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Agricultural Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 4 123 8-EC PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN Public Disclosure Authorized IN THE AMOUNT OF US$15.3 MILLION TO THE PROVINCIAL COUNCIL OF CHIMBORAZO WITH THE GUARANTEE OF THE REPUBLIC OF ECUADOR FOR A CHIMBORAZO DEVELOPMENT INVESTMENT PROJECT (PIDD) Public Disclosure Authorized November 5,2007 Sustainable Development Network Bolivia, Ecuador, Peru, Venezuela Country Management Unit Latin America and the Caribbean Region This document has a restricted distribution and may be used by recipients only in the Its Public Disclosure Authorized performance of their official duties. contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS CurrencyUnit = US$ FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AECI Spanish Agency for International Cooperation AIECH Asociacidn Indigena Evange'lica de Chimborazo (AIECH, now CONPOCIECH) AOPs Annual Operational Plans BCE Central Bank of Ecuador CADERS Agricultural Competitiveness and Sustainable Rural Development Project CAS Country Assistance Strategy CFAA Country Financial Accountability Assessment CFP ' Country Financial Parameters CGE Controller General of the State (Contraloria General del Estado) CHPC Chimborazo Provincial Council CNRH National Council of Water Resources CODECH Development Corporation of the Chanchan and Chimbo River Basin Areas CODERECH Corporacidn de Desarrollo Regional de Chimborazo CONAIE Confederation of Indigenous Nationalities of Ecuador (Confederacidn de Nacionalidades Indigenas del Ecuador) CONCOPE Ecuadorian Provincial Governments Councils CONPOCIECH Confederation of People, Organizations, Communities, Evangelical Churches of Chimborazo (Confederacidn de Pueblos, Organizaciones, Comunidades, Iglesias Evange'licas de Chimborazo) COPICCH Chimborazo Coordinator of Indigenous and Peasant Peoples COPS (Contaminantes orgdnicos persistentes) CPAR Country Procurement Assessment Review DA Designated Account DPW Directorate of Public Works EA Environmental Analysis EC European Commission (of the European Union) ECUARUNARI (Confederacidn de Pueblos de la Nacionalidad Kichwa del Ecuador) EMP Environmental Management Plan EPM Environmental Procedures Manual FA0 Food and Agriculture Organization of the United Nations FEINE Federacidn de Indigenas del Ecuador FM Financial Management FMA Financial Management Assessment FODESEC Sectional Development Fund FONDEPRO Provincial Development Fund GDP Gross domestic product FOR OFFICIAL USE ONLY GEF Global Environment Facility GOE Government of Ecuador HDM-4 Highway Development and Management System IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding ICR Implementation Completion Report IDB Inter-American Development Bank IFAC International Federation of Accountants IFRs Interim unaudited financial report IPM Integrated Pest Management IPP Indigenous Peoples Plan IPPF Indigenous Peoples Planning Framework IRR Internal Rate of Return ISA International Standards on Auditing ISDS Integrated Safeguard Data Sheet IT Information technology LOAFYC Organic Act of Financial Administration and Control (Ley Orgdnica de Adminisracidn Financiera y Control) LOREYTF Law of Responsibility, Stabilization and Transparency M&E Monitoring and evaluation MEF Ministry of Economy and Finance MEMRs Routine Road Maintenance Micro-Enterprises MICH Indigenous Movement of Chimborazo MIS Management Information System MOP Ministry of Public Works NCB National Competitive Bidding NGO Nongovernmental organization NPV Net Present Value O&M Operation and maintenance PAC Project Advisory Committee PC Project Coordinator PD Project Director PDP Provincial Development Plan PHRD Policy and Human Resources Development PIDD Chimborazo Development Investment Project PMF Pest Management Framework POM Project Operational Manual POT Project Operational Team PRAGUAS Rural and Small Towns Water Supply and Sanitation Project PRODEPINE Indigenous and Afro-Ecuadorian Peoples Development Project PROLOCAL Poverty Reduction and Local Rural Development Project PROMEC Power and Communication Sectors Modernization and Rural Services Project PROMSA Agricultural Research Project PRONADER National Sustainable Rural Development Program PU Procurement Unit This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. SA Social Assessment SBDs Standard Bidding Documents SG Sectional Governments SIAFS AG Sistema Integrado de Administracidn Financiera y Control SICA Agricultural Census and Information System Project SIGEF Financial Management Integrated Information System SIISE Integrated System of Social Indicators SIL Specific Investment Loan SINFO Accounting Information