in KEPSA- KEPSA has limited FM capacity in terms of staff numbers as they have never managed funds of this size. Lack of procurement capacity in the OPM, KEPSA, and MOYAS. A procurement assessment has confirmed that the overall oversight mechanism and procurement capacity in the OPM and MOYAS is weak, while KEPSA does not have any capacity at all to carry out procurement activities. Component 1: Insufficient coordination between line ministries - given the crosscutting nature of the design of KKV. Component 1: Inadequate level of labor intensity failure of including high labor intensity will decrease the number of supported Proposed Change Continue Continue and modify to apply to KEPSA and MOYAS only Delete Delete Risk Mitigation Activities participants meet these criteria. The complaints handling mechanism is in place with the aim of increasing the transparency and accountability of the selection process. Additionally, the beneficiary assessment and impact evaluation will assess compliance with these criteria. Mitigation measures include enhancing accounting capacity in KEPSA and recruiting a project accountant and an internal auditor. An operations manual that includes a financial management section has been developed. Original: For the procurement of the KKV, most of the activities are currently being procured by each line Ministry, and the KYEP will strengthen the procurement capacity through adequate staffing of the PCU that has been set up within the OPM. For the third component the procurement anticipated for the MoYAS mainly consists of procurement of social audit organization and consultants. The procurement capacity of the KEPSA has been identified as very weak and they are requested to employ a procurement specialist to the unit that will work on the KYEP. Draft ToRs for such technical assistance will be provided to KEPSA and the recruitment is anticipated to be finalized prior to Board presentation. Revised: For Component 3, procurement is generally expected to consist of small amounts of goods or consultancies and is thus deemed to be manageable. The procurement capacity of KEPSA was identified as very weak at project appraisal. KEPSA has since employed a full-time procurement specialist for the KYEP. Most of the complex procurement for Component 2 is nearing completion, and the restructuring was designed to minimize the need for additional large-scale procurement. Given that the current institutional structure of KKV is working well, the KYEP adopts the same structure. The existing National Steering Committee and National Management Committee with representatives of the different line ministries will be extended with representatives of the private sector. Coordination mechanisms at provincial and district level (i.e., Provincial and District Management Committees) is also be reinforced. A minimum level of labor intensity for the public works programs has been included in the OM for the KKV to ensure high labor intensity of sub-projects. Risk Rating with Mitigation M S M L 16
Project-level Risks youth. Component 1: Lack of counterpart funding may become a risk if a proposed adjustment to the funding arrangements for the KKV is adopted. Component 1: Social and environmental safeguards - KKV projects will involve unskilled and semi-skilled manual labor on road works and water and sanitation projects. Given the relatively simple and mostly manual nature of most KKV work (with the exception of some drilling in the case of the sewage pipeline laying), environmental issues are limited. Component 2: Insufficient participation by private employers Component 2: Insufficient supply of training providers able to deliver customized, shortterm competency-based training. Component 3: Lack of capacity in MOYAS to coordinate and monitor KYEP activities. Component 3: Inadequate capacity of the organization to coordinate and implement the social audits. Proposed Change Delete Delete Continue Continue Continue Delete Risk Mitigation Activities There is high social pressure on the GoK to secure funds for the continuation of KKV. KYEP is also being processed on a fast time schedule in order to profit from the existing momentum that has been created by the current KKV. In keeping with the IDA s Safeguard Policies, an Environmental and Social Management framework (ESMF) was developed. This ESMF will serve as the basis to provide an environmental and social screening process for implementation of KYEP sub-projects. As these activities are sector- and sitespecific, ESMF is intended to be used as a practical tool during sub-project formulation, design, implementation and monitoring. The Project will also provide for training for appropriate line ministry staff in environmental and social screening processes for the sub-projects. The project s credibility is enhanced if private employers are involved in its design and implementation. KEPSA, whose members represent private employers and employer organizations in both the formal and informal sectors, will implement the project. Incentives will be used to encourage employer participation. Training organizations have been engaged in designing the program, and technical assistance will be provided to pre-qualified training organizations. Third-party training providers have been contracted, and the remaining procurement processes are near completion. The restructuring has been designed in such a way as to minimize the need for additional large-scale procurement. Funds have been set aside in the KYEP to build the capacity of the project coordination unit responsible for the coordination and monitoring of the activities under Component 3. Training will also be given to district youth officers and some national-level MOYAS staff. A competitive tender for the coordination of the social audits will be undertaken to ensure adequate implementation capacity. Overall Risk Rating M Risk Rating with Mitigation S L M S M M 17
