Angola Appraisal Report

AFRICAN DEVELOPMENT FUND

PROJECT : FISHERIES SECTOR SUPPORT PROJECT

COUNTRY : ANGOLA APPRAISAL REPORT

Regional Director : Mr. C. OJUKWU, Director, ORSB

Sector Director : Mr. A. BEILEH, Acting Director, OSAN Appraisal Team Division Manager : Mr. K. JOHM , Division manager, OSAN.4

Team Leader : Mr. F. MARTTIN, Senior Fishery Officer, OSAN.4

OSAN DEPARTMENT

April 2013

TABLE OF CONTENTS

I STRATEGIC THRUST AND RATIONALE 1 1.1 Project linkages with country strategies and objectives 1 1.2 Rationale for Bank’s involvement 2 1.3 Donor coordination 2

II PROJECT DESCRIPTION 3 2.1 Project components 3 2.2 Technical solutions retained, other alternatives explored 5 2.3 Project Type 6 2.4 Project costs and financing arrangements 6 2.5 Project Target Areas and Beneficiary population 8 2.6 Participatory process for identification, design and implementation 9 2.7 Bank Group experience, lessons learnt in project design 9 2.8 Key Performance Indicators 10

III PROJECT FEASIBILITY 10 3.1 Economic and Financial Performance 10 3.2 Environmental and Social Impacts 11

IV IMPLEMENTATION 13 4.1 Implementation Arrangements 13 4.2 Monitoring & Evaluation 15 4.3 Governance 16 4.4 Sustainability 16 4.5 Risk Management 17 4.6 Knowledge Building 18 4.7 Bank’s Field Office 18

V LEGAL INSTRUMENTS AND AUTHORITY 18 5.1 Legal instrument 18 5.2 Conditions associated with Bank’s intervention 18 5.3 Compliance with Bank policies 19

VI RECOMMENDATION 19

Appendix I Country’s comparative socio-economic indicators Appendix II Table of AfDB’s portfolio in the country Appendix III Similar projects financed by the Bank and other development partners in the Angola Appendix IV Map of Angola showing project areas Appendix V Project sites

Currency Equivalents As of July 2012

UA=USD 1.55644 July 2012

Fiscal Year 01 January – 31 December

Weights and Measures

1 metric tonne = 2204 pounds (lbs) 1 kilogramme (kg) = 2.200 pounds (lbs) 1 metre (m) = 3.28 feet (ft) 1 millimetre (mm) = 0.03937 inch (“) 1 kilometre (km) = 0.62 mile 1 hectare (ha) = 2.471 acres

ABBREVIATIONS AND ACRONYMS

AfDB : African Development Bank ADF : African Development Fund AFDEP : Artisanal Fisheries Development Project AWPB : Annual Work Plan and Budget CAS : Catch and Effort Assessment Survey CDC : Community Development Committee CEFOPESCAS : Fisheries Training School (Centro de Formação Profissional de Pescas) CPA : Fish Landing Site (Centros de Pesca Artisanal) CSP : Country Strategy Paper EIA : Environmental Impact Assessment EIRR : Economic Internal Rate of Return ESMP : Environmental and Social Management Plan EU : European Union FAO : Food and Agriculture Organization of the United Nations FIRR : Financial Internal Rate of Return FSSP : Fisheries Sector Support Project GDP : Gross Domestic Product GoA : Government of Angola GPN : General Procurement Notice HACCP : Hazard Analysis and Critical Control Points ICB : International Competitive Bidding INAPIT : Instituto de Apoio as Indústrias de Pescas e Investigação Tecnológica IPA : National Institute for Development of Artisanal Fisheries and Aquaculture (Instituto da Pesca Artesanal e da Aquicultura) LDF : Local Development Fund MCS : Monitoring, Control and Surveillance MoF : Ministry of Fisheries MTR : Mid Term Review M&E : Monitoring and Evaluation MFI : Micro-Finance Institution MPA : Marine Protected Area NCB : National Competitive Bidding NGO : Non-Government Organization NPV : Net Present Value O&M : Operation and Maintenance PCR : Project Completion Report PHL : Post-Harvest Losses PIO : Project Implementation Office PIP : Public Investment Programme PRSP : Poverty Reduction Strategy Paper PSC : Project Steering Committee SBD : Standard Bidding Documents UNDB : UN Development Business USD : United States Dollar VMS : Vessel Monitoring System WFP : World Food Programme

Loan Information Client’s information

LOAN RECEPIENT : REPUBLIC OF ANGOLA

EXECUTING AGENCY : MINISTRY OF AGRICULTURE, RURAL DEVELOPMENT AND FISHERIES

Financing plan

Source Amount (UA million) Instrument ADF 20.00 Loan Government Contribution 5.49 Other n/a TOTAL COST 25.49

ADB’s key financing information

Loan / currency (UA) Interest type* n.a. Interest rate spread* 1% Commitment fee* 0.5% undisbursed balance Other fees* 0.75% Service Charge per year on the disbursed and outstanding amount Tenor 30 Years Grace period 8 years FIRR, NPV (base case) (19.49%, NPV US$234.0 million) EIRR (base case) (22.04%)

*if applicable

Timeframe - Main Milestones (expected)

Concept Note approval 01/11/2011 Project approval 03/07/2013 Effectiveness 01/09/2013 Mid Term Review 01/01/2016 Infrastructure construction completed 01/08/2016 Completion 01/01/2019 Last Disbursement 30/06/2019

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Project Summary

Section Description

Project The Fisheries Sector Support Project will increase incomes of small scale overview fishers and traders (mostly women) through marked improvements in the fish landing and handling facilities thereby reducing post-harvest losses and improving quantity and quality of fish landed and traded. It will be implemented in coastal communities of Gilco, Yembe, Egipto Praia, Salinas Sumbe, Dambe Maria and Ambriz. Key expected outputs are: 4 landing sites constructed, 2 landing sites rehabilitated, 10 landing sites with additional works completed. 20 % reduction of Post-Harvest Losses. The project will cost UA 25.49 million and will be implemented over a 5 year period.

Beneficiaries The direct beneficiaries are the fishing population of over 10,000 at the project sites including women who constitute 80% of small scale fish processors and traders. The project will also be of benefit to ancillary trades such as boat repair, net mending, transportation, petty trade and overall economic activities in the project areas.

Needs Currently the estimated post-harvest losses at project sites are more than Assessment 7,000mt/yr valued at about US$ 7 Million. The coastal population is poor and vulnerable, as alternatives to fishing are scarce. Monitoring, Control and Surveillance capacity in the artisanal fisheries is weak, as is the capacity to manage landing sites and their infrastructures, hampering the sustainable management of Angola’s marine resources.

Bank’s The Bank’s added value is from the experience and knowledge generated Added Value from the implementation of the AFDEP which was completed in 2011. In addition, the Bank has accumulated experience through the successful implementation of its fisheries portfolio in 23 African countries covering capacity building, fisheries infrastructure development and management, quality assurance and environmental safeguards. Lessons learned include: management of fishery infrastructures should be addressed from the beginning of the project, project implementation should be anchored in government structures, credit for fishing and fish marketing has a weak record in most Bank supported fishery projects, procurement and disbursement arrangements need to be tailored to the special conditions of Angola.

Knowledge The project will generate useful knowledge in community and private Management sector management of fish landing sites. It will further provide useful pilot experience in fish quality control and improvement, as well as on monitoring, control and surveillance which can be replicated over the entire coast. This knowledge will be captured and disseminated through regular project implementation reports.

