The World Bank ZAMBEZI RIVER BASIN MANAGEMENT PROJECT (P143546)

REPORT NO.: RES32227 Public Disclosure Authorized

RESTRUCTURING PAPER

ON A

PROPOSED PROJECT RESTRUCTURING

OF

ZAMBEZI RIVER BASIN MANAGEMENT PROJECT (P143546) Public Disclosure Authorized

APPROVED ON MARCH 6, 2015 TO ZAMBEZI WATERCOURSE COMMISSION (ZAMCOM)

WATER GLOBAL PRACTICE Public Disclosure Authorized AFRICA REGION

Regional Vice President: Makhtar Diop Country Director: Paul Noumba Um Senior Global Practice Director: Guang Zhe Chen Practice Manager/Manager: Catherine Signe Tovey Task Team Leader: Cecil Nundwe, William Rex Public Disclosure Authorized The World Bank ZAMBEZI RIVER BASIN MANAGEMENT PROJECT (P143546)

ABBREVIATIONS AND ACRONYMS

BASC Basin-wide Stakeholder Coordination Committee CIWA Cooperation in International Waters in Africa IWRM Integrated Water Resources Management JPSC Joint Project Steering Committee MDTF Multi-Donor Trust Fund NASC National Stakeholder Coordination Committees TF Trust Fund ZAMCOM Zambezi Watercourse Commission ZAMSTRAT IWRM Strategy and Implementation Plan for the Zambezi Basin ZAMWIS-DSS Zambezi Water Resources Information System and Decision Support System ZSP Strategic Plan for the Zambezi Watercourse The World Bank ZAMBEZI RIVER BASIN MANAGEMENT PROJECT (P143546)

BASIC DATA

Product Information

Project ID Financing Instrument P143546 Investment Project Financing

Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B)

Approval Date Current Closing Date 06-Mar-2015 30-Jun-2018

Organizations

Borrower Responsible Agency Zambezi Watercourse Commission (ZAMCOM) Zambezi Watercourse Commission (ZAMCOM)

Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY

Total Project Cost 4.00 Total Financing 0.00 Financing Gap 0.00

DETAILS-NewFin3

Project Development Objective (PDO) Original PDO To strengthen cooperative management and development within the Zambezi River Basin to facilitate sustainable, climate resilientgrowth.

OPS_TABLE_PDO_CURRENTPDO The World Bank ZAMBEZI RIVER BASIN MANAGEMENT PROJECT (P143546)

Summary Status of Financing Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed

TF-18921 06-Mar-2015 08-May-2015 08-May-2015 30-Jun-2018 4.00 2.28 1.72

Policy Waiver(s)

Does this restructuring trigger the need for any policy waiver(s)? No

The World Bank ZAMBEZI RIVER BASIN MANAGEMENT PROJECT (P143546)

I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING

A. Project Status

The Zambezi River Basin Management Project is part of a broader program of support that is facilitated through the Multi-Donor Trust Fund for Cooperation in International Waters in Africa (CIWA MDTF). The MDTF provides an integrated framework to leverage Bank supported programs across various sectors and countries across the basin. The project is directly aligned with CIWA’s objective to support the effort of riparian states, and regional bodies, to facilitate investment and growth, by developing the resources of the basin in accordance with priorities articulated in the Integrated Water Resources Management (IWRM) Strategy and Implementation Plan for the Zambezi Basin (ZAMSTRAT). The project is intended to strengthen the role of the Zambezi Watercourse Commission (ZAMCOM) in promoting cooperative management and development within the Zambezi River Basin through institutional strengthening, improved information sharing and decision support and strategic planning. Citizens of the riparian states will benefit through the contribution of secure, sustainable water to critical sectors including agriculture, energy and industrial growth. The specific beneficiaries of the outcomes related to project activities will be individuals, communities and institutions

The financing of this project is through a US$4 million grant from the CIWA MDTF (TF 18921), to be implemented over three years. The project became effective on May 8, 2015 and has a closing date of June 30, 2018. As of April 2018, the project had disbursed approximately US$2.28 million, or 57 % of the total amount available, with total contractual commitments, for the 3 project activities, at 100% of the total current project financing. Table 1. shows a summary of progress on some key results.

