Document of The World Bank

Public Disclosure Authorized Report No: ICR00004295

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IBRD 7434 – CO)

ON A

LOAN Public Disclosure Authorized IN THE AMOUNT OF US$ 90 MILLION

TO THE

DEPARTMENT OF LA GUAJIRA WITH THE GUARANTEE OF THE REPUBLIC OF COLOMBIA

FOR THE LA GUAJIRA WATER AND SANITATION INFRASTRUCTURE AND SERVICE MANAGEMENT PROJECT

Public Disclosure Authorized October 15, 2018

Water Global Practice Public Disclosure Authorized Colombia Country Management Unit Latin America and the Caribbean Region

CURRENCY EQUIVALENTS

(Exchange Rate Effective as of April 16, 2018)

Currency Unit = Colombian Peso (COP) COP 2,705.34 = US$1 US$ 0.0003696 = COP 1

FISCAL YEAR January 1 ‐ December 31

Regional Vice President: Jorge Familiar Calderon Country Director: Ulrich Zachau Senior Global Practice Director: Guang Zhe Chen Practice Manager: Rita E. Cestti Task Team Leaders: Miguel Vargas‐Ramirez Antonio Manuel Rodriguez Serrano ICR Team Leader: Antonio Manuel Rodriguez Serrano ICR Contributing Authors: Antonio Manuel Rodriguez Serrano Elizabeth Hunter Eiseman

ABBREVIATIONS AND ACRONYMS APL Adaptable Program Loan AT Temporary Administration ‐ Administración Temporal CAS Country Assistance Strategy CONPES National Council of Economic and Social Policy ‐ Consejo Nacional de Política Económica y Social CRA Commission for Regulation of Water Supply and Sanitation ‐ Comisión Reguladora de Agua Potable y Saneamiento Básico DNP National Planning Department ‐ Departamento Nacional de Planeación EIA Environmental Impact Assessment FM Financial Management GoC Government of Colombia HPD Hour per Day IBRD International Bank for Reconstruction and Development IPP Indigenous Peoples Plan IRP Indigenous Resettlement Plan IRR Internal Rate of Return LPS Liters per Second M&E Monitoring and Evaluation MAVDT Ministry of Environment, Housing and Regional Development ‐ Ministerio de Ambiente, Vivienda, y Desarrollo Territorial MVCT Ministry of Housing, City and Territory ‐ Ministerio de Vivienda, Ciudad y Territorio MDG Millennium Development Goal NGO Non‐Government Organization NRW Non‐Revenue Water O&M Operation and Maintenance PAD Project Appraisal Document PDA Departmental Water Plan ‐ Plan Departamental del Agua PDO Project Development Objective PIU Program Implementation Unit POI Works and Investment Plan ‐ Plan de Obras e Inversión PPI Indigenous Peoples Plan – Plan de Poblaciones Indígenas PRI Indigenous Peoples Resettlement Plan – Plan de Reasentamiento Indígena RPF Resettlement Policy Framework RF Results Framework SGP General Revenue Sharing System ‐ Sistema General de Participaciones SO Specialized Operator SSPD Superintendence of Domiciliary Public Services ‐ Superintendencia de Servicios Públicos Domiciliarios TA Technical Assistance UFW Unaccounted for Water WSS Water Supply and Sanitation WWTP Wastewater Treatment Plant

TABLE OF CONTENTS

DATA SHEET ...... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ...... 6 A. CONTEXT AT APPRAISAL ...... 6 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION ...... 9 II. OUTCOME ...... 11 A. RELEVANCE OF PDOs ...... 11 B. ACHIEVEMENT OF PDOs (EFFICACY) ...... 12 C. EFFICIENCY ...... 16 D. JUSTIFICATION OF OVERALL OUTCOME RATING ...... 17 E. OTHER OUTCOMES AND IMPACTS ...... 18 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ...... 19 A. KEY FACTORS DURING PREPARATION...... 19 B. KEY FACTORS DURING IMPLEMENTATION ...... 20 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 22 A. QUALITY OF MONITORING AND EVALUATION (M&E) ...... 22 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ...... 23 C. BANK PERFORMANCE ...... 24 V. LESSONS AND RECOMMENDATIONS ...... 25 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ...... 27 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ...... 63 ANNEX 3. PROJECT COST BY COMPONENT...... 66 ANNEX 4. EFFICIENCY ANALYSIS ...... 67 ANNEX 5. BORROWER, CO‐FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 85 ANNEX 6. SUPPORTING DOCUMENTS ...... 86 ANNEX 7. ADDITIONAL TABLES ...... 87

The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

DATA SHEET

BASIC INFORMATION

Product Information Project ID Project Name

La Guajira Water & Sanitation Infrastructure and Service P096965 Management Project

Country Financing Instrument

Colombia Investment Project Financing

Original EA Category Revised EA Category

Partial Assessment (B) Partial Assessment (B)

Organizations

Borrower Implementing Agency

Unidad Ejecutora del Programa, Administracion Temporal Department of La Guajira with the Guarantee of the Sector de Agua Potable y Saneamiento Basico de La Republic of Colombia Guajira

Project Development Objective (PDO)

Original PDO The objective of the proposed Project (APL Phase I) is to improve the quality of water supply and sanitation services in urban,peri‐urban areas, and rural areas of La Guajira, moving towards complete coverage with continuous supply of potable water for urbanareas. Specifically, the proposed operation will increase service quality for water supply, sanitation, and wastewater treatment inurban areas for 300,000 consumers and improve the sustainability of service by (a) supporting utility institutional performancethrough the Government of Colombia#s #Specialized Operator# policy, and (b) delivering the necessary water and sanitationinfrastructure.

Revised PDO The Project Development Objective (PDO) is "to improve the quality of water supply and sanitation services in urban, peri‐urban, and rural areas of the Borrower’s territory by: (a) supporting utility institutional performance through the use of "specialized operators"; and (b) delivering the necessary water and sanitation infrastructure.”

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

PDO as stated in the legal agreement Original PDO as stated in Legal Agreement (different from PAD): The objective of the Project is to improve the quality of water supply and sanitation services in urban and peri‐ urban areas of the Borrower's territory by: (a) supporting utility institutional performance through the use of "specialized operators"; and (b) delivering the necessary water and sanitation infrastructure.

Revised PDO as stated in the amendment of the Legal Agreement (same as RP) The objective of the Project is to improve the quality of water supply and sanitation services in urban, peri‐urban and rural areas of the Borrower's territory by: (a) supporting utility institutional performance through the use of "specialized operators"; and (b) delivering the necessary water and sanitation infrastructure.

FINANCING

Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing

90,000,000 71,441,085 71,441,085 IBRD‐74340 Total 90,000,000 71,441,085 71,441,085

Non‐World Bank Financing Borrower 50,000,000 50,000,000 36,720,000 Municipalities of Borrowing 10,200,000 10,200,000 0 Country Local Sources of Borrowing 8,000,000 8,000,000 0 Country Total 68,200,000 68,200,000 36,720,000 Total Project Cost 158,200,000 139,641,085 108,161,085

KEY DATES

Approval Effectiveness MTR Review Original Closing Actual Closing 15‐Mar‐2007 26‐Jun‐2007 01‐Nov‐2011 15‐Oct‐2011 16‐Apr‐2018

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

RESTRUCTURING AND/OR ADDITIONAL FINANCING

Date(s) Amount Disbursed (US$M) Key Revisions 07‐Oct‐2011 10.00 Change in Loan Closing Date(s) 30‐Nov‐2011 10.00 Change in Project Development Objectives Change in Loan Closing Date(s) Change in Safeguard Policies Triggered Change in Institutional Arrangements Change in Procurement Change in Implementation Schedule 22‐Sep‐2015 43.27 Change in Loan Closing Date(s) Change in Implementation Schedule 28‐Apr‐2016 49.27 Change in Results Framework 14‐Apr‐2017 56.27 Change in Loan Closing Date(s) Change in Implementation Schedule 12‐Oct‐2017 63.27 Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Reallocation between Disbursement Categories

KEY RATINGS

Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Modest

RATINGS OF PROJECT PERFORMANCE IN ISRs

Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 04‐Jun‐2007 Satisfactory Satisfactory 0

02 15‐Dec‐2007 Satisfactory Satisfactory 0

03 30‐Jun‐2008 Unsatisfactory Unsatisfactory 0

04 10‐Dec‐2008 Unsatisfactory Unsatisfactory 0 Moderately 05 07‐May‐2009 Moderately Unsatisfactory 0 Unsatisfactory Moderately 06 17‐Dec‐2009 Moderately Unsatisfactory 0 Unsatisfactory Moderately 07 14‐May‐2010 Moderately Unsatisfactory 0 Unsatisfactory

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Moderately 08 22‐Feb‐2011 Moderately Unsatisfactory 10.00 Unsatisfactory Moderately 09 16‐Oct‐2011 Moderately Satisfactory 10.00 Unsatisfactory Moderately 10 01‐Feb‐2012 Moderately Satisfactory 10.00 Unsatisfactory Moderately 11 10‐Nov‐2012 Moderately Unsatisfactory 10.00 Unsatisfactory Moderately 12 09‐Jul‐2013 Moderately Unsatisfactory 10.00 Unsatisfactory Moderately 13 23‐Feb‐2014 Moderately Unsatisfactory 15.00 Unsatisfactory 14 09‐Jul‐2014 Moderately Satisfactory Moderately Satisfactory 15.00 Moderately 15 04‐Dec‐2014 Moderately Satisfactory 22.00 Unsatisfactory Moderately 16 11‐May‐2015 Moderately Satisfactory 37.00 Unsatisfactory 17 11‐Sep‐2015 Moderately Satisfactory Moderately Satisfactory 43.27

18 30‐Mar‐2016 Moderately Satisfactory Moderately Satisfactory 49.27 Moderately 19 22‐Sep‐2016 Moderately Unsatisfactory 56.27 Unsatisfactory Moderately 20 30‐May‐2017 Moderately Unsatisfactory 56.27 Unsatisfactory 21 07‐Dec‐2017 Moderately Satisfactory Moderately Satisfactory 63.27

22 16‐Apr‐2018 Moderately Satisfactory Moderately Satisfactory 66.27

SECTORS AND THEMES

Sectors Major Sector/Sector (%)

Public Administration 8 Sub‐National Government 8

Water, Sanitation and Waste Management 92 Sanitation 21 Water Supply 71

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Private Sector Development 10

Public Private Partnerships 10

Social Development and Protection 15

Social Inclusion 15

Indigenous People and Ethnic Minorities 10

Participation and Civic Engagement 5

Urban and Rural Development 55

Urban Development 45

Services and Housing for the Poor 10

Urban Water and Sanitation 35

Rural Development 10

Rural Water and Sanitation 10

Environment and Natural Resource Management 20

Environmental Health and Pollution Management 10

Water Pollution 10

Water Resource Management 10

Water Institutions, Policies and Reform 10

ADM STAFF

Role At Approval At ICR

Regional Vice President: Pamela Cox Jorge Familiar Calderon

Country Director: Makhtar Diop Ulrich Zachau

Senior Global Practice Director: Laura Tuck Guangzhe Chen

Practice Manager: John Henry Stein Rita E. Cestti Antonio Manuel Rodriguez Menahem Libhaber, David N. Task Team Leader(s): Serrano, Miguel Vargas‐ Sislen Ramirez Antonio Manuel Rodriguez ICR Contributing Author: Serrano

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. Department Context. At appraisal, La Guajira was one of Colombia’s least developed and most impoverished departments.1 Almost all of the La Guajira’s 520,000 residents were categorized as strata one, two or three according to Colombia’s national classification system.2 Just over 40 percent of the population belonged to the Wayuu indigenous group. The Wayuu had lived in the region for more than 3,000 years and lacked almost all access to basic public services. 2. La Guajira, however, was also one of Colombia’s richest departments in terms of natural resource. El Cerrejón, one of the world’s largest open‐pit coalmines, generated approximately US$50 million per year in royalties for La Guajira. Nevertheless, the Department’s leaders were not utilizing this source of revenue systematically to improve infrastructure and public services. The public felt that fraud and corruption was a principle cause for the failure of public sector institutions.3 The Department also faced a staggering degree of political instability and deficiencies in institutional capacity. 3. Sector Context. The water supply and sanitation (WSS) sector was particularly challenging in La Guajira given the scarcity of water, limited managerial capacity and significant gaps in infrastructure. Urban centers in La Guajira suffered from water scarcity issues in the form of unreliable access (some residents reported receiving water once every two weeks). Twelve out of the Department’s 13 urban centers (Southern La Guajira), however, were producing three times more water than it would theoretically take them to supply water to all residents 24 hours a day.4 Urban water scarcity issues were largely the result of local service providers’ limited managerial capacity and inadequate infrastructure. The water issues in the Middle and Upper La Guajira, however, were distinct. These mainly rural regions suffered from a serious lack of water. Residents relied heavily on rainwater and oftentimes had to walk miles each day to find a water source. Residents of La Guajira also suffered from an increasing incidence of waterborne illness due to poor water quality.5 Around 45 percent of the water distributed in urban areas was not potable or presented high or medium sanitary risk levels. The ground water in the Upper Guajira was considered highly saline and unfit for consumption in its raw form. 4. Access rates in La Guajira were also far below national averages. For instance, only 68.2 percent of the population in La Guajira had access to water connections, while nationally 88.3 percent of Colombians had access. Similarly, only 35.1 percent of the population in La Guajira had access to sewerage connections while nationally 74 percent of Colombians had access. Moreover, only 10 percent of collected wastewater was treated. WSS providers faced considerable challenges given the backlog of needed investment, poor maintenance and a culture of non‐payment. 5. Institutional Context. Colombia’s 1991 Constitution supported a transition from the Government of Colombia (GoC) directly providing public services to private or public companies providing services. The Constitution included general rules for the participation of the private sector. In line with the 1991 Constitution, the Residential Public Services Law (Law No. 142 of July 11, 1994) decentralized public service provision to the municipal governments, who were responsible for ensuring efficient WSS service. The Law established that the

1 Colombia is divided into 32 departments, which are intermediate level of public administration, akin to provinces. 2 The Government classifies the population in six socioeconomic strata, whereby strata one represents the poorest population and strata six represents the richest population. The Government provides subsidies for strata one through three. 3 Finding from public consultations carried out during Project preparation. 4 Project Appraisal Document (PAD) pg. 40 5 National Health Institute. Status of Water Quality Surveillance for Consumption Human in Colombia 2007 ‐ 2011.

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

institutions and entities allowed to provide public services must be public service companies set up as public companies under commercial law. All residential public service companies had to convert to stock companies that could either be state‐owned, private or mixed. Under this Law, the GoC was placed in charge of developing sector policies and overseeing/enforcing implementation of regulations6 and the Ministry of Housing, City and Territory (Ministerio de Vivienda, Ciudad y Territorio, MVCT) became responsible for sector policymaking and for implementing national policies, plans and programs. 6. Despite the Law’s requirement that municipalities establish public service companies, nearly half of the country’s 1,122 municipalities continued to provide service directly. At the time of appraisal, the national GoC was actively supporting the involvement of the private sector in WSS service provision, especially in complicated areas where the traditional public utility approach had not succeeded. The World Bank‐financed Water Sector Reform Assistance Project (IBRD‐70770, 2001‐2010) facilitated the participation of private Specialized Operators (SOs), commercially independent utilities established as public companies, in the operation and management (O&M) of water utilities.7 The SOs operated under either an operation‐and‐invest model, in which public funds were utilized to cover investment costs that could not be covered by tariffs, or an operation‐only concession model. Under this approach, the municipalities were responsible for hiring and ensuring that the SOs were in compliance with the regulations, policies and norms established by the National‐level sector institutions. At appraisal, there were three SOs operating in La Guajira and a myriad of other SOs throughout the country. 7. In parallel, the GoC with the support of the World Bank was preparing a model to promote greater involvement of the country’s 32 departments in the planning and oversight of WSS services. Despite the progress experienced with the introduction of SOs,8 the GoC sought to involve departments in the management of financial resources and technical support of WSS given the fragmented and complex reality of working directly with a multitude of municipalities. This model, which launched in 2008 soon after the approval of the Project, became known as the Departmental Water Plans (Planes Departmental del Agua, PDA).9 Under the PDA, the GoC channeled funding through the departments as opposed to the municipalities. The Department of La Guajira – with the support of the Project ‐ piloted the PDA model. 8. Higher‐Level Objectives. The GoC requested a World Bank‐funded WSS Project in La Guajira given the Department’s critical WSS conditions and the challenges associated with working in La Guajira. The Project directly supported the GoC’s reform efforts, which focused on extending the SO model and launching Colombia's national PDA program.10 The Project was designed as a pilot effort to enhance sector efficiency and was expected to provide a replicable model for other departments. In addition, the Project directly supported the Department’s four‐year plan for universal coverage, and Colombia’s effort to achieve the Millennium Development Goals (MDGs) for WSS. The Project was also aligned with three objectives of the 2003‐2007 Country Assistance Strategy’s (CAS), namely: “Achieving Sustainable Growth,” “Improving Infrastructure Services to the Poor,” and “Sharing the Fruits of Growth.” 9. Rationale for Bank Assistance. The GoC and the Department requested Bank support given the dire need for WSS service improvements in La Guajira and the high‐level of difficulty of working in La Guajira. The Bank’s safeguard instruments and procurement processes were attractive to the GoC given the Department’s history of corruption and weak investments. The Bank was well positioned to support the Project given its involvement in

6 Charting a New Course: Structural Reforms in Colombia’s Water Supply and Sanitation Sector, World Bank, 2010. 7 ibid. 8 IEG Project Performance Assessment Report No. 111404 – Public and Private Paths to Sustainable Water Supply and Sanitation in Colombia 1999‐2011 9 In August 2008, the Ministry of Environment, Housing and Regional Development (MADVT) issued Decree 320, which included the regulations for the PDA program. 10 The PDA was not formally approved until after Project approval. As such, it is not mentioned by name in the PAD.

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Colombian WSS reform, experience supervising WSS modernization and institutional strengthening projects, potential to increase transparency in the sector, and experience working with indigenous populations. At appraisal, the Bank was supporting the implementation of the following WSS projects in Colombia: the Cartagena Water Supply, the Sewerage and Environmental Management Project, the Water Sector Reform Assistance Project and the Water and Sanitation Sector Support Project. Theory of Change (Results Chain) 10. The table below (Table 1) summarizes the theory of change or the results chain behind the Project, as described in the Project Appraisal Document (PAD). Table 1. Theory of Change

Activities Outputs PDO/Outcomes Long‐Term Assumptions Outcomes Support utility institutional Increased revenue Improve the quality of MDG targets The SO model would performance through the collection. water supply and 2003‐07 CAS11 Goals effectively improve service use of SOs. Reduced unaccounted sanitation services in Health, Livelihood over the course of the Finance civil works, for water (NRW). urban and peri‐urban and Environmental Project equipment, and services for areas. Improvements Increased use of micro‐ WSS for at least 10 meters. municipalities with operators (private or joint Optimized water supply venture) that have proven and sewerage networks. experience. Implement a pilot approach Community managing Approach for improving Approach replicated The communities were for extending access to WSS operation of basic WSS access in an throughout rural La willing and have the capacity services in rural areas. services in 11 systems. efficient and Guajira to manage the systems Institutional and financial sustainable manner in The Department was arrangements for scaling rural, mostly Wayuu, committed to replicating the up pilots developed. areas that can be model throughout La Guajira scaled‐up. Project Development Objectives (PDOs) 11. The Project Development Objective (PDO) as stated in the Loan Agreement was to “improve the quality of water supply and sanitation services in urban and peri‐urban areas of the Borrower’s territory by: (a) supporting utility institutional performance through the use of “specialized operators”; and (b) delivering the necessary water and sanitation infrastructure.” Key Expected Outcomes and Outcome Indicators 12. The Project had one PDO‐level Indicator: 300,000 consumers receive improved access to reliable and safe WSS services. It expected to benefit 300,000 people (250,000 were estimated to be from strata one, two or three) with improved WSS services. Of these 300,000 people, the Project expected to provide new WSS connections to an un‐served population of about 90,000, all of who were classified as strata one or two. 13. The Project was structured as an Adaptable Program Loan (APL) with the first phase (the Project) focused on improving WSS services in urban and peri‐urban areas, developing an overall department strategy and supporting a rural pilot with the aim of building a concrete model for providing sustainable WSS services in rural indigenous communities. Phase II was expected to focus primarily on rural areas.