ANGOLA Fisheries Sector Support Project Result-Based Program Matrix Country and project name: Angola: Fisheries Sector Support Project Purpose of the project: Increase income of fishing communities through investments in fishery infrastructure and their management (including marine resources management and safety at sea) PERFORMANCE INDICATORS MEANS OF RESULTS CHAIN RISKS/MITIGATION MEASURES Indicator VERIFICATION (including CSI) Baseline Target Poverty reduced and food security increase Proportion of coastal people 54.3% (to be Proportion of coastal people Risks: Due to the global economic crisis and the rising food prices poverty

among the Angolan population below the poverty line (sex confirmed by below poverty line reduced by reduction and food security increase is hampered disaggregated) the baseline 10% Mitigation measures: Dependence on the global market for income of fishing survey) Government ,MARDF communities will not be increased by focusing on local (and regional) markets MFI reports, Baseline development Percentage of Underweight 15.6% (to be Percentage of Underweight survey Children (Children under confirmed by children reduced by 20% at IMPACT the age of 5 years) the baseline landing sites covered by the survey) project Increase of fishers and fish processors income % Increase of income of 70 20 % increase of income of Risks: Encroachment by industrial fleet in the artisanal fishing zone, resulting fishers (sex disaggregated) USD/month fishers and fish processors at in destruction of gear of the artisanal fleet and depletion of fish stocks. landing sites covered by the Mitigation measures: The project will ensure Monitoring, Control and % Increase of income of 55 project Surveillance will improve. Fishers at selected landing sites will be trained in Project, Government, MFI fish processors (sex USD/month fisheries management, including the need for enforcement of management reports, Baseline survey disaggregated) (both to be measures. Communication channels with the Fisheries inspection units will be confirmed by established, ensuring that sightings of illegal (industrial) vessels will be

baseline reported by artisanal fishers and acted upon by the fisheries inspection service.

survey) Increase safety at sea Reduction of lives lost 25 lives lost 50% reduction Project, Government, MFI per year reports

Improve sustainability of fishery management No. of incursions (illegal

OUTCOMES entries into the artisanal Frequent 50% reduction of incursions at Gvt reports, project fishery zone) per year (daily) MCS-covered sites reports

Reduction of Post-Harvest Losses (value) % reduction of Post-Harvest 7 000 mt per 20 % reduction of Post-Harvest Losses (value) year (to be Losses at landing sites covered confirmed by by the project baseline survey)

1) Sustainable exploitation of marine fishery

resources through Monitoring, Control & Mgmt. 1.1) Monitoring, Control and Surveillance Coverage of inshore area by 4 towers built and system in infrastructure provided VHF MCS system, no. of 0 Project reports towers built place

No. of vessels equipped with 0 100 fishing vessels equipped Risk: Fishers unwilling to install vessel trackers as they are unclear about the

a vessel tracker unit with vessel tracker units purpose of the tracker

Reduction of lives lost 25 lives lost 50% reduction Project, Government, MFI Mitigation measure: Ensure that fishers are aware of the purposes of the

per year reports vessel tracker through training and meetings at landing sites No. of incursions (illegal Frequent 50% reduction of incursions at Government reports, entries into the artisanal (daily) MCS-covered sites project reports fishery zone) per year No. of HACCP systems 0 16 Project reports implemented at landing sites No. of fish quality samples Fishery product quality 0 50 samples/week taken and tested inspection reports 1.2) Marine fishery resource management Number of functioning Risk: Fishers do not participate, because not convinced about the benefits of improved fishery resource management. management committees at Project reports Mitigation measure: The project will educate fishers of the benefits of project sites (with a 0 16 Fishery Resource sustainable fisheries management, ensuring fair representation of all minimum participation of Management Plans (16) stakeholders involved. 50% of women)

1.3) Fishery monitoring improved National frame survey, 1 (1995), 1 (2013) Risk: Fishers unwilling to cooperate with data collection, because of fear (taxes for instance), Fishers not convinced of the benefits of data collection, Catch and effort assessment None 4 sites Data collection activities not sustainable, because of unavailability of

survey established at sites FAO generated Project sufficient resources after project closure allocated reports Mitigation measure: Educate fishers on the benefits of data collection, assure Socio-economic survey at none 16 sites that data collected will be used in fishery resources management, through sites (sex-disaggregated) participation of communities in data collection systems cost of data collection will be reduced

2) Fishery Infrastructure Development OUTPUTS

2.1) Landing sites constructed at project sites Number of Landing sites 0 4 landing sites constructed and in constructed use by at least 40 vessels to land their catch at project end 2.2) Existing landing sites enhanced with Number of landing sites 0 12 landing sites enhanced and in infrastructure such as fuel pumps, community improved use by at least 40 vessels to land Project reports meeting places, kindergarten their catch at project end Fishery Infrastructure 2.3) Sustainable management of landing sites Number of landing sites with 0 16 landing sites with sustainable Management Plans (16) (infrastructure) established fishery infrastructure management established management established (including marine resources (with a minimum management fishery information participation of 50% of system and safety at sea) women)

3) Project Management 3.1) Timely and cost effective Project Quarterly progress reports 1 each quarter; 4 per year Management submitted timely MTR 1 MTR report

ESMP ESMP Clearance certificates Supervision 2 supervision missions per year Project reports Audit report 6 months after financial year Procurement plan 1 per year (valid for 18 months) Annual work plan 1 per year (valid for 18 months) Disbursement rate Average 20% per year (KPI)

COMPONENTS INPUTS Component 1: Sustainable exploitation of marine fishery resources through Monitoring, Control and Management 1.1 Monitoring, Control, and Surveillance Component 1: 5.81 Million UA 1.2 Fishery resource management improved 1.3 Fishery monitoring Component 2: Fishery Infrastructure Development 2.1 Construction of artisanal fish landing sites/centers (– CPA) Component 2: 14.88 Million UA 2.2 Expansion of infrastructure at existing CPAs 2.3 Establishment of landing site management Component 3 : Project Management

KEYACTIVITIES Component 3: 4.80 Million UA 3 1 Timely and cost effective Project management

Total 25.49 Million UA

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ANGOLA FISHERIES SECTOR SUPPORT PROJECT Project Timeframe

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REPORT AND RECOMMENDATION OF THE MANAGEMENT TO THE BOARD OF DIRECTORS ON A PROPOSED LOAN TO ANGOLA FOR THE FISHERIES SECTOR SUPPORT PROJECT

Management submits the following Report and Recommendation on a proposed loan for UA 20.00 million to be repaid in 30 years, including a grace period of 8 years, with a commitment fee of 0.5%, other fees of 0.75% and a fixed interest rate of 1.0% p.a.to finance the Fisheries Sector Support Project in Angola.

I. STRATEGIC THRUST AND RATIONALE

1.1 Project linkages with country strategies and objectives

1.1.1 Angola has a long-term vision document entitled Angola Visão 2025, with four overarching objectives, as follows: (i) promotion and acceleration of growth and competitiveness through economic diversification; (ii) poverty reduction through human capital development and targeted interventions, specifically through private sector job creation; (iii) balanced growth and harmonized development alongside natural resource protection; (iv) achievement of all of the above by an efficient and accountable government, with emphasis on institutional strengthening and human capacity development.

1.1.2 The Angola Country Strategy Paper (CSP) aligns the Bank Group’s corporate strategy with the Government’s strategy aiming to achieve economic diversification through non-oil private sector led growth to create employment and promote poverty reduction. The CSP articulates the Bank’s engagement across two pillars: (i) Stimulus to the competitiveness of the economy; and, (ii) Support to Economic Infrastructure Development.

1.1.3 The project seeks to achieve a reduction of post-harvest losses, and an increase in fishers’ income through: (i) construction of new fish landing sites, (ii) enhancement of existing fish landing sites, (iii) sustainable management of the established fish landing sites and provision of sustainable marketing strategies which are all embedded in Pillars 1 and 2 of the CSP. The project outcomes and outputs address the areas mentioned in the broad economic and development strategy pursued by the Government, and address both pillars of the Bank’s Agriculture Sector Strategy through the development of fisheries Monitoring, Control and Surveillance (MCS) and landing site infrastructure, and through capacity building with respect to sustainable use of marine resources. The project will create employment with stable supplies of quality fishery products at the landing sites (through cold storage and availability of ice). More people will be engaged in processing and transformation of fishery products. Local trade will increase as a result of the aforementioned reasons. In total, an increase of 2,000 additional jobs directly related to the landing sites (management of the landing sites, increased trade, processing, marketing) are expected to be created. The FSSP will therefore build economic infrastructures (cold storage, ice machines, and processing areas), while sustainably managing this important natural resource.