Table 1 – Summary of Key Results

PDO Level Results Baseline YR 1 Current Status Indicators

Investment planning No financing/ No Strategic Plan Develop the Strategic Plan for the Zambezi started in January coordinated preparation 2017. The Consultant has completed the Diagnostic Phase whose US$ financing planned for planning and/No initiated/ key outputs are the Situation Analysis and Strategic Direction cooperative management and prior notification Dialogue Reports. Basin development scenarios are currently under development of international facilitated initiated on preparation, to be followed by benefit sharing assessments. waters (supported by CIWA) / development of Alongside this, procedures for prior notification of planned Common investment planning national & measures were developed and adopted by the Council of framework regional Ministers (Feb. 2017). framework / Notification Process defined The World Bank ZAMBEZI RIVER BASIN MANAGEMENT PROJECT (P143546)

Data Sharing Lack of clarity of Dialogue Rules and Procedures for Data and information Sharing were roles and established adopted by ZAMCOM Council on the 25th February 2016 and Extent of data sharing for potential conflict came into force on the 26th March 2016. Initial system design of basin wide planning the information system is complete with a knowledge portal, time series and spatial data base and platform) and integration of the Decision Support System (DSS) is in the process. Through ZAMWIS_DSS enhancement 3 sub-project, which started in January 2017, ZAMCOM in the process of updating the existing hydromet database and developing a Decision support system (DSS) to assist in the planning, management and development of water resources in the basin. Project deliverables so far are: i) Inception Report; ii) Working paper 1(Upgrading of ZAMWIS database) and iii) adopted of the Design of Decision Support System (DSS).

Legal establishment of Agreement Decision on host ZAMCOM Agreement ratified by 6 countries. Zambia acceded to ZAMCOM ratified by 6 country of the Agreement making it the seventh country to be part of Member States. permanent ZAMCOM. Malawi is yet to ratify or accede to the Agreement. Status of institution to carry institution out its mandated functions ZAMCOM Hosting Agreement in place and ZAMCOM Secretariat hosted and Secretariat (IZS) gazetted, as per gazette notice of 2015, by the Government of the operates with Republic of Zimbabwe. support of SADC- WD

Financial sustainability of % Actual Minimum Minimum functionality defined, costed and presented to the ZAMCOM contributions functionality Council of Ministers and approved. Members States agreed, at divided by actual defined and the Council of Ministers meeting in July 2015, to increase annual % contribution by Member costs costed contribution to USD 60,000 in 2016. Thereafter increase by USD States to the cost of 10,000 annually for the next four years until the maximum of USD minimum functionality 100,000 per country per year is reached.

Legislation & policy Not all national TOR drafted and -The Consultant has submitted all deliverables to the satisfaction legislation reflects approved of the client. These include i) A database of national legislation Legal frameworks for transboundary and gap analysis ii) Draft comparative Analysis iii) ZAMCOM transboundary water considerations Agreement Comparative Assessment and Gap Analysis vi) management and Regional and International Comparative Assessment & Gap development harmonized Analysis v) Final Options Paper.

Overall implementation of the project is rated as Satisfactory and the project is progressing positively. The World Bank ZAMBEZI RIVER BASIN MANAGEMENT PROJECT (P143546)

B. Rational for Restructuring

Although the three main project activities are on track, there was an initial delay of approximately 24 months at the beginning of the project. This resulted from delayed procurement processes and setbacks in formalizing the establishment of ZAMCOM and the Secretariat. It is proposed that the project be extended for an additional 12 months to ensure that the project development objectives are realized. Additional time is required to achieve the PDO, and specifically to complete the Strategic Plan for the Zambezi Watercourse (ZSP) because of implementation delays and time required for interaction with member states. ZAMCOM has demonstrated commitment to the implementation of the project through its successful completion of 1 of the 3 activities, and understands the ZSP to be their highest priority.

The following are specific points in support of this extension request:

Strategic Engagement – The Zambezi Basin has been designated as one of 4 priority river basins in Africa under the CIWA MDTF transboundary water program (recognizing the basin’s economic importance for 9 riparian countries, rapidly growing human and climate pressures over coming decades; and ZAMCOM’s unique role as a basin organization in helping countries plan and optimize allocation of scarce resources). This activity provides the foundations for a broader and more complex engagement, by strengthening the operationalization of ZAMCOM as an institution; which can be deepened over time (there is an opportunity to further leverage up to $10m in CIWA RETF funds in basin). This activity complements and anchors our support for the Kariba rehabilitation and Batoka hydropower development initiatives. It also offers an entry point to catalyze future IDA financing opportunities in the basin, through a pipeline of future investment projects that are currently being identified under the basin strategic planning process.

