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World Bank Document Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 55653 - CN PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN Public Disclosure Authorized IN THE AMOUNT OF US$80 MILLION TO THE PEOPLE'S REPUBLIC OF CHINA FOR A BAYANNAOER WATER AND ENVIRONMENT COMPREHENSIVE MANAGEMENT PROJECT April 22, 2011 Public Disclosure Authorized China and Mongolia Sustainable Development Unit Sustainable Development Department East Asia and Pacific Region Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective October 18, 2010) Currency Unit = Renminbi (RMB) or Yuan (Y) Y 1.00 = US$ 0.1503 US$ 1.00 = RMB 6.6541 FISCAL YEAR July 1 – June 30 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank ICB International Competitive Bidding BOCAD Bayannaoer Office for IDA International Development Comprehensive Agricultural Association Development BMFB Bayannaoer Municipal Finance IMFD Inner Mongolia Finance Department Bureau BMG Bayannaoer Municipal Government MOF Ministry of Finance BWAG Bayannaoer Hetao Water Affairs MWR Ministry of Water Resources Group Co., Ltd. COD Chemical Oxygen Demand NCB National Competitive Bidding CPS Country Partnership Strategy NDRC National Development and Reform Commission PMO Project Management Office CQS Consultant Quality Selection PSP Private Sector Participation CY Calendar Year O&M Operations & Maintenance DBO Design-Build-Operation QCBS Quality and Cost Based Selection EA Environment Assessment PAP Project Affected Population EMP Environmental Management Plan RAP Resettlement Action Plan EPB Environmental Protection Bureau RMB Reminbi, Chinese currency EIRR Economic Internal Rate of Return SA Special Account FB Finance Bureau SOE Statement of Expenditures FM Financial Management TA Technical Assistance FMS Financial Management Specialist TOR Terms of Reference FIRR Financial Internal Rate of Return WLIDC Wuliangsuhai Lake Industrial Development Corporation FY Fiscal Year WREC Water Reclamation Plant GDP Gross Domestic Production WWIC Yellow River West Water Industrial Co., Ltd. IBRD International Bank for WWTP Wastewater Treatment Plant Reconstruction and Development Vice President: James W. Adams, EAPVP Country Director: Klaus Rohland, EACCF Sector Director: John Roome, EASSD Sector Managers: Ede Jorge Ijjazs-Vasquez. EASCS, and Vijay Jagannathan, EASIN Task Team Leader: Shunong Hu, EASCS CHINA Bayannaoer Water and Environment Comprehensive Management Project CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 A. Country and Sector Issues ................................................................................................... 1 B. Rationale for Bank Involvement ......................................................................................... 1 C. Higher Level Objectives to Which the Project Contributes................................................ 2 II. PROJECT DESCRIPTION ................................................................................................. 2 A. Lending Instrument ............................................................................................................. 2 B. Project Development Objective and Key Indicators ........................................................... 2 C. Project Components and Project Costs ............................................................................... 2 D. Lessons Learned and Reflected in the Project Design ........................................................ 3 E. Alternatives Considered and Reasons for Rejection ........................................................... 4 III. IMPLEMENTATION ...................................................................................................... 4 A. Partnership Arrangements ................................................................................................... 4 B. Institutional and Implementation Arrangements ................................................................ 4 C. Monitoring and Evaluation of Results ................................................................................ 5 D. Sustainability....................................................................................................................... 5 E. Critical Risks and Possible Controversial Aspects ............................................................. 6 F. Loan/Credit Conditions and Covenants .............................................................................. 8 IV. APPRAISAL SUMMARY ............................................................................................... 9 A. Economic and Financial Analyses ...................................................................................... 9 B. Technical ........................................................................................................................... 10 C. Fiduciary ........................................................................................................................... 11 D. Social................................................................................................................................. 11 E. Environment ...................................................................................................................... 12 F. Safety of Dams .................................................................................................................. 13 G. Safeguard Policies ............................................................................................................. 13 H. Policy Exceptions and Readiness...................................................................................... 13 Annex 1: Country and Sector or Program Background ......................................................... 14 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 19 Annex 3: Results Framework and Monitoring ........................................................................ 21 Annex 4: Detailed Project Description ...................................................................................... 24 Annex 5: Project Costs ............................................................................................................... 28 Annex 6: Implementation Arrangements ................................................................................. 30 Annex 7: Financial Management and Disbursement Arrangements ..................................... 35 Annex 8: Procurement Arrangements ...................................................................................... 42 Annex 9: Economic and Financial Analysis ............................................................................. 48 Annex 10: Safeguard Policy Issues ............................................................................................ 57 Annex 11: Project Preparation and Supervision ..................................................................... 63 Annex 12: Documents in the Project File ................................................................................. 64 Annex 13: Statement of Loans and Credits .............................................................................. 66 Annex 14: Country at a Glance ................................................................................................. 71 Annex 15: Maps........................................................................................................................... 74 IBRD 37979 AND IBRD 38272 CHINA BAYANNAOER WATER AND ENVIRONMENT COMPREHENSIVE MANAGEMENT PROJECT PROJECT APPRAISAL DOCUMENT EAST ASIA AND PACIFIC EASCS Date: April 22, 2011 Team Leader: Shunong Hu Country Director: Klaus Rohland Sectors: General water, sanitation and flood Sector Managers: Ede Jorge Ijjazs-Vasquez, protection sector (55%); Water supply (45%) and Vijay Jagannathan Themes: Pollution management and Team Leader(s): Shunong Hu environmental health (53%); Water resource management (45%); Municipal governance and institution building (2%) Project ID: P115695 Environmental category: Full Assessment Lending Instrument: Specific Investment Loan Joint IFC: Joint Level: Project Financing Data [X] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m.): 80.00 Proposed terms: U.S. Dollar, variable spread loan with a maturity of 23 years, including a ten- year grace period, with repayment based on annuity, and a front-end fee of 1% subject to a 75 basis-point waiver. Financing Plan (US$ m) Source Local Foreign Total Borrower 75.2 9.3 84.5 International Bank for Reconstruction and 26.4 53.6 80.0 Development Total: 101.6 62.9 164.5 Borrower: The People's Republic of China Responsible Agency: Bayannaoer Hetao Water Affairs Group Co., Ltd. No. 1, Shuiyuan Road Linhe District, Bayannaoer City Inner Mongolia Autonomous Region China, 015000 Tel: (86-478) 898-8401 Fax: (86-478) 791-8423 [email protected] Estimated disbursements (Bank FY/US$ m) FY 12 13 14 15 16 17 18 Annual 2 10 15 15 10 20 8 Cumulative 2 12 27 42 52 72 80 Project implementation period: Start: September 1, 2010; End: June 30, 2017 Expected effectiveness date: September 1, 2011 Expected closing date: December 31, 2017 Does the project depart from the CAS in content or other significant respects?
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