Document of The World Bank FOR OFFICIAL USE ONLY
Public Disclosure Authorized Report No: ICR00005145
IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD 8267-AM AND IBRD 87860-AM)
ON A
LOAN
Public Disclosure Authorized IN THE AMOUNT OF US$32 MILLION
TO THE
REPUBLIC OF ARMENIA
FOR THE IRRIGATION SYSTEM ENHANCEMENT PROJECT
Public Disclosure Authorized June 22, 2020
Water Global Practice Europe And Central Asia Region
Public Disclosure Authorized
CURRENCY EQUIVALENTS
(Exchange Rate Effective {December 31, 2019})
Currency Unit = Armenian D ram AMD 479 = US$1 US$0.0020 = SDR 1
FISCAL YEAR January 1 – December 31
Regional Vice President: Anna Bjerde Country Director: Sebastian-A Molineus Regional Director: Steven N. Schonberger Practice Manager: David Michaud Task Team Leader(s): Wilfried Hundertmark, Arusyak Alaverdyan ICR Main Contributor: Nathan L. Engle
ABBREVIATIONS AND ACRONYMS
ADS Armenia Development Strategy AF Additional Finance AFD Agence Française de Développement CCW Civil Construction Works CPF Country Partnership Framework CPS Country Partnership Strategy DPO Development Policy Operation EDB Eurasian Development Bank EM Extraordinary Maintenance EMF Environmental Management Framework ERR Economic Rate of Return ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan EU European Union FIRR Financial Internal Rates of Return FM Financial Management GDP Gross Domestic Product GoA Government of Armenia GWh Gigawatt hours ICR Implementation Completion and Results Report I&D Irrigation and Drainage IDP Irrigation Development Project IFR Interim un-audited Financial Report IP Inspection Panel IREP Irrigation Rehabilitation Emergency Project IRR Internal Rate of Return ISEP Irrigation System Enhancement Project ISMP Irrigation System Modernization Project MCC Millennium Challenge Corporation MOEINR Ministry of Energy, Infrastructures and Natural Resources MTAI Ministry of Territorial Administration and Infrastructures MTR Mid-term Review NPV Net Present Value O&M Operation and Maintenance PAD Project Appraisal Document SCADA Supervisory Control and Data Acquisition SCWM State Committee for Water Management ToC Theory of Change WC Water Committee WSA Water Supply Agency WSPIU Water Sector Projects Implementation Unit WUA Water Users Association
TABLE OF CONTENTS
DATA SHEET ...... ERROR! BOOKMARK NOT DEFINED. I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ...... 5 A. CONTEXT AT APPRAISAL ...... 5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) ...... 11 II. OUTCOME ...... 15 A. RELEVANCE OF PDOs ...... 15 B. ACHIEVEMENT OF PDOs (EFFICACY) ...... 16 C. EFFICIENCY ...... 21 D. JUSTIFICATION OF OVERALL OUTCOME RATING ...... 24 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ...... 24 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ...... 27 A. KEY FACTORS DURING PREPARATION ...... 27 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 30 A. QUALITY OF MONITORING AND EVALUATION (M&E) ...... 30 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ...... 31 C. BANK PERFORMANCE ...... 34 D. RISK TO DEVELOPMENT OUTCOME ...... 35 V. LESSONS AND RECOMMENDATIONS ...... 36 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ...... 39 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ...... 50 ANNEX 3. PROJECT COST BY COMPONENT ...... 53 ANNEX 4. EFFICIENCY ANALYSIS ...... 54 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 64 ANNEX 6. SUPPORTING DOCUMENTS ...... 73 ANNEX 7. MAP ...... 75
The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
DATA SHEET
BASIC INFORMATION
Product Information Project ID Project Name
P127759 IRRIGATION SYSTEM ENHANCEMENT PROJECT
Country Financing Instrument
Armenia Investment Project Financing
Original EA Category Revised EA Category
Partial Assessment (B) Partial Assessment (B)
Organizations
Borrower Implementing Agency
Water Committee of the Ministry of Territorial Administration and Infrastructures, Water Projects Ministry of Finance Implementation Branch of the Armenian Territorial Development Fund
Project Development Objective (PDO)
Original PDO The PDO is (i) to reduce the amount of energy used and to improve the irrigation conveyance efficiency in targeted irrigation schemes; and (ii) to improve the availability and reliability of important sector data and information for decision makers and other stakeholders.
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
FINANCING
Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing
30,000,000 29,735,008 29,735,008 IBRD-82670
2,000,000 2,000,000 1,924,228 IBRD-87860 Total 32,000,000 31,735,008 31,659,236
Non-World Bank Financing 0 0 0 Borrower/Recipient 7,500,000 0 0 Total 7,500,000 0 0 Total Project Cost 39,500,000 31,735,008 31,659,237
KEY DATES
Approval Effectiveness MTR Review Original Closing Actual Closing 22-May-2013 15-Jul-2013 16-Nov-2015 30-Jun-2017 31-Dec-2019
RESTRUCTURING AND/OR ADDITIONAL FINANCING
Date(s) Amount Disbursed (US$M) Key Revisions 27-Apr-2017 27.65 Change in Loan Closing Date(s) 14-Nov-2017 29.68 Additional Financing Change in Results Framework Change in Loan Closing Date(s) 29-Jun-2018 29.93 Change in Loan Closing Date(s) 27-Jun-2019 31.55 Change in Results Framework Change in Loan Closing Date(s) Change in Implementation Schedule
KEY RATINGS
Outcome Bank Performance M&E Quality Moderately Unsatisfactory Moderately Unsatisfactory Modest
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
RATINGS OF PROJECT PERFORMANCE IN ISRs
Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 22-Oct-2013 Satisfactory Satisfactory 5.10
02 30-Jun-2014 Satisfactory Satisfactory 6.63
03 19-Nov-2014 Satisfactory Satisfactory 7.45
04 10-Apr-2015 Moderately Satisfactory Moderately Satisfactory 9.99
05 29-Oct-2015 Moderately Satisfactory Moderately Satisfactory 12.88
06 14-Jan-2016 Moderately Satisfactory Moderately Satisfactory 15.76
07 26-Apr-2016 Moderately Satisfactory Moderately Satisfactory 21.42
08 11-Jan-2017 Moderately Satisfactory Moderately Satisfactory 25.61
09 19-Sep-2017 Satisfactory Satisfactory 28.69
10 11-May-2018 Satisfactory Satisfactory 29.93
11 04-Jan-2019 Satisfactory Satisfactory 31.27
12 23-Jun-2019 Moderately Satisfactory Moderately Satisfactory 31.55
13 22-Dec-2019 Moderately Satisfactory Moderately Unsatisfactory 31.58
SECTORS AND THEMES
Sectors Major Sector/Sector (%)
Agriculture, Fishing and Forestry 100 Irrigation and Drainage 90 Public Administration - Agriculture, Fishing & Forestry 10
Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%)
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
Finance 3
Finance for Development 3
Agriculture Finance 3
Urban and Rural Development 48
Rural Development 48
Rural Markets 3
Rural Infrastructure and service delivery 45
Environment and Natural Resource Management 97
Climate change 48
Mitigation 48
Water Resource Management 49
Water Institutions, Policies and Reform 49
ADM STAFF
Role At Approval At ICR
Regional Vice President: Philippe H. Le Houerou Anna M. Bjerde
Country Director: Henry G. R. Kerali Sebastian-A Molineus
Director: Laszlo Lovei Steven N. Schonberger
Practice Manager: Dina Umali-Deininger David Michaud Wilfried Hundertmark, Arusyak Task Team Leader(s): Giuseppe Fantozzi Alaverdyan ICR Contributing Author: Nathan Lee Engle
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES
A. CONTEXT AT APPRAISAL
Context
1. Agriculture is a key driver for job creation, income diversification, and overall poverty reduction for the Armenian economy. The importance of agriculture for rural development was made evident at the time of Appraisal1 in the Armenia Development Strategy (ADS) 2025, which notes that by 2012, agriculture employed over 437,000 thousand people, translating to 37 percent of the country's total employment and 80 percent of its rural area employment. Similarly, agriculture was the main livelihood of the 36 percent of the population residing in rural areas, and a key source of employment to more than 40 percent of the country's active population, including 75 percent in rural areas.
2. By 2012, only 155,00 hectares of land were irrigated in Armenia, compared to 232,000 irrigable hectares in the country. Irrigated agriculture still accounted for 80 percent of the agriculture sector’s contribution to Gross Domestic Product (GDP). The irrigation system, however, dated to the Soviet Union era, when little concern was given to energy consumption. Much of that original irrigation infrastructure has remained in operation, and by 2012 faced a state of significant disrepair. These factors, combined with rising energy costs, have left considerable opportunities for efficiency gains through irrigation infrastructure rehabilitation (and reducing water losses) and from converting irrigation schemes reliant on high-energy use pumping to predominately gravity-fed irrigation schemes that depend on little if any electricity use.
3. The ADS and the Armenia 2014-2017 Country Partnership Strategy (CPS)2 have prioritized increases in agricultural productivity as a key factor for achieving the higher growth, shared prosperity, and faster poverty reduction envisaged throughout the country. This included targeted investments for expanding irrigated land areas and higher operating efficiency of the overall irrigation system. Such investments were expected to build from Government of Armenia (GoA) programs implemented since 1994 to slow down irrigation infrastructure deterioration, improve overall irrigation infrastructure operation and maintenance (O&M), and facilitate institutional reforms to the irrigation sector.
4. The World Bank (Bank) has supported these GoA programs from the very beginning. Initial Bank investments in the mid-1990s to early 2000s addressed emergency rehabilitation of irrigation infrastructure and dam safety priorities. Shortly after these initial investments were underway, the Bank financed the Irrigation Development Project (IDP) from 2001-2009, which focused on rehabilitating the broader irrigation system, reducing O&M costs (e.g., through energy consumption reduction), and introducing an institutional reform process predicated on a more decentralized and participatory model by introducing Water User Associations (WUAs). The Millennium Challenge Corporation (MCC) financed a parallel program supporting many of the same objectives of the IDP.
1 Project Appraisal Document is dated April 25, 2013. 2 Report Number: 81647-AM, dated October 9, 2013, and aligned with Engagement Area 1.2: Rural economy sustainably improved.
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
5. The IDP and the MCC projects placed particular importance on the ambitious institutional reform agenda. The WUA system was created to help address perennial challenges of low cost-recovery rates from high O&M costs and low water user contributions, as well as limited participation of farmers in decision making processes. The law that helped facilitate this reform process became effective in 2002 and was supported by the IDP project. Originally, 52 WUAs were established through the law, covering nearly all of the irrigated land.3 Over the decade and a half that followed, the GoA transferred management of nearly all secondary and tertiary canals to the WUAs, with the primary canals, larger dams, and pumping stations remaining under the purview of the Water Supply Agency (WSA).4 While this process has generally been lauded as a successful example of irrigation institutional reform,5 challenges remained in sustaining the gains over the previous years. Mainly, the WUAs have required continued training and capacity-building support to address lingering concerns around cost- recovery, transparency of management, and fully realizing the participatory decision-making process envisioned by the reform. Furthermore, key information gaps existed at the time of project appraisal that, if filled, would reportedly improve decision making. This included an accurate accounting of actual O&M costs and extraordinary maintenance (EM) costs, financial and operational performance of the WUAs and relevant GoA irrigation institutions, and actual quantities of water being used by the WUAs and the farmers they serve. If implemented, the GoA envisioned a more financially sustainable irrigation system by helping the WUAs reach full cost-recovery.
6. In addition to the expressed interest of the GoA to help reduce O&M costs for irrigation infrastructure through decreased energy use, the need for continued support to the WUA empowerment process and mending key information gaps were significant motivating factors for the conceptualization of the subsequent World Bank investment project in the irrigation sector; the Irrigation System Enhancement Project (ISEP).6 Thus, the ISEP was built from a long-term engagement with the GoA in the irrigation sector and was conceived of as a continuation of the broader program established through the IDP and MCC projects.7 The ISEP also intended to lay the foundation for comprehensive sector reform, as articulated in the 2009 National Irrigation Policy, addressing mounting arrears of the irrigation service entities, developing budgets for irrigation institutions, and reforming the sector’s tariff system. Ultimately, the Project was envisaged to link targeted capital improvements with ongoing and future dialogue with the GoA on addressing the myriad challenges that the wider water and agriculture sectors faced in Armenia.
3 The number of WUAs has fluctuated during the implementation of this project, with currently 15 WUAs in operation. The motivations for these changes are described in later sections of this Implementation Completion and Results Report (ICR). 4 During the project preparation, there were four WSAs, but during implementation responsibilities were consolidated into a single WSA. All subsequent references in this ICR refer to the WSA as a single entity. 5 This success is made evident by the marked increase in fees collected from the farmers by the WUAs (a quadrupling over the ten-year period after their inception), a switch to higher value crops, a decrease in protests by farmers upset with insufficient water deliveries in the form of road blockages, and survey results indicating increased satisfaction amongst farmers. 6 Support to the GoA shifted slightly in the period immediately after the IDP project to a singular focus on primary canal rehabilitation through the Irrigation Rehabilitation Emergency Project (IREP) to ensure immediate rural employment in the wake of the 2008 financial crisis. 7 Among the various outcomes of the IDP and MCC projects, annual energy savings in the project areas totaled roughly 70 million kw/h/yr). By appraisal, however, the MCC was no longer financing irrigation projects in Armenia. It is important to note that most of the infrastructure rehabilitation activities performed through the ISEP were identified through the MCC program and/or planned to enhance investments that were financed by the MCC program.
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Theory of Change (Results Chain)
7. The ISEP’s presumed theory of change (ToC), as implicit in the Project Appraisal Document (PAD), was that enhancing irrigation infrastructure through the conversion of targeted irrigation schemes from primarily pumping-dependent schemes to gravity schemes, along with the rehabilitation of selected canals, would lead to a reduction in both energy use and water losses (Component 1).8 Furthermore, the implicit ToC envisaged that improving information for management decision making and strengthening key irrigation institutions [namely the WUAs and the Water Sector Projects Implementation Unit (WSPIU)], would lead to improved availability and reliability of irrigation sector information (Components 2 and 3).
8. In the longer-term, the Project anticipated that these more narrowly-focused outcomes directly supported by the project (i.e., reduced energy use, improved conveyance efficiency, and improved availability and reliability of irrigation sector information) would lead to improved irrigation and drainage services for the farmers,9 and ultimately contribute to increased agriculture productivity and economic growth, as well as improved performance and governance of institutions responsible for the management of irrigation. In particular, the Project was envisioned as an opportunity to continue a broader sector dialogue that the Bank had established with the GoA over the previous decade. Figure 1 depicts the Project’s implicit ToC, with the associated indicators at the time of appraisal.
8 Supplying water through gravity schemes still technically “consumes” energy. The Project’s energy savings activities are thus more accurately characterized as aiming to reduce dependence on electricity needed to supply water (hence a reduction in the costs of energy use). Nevertheless, this ICR assumes that a reduction in electricity usage is implied by the objective of reducing energy use. 9 The implicit ToC depicted in Figure 1 includes improved irrigation and drainage services as an intermediate outcome, because this is how these benefits are categorized in the Project’s results framework. In practice though, and as reflected in the Project’s economic analysis, these benefits to the farmers serviced by the ISEP infrastructure investments were anticipated to accrue in the medium-longer term.
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
Figure 1: Schematic overview of the Project’s implicit theory of change (results chain).
Note: WUAs = Water Users Associations; ESMPs = Environmental and Social Management Plans; O&M = Operation and Maintenance; SCWM = State Committee for Water Management; WSAs = Water Supply Agencies; and MOEINR = Ministry of Energy, Infrastructures and Natural Resources.10
10 The SCWM has since been renamed the Water Committee (WC). All subsequent references to this entity in this ICR are with respect to its current name WC, except for when referencing the appraisal PDO level indicators. Near the end of the Project’s implementation, the MOEINR (along with the Ministry of Transport and Telecommunications) was merged with the Ministry of Territorial Administration and is now called Ministry of Territorial Administration and Infrastructures (MTAI). All subsequent references to this entity in this ICR are with respect to its current name as well, MTAI, except for when referencing the appraisal PDO level indicators.
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
Project Development Objectives (PDOs)
9. The PDO of the ISEP, as listed identically in the Loan Agreement, has two parts: 1) to reduce the amount of energy used and to improve irrigation conveyance efficiency in targeted irrigation schemes; and 2) to improve the availability and reliability of important sector data and information for decision-makers and other stakeholders.