Current Results - Working along with other development partners, such as DANIDA, the project has yielded positive results so far with the establishment and operationalization of ZAMCOM; the completion of the legal equivalence work, which provides options for harmonization; and the establishment of a water resources information system (ZAMWIS) for the whole basin. Additional components of the actual RETF, which are expected to be achieved via this extension, are the sustainability measures for ZAMWIS and, most importantly, the completion of the strategic plan.

 Implications of Not Extending the Project - The strategic plan for the Zambezi River Basin is a mandatory requirement under the ZAMCOM agreement. Not extending this activity would delay or halt the development of this plan, compromising its quality and, hence, the momentum and viability of the regional agreement itself.

 Regarding Disbursements – The initial delays associated with procurement of TA and studies has not had knock- on effect on contract management, which has been proceeding smoothly. The RETF funds are fully committed. A number of key studies have been completed and the two remaining assignments are progressing well. The Zambezi Strategic Plan and Decision Support System (ZAMWIS DSS) work are at 50 and 75% completion rate respectively. All final payments are scheduled to be completed by Dec 2018. The proposed extension allows for a 4 to 6 month buffer to further refine and embed the outputs. The buffer will allow time for greater technical scrutiny and more high-level country consultations to secure greater levels of Country buy in. The importance of this was highlighted in the Aide Memoir and management letter of March 7, 2018. The overall project status in terms of contract execution and deliverables, as well as disbursement plan for the remaining project outputs is presented below. The World Bank ZAMBEZI RIVER BASIN MANAGEMENT PROJECT (P143546)

Overall Status (Contracts and Deliverables)

Contract Contract Start Contract end %age payment Status of sub Contract Sum deliverables /%age EURO USD Progress

Legal equivalence January 2017 December 2017 100% Complete 249,401

Strategic plan January 2017 December 2018 50% Payment About 50% 2,599,478 complete

ZAMWISS/DSS January 2017 December 2018 55% Payment About 75% 804,426 400,034 complete

Disbursement Plan for the Remaining Project Outputs

Remaining Project Outputs

Deliverable Final Output Disbursement Disbursement Amount Schedule ZAMWIS - Basin Information System Phase 2 (Decision Support System) Development Upgraded Hydro-met March 2018 March 2018 EURO 160,885 Database (Paid) USD 80,007 March and ZAMWIS-DSS Design and October 2018 December 2018 EURO 80,442.80 Development USD 40,003.60

ZAMWIS DSS Sustainability December 2018 September and December 2018 Zambezi River Basin Strategic Plan Basin Development Scenarios April 2018 May 2018 USD 259 947.80 (Paid)

Basin Investment Scenarios July 2018 August, 2018 USD 259 947.80

Draft Strategic Plan Nov 2018 December 2018 USD 259 947.80

Final Strategic Plan and On- December 2019 December 2018 USD 520 000.80 line Monitoring and Implementation Tool The World Bank ZAMBEZI RIVER BASIN MANAGEMENT PROJECT (P143546)

II. DESCRIPTION OF PROPOSED CHANGES

The proposed change is a no-cost extension of the project closing date, by 12 months, from June 30, 2018 to June 28, 2019. This is the first proposed extension for this project.

II. SUMMARY OF CHANGES

Changed Not Changed Change in Loan Closing Date(s) ✔ Change in Implementation Schedule ✔ Change in Implementing Agency ✔ Change in Project's Development Objectives ✔ Change in Results Framework ✔ Change in Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Change in Disbursements Arrangements ✔ Change in Disbursement Estimates ✔ Change in Overall Risk Rating ✔ Change in Safeguard Policies Triggered ✔ Change of EA category ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Financial Management ✔ Change in Procurement ✔ Other Change(s) ✔ The World Bank ZAMBEZI RIVER BASIN MANAGEMENT PROJECT (P143546)

IV. DETAILED CHANGE(S)

OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S)

Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-18921 Effective 30-Jun-2018 28-Jun-2019 28-Oct-2019