System SPI Inter-bank Payment System (Sistema de Pagos Interbancarios) ssc Sub-project Selection Committee TA Technical Assistance TAPS Technical Assistance Providers TORS Terms of reference UNDB United Nations Development Business USAID United States Agency for International Development VPd Vehicles per day WUA Water User Association Vice President: Pamela Cox Country Managermirector: Pilar Larreamendy (Acting)/Carlos Felipe Jaramillo Sector Managermirector: Glenn Morgan (Acting)/Laura Tuck Task Team Leader: Garry Charlier and Pilar Larreamendy ECUADOR ECUADOR - CHIMBORAZO DEVELOPMENT INVESTMENT PROJECT (PIDD) PROJECT APPRAISAL DOCUMENT LATIN AMERICA AND CARIBBEAN LCSEN Date: October 3 1, 2007 Team Leader: Garry Charlier Country Director: Carlos Felipe Jaramillo Sectors: Irrigation and drainage (65%);Roads Sector ManagedDirector: Laura Tuck and highways (35%) Themes: Rural services and infrastructure (P);Other rural development (P);Other environment and natural resources management (S) Project ID: PO94784 Environmental screening category: Partial Assessment Lending Instrument: Specific Investment Loan Project Financing: Data [XI Loan [ ] Credit [ ] Grant [ 3 Guarantee [ 3 Other: Source Local Foreign Total Borrower 5.80 0.00 5.80 International Bank for Reconstruction and 15.30 0.00 15.30 Development Local Communities 2.20 0.00 2.20 Total: 23.30 0.00 23.30 Borrower: Chimborazo Provincial Council Primera Constituyente y Carabobo Riobamba, Chimborazo Ecuador, 0601 Tel: 593-3-296-9887 Fax: 593-3-296-9887 www. chimborazo. gov.ec Responsible Agency: Chimborazo Provincial Council Ecuador FY 8 9 10 11 12 13 14 0 0 4nnual 1.50 4.10 3.50 3.20 1.50 0.50 1.00 0.00 0.00 Cumulative 1.50 5.60 9.10 12.30 13.80 14.30 15.30 15.30 15.30 Does the project meet the Regional criteria for readiness for implementation? [XIYes [ ]No Ref: PAD D. 7 Project development objective Ref: PAD B.2, Technical Annex 3 The project objective is to increase production and market access of rural families living in the Chambo and Chanchan-Chimbo river basins within Chimborazo Province, through investments in irrigation and roads improvement. The major outcome indicators are: increased value of production and increased production sales. By the end ofthe project, approximately 17,500 rural families are expected to have increased their value ofproduction by 10 percent and 15,000 rural families are expected to have increased their sales by 5 percent. Project description [one-sentence summary of each component] Ref: PAD B.3.a, Technical Annex 4 Component 1-Productive Investments: This includes support oftwo key productive infrastructure systems that play an important role in the development ofthe local rural economy: i)irrigation systems rehabilitation and improvements, and ii)provincial roads improvements. Component 2-Project Management: The aim ofthis component is to ensure: (i)the efficient and effective coordination and management ofthe project that will be implemented using the existing structure ofthe CHPC; (ii)an adequately functioning Monitoring and Evaluation (M&E) system; and (iii)a communication strategy to provide ample dissemination ofproject activities, results, implementation progress, etc. at various levels and to relevant stakeholders. Which safeguard policies are triggered, if any? Ref: PAD 0.6, Technical Annex 10 O.P. 4.01 - Environmental Assessment, O.P. 4.04 - Natural Habitats, OP4.09-Pest Management, OP 4.10-Indigenous Peoples, OP 4.36- Forests. Significant, non-standard conditions, if any, for: Re$ PAD C. 7 Board presentation: None. Loadcredit effectiveness: There is one condition of effectiveness in the Loan Agreement, which states that the Borrower should comply with Articles 30 and 3 1 ofthe Executive Decree No. 61 1 that regulates the Ley Organica de Responsabilidad, Estabilizacih y Transparencia Fiscal (LOREYTF), by (a) entering into a trust agreement (Convenio de Fideicomiso) with the Central Bank of Ecuador and (b) entering into a restitution agreement (Convenio de Restitucion de Valores) with the Guarantor. The legal opinion to be furnished to the Bank by the Guarantor under the terms ofthe Loan Agreement should include confirmation that the Borrower has complied with the condition of effectiveness referred to above. Covenants applicable to project implementation: By December 14, 2007, the Borrower has strengthened and updated its financial management system in a manner satisfactory to the Bank. Within two weeks ofthe Effective date, the Borrower shall ensure that (i)the financial management specialist/accountant, (i)the financial management assistant, and (iii)the treasury, as referred to in the Operation
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