10. The PDO remained unchanged throughout project implementation.
Key Expected Outcomes and Outcome Indicators
11. The ISEP intended to most immediately and directly benefit water management institutions [particularly the Water Committee (WC), WSA, and WUAs] through outcomes associated with irrigation energy savings, conveyance efficiency gains, and management information availability improvements, as well as longer-term benefits of improved performance and governance of these institutions. It was intently focused on reducing costs of water delivery for irrigation institutions, as well as the GoA more broadly, and less directly on improving service delivery. That being noted, additional benefits were envisioned to also accrue to the water users/farmers through improved and expanded irrigation services (but in the medium-term), as well as longer-term benefits to farmers from increased agriculture productivity and economic growth. Complementarities with the Bank’s broader engagement with the GoA on sector improvements were also anticipated. The PDO level indicators were as follows:
• PDO Indicator 1. Amount of energy saved annually in operating the irrigation system (GWh). • PDO Indicator 2. Lost liters per second per 100 meters in the targeted irrigation schemes [to measure improved conveyance efficiency] (number). • PDO Indicator 3. Data about O&M and EM used by SCWM, WSA and WUAs for decision making (text). • PDO Indicator 4. Technical audit of irrigation agencies used by MOEINR and SCWM for decision making (text). • PDO Indicator 5. Percentage of WUAs having water intakes tracked by SCWM in real time (percentage).
12. PDO indicators 1 and 2 were associated with the first part of the PDO (to reduce the amount of energy used and to improve irrigation conveyance efficiency in targeted irrigation schemes), while PDO indicators 3, 4, and 5 were associated with the second part of the PDO (to improve the availability and reliability of important sector data and information for decision-makers and other stakeholders).
13. The ISEP included various intermediate results indicators to help track progress towards achieving the PDO. The Project included several World Bank Core Sector Indicators as intermediate results indicators, including:
• Area provided with irrigation and drainage services – Improved (ha). • Operational water user associations strengthened (number). • Water users provided with improved irrigation and drainage services (number). • Water users provided with improved irrigation and drainage services – female (number).
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
Components
14. The ISEP had three components. Component 1 related to the infrastructure investments and was associated with the first part of the PDO (and PDO indicators 1-2). Component 2 related to the improvement of information reliability and was associated with the second part of the PDO (and PDO indicators 3-5). Component 3 related to project management and support to WUAs, but it was not directly linked to the PDO. However, the activities in Component 3 were envisioned to contribute to the second part of the PDO, albeit indirectly, in that strengthening the WSPIU and the WUAs technical, management, and operational capacity would improve the reliability and availability of sector data for decision making. There is a link (even more direct) between Component 3 and the longer-term outcome of improved performance and governance of institutions responsible for the management of irrigation (see Figure 1).
15. The components are summarized as follows:
• Component 1. Irrigation System Enhancement (appraisal cost: US$33.1 million; actual cost: US$33.3 million).11 This component aimed to lower the O&M needs of the conveyance section in selected irrigation schemes. It included the conversion of pump-based irrigation to gravity irrigation in four schemes (Baghramyan-Norakert, Gegardalich, Kaghtsrashen, and Meghri), and also the upgrading of 52 km of outlet canals (and other canals) conveying pumped water in 13 pump-based schemes. These schemes receiving canal upgrading were different schemes than the four receiving gravity irrigation upgrades. Also, the Gegardalich scheme included the raising of the reservoir’s dam from 13.9 m to 15.5 m. Table 1 provides an overview of the schemes and canals, as depicted in the ISEP’s PAD, while the Annex includes the PAD’s map of the proposed schemes’ and canals’ locations, which did not change during implementation. • Component 2. Management Information (appraisal cost: US$1.7 million; actual cost: US$0.9 million). This component aimed to support two primary activities: technical investigations to analyze the O&M and EM needs of the irrigation system and a technical audit of the relevant irrigation institutions (i.e., the WUAs and WSA); and the installation of a supervisory control and data acquisition system (SCADA). • Component 3. Project Management and WUAs’ Support (appraisal cost: US$2.7 million; actual cost: US$2.9 million). This component aimed to support project management and also to continue strengthening the WUAs through capacity building of the WUAs’ Support Group (SG) and WUAs’ staff and executive bodies.
Table 1: Key infrastructure investment characteristics, as depicted in the ISEP's PAD. Length of Pipeline or Estimated Electricity Current Irrigated Additional Irrigated Scheme Canal (km) Savings (GWh) Land (ha) Land Expected (ha) Baghramyan-Norakert 8.50 0.86 163 410 Geghardalich 23.00 7.78 456 544 Kaghtsrashen 23.50 10.35 957 711 Meghri 34.40 4.50 672 387
11 All costs are in US$ and rounded to the nearest US$100,000, unless otherwise noted.
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Length of Estimated Electricity Current Irrigated Additional Irrigated Canal Rehabilitated Savings (GWh) Land (ha) Land Expected (ha) Section (km) Achajur 0.48 0.40 130 0 Arazap 3.70 2.00 560 0 Argina 5.70 0.50 560 70 Armash 6.25 0.40 350 40 Avshar-Aygevan 7.10 1.20 820 0 Ghara-Ghala (Karakalla) 2.80 2.10 835 0 Jrashen-Azat 2.30 0.20 150 0 Kaghtsrashen 2.80 1.20 650 0 Metsamor (Tandzut Ghamlu) 3.80 0.20 2000 200 Noyemberyan 4-stage 2.60 3.00 500 0 Saralanj 3.50 1.10 627 0 Zeytun-Haghtanak 10.00 2.20 1194 0 Zovk 1.00 0.00 86 0
B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE)
Revised PDOs and Outcome Targets
16. The Project underwent its mid-term review (MTR) in November 2015 and was subsequently restructured several times. The first restructuring occurred in April 2017, which extended the closing date by approximately one year to June 30, 2018, to catch up with delays associated with the two Inspection Panel (IP) cases (described in the textbox, below). The Project was restructured again in November 2017 to accommodate a request from the GoA for additional finance (AF) to support tertiary system investments in one of the four schemes originally targeted by the Project (i.e., the Baghramyan-Norakert scheme), and also to allow for more time to complete two other schemes that were modified by the GoA in response to community concerns during project implementation (i.e., the Geghardalich and Kaghtsrashen schemes).12 The Project was then restructured two more times to extend the closing date to allow for completion of the physical works in three of the four schemes; first to August 31,2018 (for the original loan), and then again (for the AF loan) to December 31, 2019.
12 The AF was officially signed between the World Bank and the GoA on November 20, 2017.
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IP Cases in Geghardalich and Kaghtsrashen Gravity Schemes: Key Information
Conflicts with respect to the Geghardalich and Kaghtsrashen Gravity Schemes surfaced during implementation. These conflicts did not arise with the farmers that were intended beneficiaries of the improved services provided by the Schemes. Rather, the disagreements were with stakeholders living in and around the communities from where the Schemes would extract and/or transfer water, due to concerns surrounding broader water allocation issues, as well as environmental and cultural concerns. As noted in the Project’s Additional Loan and Restructuring paper, a “Request for Inspection was submitted (April/May 2016) by members of the Goght community regarding the Geghardalich Gravity Scheme and by residents of the Garni community regarding the Kaghtsrashen Gravity Scheme…Community complaints related to, inter alia, allegations of insufficient water availability and environmental impacts. A management response was prepared and submitted to the Panel (June 20, 2016). In response to community concerns, the GOA decided to modify the designs of these two gravity schemes…. Following further review, on June 28, 2017, the Panel notified the Board of its intention not to investigate further.” While these design changes were discussed extensively with communities and accepted by them, including by the new Mayors and village council members from both communities, and the Panel decided not to investigate further, the matter has remained unsettled in the Geghardalich Scheme. In June 2019, a verbal agreement was reached on the issue on water rights between members of Goght Community and the WC, but there is no written evidence that the matter has been officially resolved. The works in Geghardalich were thus not completed by Project closing on December 31, 2019. The design changes agreed in the Kaghtsrashen Scheme precipitated the need for the results framework to be modified during the Project’s initial restructuring, due to the fact that these changes negatively affected the target indicators. In particularly the energy savings target was decreased by approximately 2.0 million kw/h, from the original savings of 10.0 million kw/h. The design changes undertaken in Geghardalich also have implication for the energy savings target (i.e., it will generate less energy and cost savings than expected because pumping stations will remain in “standby” mode).
17. The PDO remained unchanged throughout project implementation. Key outcome indicators were revised during the second restructuring in November 2017, mainly for simplification purposes, but also to align target values with design modifications and to harmonize target values with the extended closing date. These changes in PDO indicators are described below. The other three restructurings did not have any changes in indicators or target values in the results framework, except with respect to the end target dates.
Revised PDO Indicators
18. Four of the five PDO indicators were adjusted during the November 2017 restructuring; the changes are summarized as follows:
• PDO Indicator 1. Target for “Amount of energy saved annually in operating the irrigation system” was reduced from 38 GWh to 36.8 GWh to reflect design changes in response community concerns in the Kaghtsrashen Scheme; namely to alter the intake location, which precluded the decommissioning one of the pump stations (hence the projected reduction in energy savings). • PDO Indicator 2. “Lost liters per second per 100 meters in the targeted irrigation schemes [to measure improved conveyance efficiency] was adjusted to “Water losses reduced in rehabilitated canals”, to allow for more simplified monitoring and reporting. The target value was thus changed from 0.71 liters lost/second/100 meters to a reduction of 24 million cubic meters/year in losses. • PDO indicators 3 and 4. Target values for both of these indicators were changed for clarification purposes from “Data about O&M and EM used by SCWM, WSA and WUAs for decision making” and “Technical audit of
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irrigation agencies used by MOEINR and SCWM for decision making”, respectively, to “Data used for budgetary and investment planning purposes.”
19. Given the changes in PDO indicators did not represent a significant reduction in outcome targets (in terms of PDO Indicator 1) and were mainly for clarification purposes (PDO Indicators 2, 3, and 4), a split evaluation is not necessary for this ICR.
Revised Components
20. The overall objectives and structure of the Project’s components were not changed. The only differences resulting from the restructuring were minor changes in the scope of Component 1. This component was supplemented with the AF to support further improvements to the Baghramyan-Norakert Scheme, one of the four schemes that was already included in the ISEP. The additions requested by the GoA were to finance enhancements to the tertiary system that would allow for the envisaged improvements to the overall conveyance efficiency of that scheme to be fully realized, and ultimately support the increase in improved irrigation and drainage services. The final restructuring was done in part to accommodate the time to implement a later request by the Ministry of Agriculture (MoA) to alter the design of the tertiary pressurized distribution network (as planned through the AF) to allow for future facilitation of consolidated land and farm structures, if and when the GoA decides to pursue such an approach to agriculture land development.
21. The only other noteworthy changes in the scope of Component 1 were the necessary modifications to the Geghardalich and Kaghtsrashen Schemes to respond to community concerns. As noted, the resulting design changes required a reduction in anticipated energy savings, and also impacted implementation timing (contributing to the aim to finalize these schemes during the project’s restructuring periods).
22. During Project implementation, the technical investigations that would serve to indicate direct achievement of PDO Indicators 3 and 4 were combined into one activity/contract, with the scope and cost of the contract significantly reduced from the work as originally envisaged in the PAD (i.e., by a factor of more than 10; from $US0.9 million to $US0.06 million). The Project originally intended for these investigations to be conducted early in the Project’s implementation phase to provide baseline data on O&M and institutional improvements. The work was delayed and ultimately completed only in 2018.
Other Changes
23. Changes in the structure and leadership within the WC and the WSPIU throughout the Project were consequential. In 2015, the WC initiated a process to consolidate the number of WUAs. The number was originally reduced from 4413 to 37, and then in 2017 to 14. At the time of drafting this ICR,14 the number of WUAs stands at 15. The intermediate results indicator “Operational water user associations strengthened” was changed during
13 Earlier, as a result of consolidations, the number of WUAs was reduced from 52 to 44. 14 Data collection and interviews for this ICR were done in person and virtually. The main author met with the client and stakeholders during implementation and supervision missions in March 2018 and April 2019, and led a four-day virtual ICR mission in March 2020 (due to the travel restrictions associated with the COVID-19 pandemic).
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the Project’s first restructuring to 37.15 However, this target was not officially revised further to reflect the current number of 15 in the results framework. Related to the WUAs, the GoA also moved the WUAs SG from the WSPIU into another unit of the WC, a process that also resulted in reduced staff numbers and reduced services provided by the SG to the WUAs.16 In addition, Armenia experienced a rapid change in its government in mid-late 2018 that resulted in an altered institutional and political landscape. This change had minor implications for the ISEP’s implementation compared to the changes in the WC and WSPIU.
24. Two Citizens Engagement (CE) intermediate results indicators were also added to the results framework during implementation to align with the World Bank’s enhanced commitments around CE: “percent of grievances responded within 5 business days (target 100 percent); and percent of beneficiaries (farmers) who report that their needs have been reflected in Project design (target 70 percent)”.
25. During the final restructuring, the Project took advantage of the extended time allotted for completion of the works to make minor design changes to two of the four schemes to improve the reliability and efficiency of the systems’ operation. These changes were to require the installation of control valves at strategic points along the system to help regulate system control to be based upon downstream water demand, and secondarily, upstream water availability.17
26. Finally, during implementation, the World Bank agreed to provide implementation support services to the Eurasian Development Bank (EDB) for both their Irrigation System Modernization Project (ISMP) and Mastara Reservoir feasibility studies recipient-executed grants. The ISMP was structured to complement and build from the ISEP’s investments, including to support additional infrastructure in several of the ISEP Schemes and to prioritize further institutional strengthening of the irrigation sector, particularly regarding the WUAs. The ISMP ultimately proved an important part of the WSPIU’s and GoA’s plan to finalize the ISEP activities that were not completed by the Project’s closing in December 2019, as discussed in the Bank Performance section, below.
Rationale for Changes and Their Implication on the Original Theory of Change
27. The AF and project restructurings (and corresponding changes to the Project’s results framework) were deemed necessary to ensure that the Project could meet its PDO and also respond to both community concerns and the evolving priorities articulated by the GoA during implementation.
28. The AF was pursued to help improve service delivery in the Baghramyan-Norakert Scheme. Conditions of this scheme’s tertiary network that were assumed to be adequate during project preparation were subsequently determined during project implementation to be insufficient to reliably deliver irrigation water to the water users’ plots. Namely, the tertiary distribution network was found to be non-existent or in significant disrepair. Providing
15 Despite the Project’s Additional Loan and Restructuring paper making specific reference to there being 14 WUAs at the time of the restructuring, the target was revised in the results framework from 44 to 37. 16 The Legal Covenant pertaining to the Loan Agreement states, “The Borrower shall maintain the WUA’s Support Group within the PIU until completion of the Project which shall assist in the implementation of Part C.2 of the Project”. However, this section was only “Partially complied with” from 2015 onward. 17 The original project design of the schemes was based on upstream operational control, which created the potential for greater water losses if the water was supplied at times of low demand. The change to downstream control should reportedly allow for the WUAs and farmers to initiate water deliveries when they are most needed; thus resulting in less water losses.
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the AF to support rehabilitation to the tertiary network in this scheme thus aligned with the project’s longer-term outcomes.18
29. The restructurings also provided necessary time extensions to attempt to complete the Project’s physical works and make minor alterations to address issues as they arose during project implementation. Changes to the design of the Geghardalich and Kaghtsrashen schemes during the restructurings allowed the Project to respond to community concerns and also make design improvements that would purportedly improve efficiency and allow for the completion of works by closure of the Project. The changes during the final restructuring (June 2019) to the design of the Baghramyan-Norakert Scheme’s tertiary system supported by the AF were made at the request of the GoA to keep options open to pursue a land consolidation agenda at some point in the future.
30. Taken together, while these changes were aligned with the PDO and Project components, they did not materially affect the overall objectives or scope of the project. Thus, the changes did not have an impact on the overall original ToC.
31. Institutional changes to the number of WUAs and the relocation of the SG ultimately proved consequential, as described later in this ICR.
II. OUTCOME
A. RELEVANCE OF PDOs
Assessment of Relevance of PDOs and Rating
32. The relevance of the PDO is rated ‘High’. The ISEP remains fully aligned with the current CPF for the Republic of Armenia (FY19-FY23).19 The World Bank’s engagement in Armenia’s water sector articulates a shift away from water supply and toward scaled-up support to the irrigation sector to provide improved services at significantly reduced costs (from efficiency improvements in both the irrigation services infrastructure and the management/institutions).