11 World Bank, Country Assistance Strategy of the World Bank Group for the Republic of Colombia (Report No. 25129‐CO).

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Components 14. The Project had three components. Component 1: Urban WSS Infrastructure (US$129 million of which US$76 million IBRD) aimed to finance civil works, equipment, and services for urban WSS services in the participating municipalities of the Department of La Guajira. At least ten municipalities of the Department were expected to participate. Component 2: Rural Pilots (US$7 million of which US$7 million IBRD) intended to finance a small pilot of activities to improve the access of rural, mostly indigenous Wayuu, communities to appropriate water supply and sanitation services in an efficient and sustainable manner. The objective of the component was to develop a replicable approach and a model for scaling up during Phase II of the APL. Component 3: Project Management and Analytical Activities (US$7 million of which US$7 million IBRD) aimed to finance goods and services associated with the management of Project and analytical work for the design of the APL Phase II. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION Revised PDOs and Outcome Targets 15. In November 2011, the PDO was adjusted to include rural areas given that the Rural Pilot Component had been further defined. The adjusted PDO was “to improve the quality of water supply and sanitation services in urban, peri‐urban, and rural areas of the Borrower’s territory by: (a) supporting utility institutional performance through the use of “specialized operators”; and (b) delivering the necessary water and sanitation infrastructure.” Despite the wording of the PDO, no outcome indicators for rural sanitation were included in the Project’s result framework (RF). 16. In November 2011 and April 2016, the Project’s RF was revised as presented in the section below (Table 2). Outcome targets were revised in subsequent restructurings to reflect updated plans and closing dates. Table 2. Revised PDO Indicators Original Restructuring – 11/30/2011 Restructuring – 04/28/2016 300,000 consumers receive improved access to reliable and safe WSS services Number of municipalities with SOs participating in the Number of municipalities with SOs participating in the PDA/Project with Adjusted Performance standards PDA/Project with Adjusted Performance standards Level of water service as measured by a series of core indicators (brought from the intermediate level) Direct Project Beneficiaries (number), of which female (percentage)” (Target 360,000) Number of people in urban areas provided with access to Improved Water Sources under the project (number) Number of people in rural areas provided with access to Improved Water Sources under the project (number)12 People provided with access to ‘improved sanitation facilities (number)13 Number of uninterrupted hours per day of running water in participating municipalities Percentage of households in participating municipalities with micro‐metering Satisfaction level of indigenous communities with Reduction of time spent fetching water in communities reservoirs served by the rural water supply systems (hours).

12 As per the World Bank Guidelines on Core Indicators, “Improved Water Sources,” include piped household connections (house or yard connections), public standpipe, boreholes, protected dug well, protected spring and rainwater collection. 13 As per the World Bank Guidelines on Core Indicators, “Improved Sanitation Facilities,” include flush/pour‐flush into a piped sewer system, septic tank or pit latrine, VIP latrine, pit latrine with slab, and compositing toilets.

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Revised PDO Indicators 17. In April 2016, the Project’s RF was revised to: (i) include required corporate indicators (core indicators), (ii) adjust indicators and include new indicators to better measure the PDO and adequately reflect progress achieved under the Project, (iii) reflect Project activities and foreseen targets, and (iv) correct inconsistencies in the RF presented in the PAD and the RF presented in the 2011 Restructuring Paper (Report No: 64938‐CO). Revised Components 18. The components were not formally revised, but the rural pilot component (Component 2) became better defined over the course of implementation. The activity to improve water services in rural areas focused on the construction of reservoirs and appropriate ancillary infrastructure (fences, drinking points, spillways and other dam safety measures) in selected indigenous communities. The activity also supported the formation of community water committees to maintain the reservoirs. The WSS situation in rural La Guajira was complex and challenging – as such the Project strategically focused mainly on rural water. Rural sanitation activities were implemented under the PDA, the Indigenous People Resettlement (IPR) plan in Riohacha and the Indigenous People Plans (IPP) in Maicao and Uribia. Other Changes 19. Over the course of implementation, the Project underwent six restructurings. In all but one of those restructurings the closing date was extended. The Project’s closing date was ultimately extended from October 15, 2011 to April 16, 2018. 20. In February 2017, the National Government temporarily assumed responsibility for the Department’s health, education and water sectors for a period of three years14 given the Department’s political difficulties and governance problems (See Implementation Section). The Government assigned a Temporary Administration (Administración Temporal, AT) under the MVCT to manage WSS funds on behalf of the Department for three years through February 2020.15 21. The focus on carrying out the second phase of the APL diminished with the implementation delays. Moreover, the Bank dropped the APL instrument over the course of implementation, updating OP/BP 10.00 to consolidate all Bank investment lending under Investment Project Financing. Rationale for Changes and Their Implication on the Original Theory of Change 22. The rationale for the different restructurings was as follow:  First Restructuring: October 7, 2011. The restructuring extended the closing date from October 15, 2011 to December 31, 2011 in order to give the Bank, the GoC and the Departmental Government enough time to prepare a more comprehensive restructuring (described below).  Second Restructuring: November 30, 2011. The restructuring modified the implementation and procurement arrangements to align the Project with the 2008 PDA. In the original design, the municipal governments were responsible for implementing the urban infrastructure investments. At this restructuring, the implementation arrangements were revised to give the Department, through an external management agency (the Gerencia), responsibility for the contracting and implementation of the infrastructure investments. The Project’s Theory of Change for the outcome “improved WSS service quality” was strengthened through this adjustment, as the main activity, Support utility institutional performance through the use of SOs, was expected to be further supported by the Department/Gerencia under this arrangement. The restructuring also included an extension

14 CONPES 3883, dated February 21, 2017. 15 Resolution No. 0460, dated February 21, 2017 (Medida Correctiva de Asunción Temporal de la Competencia en la prestación del servicio del Agua Potable y Saneamiento Básico en el Departamento de La Guajira) (Medida Preventiva)

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of the closing date until October 15, 2015. The Project required a long‐term extension given the initial political resistance to implementation (See Implementation Section). As indicated above, the restructuring also modified the PDO to include rural areas given that the Rural Pilot Component had been further defined. The Project’s Theory of Change for the rural pilot component also became better defined at this stage in terms of the “activities” and “outputs.” The central activity was supporting the Department’s rural reservoir program and the output was adequately defined as “protected rainwater reservoirs throughout the Mid and Upper Guajira.” Accordingly, the restructuring triggered a new safeguard policy, OP 4.37 on Dam Safety.  Third Restructuring: September 22, 2015. Under this restructuring, the Project’s closing date was extended from October 15, 2015 to April 15, 2017 and the implementation and disbursement schedule were adjusted.  Fourth Restructuring: April 28, 2016. The restructuring modified the RF to better align the PDO‐level indicators with the Bank’s core indicators, strengthen outcome indicators, revise baselines and targets, and correct inconsistencies (See Table 2).  Fifth Restructuring: April 7, 2017. Given the GoC’s renewed commitment to improve Project performance through the AT, this restructuring extended the closing date by six months, from April 15, 2017 to October 15, 2017, to enable the Project to meet several of its intermediate results and PDO‐level indicators, to consolidate social and institutional strengthening activities, to advance with safeguard and fiduciary policy compliance, and to permit further progress on ongoing works contracts.  Sixth Restructuring: October 12, 2017. This final restructuring enabled the reallocation between disbursement categories in line with the actual components costs and extended the closing date until April 16, 2018 to permit the completion of ongoing works and an orderly Project closing. The restructuring was granted given the dramatic turnaround in Project implementation since the April 2017 restructuring. II. OUTCOME A. RELEVANCE OF PDOs Assessment of Relevance of PDOs and Rating Rating: High 23. The PDO remains highly relevant to Colombia. The PDO is aligned with two of the FY16‐FY21 Country Partnership Framework’s three pillars,16 namely: (i) fostering balanced territorial development and (ii) enhancing social inclusion and mobility through improved service delivery. In addition, the PDO is well aligned with the 2015 Colombia Systematic Country Diagnostic (SCD). Remedying the infrastructure and public service delivery gaps across regions/departments is highlighted as a frontline priority in the SCD for inclusive and sustainable growth. The SCD identifies “uneven territorial development” and gaps in “standards of living between rural and urban areas, across geographic regions, and even across departments and municipalities” as defining characteristics that will “condition” future poverty eradication and sustainable, shared prosperity. L Guajira is one of the poorest regions in Colombia and has suffered from corruption, public sector mismanagement and unfavorable climatic conditions (extremely low precipitation levels and droughts). The Project is also fully aligned with the National Government’s strategy for the Department. As outlined in Colombia’s National Council of Political and Social Economy 2017 report on the Department, the GoC deployed extraordinary measures (the establishment of the AT) to ensure more effective implementation of the Project and, in line with the Project’s PDO, to improve WSS service quality throughout La Guajira. The report highlights the GoC’s focus on improving WSS in La Guajira. The PDO also directly supports Colombia in its efforts to meet Sustainable Development Goal Six ̶ Ensure availability and sustainable management of water and sanitation for all.

16 World Bank, Report No. 101552‐CO.

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B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome 24. Overall, the Project far surpassed its direct beneficiaries goal. About 422,269 people (target 360,785 people), of which 51 percent female, received access to improved water and sanitation services in urban and rural areas of participating municipalities from La Guajira as a result of the Project. 25. The PDO contained four objectives: (i) increase water supply service quality in urban and peri‐urban areas of La Guajira; (ii) increase sanitation service quality in urban and peri‐urban areas of La Guajira; (iii) increase water supply service quality in rural areas of La Guajira; and (iv) increase sanitation service quality in rural areas of La Guajira. The Project’s achievement of each of these objectives is analyzed below. PDO 1: Increase water supply service quality in urban and peri‐urban17 areas of La Guajira. 26. In the urban context, the ICR team measured water supply service quality based on the reliability (continuity) and safety (quality) of the water provided. This definition is based on the original definition in the PAD. During the 2011 and 2016 restructurings, however, the “safety” aspect of service quality was dropped. Table 3. PDO 1: Outcome of Key Indicators Pre and Post Restructurings Indicator Percentage Achieved / Result Comments Pre‐2011 Restructuring (June 2007 to November 2011) – Rating: Substantial 300,000 consumers receive 136 percent achieved. Safe was defined in the PAD as drinking water quality meets improved access to reliable and national standards, but reliable was not defined. As such, the ICR safe WSS services team, based on the results‐level indicators defined reliability as continuity. The Project improved the reliability and safety of water service through the extension of piped water and hydraulic optimization activities. Some 409,160 urban residents received access to improved water services as a result of the Project. Water quality risk index assessments revealed that the water provided met national quality standards18 in each of the participating municipalities. Water service continuity increased from an average of 8 hours to an average of 11.4 hours in participating municipalities and surpassed 22 hours in prioritized sectors benefiting 58,000 people (19 percent of target population). Post 2011 Restructuring (November 2011 to April 2016) – Rating: Substantial Number of municipalities with SOs 125 percent achieved. The Project supported seven municipalities with SOs, exceeding participating in the PDA/Project the target of six. This is a significant achievement given the SOs, with Adjusted Performance with the adjusted service performance standards by contract, will standards* likely contribute to the achievement and sustenance of results. Level of water service as measured Moderately Satisfactory (MS), This indicator was based on an index that combined categories by a series of core indicators since two targets have been related to water and sanitation.19 The Project surpassed the achieved, two additional targets for water supply infrastructure coverage (target: 88 targets will likely be met by percent; actual: 90 percent) and sewerage infrastructure coverage June 2019, and improvements (target: 74 percent; actual: 80 percent). The Project registered have been registered in all improvements in all other water‐related indicators, including NRW other water‐related (target: 40 percent; actual: 57 percent; target achieved in Albania categories, for this indicator’s and Maicao and almost in Riohacha), revenue collection (target: 54 index. percent; actual: 48 percent; target achieved in Riohacha),

17 The participating municipalities do not have a clear distinction between urban and peri‐urban areas, both are considered as part of the urban areas. 18 According to the Colombian National Health Institute, the Water Quality Risk Index (Índice de Riesgo de Calidad del Agua – IRCA) needs to be below 5 percent to be suitable for human consumption. 19 The index measured NRW, revenue collection, water supply infrastructure coverage, continuity, micro‐metering, wastewater treatment, sewerage infrastructure coverage, and the number of subscribers for water supply and sewerage infrastructure.

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

continuity (target: 22 hours; actual: 11.4 hours), and micro‐ metering (target: 81 percent, actual: 51 percent).20 By June 2019, the NRW and the revenue collection targets will likely be met. Post 2016 Restructuring (April 2016 to Close) – Rating: Substantial Number of people in urban areas 115 percent of revised target Under the Project, 409,160 urban residents had access to provided with access to Improved achieved. improved water sources exceeding by the target of 357,285. Water Sources under the project Number of uninterrupted hours per 81 percent achieved. Service continuity improved from an average of eight hours to an day of running water in average of 11.4 hours (revised target 14 hours). Water service participating municipalities continuity reached unprecedented average of 22‐24 uninterrupted hours of service seven days a week for some 58,000 people in prioritized sectors of participating municipalities. By June 2019, service continuity will likely reach 13.1 hours on average in participating municipalities. Percentage of households in 72 percent achieved. The Project increased micro‐metering coverage from 16 percent to participating municipalities with 51 percent (42,183 meters) over the course of implementation, micro‐metering (2016 achieving 72 percent of the target of 81 percent (59,512 meters). restructuring) The Project encountered various shortcomings in achieving this goal, including: blockages due to the concentration of calcium in the water, community and political resistance to metering and a weak/unreliable baseline. The baseline was weak given that not all the meters that were installed pre‐Project were functional and the number of households subscribed to water services increased above expected projections. *Indicator maintained throughout the end of the Project 27. Pre‐Restructuring Rating: Substantial. As indicated in the table above, the Project far surpassed its general access goal as well as its access to safe water services. Some 58,000 residents also received access to a continuous supply of water for 22 plus hours a day in prioritized sectors, namely in Albania (4,572), Maicao (21,660), Riohacha (22,698) and Villanueva (9,159), representing 19 percent of the original target population. 28. Post‐2011 Restructuring Rating: Substantial. The Project surpassed its goal in terms of the number of SOs participating in the Project. In regard to the “index” water service indicator, the Project registered overall improvements in all Project areas (Riohacha, Maicao and Fonseca) related to water service and surpassed the targets for water supply and sewerage infrastructure coverage. In addition, it surpassed the NRW goal in Albania and Maicao and the revenue collection goal in Riohacha. 29. Post‐2016 Restructuring Rating: Substantial. As illustrated in Table 3, over the course of implementation, the Project substantially increased access to improved water services in urban and peri‐urban areas of La Guajira. In addition, it exceeded the access to improved water source target and extending urban infrastructure to 90 percent of the benefitting municipalities (surpassing the Project’s target of 88 percent). The Project had a marked impact on service quality in the Department’s largest municipalities, Riohacha21 and Maicao. As a result of the Project, over 10,000 households in Riohacha’s and Maicao’s urban centers gained access to uninterrupted water service (24 hours a day, seven days a week) for the first time in the Cities’ history. 30. The Project is likely to fully deliver on water service access and quality once the ongoing works are completed by June 2019. At the time of the ICR, all work contract for the hydraulic optimization of water systems in Albania, Barrancas, San Juan del Cesar and Villanueva were solidly ongoing, the five support boreholes (which

20 The urban targets established in the pre‐restructuring framework reflected five municipalities linked to the PDA, Riohacha, Maicao, Fonseca, Uribia and Manaure. The latter two dropped out of the Project’s Component 1 and the municipalities of San Juan del Cesar, Villanueva, Albania and Barrancas joined the Project. 21 The US$21 million Riohacha Water Distribution Improvement Contract was the largest contract in the Project and benefitted around 200,000 people.

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

duplicate the water offer) in Maicao were completed and being tested, and the improvement to the Metesusto Water Treatment Plant (which will increase the Plant’s capacity from 300 to 500 liters per second) were to see its full impact on the downstream municipalities. With the completion of these works, coupled with adjusted service performance standards put in place by the SOs, by June 2019 the number of urban water beneficiaries will likely increase to over 418,900 people, the NRW and the revenue collection goals will likely be met, reaching 60 percent and 54 percent respectively, the micro‐metering coverage is expected increase to 67 percent (52,836 meters installed) and service continuity will likely reach an average of 13.1 hours a day in participating municipalities. PDO 2: Increase sanitation service quality in urban and peri‐urban areas of La Guajira 31. In the urban context, the ICR team measured sanitation service quality based on coverage of improved sanitation infrastructure and the wastewater treatment rate. The PAD did not define sanitation service quality. Table 4. PDO2: Outcome of Key Indicators Pre and Post Restructuring Indicator Percentage achieved / Results Comments Pre‐Restructuring (June 2007 to November 2011) – Rating: Substantial 300,000 consumers receive improved access 121 percent achieved. The Project provided with access to improved sanitation to reliable and safe WSS services facilities to 362,131 people (target 298,761 people). The PAD did not define safe or reliable sanitation. The ICR utilized the results‐level indicator for sanitation given the connection to sewerage networks ensured reliable and safe removal of the wastewater produced by connected households. percentage of urban households in 142 percent achieved. The Project increased sewerage coverage from 53 percent to participating municipalities connected to a 80 percent (target 72 percent). municipal sewerage network Post 2011 Restructuring (November 2011 to April 2016) – Rating: Modest Level of water service as measured by a Moderately Unsatisfactory As described in Table 3, this indicator was based on an index series of core indicators (MU), defined as improvement that combined categories related to water and sanitation. in at least four categories, for The Project surpassed the sewerage infrastructure coverage this indicator’s index. target, but the wastewater treatment rate decreased over the course of implementation due to the uncompleted wastewater treatment works in Riohacha and Maicao. Post 2016 Restructuring (April 2016 to Close) – Rating: Modest People provided with access to improved 121 percent achieved. The Project provided access to improved sanitation facilities sanitation facilities (2016 Restructuring) to 362,131 people, surpassing the target of 298,761 people. Wastewater Treatment Rate in participating 11 percent achieved, but likely The wastewater treatment rate target was achieved in municipalities to increase to 80 percent Barrancas, Fonseca, San Juan del Cesar and Villanueva. The achieved by June 2019. average wastewater treatment rate decreased from 20 percent to 14 percent. However, it is likely to reverse course and reach 62 percent in participating municipalities.

32. Pre‐Restructuring Rating: Substantial. The Project surpassed its target on percentage of urban households in participating municipalities connected to a municipal sewerage network, achieving an average 80 percent sewerage coverage and providing improved access to sanitation services to 362,131 people (target 298,761). 33. Post‐2011 Restructuring Rating: Modest. Although the Project surpassed the target related to sewerage infrastructure, the wastewater treatment rate decreased over the course of implementation. 34. Post‐2016 Restructuring Rating: Modest. The Project surpassed its goals in terms of people provided with access to improved sanitation in urban and peri‐urban areas. At the start of the Project, only 193,445 people had access and by the end of the Project 362,131 had access. These gains were the result of the Project’s support of SOs and infrastructure investments.

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

35. Although access to improved sanitation increased markedly over the course of implementation, the Project was unable to ensure adequate treatment of the collected sewage in Riohacha and Maicao, the Project’s largest municipalities. In this two localities, the Project supported the construction of wastewater treatment lagoons,22 but at the Project’s closure, the lagoons were pending completion.23 Wastewater treatment targets were achieved in Barrancas and Fonseca and exceeded in San Juan del Cesar and Villanueva, but the average wastewater treatment rate in Project areas actually decreased from 20 percent to 14 percent over the course of implementation given the deterioration of existing wastewater treatment infrastructure in Maicao and the pending completion of the Maicao and Riohacha lagoons. Nevertheless, the coverage rate will likely reverse course in 2019, given the new Administration is fully committed to complete these works. Both lagoons have been prioritized as part of the “La Guajira Azul,” a new WSS investment program aimed to achieve “water clean, always and for all in La Guajira” that was recently launched by the President of Colombia. The ICR team considered the construction of the Riohacha lagoon (8‐months term contract) should resume soon24 and will be likely completed in 2019, while the construction of the Maicao lagoon is likely to take longer given its current state of deterioration. Once Riohacha lagoon is completed, the wastewater treatment rate is expected to reach 90 percent in Riohacha, increasing the average wastewater treatment rate to 62 percent (80 percent of the average target) in participating municipalities. PDO 3: Increase water supply service quality in rural areas of La Guajira 36. In the rural context, the ICR team measured water service quality as access to improved water sources, level of satisfaction and reduction of time spent fetching water by the indigenous Wayuu communities in the catchment area of the reservoirs. Table 5. PDO3: Outcome of Key Indicators Pre and Post Restructuring Indicator Percentage achieved / Results Comments Post 2011 Restructuring (November 2011 to April 2016) – Rating: High Satisfaction level of indigenous Achieved The Project defined achievement of this indicators as communities with reservoirs “Expectations realized with respect to water availability, and (2011 Restructuring) partially with respect to quality.” As indicated by the time spent fetching water indicator, the availability of water increased dramatically. In terms of quality, the communities gained access to improved water sources (protected rainwater reservoirs). A Project´s survey carried out in indigenous Wayuu communities in the catchment area of seven of the reservoirs confirmed satisfactory results. Number of reservoirs Achieved The Project supported the construction of 10 reservoirs and constructed ancillary infrastructure. Post 2016 Restructuring (April 2016 to Close) – Rating: High Number of people in rural areas 254 percent achieved The Project provided 8,881 indigenous Wayuu people (target provided with access to 3,500) with access to improved water sources.

22 The Project did not directly support the construction of the lagoon in Maicao, to be constructed by the SO, but supported the social component through the IPP (Indigenous People Plan) safeguard. 23 The Riohacha construction contract was signed in January 2016 but was suspended in July 2016 (with only 9 percent physical progress) due initially to community opposition and subsequently to a new regulation instituted by the GoC that required the preparation of an archaeological plan (the plan was approved by the Colombian Institute of Anthropology and History (ICANH) at the Project’s closure). The construction of the Maicao lagoon was stalled because of complications around the purchase of land for the community members who had to relocate due to the construction of the lagoon. The lagoon was 95% complete when the communities started stalling the works because they had not received any of the benefits agreed on through “Consulta Previa”/IPP at that time. The SO finally acquired the land plot in November 2017, but the construction of the lagoon is still to be resumed. 24 The Riohacha lagoon archaeological plan has been approved by the Colombian Institute of Anthropology and History (ICANH).