1.1.4 The strategies adopted by the Angolan Government for the development of the fishery sector aim to: organize and modernize the semi-industrial and industrial fishing fleet and fish processing industries; support sustainable exploitation of the continental and maritime artisanal fishery; development of inland and marine and inland aquaculture; create infrastructure for fish landings and conservation; improve the fish distribution chain for frozen, salted and dried fish; and, improve the fish quality assurance and inspection system.

1.2 Rationale for Bank’s involvement

1.2.1 The objective of the project is to increase the income of artisanal fishery communities through investments in fishery infrastructure and sustainable management of the resource. The Bank has successfully implemented a similar project in Angola, with positive outcomes. The project sites supported through the previous project are currently being used. Key lessons learned were that the management of infrastructures should be addressed at project inception, staff retention should be a priority, official documents should be translated into Portuguese, and baseline surveys should be carried out to measure impacts.

1.2.2 The Bank is in a unique position to succeed with the project, as it has experience with the implementation of similar fisheries projects in 23 countries in Africa covering capacity building, fisheries infrastructure development and management, quality assurance and environmental safeguards. Lessons learned from these projects, like management of fishery infrastructures should be addressed from the beginning of the project, project implementation should be anchored in government structures, credit for fishing and fish marketing has a weak record in most Bank supported fishery projects, procurement and disbursement arrangements need to be tailored to the special conditions of Angola, have been taken into account during the design of the FSSP.

1.3 Donor coordination

1.3.1. Donor activity in Angola has shifted in the last two years to an increased presence in cross-cutting areas such as environment, decentralization, private sector development, and regional integration. The major donors in Angola are the European Union, USAID, World Bank, Italy and Norway. These donors focus on Health, Agriculture/Rural development, Water, Infrastructure, Civil Society, Fishery Research and Human Rights.

1.3.2 While there is no formal donor coordination mechanism, an informal donor network exists, through a thematic working group that meets as and when needed to discuss different sectors (such as Social, Energy, Transport). With the opening of its field office in Angola, the Bank aims to play a significant role in this working group.

1.3.3 There is no other major donor involvement in the project locations, apart from the Bank financed Sumbe Water Supply, Sanitation and Institutional Support Project (SWSSISP). Through cooperation between SWSSISP and the FSSP, potable water will be provided to the Sumbe-Salinas landing site.

Table 1.1: Overview of Major Donor assistance in Angola

Sector or subsector Size GDP Exports Labour force Agriculture and 21.1% 5% 50 000 people Fisheries sector

Players public annual Expenditure (2008 – 2011) average Donors USD %

EU 64.0 33.26 USAID 44.5 23.13 World Bank 35.8 18.61 Italy 26.2 13.62 Norway 21.9 11.38 Total 192.4 100 Level of Donor Coordination Existence of thematic Working Group Y Existence of SWAPs or Integrated Sector Approaches N ADB’s Involvement in donor coordination *** M [L/M/none]**** *As most appropriate ** Years [yy1 to yy2] ***for this sector or sub-sector ****L: leader, M: member but not leader, none: no involvement.

II. PROJECT DESCRIPTION

2.0.1 The sector goal of the project is to support sustainable exploitation of maritime artisanal fishery; to create infrastructure for fish landings and conservation; improve the fish distribution chain for frozen, salted and dried fish; and, improve the fish quality assurance and inspection system in line with the overall sector objectives formulated by the Government of Angola. The purpose of the project is to increase the income of artisanal fishing communities through investments in fishery infrastructure and its management (including marine resources and safety at sea)

2.0.2 The specific objective of the project is the reduction of Post-Harvest Losses and the increase of fishers’ income through (i) Construction of new fish landing sites, (ii) Increasing the community support function of fish landing sites, (iii) Establishment of sustainable management of the fish landing sites, (iv) Monitoring, Control, and Management of the artisanal fishing fleet and associated marine resources at the fish landing sites, (v) Improvement of the management and monitoring of fishery resources.

2.1 Project components

2.1.1 The project is structured into three components: (A) Fishery Monitoring, Control and Management; (B) Fishery Infrastructure Development; and, (C) Project Management. The project will build four new Artisanal Fish Landing sites and improve the feeder roads to two of these sites. Facilities provided at the landing sites will include cold storage, ice making machines, and fish processing facilities, which are currently not available at the selected sites. With these facilities and their proper management, post-harvest losses (currently estimated at 30% or around 7,000 mt) will be reduced. These landing sites will be managed according to a management plan to be developed during the first year of the project.

2.1.2 A Vessel Monitoring System (VMS) will be installed in at least two sites (Egipto Praia, Yembe), to enable the GoA to review options to increase the safety at sea for artisanal fishers, and to manage fishery resources in a more sustainable manner. Two sites will be rehabilitated (Ambriz and Dambe Maria) including putting in place a management system.

2.1.3 The ten sites of the Artisanal Fisheries Development Project (AFDEP) will be supported with the installation of a fuel pump to reduce the burden of fishers to collect fuel from fuel points far away their landing sites, and to increase the feasibility for private management of the fishery infrastructure. With the provided facilities at the project fish landing sites, traders will be sure of availability of (high quality) product at the sites. This will therefore solidify the access of the involved fishing communities to markets. The two feeder roads to Yembe and Egipto Praia will ensure year round access of traders to the fish landing sites (the other sites are already accessible throughout the year).

2.1.4 The project does not aim to increase the total volume of landed fish, but aims at reducing the quality losses after capture. Angola knows three quality categories (I, II, III) with different pricings. Category I fetches the highest price, these are high-priced species with a high quality. If the quality of the fish degrades, it will be classified one or two classes lower according to the level of deterioration. The price of Category II is approximately 25% of the Category I price.

2.1.5 Much of the fish at the selected landing sites is distributed in fresh form to the domestic market. Currently, there is a significant quality (and therefore price-) loss in the value chain caused by a lack of knowledge and skills in this respect. The project will address these losses in quality through different actions; infrastructures (cold-rooms and ice making machines) at project sites will prevent quality loss, and fishers/processors will be trained in quality preservation and Post-Harvest Loss reduction techniques. Processors will also be trained in appropriate transformation techniques, like fish salting, smoking and drying, while others will learn to process slaughter waste into valuable fish meal, which can be used as a component in animal feed.

2.1.6 The increased quality of the product will result in increased nutritional value for consumers. The total monetary value of landed products (fish) will increase by at least ten to fifteen per cent (10 – 15%). This increase will benefit fishers, processors and traders.

2.1.7 The direct beneficiaries are the fishing population of over 10,000 at the project sites including women who constitute 80% of small scale fish processors and traders. Fishers will receive more income (around 20%) through reduced post-harvest losses. The project will also be of benefit to ancillary trades such as boat repair, net mending, transportation, petty trade and overall economic activities in the project areas.

Table 2.1: Project Components Component Costs Description (UA mill)  National Artisanal Fishing Vessel Frame Survey, including socio-economic information done at the beginning of the project, and at the end of the project, so that progress of Key Performance Indicators can be followed  Artisanal Catch and Effort Assessment Survey System in place, enabling IPA to make a reliable estimate of the production of the artisanal fisheries sector  Institutional capacity building of IPA and the Ministry (fishery management, data collection and management, infrastructure management, languages) so that support with respect to the landing sites is ensured after project completion  Awareness raising with respect to sustainable exploitation of marine resources, through workshops/trainings at 16 sites Fishery Monitoring,  Management arrangements in place with respect to marine A Control and 5.81 resources attributed to 16 CPAs Management  VHF based Vessel Monitoring System established, through placing at least two (2) VHF towers at Yembe and at Egipto Praia, and providing all artisanal fishing vessels at those sites with a vessel tracker  Implementation of the Environmental and Social Management Plan  Support to the HACCP programme implemented by the Instituto de Apoio as Indústrias de Pescas e Investigação Tecnológica (INAPIT) and the National System of Inspection of Fishery Products implemented by the National Direction of Fishery  Fish quality control, inspection, certification at Gilco landing site, ensuring quality and safety of products entering the markets  HIV/AIDS awareness raising amongst fisher population  Construction of four (4) artisanal fish landing sites/centers CPA at Gilco, Yembe, Egipto Praia, and Salinas-Sumbe with ancillary facilities and associated road works  Rehabilitation/improvement of two (2) landing sites at Ambriz Fishery Infrastructure and Dambe Maria B 14.88 Development  Additional infrastructure at ten (10) CPAs supported during AFDEP  Sustainable Management of the sixteen (16) CPAs, either through private sector management, or other management options  Planning, management, coordination and implementation of project activities C Project Management 4.80  Monitoring and evaluation  Provision of technical assistance  Procurement of relevant office equipment and vehicles TOTAL 25.49

2.2 Technical solutions retained other alternatives explored

2.2.1 The design of the project follows the design of the AFDEP, with a shift in focus towards greater private sector engagement. Alternative approaches could have been: support to fishery research, or support of the industrial fisheries sector. These were not chosen, as other donors are supporting fishery research.