33. More specifically, CPF Objective 1 identifies agriculture as one of three priority export-enabling sectors for improved performance, including innovative digital platforms for better irrigation. Furthermore, Objective 8 to improve management of natural resources notes that “engagement in agriculture and irrigation aims to strengthen water resource management and governance; enhance climate change mitigation and adaptation; and support structural transformation in the agricultural sector and a broadening of the rural employment base.” Both Objectives are directly aligned with the ISEP’s PDO. The CPF also notes that the Bank will maintain emphasis on strengthening WUAs and continue to ‘crowd-in’ other partners around the irrigation sector improvement agenda.
18 While the AF aligned with longer-term outcomes, direct contribution to the PDO proved marginal, as explained later in this document. 19 Report Number: 123902-AM, dated February 28, 2019.
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34. The ISEP also helps to support another area of increasing importance to the GoA as outlined in the CPF – climate change. The improvements in water use and energy efficiency through the ISEP support Armenia’s adaptation and mitigation priorities. The PDO aligns with Objectives 9 and 10, which seek to: enhance climate-change resilience, water security, and disaster risk management capacity; and enhance energy sustainability and renewable energy resources.
35. In addition, the PDO remains aligned with recent national policies and priorities, particularly the five-year Armenia Government Program, which was adopted by the parliament in February 2019. Within the Government Program, the GoA outlines an agenda for irrigation in the country, noting the need for “modernizing water system management and implementing projects supporting irrigation systems upgrades”, along with an ambitious vision that “irrigation water in Armenia should be as accessible and common as electricity supply”. In addition to reflecting an ambitious agenda, it also indicates that the vision is indeed achievable in the view of the GoA, in part through the foundations laid by the World Bank’s ongoing engagement through the ISEP (and predecessor projects).
B. ACHIEVEMENT OF PDOs (EFFICACY)
36. The PDO consisted of two parts: 1) to reduce the amount of energy used and to improve irrigation conveyance efficiency in targeted irrigation schemes; and 2) to improve the availability and reliability of important sector data and information for decision-makers and other stakeholders. Achievement of the objectives and outcomes towards both parts of the PDO is discussed below and summarized in Table 2. For a complete review of the Project’s PDO indicators and intermediate results Indicators, see Annex 1.
Assessment of Achievement of Each Objective/Outcome
37. PDO part 1: Reduce the amount of energy used and to improve irrigation conveyance efficiency in targeted irrigation schemes.
38. The extent to which part 1 of the PDO was achieved is best evaluated based on the two associated indicators (PDO Indicators 1 and 2).
39. PDO Indicator 1: At the time of project closure, 3.7 GWh of energy was saved (compared to the revised end target of 36.8 GWh), all from the Meghri Scheme’s conversion from pumped to gravity distribution through Component 1.1.20,21 The Geghardalich Scheme remains incomplete because of the challenges with the Goght community, whereas the Kaghtsrashen Scheme is complete, but has failed several pressure tests and is not yet operational. The breaks appear to be associated with the decision to use lower cost glass-reinforced plastic (GRP) piping from local sources instead of steel and to laminate the joints in the field (as opposed to the factory), as well as the design flaws associated with the assumption that GRP and steel were interchangeable, despite the
20 Estimated savings at appraisal for Meghri was 4.5 GWh. 21 The Project did not deliver actual energy savings from the canal lining; as pumping did not decrease. That is, there were increases in irrigation resulting from the canal lining improvements (i.e., more of the pumped water was able to reach further into the command areas and beyond in the schemes serviced by these improved canals). Thus, because the continued electricity consumption at pre-Project levels offset the energy savings derived from the reduced water losses, no net energy savings from the supply and outlet canals are accounted for under this indicator.
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complex topography and system design. These tests are set to continue again as the 2020 irrigation season begins, but at the time of drafting this ICR, the energy savings from the Kaghtsrashen Scheme are not counted toward the Project’s results. Despite the results from Meghri being verified during subsequent irrigation seasons after completion of the works, and the other schemes nearly completed, these energy savings can only be attributed to 10 percent achievement of what was originally envisioned by the Project.
40. It is debatable whether the energy savings from Baghramyan-Norakert should be included in the calculation of energy savings, in terms of both setting the target (the denominator) and contribution to achieving that target (the numerator), given that the system is not operational and the discovery during implementation that the pumps for this scheme had not been functioning for many years (estimates range from 5-20 years) prior to the Project’s initiation. For the purposes of this ICR, the energy savings from this scheme are therefore not included.
41. It is also noteworthy that for the energy savings to be fully realized from the four schemes, the pumps being replaced were to be physically decommissioned or relocated by the Project. This concern was originally flagged in Project preparation AMs and carried through into the PAD.22 Subsequent reporting the progress of these works indicates that the Meghri system kept two pumps that were originally decommissioned for the project back online when there was insufficient water availability in the stream to operate the gravity system. Field visits reported that these were indeed used as backup in years after the works were completed, particularly to deliver water from the Aras River to the most remote part of the network during the driest days of the irrigation season. Moreover, the reported agreement with the Goght community to allow for the completion of the Geghardalich works in the year after the Project’s closure indicates that to guarantee 2.4 million m3 flowing to the Goght community will require some of these pumps to remain in “standby” mode. Given the above, particularly the uncertainty with whether the GoA will be successful in completing the remaining works in the Geghardalich Scheme over the coming year, as well as the uncertainty of whether the Kaghtsrashen Scheme will pass its pressure testing in early-mid 2020 (and thus be considered as operational), the ICR concludes that this part of the PDO indicator was moderately achieved.
Table 2: Overview of key ISEP targets, outcomes, and achievements. PDO Part 1 Target Achievement 1. Amount of energy saved annually in operating 36.80 3.70 the irrigation system (GWh) PDO Indicators 2. Water losses reduced in rehabilitated canals 23.58 21.44 (million m3) 1. Number of pump stations shut down (#)23 4 1 Intermediate Results Indicators 52 57.26
22 The Project’s PAD states, “Furthermore, all pump stations that will be replaced by gravity sources will be de-facto decommissioned and this task will be included in the list of works to be done by the civil contractors. The works will include the demolition and backfill of the stilling basins, where in existence, and the removal of the suction pipelines and the pumps and engines and their relocation to the corresponding government warehouse or to be disposed as scrap as appropriate.” 23 At the time of completion of the Project, only the Meghri gravity scheme was fully operational and thus this indicator is reported as 1.
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2. Length of outlet canals receiving water from pumping stations that have been rehabilitated (Km) 12,932 9,53724
3. Area provided with improved service (Ha) 12,336 [493] 8,286 [331]
4. Water users provided with improved services (#) [female] PDO Part 2 Target Achievement 1. Data about O&M and EM used by SCWM, WSAs Data used for Entered into and WUAs for decision making (Text) budgetary and database to be used investment planning for budgetary and purposes investment planning purposes PDO Indicators 2. Technical audit of irrigation agencies used by Same as immediately Same as immediately MONEIR and SCWM for decision making (Text) above above
3. Percentage of WUAs having water intakes 100.00 93.00 tracked by SCWM in real time (Percentage) 1. Number of observation points equipped with 71 80 installation of limnographs and water measurement devices for the SCADA system (#)
2. Number of operational WUAs strengthened (#) 1525 15 Intermediate Results Indicators 3. Number of WUAs staff trained (#) [female] 220 [80] 228 [46]
4. Percentage of women in WUAs executive bodies 10 41 (excluding water masters) (%)
5. Number of site specific ESMPs prepared (#) 4 4
42. PDO Indicator 2: The Project nearly achieved the water losses reduced in rehabilitated canals target,26 delivering savings of 21.44 million m3/year compared to the target of 23.58 million m3/year, associated with rehabilitating 57.26 km of outlet canals (verses 52 km targeted at appraisal). The works associated with these indicators were
24 Including 686 ha under Meghri gravity scheme and 8,851 ha command area under the rehabilitated outlet canals. Although only 6,868 ha were actually irrigated in 2018 (686 ha under the Meghri scheme and 6,182 ha under the canals), the overall command area is recognized as an achievement because the deviation in 2018 is due to water shortages in that year only. 25 Although not officially revised to 15 during Project’s restructuring, the final number of WUAs at Project closure due to the consolidation process was 15; thus this ICR uses the actual number of WUAs at closing; consistent with the Borrower’s ICR. 26 The PAD recommended the use of fiberglass-reinforced concrete for canal-lining to improve the conveyance performance in terms of reduced water losses (by controlling the rate of cracking due to alternate frost and defrosting activity). This recommendation was rejected by the Project during implementation in favor of conventional concrete; a more conservative approach that was based on long-term local experiences in concrete canal-lining.
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successfully implemented by the 2016 irrigation season. The rehabilitated canals are also linked to 8,851 ha of land provided with improved irrigation and drainage services.
43. PDO part 2: Improve the availability and reliability of important sector data and information for decision- makers and other stakeholders.
44. The extent to which part 2 of the PDO was achieved is evaluated based on the three remaining PDO indicators.
45. Evidence suggests that the Project improved the availability and reliability of irrigation data and information, and that this information is being used to inform decision making. However, these results are mixed, with the Project demonstrating marginal evidence for achieving PDO Indicators 3 and 4, and more substantial evidence for achieving PDO Indicator 5.
46. Examinations of the five reports produced by the Contractor that was hired to conduct the technical investigations (referenced in PDO Indicators 3 and 4), which included asset and staffing inventories for 13 WUAs and the WSA, indicates that the findings were fed into a GIS database and handed over to the GoA. However, given that there have not been significant investment decisions by the irrigation sector institutions since the completion of these technical investigations in late 2018, the extent to which these indicators’ targets were achieved remains inconclusive at the time of completing this ICR.27
47. The SCADA system installation supported by Component 2 provided limnographs and water measurement devices at key intakes for the canals, representing the handover points from the WSA to the WUAs.28 At the time of Project completion, 93 percent of the WUAs were having their intakes tracked in real time. Prior to this, simple water meters measured water flow volumes twice per day using a rudimentary ruler system. This led to approximate measures only, and ultimately many disputes ensued between the WSA and WUAs, as well as between the WUAs and their farmers. Moreover, measurements were more vulnerable to manipulation by the WUAs prior to the installation of the SCADA system. Once installed by the Project, the devices helped increase transparency of decision making and has since led to fewer disputes.
48. The SCADA devices installed through the Project met or even exceeded expectations. At one point in the Project’s implementation, it was reported that 83 devices had been installed, compared to the 71 planned. Evidence suggests, however, that this final number is most accurately reported as 80.29 This number was increased above
27 Inquiries conducted for the preparation of this ICR indicate that although the technical investigations/audits were produced, there evidence is lacking for these having informed decision making. Thus, it’s important to point out the discrepancy with the Project’s final ISR, which indicates the following: “O&M and EM related information generated through the Project in the form of technical and financial audits, as well as procedures and databases developed by the WSPIU, are reported to be informing yearly budgeting decisions for the WUAs and the WSA”, and “…results were transformed into a database software/tool by the WSPIU. MTAI and the WC are reportedly using these audits to inform future investment plans. Evidence suggests that EDB used the database and the results of the audits to select sites for the ISMP tertiary networks”. On this last point, interviews with the Bank Task Team and the WSPIU indicate that ISMP sites were selected in 2015-2016 and thus cannot be associated with the results of these ISEP technical audits. 28 The SCADA system installed in Armenia has a flow monitoring function, taking the readings from meter gates at the system intake and transmitting the data to a central dashboard at the WSA. This has informed operational gate setting procedures for more accurate service delivery and hence improved service efficiency. 29 The number of reported devices installed fluctuated considerably throughout implementation. This was due to several devices being stolen, others going missing for a period of time during the process of removing them during the irrigation “off-season”, and yet others becoming temporarily inoperable because of technical problems. At the time of project closing and as detailed in the Borrower’s ICR, 50 devices were considered fully operational, two devices were stolen and not replaced, and an additional 30 were scheduled for planned repairs to be brought back online for the 2020 irrigation season. This brings the final number of installed devices attributable to the Project to 80. Interviews with the
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the target by using savings under the Project to address the continued concerns with Goght village and the Gergardalich Scheme. The additional SCADA devices helped to show there would be sufficient water for the village (first) and downstream uses (second). In addition to helping to resolve conflict in the Goght community, an interview conducted for this ICR with the Aragotsotn WUA confirmed this dispute resolution function/improvement brought about through the Project via the SCADA system.
49. The meters have helped also with several decision-making enhancements. First, they have aided WUAs with monitoring and measuring water taken from their own source; improving the accuracy of fee collection from the users and closing budget gaps that were previously associated with under-charging their users. Second, data provided from the WSA indicates that (operational) losses in the irrigation system decreased after the installation of the SCADA system by roughly 9 percent (from 2014-2019), despite a general increase in overall water use. Figure 2 illustrates this reduction in losses across the system, with key decreases starting around the time the SCADA system was fully installed by the time of the 2015 irrigation season. After the inaugural 2015 irrigation season, all of the installed devices were subsequently removed and stored in a warehouse to avoid having them stolen, as was the case in Garni with one of the devices during that 2015 season (this Garni device was never reinstalled, as referenced above). The Bank supervision mission in the autumn of 2016 revealed that the full set of devices were never reinstalled for the 2016 irrigation season. Tellingly, there is a slight rebound in water losses depicted in Figure 2 during that 2016 season after the initial 2015 decrease. The downward trend in water losses after they were reinstalled for the 2017 irrigation seasons and beyond indicates that there is at least a correlation between the SCADA system and the ability of the WUAs and WSA to better manage water decisions with this information (as indicated by decreased water losses).
Figure 2: Water Supply Agency losses compared to total water supplied before and during ISEP implementation; note the increase in supply and decreases in losses after 2014 and the installation of the SCADA system
* The data depicted in this figure pertain to the entire WSA network, and not only the schemes and canals supported by the Project.
WSPIU and WC in preparation for this ICR indicate that the GoA has a plan and the budget to bring the full system back into operation by the 2020 irrigation season (currently it is offline to address the upgrades to those experiencing technical problems), and to even expand the system by increasing the number of monitoring points beyond the 80 supported through the Project.
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50. WSA staff interviewed for this ICR attributed a significant portion of the demonstrated decrease in percent losses to the SCADA system, with the other savings derived from the lining of the canals by the Project. The WSA staff also indicated that the SCADA system has helped to advance their understanding of water balance in the irrigation system; thus, improving management and future investment decisions (e.g., how much water they should budget to be extracted from the important Lake Sevan system based on better knowledge of the irrigation system’s water deliveries and losses).
51. Underlying these achievements were less direct (but also important) mechanisms through which the Project helped to achieve part 2 of the PDO, as depicted in the Project’s implicit ToC through the intermediate results indicators; namely through strengthening the WUAs and the WSPIU (Component 3). The capacity building and training of WUA staff led to more accurate and higher-quality information being reported by the WUAs to the WSPIU, and ultimately the WC, through management databases and systems (such as the one developed by the WSPIU described in the following paragraph).
52. Finally, the WSPIU strengthening provided through Component 3 of the Project resulted in improved availability and reliability of information for decision making. Interviews conducted for this ICR with current and former WSPIU staff highlighted examples where the Unit took proactive measures to strengthen GoA and WUA information systems. Key to this was improving upon a sector-wide Geographic Information System (GIS) database (established in 2004) to monitor the irrigation management system and developing software and tools to improve management decisions. In turn, the additional layers produced through support of the ISEP have helped to strengthen the information WUAs provide to the WSPIU and WC (as noted above).
Justification of Overall Efficacy Rating
53. The achievement of energy savings associated with part 1 of the PDO was less than anticipated, and the use of the technical audits and investigations associated with part 2 of the PDO was inconclusive. Thus, given that only one of two PDO indicators was (nearly) achieved for part 1 of the PDO, and only one of the three PDO indicators could be confirmed as achieved for part 2 of the PDO, the overall efficacy rating is ‘Modest’. Despite the shortcomings with achieving the PDO indicators and fully delivering on the Project’s intended outcomes, it is the conclusion of this ICR that the ISEP has a clear path for significant success, once the three remaining schemes are finalized. After these are completed, and considered in conjunction with the broader engagement with the GoA that the ISEP helped to facilitate, the Project will have contributed significantly to placing the irrigation sector on an overall path of improvement.
C. EFFICIENCY
Assessment of Efficiency and Rating
54. Economic analysis. An ex-ante cost-benefit analysis was prepared at project appraisal using a ‘with and without project’ methodology to calculate the Economic Rate of Return (ERR) of the Project-related investments in each of the water conversion schemes and the outlet and diversion canals. The results were aggregated at project level.