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Improved Water Sources under the project (2016 restructuring) Reduction of time spent fetching 102 percent achieved The Project fully achieved this indicator, reducing the average time water in the communities spent fetching water by 4.1 hours (surpassing the target of 4 served by the rural water supply hours). systems (2016 restructuring) Number of reservoir constructed 125 percent achieved The Project supported the construction of 10 reservoirs (target 8) and ancillary infrastructure. 37. The Project provided 8,881 indigenous Wayuu people with access to improved water sources25 in rural areas, far exceeding its target of 3,500. The Project achieved this goal through supporting the construction of ten reservoirs and ancillary infrastructure (fence, livestock drinking points, dam safety measures) around those reservoirs. As a result of these investments, the time spent fetching water decreased by over four hours. Moreover, 9 of the 10 reservoirs have water quality that is apt for human consumption. In one reservoir, Gran Via, the salinity was above a potable level, but the municipality built a desalination plant to remedy the issue. PDO 4: Increase sanitation service quality in rural areas of La Guajira 38. Although the revised PDO implies that the Project had outcomes related to rural sanitation, the Project’s RF never contemplated targets for providing sanitation solutions to rural areas. The Project, however, supported investment in rural sanitation as part of the Indigenous Peoples Resettlement Plan (IRP) in Riohacha, the Indigenous Peoples Plan (IPP) in Maicao and the PDA. Rural sanitation related targets under the Riohacha IRP and the Maicao IPP were met and numerous rural beneficiaries gained access to improved sanitation services. As result of the Project, 468 rural indigenous Wayuu residents in Riohacha and 112 rural residents in Maicao shifted from open defecation or unimproved sanitation facilities to improved sanitation solutions, and 300 students gained access to school sanitation facilities for the first time. Furthermore, as part of the PDA, over 5,000 beneficiaries received access to sewerage and 12,000 to improved sanitation. Overall, the Project benefited approximately 17,880 people in rural areas with improved sanitation services, twice the rural water beneficiaries. Justification of Overall Efficacy Rating Rating: Substantial 39. A split evaluation was carried out (See Table 6) given that the PDO and associated targets were adjusted over the course of implementation. Based on the Project’s substantial achievement of the PDO pre‐ and post‐ restructuring, the ICR Team rates overall efficacy as Substantial.

C. EFFICIENCY Assessment of Efficiency and Rating Rating: Modest 40. All the interventions implemented under the Project were evaluated from economic and financial perspectives. The economic evaluation measured if the investment were justified, that is, if the economic benefits were higher than the costs associated with the intervention. The financial evaluation measured if the interventions were financially sustainable. At appraisal, investments were evaluated for all 15 municipalities in the Department. The evaluation was conducted using a cost benefit analysis. A financial evaluation of the operators was also carried out. Results of the economic analysis at appraisal showed that the interventions in the municipalities that implemented works were economically viable with an average return of 18 percent. The overall net benefit expected from the Project was US$42 million using a discount rate of 12 percent. Results of the financial analysis showed that the interventions were only financially viable if the GoC transferred funds to cover subsidies and the operators attained efficiency gains.

25 Protected rainwater reservoirs

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

41. Interventions were implemented in seven municipalities and rural areas. Two municipalities, Riohacha and Maicao, used 54 percent of Project funds. Following the methodology used at appraisal, a cost benefit analysis was carried out to evaluate the Project’s results. Actual achievements and actual costs of interventions were used in the evaluation. Benefits were estimated through an avoided cost approach based on actual savings the population reported. Flow of costs and benefits were transformed to 2007 prices to make them comparable to those foreseen at appraisal. As at appraisal, the evaluation utilized a discount rate of 12 percent and a 30‐year lifetime. Net benefits were estimated as the difference between incremental benefits and incremental costs of two scenarios: with and without Project. For the with Project scenario, actual costs and benefits were projected. For the without Project scenario, costs and benefits were projected as a business as usual scenario. Economic benefits for Component 1 were estimated as the savings of prices paid for water and operating costs when efficiencies were attained. Economic benefits for Component 2 were estimated as savings from reduced time spent fetching and collecting water. 42. Results show that Component 1 benefits surpassed expected benefits in the major municipalities of Maicao and Riohacha. Overall, actual benefits were US$34 million versus expected benefits of US$42 million. The actual return was 21 percent, which is higher than the 18 percent expected at appraisal. Component 2, which was not evaluated at appraisal, showed actual net benefits of US$1.3 million and 25 percent returns. Overall, the Project yielded net benefits of US$36 million and 21 percent returns. The financial analysis shows that, as expected at appraisal, the GoC transferred funds to municipalities for subsidies to the SOs and the operators attained efficiency gains.26 By the end of the Project, all the operators achieved full cost recovery, with margins ranging from 3 percent in Riohacha to 49 percent in Fonseca. The operation of the Project did not bring additional burden to the operators that could risk their financial sustainability. Rather, efficiency gains allowed the operators to operate at lower costs and to generate higher revenues. 43. As illustrated in the Key Factors That Affected Implementation Section, the Project’s administrative and operational efficiency was greatly impacted by political turnover, strong appreciation of the US dollar vis‐à‐ vis the Colombian peso and periodic resistance to the Project from politicians. These exogenous factors delayed implementation. The Project implementation period went over 10 years, which should not be considered as an outlier, given the fragility context and the rising risks that prevailed in La Guajira during the Project life. The original implementation period of four years was unrealistic. The Project Implementation Unit (PIU) exhibited administrative and operational efficiency shortcomings, associated with poor governance and political instability. The Task Team, however, pro‐actively adjusted the implementation arrangements, resulting in substantial administrative and operational efficiency improvements over the course of implementation. These factors jeopardize Project efficiency, which is assigned an overall rating of Modest.

D. JUSTIFICATION OF OVERALL OUTCOME RATING Rating: Moderately Satisfactory 44. Given that the Project’s PDO and PDO‐level indicators were revised during implementation, the ICR Team carried out a split evaluation (See Table 6). The split evaluation results in an overall outcome rating of Moderately Satisfactory.

26 The regulatory framework for tariff setting in Colombia establishes that in areas where most of the population is classified as poor (the case of La Guajira), tariffs should be set below the costs of providing the service. Nevertheless, the municipality is responsible for transferring the difference to the operator to guarantee full cost recovery. During Project implementation, the municipalities complied with their obligation and the operators charged and collected the appropriate tariff.

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Table 6. Split Evaluation Against Original Against Revised Against Revised (final) PDO Indicators PDO Indicators PDO Indicators Overall (Period: Launch to (Period: 11/30/2011 to (Period: 04/28/2016 to 11/30/2011) 04/28/2016) Completion) Relevance High High High Efficacy Substantial Substantial Substantial PDO 1 Urban Water Substantial Substantial Substantial PDO 2 Urban Sanitation Substantial Modest Modest PDO 3 Rural Water ‐ High High PDO 4 Rural Sanitation ‐ Substantial Substantial Efficiency Modest Modest Modest Overall Rating (6‐scale) 4 4 4 Weight (% disbursed 14.00% (US$10 million 54.97% (US$39.27 31.03% (US$22.17 US$71.44 million before/after PDO change) disbursed) million disbursed) million disbursed) (total disbursed at ICR) Weighted value 0.56 2.20 1.24 4.00 Final rating (rounded) Moderately Satisfactory

45. The Project’s Moderately Satisfactory outcome rating is further strengthened by counterfactual evidence that demonstrates the relevance, efficacy and efficiency of the Project. In 2009, the GoC launched a water bond program in an attempt to improve WSS investments at the municipal level. After six years of implementation, the program had only shown minimal results. In a 2015 article by the Colombian newspaper “La República,” it is reported that of the 117 participating municipalities, only 30 had operational systems.27 The article revealed that procurement processes were inadequate, financial resources were not used for their intended purpose, supervision was lacking, construction contracts stalled, and municipalities were left in debt among a myriad of other issues. E. OTHER OUTCOMES AND IMPACTS Gender 46. The Project did not have a specific gender angle. Nevertheless, women in La Guajira, especially in the rural sector, were affected disproportionately by the lack of access to water pre‐Project. Women and girls were largely responsible for walking long distances to collect water for their families. Additionally, the Project supported the construction of gender informed school sanitation facilities for some 300 students under the IPPs. Institutional Strengthening 47. As mentioned in the Context at Appraisal Section, the Project served as a pilot for the PDA program. As a result of this Project, the GoC adjusted the constitution so that other departments could launch their own PDA programs.28 At the time of the ICR, all of Colombia’s 32 departments had PDA programs. The launch of the PDA program represented a significant step forward for Colombia’s WSS sector as overseeing and regulating WSS service in the country’s multitude of municipalities had proved inefficient and ineffective for the GoC. 48. As part of the PDA program, the Project aimed to support the development of a departmental water company to oversee the sector, to channel funding from the GoC, and to provide support to SOs and utilities across the Department. The Department’s AT is currently acting as the de facto departmental water company and in doing so is laying the groundwork for a future company. In addition to demonstrating the dynamic of how the future water company can interact with the municipalities and SOs, the AT, which is composed of staff from La Guajira,

27 https://www.larepublica.co/infraestructura/las‐secuelas‐de‐los‐bonos‐agua‐en‐las‐obras‐seis‐anos‐despues‐2270216 28 Article 356 of the Constitution had to be changed to generate a pool of resources for WSS under the revenue sharing system (Sistema General de Participaciones, SGP). Previously, under Law 1176 (2007), 5.4 percent of the total amount of the SGP was dedicated to WSS, but the distribution was set as 15 percent for the Departments and 85 percent for municipalities.

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

is building local capacity to manage the future water company. The Project supported the development of a strategy to transition sector responsibility from the AT to the departmental water company. The MVCT, the AT, the Department and the Municipalities are also establishing a regional water company focused on indigenous communities. The planned Indigenous Water Company will support the provision and extension of access to improved water sources for Wayuu communities throughout the Department. With support from the MVCT, the Company will explore building and extending public water storage tanks and distribution points throughout the Mid and Upper La Guajira. The new Administration has prioritized investments in WSS in La Guajira and the President of Colombia has recently launched “La Guajira Azul” program aimed to achieve “water clean, always and for all in La Guajira” by 2020. This program incorporates financial and technical support to build additional infrastructure, both in urban and rural areas, including at the rural reservoirs, and improve WSS service quality in all the municipalities supported by the Project. Mobilizing Private Sector Financing 49. The Project did not mobilize private sector financing, but it supported the GoC’s strategy to utilize the private sector to fill viability gap through reverse concessions (management contracts with capital subsidies). The capital investment financed by the World Bank created an enabling environment that attracted private SOs, such as Avanzadas Soluciones de Acueducto y Alcantarillado S.A. E.S.P. (ASAA) in Riohacha and Aguas de la Peninsula in Maicao, to manage WSS services. Poverty Reduction and Shared Prosperity 50. The majority of the residents of La Guajira are classified as poor according to Colombia’s socio‐economic stratification system. The Project increased access to WSS services, improving these residents’ health and wellbeing. In Alta Guajira, anecdotal evidence indicates that morbidity rates due to waterborne illness declined. Other Unintended Outcomes and Impacts 51. The Department and municipal governments were seen as more responsive to the WSS crisis as a result of the Project. In Maicao, the municipality reported as being better equipped to handle the inflow of Venezuelan refugees because of the WSS improvements. Additional indirect impacts included an increase in tourism in Riohacha and an increase in property values.

III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 52. Strong alignment but overly ambitious scope. The design was aligned with the Department’s growth strategy and represented a continuation and strengthening of an approach – the use of SOs – that had already shown positive results in Colombia. The Project also incorporated lessons from the ongoing projects. For example, the Project design reflected a lesson highlighted in the IEG’s Project Performance Assessment Report, namely that: “small municipalities with limited service coverage require large capital investments, and because of their lack of financial autonomy, government subsidies would be required until full cost recovery is achieved.” The scope of the Project, which aimed to reach 300,000 people in four and a half years, however, was overly ambitious given the complicated operating environment in La Guajira and the level of political commitment required to integrate each SO into the Project and carryout works plans. The inclusion of rural activities in the design also added an additional layer of complexity to the Project as the challenges in the rural and the urban sectors were tremendous and distinct. There were limited synergies to be gained through bundling the urban and rural sector investments in one Project yet designing a WSS intervention in La Guajira that did not include investments in rural areas would not have been politically feasible given the dire need for rural WSS improvements. 53. Designed for difficult political context and low institutional capacity. The Project’s implementation arrangements focused on creating an independent PIU that was shielded from the political uncertainty in La

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Guajira. The Task Team was aware that in order for this Project to move forward, the PIU needed to have adequate decisionmaking power to act somewhat independently from the Departmental Government. The Colombian decentralization policy required departmental governments to maintain resposibility for contract signature and payment authorizations. At the same time, the Project foresaw staffing the PIU with professionals from La Guajira thereby building capacity within the Department to maintain and further advance WSS services in the future. Given the institutional weakness in the Department, the design, at the request of the GoC and the Departmental Government, focused on institutional reform through integrating SOs/the private sector in the operation of WSS in La Guajira. Finally, to build commitment for the Project, the design took a framework approach based on the demand of municipalities.29 54. Inadquate risk mitigation measures. Although the Project’s design was largely shaped to mitigate the potential difficulties associated with the complex operating enviornment in La Guajira, the Project’s risk assessment underestimated the political risk of working in La Guajira. The “risk that new mayors or Department‐level officials will backtrack on commitments made during preparation and implementation by former administrations” was marked as low. Nevertheless, the Governor and Municipal leaders played critical roles in the implementation of the Project given that the Governor and municipal leaders needed to approve works and investment plans (POIs). Another risk that was not identified was the time required for approval of work plans by the GoC. The approval processes took up to several years in extreme cases.30 B. KEY FACTORS DURING IMPLEMENTATION 55. Complicated political climate. Over the course of implementation, La Guajira had twelve governors (See Table 2 in Annex 7 for more detail). The volatility in leadership played a primary role in delaying Project implementation.31 There was resistance to the Project at the gobernatorial level given the ingrained custom of awarding construction contracts to political supporters (a practice that the World Bank’s procurement and transparency policies would curtail). Moreover, at the start of the Project, the governors did not need funds from the World Bank given that they received ample funds from El Cerrejon’s and other mines’ royalties.32 The first leadership transition took place in 2008, just after Project approval. The then newly elected governor did not support the Project for the reasons described above as well as the fact that he saw the Project as a vestige of the administration of the former governor (his political opposition). The governor is currently being legally charged in La Guajira for actively blocking the advance of the Project during his four years in office.33 The following governor supported implementation but within a year of taking office was arrested on charges of conspiracy in the murder of political rivals and was removed from office. This brought a period of uncertainty and inefficiency in the Department. From 2013 to 2017, the Department had seven governors (four elected and three interim). Three out of the four elected governors ended up in prison on charges of election fraud, corruption and/or conspiracy of murder. At the municipal level, the Project also witnessed various changes in leadership due to similar issues. Each change in leadership brought challenges and delays given the learning curve required for understanding the Project’s background. The Project faced overdue contractor payments and limited/stalled action on contract management procedures as a result of these rocky transitions.

29The municipalities who expressed interest had to fulfill a series of criteria, including signing new or renegotiatied investment contracts with the SOs and transfering the use of all WSS assets to the operator during the contract period, would be admitted to the Project. Although the Project design took a framework approach, three SOs were already identified at design. 30 By the time plans were approved, construction norms had changed requiring the plans to be updated and resubmitted. 31 Original closing date: October 15, 2011; Actual closing date: April 16, 2018 32 Most governors wanted to limit their use of the loan to the extent possible and only spent what they were going to use. Governors reimbursed Equivalent US$ 9.3 million of the loan. 33 The Governor was charged with deliberately stalling the Project (see: https://laguajirahoy.com/2017/12/exgobernador‐de‐la‐ guajira‐sancionado‐por‐no‐agilizar‐proceso‐con‐el‐banco‐mundial.html)

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56. Shifting implementation strategies. Project implementation can be divided into four phases corresponding to distinct implementation arrangements. During the first phase, the PIU, which was positioned within the Department, faced serious capacity issues given political resistance to properly staffing the unit. In light of these challenges, the Task Team adjusted course and, in line with the original design, suggested that Project management be outsourced to an external project management agency. While this model diminished the impact of La Guajira’s political volatility, the independence of this external PIU envisioned at design was compromised by the requirement that contracts and payments still had to be approved by the Department. Moreover, the contracted company, which was based in Bogota and had limited experience working on Colombia’s Caribbean coast, struggled to adapt to the implementation context of La Guajira. The Task Team adjusted course yet again, advocating for the hiring of a company with more experience working on the coast. At the end of 2013, a company with experience working in the Caribbean region took over management of the Project. The company hired experienced professionals from La Guajira and the Caribbean Region and brought the expertise necessary to move the Project forward. Reflective of the positive impact of these arrangements, in FY2015 the Project disbursed US$22 million (24 percent of the loan). The company, however, still met substantial implementation roadblocks, such as stalled payments to contractors, which were beyond its control. In 2017, the GoC’s AT assumed management of Project implementation. The AT had fiduciary and administrative independence from the Departmental Government, minimizing the impact of political roadblocks and speeding up Project implementation. This final shift in implementation strategy, which was accompanied by more intensive and frequent missions by the Bank as well as active engagment by the Country Management Unit (CMU),34 marked a turn‐around point for the Project. With the support of the Task Team, the AT eradicated roadblocks that had plagued the Project for years. For instance, the AT successfully reactivated 17 stalled civil works contracts, accelerated necessary contract modifications and backlogged payments to contractors, and resolved outstanding safeguard issues. Moreover, the AT laid the groundwork for the Departmental Water Company. 57. Contract management. All designs needed to undergo feasibility assessments and to be approved by the GoC (MVCT) before work could be contracted. This process took years given that the municipalities largely left the SOs in charge of structuring the sub‐projects and did not provide adequate support to push the sub‐projects forward. In addition, the designs were oftentimes returned by the National Government for further correction before approval. In 2013, the GoC and the Task Team worked together to reduce the delays caused by this process through designating a specific person within the MVCT to assess the feasibility of all the Project’s plans. This person began participating in all of the missions. Simultaneously, the PIU and the Task Team began providing more hands‐on support in the development of the designs so that they were submitted for feasibility assessments with a higher grade of readiness. These actions helped mitigate the delays caused by the approval process. The Project’s initial dependence on the Department for payments, however, meant that contractors oftentimes went for extended periods without payment, creating further delays. 58. Adabtability and persistence in the rural pilot. Over the course of implementation, the Task Team adapted the Project to ensure a high degree of relevance with the priorities of the GoC and the Department. This adaptability was highlighted in the adjustments to the implementation arrangements described above and the rural pilot component. In light of the severe water shortages in La Guajira, in 2009 the Departmental and National Government began laying the groundwork for a small rural reservoir program. This program, which consisted in building 10 small reservoirs in the municipality of Uribia, was conceived and developed independently from the Project. After the technical and environmental feasability studies were approved, officials at the highest level of the GoC requested incorporating the program into the Project to enhance its

34 The Bank tripled resources dedicated to supervision. The AT had no previous experience working with the Bank. As such, Bank guidance on safeguard and fiduciary requirements was critical to the Administration’s successful performance

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sustainability.35 The Project, which had originally foreseen focusing on small town pilots, adjusted course to officialy incorporate the rural reservoir program in 2011. The reservoirs, however, suffered from weak design, poor construction and a lack of a appropriate supervision structure. Moreover, given that the program was conceived independently from the Project, the reservoir program was not in compliance with Bank safeguards. Despite these challenges, the Task Team decided unequivocally to include the reservoirs in the Project and requested to suspend construction given the need for more technical support. The Task Team negotiated with the PIU to have a separate contract for construction supervision and amended the construction contract to include redesign work. By the end of the Project all the reservoirs were operational and in compliance with Bank safeguards. 59. GoC’s commitment and Bank’s convening power. The GoC’s commitment to the Project was key to its successful implementation. For instance, although the Governor of La Guajira from 2008 to 2011 wanted to cancel the Project, the GoC would not permit it. In 2013, the Bank decided to maintain the Project open because of the GoC’s prioritization of interventions La Guajira. The GoC’s and the Bank’s decision to maintain the Project was accompanied by a new‐level of commitment that greatly facilitated implementation. During the second half of implementation, the CMU was actively monitoring the Project implementation. The Country Manager participated in numerous missions and held monthly meetings with key stakeholders at the local and national level to ensure communication and coordinated action. The GoC also took the unprecedented step of involving the Ministry of Finance and the National Planning Department in regular follow‐up missions. Moreover, the Task Team began conducting monthly missions in order to review the status of each of the Project´s 22 sub‐projects with all stakeholders and to identify and remedy roadblocks.

IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME

A. QUALITY OF MONITORING AND EVALUATION (M&E) M&E Design 60. The original RF had various shortcomings. The Project had one PDO‐level indicator, 300,000 consumers in the Project area receive improved access to reliable and safe water supply and sanitation services. While the indicator was closely aligned to the PDO, no parameters were established to define what constituted “safe” and “reliable” sanitation access. Although the original RF included clear intermediate results indicators that were well aligned with each component’s activities, the capacity of the SOs to collect all the information to track the indicators (and of the PIU to monitor the quality) at the beginning of the Project was overestimated. At the outset of the Project, many SOs did not even have a solid cadaster of users; collecting information on NRW was beyond their capacity. Moreover, the original targets were very ambitious given the scope of the Project and the operating context of La Guajira. As indicated in the Other Significant Changes section, however, the RF underwent a number of adjustments to tie indicators more closely to Project interventions over the course of implementation. For instance, in the 2011 restructuring the indicators/targets were adjusted to align with the final performance indicators adopted by SOs in their revised agreements with the municipal and departmental governments in their revised agreements. The design of the M&E implementation arrangements was straightforward. The SOs were responsible for sending financial and operational data to the PIU. The PIU, which was expected to have staff with considerable M&E experience, would then verify and ensure the quality of the information. The PIU was responsible for the overall coordination, validation, and production of the M&E framework. These arrangements, however, assumed that the SOs and the PIU had adequate capacity to carry out these processes.

35 The contracting of the reservoirs was done according to Bank procurement procedures to enable the future incorporation of the reservoir program, which was financed with national funds, into the Project.

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M&E Implementation 61. Implementation of the M&E framework suffered from the Department’s political upheaval and changes in the PIU. The SOs applied standard calculation methods issued by the Superintendence for each performance indicator. However, the PIU did not consistently carryout its role as a verification agent, resulting in unfiltered, questionable data that made it difficult to assess Project’s overall progress for most of the Project’s life. During the last two years of implementation, however, the PIU, the AT and the Task Team resolved these issues through providing hands‐on, systematic M&E support to the SOs. By the end of the Project, the SO and the AT were effectively implementing the M&E framework. M&E Utilization 62. Since 2016, the Department has been utilizing the Project’s M&E and indicators to monitor progress in a systematic format across all municipalities participating in the Project. With the support of the Task Team, the AT and the Department have used the information on indicators to make strategic decisions on priority investments as well as contract implementation to fulfill indicators. The AT established monthly reporting and follow‐up discussion on WSS service performance indicators with SOs and has continued to monitor the indicators post‐Project. Justification of Overall Rating of Quality of M&E

63. The Project had a remarkable turnaround with regard to M&E over the last two years of implementation. This turnaround enabled a solid assessment of the achievement of the Project’s objectives despite the M&E shortcomings experienced earlier in implementation. The ICR Team, however, rates the overall quality of M&E as Modest given the issues with M&E for the majority of the life of the Project.

B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE 64. Environmental and social safeguards compliance. The Project finished with a Moderately Satisfactory safeguards rating. At the time of the ICR, the Project was in compliance with all safeguards (See Table 3 in Annex 7 for more detail). 65. Financial management (FM). The Project finished with a Moderately Unsatisfactory FM rating. Although there was reasonable assurance that the Project funds were being used for their intended purpose, the Project encountered a number of moderate shortcomings in terms of providing on‐time audits. These delays jeopardized the capacity of the PIU to provide timely and reliable information required to manage and monitor the Project implementation. By the time of the Project’s closure, however, the Project had turned in all expected audits.36 In addition, the PIU faced significant delays in finalizing outstanding payments for awarded contracts given political complications. At the time of the Project’s closure, however, there were no outstanding payments. 66. Procurement. The Project finished with a Moderately Satisfactory procurement rating. The delays in procurement were mainly related to technical issues with the proposed designs and the GoC’s lengthy approval process. Overall, the capacity at the local level to develop adequate bidding documents and designs was lower than expected. The PIU and the Task Team provided significant handholding to overcome this challenge. The bidding processes, however, were for the most part fluid and in compliance with Bank norms.

36 The Task Team decided to combine the 2017 and 2018 audits. The Temporary Administration is expected to turn in the 2017/2018 by June 2018.

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

C. BANK PERFORMANCE Quality at Entry 67. At Appraisal, the Task Team conducted a thorough background analysis and leveraged knowledge from past and ongoing projects in the Colombian water sector. Moreover, the Task Team successfully ensured strong alignment between the Project and Departmental and National Growth Plans. The implementation arrangements reflected the Task Team’s awareness of the lack of capacity and high‐level of instability within the Department’s institutions. Moderate shortcomings in Project design included an underestimation of political risks and an ambitious scope for the limited initial implementation period. In addition, the original M&E framework contained indicators that were unrealistic given the lack of reliable baseline and adequate Department’s capacity to monitor the Project Implementation. Nevertheless, the ICR team recognizes that the Project’s framework approach limited the capacity of the Task Team to select appropriate indicators at the time of design. Quality of Supervision 68. The political volatility of La Guajira resulted in significant implementation delays and enormous implementation challenges that required the Task Team to continually readjust approaches and strategies and to go beyond normal supervision responsibilities. The Task Team’s role in adjusting implementation arrangements over the course of implementation proved critical to the Project’s ultimate success. Moreover, the Task Team and CMU effectively utilized their convening power to ease and overcome various bureaucratic roadblocks. For most of the Project’s life, the Task Team broke with typical Bank supervision norms and conducted a minimum of five supervision missions per year. During the last two years of implementation, the Task Team began conducting monthly supervision missions to monitor implementation. At the site of each sub‐project, the Task Team provided hands‐on support directly to the contractors to enhance their accountability. During this period, the Task Team also had a consultant stationed in Riohacha dedicated to supervising the Project’s progress. Moderate shortcomings included the short‐term nature of the extensions towards the end of the Project, which motivated action but limited overall strategic planning. In addition, the 2011 restructuring resulted in PDO‐level indicators that were overly ambitious given the conditions on the ground. Justification of Overall Rating of Bank Performance 69. The ICR Team rates overall Bank performance as Moderately Satisfactory given the agility with which the Task Team readjusted implementation strategies and the extra support provided to maximize implementation in light of the many obstacles the Project faced. D. RISK TO DEVELOPMENT OUTCOME 70. The risk to the development outcome in Riohacha and Maicao is low as both municipalities have contracts with SOs that run through 2030. The SOs will not only maintain the Project’s results but also further improve WSS services post‐Project. Likewise, the sustainability of the results in the southern municipalities (Barrancas, San Juan del Sur, Fonseca and Villanueva) will depend on contracting a new SO as the current SO’s contract is set to expire by end 2018. The MVCT, with support from the Bank,37 is assisting the southern municipalities in structuring a new sustainable operation model and has committed to hiring a new SO by December 2018. The AT, which provides administrative and fiduciary support to the municipal water companies, will promote the sustainability of the results over the next two years and have a multiplier effect on the Project’s impact through extending good practices from this Project to new municipalities. The future autonomous departmental water

37 The Bank is providing analytic and advisory services to help the MVCT structuring the regional operational model of the operator for the municipalities of the South of La Guajira through the ASA ‐ Maximizing Finance for Development in the Water Sector in LAC (P166898).

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

company, which is expected to replace the AT, will fortify the WSS sector in La Guajira by providing consistent support to the municipalities and WSS operators in the Department. Besides, the contracts established between the SOs and the municipalities minimize the risk to the development outcome. Additionally, the “La Guajira Azul” program, already launched by the new Administration, incorporates financial and technical support that will strengthen the Project results in all participating municipalities and ensure the sustainability of the development outcome.

V. LESSONS AND RECOMMENDATIONS

71. Implementing projects in difficult operating environments requires time and flexibility. When engaging in a politically sensitive region such as La Guajira, project teams should monitor the situation and act swiftly when there is an opening for reform. The Project engaged the Department when the political climate was favorable and “weathered the storm” when the political climate changed. Implementing this high‐risk, high‐reward Project successfully, however, required an extended timeline and a relatively flexible Project design. The national Government requested extensions of the closing date commensurable with the capacity of the Department and oftentimes received shorter extensions than requested. This resulted in a “start‐stop” implementation style that motivated action but disrupted strategic implementation planning. Overall, when deciding whether or not to extend a Project (or how long to extend a project for), it is critical to take a holistic view of implementation issues. When the Project was closed, implementation was proceeding at an unprecedented pace and significant additional potential benefits were lost by closing the Project. 72. Employing the Bank’s convening power helps to overcome bureaucratic inefficiencies and implementation roadblocks. For challenging projects that involve multiple stakeholders at the national and the local level, the CMU and Task Team can play a key role in coordinating and motivating synchronized action. During the second half of implementation, the Country Manager regularly participated in missions in La Guajira and held monthly breakfasts with key stakeholders at the national and local level to ensure that information was shared and that action plans were agreed upon. Moreover, the Task Team began conducting monthly missions to convene key actors at the local level (the PIU, the supervision firm, the SOs, and the municipalities) to review progress and motivate action. The Bank’s convening power at the CMU and Task Team level proved critical to the Project’s substantial results. 73. Safeguarding against the volatility of local politics. Under the Project, the Department of La Guajira acted as the borrower and executing agency. The political instability and the limited institutional capacity at the Departmental level, however, resulted in significant implementation delays. The AT successfully safeguarded the Project from this volatility given its independence from the Departmental Government. Drawing upon this lesson, the “Colombia Plan PAZcifico: Water Supply and Basic Sanitation Infrastructure and Service Delivery Project” (IBRD Loan # 8649) adopted an approach under which national authorities, in close collaboration with local authorities, lead execution of the project through a centralized PIU and an umbrella integrated supervision contract. 74. Establishing and implementing IPPs in challenging environments. The Project encountered various roadblocks in implementing the IPPs. The Ministry of the Interior carried out the initial consultations in line with Bank policy, but during the long implementation period of the Project, the Departmental and municipal authorities formed additional agreements with the indigenous communities, which created misunderstandings and conflicts. A lesson moving forward is to ensure that only the initial agency involved in the consultation process – in this case the Ministry of the Interior – has the capacity to adjust the initial agreement. Another issue was that implementation of the IPPs relied on financing from the Departmental and municipal governments subjecting implementation to political will. When the Project allocated resources to finance several IPPs, implementation moved forward effectively.

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75. Applying Bank’s procedures only to the Project´s contracts that are financed by the Bank. The Loan Agreement 7434‐CO included the conditions that the Borrower shall apply safeguards and procurement procedures, referred to in Section I and in Section III of Schedule 2 of the Agreement, to the procurement of all works under part 1 of the Project, and that all contractors carrying out works and consultants providing goods or services under the Project shall carry out their activities in compliance with Bank’s safeguards, whether financed from the loan proceeds or from other sources. While this approach sounded intuitive and was instrumental to increase disbursement through the reimbursement of eligible expenses initially fully financed by counterpart financing, such an approach posed high degree of reputational risk for the Bank and imposed a heavy burden on the Project team with direct consequences on the Bank's ability to supervise and ensure compliance with Bank’s safeguards and procurement guidelines when activities were totally financed from local sources different from the loan proceeds.

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS

A. RESULTS INDICATORS

A.1 PDO Indicators

Objective/Outcome: PDO 1: Increase water supply service quality in urban and peri‐urban areas of La Guajira Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Direct project beneficiaries Number 0.00 300000.00 360785.00 422269.00

01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Female beneficiaries Percentage 0.00 0.00 51.00 51.00

01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Comments (achievements against targets): Achievement rate is 141 percent of the original target and 117 percent of the revised target. The number of direct Project beneficiaries includes both urban and rural beneficiaries. This indicator value is expected to reach over 465,000 once the contracts that were ongoing at closing are completed by June 2019, mainly driven by the beneficiaries of the water systems optimization in Albania, Barrancas, San Juan del Cesar and Villanueva.

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Specialized Operators Number 2.00 6.00 0.00 7.00

06‐Jan‐2012 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Comments (achievements against targets): Achievement rate is 125 percent. An additional municipality, the municipality of Mongui, joined the Water Departmental Plan (Plan Departamental de Agua ‐ PDA by its Spanish acronym) in November 2017 adding to the expected number of municipalities with Specialized Operators (SO). The fact that SOs are participating in the PDA with adjusted performance standards required by contract indicates that the wss service quality will likely continue improving in participating municiapalities.

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of people in urban Number 254563.00 0.00 357285.00 409160.00 areas provided with access to Improved Water Sources 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018 under the project

Comments (achievements against targets): Achievement rate is 136 percent of the original general target and 115 percent of the revised target. The actual achievement at completion is driven by the surpass of the water coverage target and the population increase in the major municipalities, especially in Maicaco and Riohacha. The completion of the water systems optimization contracts in Albania, Barrancas, San Juan del Cesar and Villanueva, which were ongoing at closing, coupled with adjusted service performance standards under implementation by the SOs, is expected to increase this indicator value to over 418,900 people by June 2019.

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of uninterrupted Hours 8.00 22.00 14.00 11.40 hours per day of running water in participating 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018 municipalities (hrs/day)

Comments (achievements against targets): Achievement rate is 81 percent. The average continuity of water service falls below the revised target in participating municipalities. However, it is worth noting that service continuity have reached 24 hours per day of running water in centers

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and other prioritized sectors of the participating municipalities. With the completion of the ongoing optimization works, coupled with adjusted service performance standards put in place by the SOs, by June 2019 service continuity will likely reach an average of 13.1 hours a day in participating municipalities.

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of households in Percentage 16.00 82.00 81.00 51.00 participating municipalities with micro‐metering 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Comments (achievements against targets): Achievement rate is 72 percent. As of June 30, 2018, 42,183 out of the 59,512 planned micro‐meters were installed over the course of implementation. However, the number of households subscribed to water services increased above expected projections, reducing the percentage of households with micro‐metering in participating municipalities from 68 percent to 51 percent. The Project encountered various shortcomings in achieving this goal, including: blockages due to the concentration of calcium in the water, community and political resistance to metering and a weak/unreliable baseline. Once the ongoing works are completed by June 2019, the percentage of households with micro‐metering in participating municipalities is expected to increase from 51 percent to 67 percent.

Objective/Outcome: PDO 2:. Increase sanitation service quality in urban and peri‐urban areas of La Guajira Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Direct project beneficiaries Number 0.00 300000.00 360785.00 422269.00

01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Female beneficiaries Percentage 0.00 0.00 51.00 51.00

01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Comments (achievements against targets): Achievement rate is 141 percent of the original target and 117 percent of the revised target. The number of direct Project beneficiaries includes both urban and rural beneficiaries. This indicator value is expected to reach over 465,000 once the contracts that were ongoing at closing are completed by June 2019, mainly driven by the beneficiaries of the water systems optimization in Albania, Barrancas, San Juan del Cesar and Villanueva.

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Specialized Operators Number 2.00 6.00 0.00 7.00

06‐Jan‐2012 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Comments (achievements against targets): Achievement rate is 125 percent. An additional municipality, the municipality of Mongui, joined the Water Departmental Plan (Plan Departamental de Agua ‐ PDA by its Spanish acronym) in November 2017 adding to the expected number of municipalities with Specialized Operators (SO). The fact that SOs are participating in the PDA with adjusted performance standards required by contract indicates that the wss service quality will likely continue improving in participating municiapalities.

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion

People provided with access Number 193445.00 0.00 298761.00 362131.00 to improved sanitation services 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

People provided with access Number 193445.00 0.00 298761.00 362131.00 to “improved sanitation facilities” ‐ urban 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Comments (achievements against targets): Achievement rate is 121 percent of the revised target. The actual achievement at completion is mainly driven by the beneficiaries of the construction of the sewerage collectors in Fonseca and the optimization of the sewerage systems in

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Maicao and Riohacha.

Objective/Outcome: PDO3: Increase water supply service quality in rural areas of La Guajira Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Direct project beneficiaries Number 0.00 300000.00 360785.00 422269.00

01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Female beneficiaries Percentage 0.00 0.00 51.00 51.00

01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Comments (achievements against targets): Achievement rate is 141 percent of the original target and 117 percent of the revised target. The number of direct Project beneficiaries includes both urban and rural beneficiaries. This indicator value is expected to reach over 465,000 once the contracts that were ongoing at closing are completed by June 2019, mainly driven by the beneficiaries of the water systems optimization in Albania, Barrancas, San Juan del Cesar and Villanueva.

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of people in rural Number 0.00 0.00 3500.00 8881.00 areas provided with access to Improved Water Sources 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018 under the project

Comments (achievements against targets): Achievement rate is 254 percent of the revised target. Only the people living in the catchment area the reservoirs is computed as a beneficiary population. Other casual population sporadically detected is not computed.

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Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Reduction of time spent Hours 5.00 0.00 4.00 4.10 fetching water in the communities served by the 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018 rural water supply systems

Comments (achievements against targets): Achievement rate is 102 percent. Based on a field surveys to reservoirs water users before and after completion of the reservoirs.

Objective/Outcome: PDO 4: Increase sanitation service quality in rural areas of La Guajira Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Direct project beneficiaries Number 0.00 300000.00 360785.00 422269.00

01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Female beneficiaries Percentage 0.00 0.00 51.00 51.00

01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Comments (achievements against targets): Achievement rate is 141 percent of the original target and 117 percent of the revised target. The number of direct Project beneficiaries includes both urban and rural beneficiaries. This indicator value is expected to reach over 465,000 once the contracts that were ongoing at closing are completed by June 2019, mainly driven by the beneficiaries of the water systems optimization in Albania, Barrancas, San Juan del Cesar and Villanueva.

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

People provided with access Number 193445.00 0.00 298761.00 362131.00 to improved sanitation services 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

People provided with access Number 193445.00 0.00 298761.00 362131.00 to “improved sanitation facilities” ‐ urban 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Comments (achievements against targets): Achievement rate is 121 percent of the revised target. The actual achievement at completion is mainly driven by the beneficiaries of the construction of the sewerage collectors in Fonseca and the optimization of the sewerage systems in Maicao and Riohacha.

A.2 Intermediate Results Indicators

Component: Component 1: Urban Water Supply and Sewerage Infrastructure

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Revenue Collection Rate in Percentage 28.00 63.00 54.00 48.00 participating municipalities 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Comments (achievements against targets): Achievement rate is 76 percent of the revised target. Revenue collection rate increased in all participating municipalities, however the target was only achieved in Riohacha. This is in part due to the fact that the works have been recently completed or still ongoing in the other municipalities, so the demand management programs have not been implemented by the SO. The Project is likely to fully deliver on revenue collection rate once the optimization works are completed and demand management program implemented. According to AT's projections, the revenue collection rate will likely reach 54 percent on average in participating municipalities, meeting the goal by June 2019.

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Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Water Supply Infrastructure Percentage 70.00 90.00 88.00 90.00 Coverage in participating municipalities 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Comments (achievements against targets): Achievement rate is 113 percent of the revised target. Water supply coverage targets were surpassed in Fonseca, Maicao and San Juan del Cesar, met in Riohacha and partially met in Albania, Barrancas and Villanueva.

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Wastewater Treatment Rate Percentage 20.00 0.00 77.00 14.00 in participating municipalities 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Comments (achievements against targets): Achievement rate is 11 percent. Wastewater treatment rate targets were achieved in Barrancas and Fonseca and exceeded in San Juan del Cesar and Villanueva. However, the wastewater treatment facilities in the most populated cities of Riohacha and Maicao are not completed at closing, dragging the average wastewater treatment rate even below baseline value. This situation will likely reverse course given that the construction of the Riohacha lagoon should resume soon and will be likely completed in 2019. Once the Riohacha lagoon contract (8‐months term) is completed, the wastewater treatment rate is expected to reach 90 percent in Riohacha, increasing the average wastewater treatment rate to 62 percent in participating municipalities.

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Sewerage Infrastructure Percentage 53.00 72.00 74.00 80.00 Coverage in participating municipalities 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Comments (achievements against targets): Achievement rate is 108 percent of the revised target. Sewerage infrastructure coverage targets exceeded in all participating municipalities, except Albania.

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Unaccounted for water in Percentage 78.00 40.00 61.00 57.00 participating municipalities 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Comments (achievements against targets): Achievement rate is 126 percent of the revised target. Target exceeded in Barrancas, Fonseca, Riohacha, San Juan del Cesar and Villanueva and not meet in Albania and Maicao.

Component: Component 2: Rural Pilots

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of Rural Reservoirs Number 0.00 0.00 8.00 10.00 Constructed 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018

Comments (achievements against targets): Achievement rate is 125 percent. A total of 10 reservoirs have been constructed in compliance with OP4.37 on Dam safety.

Component: Component 3: Program Management and Analytical Activities

Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion

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The Department of La Text No ‐ Yes No Guajira has established a Departmental Water 01‐Jun‐2010 15‐Oct‐2011 28‐Apr‐2016 30‐Jun‐2018 Company.