Table 2.2: Project alternatives considered and reasons for rejection

Alternative Name Brief Description Reasons for Rejection Fishery Research Through research providing Angola receives already support in this field, through information for the sustainable the SAP-Imp project and through the EAF-Nansen management of the marine project (supported by NORAD) aquatic resource Industrial Supporting the No direct impact for poverty alleviation Fisheries construction/rehabilitation of a fishing port

2.3 Project Type

This is a stand-alone project following up on an earlier intervention, the Artisanal Fisheries Development Project, which was funded by the Bank in 2002. The AFDEP project was successfully completed in 2011.

2.4 Project costs and financing arrangements

2.4.1 Project Costs: The total costs for the project, is estimated at UA 25.49 Million, comprising 64% in foreign cost and 36% in local costs. Physical and price contingencies were estimated at 7% and 10%, respectively based on actual and projected levels of local and foreign inflation rates. Physical contingencies are low given the information available from completed civil works and goods purchased in the former fisheries project. A summary of the project cost estimates by components and expenditure accounts is shown in Tables 2.3 and 2.4 below, while details are captured in the annexes.

Table 2.3: Fisheries Sector Support Project - Summary Costs by Components

US$ ‘000 UA ‘000 % % COMPONENTS Local Foreign Local Foreign Base Total Total F.E Currency Exchange Currency Exchange Cost Fishery Monitoring, Ctrl & Mgt 1 617,00 6 468,00 8 085,00 1 038,91 4 155,64 5 194,55 80 24 Fishery Infrastructure Dvpt 5 062,94 14 758,81 19 821,75 3 252,90 9 482,42 12 735,31 74 58 Project Management 4 329,09 1 704,71 6 033,81 2 781,41 1 095,27 3 876,67 28 18 Total BASELINE COSTS 11 009,03 22 931,53 33 940,56 7 073,21 14 733,32 21 806,53 68 100 Physical Contingencies 580,62 1 753,75 2 334,37 373,05 1 126,77 1 499,81 75 7 Price Contingencies 2 621,85 779,50 3 401,35 1 684,52 500,82 2 185,34 23 10 Total PROJECT COSTS 14 211,50 25 464,77 39 676,28 9 130,77 16 360,91 25 491,68 64 117

Table 2.4: Fisheries Sector Support Project - Summary Costs by Expenditure Accounts

US$ ‘000 UA ‘000 EXPENDITURE Local Foreign Local Foreign % F.E % Bc ACCOUNTS Total Total Currency Exchange Currency Exchange INVESTMENT COSTS 6 883,79 22 621,65 29 505,43 4 422,78 14 534,22 18 957,00 77 87 WORKS 3 982,44 11 947,31 15 929,75 2 558,68 7 676,05 10 234,73 75 47 Construction & Rehab. 1 048,13 3 144,38 4 192,50 673,41 2 020,24 2 693,65 75 12 Public Utilities 50,00 150,00 200,00 32,12 96,37 128,50 75 1 Roads 2 884,31 8 652,94 11 537,25 1 853,15 5 559,44 7 412,59 75 34 GOODS 793,35 1 888,65 2 682,00 509,72 1 213,44 1 723,16 70 8 Vehicles 56,25 168,75 225,00 36,14 108,42 144,56 75 1 Equipment 737,10 1 719,90 2 457,00 473,58 1 105,02 1 578,60 70 7 SERVICES 2 108,00 8 785,69 10 893,69 1 354,37 5 644,73 6 999,10 81 32 Training 765,00 765,00 1 530,00 491,51 491,51 983,01 50 5 Technical Assistance - 4 111,69 4 111,69 - 2 641,72 2 641,72 100 12 Contractual Services 1 263,00 3 789,00 5 052,00 811,47 2 434,40 3 245,87 75 15 Audit 80,00 120,00 200,00 51,40 77,10 128,50 60 1 RECURRENT COSTS 4 125,24 309,88 4 435,12 2 650,43 199,09 2 849,53 7 13 PERSONNEL 3 450,00 - 3 450,00 2 216,60 - 2 216,60 - 10 DSA 567,00 189,00 756,00 364,29 121,43 485,72 25 2 O&M 14,74 27,38 42,12 9,47 17,59 27,06 65 - Equipment 4,69 8,71 13,40 3,01 5,60 8,61 65 - Vehicles 10,05 18,67 28,72 6,46 11,99 18,45 65 - Infrastructures ------GOC 93,50 93,50 187,00 60,07 60,07 120,15 50 1 Total BASELINE COSTS 11 009,03 22 931,53 33 940,56 7 073,21 14 733,32 21 806,53 68 100 Physical Contingencies 580,62 1 753,75 2 334,37 373,05 1 126,77 1 499,81 75 7 Price Contingencies 2 621,85 779,50 3 401,35 1 684,52 500,82 2 185,34 23 10 Total PROJECT COSTS 14 211,50 25 464,77 39 676,28 9 130,77 16 360,91 25 491,68 64 117

Table 2.5: Fisheries Sector Support Project - Summary Costs by Year (‘000 UA)

COMPONENTS 2013 2014 2015 2016 2017 TOTAL Fishery Monitoring, Control & Mgt 2 413,07 1 171,95 1 133,38 570,62 520,17 5 809,18 Fishery Infrastructure Development 2 974,34 8 345,61 3 557,89 - - 14 877,84 Project Management 1 650,08 699,92 764,97 820,42 869,28 4 804,66 TOTAL 7 037,48 10 217,48 5 456,24 1 391,03 1 389,45 25 491,68

2.4.2 Project Financing: The Bank will provide a loan to the tune of UA 20.00 Million from ADF XII resources, representing 78.50% of the project cost, excluding taxes and duties. The ADF financing will be in the form of a loan. The remaining balance of the project costs amounting to UA 5.49 Million or 21.50% of the total project cost will be covered by the Government of Angola. The detailed breakdown of financing for the project has been captured in Annex B2. A summary of the project costs financing estimates by source of finance is shown in Tables 2.6, 2.7 and 2.8 below:

Table 2.6: Fisheries Sector Support Project - Financing Plan Sources of Finance

(‘000 US$) (‘000 UA) FINANCING SOURCE % Local Foreign Total Local Foreign Total Government of Angola 6 690,69 1 856,79 8 547,48 4 298,71 1 192,97 5 491,68 21,5 ADF Loan 7 520,81 23 607,99 31 128,80 4 832,06 15 167,94 20 000,00 78,5 Total 14 211,50 25 464,77 39 676,28 9 130,77 16 360,91 25 491,68 100,0

Table 2.7: Fisheries Sector Support Project - Financing Plan Sources of Finance per component

ADF Government Total COMPONENTS UA ‘000 % UA ‘000 % UA ‘000 % Fishery Monitoring, Ctrl & Mgt 4 624,95 79,6 1 184,23 20,4 5 809,18 22,8 Fishery Infrastructure Development 14 460,85 97,2 416,98 2,8 14 877,84 58,4 Project Management 914,19 19,0 3 890,47 81,0 4 804,66 18,8 TOTAL 20 000,00 78,5 5 491,68 21,5 25 491,68 100,0