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55. The benefits measured in monetary terms were: (1) savings in electricity usage (estimated at US$4.1 million per annum), resulting from either the conversion of pumped irrigation systems to gravity-fed irrigation systems, thus eliminating pumping costs, or the rehabilitation of outlet canals, thus reducing water losses; (2) increased intensity of production and changes in cropping patterns (from low-value to higher-value crops such as orchards or vegetables), as a result of the improved reliability and duration of the water supply in the target schemes and canals; and (3) in limited cases, recuperation to irrigation of some portions of the existing command area that had not received sufficient water. Overall, it was estimated that the irrigation area that would return to the original coverage of irrigation amounted to over 20 percent. The agronomic benefits from both existing and newly irrigated areas were assumed to require a period of 4 years to reach their full potential, being phased in at a rate of 25 percent per annum. All gravity-fed irrigation conversion schemes, and only 3 of 13 outlet canals, were expected to generate benefits in all three of the above-mentioned categories. No benefits were calculated for reduced losses of water, as water for irrigation in Armenia had no imputed value per se; water costs reflected only the expense of delivery.
56. Internal rates of return (IRRs) were calculated in the PAD for four individual gravity irrigation schemes and 13 prioritized outlet canals (considering only the civil works as costs), and for the overall ISEP (using all costs) for a period of 15 years. Later, at design stage, the figures were revised, and the Project horizon was extended to 20 years. For individual schemes and outlet canals, returns ranged from 20.3 percent to 53.8 percent for the gravity irrigation schemes and from 18.4 percent to 86.6 percent for outlet canal rehabilitation. For the overall project, the IRR was calculated at 25.4 percent.
57. The methodology applied at project appraisal, and later up-dated - at project design, is sufficiently clear and transparent to allow direct comparison with the ex-post aggregated results. Therefore, the ex-post analysis up- grades it, concentrating on revising and up-dating the assumptions, and re-calculating the main economic results at project end, where the ex-post economic indicators (IRR) per water conversion scheme, aggregated outlet canals, and aggregated project results are compared with the corresponding values from the ex-ante CBA (at project appraisal and “at design” phases).
58. The ex-post economic was first performed for the Project based on the bottom-up approach (i.e., an economic analysis at water conversion scheme and aggregated outlet canal levels, considering the corresponding civil construction works (CCW) of Component 1, and then aggregated at project level, where the investment costs of all Components were considered. Results of the ex-post project-level economic analysis, compared to the results of the project appraisal and project design phases, are summarized in the Table 3, below.
Table 3: Results of the ex-ante and ex-post economic analyses.
IRR* Baghramyan-Norakert Geghardalitch Kaghtsrashen Megri Outlet canals Aggregated Ex-ante At PAD stage 56.5% 32.5% 28.2% 21.4% 27.6% 25.4% At design stage30 53.8 % 24.6% 22.1% 20.3% 18.4%-86.6% 25.4% Ex-post
30 The ex-ante data were updated during the design phase.
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Conservative31 6.7% 10.8%-18.3% 11.8%-13.1% 20.6%-23.6% 9%-14% 13.9%-14.2% Optimistic32 8.7% 19.9% 14.4% 24% 14.4% 16.7%
*Minimum required return is 10 percent (discount rate)
59. Unit costs and exchange rates are up-dated and are calculated in 2018 constant terms.33 A 20-year project time horizon is applied.
60. The PAD and design stage economic analyses envisaged materialization of benefits once the corresponding scheme was put into operation. However, considering the delay in three out of four schemes (i.e., Baghramyan- Norakert, Geghardalitch and Kaghtsrashen Schemes) different scenarios (conservative and optimistic) are developed to better understand the range of potential impacts, based on the Projects’ changes on the overall benefits as compared to what was originally envisaged at these earlier stages.
61. Savings in electricity costs estimated ex-post are almost US$2.1 million per annum (or 45 percent less than those at appraisal stage), and the irrigation area expected to return to the original coverage of irrigation is about 75 percent of the additional irrigated areas estimated in the PAD. Although the agro-economic benefits in ex-post CBA of the entire project also stem from the involvement of additional lands and better irrigation, the plant maturity is estimated at three to four years for apricot trees to fruit, five years for vineyards, and one year for vegetables and alfalfa. On contrary, in the PAD the agronomic benefits from both existing and newly irrigated areas were assumed to take place in a period of four years to reach their full potential, being phased in at a rate of 25 percent per annum (regardless of the specifics of the different crops). This simplified approach overestimated the net agro-benefits in the first years of the irrigation. Therefore, this assumption was corrected in the ex-post analysis.
62. All the above-mentioned changes have direct impact on the Project’s net benefits, namely a two-fold decrease in benefits versus those estimated at PAD/design phase, which is mainly due to insufficient detail of the investigations/feasibility studies performed at the time of the appraisal. If the analysis would have been performed in more detail at the earlier stages by corroborating the desk review with field visits, the appraisal and design economic analyses would have identified some of the challenges, most notably the lack of an existing reliable tertiary distribution network in Bagramyan-Norakert Scheme.
63. Nevertheless, the Project still demonstrates sufficient economic viability at closure; all water conversion schemes and aggregated canals, except the Bagramyan-Norakert gravity scheme, clearly exceed the minimal required return (10 percent). The ex-post economic benefits of Meghri water conversion scheme (the only one that is already fully operational) slightly exceed the ex-ante benefits estimate (despite some of the pumps needing to be re-commissioned). This is mainly due to its on-time completion, as well as the inclusion of the right branch (in 2018). Further, in the long term, the users are expected to increase their net income not only from the additional irrigated land, but also from the improved yield and changes in cropping patterns (from low-value crops to higher-value crops such as orchards or vegetables), as a result of the improved reliability and duration of the water supply in the targeted schemes and canals. Moreover, the realized savings and increased net benefits for
31 Lessons learned from completed projects (Meghri and outlet canals) are reflected in the other water conversion schemes. 32 Whole additional area considered will be irrigated. 33 More recent data are not available at the date of the preparation of this ICR.
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the users as a result of the Project should ultimately allow for a decrease in subsidies for the sector in Armenia, if the GoA chooses to pursue this route.
64. However, it is noteworthy that further delays in Geghardalitch and Kaghtsrashen Schemes would decrease the economic viability of the Project, and at some point will render these below the 10 percent threshold for economic viability. It is therefore a conclusion of this ex-post economic analysis that anything beyond a two-year delay (where decreased pumping-related savings from electricity and O&M and agro-benefits cannot accrue) would sufficiently place these Schemes into the category of being economically not viable.
65. With regard to Bagramyan-Norakert Scheme, its deviation from appraisal is significant, and marginally negative economic results are already observed. A delay in its implementation would only further decrease the expected net benefits below the 10 percent threshold (where it already sits in all three scenarios). Bearing in mind the insufficient interest demonstrated by the local communities in the new technology considered (as per the Social Study Report Endline- ISEP/AF/CQS/CS-17/001), a public awareness campaign is needed to build knowledge among local communities and beneficiary farmers about the advantages of the new technology and to mobilize them to use it after the Scheme is complete and fully operational.
66. The negative departure from the appraisal/design economic analysis, combined with the likelihood for continued delays in the operationalization of three of the four schemes, the overall efficiency rating of the Project is ‘Modest’.
D. JUSTIFICATION OF OVERALL OUTCOME RATING
67. Given the ISEP’s ‘High’ relevance, ‘Modest’ efficacy, and ‘Modest’ efficiency ratings, the Project is rated as ‘Moderately Unsatisfactory’ for its overall outcome rating.
E. OTHER OUTCOMES AND IMPACTS (IF ANY)
Gender
68. The Project promoted the inclusion of women, youth, and poor community members during project preparation and implementation. This is mainly evidenced by the WSPIU’s approach to gender-sensitive community consultations. The intermediate results indicators highlight this, with the most noteworthy achievement with respect to gender being that the ratio of women representation in WUA executive bodies (excluding Water Masters) was 41 percent compared to 10 percent targeted (although the disaggregated gender numbers for the WUAs trainings underperformed compared to the target).
Citizens Engagement
69. The Project was approved prior to the World Bank’s new citizen engagement corporate requirements introduced in FY14. Thus, citizen engagement activities included in its design were limited to consultations related to the safeguard instruments (ESIAs). In response to emerging concerns from citizens in two of the four gravity schemes (including environmental NGOs, local media, and the general public) the WSPIU introduced a variety of additional communication and engagement measures. For example, the WSPIU began a community monitoring of the
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ecological flow of Azat River where Garni residents were invited to partake in river flow measurements each month, interviews with local hydrologists and the TTL were published in national media, additional consultations were held in the World Bank office and focus group discussions organized with diverse stakeholders in the communities.
70. A more explicit citizen-oriented design and beneficiary feedback indicators were introduced with the approval of AF in 2017. These included: (i) the intent of preliminary, mid-term, and final consultations on the design and implementation of secondary and tertiary rehabilitation works at Baghramyan-Norakert scheme, along with surveys to assess the extent to which beneficiaries believe their needs have been reflected in project design; and (ii) a grievance redress mechanism (GRM) and result indicator to record share of grievances responded within five days. Consultations and survey with AF beneficiaries were conducted at baseline but were not repeated given that the Government changed the design of the scheme and WSPIU expected that satisfaction with the new design would be lower. The GRM was maintained for the duration of the Project; five out of six recorded grievances were responded to within five days.
Institutional Strengthening
71. The Project helped to facilitate several activities that further contributed to the institutional strengthening outcomes described above, including to conduct pertinent analytical work, to help with leading the coordination of other development partners operating in the irrigation and water sectors in Armenia, and to organize workshops and events on the topic. For example, the Bank secured a small grant (< $200,000) from internal funding sources to finance an investigation of the financial performance of the WUAs that included financial modeling and exploration of scenarios for cost recovery. This replaced a portion of the analysis that was originally envisaged to comprise a significant part of Component 2 to better understand the O&M and EM costs for the WUAs. This strategic financial modeling exercise was discussed during a workshop that the Project facilitated in June 2015, which included the participation of the WSPIU, the WC (including its Chairman and Deputy) and representatives from all of the WUAs. This event was a rare but welcome example where all of the key institutional actors were engaged in discussion around improvement of the irrigation sector in Armenia.
72. More broadly, the Project created the space for continued dialogue with the GoA on improving water and agriculture management, contributing to the wider program of engagement that the Bank and GoA had established over the years. This broader engagement, mentioned at various points throughout this ICR, is summarized in the textbox, below. Contributions to this broader engagement made possible by the ISEP included discussions and analyses that led to the publication of the following Bank studies early in the Project implementation period: “Towards Integrated Water Resources Management: Revisited” and “Reducing the Vulnerability of Armenia’s Agricultural Systems to Climate Change”. During the final years of implementation, the Bank and GoA engagement through the ISEP also supported institutional strengthening efforts with analytical and advisory services related to: “Irrigation and Water Security”, which aimed to move the discussion toward a more strategic and integrated approach to water governance, as well as build resilience to climate change.
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World Bank Engagement in the Armenian Irrigation Sector: Past, Present, and Future
Over the past few decades, Armenia has achieved substantial progress in improving its irrigation and drainage (I&D) system and establishing a basis for sustainable management of the associated infrastructure. The Bank has been a critical partner in these pursuits. A long-term national program was conceived in the mid-1990s to support the rehabilitation and restructuring
of the I&D system. The first phase of this long-term program consisted of emergency interventions to secure continued operation; implemented under the Irrigation Rehabilitation Project (1994-2001), followed by the Dam Safety Project (1998- 2009) and the Irrigation Dam Safety Project II (2004-2011).
The second phase of the long-term program was focused on building a solid basis for system sustainability, through further rehabilitation of critical structures, reduction of energy usage in the system, and empowerment of stakeholders in carrying out O&M of the system; implemented through the Irrigation Development Project (2001-2009). Some of the key results included substantial improvement in the cost-recovery rate of overall O&M expenses, increase in the number of hectares irrigated, and reduction of the amount of energy and its costs – as well as reduction of water losses. The Irrigation Development Project also introduced participatory management principles. The GoA launched an institutional reform process based on these principles, including the passing of a law supporting the establishment of the WUAs and a Water
Code in 2002. As a result, during the last decade, 44 WUAs were established (again, later merged into 15), covering some 60 percent of the irrigated land in Armenia. Soon after the WUAs were established, the GoA started transferring the management of parts of the irrigation infrastructure to the WUAs. Currently, the WUAs manage nearly all of the I&D infrastructure within their boundaries, except the primary canals, medium and large dams, and large pumping stations, which are still under the management of the WSA. Despite some successes, the WUAs continue to require support to fully realize the goal of participatory management and transparency in decision making. Further strengthening will likely require, amongst other changes, the ability to establish their own fee structure and empowering members to enhance democratic participation.
The ISEP represented a continuation of this long-term engagement with the GoA. In addition to the activities directly financed through the Project, during the period of ISEP implementation, the Bank financed an investigation of the financial
performance of the WUAs, as well as an important WUA workshop that brought together all of the key decision makers involved with the irrigation sector. The Development Policy Option (3rd phase, 2015) also included a critical piece of the reform agenda; the Irrigation Action Plan, which was developed in conjunction with the ISEP-related engagement. The Bank also initiated a pilot on water productivity monitoring based on remote sensing, and engaged stakeholders in broader water security discussions focusing on water related risks affecting not only irrigation but also other water uses. During the ISEP implementation period, the Bank produced several key analytical pieces during this time, including: “Towards Integrated Water Resources Management: Revisited”, “Reducing the Vulnerability of Armenia’s Agricultural Systems to Climate Change”, and most recently, the “Irrigation and Water Security” study.
Combined, these activities have helped to begin shifting the discussion with the GoA toward a more strategic and integrated approach to water governance in Armenia.
Mobilizing Private Sector Financing
73. As noted previously, the Project helped the GoA to leverage financing from the EDB for the ISMP, which directly linked with and augmented the investments of the ISEP. Furthermore, the completion of the tertiary network after Project closing for the Baghramyan-Norakert Scheme is expected to rely on finance secured from the European Union (EU) and the Agence Française de Développement (AFD).
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Poverty Reduction and Shared Prosperity
74. The Project did not specifically conduct surveys that would elicit the benefits from the Project on ending poverty in Armenia, nor the benefits to the bottom 40 percent of the population in Armenia. However, given that 75-80 percent of the rural population depends on agriculture for employment, and the majority of these are smallholder farmers relying upon irrigation services, it can be concluded that the Project will likely have a lasting positive impact on the achievement of the ‘twin goals’ in Armenia.
Other Unintended Outcomes and Impacts
75. Not applicable.
III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME
A. KEY FACTORS DURING PREPARATION
76. Realistic objectives and readiness for implementation. Previous World Bank projects in the irrigation sector over the decade preceding the ISEP (i.e., namely through the IDP) helped to set the enabling conditions for efficient project preparation. The Project built from an ongoing and productive relationship with the WSPIU and capitalized on the foundational work conducted through the IDP and the MCC engagement to identify a realistic set of objectives and investments for the ISEP. It did not represent a significant shift or innovation in the sector, as it included selecting schemes already analyzed and considered for pump to gravity conversion under the MCC program (but which were not financed due to rescoping of the MCC program in Armenia), targeting works where farmers were already trained through MCC programs, and building from the efforts that both IDP and MCC shepherded on the institutional reform agenda.
77. Emphasis on institutional strengthening activities. The Bank and GoA recognized the need to continue supporting institutional strengthening activities through the Project. This institutional strengthening was deemed critical to continue building from the reform process that the Bank helped to initiate and support over the decade preceding the ISEP. Preparation AMs indicate that the Project was at one point planning to include the institutional efforts as part of the PDO, and to devote a larger amount of the financing to the WUA strengthening agenda. This ultimately did not occur, mainly at the request of the GoA in later stages of preparation (because they wished to finance a smaller portion of technical assistance through the loan). Nevertheless, key institutional strengthening activities were included, which proved to be integral to the Project’s results.