Comments (achievements against targets): The National Government assumed responsibility for the water sector in the Department of La Guajira and the Ministry of Housing, City and Territory (MVCT) established a Temporary Water Administration in February 2017. The Department’s AT was structured as the precursor and is currently acting as the de facto Departmental Water Company and in doing so is laying the groundwork for a future company

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B. KEY OUTPUTS BY COMPONENT B.1 Outcome Indicators and Outputs by Objective

Objective/Outcome 1 ‐ Increase water supply service quality in urban and peri‐urban areas of La Guajira Outcome Indicators 1. 300,000 consumers receive improved access to reliable and safe WSS services (dropped at Nov 2011 restructuring) 2. Number of municipalities with SOs participating in the PDA/Project with adjusted performance standards 3. Level of water service as measured by the core indicators (period post Nov 2011 to April 2016 restructurings) 4. Number of people in urban areas provided with access to Improved Water Sources under the Project 5. Number of uninterrupted hours per day of running water in participating municipalities 6. Percentage of households in participating municipalities with micro‐metering Intermediate Results Indicators 1. Revenue collection rate in participating municipalities 2. Water supply infrastructure coverage in participating municipalities 3. Unaccounted for water in participating municipalities 4. Value of water supply and sewerage works constructed (period post Nov 2011 to April 2016 restructurings) 5. The Department has established a Departmental Water Company Key Outputs by Component 1. Seven municipalities with SOs participating in the PDA with adjusted performance standards (linked to the achievement of 2. Support water infrastructure under the POIs of participating SOs the Objective/Outcome 1) 3. Extension of water coverage from 70% to 90% in urban areas, benefitting 362,131 people from participating municipalities 4. Optimization and sectorization of water networks, resulting in water service continuity increase on average from 8 to 11.4 hpd and to more than 22 hours for 58,000 people in prioritized sectors in Albania, Maicao, Riohacha and Villanueva. 5. Installation of 42,183 micro‐meters, extending micro‐meter coverage from 16% to 51% on average in participating municipalities 6. Supported demand management program by SOs, resulting in revenue collection rate increase from 28% to 48% on average in participating municipalities 7. Unaccounted for water reduced from 78% to 57% on average in participating municipalities 8. Expansion of Metesusto Water Treatment Plant’s capacity from to 300 lps to 532 lps 9. Support a transition strategy from Temporary Administration to the Departmental Water Company

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

Objective/Outcome 2 Increase sanitation service quality in urban and peri‐urban areas of La Guajira

Outcome Indicators 1. 300,000 consumers receive improved access to reliable and safe WSS services (dropped at Nov 2011 restructuring) 2. Level of water service as measured by the core indicators (post Nov 2011 to April 2016 restructurings) 3. People provided with access to Improved Sanitation Facilities – urban (post April 2016 restructurings) Intermediate Results Indicators 1. Sewerage infrastructure coverage in participating municipalities 2. Wastewater treatment rate in participating municipalities 3. Value of water supply and sewerage works constructed (period post Nov 2011 to April 2016 restructurings) Key Outputs by Component 1. Extension of sewerage coverage from 53% of Project area to 80% (linked to the achievement of 2. Optimization of wastewater pumping stations 2 and 3 and sewerage networks in four neighborhoods benefitting the Objective/Outcome 2) 180,000 people in Riohacha 3. Construction of wastewater collector (Sur Oriental Etapa IV) and sewerage networks, including household connections, in five neighborhoods, benefitting 9,787 people in Maicao 4. Construction of two wastewater collectors (Sur and Carrera 21), benefitting 13,508 people in Fonseca Objective/Outcome 3 Increase water supply service quality in rural areas of La Guajira Outcome Indicators 1. Satisfaction Level of Indigenous Communities with Reservoirs (post Nov 2011 to April 2016 restructurings) 2. Number of people in rural areas provided with access to Improved Water Sources under the Project 3. Reduction of time spent fetching water in the communities served by the rural water supply systems Intermediate Results Indicators 1.Number of rural reservoirs constructed

Key Outputs by Component 1. Ten rural reservoirs constructed (linked to the achievement of 2. Ancillary equipment (fence, livestock drinking points, dam safety measures) around reservoirs the Objective/Outcome 3) Objective/Outcome 4 Increase sanitation service quality in rural areas of La Guajira

Outcome Indicators N/A

Intermediate Results Indicators N/A Key Outputs by Component 1. Construction of improved sanitation solutions benefiting 580 rural indigenous Wayuu people in Riohacha and Maicao

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(linked to the achievement of 2. Construction of school sanitation facilities benefiting 300 rural indigenous Wayuu people students in Riohacha the Objective/Outcome 4) 3. Construction of improved sanitation solutions, benefiting 12,000 rural residents 4. Extension of household sewerage connections, benefiting 5,000 rural residents in Riohacha

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B.2 Outputs by component and municipality Component 1 – Urban Water and Sewerage Infrastructure

1. Riohacha

Riohacha ‐ Water Service

Indicators Baseline (2010) As of June 30, 2018 Goal Total number of Project beneficiaries 0 202,742 212,205 Number of beneficiaries with access to 96,207 202,742 166,037 improved water service under the Project Continuity of water service 10 14,1 15 number 0 23,141 28,195 Micro metering coverage 0% 69% 90% Collection rate 28% 61% 60% Water network coverage 54% 84% 85% Unaccounted for Water (NRW) 80% 62% 60% CONTRACT 194‐2013 Contractor Consortium Acciona Cost COP 49,267,514,636 COP 49,267,514,636 100% Items Target Progress Status Achieved (%) Water Pipes 92,581 101.861 110% Macrometers 9 13 144% Micrometers 28.195 15.580 55% Household & intra‐household connections 0 6.072 100%

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Riohacha – Sewerage Service

Indicators Baseline (2010) As of June 30, 2018 Goal Number of Project beneficiaries 0 180,996 178,162 Number of people with improved sanitation 87,581 171,250 126,969 services Sewage treatment rate 0% 0% 80% Sewerage coverage rate 50% 71% 65% CONTRACT 292‐2010 – EBAR 3 Contractor Mejia Villegas Constructores S.A. Cost COP 1.881.920.950 COP 1.865.237.514 99% Items Target Progress Status Achieved (%) Multiple impulsion piping 1 1 100% Pumping equipment 4 4 100% CONTRACT 293‐2010 – BARRIO CUELLAR Contractor José Salvador Daza Morales Cost COP 2.070.490.796 COP 915.085.495 44% Items Target Progress Status Achieved (%) Collection pipes 3,036 1,246 41% Household and intra‐household connections 291 123 42%

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Riohacha – Sewerage Service CONTRACT 294‐2010 – EBAR 2 Contractor José Daza Geneco Cost COP 897.254.420 COP 718.798.793 80% Items Target Progress Status Achieved (%) Impulsion pipes 310 629 203% Multiple impulsion 1 0,5 50% CONTRACT 295‐2010 – BARRIO ARRIBA Contractor Inversiones La Macuira Cost COP 5.786.113.522 COP 5.784.609.102 99.9% Items Target Progress Status Achieved (%) Collection pipes 7,640 7,386 97% Household and intra‐household connections 923 920 99% CONTRACT 291‐2010 – MERCADO VIEJO Contractor Consortium Mercavi 2010 Cost COP 3.359.536.358 COP 2.249.244.799 67% Items Target Progress Status Achieved (%) Collection piping 3,944 1,134 29% Household connections and intra‐household 435 177 41% connections CONTRACT 240‐2015 – COMUNA 10 Contractor Consortium SEWERAGE Comuna 10 COP Cost COP 9.782.334.316 56% 16,199,952,992 Items Target Progress Status Achieved (%) Impulsion line 2 1.31 66% WWPS 2 0.75 37% Collectors 2 1.26 63%

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Riohacha – Sewerage Service CONTRACT 239‐2015 – LAGUNAS Contractor Unión Temporal Lagunas Cost $21,620,641,547 Items Target Progress Status Achieved (%) Lagoons 1 ‐ 9 %

2. Maicao

MAICAO – WATER SYSTEM

(‐) First Formulation (‐) Second formulation (10 KM of pipes in diameters 3”, 4”, 6” Y 8”) Indicators Baseline (2010) As of June 30, 2018 Goal Number of Project beneficiaries 0 108,960 103,671 Number of beneficiaries with access to 75,745 108,960 99,932 improved water service Water service continuity 2 6,7 10 5,865 9,781 17,010 Micro‐metering coverage 33% 39% 80% Collection rate 25% 36% 50% Water network coverage 78% 97% 90% NRW 67% 32% 60%

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MAICAO – WATER SYSTEM CONTRACT 024‐2013 – Supply and installation of Micrometers ‐ Etapa IV Contractor Viñas Russi y Compañía Cost COP 1.884.046.966 COP 1,687,851,860 100% Items Target Progress Status Achieved (%) Micro‐meters 5,770 5,206 100% Domiciliary Joints 1,707 279 100% CONTRACT 412‐2015 – Hydraulic Optimization ‐ Etapa III Contractor Consortium San José Cost COP 3,829,095,316 COP 3.580.032.525 98% Items Target Progress Status Achieved (%) Linear meters of pipes 4.398 20.771 472% Macro‐meters 4 4 100% Household connections 0 650 100% CONTRACT 465‐2015 – Hydraulic Optimization ‐ Etapa IV Contractor Consorcio Acueducto de Maicao Cost COP 8,220,741,658 COP 5.578.436.581 67% Items Target Progress Status Achieved (%) Definition of hydraulic subsectors 27 10 37% Linear meters of pipes 20,724 21.360 103% Macro‐meters 27 10 37% Micro‐meters 5,871 4,734 81%

Hydraulic optimization and household connections work in Canal street, Maicao.

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MAICAO – WATER SYSTEM CONTRACT 411‐2015 – Deep wells backup system Contractor Consortium Aguas para Maicao Cost COP 7,626,651,512 COP 7,775,293,983 102% Items Target Progress Status Achieved (%) Deep Wells 5 5 100%

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The World Bank La Guajira Water & Sanitation Infrastructure and Service Management Project (P096965)

MAICAO ‐ SEWERAGE

Indicators Baseline (2010) As of June 30, 2018 Goal Number of Project beneficiaries 0 108,960 103,671 Number of people with improved sanitation 36,901 98,269 88,829 infrastructure Sewage treatment rate 30% 0% 80% Sewerage coverage rate 38% 88% 80% CONTRACT 022‐2013 – Collector Sur Oriental ‐ Etapa IV Contractor Unión Temporal Maicao 2012 Cost COP 2.809.243.004 COP 2,784,220,082 99% Items Target Progress Status Achieved (%) Collection piping 8,606 11,808 137% Household connections 433 682 157% Intra‐household connections 433 588 136% CONTRACT 664‐2014 – Nueva Esperanza, Camilo Torres, 11 November, Villa Inés, El Bosque Contractor Consortium Maicao PDA 2014 Cost COP 6,154,211,901 COP 5.001.570.474 85% Items Target Progress Status Achieved (%) Collection piping 6,911 9,369 135% Household connections 534 983 184% Intra‐household connections 330 870 263%

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3. Albania

ALBANIA – WATER SYSTEM

Indicators Baseline (2010) As of June 30, 2018 Goal Number of Project beneficiaries 0 2,866 11,279 Number of beneficiaries with access to 11,962 12,805 13,160 improved water service (network) Water service continuity 6 8,3 12 800 828 1,350 Micro‐metering coverage 47% 28% 52% Collection rate 27% 31% 35% Water network coverage 100% 93% 95% NRW 60% 31% 70% CONTRACT 212‐2015 Contractor Promotora el Campin S.A. Cost COP 2,697,705,549 COP 2.418.775.350 90% Items Target Progress Status Achieved (%) Piping in ml 7.461 7723 104% Macro‐meters 1 0 0% Micro‐meters 1350 843 62% Household connections 1350 348 26%

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4. Barrancas

BARRANCAS – WATER SYSTEM Indicators Baseline (2010) As of June 30, 2018 Goal Number of Project beneficiaries 0 8,065 11,279 Number of beneficiaries with access to 12,830 16,444 17,120 improved water service (network) Water service continuity 11 6,2 15 69 1,802 3,456 Micro‐metering coverage 2% 42% 80% Collection rate 38% 17% 50% Water network coverage 75% 87% 90% NRW 87% 82% 60% CONTRACT 179‐2016 Contractor T&J Cost COP 5,916,784,517 COP 3.247.462.113 68% Items Target Progress Status Achieved (%) Piping in ml 3,111 4,368 140% Macro‐meters 3 2 67% Micro‐meters 3,801 1932 51%

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5. Fonseca

FONSECA – WATER SYSTEM Indicators Baseline (2010) As of June 30, 2018 Goal Number of Project beneficiaries 0 16,619 15,934 Number of beneficiaries with access to 14,483 20,387 17,483 improved water service (network) Water service continuity 12 7,6 14 0 333 1,938 Micrometering coverage 0% 6% 40% Collection rate 28% 23% 43% Water network coverage 73% 91% 80% NRW 93% 78% 65% CONTRACT 021‐2013 ‐ Sector Piloto ‐ ETAPA III Contractor Unión Temporal VRJ 2012 Cost COP 958.469.901 COP 862,341,760 90% Items Target Progress Status Achieved (%) Intra‐household connections 793 750 95% FONSECA – SEWERAGE

Indicators Baseline (2010) As of June 30, 2018 Goal Number of Project beneficiaries 0 16,619 15,934 Number of people with improved sanitation 11,507 18,884 14,204 infrastructure Sewage treatment rate 0% 80% 80% Sewerage coverage rate 58% 84% 65% CONTRACT 195‐2013 – Collector Sur y Cra. 21 Contractor Consortium Saneamiento Fonseca Cost COP 4,171,082,860 COP 4.170.997.980 100% Items Target Progress Status Achieved (%) Collection piping 3,556 3,909 110% Household and intra‐household connections 442 250 57%

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6. San Juan del Cesar

SAN JUAN DEL CESAR – WATER SYSTEM

Indicators Baseline (2010) As of June 30, 2018 Goal Number of Project beneficiaries 0 10,806 24,031 Number of beneficiaries with access to 21,511 25,474 24,680 improved water service (network) Water service continuity 13 9,8 16 0 1,973 3,234 Micro‐metering coverage 0% 32% 60% Collection rate 29% 37% 55% Water network coverage 95% 99% 98% NRW 88% 75% 70% CONTRACT 180‐2016 Contractor Unión Temporal San Juan Cost COP 8,148,128,788 COP 4.708.654.995 68% Items Target Progress Status Achieved (%) Piping in ml 27,751 39.249 141% Macro‐meters 3 1 33% Micro‐meters 3,801 1,973 52%

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7. Villanueva

VILLANUEVA – WATER SYSTEM

Indicators Baseline (2010) As of June 30, 2018 Goal Number of Project beneficiaries 0 18,048 19,428 Number of beneficiaries with access to 16,387 18.048 18,896 improved water service (network) Water service continuity 17 18.8 22 729 4361 4,329 Micro‐metering coverage 18% 89% 93% Collection rate 38% 34% 45% Water network coverage 87% 92% 95% NRW 88% 80% 65% CONTRACT 181‐2016 Contractor Unión Temporal Villanueva Cost COP 7,061,065,500 COP 6.894.163.683 98% Items Target Progress Status Achieved (%) Piping in ml 26,527 27,539 104% Macro‐meters 6 6 100% Micro‐meters 2,250 2.250 100%

Pipe joint with PDWTP Metesusto (April 2018) Pipe joint with PDWTP Metesusto (July 2018)

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8. Regional

METESUSTO – DRINKING WATER TREATMENT PLANT (DWTP)

Indicators Baseline (2010) As of June 30, 2018 Goal Number of Project beneficiaries 0 45,283 49,575 CONTRACT 181‐2016 Cost COP 21,518,828,141 COP 19,684,582,039 99% Contractor Consortium Acciona PTAP Metesusto Items Target Progress Status Achieved (%) Optimization of the water treatment plant 1 1 100% Automatization and control system 1 1 100% Expansion of the water treatment plant 1 1 100% Laboratory 1 1 100% Buildings 1 1 100%

Bypass Adbuction line Chlorination building Sulphate dispensers

Washing filters Laboratory SCADA Dashboard

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Component 2 – Rural Pilots (Small Reservoirs in the Municipality of Uribia)

1. KAIWA RESERVOIR KAIWA ‐ CONTRACT 741 BIS OF 2009

Technical Specifications Status as of April 16, 2018 (Project’s closing) Capacity (m3) 98,448 Area (ha) 1.55 Beneficiaries 1,159 Water Quantity Water sheet of approximately 1.50 m Conductivity 155 ppm Contractual Progress Status Comments and pending works Physical progress of work contract 100% Completed Location and Stakeout 100% Completed Stripping and Clearing 100% Completed Cutting of Selected Material 100% Improved slopes and inflow canal to avoid backflow. Loading and Transport of Selected Material 100% Completed Cutting and Removal of Material from Spillway 100% Completed Construction of Spillway 100% Completed Fence 100% Completed Additional Works 100% Completed Impact Status as of April 16, 2018 Average time reduced from 5.2 hours to 54 minutes; Time spent fetching water maximum time spent of 2 hours. Livestock Activities Positive Agricultural Activities Neutral Productive Activities Positive – Increase from 4 hours/day to 6 to 7 hours/day Diseases Positive School Attendance Positive

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2. MAURARU RESERVOIR

MAURARU ‐ CONTRACT 741 BIS OF 2009

Technical Specifications Status as of April 16, 2018 (Project’s closing) Capacity (m3) 457,244 Area (ha) 11.57 Beneficiaries 750 Water Quantity Water sheet of approximately 1.50 m Conductivity 284 ppm Contractual Progress Status Comments and pending works Physical progress of work contract 100% Completed Stripping and Clearing 100% Completed Cutting of Selected Material 100% Completed Loading and Transport of Selected Material 100% Completed Dam Conformation 100% Completed Supply and Installation of 3” PVC Piping 100% Completed Cutting and Removal of Material from Spillway 100% Completed Construction of Spillway 100% Completed Rockfill of Internal and External Slopes 100% Completed Geoderen Filter with PAVCO piping NA NA Fence 100% Completed Additional Works 90% Moving the washing place closer to the reservoir.

Impact Status as of April 16, 2018 Average time reduced from 7.14 hours to 44 minutes; Time spent fetching water maximum time spent of 1 hour. Livestock Activities Positive Agricultural Activities Neutral Productive Activities Positive Diseases Neutral School Attendance Positive

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3. LA GRAN VÍA RESERVOIR

GRAN VÍA ‐ CONTRACT 441 OF 2009

Technical Specifications Status as of April 16, 2018 (Project’s closing) Capacity (m3) 184,770 Area (ha) 11.75 Beneficiaries 1,589 Water Quantity Water sheet of approximately 1.50 m, with presence of algae. Conductivity 1.800 ppm (Desalination system in place by the municipality) Contractual Progress Status Comments and pending works Physical progress of work contract 100% Completed Location and Stakeout 100% Completed Stripping and Clearing 100% Completed Cutting of Selected Material 100% Completed Loading and Transport of Selected Material 100% Completed Dam Conformation 100% Completed Supply and Installation of 3” PVC Piping 100% Completed Cutting and Removal of Material from Spillway 100% Completed, but some adjustments required. Construction of Spillway 100% Completed, but concrete spillway is deteriorating. Rockfill of Internal and External Slopes 100% Completed Fence 100% Completed by the municipality of Uribia Additional Works 100% Completed by the municipality of Uribia The municipality of Uribia installed a solar desalination plant, with a water tank of 5,000l, and livestock watering. At the ICR mission, the system could not be used because of the low water level in the reservoir (dry season).

Impact Status as of April 16, 2018 Average time reduced from 2.48 hours to 45 minutes; Time spent fetching water maximum time spent of 2 hours. Livestock Activities Positive Agricultural Activities Positive Productive Activities Positive Diseases Neutral School Attendance Positive

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4. PUERTO VIRGEN RESERVOIR

PUERTO VIRGEN ‐ CONTRACT 441 OF 2009

Technical Specifications Status as of August 1, 2018 (Project’s supervision mission) Capacity (m3) 1,671,622 Area (ha) 60.75 Beneficiaries 619 Water Quantity Water sheet of approximately 3 m. Conductivity 430 ppm Contractual Progress Status Comments and pending works Physical progress of work contract 100% Completed Location and Stakeout 100% Completed Stripping and Clearing 100% Completed Cutting of Selected Material 100% Completed Loading and Transport of Selected Material 100% Completed Dam Conformation 100% The dam requires repairs because a water overflow destabilized it, causing leakages in the left shoulder. Supply and Installation of 3” PVC Piping 100% Completed Cutting and Removal of Material from Spillway 100% Completed, but some adjustments required. Construction of Spillway 100% Completed. The spillway needs to be repaired and expanded to avoid future overflows. Rockfill of Internal and External Slopes 100% Completed Fence 80% 100 % executed according to the contractor. Other: a solar pumping system, including water treatment and elevated tank, was built through a project financed by Repsol, Ecopetrol, PNUD, Gea Constructores S.A.S. The system is not working, and the elevated tank is leaking.