Table 2.8 Expenditure Accounts by Financiers (‘000 UA)

EXPENDITURE ACCOUNTS ADF % Government % Total % INVESTMENT COSTS 20 000,00 91,7 1 813,31 8,3 21 813,31 85,6 WORKS 12 048,26 98,8 148,02 1,2 12 196,28 47,8 Construction & Rehab. 3 201,45 100,0 0,00 - 3 201,45 12,6 Public Utilities - - 148,02 100,0 148,02 0,6 Roads 8 846,81 100,0 0,00 - 8 846,81 34,7 GOODS 1 657,88 86,9 249,74 13,1 1 907,62 7,5 Vehicles 162,85 100,0 0,00 - 162,85 0,6 Equipment 1 495,02 85,7 249,74 14,3 1 744,76 6,8 SERVICES 6 293,87 81,6 1 415,55 18,4 7 709,42 30,2 Training 1 158,06 100,0 0,00 - 1 158,06 4,5 Technical Assistance 2 354,53 81,6 532,58 18,4 2 887,11 11,3 Contractual Services 2 626,11 74,8 882,97 25,2 3 509,08 13,8 Audit 155,17 100,0 0,00 - 155,17 0,6 RECURRENT COSTS - - 3 678,37 100,0 3 678,37 14,4 PERSONNEL - - 2 877,95 100,0 2 877,95 11,3 DSA - - 635,14 100,0 635,14 2,5 O&M - - 34,30 100,0 34,30 0,1 Equipment - - 11,03 100,0 11,03 - Vehicles - - 23,27 100,0 23,27 0,1 Infrastructures GOC - - 130,98 100,0 130,98 0,5 TOTAL 20 000,00 78,5 5 491,68 21,5 25 491,68 100,0

2.5 Project Target Areas and Beneficiary population

2.5.1 The project target areas are the rural coastal communities of Gilco, Yembe, Egipto Praia, Salinas-Sumbe, Ambriz, Dambe Maria (selected on the basis of daily fish catches, fishing population and market coverage among others) and the ten (10) sites of the AFDEP. The total number of the fishing population of these sites stands around 10,000. Currently, about 80% of small scale fish processors and traders are women. The project outcomes for this target group are the reduction of PHL and increased incomes. There will also be benefits to ancillary trades such as boat repair, net mending and overall economic activities in the project areas.

2.6 Participatory process for identification, design and implementation

2.6.1 Beneficiaries and other relevant stakeholders participated during the identification (August 2010), preparation (September 2011) and appraisal (January 2012) of this operation. At each potential project site, a meeting with local stakeholders was organized. During these meetings an overview of the situation of the site was elaborated upon with the stakeholders (number of people, number of vessels, species fished on, processing methods, etc). Based on the overview, a fishery infrastructure needs assessment was conducted and an estimate of the yearly production was made.

Landing site Processing Ice Cold Quay Fuel Road Management Yearly area machine storage point production (mt) Gilco Y Y Y N Y N P 9460 Egipto Praia Y Y Y Y Y Y C 5924 Yembe Y Y Y N Y Y P/C 2974 Sumbe Y Y Y N Y N P 2750 Ambriz N R R N N N P 1342 Dambe Maria N R R N N N P 1162 Y = Yes, N = No, R = Rehabilitation, P =Private, C = Community

2.6.2 Communities expressed a strong desire for ice making machines, cold storage, processing facilities, and improvement of the access road to allow communication in the rainy season (Egipto Praia and Yembe). The communities were also assessed with respect to their management capacities. The Angolan Institute for the Development of Artisanal Fisheries (IPA) was part of the appraisal team and agreed with the sites proposed. All stakeholders will be represented in the infrastructure management committees and the marine natural resources management committees to ensure sustainability of project achievements.

2.7 Bank Group experience, lessons learnt in project design

2.7.1 Based on lessons learnt from the AFDEP, advance contracting will be used for the procurement of services for the design and implementation of the baseline surveys (the frame survey, including socio-economic indicators) and the design and supervision of the landing sites. The artisanal fishery development project had problems in retaining staff, and therefore not all positions required for project implementation were filled. With competitive remuneration, staff will be retained and the Project Implementation Office (PIO) shall have the full complement required to implement the project as detailed in paragraph 4.1.1.

2.7.2 Lessons learnt from the AFDEP in Angola and other AfDB fishery projects in Africa include, but are not limited to (see also paragraph 1.2.25 of the technical annex): (i) management of infrastructures should be addressed during the start of the project; (ii) staff retention should be a priority; (iii) official documents should be translated into Portuguese; (iv) baseline-surveys should be carried out at the beginning of the project; (v) project implementation should be anchored in the government structures for sustainability purposes; (vi) a comprehensive ESMP design and implementation is needed; and, (vii) credit for fishing and fish marketing has a weak record in most Bank supported fishery projects, and was therefore avoided. Procurement and disbursement arrangements need to be tailored to the specific conditions of Angola with limited use of ICB/NCB for goods and services widely available in the local market.

2.7.3 The Bank’s current portfolio performance has been weak. This was mainly due to absence of local Bank representation, project units operating as almost autonomous units and not being embedded in Government structures; weak internal controls with respect to financial management; and weak capacity within the project implementation units with respect to application of Bank’s procurement rules and procedures. In the design of the proposed project, emphasis has been put on anchoring the project in the National Institute for Artisanal Fisheries and Aquaculture (IPA). This will ensure a continuous exchange of information on the project, and its implementation, and will ensure the sustainability of the project. The FSSP will not have a Special Account for Bank resources, avoiding disbursement issues in this respect. Once the project has started, its capacity with respect to procurement and disbursement will be supported through dedicated training and support from the Bank’s Field Offices in Angola and South Africa.

2.8 Key Performance Indicators

2.8.1 Progress towards achieving income increase in fishing communities will be measured through a baseline, midterm and project-end socio-economic surveys. With respect to PHL reduction, achievements will be measured through combining the Catch and Effort Assessment Survey (CAS) and product marketing survey. The M&E Specialist of the PIO will be responsible for this assignment in cooperation with IPA and FAO. An MoU will be concluded between FAO and the project to cover technical assistance for the artisanal fishing vessel frame survey (including socio-economic data), basic fisheries data collection set-up (Catch and Effort records), post-harvest loss assessment, reduction of post-harvest losses, marine fishery resources management, and fishery infrastructure management.

2.8.2 The key performance indicators to be monitored include: (i) reduction of lives lost, (ii) No. of incursions per year (iii) percentage reduction of post-harvest losses (value), (iv) Coverage of inshore area by VHF MCS system and no. of towers built, (v) No. of vessels equipped with a vessel tracker unit, (vi) No. of fish quality samples taken and tested, (vii) Number of functioning fishery resource and infrastructure management committees in project sites, and (viii) Number of Landing sites constructed and improved.

2.8.3 In particular, the numbers of women serving on the committees for management of fishery infrastructure and the committees for management of the marine natural resources and also the number of women trained during project implementation will be closely monitored to ensure the set targets are met.

III. PROJECT FEASIBILITY

3.1 Economic and Financial Performance

3.1.1 The financial and economic analyses were carried-out on the basis of the assumptions that the successful implementation of the project would generate the following three (03) types of benefits: (i) Increased quality, volume and value of marketed fish; (ii) Temporary and permanent jobs creation; and (ii) improved population livelihood.

3.1.2 Financial Analysis: The financial analysis was carried-out on the basis fishing activity models for a 20-year period and about 980 fishing boats producing 35,000 mt tons annually or 170 kg per unit in 210 rotations per year. Post-harvest losses is currently estimated to be 7,000 mt (valued at about US$ 7 Million), which the project is expected to

reduce by 20%. In this context, only 70 % represent premium market fish valued at US$ 3,500 per ton out of a total marketable production of 28,000 mt in the without project situation. The remaining production corresponds to 20 % of medium quality value at US$ 1,000.00 per ton, and 10 % for household for consumption. Current average incomes per fisher are estimated at US$840 per annum. With the project support, incomes are expected to rise to at least US$1,010 per annum per fisher.