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78. Site selection and community engagement. The four schemes and canals comprising Component 1 were ultimately selected based on the highest financial internal rates of return (FIRR), as demonstrated by the economic analysis. Preparation AMs indicate that the sites for the schemes were at some point visited prior to ISEP approval. However, as the Project advanced to implementation, it became clear that there were several problems with the site selection process. First, technical shortcomings of the Baghramyan-Norakert Scheme were reported only after the first year of implementation. The lack of an existing tertiary distribution network, doubts about whether the land would be brought back into irrigation after Project completion, and the discovery that the pumps were already non-functional several years prior to the ISEP investments would have influenced the calculations regarding scheme selection for ISEP investments. This specific scheme’s inclusion had negative implications for the Project’s success, as it was not considered operational at the time of project completion. Second, there is no evidence that the farmers in the targeted beneficiary communities were engaged prior to project approval. Even more consequential, the insufficient stakeholder engagement during preparation to balance the various interests in the communities in and around the areas where the ISEP’s physical investments would be constructed (and extract water from) had a significant impact on the Project’s outcomes and implementation success; in particular with respect to the Gegardalich and Kaghtsrashen Schemes.
B. KEY FACTORS DURING IMPLEMENTATION
79. Social/Environmental. The community conflicts associated with the Gegardalich and Kaghtsrashen Schemes resulted in a significant amount of time and resources devoted by the WSPIU and GoA implementing entities, as well as the Bank, to address these concerns. These issues developed for separate reasons in both schemes within the first year of implementation, lasting well through the MTR in the case of the Kaghtsrashen Scheme, and persisting through project completion in the case of the Gegardalich Scheme. In the former, the conflict was eventually resolved after numerous meetings, communication campaigns, and scientific monitoring demonstrations, amongst other actions, to bring the community on board. These efforts culminated in changing the technical design of the Scheme, which resulted in an expected decrease in energy savings compared to what was originally anticipated. In the latter, the status of the situation at the time of project closing was that a tentative agreement had been reached with the Goght community to guarantee a certain amount of water to its users. Assuming this agreement holds and the works are completed in the subsequent months, this issue will have resulted in an additional feeder canal being built to satisfy the needs of the community in relation to the IP case, several pump stations not being decommissioned to serve as backup in ‘stand-by’ mode, and presumably fewer energy savings than originally envisaged by the Project.
80. Overextended WSPIU. The WSPIU spent considerable time attempting to manage these conflicts and performed satisfactorily in these efforts. However, the WSPIU, along with the WC, local authorities, and high-level ministry staff, were stretched very thin from the beginning to the end of project implementation. The primary reason was due to managing the community conflicts and responding to requests to prepare and manage projects associated with other donors. Despite the Bank’s best efforts to flag these as issues of concern that should be rectified, they persisted throughout, and ultimately negatively impacted the ability of the WSPIU to proactively manage challenges, risks, and new issues.
81. Regular reporting in ISRs. Project supervision and implementation support was regular and thorough. The Project’s ISRs were written earnestly, with the intent to address challenges and provide critical feedback to ultimately maximize the impact of the Project. However, as noted in the Quality of M&E Section, below,
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shortcomings in the M&E design limited the ability of the Bank to get ahead of challenges as they developed during implementation.
82. Ambitious design changes. The ISEP faced key decisions during implementation that led to the pursuit of complex designs and innovative approaches to irrigation services delivery. This included the switch from metallic/steel piping to locally produced GRP piping, as well as the pursuit of demand-driven pressurized schemes (as opposed to the traditional supply-driven schemes), including tertiary networks that supported modernized drip irrigation. While laudable and reflective of the ambitiousness of the GoA in this sector, many of these decisions ultimately proved to be ahead of the country’s capacity to implement these designs. For example, the decision to use GRP piping was made to accommodate higher than expected costs for the steel piping and to experiment with a more modern and innovative solution that could result in increased longevity of material and decreased O&M costs. The GoA and contractors did not have adequate experience using the novel GRP material, and the contractors discovered in the field during construction that it actually required more support structures than originally envisaged.
83. Commitment and leadership. The Bank was steadfast in its support of and advocacy for the institutional reform process throughout implementation, which was a key aspect of its broader engagement with the GoA in the sector. The GoA also remained highly committed to the overall irrigation modernization agenda, even if this commitment was reflected in shifting views on the “right” institutional model for irrigation services delivery. This commitment was demonstrated by the gains in WUA strengthening that occurred in the early stages of implementation, and continued through the later stages of implementation, as shown by the WC’s exploration of alternative service delivery models (e.g., public-private-partnerships). Despite the negative repercussions that these shifting priorities had on the overall institutional reform agenda (see Risk to Development Outcome section, below), the GoA was unwavering in its goal of expanding irrigation services and improving cost recovery within the sector. Moreover, interviews with the WC in preparation for this ICR confirmed that the GoA has recommitted itself to the WUA strengthening agenda, after the setbacks that this agenda had experienced in recent years.
84. Additional finance. The main impetus for the AF to complete the tertiary distribution network of the Baghramyan- Norakert Scheme was that it presented an opportunity to be more innovative through piloting a comprehensive modernization of the network that could allow farmers to adopt drip irrigation. It was a risky approach, in that there was no verifiable evidence that this modernization pilot was designed to meet expressed demand. On the one hand, the AF provided a workable solution to a critical shortcoming of the Scheme. The AF (and its associated restructuring to move the closing date to December 2019) also allowed for a de facto extension of the other two schemes that failed to reach completion by the time of the original loan’s closing date (i.e., the Gegardalich and Kaghtsrashen Schemes). On the other hand, the modernization piloting through the AF created further complications for project completion. The original design of the AF works allowed for water distribution to individual plots. As noted previously, this configuration was later changed at the request of MoA only after most of the AF works were completed and metering equipment installed/procured, which led to the Bank and WSPIU hastening to find a suitable solution that would satisfy the GoA’s request (as well as financial losses from the installed/procured equipment that was unusable in the Scheme under the redesign). Not only did this delay the Project’s completion, it came as an unwelcome surprise to the farmers that were expecting to be able to rely on the direct access to irrigation water for their plots. It is also noteworthy that at the time of deciding upon the AF, the works in the Baghramyan-Norakert Scheme under the original loan had not yet been initiated, thus there were
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few sunk costs associated with it and the Project could have proceeded without the Baghramyan-Norakert Scheme with minimal losses. This decision around the AF ultimately proved consequential for the Project’s implementation.34
IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME
A. QUALITY OF MONITORING AND EVALUATION (M&E)
M&E Design
85. It was made evident during the Project’s restructuring that several of the initial results indicators were unclear in their initial design, which warranted minor adjustments to definitions, measurement approaches, and targets during implementation. The indicators had shortcomings in their ability to accurately capture progress toward achieving the PDO (even after restructuring), in that they were defined in a way that left them open to interpretation. This was clearly the case for the technical audits and investigations indicators, and also the indicator on water savings. Moreover, the relationship between indicators was not carefully considered when designing the M&E system (e.g., the water savings from the canals negating the energy savings from the canals). As such, the Bank teams and the WSPIU perceived the Project to be on a better track than it likely was during implementation, thus missing the opportunity to proactively course correct.
86. At the time of preparation, Bank teams were not required to carefully consider and articulate a Project’s ToC; thus, the ToC presented in earlier sections is inferred after examination of project documents and discussions with key stakeholders in preparation for this ICR. Nevertheless, a more clearly articulated logic model that was consistent with the results framework would have helped to better guide the Project through difficult decisions that developed later in implementation, such as whether to move forward with the AF.
87. With respect to the Borrower, the WSPIU was responsible for the preparation and implementation of the M&E program, which was integrated into already existing systems and databases. The WSPIU also hired safeguard specialists during the early stages of the Project to help to oversee monitoring of the safeguard requirements’ implementation.
M&E Implementation
88. The WSPIU collected information through their M&E tracking system and the Bank utilized this system during implementation to report on progress. The WSPIU prepared regular progress reports and submitted them to the
34 As detailed in the Lessons and Recommendations section of this ICR, the decision to move forward with the AF was largely driven by an interest in piloting a modernized approach, as well as by the economic analysis and the longer-term benefits of increased irrigation access. It is the conclusion of this ICR that not only was this economic analysis somewhat flawed in its assumptions for this Baghramyan-Norakert Scheme (i.e., pump removal, tertiary network in existence, and lands to be brought back into production), the Scheme contributed only minimally to achieving the Project’s PDO. Thus, in hindsight, it may have been more prudent to not have pursued the AF and rather have used the savings from the Scheme to support WUA capacity building (which was expressed as an alternative use for the savings at the time), while focusing attention on the completion of the remaining schemes.
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World Bank for review. The Unit monitored progress towards the indicators and also took the liberty to adjust the Project’s targets in the WSPIU tracking system during project implementation as new information became available. While proactive, these changes in targets went beyond the changes made formally in the Project’s 2017 restructuring process, which resulted in inconsistent reporting between the WSPIU’s M&E system and the Project’s official results framework.
M&E Utilization
89. The overall results framework was still adequate to facilitate basic use of an M&E system for tracking progress and making necessary course corrections. The WSPIU was required to produce biannual progress reports, which should have included analysis related to the M&E system. These reports were regularly produced (albeit not as frequently as required), but they were primarily structured along procurement milestones for each of the Project’s components. Each report contained a section at the end that reported on a subset of the results framework indicators, but the information provided did not include significant detail or analysis to indicate that it was utilized to guide decision making.
90. The Bank’s use of the M&E system revealed reporting inconsistencies and confusion regarding indicator definitions, targets, and processes to make changes to the results framework. For instance, the Bank frequently reported that the Project’s indicators and/or targets had been adjusted or updated, without a formal restructuring. This meant that the Bank teams were utilizing the targets and indicators that had been changed in the WSPIU’s system to inform decisions, but were not accurately reflecting this in internal reporting, in that the Project’s formal results framework remained unchanged. Even after the 2017 restructuring that included several changes to the results framework, indicators that had been previously flagged by the Bank as necessary to adjust (or that had been adjusted in the WSPIU M&E system) were never actually changed during the restructuring process; leaving inconsistent and confusing definitions or targets. An example of this was keeping PDO Indicators 3 and 4 as two independent indicators, despite the pre-restructuring stated intentions to merge them due to the combination of the technical investigations into one contract. Another example is the client’s reporting of pump stations to be decommissioned continued to be inconsistent with the Bank’s results framework after the restructuring. Ultimately, these inconsistencies, combined with the M&E design shortcomings, made it difficult to effectively utilize the M&E system to track the implementation progress for the Project and inform critical decisions. As noted previously, key decisions were guided more by the economic analysis than the results framework.
Justification of Overall Rating of Quality of M&E
91. The overall rating for the Project’s M&E quality is ‘Modest’, due mainly to design, implementation, and utilization issues that hindered a more productive use of the M&E system to guide decision making.
B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE
92. Environmental safeguards. ISEP was classified as environmental category B and triggered OP/BP 4.01 Environmental Assessment, OP 4.09 Pest Management, OP/BP 4.12 Involuntary Resettlement, OP/BP 4.37 Safety of Dams, and OP/BP 7.50 Project on International Waterways. Provision of the AF to ISEP did not cause a change in categorization and did not require triggering of any additional safeguard policies. OP/BP 4.01 was triggered because the project was designed to support civil works for reconstruction/construction of canals and other
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hydraulic structures of irrigation schemes, and was expected to have medium to minor environmental and social impacts. OP 4.09 was triggered because improved delivery of irrigation services resulting from the project implementation was likely to intensity farming of irrigation land plots leading to possible increase in pesticide use. OP/BP 4.12 was triggered because the likelihood of temporary or permanent land take for project implementation purposes could not have been excluded at the project preparation stage, and a need for some restrictions in the land use had been expected. OP/BP 4.37 was triggered because conversion of Geghardalich pumping scheme to gravity required increasing the height of the existing dam of Geghardalich reservoir from 13.9 m to 15.5 m, bringing it into the category of “large dams”, subject to OP/BP 4.37. OP/BP 7.50 was triggered because the Meghri scheme abstracts water from Meghri and Araks rivers, the latter being an international waterway shared by Armenia, Turkey, Iran, and Azerbaijan. However, project-supported activities would not have any impact on the quality and quantity of water in a trans-boundary river Araks; thus, communication to the riparian countries was deemed unnecessary and a waiver on notification was granted by ECAVP.
93. Because ISEP was designed to make several individual investments in irrigation infrastructure across the country, and because design documentation for these investments would be developed at different times of the project cycle, the Borrower developed an Environmental Management Framework (EMF) and a Resettlement Policy Framework to guide site-specific environmental and social work for all sub-projects. Depending on the environmental and social screening and risk rating of these sub-projects, an Environmental and Social Impact Assessment (ESIA) was carried out for works on some irrigation schemes and Environmental Management Plans (EMPs) developed thereafter, or self-standing ESMPs were prepared for others. The Borrower struggled with producing quality ESIA reports and EMPs in the early stage of the Project life. Commencement of works on several irrigation schemes were delayed mostly because of this reason. Still, the Project closed with having ultimately met all the triggered policies.
94. Significant issues were encountered during public consultations on the draft ESIA report for Kaghtsrashen Scheme. Mainly, the Scheme faced opposition due to perceived environmental damage to the river ecosystem and loss of aesthetic value of the river gorge in immediate proximity to highly important natural and cultural monuments. With the Bank’s support, the Borrower developed an effective communication strategy and improved the consultation process which resulted in a compromise solution: the water intake point was moved downstream to the satisfaction of affected communities at the expense of the scheme (i.e., it became a combination of gravity and pumping instead of complete conversion to gravity).
95. Competition for water use emerged among project-affected communities over the reconstruction design of Geghardalich irrigation scheme too, necessitating a similar revision of the design. Social tensions related to water sharing as well as economic, political, and environmental issues culminated in an Inspection Panel (IP) request submitted to the World Bank in 2016 regarding the Kaghstrashen and Geghardalich schemes. Revisions made to the scheme designs allowed to address community concerns, and the IP case was closed in 2017.35
96. Environmental monitoring of works, recordkeeping, and reporting on environmental performance remained a relative weakness of the Project implementing entity throughout the Project implementation. The same is true for the discipline of local works providers in maintaining work-site safety. Once reconstruction of several irrigation schemes neared completion, the Bank agreed with the Borrower regarding actions and steps for preparing and
35 For more information on these two conflicts, see earlier text box on “IP Cases in Geghardalich and Kaghtsrashen Gravity Schemes: Key Information.”
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undertaking awareness-raising campaigns for the beneficiaries of these schemes aimed at promoting the safe and sound use of pesticides and educating farmers on the principles of Integrated Pest Management.
97. Social safeguards. Social safeguard performance of the Project was rated Moderately Satisfactory for the majority of its implementation and remained as such at project closing. At preparation, the Project triggered OP 4.12 policy on Involuntary Resettlement. As the exact locations and footprint of the Project investments was not known by Appraisal the PIU prepared a disclosed a Resettlement Policy Framework (RPF) in January 2013. The RPF served as a guiding document in the event that any impacts on private land, assets, or livelihoods occurred during implementation. Other social impacts and mitigation measures were guided by the Environmental and Social Impact Assessments prepared for each gravity scheme, and the Environmental and Social Management Plan prepared for the AF secondary and tertiary network rehabilitation works. The PIU recruited and retained a full- time Social Safeguards specialist who received training in resettlement and social risk management in the course of the Project.
98. The Project did not cause any resettlement impacts and no Resettlement Action Plans were prepared. However, during supervision mission in March 2015 the Bank team discovered un-recorded cases of use of private lands for laying of water pipes on the Meghri scheme, as a result of design realignments. Given that the affected persons were also beneficiaries of the Project and the impacts did not entail permanent land acquisition, rather restrictions on land use and right of access for future maintenance, voluntary use agreements were signed between the land owners and the PIU. This also warranted a downgrade of social safeguard performance to Moderately Satisfactory.
99. Financial Management (FM). FM arrangements under the Project, including planning and budgeting, accounting, financial reporting, external audit, funds flow, internal controls, organization and staffing, were overall adequate and satisfactory to the Bank throughout the Project implementation period. The FM staff working on the Project has an extensive experience in the Bank-financed projects and FM policies and procedures. The Project ISR FM rating was satisfactory, and the Project FM risk was moderate throughout the Project implementation period.
100. Interim un-audited Financial Reports (IFRs) and External Audits. The Project semi-annual interim un-audited financial reports (IFR) were always received on time and found to be acceptable to the Bank. The auditors issued unmodified (clean) opinions on the Project’s annual financial statements, which were received by the due date. The Borrower complied with the public disclosure requirement for the audited financial statements.
101. Procurement. The Project was implemented using the Bank’s STEP system. The public procurement platform for e-procurement (ARMEPS) was used for all procurement of works/goods since 2017. The GoA’s procurement staff actively attended procurement relating training and workshops organized by the Bank, both locally and regionally. The procurement and contract administration risks of the Project were assessed as low or moderate and the Project ISR procurement rating was satisfactory throughout project implementation. The following two issues affected Project procurement during implementation.