Impact Status as of April 16, 2018 Average time reduced from 5.25 hours to 31 minutes; Time spent in search of water maximum time spent of 2 hours. Livestock Activities Positive – Increase by 45 percent Agricultural Activities Positive – Pilot Farm Productive Activities Positive Diseases Neutral School Attendance Positive

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5. SHAPURRAITU RESERVOIR

SHAPURRAITU ‐ CONTRACT 441 OF 2009

Technical Specifications Status as of April 16, 2018 (Project’s closing) Capacity (m3) 146,252 Area (ha) 8.26 Beneficiaries 667 Water Quantity Water sheet of approximately 1,5 m (September 2017) Conductivity 560 ppm Contractual Progress Status Comments and pending works Physical progress of work contract 72% 28% Location and Stakeout 100% Completed Stripping and Clearing 100% Completed Cutting of Selected Material 100% Completed Loading and Transport of Selected Material 100% Completed Dam Conformation 100% Completed Supply and Installation of 3” PVC Piping 100% Completed Cutting and Removal of Material from Spillway 0% Pending construction by the contractor Construction of Spillway 0% Pending construction by the contractor Rockfill of Internal and External Slopes 100% Completed, but the slopes present gullies due to water action that should be repaired. Fence 100% Completed Additional Works 0% 100%

Impact Status as of April 16, 2018 Average time reduced from 5.25 hours to 1.5 hours; Time spent fetching water maximum time spent of 2 hours. Livestock Activities Neutral Agricultural Activities Neutral Productive Activities Positive Diseases Positive School Attendance Positive

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6. UTAIKALAMANA RESERVOIR

UTAIKALAMANA ‐ CONTRACT 441 OF 2009

Technical Specifications Status as of April 16, 2018 (Project’s closing) Capacity (m3) 245,086 Area (ha) 9.15 Beneficiaries 1,013 Water Quantity Water sheet of approximately 1 m (September 2017) Conductivity 880 ppm (September 2017) Contractual Progress Status Comments and pending works Physical progress of work contract 89% 11% Location and Stakeout 100% Completed Stripping and Clearing 100% Completed Cutting of Selected Material 100% Completed Loading and Transport of Selected Material 100% Completed Dam Conformation 100% Completed Supply and Installation of 3” PVC Piping 100% Completed Cutting and Removal of Material from Spillway 0% The section for the spillway has been cut, but the spillway has not been constructed. Construction of Spillway 0% Pending Rockfill of Internal and External Slopes 100% Completed, but some areas of the slope should be improved due to gullies by water action. Fence 100% Barbwire is rusty. Additional Works 0% 100%

Impact Status as of April 16, 2018 Average time reduced from 8.3 hours to 49 minutes; Time spent fetching water maximum time spent of 2 hours Livestock Activities Positive – there is a large quantity of water Agricultural Activities Neutral Productive Activities Neutral Diseases Neutral School Attendance Positive

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7. MORROCOMANA RESERVOIR

MORROCOMANA ‐ CONTRACT 742 BIS OF 2009

Technical Specifications Status as of April 16, 2018 (Project’s closing) Capacity (m3) 1.928.064 Area (ha) 25,80 Beneficiaries 849 Water Quantity Water sheet of approximately 1,5 m Conductivity 515 ppm Contractual Progress Status Comments and pending works Physical progress of work contract 95% 5% Location and Stakeout 100% Completed Stripping and Clearing 100% Completed Cutting of Selected Material 100% Completed Loading and Transport of Selected Material 100% Completed Dam Conformation 100% Presence of leakages downstream the dam slope Supply and Installation of 3” PVC Piping 0% 100% Cutting and Removal of Material from Spillway 0% 100% Construction of Spillway 0% 100% Rockfill of Internal and External Slopes 100% Completed Fence 100% Completed Additional Works 100% Completed The community is accessing the water through a hose which results in water waste, so it is recommended to improve the water access system.

Impact Status as of April 16, 2018 Average time reduced from 5.35 hours to 1 hour; maximum Time spent fetching water time spent of 2 hours Livestock Activities Positive Agricultural Activities Neutral due to drought Productive Activities Positive Diseases Positive School Attendance Positive

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8. MAIWO RESERVOIR

MAIWO ‐ CONTRACT 742 BIS OF 2009

Technical Specifications Status as of April 16, 2018 (Project’s closing) Capacity (m3) 475,623 Area (ha) 10.61 Beneficiaries 450 Water Quantity Water sheet of approximately 1 m (September 2017) Conductivity 117 ppm (September 2017) Contractual Progress Status Comments and pending works Physical progress of work contract 85% 15% Location and Stakeout 100% Completed Stripping and Clearing 100% Completed Cutting of Selected Material 100% Completed Loading and Transport of Selected Material 100% Completed Dam Conformation 100% Completed. Presence of gullies downstream the dam slope Supply and Installation of 3” PVC Piping 100% Completed Cutting and Removal of Material from Spillway 100% Completed Construction of Spillway 0% Completed. The removal of the rocks in the spillway area required explosives. Rockfill of Internal and External Slopes 30% Pending rockfill of upper slope. Fence 100% Completed Additional Works 100% Completed

Impact Status as of April 16, 2018 Time spent fetching water No information available. Livestock Activities No information available. Agricultural Activities No information available. Productive Activities No information available. Diseases No information available. School Attendance No information available.

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9. AMULAMANA RESERVOIR

AMULAMANA ‐ CONTRACT 441 OF 2009

Technical Specifications Status as of April 16, 2018 (Project’s closing) Capacity (m3) 223,398 Area (ha) 7.09 Beneficiaries 2,809 Water Quantity Water sheet of approximately 0.7 m (September 2017) Conductivity 94 ppm (September 2017) Contractual Progress Status Comments and pending works Physical progress of contract 100% Completed Location and Stakeout 100% Completed Stripping and Clearing Completed. Observed a large amount of stubble 100% and trees in the vessel requiring maintenance. Cutting of Selected Material 100% Completed Loading and Transport of Selected Material 100% Completed Dam Conformation 100% Infiltrations observed when the reservoir is filled. Supply and Installation of 3” PVC Piping 100% Completed Cutting and Removal of Material from Spillway 100% Completed, but some adjustments required. Construction of Spillway 100% Completed, but some adjustments required. Rockfill of Internal and External Slopes 100% Completed, but presence of gullies in the slope. Fence 100% Completed Additional Works 0% 0% A small reservoir (Jaguey) was formed in the place where the material for the construction of the dam was removed. This Jaguey maintains the water at a good quality for long periods and is also used by the community.

Impact Status as of April 16, 2018 Time spent fetching water Average time reduced from 1 hour to 10 minutes Livestock Activities Neutral Agricultural Activities Neutral Productive Activities Neutral Diseases Neutral School Attendance Neutral

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10. WUINMUCHASTIRRA RESERVOIR

AMULAMANA ‐ CONTRACT 441 OF 2009

Technical Specifications Status as of April 16, 2018 (Project’s closing) Capacity (m3) Area (ha) Beneficiaries Water Quantity No water at time of completion Conductivity No water at time of completion Contractual Progress Status Comments and pending works Physical progress of contract 100% Completed Location and Stakeout 100% Completed Stripping and Clearing 100% Completed Cutting of Selected Material 100% Completed Loading and Transport of Selected Material 100% Completed Dam Conformation 100% Completed Supply and Installation of 3” PVC Piping 100% Completed Cutting and Removal of Material from Spillway 100% Completed Construction of Spillway 100% Completed Rockfill of Internal and External Slopes 100% Completed Fence 100% Completed Additional Works NA NA Impact Status as of April 16, 2018 Time spent fetching water No information available. Livestock Activities No information available. Agricultural Activities No information available. Productive Activities No information available. Diseases No information available. School Attendance No information available.

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ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION

A. TASK TEAM MEMBERS

Name Role Preparation David N. Sislen Task Team Leader Menahem Libhaber Task Team Leader

Ming Zhang Senior Urban Specialist

Diana Ortiz Zuluaga Urban Specialist

Taimur Samad Urban Specialist

Patricia Lopez Financial Analyst

Issam Abousleiman Financial Officer

Jeannette Estupiñan Financial Management Specialist

Christian Gonzalez Economist

Luz Maria Gonzalez Financial Analyst

Jorge Kamine Counsel

Jose Martinez Procurement Specialist

Ernesto Sanchez‐Triana Environmental Specialist

Susanna Shapiro Social Specialist

Patricia Cleves Social Specialist

Hernan Dario Correa Anthropologist

Jairo Arboleda Civil Society Specialist

Gabriela Aguilar Communications Specialist

Laura Kullenberg Operations Officer

Regis Cunningham Loan Officer

Ethel Sennhauser Peer Reviewer

Manuel G. Mariño Peer Reviewer

Oscar Alvarado Peer Reviewer

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Supervision/ICR Antonio Manuel Rodriguez Serrano Task Team Leader Miguel Vargas‐Ramirez Task Team Leader Carmen Yee‐Batista Task Team Leader Carlos A. Uribe Task Team Leader Greg Browder Task Team Leader Santiago Rene Torres Procurement Specialist(s) Jeannette Estupinan Financial Management Specialist Miguel Vargas‐Ramirez Team Member Maria Claudia Pabon Triana Team Member Carlos Vargas Bejarano Environmental Safeguards Specialist Carlos Alberto Molina Prieto Social Safeguards Specialist Susanna Eve Shapiro Social Safeguards Specialist Ernesto Sanchez‐Triana Lead Environmental Specialist Robert H. Montgomery Lead Environmental Specialist Sabrina Melanie Yvonne Zimmermann Team Member Elvira Cusiqoyllor Broeks Motta Team Member Javier Ignacio Algorta Duran Team Member Luis Alfonso Pinzon Corcho Team Member Maria Margarita Zamudio Rojas Team Member Sandra Nelly Forero Amaya Team Member Karen Priscila Navarro Rios Team Member Juan Camilo Gil Consultant Elizabeth Eiseman Consultant Luz Maria Gonzalez Consultant

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B. STAFF TIME AND COST

Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY06 47.854 345,353.53 FY07 27.319 205,180.36

Total 75.17 550,533.89

Supervision/ICR FY07 0 13,005.59 FY08 11.799 140,485.52 FY09 17.981 117,318.51 FY10 48.113 200,425.89 FY11 48.659 260,599.11 FY12 19.010 171,346.86 FY13 13.944 168,278.03 FY14 32.357 210,412.10 FY15 53.794 227,205.23 FY16 31.026 148,818.31 FY17 31.619 208,861.95 FY18 28.076 208,475.38 FY19 7.228 54,974.68 Total 343.61 2,130,207.16

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ANNEX 3. PROJECT COST BY COMPONENT

Amount at Approval Actual at Project Percentage of Approval Components (US$ million) Closing (US$ million) (US$ million) Urban Water Supply and Sewerage Infrastructure 129.0 90.1 70% Component Rural Pilot Component 7.0 7.2 102% Program Management and Analytical Activities 7.0 10.8 154% Component Total 143.00 108.1 76%

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ANNEX 4. EFFICIENCY ANALYSIS

1. The interventions implemented under the Project were evaluated from the economic and financial perspectives. The economic evaluation measured if the investments were justified, that is, if the economic benefits were higher than the costs associated with the interventions. The financial evaluation measured if the interventions are financial sustainable, that is, if the operators can respond with the financial obligations that the interventions brought along.

A. ECONOMIC ANALYSIS OF THE PROJECT Evaluation at time of Appraisal

2. For the economic evaluation, a Cost‐Benefit Analysis was used and applied to interventions in all municipalities of La Guajira (15), even though at time of appraisal only 10 municipalities had shown interest in participating, and of those, 9 were under specialized independent management.

3. The main benefits identified at time of appraisal were: (i) increase of water and sewerage coverage; (ii) reduction or elimination of rationing and intermittence in the water supply; and (iii) reduction or elimination of water pollution levels. The approach used for measuring the benefits was the Willingness‐to‐Pay (WTP), which was based on the results of a WTP study conducted in 2005, during preparation of another project in Colombia (Colombian Water and Sanitation Sector Support Project). Benefits were estimated per household according to availability of water connection. Results of the study showed that benefits for households already connected to the service varied according to the volume of water they were getting in their houses. As it was expected, the higher the volume of water they were receiving, the lower the WTP from the Project, and vice versa. The WTP varied from COP 21,776 per household per month if the residents received less than 10 cubic meters per month to COP 84,000 if the monthly amount of water received was 20 cubic meters or more. For households without service, the WTP was higher at about COP 100,000 per household per month.

4. The results of the economic evaluation showed that interventions in all municipalities were economically viable. Overall, the expected net benefits for intervention in all municipalities were US$36 million at 12 percent discount rate and expected return of 21 percent. For the municipalities that actually participated in the Project, expected net benefits were US$ 33 million and expected rate of return of 18 percent.

5. The financial analysis was conducted for the three main operators providing the service to 9 municipalities: (i) Aguas de la Peninsula, serving Maicao; (ii) Aguas de la Guajira: providing the service to Riohacha; and (iii) Aguas del Sur, providing the service to seven municipalities in the South. Results of the financial evaluation showed that the operation would be viable only if subsidies from the Department of La Guajira were included and efficiencies gains were attained. During restructuring in 2011, the financial situation of the operators was examined, and results showed that Aguas de la Guajira and Aguas del Sur could achieve financial equilibrium by improving water service, and attaining better operation, commercial and social practices. Aguas de la Peninsula faced fundamental challenges due to lack of enough raw water supply, which limited the amount of water to sell.

6. Regarding Component 2, there were changes during implementation. In 2009, the Department of La Guajira developed a “small rural reservoir program” consisting of the construction of approximately 11 small reservoirs to supply water for adjacent indigenous rural communities in the municipality of Uribia. By the end of 2011, ten of eleven small reservoirs were either built or under construction with counterpart funds. During restructuring, in 2011, these

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rural reservoirs were included as pilots in the Component 2 of the project. To ensure sustainability of the reservoirs and in compliance with the agreements established under the Indigenous People Plan, it was agreed that the Bank would finance ancillary infrastructure, such as, small water treatment plants, conveyance facilities, and storage tanks. The Bank financed activities to develop organizational and financial mechanisms. No economic evaluation was conducted.

Evaluation for this ICR

7. The evaluation for this ICR followed the same methodology used during appraisal, that is, Cost Benefit Analysis. This approach was applied to interventions in Component 1 and Component 2. For Component 1, the interventions implemented in Riohacha, Maicao, Fonseca, Albania, and the water treatment plant Metesusto were evaluated; and for Component 2, the interventions in rural reservoirs were included. About 7 percent of total investment was implemented in Barrancas, Villanueva, and San Juan del Cesar, yet works were solidly ongoing but not fully completed at time of closing. Counterpart funds are allocated and will be used to finalize them, and the population can get the expected benefits. For this evaluation, however, only those activities that already showed benefits, were included.

8. Actual achievements and actual costs of interventions were used in this evaluation. Benefits were estimated through avoided cost approach based on actual savings that population reported. Flow of costs and benefits were transformed to 2007 prices to make them comparable to those foreseen at appraisal. Same discount rate of 12 percent and 30‐years lifetime were used for the evaluation.

9. Net benefits were estimated as the difference between incremental benefits and incremental costs of two scenarios: with and without project. For the with interventions scenario, actual costs and benefits were projected. For the without project scenario, costs and benefits were projected as business as usual scenario.

10. Economic benefits from water intervention under component 1 were measured as: (i) savings of operating costs when efficiency gains were attained; and/or (ii) customer’s benefits resulting from savings of coping costs when water supply improved. Economic benefits from sewerage interventions were measured as the willingness to pay for accessing the service, which was estimated as proxy as the monthly bill paid for the service. Benefits from sewage treatment were not include as the investments were not completed. Economic benefits under component 2 were estimated as savings of time spent fetching and collecting water. Financial benefits were estimated as: (i) savings of operating costs, when occurred; and (ii) increase of revenues due to expansion of the services and improvement of water distribution and billing practices.

Actual Cost of Investment. 11. Expected costs of the Project at time of appraisal was US$ 143 million. Actual cost of implemented investment was 76 percent of expected US$ 108.2 million.

Table A3.1. Investment Costs: Expected and Actual (US$ million) Actual Expected (Nominal Prices) Actual/Expected Component 1 129.0 90.1 70% Component 2 7.0 7.2 104% Component 3 7.0 10.8 154% Total Project 143.0 108.1 76%

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12. Among the reasons that may explain the differences between expected and actual costs are the following: (i) currency fluctuation, especially important in Colombia, that experienced 46 percent inflation rate during implementation period, and variation of the exchange rate, which made the local currency appreciate and depreciate during the period, for a net 33 percent depreciation of the Colombian peso against the US dollar at the end of the project; (ii) adjustment of interventions during implementation; or (iii) lower than expected investment execution.

13. To make proper comparison of expected costs to actual costs, actual investment costs expressed in nominal prices were transformed to constant 2007 prices. For doing so, the cost of each intervention was broken down by currency and date of occurrence. This is important as the disbursements of the loan were in US dollar, while the counterpart funds were in local currency. Disbursements were affected from variation of the exchange rate; while the counterpart funds were affected from inflation rate.

14. Investment costs at 2007 prices were estimated as follows: a) Disbursements in US$ were transformed to COP using the exchange rate at time of disbursement and then transformed to 2007 US$ applying the exchange rate at time of appraisal; b) Counterpart funds were transformed to 2007 prices deflecting the amount by the 2007 price index and transformed to 2007 US$ using the exchange rate at time of the appraisal.

15. From time of appraisal to the end of the Project (April 2018), the inflation was 46 percent. The exchange rate varied widely during this period, it went from COP 2,264: 1US dollar at time of appraisal to COP 3,000: 1US dollar at last restructuring (October 2017) (see figure). The COP depreciated 22 percent from 2007 to 2012, then it started to appreciate, and it showed 15 percent appreciation compared to 2007 level by the end of 2013. From 2014 onwards, the depreciation continued until it reached COP 3,000 towards the end of the project, or 33 percent depreciation since the time of appraisal.

Figure A3.1. Actual Cost of Investment, Exchange Rate, and CPI

Investment CPI Exchange rate (000 COP/US$)

45,000 3.5

40,000

3.0 35,000

30,000

2.5 25,000 Exchange rate (000 COP/US$)

20,000 2.0

Investment (000 US$) 15,000 Cumulative CPI; Exchange rate 10,000 1.5 Investment 5,000 CPI

0 1.0 2,007 2,008 2,009 2,010 2,011 2,012 2,013 2,014 2,015 2,016 2017 / 2018 16. Out of the US$ 143 million expected at appraisal, US$ 90 million were to be financed from the loan proceeds, and US$ 53 from counterpart funds. Actually, the costs of investment were US$ 108.16 million, of which US$ 71.44 million were disbursed from the IBRD loan, and the remaining US$ 36.72 million from counterpart funds.

17. Around 66 percent of interventions were financed by IBRD funds, and 34 percent by counterpart funds. By the end of 2013, only 14 percent of IBRD funds were used, and so were affected by the appreciation of the COP against the

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US dollar. The remaining 86 percent of IBRD funds were used after 2014, and so were affected by depreciation. Similar situation occurred with counterpart funds, of which 18 percent were used before 2014 and 76 percent after 2014. Table A3.2. Actual Cost (Nominal Prices) of Investment per Source of Financing

TOTAL Participation per source and year Source US$ million Share From 2007‐13 From2014‐18 Total IBRD 71.44 66% 14% 86% 100% Counterpart funds 36.72 34% 24% 76% 100% TOTAL 108.16 100% 18% 82% 100% 18. Results of the cost analysis showed that actual investment cost expressed in 2007 prices amounted US$ 110 million, one percent higher than the investment cost expressed in nominal prices (US$ 108 million). This small difference is explained by the fact that most of the IBRD disbursements occurred during the period when the COP depreciated against the US dollar, and most of the counterpart funds were used towards the end of the implementation period. Depreciation counter balanced the effect of inflation and the net balance was just 1 percent difference.

19. Given that fluctuations of currency did not impact much the actual cost of investment, the 24 percent difference between actual and predicted costs was explained by the investment itself. Investment were implemented in eight municipalities38 compared to 15 municipalities for which priority investment were identified, yet only 9 of them were eligible to participate. Investments in all municipalities but Riohacha were lower than expected, yet most of the targets were achieved. In Component 2, at time of appraisal was not clear what type of investment will be implemented and a reference cost was allocated. At the end of the Project 104 percent of this allocation was implemented. This evaluation used actual costs expressed at 2007 prices. Table A3.3. Expected and Actual Investment Cost (Nominal and 2007 prices) Million US$ Actual Costs Nominal Actual PAD Nominal 2007 Prices Costs/PAD 2007/PAD Component 1 Riohacha 33.30 42.70 43.30 128% 130% Maicao 47.60 15.58 15.80 33% 33% Albania 1.20 1.07 1.09 89% 91% Fonseca 7.00 2.41 2.44 34% 35% San Juan del Cesar 9.30 3.24 3.29 35% 35% Barrancas 5.40 2.35 2.39 44% 44% Villanueva 8.50 3.28 3.33 39% 39% WTP Metesusto ‐ 8.56 8.68 Supervision 10.91 11.06 Unallocated 16.40 Subtotal Component 1 129.00 90.09 91.37 70% 71% Component 2 7.00 7.25 7.35 104% 105% Component 3 7.00 10.81 10.97 154% 157% Total Project 143.00 108.16 109.69 76% 77%

38 Other municipalities (Hatonuevo and Distraccion) will benefit from the investment on the Metesusto drinking water treatment plant.

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20. At appraisal, 38 percent of the planned investment was expected to go to water supply, while 62 percent to sanitation. The distribution between sectors and municipalities changed during implementation. The water supply received 71 percent of the funds, while the remaining 29 percent went to sanitation. Four municipalities implemented works in sanitation. One of them, Riohacha, invested in wastewater treatment system, however hurdles during implementation, such as, initial opposition from indigenous communities and a change towards the end of the project in the policy that required carrying out an archeological plan before works could reinitiate, impeded the completion of works.