ANNEX 1: Results Framework and Monitoring KENYA: KENYA YOUTH EMPOWERMENT PROJECT Project Development Objective (PDO): To support the GoK efforts to increase access to youth targeted temporary employment programs and to improve youth employability. Revised Project Development Objective: To support the GoK efforts to improve youth employability. PDO-level Results Indicators Indicator 1: Number of additional KKV beneficiaries Core D=Dropped C=Continue N= New R=Revised Unit of Measure Baseline Cumulative Target Values YR 1 YR 2 YR 3 YR4 D Number 0 38,000 114,000 152,000 At least 190,000 Frequency Data Source/ Methodology Quarterly MIS OPM Responsibility for Data Collection Indicator 2: Number of additional person days provided in KKV public works Indicator 3: Percentage of interns who complete the internship and are immediately employed by their internship employer or who have found employment with a new employer or are starting a business (disaggregated by gender) Indicator 4: Percentage of interns employed or selfemployed six months after D Number 0 1,950,000 6,000,000 8,000,000 C Percent 0 30% 30% 35% 35% C Percent 0 50% 50% At least 10,000,000 Quarterly MIS OPM Every 6 months Year 2 and 4 Beneficiary Assessment Impact Evaluation KEPSA/ consultant KEPSA/consulta nt 18
internship completion (disaggregated by gender) INTERMEDIATE RESULTS (Component One): Support the GoK to reduce vulnerability of unemployed youth (18-35) by expanding the KKV coverage, enhancing innovations (female participation, training, community involvement, payment delivery methods) and strengthening its M&E and management capacity. Revised (Component 1): None component cancelled indicator One: Share of female participation (as a share of total KKV participants) indicator Two: Percentage of total costs going to wage bills (in all KKV projects) indicator Three: Percentage of participants receiving skills training (as a share of additional participants only) indicator Four: Number of assets to be created/rehabilitated or maintained indicator Five: Percentage of beneficiaries reporting satisfaction with newly created or rehabilitated infrastructure indicator Six: Percentage D % 25% 25% 30% 35% 40% Quarterly MIS OPM D % 50% 55% 60% 65% 70% Quarterly MIS OPM D % n/a 5% 5% 10% 10% Quarterly MIS OPM D Number 0 200 600 800 At least 1,000 D % n/a 80% 80% Years 2 and 4 D % n/a 80% 80% Years 2 and 4 Quarterly MIS OPM Impact Evaluation Beneficiary Assessment OPM OPM 19
of participants reporting satisfaction with, or benefiting from, employment experience or training indicator Seven: Number of quarterly reports produced by the KKV MIS D Number 0 4 8 12 16 Quarterly MIS OPM (Component 2): Provide youth with work experience and skills through the creation of internships and relevant training in the formal and informal sector with priority given to growing industries. Revised (Component 2): Provide youth with work experience and skills through the creation of internships and relevant training in the formal and informal sector with priority given to growing industries. indicator One: Number of youth participating in the C Number 0 2,500 5,000 7,500 10,000 Every 6 months MIS KEPSA internship and training program indicator Two: Total number of internship C Number 0 50,000 100,000 150,000 200,000 Every 6 months MIS KEPSA weeks provided indicator Three: Total number of training weeks C Number 0 25,000 50,000 75,000 100,000 Every 6 months MIS KEPSA provided by third party providers indicator Four: Total number of youth C Number 0 3,750 7,500 11,250 15,000 Every 6 months MIS KEPSA completing life skills training indicator Five: Completion C % 0 0.90 0.95 0.95 0.95 Every 6 months MIS KEPSA 20
rate of internship indicator Six: Number of regular monitoring reports, produced by C Number 0 2 4 6 8 Every 6 months MIS KEPSA KEPSA MIS according to the agreed reporting standards indicator Seven: Percentage of participants C % na 90% 95% 95% 95% Every 6 months MIS KEPSA satisfied with internship and training program indicator Eight: Percentage of employers satisfied with the internship and training program C % na 90% 95% 95% 95% Every 6 months MIS KEPSA (Component 3): Create institutional capacity for evidence-based youth policy planning Revised (Component 3 ): Create institutional capacity for evidence-based youth policy planning indicator One: Number of district officers in the MOYAS trained through the KYEP indicator Two: Number of pilot social audits finalized indicator Three: Number of districts covered with communication activities C Number 0 80 160 240 315 Quarterly D Number 0 5 10 15 20 Quarterly R Number 0 1 3 5 5 Quarterly Quarterly progress report Quarterly progress report Quarterly progress report MOYAS MOYAS MOYAS 21
indicator Four: Action plan for the establishment of the National Youth Council developed R Categorical No action plan in place Action plan developed Quarterly Quarterly progress report MOYAS 22