102. First, as regularly reported by the Bank’s Procurement Specialist, there was insufficient proactivity of the WSPIU to identify possible issues and delays during the contract implementation period. This was caused by strict distribution of works among the various departments, each of which worked separately (FM, legal, technical, and procurement). Since the end of 2018, the Bank has worked with the WSPIU to remedy this by initiating a contract monitoring activity that entails the procurement staff of the implementing agencies to provide details on contract
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implementation processes and to update the Bank on physical and financial progress of high value contracts on monthly basis. Second, the reorganization and managerial restructuring observed within the WSPIU over the past two years negatively affected the decision-making process leading to some delays in procurement activities (i.e., initiation, evaluation and award, and implementation).
103. At the time of drafting this ICR, all procurement activities planned under the main Project and AF have been implemented. Several additional contracts were initiated due to accrued savings by the end of Project implementation. Any recorded delays or partially implemented contracts were justified on environmental and technical grounds.
C. BANK PERFORMANCE
Quality at Entry
104. Overall quality at entry was mixed. The Project was well aligned with the strategic engagement priorities between the Bank and the GoA. Its design built from a history of successful and productive engagement with the GoA in the irrigation sector, including to: target critical infrastructure needs identified by earlier GoA engagements with the Bank and other development partners; continue building upon the important institutional reform progress from previous projects; and utilize a well-experienced WSPIU. These factors contributed to an efficient and justifiable design in terms of scope and implementation arrangements. However, the Project’s M&E system was lacking in design, and the extent to which the Bank verified key assumptions on the ground (i.e., technical design and community support) for the selected sites had negative repercussions into its implementation period. These quality at entry shortcomings resulted in constraining the Bank’s ability to anticipate and respond to challenges (and opportunities) as they occurred during implementation, such as changes in GoA perspective regarding the irrigation sector reform process.
Quality of Supervision
105. On balance, Bank supervision was generally positive, with some exceptions. Bank teams diligently conducted supervision and implementation support missions on a bi-annual basis throughout the Project’s duration and added additional technical missions in the interim periods to address needs as they arose. This was particularly evident toward the end of the implementation period when the GoA and WSPIU needed the most encouragement to operationalize a plan and design adjustments to bring the Project to successful completion in the year following project closure. The Bank regularly articulated concerns regarding safeguards and community support, technical design, and institutional and governance challenges to the WSPIU and broader GoA. Appreciation for the Bank’s support on these issues was reflected in the Borrower’s ICR, as well as the interviews conducted in preparation for this ICR. The Bank also proved savvy at redirecting Project savings to other needs and adjusting to shifting GoA demands and was flexible in presenting or approving creative solutions to emerging issues.36 An example of this
36 During the final year of implementation, the Bank team flagged a previously overlooked concern pertaining to the lack of flexibility in the irrigation infrastructure system to control water distribution in the newly rehabilitated schemes. That is, they had been designed to be controlled only from the top of the Schemes; at the water source intakes. The Bank has urged the WSPIU to consider how to control the flow in a more supply-oriented manner further down the system. Ideas presented by the Bank include to add valves just before key bifurcation points, as well as sensors so that when a given pump stops, it shuts off the valve downstream to avoid water loss and air from entering the system (or vice versa, when pressure builds at the
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was the internal grant secured to evaluate the financial performance of the WUAs. Similarly, the Bank strategically leveraged other donors’ engagements to fill gaps or address challenges that the ISEP was limited in addressing on its own. This included the encouragement of WUA capacity building in the EDB’s project, the ISMP, and ultimately plans to complete the Gegardalich Scheme through ISMP funds once the ISEP closed.
106. Bank supervision did, however, demonstrate some noteworthy deficiencies. Mainly, the Bank’s M&E implementation and utilization were sub-par. Bank teams were also not as diligent in following up with the GoA on the completion and utilization of the technical investigations of the irrigation institutions, which affected the ability to track and report definitively on theses aspects of the Project. Finally, a transition between task team leaders occurred at a pivotal time during implementation, which resulted in a delay in effectively signaling to management (by downgrading the respective ISR ratings) that the Project was tracking off course in terms of delivering on its outcomes. Some of this can be attributed to the M&E design shortcomings during preparation, but nevertheless, the result was two short extensions at the end of the Project that led to minimal improvements to the Project’s outcomes.
Justification of Overall Rating of Bank Performance
107. Based on the shortcomings of quality at entry and the quality of supervision, the overall rating for Bank Performance is ‘Moderately Unsatisfactory’.
D. RISK TO DEVELOPMENT OUTCOME
108. Whether or not the infrastructure related outcomes can be fully achieved in the year(s) after the ISEP closing poses the main risk to the development outcome. Given the limited success in the final year of the Project to effectively address the technical and community challenges that have hamstrung the functionality and completion of the Kaghtsrashen and Gegardalich Schemes, the achievement of the outcomes is uncertain. Addressing fundamental governance issues pertaining to water rights will be key, as evidenced by the allocation challenges between water users in the Meghri Scheme (and the need to keep pumps that were meant to be decommissioned). The lack of clarity with whether the Baghramyan-Norakert Scheme will deliver the anticipated benefits to its farmers exacerbates the risk to the development outcome. In the end, maintaining any of the infrastructure outcomes achieved through the Project depends on the capacity of the WUAs and users to operate and maintain the irrigation systems, which will take sustained institutional strengthening, as well as continued technical and financial support.
109. There are risks, however, related to the institutional and capacity building aspects of the Project. Since 2014 there have been multiple changes in leadership within the WC, resulting in a transfer of certain executive and support functions from the WSPIU to another unit in the WC. These changes also coincided with the beginning of a WUA system restructuring, shifting the number of WUAs from 44 to the current level of 15, as well as the WC appointing new Directors to each of these newly demarcated WUAs. These changes were reportedly made by the GoA through the WC to root out corruption in the WUA system and ultimately shift to a more private-
dispersion/bifurcation point, it would shut off the pump). This system control is important for a more stable system, and overall usefulness and sustainability of the investments; however, it was not originally envisaged this way in the Project design.
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sector oriented management system. That the Directors were no longer elected by the WUAs resulted in some erosion of trust between the users and their new WUA management, and also significant challenges for WUA management with span of control. The decreasing level of technical assistance and support to the WUAs (through moving the SG from the WSPIU to another unit in WC and providing the SG with fewer resources/staff to support them), coincided with these institutional changes. This left the SG unable to provide the same level of technical and accountability support for the WUAs as it had in previous years – even though the demand for their support remained high or even increased due to the WUA restructuring. Furthermore, most of the training, capacity building, and strengthening of the WUAs and the WSPIU occurred in the first two years of implementation, so knowledge and skill-building gains are at risk of being eroded if not resumed in the near term. Thus, earlier gains in WUA and WSPIU strengthening brought about through the Project are at significant risk at the time of completion.
110. Combined, these infrastructure and institutional uncertainties bring a substantial risk to the overall development outcome.
V. LESSONS AND RECOMMENDATIONS
111. Although the irrigation sector as a whole has progressed in the past two decades, in part due to the Bank’s broader engagement with the GoA, the overall engagement framework should fully transition away from an input-based approach focused on infrastructure to one based on service delivery and results. The challenges that the ISEP both faced and attempted to address are symptomatic of the broader water sector situation in Armenia (and across most parts of the world). That is, the sector faces obsolete assets and under-funded O&M, poor overall service delivery, and the lack of a strong governance framework to manage and allocate water strategically. The somewhat narrow focus of the ISEP on capital improvements for specific schemes and canals was an extension of the lessons learned from previous projects in the Armenian irrigation sector. Despite the limited achievement of the ISEP’s outcomes, particularly related to energy savings, the Project created the space for continued dialogue and support to broader irrigation sector improvements in the country (even if not captured in the results framework). This continued dialogue and support facilitated by the ISEP engagement has led to a shared understanding that water is essential to accomplish a number of the GoA’s strategic development goals, such as increasing agriculture productivity, increasing tourism, and even developing renewable energy. Thus, an approach that emphasizes service delivery, over the traditional infrastructure-centric solutions is required to address these challenges and deliver on these goals. Such an approach means a more integrated model that interfaces between water security (water supply & sanitation and water resources management), irrigation services, and agricultural business planning, support, and development (including a plan that clearly articulates where the demand for irrigation services is and is not). Such engagement, which would also need to prioritize climate change, could help countries like Armenia to better manage and allocate water resources (and in so doing hedge against potential conflicts), deliver reliable services, and build resilience to climate and water related risks. Testing this next generation engagement model that considers these broader tradeoffs, as well as different institutional and stakeholder engagement approaches, might include specific areas where conflicts could arise given already challenged conditions (e.g., the Lake Sevan system and/or the Ararat Valley). Engagement around this type model has already begun in Armenia, which bodes well for the ultimate impact of
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future projects in the water and irrigation sectors.
112. Securing buy-in of stakeholders and communities should occur prior to final site selection. The tremendous amount of time and resources devoted to managing the community conflicts that occurred in two of the ISEP schemes offer an important lesson for future infrastructure projects in Armenia (and beyond). Engagement, communication, and feedback mechanisms should be proactively deployed in the communities where the investments could impact stakeholder interests (directly or indirectly) from the very beginning; even prior to site selection. While a particular location might appear viable or desirable from the national government’s perspective or through the lens of the economic analysis, it still requires gaining the support from the community and/or building their confidence that concerns can be addressed in a way that will still make it a beneficial investment.
113. Although the future direction of the irrigation sector reform agenda is uncertain, a strong technical support group and the continued commitment of the central government are critical factors for success. The Armenian irrigation sector reform process initiated in 2002 has proven challenging to fully realize. Institutional change is a long and complex process, but WUA system is clearly at the heart of this reform agenda. They serve to bridge the irrigation service delivery gap between the bulk water provider (i.e., GoA through WSA and the WC), and the users (i.e., the farmers), while giving a voice to the farmers in decision making processes. Despite successes contributing to the institutional reform agenda in the early stages of the Project, the post-2014 changes in GoA leadership and WUA governance structures, and the decrease amount and quality of technical support provided to the WUAs and farmers through the SG, has left the future of the reform process in a state of limbo and significant mistrust between stakeholders. While no single path forward can be recommended, there are well analyzed and documented principles and actions that the GoA could take to bring the irrigation sector reform process back on track.37 Central to this would be to begin restoring the ‘social compacts’ between WUAs and their users, and between the WUAs and the GoA; and a well capacitated SG is unequivocal in these pursuits. Moreover, future irrigation development projects in Armenia should incorporate institutional strengthening activities. For countries where sector-wide institutional reform is still in a relatively early stage of development, such as the irrigation sector in Armenia, including the institutional reform aspects of a project will help to buttress any early progress against a litany of potential forces, such as political upheaval, changes in leadership, and mismanagement. Importantly, when changes in leadership do occur, it will be critical for the Government to analyze the challenges as objectively as possible and err on the side of incremental changes over drastic decisions that could disrupt earlier gains. It was positive to learn in the ICR preparation process that the GoA again recognizes the importance of the WUAs and the need to continue the process of empowering and strengthening
37 These include priorities identified in the Irrigation Action Plan that was agreed to as a results indicator for the Armenia First Development Policy Operation (DPO) project (Report No. 79854-AM – dated August 2013). The Irrigation Action Plan was considered under DPO3, which was approved on December 9, 2015. As noted in the ICR for the DPO series (Report No: ICR00004057 – dated March 27, 2019), the Irrigation Action Plan was adopted by the GoA as a Protocol Decree. This meant it was not binding, and thus many of its activities were not implemented. The most recent accounting of the status of Irrigation Action Plan can be found in Annex 3 of the July 2017 ISEP AM. In addition to the Irrigation Action Plan, other policies, principles, and recommendations for future irrigation sector reform can be found in the “National Irrigation Policy” developed with the support of MCC, as well as recommendations put forward in the MCC final report for its institutional strengthening activities. See, Millennium Challenge Corporation: National Irrigation Policy – Armenia, October 2009. Millennium Challenge Account, Armenia; and Millennium Challenge Corporation Final Report: Institutional Strengthening of Irrigation Management Entities Sub-Activity – September 2008-August 2011, August 2011. Millennium Challenge Account, Armenia. Finally, the World Bank’s working paper, “Governance in Irrigation and Drainage: Concepts, Cases, and Action-Oriented Approaches—A Practitioner’s Resource”, offers useful insights that could be applied to the Armenian irrigation sector reform process.
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them through further reforms.
114. Engineering design processes should be commensurate with capacity, more inclusive, and provide opportunities for learning. An important limitation of the ISEP was that it encountered engineering problems and delays that could have been avoided if the country’s ambitiousness to innovate was tempered with the reality of the situation on-the-ground with respect to technical capacity. An example of this was the decision to introduce GRP piping when cost overruns became a concern. The extent to which this novel material was appropriate given the associated capacity to implement its inclusion in the design was not adequately considered. Furthermore, future projects would benefit from bringing together the designers and construction contractors, along with the environmental and social specialists, in a more participatory manner from the beginning of project to discuss the infrastructure design and implementation in a workshop format. Such a participatory approach to technical aspects would help with sharing opinions and experience from the various specialists, and to move the discussion beyond routine implementation of the operations manual and towards a more comprehensive understanding of the challenges and potential solutions that the works might encounter. It could also provide an important opportunity for training the specialists, including the WUA staff that will ultimately be operating and maintaining the infrastructure. In meetings conducted in preparation for this ICR it was encouraging to learn that the WSPIU is already incorporating this participatory workshop approach into recent projects, such as the ISMP.
.
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ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS
A. RESULTS INDICATORS
A.1 PDO Indicators
Objective/Outcome: Reduce the amount of energy used and improve the irrigation conveyance efficiency Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Amount of energy saved Gigawatt-hour 0.00 38.00 36.80 3.70 annually in operating the (GWh) irrigation system 30-Nov-2012 30-Jun-2017 31-Dec-2019 31-Dec-2019
Comments (achievements against targets): 10 percent achieved. It is important to note here the discrepancy between the Borrower's ICR (and Bank reporting on this indicator during implementation) and this ICR's analysis regarding the energy savings from the canal rehabilitation. Mainly, although the canal rehabilitation resulted in an increase in conveyance efficiency (closing a supply gap), this ICR does not attribute energy savings to the canals because actual pumping and energy use was not reduced. It is helpful to illustrate, nevertheless, the percent achieved if the canal savings were to have been excluded from the denominator. In this case, the 3.7 GWh saved from Meghri would have represented 16 percent achieved. Again though, this is only highlighted here for illustrative purposes.
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Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Water losses reduced in Cubic 0.00 0.71 23.58 21.44 rehabilitated canals Meter(m3)
30-Nov-2012 30-Jun-2017 31-Dec-2019 31-Dec-2019
Comments (achievements against targets): 91 percent achieved. Original indicator was "lost liters per second per 100 meters in the targeted irrigation schemes", with target units of liters/s/per 100 meters. The indicator was simplified during mid-term review and restructuring with target units changed to million cubic meters. Also, there is a difference between the Borrower’s ICR (as well as the Bank’s final ISR) and the figure reported in this ICR. While the Borrower’s ICR and Bank’s ISR report 24 million m3 as reduced losses, the reduced water losses estimated in this ICR represent the difference between the amount of water to be pumped before and after rehabilitation for irrigating the command area without changing the crops patterns or intensity. Thus, this 21.44 m3 figure is derived from these 2018 data provided by the Borrower.
Objective/Outcome: Improve the availability and reliability of important sector data and information for decision-maker Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Data about O&M and EM Text Not available Most Data used for Entered into database used by SCWE, WSAs and recommendations budgetary and to be used for WUAs for decision making adopted investment planning budgetary and purposes investment planning purposes
30-Nov-2012 30-Jun-2017 31-Dec-2019 31-Dec-2019
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Comments (achievements against targets): The target description was changed during the Project's restructuring. Partially achieved - data entered into database for potential use for budgetary and investment planning purposes.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Technical audit of irrigation Text Not Available Most Data used for Entered into database agencies used by MOEINR recommendations budgetary and to be used for and SCWE for decision adopted investment planning budgetary and making purposes investment planning purposes
30-Nov-2012 30-Jun-2017 31-Dec-2019 31-Dec-2019
Comments (achievements against targets): The target description was changed during the Project's restructuring. Partially achieved - data entered into database for potential use for budgetary and investment planning purposes.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of WUAs having Percentage 0.00 100.00 100.00 93.00
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water intakes tracked by 30-Nov-2012 30-Jun-2017 31-Dec-2019 31-Dec-2019 SCWE in real time.