3.1.3 The expected reduction of 20% in post-harvest losses sets marketable volume to 29,400 mt of which premium and medium quality represent 85 % and 5%, in the with- project situation. In addition, the project is also expected to generate temporary and permanent employments with an estimated financial benefit of US$ 7.69 Million p.a. On the basis of these assumptions, the project worth came out with an IRR of 17.59% and net present value of 83.99 Million. The IRR and NPV are greater than the opportunity cost of capital (OCC) estimated at 12% and zero, respectively.

3.1.4 Economic Analysis: The economic analysis was carried-out on the basis of fishing activity models and economic prices and cost. The economic cost was generated from COSTAB, on the basis a standard conversion factor (SCF) of 0.95, which was also used for the shadow pricing of benefits from tradable goods, corresponding to the volume of premium quality fish, on the basis the following formula:

SER = OER*(1+FxP) or OER/SER=1/(1+FxP) = SCF or SER=OER/SCF ▪Where SER = shadow exchange rate; OER = Official exchange rate; FxP= Foreign exchange premium; and SCF=Standard conversion factor

3.15 In addition, cost of labour was adjusted to a conversion factor of 0.65, as a non- tradable and inelastic good, due to unemployment. Furthermore, fish consumption volumes were included as substitutes for marketed protein. Finally tax, subsidies and interest payments were also removed from financial values and prices, so as to reflect costs and benefits to society, in the process of computing costs and benefits in situations with and without project. As a result of the computation, the economic analysis yielded, based on the above assumptions a combined net economic impact (NPV) of about US$ 97.58 million for a 20- year operational period and ERR (economic rate of return) of 22.45%. This outcome means that the economic feasibility of the project is even higher than the financial feasibility, or the value to society for the establishment of fisheries infrastructures is even higher than the cash value of its benefits. The detailed economic analysis of the program is captured in the technical annexes of the current report.

3.2 Environmental and Social Impacts

3.2.1 The project has been classified as Environmental Category II according to the Bank’s Environmental and Social Assessment Procedures (ESAP) (August 2011), as it is expected to have site-specific and short-term negative impacts largely occurring during the construction phase. Overall, the project is expected to generate positive social-economic and environment benefits leading to improved environmental and socio-economic conditions of the fisher communities at the project sites. Potential negative impacts will likely occur during the construction of the fish landing sites, fish processing facilities, water supply and sanitation, and waste management system. The envisaged impacts include noise and vibration, dust, soil erosion and water pollution. An Environmental and Social Management Plan has been prepared elaborating the mitigation and monitoring measures to be undertaken during project implementation. They include sprinkling water at the construction sites to suppress dust,

providing erosion control measures to reduce soil and water pollution, proper selection of borrow pits and rehabilitation with vegetation after decommissioning. To address the current practice of discarding slaughter waste at sea and on land (approximately 20% of catch), the project will support facilities for processing waste into animal feed. Both waste management and potable water availability at all sites will improve sanitary conditions at landing sites and reduce spread of infectious diseases such as cholera.

Climate change

3.2.2 Data on specific impacts of climate change on the Angola fisheries sector is not comprehensive. The predicted variations in temperatures, precipitation, storm frequency and intensity and the changes in the Benguela current are expected to have an impact on productivity of ecosystems and hence the quantity and distribution of fish species. The National Adaptation Plan of Action (NAPA) priorities published in December 2011 include the need for a study on the exact impacts of climate change on the fisheries sector, given its vulnerability. The vulnerability of the sector is due to the level of dependence on fisheries in specific sites and the adaptive capacity in the sector. As such, the mitigation measures included in the project are in capacity building to raise awareness on impacts of climate change and the dissemination of knowledge on adaptation measures. The project will provide information on fish landings to support the NAPA objectives. With respect to infrastructure, sites have been selected at locations with some natural protection and the design of infrastructure will take cognisance of the potential impact of climate change, while the VMS will be able to issue storm warnings.

Gender

3.2.3 In Angola it is estimated that 80% of small scale fish traders and processors are women1. The fish processing facilities at each of the landing sites will thus be mainly of benefit to the women in the fishing communities. Much of the fish at the selected landing sites is distributed in fresh form to the domestic market. Currently, there is a significant quality (and therefore price-) loss in this value chain caused by a lack of knowledge and skills with respect to quality preservation. At the project sites, infrastructures (cold-rooms and ice making machines) will prevent quality loss, while processors will be trained in quality preservation and Post-Harvest Loss reduction techniques. Processors will also be trained in appropriate transformation techniques, like fish salting, smoking and drying, while others will learn to process slaughter waste into valuable fish meal, which can be used as a component in animal feed. Women and youth make up 60% of the population in the selected fishing communities and the improved fish production is expected to result in increased incomes for the fish traders and to provide employment for some of the youth during the project implementation phase and the management of the sites.

3.2.4 The project implementation is expected to enhance the roles of women in the fishing communities. Key Performance Indicators data to be collected in this respect are: Household incomes of the coastal population, Distribution of male versus female in the Management committees, Volume of trade per vendor at the project sites, Number of businesses at the landing sites, number of processing facilities, including the gender of the management. All data collected will be gender dis-aggregated.

1 FAO Fishery Sector Overview, ftp://ftp.fao.org/FI/DOCUMENT/fcp/en/FI_CP_AO.pdf

3.2.5 The baseline survey of family living conditions will show the proportion of female- headed households which most likely will be high, after 30 years of internal conflict. Thus the project, in addition to rehabilitating infrastructure to support the reduction of post-harvest losses, will support women to better organise themselves in production and marketing, and contribute to the development of women’s associations. The project will systematise the representation of women and the youth in resource and infrastructure management decision- making bodies to enable them to fully defend their interests and thus gradually improve their status and empower themselves. In collaboration with NGO’s and the Gender Institutions, the project will carry out training in gender equality for the various parties involved (project staff, technical services, partner institutions, etc.).

Social Impacts

3.2.6 The project will improve the quality of fish being landed thus increasing the value and reducing post-harvest losses, which are currently estimated at 30-35%. Through the reduction of PHL fishers and processors will handle more, higher quality product and thus have a higher income. The construction works will provide short term employment for some of the community members while the operation of the landing sites will provide more long term employment opportunities. The project infrastructure will improve the well-being and hygiene of the communities through the provision of sanitary facilities and waste management system. This will reduce the disease burden on the community and the time spent in search of potable water. The HIV prevalence rate is higher in the fishing communities compared to the national prevalence rates. Therefore the project has included HIV/AIDS awareness and sensitisation activities for the communities. The project is not expected to result in any major negative social impacts.

Involuntary resettlement

3.2.7 The project will not involve any involuntary resettlement

IV. IMPLEMENTATION

4.1 Implementation Arrangements

Executing Agency

4.1.1 The Ministry of Fisheries (MoF) is the executing agency and will be responsible for overseeing the overall implementation of the project. A Project Implementation Office (PIO) in the National Institute for Development of Artisanal Fisheries and Aquaculture (IPA) will manage the day-to-day activities of the project. The PIO will be headed by a Project Coordinator (PC). The Project Coordinator will be supported by staff seconded from IPA or the MoF, especially the Fisheries Specialist, the Environmental Management Specialist, the Community Development Specialist, and the Monitoring and Evaluation Specialist knowledgeable in fisheries statistics. This will ensure ownership of the project in the MoF, and IPA. If these four positions cannot be filled by staff from IPA or the Ministry they will be recruited competitively. The Civil Engineer/Quantity Surveyor, Procurement Specialist, Accountant, and Book Keeper will be recruited competitively. All proposals with respect to project staff will be submitted to the Bank for review and No Objection. A Project Steering Committee (PSC), chaired by the Director of IPA, will provide policy guidance and oversee

project implementation. The Project Coordinator will act as the PSC Secretary. The PSC will meet at least twice a year. At the project sites the district officers of IPA will play a pivotal role with respect to project activities. They will coordinate all activities at their site with the support from the Implementation Office in Luanda. The road works will be under the general oversight of the local governments (Benguela Provincial Government for Egipto Praia and Bengo Government for Yembe) supported by the Consulting Engineer.