21. The major cities of Riohacha and Maicao received 54 percent of the investment. Riohacha was the highest beneficiary with 40 percent of all investment. Maicao benefited with 14 percent of the investment. The rural component shared 6 percent of investment, as planned at appraisal. 22. Investment in water supply under Component 1 consisted of optimization of the distribution network and improvement of demand management. In Component 2, rural area, investment focused on building reservoirs to provide water to the indigenous communities. In the sanitation sector, investment consisted basically of the rehabilitation and expansion of the sewerage networks. Investment in rural sanitation, included in the Indigenous Peoples Policy (IPP) and Indigenous Peoples Resettlement (IRP) Plan supported by the Project, is not considered in the cost benefit analysis. 23. Comparing actual achievements of participant municipalities to revised targets, results show that achievements of coverage, beneficiaries, and uncounted for water (UFW) surpassed targets; while revenue collection, continuity, and micro‐metering fell short. Despite of being below expectation in some of the targets, the interventions showed important benefits in all fronts. Table A3.4. Targets Expected and Actual achievements

Targets Actual Baseline PAD PP (2011) Restructuring 2016

2010 Target 2011 Target 2015 Target 2017 End of Project Subscribers 69,687 74,399 82,302 # Beneficiaries 300,000 360,785 360,00 413,388 Water coverage 71% 90% 86.0% 88% 90% Sewerage coverage 49% 72% 72% 74% 80% UFW 78% 40% 40.0% 61% 57% Revenue collection 27% 63% 63.1% 54% 48% Continuity 8.4 22.0 19.7 13.9 11.4 (hours/day) Micro‐metering (%) 82% 79.0% 81% 52% Evaluation of Component 1 Provision of water and sanitation services before the project 24. There were three operators in the Project’s area: (i) Aguas de la Guajira, which provided the services in Riohacha; (ii) Aguas de la Peninsula, which provided the service in Maicao and Albania; and (iii) Aguas del Sur, which provided the service in the municipalities located in the South. Over the course of implementation, the operation in Riohacha changed from Aguas de la Guajira to ASAA (Avanzadas Soluciones de Acueducto y Alcantarillado) in

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September 2013. ASAA is a mixed private and public capital specialized operator (20 percent of shares owned by the municipality and 80 percent by private investors). Aguas de la Peninsula changed its owners and administration but kept the same name. In the Municipality of Albania, the service was provided by the municipality up to 2015, when it linked the specialized operator Aguas de Albania, which belongs to the same group of Aguas de la Peninsula.

25. At time of appraisal the service was poorly provided. Unaccounted for water ranged from 93 percent in Fonseca to 67 percent in Maicao. Water was supplied just few hours per day, and in some cases only 2 hours (Maicao); revenue collection rate was lower than 40 percent in all the municipalities. Table A3.5. Indicators before the interventions Riohacha Maicao Albania Fonseca San Juan Villanueva Population 2010 178,162 97,109 11,962 19,840 22,643 18,836 UFW 80% 67% 60% 93% 88% 88% Continuity (hours/day) 10 2 6 12 13 17 Micro‐metering 0% 33% 47% 0% 0% 18% Revenue Collection rate 28% 25% 27% 28% 29% 38% Water coverage 54% 78% 100% 73% 95% 87% Sewerage coverage 50% 38% 100% 58% 77% 74%

26. Water service coverage was high in some municipalities, but water was supplied occasionally in all of them. There was uncertainty of the days or the time the water was supplied and someone at the household had to be vigilant and ready to store as much water as possible when available. Households had at least one electric pump to push water from the main pipes or/and to distribute it inside the house. Eventually, they also had to purchase water from private water trucks to complement their water needs. Households with no water connection had to rely mainly on water from private vendors. The perception of the quality of water was not good and so households used to buy bottled water for drinking and cooking. 27. Lack of proper water service brought along high price solutions to cope with the difficult situation. Among the solution households used were: (i) storing water, which implied purchasing containers and spending time supervising that containers did not overflow; (ii) purchasing bottled water for drinking and cooking; (iii) installing and operating the pump(s); and (iv) purchasing water from private vendors. The prices paid per solution differed according to level of intermittence. 28. In general, costs incurred by households connected to the network were as follows. Water was stored in several ways: (i) reservoirs (from 1,000 to 5,000 liters capacity) installed either underground, on the rooftop, or on the ground close to the house; (ii) water containers ranging from 50 to 500 liters; and jerry‐cans of 5 to 25 liters. Price paid for the installation of two 1000 liter‐tanks was about COP 450,000; and for the purchase of various containers of lower capacity of COP 70,000. Equivalent monthly cost was COP 8,20039 in 2007 prices. Cost incurred for installing and operating the pump was about COP 8,000 per month.40 Cost incurred for the purchase of 2 containers of 5‐gallons of water were bought per household per week was about COP 70,000 per month. Cost incurred for the purchase of water from water trucks (operated by private vendors) at least once per month at a price of about COP 27,00041 per month.

39 The monthly price was estimated assuming 10‐year lifetime for reservoirs, and 5‐years for minor containers. 40 Cost of the pump US$ 150 and operating cost 5%. Lifetime 5 years. 41 The price paid to private vendors was about COP 27,000 per 50‐liters.

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29. Households without water connection incurred the following costs. Cost incurred for storing water in containers of 50 to 500 liters and jerry‐cans of 5 to 25 liters, paying a price of COP 70,000, equivalent to a monthly cost of about COP 1,600 in 2007 prices. Cost incurred for purchasing bottled water, on average 3 containers of 5‐gallons a week at a price of about COP 7,000 each, was bout COP 84,000 per month. Cost incurred for purchasing water from private vendors at least once per week was about COP 82,000 per month. Resulting monthly coping cost per household with water connection was about COP 113,000; and without water connection about COP 168,000. 30. In some municipalities such as Maicao and Albania, where the service was poorly provided. The water was supplied just a few hours per week and the price paid by households with water connection was the same as the price paid for households without water connection. Table A3.6. Coping Cost of Facing Poor Water Service (COP/household/month 2007 prices) Household with water Households without water connection connection COP/household/month COP/household/month Price of storing water 8,200 1,600 Bottled water for drinking and cooking 70,000 84,000 Installing and operating electric pump 8,000 ‐ Water from private vendors 27,000 82,000 Total 113,200 167,600 31. The situation of the sewerage service was also poor. The network was no properly maintained, and pipes broke and clogged frequently. Provision of water and sanitation services with the project

Riohacha 32. The intervention in the water sector focused in the optimization of the distribution system, dividing it in six separate hydraulic sectors. It also included investment on water demand management, mainly through micro‐metering, cadaster, and adjustment of tariffs. No investment was implemented to expand the capacity of the facilities for water production or to rehabilitate the conduction pipe. The capacity of the water intake is 750 lps, and the water treatment plant is 560 lps. It is estimated that 20 percent of the water transported along 47 km from the treatment plant to distribution system is lost. Even though some of the indicators did not reach the expected targets, there was important improvements in the operation and the quality of the service received by customers.

33. Water distributed in the network augmented even though there was no increase of production capacity. Water losses decreased from 80 percent to 62, which means that an additional 18 percent of the water produced is now going to the households and billed, instead of being lost. Water supplied per customer decreased by about 50 percent from 71m3/connection/month to 37m3/connection/month. This allowed serving more customers and increasing coverage from 54 percent to 84 percent. In some areas the water is supplied 24/7, benefiting about 22,500 residents. In the other areas, the water service improved significantly as water pressure is high, and the continuity went on average from 10 hours per day to 14 hours per day, despite higher number of households served.

34. Additional works were implemented to improve and expand the sewerage network, increasing coverage from 50 percent to 71 percent. Wastewater treatment did not improve, due to issues raised during implementation, that are currently addressed by authorities and it is expected the investment will be complete with counterpart funds.

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35. When achievements are compared to targets, results show that water customers, sewerage coverage, were better than expected. However, micro‐meters fell short by about 20 points. Unaccounted for water, revenue collection rate and continuity were as expected when the project was restructured.

Table A3.7. Expected Targets and Actual Achievements. Riohacha Actual Expected targets End of Restructuring Restructuring 2013 2014 2015 2016 Project 2011 2016 Water produced (000 m3) 15,673 15,673 15,911 15,130 14,324 Water billed (000 m3) 3,197 3,985 5,036 5,264 5,730 UFW 80% 75% 68% 65% 60% 40% 60% Water customers 18,115 26,807 29,348 31,903 33,458 31,328 Micro‐meters ‐ 11,238 17,123 20,432 23,141 28,195 % micro‐ meters/customers 0% 42% 58% 64% 69% 100% 90% Continuity 10 12 12 14 15 24 15 Revenue collection rate 26% 41% 46% 61% 61% 63% 60% Water coverage 54% 74% 81% 84% 84% 70% 85% Sewerage coverage 50% 64% 70% 70% 71% 70% 65%

36. Even though there was no investment in water treatment, the water quality improved as the use of storing containers, which are focus of contamination, was reduced or eliminated altogether in some areas.

37. Revenue collection rate improved from 26 percent to 61 percent at the end of the project. It is important to highlight that according to ASAA’s commercial figures, the better the service, the higher the response to payment. Currently, Sector 1, where all its customers are receiving the service 24/7, presents the highest collection rate of 75 percent. All other sectors improved the service as well as their revenue collection rate.

Table A3.8. Revenue Collection Rate per Hydraulic Sector. Riohacha 2013 2014 2015 2016 2017 (From January‐June) Hydraulic Sector 1 49% 58% 69% 75% Hydraulic Sector 2 43% 50% 59% 59% Hydraulic Sector 3 20% 25% 37% 39% Hydraulic Sector 4 33% 39% 48% 52% Hydraulic Sector 5 31% 0% 50% 50% Hydraulic Sector 6 8% 8% 12% 15% Weighted Average 26% 38% 45% 52% 57%

38. Micro‐metering increased from 0 to 69 percent. Monthly bills were based on actual consumption, which helped reducing consumption per connection by 8 percent.

39. Residents benefited from the interventions. Those who had water connection are enjoying more hours of service and better water pressure; and those with new water connection are enjoying the service they did not have. Economic benefits are reflected in lower coping costs. Beneficiaries are not using the electric pump, buying less bottled water and less water from private vendors. According to interviews with beneficiaries, current average coping costs for

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those who previously had water connection is about COP 71,600; and for those with new connection is about COP 126,000 per month. Table A3.9. Coping Cost before and after the project. Riohacha (COP/household/month 2007 prices) Households that previously had Households connected to the service during water connection implementation COP/household/month COP/household/month Before the project 113,200 167,600 After the project 41,600 41,600 Monthly savings 71,600 126,000

40. Economic benefits of water component were estimated as savings of coping costs to customers. The operator benefited from better operation and demand management, which allowed to better serve more households with same volume of water.

41. The Project also brought benefits for households that connected to the sewerage. The economic benefits of sewerage connections were estimate using current bill as a proxy of the willingness to pay. The wastewater treatment system is an ongoing project and expected to be completed once the authorities resolve the issues raised that have impeded completion. The benefits that will come along were not included in this evaluation.

42. Economic evaluation shows sound results. Economic benefits were 50 percent higher than the costs, yielding US$ 19 million of net benefits. Actual return is 19 percent, which is far higher than the 12 percent discount rate used for the evaluation, and higher than the expected return of 18 percent.

Table A3.10. Results of the Evaluation of Water and Sewerage Intervention in Riohacha Actual Results Expected Results Present Value Flows (000 US$) 2007 prices IRR Net Benefit IRR Costs Benefits Net Benefit % (000 US$) % Economic 33,770 50,566 16,795 19% 11,602 18%

43. Net benefits were higher than expected at appraisal, given higher efficiency gains (water and sewerage customers, higher volume of water billed, and higher savings for households). These gains compensated for the indicators that did not meet the targets.

Maicao 44. The investment focused on the optimization of the water distribution system through the separation of the area in seven hydraulic sectors and the improvement of the water demand management. The increase in the number of hours of water supply had important impact in the quality of life of residents. Water pressure in the distribution system increased, and so households do not need the electric pump as much; some households are not using it altogether. Intermittence is planned and informed to customers. The service improved for some sectors more than for others. Some pilot areas are receiving the service 24/7, having reached a maximum of 22,660 beneficiaries so far. The network was also expanded to areas that previously lacked access. Water coverage increased from 80 percent to 96 percent. Improvements in the distribution system and demand management allowed increasing coverage and continuity. The service will improve farther as five new wells started operation at the end of 2017 and will increase the capacity by 120 lps.

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45. There was improvement in all indicators. Unaccounted for water decreased from 75 percent to 32 percent, which allowed recovering about 31 lps that are now send to the distribution system. Micro‐metering was a challenge, yet the meters were replaced and used for billing. Revenue collection rate increased from 25 percent to 39 percent. Water and sewerage coverage increased to 97 percent and 88 percent, exceeding the expected targets of 90 percent and 80 percent respectively. Actual water and sewerage coverage and UFW results were better than expected; while continuity and revenue collection rate did not reach the expected targets. Table A3.11. Targets Expected and Actual Achievements. Maicao Actual Expected PP Restructuring Restructuring Maicao 2014 2015 2016 End of Project 2011 2016 UFW 75% 70% 64% 32% 40% 60% Water customers 22,920 23,106 23,337 25,328 25,537 23,625 Production/customer/month 16 14 13 Micro‐meters 8,613 9,164 5,840 9,781 17,010 % micro‐meters/customers 39% 23% 39% 80% 80% Continuity h/day 2.0 5.2 6.7 8.1 12 10 Revenue collection rate 25% 34% 39% 36% 63% 50% Water coverage 81% 81% 82% 97% 90% 90% Sewerage coverage 69% 71% 86% 88% 80% 80% 46. Customers interviewed in the field expressed that even though the service still has lot of room for improvement, they have benefited from the works as they are buying less water from private vendors and less bottled water. The use of the electric pump decreased.

Table A3.12. Coping costs before and after the project. Maicao (COP/household/month 2007 prices) Households that previously had Households connected to the service water connection during implementation COP/household/month COP/household/month Before the project 147,372 165,544 After the project 92,851 92,851 Monthly savings 54,520 72,693

47. The Project also brought benefits for households that were connected to the sewerage. The economic benefits of sewerage connections were estimate using current bill as a proxy of the willingness to pay. 48. Results of the evaluation show 27 percent return, which is far higher than the 17 percent expected at appraisal, and the 12 percent discount rate used for the evaluation. Net benefits of US$ 16 million during the lifetime of the interventions are also higher than the US$ 14 million expected at appraisal. Table A3.13. Results of the Evaluation of Water and Sewerage Intervention. Maicao Actual Results Expected Results Present Value Flows (000 US$) 2007 prices IRR Net Benefit IRR Costs Benefits Net Benefit % (000 US$) % Economic 11,231 27,697 16,466 27% 14,195 17%

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49. Higher returns are explained and lower investment costs and achievement in coverage higher than expected and more efficiency gains attained in water management.

Albania

50. Aguas de Albania started operation in 2015, replacing the municipality as service provider. Water coverage was universal, yet the service was poorly provided. The works implemented under the Project consisted of a conduction pipe to improve the service to 1,700 households, 55 percent of the residents. Capacity of water production remained the same. Micro‐meters could not be installed due to the presence of calcium oxide the water. The drinking water treatment plant, previously built by the municipality, does not eliminate the calcium oxide, which is clogging the pipes and impeding the installation of micro‐meters. As result of the intervention, the water service continuity increased on average from 6 to 8.3 hours per day, with 24/7 service provision for 994 households in prioritized hydraulic sectors (S4 and S5). Unaccounted for water was halved, decreasing from 60 percent to 31 percent.

Table A3.14. Actual Achievements. Albania Municipality of Aguas de Albania* Target Albania End of Restructuring Albania 2,010 2,014 2015 2,016 Project 2016 UFW 60% 80% 44.3% 38.0% 31% 70% Number of customers 1,700 1,859 2,008 2,798 2,938 2,613 Micro‐meters 800 184 1 838 828 1,350 % micro‐meters/customers 47% 10% 0% 28% 28% 52% Continuity 6.0 6.8 6.0 5.9 8.3 12 Revenue collection rate 32% 33% 36% 35% Water coverage 100% 95% 94% 94% 93% 95% Sewerage coverage 100% 94% 82% 81% 80% 88% *The new operator started at the end of 2015 51. The immediate improvement seen by the customers is the water pressure which is higher than before, and residents perceive the difference, they still use the electric pump, yet a little bit less. 52. The intervention will yield additional benefits in the long term, as the operator is working closely with the municipality to improve the quality of water and to expand the capacity of production. When this occur, the conduction pipe will allow the operator to distribute efficiently the water in the area, bringing benefits associated with better water demand management. 53. For this evaluation, long term benefits were not included as they are beyond the scope of the project. The benefits are associated with the increase in coverage, improvement of continuity, reduction of unaccounted for water, and reduction of the use of pumps. 54. Results show benefits of US$ 0.2 million and 17 percent return, which is lower than expected but higher than the 12 percent discount rate used for the evaluation. The investment showed benefits that surpassed the costs by 50 percent.

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Table A3.15. Results of the Evaluation of Water and Sewerage Intervention in Albania Actual Results Expected Results Present Value Flows (000 US$) 2007 prices IRR Net Benefit IRR Costs Benefits Net Benefit % (000 US$) % Economic 482 689 207 17% 1,051 27%

Fonseca

55. The service in Fonseca and other six municipalities in the south of La Guajira is provided by Aguas del Sur. When the intervention started, water coverage was 76 percent, water was supplied about 11 hours per day, unaccounted for water was close to 90 percent and revenue collection rate 28 percent. The intervention in water supply aimed to optimize the distribution system and improve water demand management. However, only two of the activities expected were implemented: installation of 450 in‐house connections, sewerage expansion, and rehabilitation of a main sewage collector pipe. Continuity did not improve. UFW decreased, but its level is far above what was expected. Revenue collection decreased. On the other hand, water and sewerage coverage increased far beyond expected and some 450 households got in‐house connections receiving most of the benefits.

Table A3.16. Targets Expected and Actual Achievements. Fonseca Actual Expected End of Restructuring Restructuring Fonseca 2014 2015 2016 Project 2011 2016 Water produced (000 m3) 5,464 4,101 4,023 4,744 Water billed (000 m3) 626 636 802 887 UFW 89% 84% 80% 78% 40% 65% Number of customers 4,494 4,531 5,344 5,414 4,831 Micro‐meters 333 333 333 333 1,938 % micro‐ meters/customers 6% 6% 6% 6% 100% 40% Continuity 10.6 7.6 8 7.6 24 14 Revenue collection rate 33% 27% 27% 23% 65% 43% Water coverage 76% 91% 91% 91% 90% 80% Sewerage coverage 58% 63% 84% 84% 81% 65%

56. Attained benefits were as follow: (i) the in‐house connections provided for 450 households, improved the service significantly; and (ii) the sewerage network coverage expanded from 58 percent to 84 percent. Previously, these households had artisanal connections made of hoses with plenty of leaks. Households had to use electric pumps to get water in front of their houses. Through the in‐house connections interventions, households can take water from three water taps inside their houses. They hardly use the electric pump now and they are enjoying more water than before. They do not buy water from private vendors and bottled water purchase reduced to half. Regarding sewerage, a main collector was rehabilitated, and previous clogs and sewage overflows were eliminated. Maintenance costs of sewerage pipes decreased by 62 percent as result of this intervention.

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Table A3.17. Maintenance Cost of Sewerage Pipes in Fonseca Fonseca 2014 2015 2016 2017 Variation (%) Nominal prices (million COP) 44,820 29,695 17,922 8,330 2017 Prices (million COP) 40,298 25,739 15,164 6,914 ‐62%

57. For water interventions, benefits were estimated as savings of coping costs for the 450 household beneficiaries, which was estimated as COP 108,000 per household per month. For sewerage, benefits were measured as willingness to pay for the service using tariff as proxy, plus saving of maintenance costs for the operator.

58. Results show net benefits from water interventions were US$ 0.16 million and 18 percent return. However, benefits from sewerage interventions were not enough to cover the costs, resulting in a net loss of US$0.16 million when adding both interventions. The rate of return was 10 percent, which is lower than the 12 percent discount rate used but higher than the 6 percent established by the new Bank’s guidelines to evaluate this kind of projects.

Table A3.18. Results of the Evaluation from Water and Sewerage Intervention in Fonseca Actual Results Expected Results Present Value Flows (000 US$) 2007 prices IRR Net Benefit IRR Costs Benefits Net Benefit % (000 US$) % Water 543 704 161 18% Water and Sewerage 1,553 1,389 (164) 10% 6,364 25% 59. Environmental benefits that will come along with proper sewage disposal into wastewater treatment system in place in Fonseca were not accounted for.

San Juan del Cesar 60. Aguas del Sur is also the service operator in San Juan del Cesar. The intervention aimed to optimize the distribution system and to improve water demand management. All the indicators improved, but only the coverage targets were met. 61. Results show that the interventions did not generated enough benefits to compensate the costs with a negative result of US$ 0.3 million. Table A3.19. Actual Achievements. San Juan del Cesar Actual Expected End of San Juan del Cesar 2010 2014 2015 2016 Project Restructuring 2016 UFW 88% 75% 77% 84% 75% 70% Number of customers 5,150 5,503 5,254 5,984 6,122 5,390 Micro‐meters ‐ 47 46 348 1,973 3,234 % micro‐ meters/customers 0% 1% 1% 6% 32% 60% Continuity 13 13 10 10 10 16 Revenue collection rate 29% 48% 45% 55% 37% 55% Water coverage 95% 95% 96% 100% 99% 98% Sewerage coverage 77% 90% 90% 92% 93% 92%

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Villanueva 62. Aguas del Sur is also the service operator in Villanueva. The intervention in Villanueva aimed to optimize the distribution system and to improve water demand management. The indicators did not improve much, but the micro‐ metering that increased from 18 percent to 100 percent. Water service continuity increased from 17 to 18.8 hours per day on average, and 9,159 people are receiving 24/7 service. At the time of the ICR, the operator has just started reading the micro‐meters for billing purposes. Benefits will be important in the near future when production increases, water supply improves, and efficiency in the billing process is attained. However, only the actual benefits attained so far were included in the analysis. Table A3.20. Actual Achievements. Villanueva Actual Expected Villanueva 2010 2014 2015 2016 End of Project Restructuring 2016 UFW 88% 75% 86% 88% 80% 65% Number of customers 4,119 4,579 4,490 4,755 4,796 4,655 Micro‐meters 729 2,291 2,610 2,610 4,786 4,329 % micro‐meters/customers 18% 50% 58% 55% 100% 93% Continuity 17 22 19 18 18.8 22 Revenue collection rate 38% 41% 35% 47% 34% 45% Water coverage 87% 93% 92% 92% 92% 95% Sewerage coverage 74% 78% 77% 80% 80% 79% 63. Results show that the benefits of the intervention did not compensate the costs with a net loss of US$ 0.8M.