Comments (achievements against targets): 93 percent achieved. There is an inconsistency between the Borrower’s ICR and the Bank’s final ISR with respect to this indicator. The Borrower’s ICR reports 93 percent, because among the currently operating 15 WUAs, the SCADA system was not installed in one of the WUAs (Ararat WUA), as it receives water from local sources and not the WSA. This ICR assumes the Borrower’s interpretation of this indicator, because it is most clearly aligned with its original framing in the PAD, which does not distinguish between WUAs based on their source of water.
A.2 Intermediate Results Indicators
Component: Component 1. Irrigation System Enhancement
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of Pump Stations Number 0.00 4.00 1.00 shut down 30-Nov-2012 30-Jun-2017 31-Dec-2019
Comments (achievements against targets): 25 percent achieved.The target number in the Borrower’s ICR for this indicator was 22, whereas the Bank’s was 4 throughout implementation. The Bank’s characterization was indicative of the number of schemes to contain pump stations to be shut down, rather than the aggregate number of pump stations to be shut down across those four schemes. The Bank’s mischaracterization of this indicator was never corrected. Nevertheless, this ICR uses the Bank’s reporting on this indicator, because of the number of pump stations to be shut down shifted over the implementation of the Project with the redesign of several schemes due to community conflicts and challenges faced with allocations (and needing to keep some of the pumps in operation/stand-by mode); rendering it not possible to pinpoint how many pump stations were actually “shut down” throughout the Project. Thus, the broader interpretation of this
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indicator reflects the number of schemes that are fully operational and have shut down pump stations within their system, as attributed to the Project. At the time of completion of the Project, only the Meghri gravity scheme was fully operational and thus this indicator is reported as 1.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Length of outlet canals Kilometers 0.00 52.00 57.26 receiving water from pumping stations that have 30-Nov-2012 30-Jun-2017 31-Dec-2018 been rehabilitated
Comments (achievements against targets): 110 percent achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion
Area provided with irrigation Hectare(Ha) 0.00 12932.00 9537.00 and drainage services (ha) 30-Nov-2012 30-Jun-2017 31-Dec-2019
Area provided with Hectare(Ha) 0.00 12932.00 9537.00 irrigation and drainage services - Improved (ha) 30-Nov-2012 30-Jun-2017 31-Dec-2019
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Comments (achievements against targets): 74 percent achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Water users provided with Number 0.00 12336.00 8286.00 improved irrigation and drainage services (number) 30-Nov-2012 30-Jun-2017 31-Dec-2019
Water users provided with Number 0.00 493.00 331.00 improved irrigation and drainage services - female 30-Nov-2012 30-Jun-2017 31-Dec-2019 (number)
Comments (achievements against targets): 67 percent achieved.
Component: Component 2. Management Information
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Observation points equipped Number 0.00 71.00 80.00
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with Installation of 30-Nov-2012 30-Jun-2017 31-Dec-2019 limnographs and water measurement devices for the SCADA system
Comments (achievements against targets): 113 percent achieved.
Component: Component 3. Project Management and WUAs? Support
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Operational water user Number 0.00 15.00 15.00 associations strengthened (number) 30-Nov-2012 30-Jun-2017 31-Dec-2019
Comments (achievements against targets): 100 percent achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion WUAs staff trained Number 0.00 220.00 228.00
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30-Nov-2012 30-Jun-2017 31-Dec-2019
WUAs' women staff trained Number 0.00 80.00 46.00
30-Nov-2012 30-Jun-2017 31-Dec-2019
Comments (achievements against targets): 104 percent achieved [58 percent achieved for women WUA staff trained sub-target]. The Project exceeded its overall target in terms of WUA staff training; however, the exact number of WUA staff trained is difficult to confirm, as it is reported differently across the Borrower’s ICR, Borrower’s Progress Reports, and Bank’s ISRs. The final number in the results framework for both the Bank’s and Borrower’s ICR is 341. The text of the Borrower’s ICR only details 228 trained staff across four types of trainings: O&M techniques; Preparing reports according to IFRS; Dispute settlement; and Audits. Thus, this ICR assumes the more conservative number of 228, which still exceeds the target.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Presence of women in WUAs' Percentage 4.00 10.00 41.00 executive bodies (excluding water masters) 30-Nov-2012 30-Jun-2017 31-Dec-2019
Comments (achievements against targets): 410 percent achieved.
Indicator Name Unit of Measure Baseline Original Target Formally Revised Actual Achieved at
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Target Completion Number of site specific Number 0.00 4.00 4.00 ESMPs prepared 30-Nov-2012 30-Jun-2017 31-Dec-2019
Comments (achievements against targets): 100 percent achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion % of grievances responded Percentage 0.00 100.00 83.30 within 5 business days 14-Sep-2017 20-Jun-2019 31-Dec-2019
Comments (achievements against targets): 83 percent achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion % beneficiaries who report Percentage 0.00 70.00 13.00 that their needs have been reflected in project design 14-Sep-2017 20-Jun-2019 31-Dec-2019
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(disaggregated by gender)
Comments (achievements against targets): 19 percent achieved.
A. KEY OUTPUTS BY COMPONENT
Objective/Outcome 1: Reduce the amount of energy used and to improve irrigation conveyance efficiency in targeted irrigation schemes 1. Amount of energy saved annually in operating the irrigation system (GWh). Outcome Indicators 2. Water losses reduced in rehabilitated canals (Cubic Meter(m3)). 1. Number of pump stations shut down (#) 2. Length of outlet canals receiving water from pumping stations that have been Intermediate Results Indicators rehabilitated (Km) 3. Area provided with improved irrigation and drainage service (Ha). 4. Water users provided with improved services (#) [female] 1. 21.44 Cubic Meter(m3) water losses reduced in rehabilitated canals Key Outputs by Component 2. One (1) pumping station shut down. (linked to the achievement of the 3. 57.26 km length of outlet canals receiving water from rehabilitated pumping stations. Objective/Outcome 1) 4. 9537.00 hectares provided with provided with improved irrigation and drainage service. 5. 8286 water users provided with improved services of which 331 female
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Objective/Outcome 2: Improve the availability and reliability of important sector data and information for decision-makers and other stakeholders. 1. Data about O&M and EM used by SCWM, WSA and WUAs for decision making (text). 2. Technical audit of irrigation agencies used by MOEINR and SCWM for decision making Outcome Indicators (text). 3. Percentage of WUAs having water intakes tracked by SCWM in real time (percentage). 1. Number of observation points equipped with installation of limnographs and water measurement devices for the SCADA system (#). 2. Number of operational WUAs strengthened (#). Intermediate Results Indicators 3. Number of WUAs staff trained (#) [female]. 4. Percentage of women in WUAs executive bodies (excluding water masters) (%) 5. Number of site specific ESMPs prepared. 1. Data has been entered into database to be used for budgetary and investment planning purposes. 2. 93 percent of WUAs have water intakes tracked by SCWM. Key Outputs by Component 3. 80 observation points have been equipped with installation of limnographs and water (linked to the achievement of the measurement devices for the SCADA system. Objective/Outcome 2) 4. 15 operational Water Users Associations (WUAs) strengthened. 5. 228 WUAs staff were trained and from 80 female staff, 46 were trained. 6. 41 percent of women in WUAs are on executive bodies. 7. 4 site specific ESMPs have been prepared.
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ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION
A. TASK TEAM MEMBERS
Name Role Preparation Giuseppe Fantozzi Task Team Leader(s)
Arusyak Alaverdyan Irrigation Specialist
Mariana Montiel Country Lawyer
Ghada Youness Lawyer
Darejan Kapanadze Environmental Specialist
Kosuke Anan Social Specialist
Vigen Sargsyan Communications Specialist
Alexander Astvatsatryan Procurement Specialist
Arman Vatyan Financial Management Specialist
Garik Sergeyan Consultant, Financial Management Specialist
Silvia Mauri Consultant
Satik S. Nairian Team Assistant
Larysa Hrebianchuk Program Assistant
Joeseph P. Formoso Finance Officer
Giovanni Munoz Consultant, Irrigation Engineer
Aidan Gulliver Consultant, Economist
Supervision/ICR Winston Yu, Arusyak Alaverdyan, Wilfried Task Team Leader(s) Hundertmark Armine Aydinyan Procurement Specialist
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Lusine Grigoryan Financial Management Specialist Anne N. Ranasinghe Procurement Team Sylvie Ngo-Bodog Program Assistant Mohammad Ilyas Butt Procurement Team Darejan Kapanadze Environmental Specialist Marina Sahakyan Team Assistant Sophia V. Georgieva Social Specialist Qays Hamad Operations Officer Hiromi Yamaguchi Consultant Irina Tevosyan Procurement Team Kazuhiro Yoshida Irrigation Specialist Gevorg Michikyan Consultant Nathan Engle Climate Change Specialist/ICR Main Author Steve Goss Consultant Svetlana Valieva Program Analyst Dessislava Kovatcheva ICR Economist
B. STAFF TIME AND COST
Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY12 3.000 6,651.27 FY13 26.381 113,761.25 FY14 0 8.34
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FY16 1.454 5,084.35
Total 30.84 125,505.21
Supervision/ICR FY14 26.111 115,912.15 FY15 25.857 221,475.17 FY16 25.942 164,500.13 FY17 18.779 199,116.56 FY18 40.571 224,940.64 FY19 37.372 185,033.79 FY20 36.615 194,242.60 Total 211.25 1,305,221.04
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ANNEX 3. PROJECT COST BY COMPONENT
Amount at Approval Actual at Project Percentage of Approval Components (US$M) Closing (US$M) (US$M) Component 1. Irrigation 33.1 33.3 100.6 System Enhancement Component 1. Irrigation System Enhancement 2.0 1.0 50.0 [Additional Finance] Component 2. 1.7 0.9 52.9 Management Information Component 3. Project Management and WUAs’ 2.7 2.9 107.4 Support Component 3. Project Management and WUAs’ 0.5 0.4 80.0 Support [Additional Finance] Total 40.0 38.5 96.2
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
ANNEX 4. EFFICIENCY ANALYSIS
1. The ex-post economic analysis is first performed for the Project based on the bottom-up approach (i.e., an economic analysis at water conversion scheme and aggregated outlet canal levels, considering the corresponding CCW of Component 1), and then aggregated at project level, where the investment costs of all Components are considered. Results of the ex-post project-level economic analysis, compared to the results of the project appraisal and project design phases, are summarized in the table below:
Baghramyan- IRR Geghardalitch Kaghtsrashen Megri Outlet canals Aggregated Norakert Ex-ante At PAD stage 56.5% 32.5% 28.2% 21.4% 27.6% 25.4% At design stage* 53.8 % 24.6% 22.1% 20.3% 18.4%-86.6% 25.4% Ex-post Conservative** 6.7% 10.8%-18.3% 11.8%-13.1% 20.6%-23.6% 9%-14% 13.9%-14.2% Optimistic*** 8.7% 19.9% 14.4% 24% 14.4% 16.7% * The ex-ante analysis data were updated during the design phase. ** Lessons learned from completed projects (Meghri and outlet canals) are transferred into the others, resulting in lower savings than preliminary expected. *** Whole additional area considered will be irrigated.
2. The methodology applied at project preparation was sufficiently clear and transparent to allow direct comparison with the ex-post aggregated results. Therefore, the ex-post analysis concentrated on up- dating and fine-tuning the assumptions and re-calculating the main economic results at project closure, where the ex-post economic indicators (i.e., the IRR) per water conversion scheme, aggregated outlet canals, and aggregated project results were compared with the corresponding values from the ex-ante CBA. The same discount rate (10 percent) was applied.
3. Unit costs and exchange rates were calculated in 2018 constant terms.
4. The economic analysis envisaged materialization of benefits once the corresponding scheme had been put into operation. However, considering that the project realization of three of all four water schemes were delayed, different scenarios (optimistic and conservative) were developed to determine the impact of the Projects’ changes on the overall project benefits as compared to the ex-ante and “at-design” stages. A 20-year project time horizon was applied.
Methodology for the ex-post economic analysis
5. The traditional economic evaluation method, based on the incremental benefit and cost flows between the situation “with” and “without” the Project was applied, to catch only the “pure project” impacts.
6. A bottom-up ex-post cost-benefit analysis on incremental basis was prepared to calculate the Economic Rate of Return (ERR) and Net Present Value (NPV) of the investments for each of the water conversion schemes, aggregated outlet canals. These were aggregated at a project level, based on the following
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
assumptions:
Investment costs:
7. Total $38.5 million for the actual ISEP and AF related investment costs for all three Project components are as follows:
ISEP and ISEP AF 1 ISEP: Project Activities Actual Cost (US$) Cost in Project Appraisal Document (US$)
Component 1 - Irrigation System Enhancement 33,325,778.23 33,100,000.00 1.1: Conversion of pump-based irrigation to gravity irrigation 26,564,737.88 24,700,000.00 1.2: Upgrading of outlet and other canals conveying pumped water 6,761,040.35 8,400,000.00
Component 2 - Management Information 876,441.55 1,700,000.00 2.1: Technical investigations 60,729.39 900,000.00 2.2: Supervisory control and data acquisition (SCADA) system installation 815,712.16 800,000.00
Component 3 - . Project Management and WUAs’ support 2,868,270.91 2,700,000.00 3.1: Project management 2,527,668.56 1,500,000.00 3.2: WUAs’ support 340,602.35 1,200,000.00 3.2.1: The WUAs’ support group 99,331.24 800,000.00 3.2.2: Capacity building of WUAs’ executive bodies 197,410.67 240,000.00 3.2.3: Awareness raising and communication activities 43,860.44 160,000.00
Total 37,070,490.69 37,500,000.00
Front-end Fee 75,000.00
Total Project Expenditure 37,145,490.69 37,500,000.00
2 ISEP AF: Project Activities
Component 1.1: Conversion of pump-based irrigation to gravity irrigation 954,659.36 2,000,000.00 Component 3.1: Project management 385,982.47 480,000.00 Component 3.2.1: The WUAs’ support group 31,273.99 20,000.00
Total 1,371,915.82 2,500,000.00
Front-end Fee 5,000
Total Project Expenditure 1,376,915.82 2,500,000.00
8. In addition, other project-related capital investments are considered based on the following assumptions:
Bagramyan-Norakert Scheme Total investment costs by the end AMD 507.2 million or USD 1.1 in 2018 constant prices (initial funding) + of the project AMD 461 million or USD 0.9 in 2018 constant prices (AF). Estimated additional investment 5-fold the investment made through the AF - to make the system (under the EU funds and AFD) operational O&M costs 2 percent of investment costs Electricity savings None - the pumping stations to be replaced have been out of operations Savings from pump stations O&M since late 1990s costs Improved/reliable irrigation 573 ha (as per Borrower’s ICR) services to, of which Newly added 528 ha - data on crops being grown on area of 528 ha currently not supplied with irrigation water is not available. Therefore, it is assumed nothing is being grown on 528 ha previously irrigated by the Baghramyan- Norakert pumping stations. Crops The representative crops selected within the impact area include apricot orchards, vineyards, and alfalfa.