Table 4.1: Breakdown of project costs by procurement methods

ANGOLA FISHERIES SECTOR SUPPORT PROJECT Procurement Arrangements - Non ICB/NCB/QCBS Aggregated as Other (UC '000) PROCUREMENT Procurement Method ACCOUNTS ICB LIB NCB QCBS Other N.B.F. Total A. GOODS Vehicles - - - - 162,85 - 162,85 [162,85] [162,85] Equipment 935,28 437,04 - - 372,44 - 1 744,76 [935,28] [187,30] [372,44] [1 495,02] B. WORKS Construction & Rehabilitation 2 678,06 - 523,39 - - - 3 201,45 [2 678,06] [523,39] [3 201,45] Public Utilities - - - - - 148,02 148,02

Roads 8 846,81 - - - - - 8 846,81 [8 846,81] [8 846,81] C. SERVICES Training - - - 988,54 169,52 - 1 158,06 [988,54] [169,52] [1 158,06] Technical Assistance - - 638,25 2 248,86 - - 2 887,11 [638,25] [1 716,28] [2 354,53] Contractual Services - - - 1 542,07 1 967,01 - 3 509,08 [1 233,66] [1 392,45] [2 626,11] Audit - - - 155,17 - - 155,17 [155,17] [155,17] D. PERSONNEL - - - - - 2 877,95 2 877,95

E. OPERATING COSTS - - - - - 800,42 800,42

Total 12 460,14 437,04 1 161,64 4 934,64 2 671,82 3 826,39 25 491,68 [12 460,14] [187,30] [1 161,64] [4 093,65] [2 097,26] - [20 000,00]

Note: Figures in parenthesis are the respective amounts financed by ADF Loan

Procurement Arrangements

4.1.2 Following the assessment of the National Procedures and Regulations (NPP) and bidding documents for procurement of Goods and Works under NCB done by the Bank in October 2011, it was noted that the NPP are generally consistent with the Bank Rules and Procedures. Principles under the new Law are in line with procurement best practices regarding fairness, transparency, competitiveness and cost effectiveness. On the other hand the assessment noted that the Regulations and Standard Bidding Documents (SBDs) complementing the new law have not yet been developed to give effect to the implementation of the law. The National Competitive Bidding Procedures (NCB) have been found to be generally compliant with international acceptable practices, however, some deviations need

to be addressed in order to make NPP comply with Bank rules and procedures. Angola has also not developed national SBDs for procurement of Goods and Small Works.

4.1.3 In view of the above, all procurement under the project done by NCB will be subject to the Bank’s Rules and Procedures for the Procurement of Goods and Works, May 2008 edition and as amended from time to time using the relevant Bank’s SBDs. The various items under different expenditure categories and related procurement arrangements are summarized in Table 4.1 above. Each contract to be financed by the Loan, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior- review requirements, and time frame are agreed between the Borrower and the Bank project team and are provided in the Procurement Plan in technical annex B5. Further details with respect to Procurement arrangements can be found in Technical Annex B5 Procurement Arrangements.

Disbursement Arrangements

4.1.4 The Direct Payment Method will be used for the disbursement of the loan resources according to the Disbursement Handbook of the Bank. Where necessary, the reimbursement method will be used for eligible expenses. The PIO will open an account into which the Government will make its counterpart contribution.

Financial Management

4.1.5 The Project accountant will be responsible for ensuring the maintenance, at all times, of satisfactory and professionally acceptable accounting records and asset registers in accordance with Bank guidelines. In addition, The PIO will ensure that adequate internal control systems are maintained. The project accounts will be audited annually by an independent audit firm recruited through Least Cost Selection. Annual audit reports will be submitted to the Bank not later than six (6) months after the end of each financial year. The PIO will also submit regular quarterly and annual progress reports in accordance with the Bank Group reporting guidelines. The PIO will use the administrative manuals which are already in use by the other AfDB projects in the Agriculture and Environment Sectors as a basis for the FSSP administrative manual.

4.2 Monitoring and Evaluation

4.2.1 For the monitoring and evaluation of the project, a number of milestones have been established during the entire 5-year implementation period to ensure activities are effectively implemented as planned. The M&E Specialist will be responsible for all M&E activities, other duties will be assigned to specific staff of the PIO. All socio-economic surveys and, where possible, other surveys, will collect gender disaggregated data. Some indicators to be collected will be: income gender-disaggregated, percentage of female-headed households, Number of people (gender disaggregated) sensitized in gender issues, number of participants in trainings (gender disaggregated), and management committee members (gender- disaggregated)

4.2.2 With respect to Monitoring and Evaluation the project will be supported by FAO, a centre of excellence, which has experience with similar projects in the region. FAO will assist with the implementation and analysis of the data of these surveys. The M&E framework will require strong engagement of beneficiaries in order to better determine the impact of the

project on their welfare. The M&E system will demonstrate impacts on the local economy through linkages with other sectors.

Timeframe Milestone Monitoring process feedback loop Yr 0 Design of New infrastructure (4 sites) PC, Proc S, CE, & M&E, Consultant reports Yr 0 Design of Rehabilitation structures (2 Sites) PC, Proc S, CE, & M&E, Consultant reports Yr 0 Design of additional works (10 sites) PC, Proc S, CE, & M&E, Consultant reports Yr 0 Baseline Survey (Socio-Eco, CAS, Marketing) FS, CDS, M&E reports Yr 2 VMS in place PC, FS Yr 3 4 sites ready PC, Proc S, CE, & M&E, Consultant reports Yr 3 2 sites rehabilitated PC, Proc S, CE, & M&E, Consultant reports Yr 3 10 sites with additional works ready PC, Proc S, CE, & M&E, Consultant reports Yr 3 Mid-term Survey (Socio-Eco, CAS, Marketing) FS, CDS, M&E reports Yr 4 Infrastructure management in place (16 sites) PC, FS, CDS reports Yr 4 Resource management in place (16 sites) PC, FS, CDS reports Yr 5 End Survey (Socio-Eco, CAS, Marketing) FS, CDS, M&E reports

4.3 Governance

4.3.1 The main governance issues relate to bidding and contracting procedures for the various contracts under the project. To avert irregularities in the bidding processes the standard Bank rules and procedures will be used. In addition, the Project Steering Committee (PSC) will play an important over-sight role to ensure that procurement procedures are transparent and competitive. The PSC will be constituted by members from key Ministries and beneficiary representatives (see paragraph 2.3.2 of the technical annex). The PIO will maintain up-to-date books of accounts and asset registers for the project. The books of accounts and asset registers will be audited by an independent audit firm to ensure that project resources are used efficiently and effectively for intended purposes.

4.3.2 Another governance issue relates to sustainable management of marine resources. Currently there is a lack of sufficient information on artisanal fisheries to base sustainable management on. Through the project an artisanal fishing vessel frame survey will be conducted, which will serve as the basis for a catch and effort assessment survey system (CAS). This CAS will provide additional information to base sustainable fisheries management on. Through the VMS the enforcement of measures with respect to closed areas, or seasons, will be facilitated, which is also improving governance.

4.4 Sustainability

Sustainable Resource Use

4.4.1 The implementing agency (IPA) has the mandate to ensure sustainable use of Marine Fishery Resources. With the support from FAO, information with respect to targeted fish stocks attributed to the project landing sites will be improved, allowing better informed management decisions on the exploitation of the fish stocks. Also, with FAO support, the IPA will work with the communities to draw up a fishery resource management plan which will be adopted at each landing site. The management plans will have as objective to maximise the yield of the marine fishery resources in a sustainable way, to support the incomes of the fishing communities involved.

