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For Official Use Only Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No.: PAD1551 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF €25 MILLION Public Disclosure Authorized (US$28.038 MILLION EQUIVALENT) TO THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA FOR A SECOND MUNICIPAL SERVICES IMPROVEMENT PROJECT NOVEMBER 19, 2015 Public Disclosure Authorized Social, Urban, Rural & Resilience Global Practice Europe And Central Asia This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective as of September 30, 2015) Currency Unit = Macedonian denar (MKD) €1 = US$1.12 = MKD54.92 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS CPS Country Partnership Strategy CSE Communal Service Enterprise DA Designated Account DWP Danube Water Program EA Environmental Assessment EAMF Environmental Assessment Management Framework EIA Environmental Impact Assessment EMP Environmental Management Plan EU European Union FM Financial Management FYR Former Yugoslav Republic GRS Grievance Redress Service IFR Interim Un-audited Financial Report IPA Instrument Pre-accession LARPF Land Acquisition and Resettlement Policy Framework M&E Monitoring and Evaluation MBDP Macedonian Bank for Development Promotion MOF Ministry of Finance MSIP Municipal Services Improvement Project MSIP2 Second Municipal Services Improvement Project NBRM National Bank of Republic of Macedonia O&M Operation and Maintenance PAD Project Appraisal Document PCC Project Coordination Committee PDO Project Development Objective PMU Project Management Unit POM Project Operational Manual RPF Resettlement Policy Framework TA Technical Assistance UPP Urban Partnership Program Regional Vice President: Cyril E. Muller Country Director: Ellen A. Goldstein Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager: David N. Sislen Task Team Leader: Toshiaki Keicho TABLE OF CONTENTS I. STRATEGIC CONTEXT .......................................................................................... 1 A. Country Context ............................................................................................................ 1 B. Situations of Urgent Need of Assistance or Capacity Constraints (if applicable) ........ 2 C. Sectoral and Institutional Context ................................................................................. 2 D. Higher Level Objectives to which the Project Contributes .......................................... 3 II. PROJECT DEVELOPMENT OBJECTIVES ......................................................... 4 A. PDO............................................................................................................................... 4 Project Beneficiaries ........................................................................................................... 4 PDO Level Results Indicators ............................................................................................. 4 III. PROJECT DESCRIPTION ....................................................................................... 5 A. Project Components ...................................................................................................... 6 B. Project Financing .......................................................................................................... 7 C. Series of Project Objective and Phases ......................................................................... 8 D. Lessons Learned and Reflected in the Project Design .................................................. 8 IV. IMPLEMENTATION ................................................................................................ 8 A. Institutional and Implementation Arrangements .......................................................... 8 B. Results Monitoring and Evaluation ............................................................................ 10 C. Sustainability............................................................................................................... 10 V. KEY RISKS ............................................................................................................... 11 A. Overall Risk Rating and Explanation of Key Risks.................................................... 11 VI. APPRAISAL SUMMARY ....................................................................................... 12 A. Economic and Financial (if applicable) Analysis ....................................................... 12 B. Technical ..................................................................................................................... 14 C. Financial Management ................................................................................................ 14 D. Procurement ................................................................................................................ 15 E. Social (including Safeguards) ..................................................................................... 16 F. Environment (including Safeguards) .......................................................................... 18 G. Other Safeguards Policies Triggered .......................................................................... 19 H. World Bank Grievance Redress .................................................................................. 20 Annex 1: Results Framework and Monitoring ........................................................................ 21 Annex 2: Detailed Project Description ...................................................................................... 26 Annex 3: Implementation Arrangements ................................................................................. 31 Annex 4: Implementation Support Plan ................................................................................... 44 Annex 5: MAP ............................................................................................................................. 46 PAD DATA SHEET Macedonia, former Yugoslav Republic of Second Municipal Services Improvement Project (P154464) PROJECT APPRAISAL DOCUMENT . EUROPE AND CENTRAL ASIA GSU09 Report No.: PAD1551 Basic Information Project ID EA Category Team Leader(s) P154464 B - Partial Assessment Toshiaki Keicho Lending Instrument Fragile and/or Capacity Constraints [ ] Investment Project Financing Financial Intermediaries [ ] Series of Projects [ ] Project Implementation Start Date Project Implementation End Date 01-Apr-2016 30-Sep-2020 Expected Effectiveness Date Expected Closing Date 31-Mar-2016 31-Mar-2021 Joint IFC No Practice Senior Global Practice Country Director Regional Vice President Manager/Manager Director David N. Sislen Ede Jorge Ijjasz-Vasquez Ellen A. Goldstein Cyril E Muller . Borrower: Former Yugoslav Republic of Macedonia Responsible Agency: Ministry of Finance Contact: Suzana Peneva Title: State Advisor Telephone No.: 389 3 255 373 Email: [email protected] . Project Financing Data(in US$, millions) [ X ] Loan [ ] IDA Grant [ ] Guarantee [ ] Credit [ ] Grant [ ] Other Total Project Cost: 28.04 Total Bank Financing: 28.04 Financing Gap: 0.00 . Financing Source Amount Borrower 0.00 i International Bank for Reconstruction and 28.04 Development Total 28.04 . Expected Disbursements (in US$, millions) Fiscal Year 2016 2017 2018 2019 2020 2021 0000 0000 0000 0000 Annual 0.30 2.50 6.00 8.00 7.67 3.57 0.00 0.00 0.00 0.00 Cumulative 0.30 2.80 8.80 16.80 24.47 28.04 0.00 0.00 0.00 0.00 . Institutional Data Practice Area (Lead) Social, Urban, Rural & Resilience Global Practice Contributing Practice Areas Water Cross Cutting Topics [ ] Climate Change [ ] Fragile, Conflict & Violence [ ] Gender [ ] Jobs [ ] Public Private Partnership Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co- Co-benefits % benefits % Transportation Urban Transport 30 Water, sanitation and flood protection General water, sanitation 20 and flood protection sector Water, sanitation and flood protection Solid waste management 15 Energy and mining Energy efficiency in 15 Heat and Power Public Administration, Law, and Sub-national government 20 Justice administration Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Urban development City-wide Infrastructure and Service 60 Delivery Urban development Municipal finance 25 Urban development Municipal governance and institution 15 building Total 100 ii . Proposed Development Objective(s) The proposed development objective of the Second Municipal Services Improvement Project (MSIP2) is to improve transparency, financial sustainability, and inclusive delivery of targeted municipal services in the participating municipalities. Components Component Name Cost (US$, millions) Municipal Investment Subloans 20.76 Poverty and Social Inclusion Investment Grants 5.53 Project Management, Monitoring and Evaluation, and 1.68 Capacity Building . Systematic Operations Risk-Rating Tool (SORT) Risk Category Rating 1. Political and Governance Moderate 2. Macroeconomic Moderate 3. Sector Strategies and Policies Low 4. Technical Design of Project or Program Low 5. Institutional Capacity
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