Regional Drinking Water Treatment Plant of Metesusto 64. The drinking water treatment plant of Metesusto serves the municipalities of Fonseca, Distraccion, Barrancas, and Hatonuevo. The Project increased its capacity from 300 lps to 500 lps. At the ICR date, the works were completed, yet some additional works in the distribution systems are needed to fully realize its potential benefits. Ocne all works are completed, the water treatment plant will bring important benefits for all residents and eventually it will eliminate the current water deficit. The benefits of reducing intermittence will be reflected in savings of coping costs incurred by households, which may be in the range of about COP 60,000 to COP 130,000 per month per household as it happened in the municipalities that implemented investments under the Project. The tariff meanwhile is about COP 15,000 per household per month (expressed in 2007 prices). 65. The net benefit for WTP Metesusto will correspond to the difference between savings on coping costs minus costs associated with the intervention and complementary works. Using the tariff as reference of benefits, which is much lower than actual benefits; and including the costs associated with the WTP, results show net benefit of US$ 1.6 million and rate of return of 20 percent. Summary of the Economic Evaluation of Component 1 and comparison to expected results 66. At appraisal, investments were evaluated for all the fifteen municipalities in the department of Guajira, even though some of them were not candidates for interventions as they did not show interest in participating. Actual interventions were implemented in seven municipalities and in rural areas. 67. Two municipalities, Riohacha and Maicao, used 54 percent of the project funds. Both exceeded expectations in coverage of water and sewerage and gained efficiency in water management and revenue collection. Achievements in UFW and continuity were close to expected, and micro‐metering improved significantly in Riohacha, yet it fell short to

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what was expected. The benefits will significantly impact the municipalities and their residents, who are seeing a reduction or elimination of water shortage. In Fonseca, the sewerage system was expanded and improved, and some 450 households were provided with in‐house water connection. The rest of the investment under Component 1 served to implement works in Albania, Barrancas, San Juan del Cesar, Villanueva, and the water treatment plant of Metesusto. 68. Results show that benefits surpassed expected benefits in the major cities of Maicao and Riohacha. Actual net benefits were US$33.8 million versus US$ 42.8 million expected. Actual internal rate of return was 21 percent higher than the 18 percent expected at appraisal. Table A3.21. Expected and Actual Benefits from Component 1 of the Project Expected Results Actual Results Net Benefits IRR Net Benefits IRR (000 US$) (000 US$) Maicao 14,195 17% 16,466 27% Riohacha 11,602 18% 16,795 19% Fonseca 6,364 25% (164) 10% Albania 1,051 27% 207 17% Villanueva 1,691 16% (777) 0% San Juan del Cesar 7,943 31% (330) 0% WTP Metesusto 1,634 20% Total Component 1 42,846 18% 33,831 21% 69. Results are reassuring as additional benefits that come along the improvement of the services were not included, such as impact on the economy and development of new activities and environmental benefits. Evaluation of Component 2

70. Intervention under Component 2 consisted of the construction of 10 reservoirs in rural areas of the municipality of Uribia, where indigenous communities reside. Before the Project, these communities were affected by severe water shortage. The construction of the reservoirs was accompanied by ancillary facilities and institutional arrangements to ensure their sustainability. 71. Results of a survey conducted after Project implementation in the communities where the reservoirs were built, found that main benefits for the population were: (i) reduction of time getting water needed for themselves and their goats; and (ii) improvement of farming, so crucial for their subsistence. Before the Project, residents of these communities had to walk long distances to fetch water, taking as long as 5 hours per trip. After the Project, the time reduced in average to about one hour. Table A3.22. Reservoirs. Population and time spent fetching water (with and without project) Time spent fetching water (hours per time) Community Population Before Project After Project Kaiwa 1,159 5.19 0.90 Mauraru 750 7.14 0.74 La Gran Via 1,589 2.48 0.75 Utaikalamana 1,013 8.63 0.81 Puerto Virgen 619 5.25 0.52 Morrocomana 849 5.35 1.08

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Shapurraitu 677 5.25 1.50 Winmuchastirra 350 Not interviewed Not interviewed Maiwo 450 Not interviewed Not interviewed Total 7,456 5.32 0.88 72. This evaluation was conducted estimating benefits as savings of time spent fetching and collecting water. Additional benefits of farming improvement were not estimated due to lack of information. 73. Estimating the value of the time spent fetching water by indigenous people was a challenge as they live under a non‐market economy and rely only on natural resources to provide for basic needs, i.e., in a subsistence economy. For this evaluation, monthly income was associated to the basic food basket, published by the Department of Statistics in Colombia. In 2007 the value of the food basket was about US$ 90 per household per month. 74. Given that children and kids are generally those who go to fetch water, the estimate monthly income was adjusted by 50 percent. The value of time was projected for both situations with and without Project for a 20‐years period. The difference between these two scenarios corresponds to the savings originated from the project. The cost of investment was included in the evaluation as well. Benefits associated by reduction of sickness and better nutrition were not calculated due to lack of information. 75. Results of the evaluation show 25 percent return and US$ 2.7 million of net benefit. Table A3.23. Results of the Economic evaluation of the Component 2 of the Project ‐ Reservoirs Actual Results Present Value Flows (000 US$) 2007 prices IRR Costs Benefits Net Benefit % Component 2 of the Project ‐ 4,855 7,604 2,749 25% Reservoirs

Summary of Results of the project.

76. Results of the evaluation show that net benefits yielded from the project are US$ 36.6 million and an internal rate of return of 21 percent. Table A3.24. Results of the Economic evaluation of the Project Expected Results Actual Results Net Benefits IRR Net Benefits IRR (000 US$) (000 US$) Component 1 Municipalities that participated 42,846 18% 33,830 21% Other municipalities 11,675 23% Subtotal Component 1 54,521 19% 33,830 21% Component 2 2,749 25% Total Project 54,521 19% 36,579 21%

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B. FINANCIAL EVALUATION OF THE OPERATORS 77. At appraisal, the financial analysis showed that the Project would be financially sustainable only when Government transferred funds from subsidies and the operators attained efficiency gains. Results showed that financial performance of operators were very poor, with very tiny operating and net losses when depreciation and financial expenses were included. 78. For this evaluation, the financial analysis of operators was conducted, and their financial sustainability was examined. The evaluation was based on the financial statements of all operators where investment was completed, that is, Riohacha, Maicao, Albania, and Fonseca. 79. The operators attained efficiency gains and received the subsidy from the government expected at appraisal. Results show that all operators achieved full cost recovery. By the end of the Project, the cost recovery ratio ranged from 1.03 in Riohacha to 1.49 in Fonseca. The interventions of the Project did not bring additional burden that could put in risk the financial sustainability. On the contrary, efficiency gains allowed the provider to operate at lower costs and to generate higher revenues. Table A3.25. Income Statement (COP million) Riohacha Maicao Albania Fonseca 2013 2016 2013 2016 2015 2016 2015 2016 Revenues 9,669 20,536 4,331 9,160 242 1,598 715 1,800 Costs 9,355 19,906 4,164 7,539 155 1,246 594 1,211 EBIT 314 630 167 1,622 87 352 121 589 Other 42 (557) ‐ (1,036) (9) (59) (4) 55 Net Income 357 74 167 585 79 293 117 644 Cost recovery 1.03 1.03 1.04 1.22 1.57 1.28 1.20 1.49 80. When the capital structure is examined, results showed that Riohacha is not in a good financial position. 85 percent of its capital correspond to liabilities, while only 16 percent is equity. The other operators show better position with equity/assets ratio ranging from 37 percent in Aguas de la Pensinsula to 72 percent in Aguas de Albania. It is important that the operators, especially Riohacha, be cautious with their liabilities, which consist basically of short term accounts payable, and be careful managing their working capital. Table A3.26. Balance Sheet (COP million) Aguas de la Fonseca ASAA Riohacha Aguas de Albania Peninsula Maicao (Aguas del Sur) 2013 2016 2013 2016 2015 2016 2015 2016 Assets Current assets 11,745 17,303 3,462 5,376 423 785 1,611 3,189 Long term assets 1,246 8,106 505 3,506 4 155 18 1 Total Assets 12,991 25,409 3,967 8,882 427 940 1,629 3,190 Liabilities Current Liability 6,866 15,930 1,688 3,307 48 267 1,422 1,624 LT Liabilities 4,468 5,613 569 2,314 ‐ ‐ ‐ ‐ Total Liabilities 11,334 21,543 2,257 5,622 48 267 1,422 1,624 Equity 1,657 3,866 1,710 3,260 379 673 208 1,566

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Liability & Equity 12,991 25,409 3,967 8,882 427 940 1,630 3,190 Liabilities/assets 87% 85% 57% 63% 11% 28% 87% 51% Current assets/assets 90% 68% 87% 61% 99% 84% 99% 100% Current liabilities/ liabilities 61% 74% 75% 59% 100% 100% 100% 100%

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ANNEX 5. BORROWER, CO‐FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS

1. A Spanish version of the draft ICR report was submitted to the Borrower for comments on July 30, 2018. The ICR Team also presented the methodology, preliminary findings, key results and ratings to the Borrower during the last ICR mission on August 17, 2018. Additionally, the ICR Team presented the Project’s achievements to the Minister of Housing, City and Territory and the Vice minister of Water, the AT, the Departmental and Municipal Authorities, during a visit to La Guajira on September 12, 2018, where they visited, inter‐alia, the Metesusto water treatment plant.

2. The Temporary Administration did not send written comments to the ICR report, but the IRC Team collected some remarks made on the Project’s results that are summarized below: Comments by the Ministry of Housing, City and Territory (MVCT) 3. During his recent visit to La Guajira (September 2018), the Minister of MVCT highlighted the relevance given by the President of Colombia to La Guajira, especially with regards to drinking water and sanitation, and he announced the launching of La Guajira Azul Program by the President in the coming weeks. He stood out the Project’s results as good news. He remarked the expansion of Metesusto Water Treatment Plant’s capacity from to 300 lps to 532 lps, indicating that the MVCT is committed to completing the conduction pipes under the “La Guajira Azul” program. He indicated that the AT is moving forward in the structuring of a Departmental Company for Public Services, which is aimed to provide technical assistance on water supply and sanitation to the 10 municipalities in the south of the Department and the rural schemes supported by the Project. He also informed that the MVCT is finalizing the contractual model of the Regional Operator for municipalities of the South of La Guajira, which will provide services to Barrancas, Distracción, Hatonuevo, Fonseca, San Juan del Cesar, El Molino and Villanueva. He announced that the new Regional Specialized Operator will be on board by December 2018. Comments by Ministry of Hacienda and Public Credit (MHCP) 4. The MHCP’s official that participated in the last Project’s supervision mission highlighted the technical support as the Bank’s added value: “el Banco es un actor importante, no solo por la financiación, sino por el apoyo técnico, que es el gran valor agregado del Banco.”

Comments by National Planning Department (DNP) 5. The DNP’s Director for Urban Development participated in the last Project’s supervision mission, from April 10‐12, 2018). The Director highlighted the relevance of the results achieved by the Project, especially given the context of La Guajira. The Director indicated that “todos los resultados que se han presentado con este Proyecto es un gran avance que puede mostrar el Departamento y son unos aprendizajes fundamentales para futuras intervenciones en La Guajira y otros Departamentos.”

Comments by Departmental Representatives 6. A comment worth to remark was shared in an interview meeting with the current Governor of La Guajira and two Departmental Representatives (Diputados de la Asamblea Departamental) during the last supervision mission (April 10, 2018). All they agree that “the Project wouldn’t have achieved the results if it wasn’t for the Bank’s continued engagement and implementation support.”

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ANNEX 6. SUPPORTING DOCUMENTS

Project‐specific Documents

 Project Preparation Mission Final Report, Libhaber & Carrasco, 2005  Project Formulation for Rural Pilot Program, 2005  Project Information Document (PID Report No. AB 1890), 2005 & (PID AB2511), 2006  Environmental Assessment: Environmental Management Plan (Plan de Manejo Ambiental), 2006  Project Appraisal Document (Report No: 38508‐CO), 2007  Integrated Safeguards Data Sheet (Report No.: AC2735), 2007  Loan Agreement 7434‐CO (April 16, 2007) and Addendum to the LA (December 20, 2011)  Indigenous Peoples Planning Framework (IPP200), 2007  Resettlement plan: Resettlement policy framework (RP507), 2007  Indigenous People Plan Maicao and Uribia  Indigenous People Resettlement Plan for Riohacha  Project Procurement Plan and Financial Reports  Restructuring Papers Reports No: 64786‐CO (Oct 2011), 64938‐CO (Nov 2011), RES20418 (Sep 2015), RES22942 (Apr 2016), RES27615 (Apr 2017) and RES28498 (Oct 2017). Memos for CD and RVP  Aide Memoires of Project Supervision Missions and Implementation Status and Results Reports (1 to 22)  Aide Memoire for ICR fact finding mission  Borrower Completion Report, July 2018

Additional Documents

 Bank Guidance ‐ Implementation Completion and Results Report (ICR) for Investment Project Financing (IPF) Operations, 2017  WBG – Colombia Country Assistance Strategy (CAS) for FY2003 to 2007 (Report No. 25129‐CO), 2002  WBG ‐ Colombia Country Partnership Framework for FY16 to 2021 (Report No. 101552‐CO), 2016  WBG ‐ Colombia 2015 Country Systematic Diagnostic (SCD) (Report No. 97878), 2015  IEG ‐ Project Performance Assessment Report No. 36345 – Municipal Development Project (Loan 3336‐ CO) and Urban Infrastructure Services Development Project (Loan 4345‐CO), 2006  IEG ‐ Project Performance Assessment Report No. 111404 – Public and Private Paths to Sustainable Water Supply and Sanitation in Colombia 1999‐2011, 2016  WBG ‐ Implementation Completion and Results Report No. ICR00001053 ‐ Cartagena Water Supply, Sewerage and Environmental Management Project (IBRD‐45070 IBRD‐74040), 2010  National Health Institute, Republic of Colombia ‐ Status of Water Quality Surveillance for Human Consumption in Colombia 2007‐2011 (Estado de la Vigilancia de la Calidad de Agua para Consumo Humano en Colombia 2007‐ 2011), 2012  National Water Quality Report 2014, Ministry of Health, Colombia (Informe Nacional de Calidad del Agua 2014, INCA), 2015

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ANNEX 7. ADDITIONAL TABLES

Table 1. Project Costs

Component Estimated Cost Estimated Cost Revised at Actual Cost at closing (US$ million) October 2017 restructuring (US$ million) (US$ million) Component 1 – Urban WSS 90.1 (61.5 IBRD) 129.0 (76.0 IBRD) 129 (76.0 IBRD) Infrastructure Component 2 – Rural Pilots 7.0 (7.0 IBRD) 4.0 (4.0 IBRD) 7.2 (1.0 IBRD) Component 3 – Project 10.8 (8.9 IBRD) Management and Analytical 7.0 (7.0 IBRD) 10.0 (10.0 IBRD) Activities

Total 143.0 (90.0 IBRD) 143.0 (90.0 IBRD) 108.1 (71.4 IBRD)

Table 2. List of Governors

Governor Period Full or Interrupted Term José Luis González Crespo (E)* 1/1/2004 – 31/12/2007 Full Jorge Eduardo Pérez Bernier (E) 1/1/2008 – 31/12/2011 Full Juan Francisco Gómez Cerchar (E) 1/1/2012 – 28/10/2013 Interrupted Fahian Al‐Fayes Chaljub (A)** 29/10/2013 ‐ 1/2/2014 Interrupted Sugeila Oñate Rosado (A) 1/2/2014 ‐ 1/7/2014 Interrupted José Maria Ballesteros Valdivieso (E) 1/7/2014 – 31/12/2015 Interrupted Oneida Rayeth Pinto Pérez (E) 1/1/2016 ‐ 8/6/2016 Interrupted Jorge Enrique Vélez (A) 10/8/2016 ‐ 5/11/2016 Interrupted Wilmer David González Brito (E) 6/11/2016 ‐ 22/2/2017 Interrupted Weildler Guerra Curvelo (A) 23/2/2017 ‐ 19/11/2017 Interrupted Tania Buitrago Gonzalez (A) 20/11/2017 ‐ Present ‐ * Elected (E) **Appointed (A)

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Table 3. Environmental and Social Safeguards Compliance

Safeguard Compliance Comments / Pending items Environmental At Appraisal, the Project did not anticipate financing The study on wastewater reuse is Assessment (EA. OP any Category A sub‐projects. An Environmental pending. The Temporary Administration 4.01) Management Plan (EMP) was developed to minimize plans to carry out the study only after and control environmental impacts, establish the contract for the construction of the compliance requirements for the operations, and lagoons in Riohacha resumes. establish protocols for environmental audits in order to ensure that the sub‐projects complied with minimum environmental standards and current legislation. The EMP also included environmental technical specifications for the long‐term maintenance of the investments. In compliance with the safeguard, an Environmental Impact Assessment was prepared and approved by the Department’s Environmental Authority (CORPOGUAJIRA) for each sub‐project. The PIU prepared regular follow‐up technical reports that included an assessment of compliance with safeguards instruments. At the time of the ICR, the Project was in compliance with this indicator. Natural Habitats (OP The Project, in compliance with the safeguard, included N/A 4.04) screening requirements for each intervention to assess the possibility of degrading or converting natural habitats. Cultural Property (OP The Project adapted and applied Good Practice Near the close of the Project, new 4.11) Guidelines for screening the location of sub‐project Colombian legislation on archaeological locations and applying chance find procedures. chance finds was established. In compliance with this new legislation, the PIU developed an archaeological plan for the Riohacha Wastewater Treatment Lagoon. At the time of the ICR, the plan was pending approval by the GoC. Involuntary The Project included the preparation of a Resettlement At the time of the ICR, the GoC had Resettlement (OP Policy Framework (RPF). An Indigenous Resettlement budgeted for the Temporary Water 4.12) Plan (IRP) for the Indigenous People communities Administration, Departmental or by the surrounding the area identified for the construction of local authority in charge to finance the the Wastewater Treatment Lagoon in Riohacha. At the only outstanding commitment for the time of the ICR, the Project was in compliance with this resettled houses: electrification. safeguard, the IRP was 96 completed, and the Temporary Administrations had plans for the implementation of pending commitment. Indigenous Peoples In line with the safeguard, an Indigenous Peoples Policy The Project encountered various (OP 4.10) Framework (IPPF) was prepared as part of the Project. obstacles related to social safeguards Plans were prepared for Maicao and Reservoirs in during implementation. Although the Uribia. Project developed safeguards instruments and carried out consultations in compliance with the At the time of ICR, the IPP for Reservoirs was completed policies, the Project met significant (100%) and the IPP for Maicao was almost completed resistance given that: (i) the (95%), just pending the completion of the micro‐ municipalities/departments were not aqueduct to improve water supply to indigenous complying with the agreements communities (works ongoing with 80 percent progress). established in the consultations; and (ii)

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with each consultation, the Project received more demands. The Maicao Wastewater Treatment Lagoons, which were not financed by the Project and thus limited the leverage of the Bank in regard to safeguard compliance, faced continuous delays in complying with the IPP. Under the Temporary Administration, these sub‐projects began to move forward. International The Project’s WSS interventions expected to impact N/A Waterways (OP 7.50) tributaries of basins that flow through the Bolivarian Republic of Venezuela. The Project, however, expected to have no adverse impact on the quality or quantity of water flows to Venezuela. In compliance with this safeguard, the GoC notified the Venezuelan Government. Dam Safety (OP 4.37) The Dam Safety Safeguard was triggered during Required ancillary works on Reservoirs implementation due to the construction of reservoirs advised by Dams Safety Specialist were higher than 12 meters and the use of the “El Cercado” incorporated in the scope of the dam as source of water for the Metesusto Drinking contracts and completed in accordance Water Treatment Plan. As a result, a Dam Safety study with OP 4.37 Safety of Dams. was carried out. The study recommended monitoring the constructed dams through visual inspections during their operation phase, especially after the rainy season or after extreme rains affecting the reservoir, dam and discharge areas, to determine any infrastructural risks. A Report on Safety of Dams in accordance with OP 4.37 was completed in 2011, and a series of missions by international dam experts on May 2017 provided recommendations that were further incorporated in the scope of the contractor’s work. The PIU has also received information from the National Rural Agency in charge of the administration of the El Cercado Reservoir, which provides raw water for a water treatment plant sub‐project in the Urban Component, that is in compliance with O.P. 4.37.

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