Infrastructure Management

4.4.2 All stakeholders will be involved in the implementation of the management structure of the landing sites, ensuring ownership of the management process. These management structures will deal with the daily running of the sites, and will be guided by an infrastructure management committee at each site. The management committee will ensure that the landing site will be run in an economically viable manner, ensuring the sustainability of the structures (covering not only maintenance costs, but also depreciation) and the provision of services for an acceptable cost to the communities involved. Boat landing fees will contribute to cost recovery towards maintenance of the infrastructure while the ice making and cold storage facilities will be run on commercial terms by private sector entities.

IPA Support

4.4.3 The project provides for strengthening of human and institutional capacity of IPA at headquarters and provincial offices, including infrastructure management capacities. After the end of the project, IPA/GoA will be able to continue supporting the fishing communities with respect to sustainable management of fishery resources and fishery infrastructures.

4.5 Risks Management

4.5.1 Based on experiences of the Artisanal Fisheries Development Project and other fisheries projects in the region five risks to the FSSP implementation have been identified.

4.5.2 The global economic crisis and rising food prices on the world market might have a negative impact with respect to reducing poverty and increasing food security. By focusing on local market development, the project will not increase the dependence of participating communities on the global market forces and minimize the impact of these risks on the target population.

4.5.3 The project will ensure that Monitoring, Control and Surveillance of the Artisanal Fisheries Zone attributed to the project fish landing sites will be improved. Fishers and other stakeholders at the landing sites will be trained in fisheries management, including ways of enforcement of management decisions. Communication channels with the fishery inspection service will be established, ensuring that sightings of illegal (industrial) vessels will be reported and acted upon. The encroachment by the industrial fleet of the artisanal fisheries zone will be prevented, preventing destruction of gear of artisanal fishers, and the depletion of fish stocks in the artisanal fisheries zone by the industrial fleet.

4.5.4 Through training and awareness campaigns at the project fish landing sites, fishers will be made aware of the advantages of vessel tracker units on fishing vessels with respect to safety at sea (in an emergency a distress signal indicates which position the vessel in distress has). This will reduce the reluctance of fishers to install vessel trackers on their vessels

4.5.5 Stakeholders at the project fish landing sites will be trained in the benefits of sustainable fishery management, including ways to participate in making fishery management decisions in the fishery management committees to be established at the project fish landing sites. Through this training participation by all stakeholders in fishery management committees will be ensured.

4.5.6 Fishery data collection needs to be done routinely to establish the status and trends of the fishery, needed to make informed fishery management decisions. However, data collection schemes implemented by the Government only would be too costly to be sustainable. Through participation of the stakeholders at the landing sites, including the fishers, the cost of this data collection can be reduced, ensuring sustainability.

4.6 Knowledge Building

4.6.1 The project is expected to generate considerable knowledge, lessons and experiences that will add value and build up a knowledge-base to inform the design and management of similar projects in other RMCs. The effectiveness of various fishery infrastructure management options will be evaluated. An assessment of PHL will be made and poverty levels of population at the project sites will be monitored.

4.6.2 A report on the fishery infrastructure management will be produced. A frame survey will form the basis for the basic fisheries data collection through the CAS. This will provide information on the use of the marine fishery resources. PHL will be assessed by comparing landed against marketed production. Through three socio-economic surveys, information will be available to track incomes of fishers and processors over the project life and beyond.

4.7 Bank’s Field Office

4.7.1 The African Development Bank Field Office (AOFO) in Luanda will support the project through assisting with the preparation of documents, monitoring of progress, and interface between different Bank projects for periodic meetings, where exchanges of experiences and lessons will take place. To this end a project monitoring and tracking tool has been finalised by AOFO. Furthermore the Bank’s Field office will liaise between the Project and responsible officers in the Bank.

V. LEGAL INSTRUMENTS AND AUTHORITY

5.1 Legal instrument

The project will be financed pursuant to an ADF loan agreement between the Borrower and the ADF

5.2 Conditions associated with Bank’s intervention

Conditions for Bank’s first disbursement/effectiveness

5.2.1 Conditions for effectiveness: The Loan Agreement will enter into force upon fulfillment by the Borrower of the provisions of Section 12.01 of the General Conditions.

5.2.2. Conditions Precedent to First Disbursement of the Loan: The obligations of the Fund to make the first disbursement of the Loan shall be conditional upon the entry into force of the Loan Agreement and the fulfillment by the Borrower, in form and substance satisfactory to the Fund, of the following condition:

(i) Provide evidence of the recruitment of a Project Coordinator whose qualifications and experience shall be acceptable to the Fund.

5.2.3. Other Conditions: The Borrower shall, in form and substance satisfactory to the Fund, fulfill the following conditions:

(i) Provide, within six (6) months after the first disbursement, evidence of the recruitment of: (a) a fisheries specialist; (b) an environmental management specialist; (c) a community development specialist; (d) a monitoring and evaluation specialist knowledgeable in fisheries statistics; (e) a civil engineer/quantity surveyor; (f) a procurement specialist; (g) an accountant; and (h) a book keeper; whose qualifications and experience shall be acceptable to the Fund;

(ii) Provide, within six (6) months after the first disbursement, evidence of the establishment of a Project Steering Committee (PSC) consisting of the following members/representatives of: Minister of Fisheries (Chairperson), Ministry of Finance, Ministry of Planning, Ministry of Environment, Ministry of Public Works and Roads, Women Promotion Ministry, Representatives of the community development committee; and

(iii) Provide, within twelve (12) months after the first disbursement, evidence of the completion of: (a) the FAO supported artisanal fishing vessel frame survey; and (b) the socio-economic survey.

5.2.4 Undertaking: The Borrower undertakes, in form and substance satisfactory to the Fund, to: i) carry out, and require its contractors to carry out, the Project in accordance with the recommendations, standards and procedures set forth in the ESMP; and

ii) deliver to the Fund project quarterly reports, describing the Borrower’s implementation of the ESMP (including any implementation failures and related remedies, if any).

5.3 Compliance with Bank Policies

This project complies with all applicable Bank policies.

VI. RECOMMENDATION

6.0.1 Management recommends that the Board of Directors approves a loan not exceeding an amount of UA 20 million to the Republic of Angola for the purposes and subject to the conditions and modalities stipulated in this report.

Appendix I: Angola’s comparative Socio-economic indicators

Appendix II: Table of AfDB’s portfolio in Angola

On-Going Portfolio In Angola (UA millions) % APPROVAL EFFECTIVE CLOSING TOTAL TOTAL PROJECT SECTOR DISBURSE DATE DATE DATE COST DISBURSED MENT Bom Jesus Calenga Rural Development Agriculture Project and Rural 24/11/2005 14/09/2006 31/12/2012 17.20 6.91 40.20% Development P-AO-A00-001 Environmental Sector Support Project Environment 11/03/2009 17/12/2009 31/12/2015 12.00 1.3 10.70% P-AO-CZO-001 Financial Support Management Project Finance 14/11/2007 04/09/2008 31/12/2012 5.90 0.4 7.81% P-AO-KFO-002 Sumbe Water Supply, Sanitation Water and and Institutional 28/11/2007 04/04/2009 30/06/2013 12.00 0.1 1.58% Support Project Sanitation P-AO-E00-003 Institutional Capacity Building Governance 23/02/2011 May 2011 30/07/2013 5.17 0 0% Poverty Reduction Project

GRAND TOTAL COMMITMENT 52.27 8.71 16.66%

Appendix III: Similar projects financed by the Bank and other development partners in Angola

The EU is undertaking a survey with respect to projects per donor in Angola for 2010/2011, the information will be shared from the EU representation as soon as the report is finalized. Once this information is available it will be included in this appendix

III

Appendix IV: Map of the project area

Appendix V: Project Sites

Project sites: 1 : Gilco 2 : Sumbe 3 : Yembe 4 : Egipto Praia 5 : Dambe Maria 6 : Ambriz

A : Praia Da Sancada B : Lucira C : Praia de Cambolo D : Kicombo E : Cabo Ledo F : Buraco G : Barra do Dande H : Kasaï I : Lombo-Lombo J : Lândana