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
Cropping patterns are assumed to remain the same after the Project’s implementation, but the water losses in the without-project scenario are much higher. Scenario 1 The first irrigation season starts in 2022, following successful completion of the EU-funded project in 2021. Additional investment costs and time are necessary to make the system operational. Under this scenario it is assumed that all command area will be irrigated under the assumptions provided above. Scenario 2 As per Scenario 1, but only part of the command area will be irrigated in line with the insufficient interest demonstrated by the local communities in Baghramyan and Norakert during the Endline survey and the lessons learned from Meghri. Geghardalitch Scheme Total investment costs by the end AMD 3.360 billion or USD 6.9 million in 2018 constant prices. of the project Estimated additional investment 20 percent of the investment made by ISEP – Scenario 1 25 percent of the investment made by ISEP – Scenario 2 O&M costs 2 percent of investment costs Electricity savings 10.05 million kWh/a, where a 30 percent decrease in electricity savings as a result of the need to keep some pumps in ‘’standby” mode to guarantee sufficient flow to the Goght community is reflected in the Conservative Scenario. Savings from pump stations O&M 53, 660 USD (as per the ex-ante Analysis), where a 30 percent decrease in costs electricity savings as a result of the need to keep some pumps in ‘’standby” mode to guarantee sufficient flow to the Goght community is reflected in the Conservative Scenario. Improved/reliable irrigation 1,260.52 ha (as per the Borrower’s ICR) services to, of which Newly added 575.52 ha - data on crops being grown on this area, currently not supplied with irrigation water, is not available. Therefore, it is assumed nothing is being grown on it before the Project. Crops The representative crops selected within the impact area include apricot orchards and vegetables (tomatoes). Cropping patterns are assumed to change slightly; 10 percent decrease in vegetables is compensated by increase in the orchards, as per the ex-ante CBA. Scenario 1 The first irrigation season starts in 2021 following successful completion of the project in 2020. Additional investment costs and time are necessary to make the system operational. Scenario 2 The first irrigation season starts in 2022 following successful completion of the project in 2021. Additional investment costs and time are necessary to make the system operational. Kaghtsrashen Scheme Total investment costs by the end AMD 3.99 billion or USD 8.1 million in 2018 constant prices (ISEP) and AM of the project 112.60 million or USD 0.2 million (AF). Estimated additional investment No additional funding – Scenario 1 3-fold of the investment made by AF – Scenario2 O&M costs 2 percent of investment costs Electricity savings 8 million kWh/a (as per Borrower’s ICR)
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
Savings from pump stations O&M 32,920 USD – estimated based on the information provided in the costs Borrower’s ICR and ex-ante CBA. Improved/reliable irrigation 1,232 ha (as per Borrower’s ICR) services to, of which Newly added 378 ha - data on crops being grown on this area, currently not supplied with irrigation water, is not available. Therefore, it is assumed nothing is being grown on it before the Project. Crops The representative crops selected within the impact area include apricot orchards, tomatoes, alfalfa, and vineyards. Cropping patterns are assumed to change slightly; newly irrigated area is to be shared between orchards (60 percent) and vineyards (40 percent) - based on the information provided in the Borrower’s ICR and ex-ante CBA. Scenario 1 The first irrigation season starts in 2020 following successful tests to be performed in April-May 2020. Scenario 2 The first irrigation season starts in 2021 as additional costs and time are necessary to make the system operational in case of insufficiently successful tests in April-May 2020. Meghri Scheme Total investment costs by the end AMD 3.500 billion or USD 7.1 million in 2018 constant prices. of the project Estimated additional investment No additional costs; the left branch has been operational since 2016, and the right branch – since 2018. O&M costs 2 percent of investment costs Electricity savings 2.5 million kWh/a incremental electricity saving, i.e. the with-project scenario vs. the without-project scenario, based on electricity consumed in 2019 (after the project realization) vs. 2015 (before the project completion) – data are from the Borrower’s ICR. Savings from pump stations O&M 107,125 USD (based on the information provided in the ex-ante CBA and costs Borrower’s ICR) Improved/reliable irrigation 686 ha (As per Borrower’s ICR) services to, of which Newly added None Crops The representative crops selected within the impact area include tomatoes, pomegranate, and vineyards. Cropping patterns are assumed not to change as a result of the Project. Scenario 1 Constant 2018 values Scenario 2 Existing decreasing trends continue Outlet Canals Total investment costs by the end AMD 3.05 billion or USD 6.7 million (ISEP) of the project Estimated additional investment No additional costs; completed and has been operational by 2016. O&M costs 2 percent of investment costs Electricity savings Estimated based on the reduced water losses in the with-project scenario vs. the without-project scenario, where 0.5047 specific electricity coefficient per m3 water delivered is applied. Increase in the electricity consumed is included into the agro-economic net benefits; hence it is excluded from electricity savings to avoid double counting. Saved electricity costs Estimated based on electricity savings and unit cost in 2018 constant terms Water savings, m3 Pro-rata of 21.44 million m3 applied to the total water supply in 2018 (as
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
per the data provided for 2018 in the Borrower’s ICR). Increase in the water consumed is included into the agro-economic net benefits; hence it is excluded from water savings to avoid double counting. Water Savings Estimated based on water savings and unit cost in 2018 constant terms Improved/reliable irrigation 6,182 ha (as per the information provided for 2018 in the Borrower’s ICR) services to, of which Newly added None, but the irrigated area under the with-out project scenario decreases by 5 percent annually following the pre-project trends, hence the incremental land increases Crops The representative crops selected within the impact area include orchards, vegetables (tomatoes), alfalfa, winter wheat, and vineyards. Cropping patterns are assumed not to change. Scenario 1 Constant 2018 values Scenario 2 Existing decreasing trends continue Component 2: Completed. Considered only in the aggregated model at project level Component 3: Completed. Considered only in the aggregated model at project level
9. The project time horizon was 20 years (as typical for this kind of project) and in line with the up-dated ex-ante CBA at design stage.
10. 10 percent discount rate was applied (as per PAD).
Costs:
11. The incremental operating and maintenance costs (directly resulting from the Project) were calculated at 2 percent of the investment costs, as per the designs.
Benefits:
12. Savings in electricity usage, resulting from:
• the actual conversion of pumped irrigation systems to gravity-fed irrigation systems (based on reported historical data of Meghri, where the electricity generated from the re-commissioned pumps is also reflected); • updated estimations for Kaghtsrashen, Geghardalitch and outlet canals; • no electricity/pumping related savings for Baghramyan-Norakert, because its pumps have been out of operation for over 20 years; and • estimated water savings from rehabilitation of outlet canals.
13. Estimated savings in water costs from rehabilitation of outlet canals is also included, where the economic cost of the water is estimated based on current delivery cost of AMD 11/m3.
14. Increased intensity of production and changes in cropping patterns is included (from low-value crops to higher-value crops such as orchards or vegetables), as a result of the improved reliability and duration of the water supply in the target schemes and canals. The plant maturity is estimated at three to four years for orchards to fruit, five years for vineyards, and one year for vegetables to produce proper yields. The agro-economic benefits of the entire Project come from the improved yield as a result of better irrigation.
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
The implementation of the gravity irrigation system would allow for the opportunity to increase the productivity of agricultural crops (due to improved irrigation services), and to decrease subsidies (due to the realized savings).
15. A number of conversion factors were considered for the economic analysis, many of which are summarized in the tabled below.
Goods and Services Unit Financial Price Economic Price Conversion factor Materials and services Irrigation water dram/ cubic 11.0 19.5 1.77 meter Energy dram/kWh 31.6 41.3 1.31 Pesticides: Ammonia solt/Wheat dram/kg 5,006.0 5,506.6 1.10 Zincor/Vegetables dram/kg 13,889.0 15,277.9 1.10 Baileton/Fruits dram/kg 8,863.0 9,749.3 1.10 Cuprosan/Grapes dram/kg 6,919.0 7,610.9 1.10 Karate/Potato dram/kg 9,793.0 10,772.3 1.10 Fertilizers Manure dram/ton 6,500.0 7,150.0 1.10 Nitrogen dram/kg 157.8 173.6 1.10 Transport services 3 tons/10 km 6,123.0 5,143.3 0.84 Combine services dram/ha 35,000.0 38,500.0 1.10 Tractor services: Wheat dram/ha 85,000.0 93,500.0 1.10 Vegetables/Tomato dram/ha 110,000.0 121,000.0 1.10 Vegetables/Cabbage dram/ha 105,000.0 115,500.0 1.10 Vegetables/Watermelon 105,000.0 115,500.0 1.10 Potato dram/ha 105,000.0 115,500.0 1.10 Fruits/Apple dram/ha 200,000.0 220,000.0 1.10 Fruits/Apricot dram/ha 20,000.0 22,000.0 1.10 Fruits/Peach dram/ha 150,000.0 165,000.0 1.10 Grapes dram/ha 80,000.0 88,000.0 1.10 Alfalfa dram/ha 180,000.0 198,000.0 1.10 Labor cost dram/man-day 5,000.0 3,500.0 0.70 Seeds and seedlings Wheat dram / kg 118.0 129.8 1.10 Tomato 1000 seedlings 5,600.0 8,848.0 1.58 Fruits/Apricot 1sapling 832.0 832.0 1.00 Grapes dram/kg 400.0 520.0 1.30 Alfalfa dram/kg 1,500.0 1,650.0 1.10 Products Wheat dram/kg 100.0 100.0 1.00 Tomato dram/kg 85.0 85.0 1.00 Apricots dram/kg 320.0 320.0 1.00 Grapes dram/kg 170.0 170.0 1.00 Alfalfa dram/kg 50.0 50.0 1.00 Exchange rate AMD/USD 490.70 569.2 1.16
16. The most important economic adjustments occurred in relation to the benefits from water and electricity savings, because:
• Armenia receives a significant share of its electrical power from Russia at prices which are much below the world prices (Russia has indicated its intention to renegotiate these rates). In addition, Armenia’s nuclear power station is due for decommissioning in the near term, suggesting a greater dependency
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
on Russian supplies in the future. These factors suggest that the electricity prices in Armenia have been significantly below their real cost. • Currently, irrigation water in Armenia has no clear financial cost. However, the beneficiaries pay 11 AMD/m3 water supplied, which was used as a basis for the calculation of the economic price of the water.
17. Bearing in mind that the project as a whole results in an opportunity to increase the productivity of agricultural crops (due to improved irrigation services) and bring about electricity savings, the subsidies are expected to decrease, due to the increased net benefits for the users.
18. Results from the ex-post CBA analysis at the Project level (and by water conversion scheme and aggregated outlet canals) are presented below: Economic Analysis at Project Level – Conservative Scenario
Additional Pump Long-term exploitatio Electricity Agro- stations NB if AE investment n costs cost econ O&M profit ↓ by costs, '000 with savings ↓ benefits ↓ Years savings ↓ 15% USD project, by 30% by 15% by 30% '000 USD 1 (38,522) - - - - (31,075) 2 (6,067) (445) 946 489 (953) (5,758) 3 - (715) 1,456 526 794 2,568 4 - (715) 1,456 526 1,178 2,953 5 - (715) 1,456 526 3,843 5,618 6 - (715) 1,456 526 6,307 8,081 7 - (715) 1,456 526 6,310 8,085 8 - (715) 1,456 526 6,314 8,088 9 - (715) 1,456 526 6,317 8,091 10 - (715) 1,456 526 6,320 8,094 11 - (715) 1,456 526 6,323 8,097 12 - (715) 1,456 526 6,325 8,100 13 - (715) 1,456 526 6,328 8,102 14 - (715) 1,456 526 6,330 8,105 15 - (715) 1,456 526 6,333 8,107 16 - (715) 1,456 526 6,335 8,109 17 - (715) 1,456 526 6,337 8,111 18 - (715) 1,456 526 6,339 8,113 19 - (715) 1,456 526 6,341 8,115 20 - (715) 1,456 526 6,343 8,117 IRR 14.2% NPV ¹=10% $ 12,665 Economic Analysis of Meghri Scheme – Conservative Scenario
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
Economic Analysis of Geghardalich Scheme – Conservative Scenario
Additional Pump Long-term exploitatio Electricity Agro- stations investment n costs cost econ NB if AE O&M costs, '000 with savings ↓ benefits ↓ profit ↓ Years savings ↓ USD project, by 30% by 15% by 30% '000 USD 1 (6,847) - - - - (6,847) 2 (1,369) - - - - (1,369) 3 (137) 511 38 (180) 466 4 (137) 511 38 27 673 5 (137) 511 38 213 860 6 (137) 511 38 2,017 2,663 7 (137) 511 38 2,017 2,663 8 (137) 511 38 2,017 2,663 9 (137) 511 38 2,017 2,663 10 (137) 511 38 2,017 2,663 11 (137) 511 38 2,017 2,663 12 (137) 511 38 2,017 2,663 13 (137) 511 38 2,017 2,663 14 (137) 511 38 2,017 2,663 15 (137) 511 38 2,017 2,663 16 (137) 511 38 2,017 2,663 17 (137) 511 38 2,017 2,663 18 (137) 511 38 2,017 2,663 19 (137) 511 38 2,017 2,663 20 (137) 511 38 2,017 2,663 IRR 18.3% NPV ¹=10% $ 6,566 Economic Analysis of Kaghtsrashen Scheme – Conservative Scenario
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
Additional Pump Long-term exploitatio Electricity Agro- stations investment n costs cost econ NB if AE O&M costs, '000 with savings ↓ benefits ↓ profit ↓ Years savings ↓ USD project, by 30% by 15% by 30% '000 USD 1 (8,361) - - - (8,361) 2 (167) 407 28 (795) (341) 3 (167) 407 28 (219) 234 4 (167) 407 28 (486) (33) 5 (167) 407 28 1,040 1,493 6 (167) 407 28 1,481 1,934 7 (167) 407 28 1,481 1,934 8 (167) 407 28 1,481 1,934 9 (167) 407 28 1,481 1,934 10 (167) 407 28 1,481 1,934 11 (167) 407 28 1,481 1,934 12 (167) 407 28 1,481 1,934 13 (167) 407 28 1,481 1,934 14 (167) 407 28 1,481 1,934 15 (167) 407 28 1,481 1,934 16 (167) 407 28 1,481 1,934 17 (167) 407 28 1,481 1,934 18 (167) 407 28 1,481 1,934 19 (167) 407 28 1,481 1,934 20 (167) 407 28 1,481 1,934 IRR 13.1% NPV ¹=10% $ 2,333 Economic Analysis of Baghramyan-Norakert Scheme – Conservative Scenario
Additional Pump Long-term exploitatio Electricity Agro- stations investment n costs cost econ NB if AE Years O&M costs, '000 with savings ↓ benefits ↓ profit savings ↓ USD project, by 30% by 15% by 30% '000 USD 1 (1,973) - - (1,973) 2 (4,697) - - (4,697) 3 (133) - - (479) (612) 4 (133) - - (111) (244) 5 (133) - - 838 705 6 (133) - - 1,053 919 7 (133) - - 1,053 919 8 (133) - - 1,053 919 9 (133) - - 1,053 919 10 (133) - - 1,053 919 11 (133) - - 1,053 919 12 (133) - - 1,053 919 13 (133) - - 1,053 919 14 (133) - - 1,053 919 15 (133) - - 1,053 919 16 (133) - - 1,053 919 17 (133) - - 1,053 919 18 (133) - - 1,053 919 19 (133) - - 1,053 919 20 (133) - - 1,053 919 IRR 6.7% NPV ¹=10% $ (1,524)
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
Economic Analysis of Aggregated Outlet Canals – Conservative Scenario
Long-term Additional exploitation Saved Agro-economic Net benefits Other savings, Years investment costs with project, electricity benefits, '000 (B-C), '0000 '000 USD costs, '000 USD '000 USD costs, '000 USD USD USD
1 (6,761) (6,761) 2 (135.22) 590.3 551.0 29.41 1,036 3 (135.22) 590.3 551.0 34.45 1,041 4 (135.22) 590.3 551.0 39.25 1,045 5 (135.22) 590.3 551.0 43.80 1,050 6 (135.22) 590.3 551.0 48.13 1,054 7 (135.22) 590.3 551.0 52.24 1,058 8 (135.22) 590.3 551.0 56.14 1,062 9 (135.22) 590.3 551.0 59.85 1,066 10 (135.22) 590.3 551.0 63.38 1,070 11 (135.22) 590.3 551.0 66.72 1,073 12 (135.22) 590.3 551.0 69.90 1,076 13 (135.22) 590.3 551.0 72.93 1,079 14 (135.22) 590.3 551.0 75.80 1,082 15 (135.22) 590.3 551.0 78.52 1,085 16 (135.22) 590.3 551.0 81.11 1,087 17 (135.22) 590.3 551.0 83.57 1,090 18 (135.22) 590.3 551.0 85.91 1,092 19 (135.22) 590.3 551.0 88.13 1,094 20 (135.22) 590.3 551.0 90.24 1,096 IRR 14.4% NPV ¹=10% $1,921.9
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS
1. The GoA provided feedback on the Bank’s ICR, which was received on June 10, 2020, and is captured in the figure below.
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
2. The client also prepared a detailed ICR documenting its assessment of, inter alia: achievement of the ISEP’s objectives and results; technical support from the Bank; and proposed arrangements for future operations/lessons learned. Key portions of each of these assessments are provided below, as quoted directly from the client’s ICR.
Summary of Client’s Assessment of Achievement of Outcomes and Results
3. Meghri Gravity Irrigation Scheme. The construction of Meghri gravity scheme (Lots 1, 2 and 3) has been completed and the system is operational. Three contractors under three civil works contracts implemented the works. The project decommissioned from operation 18 pumps (including 10 on river and 8 second and higher stage) 2 of which on the River Araks were later re-commissioned due to water shortage. The works consisted of construction of an intake structure on the Meghri River and a pressurized pipeline of 37.46 km. The aggregate cost of these investments was about AMD 3.5 billion. Actual payment to contractors under these contracts was AMD 3.5 billion, or 100% of total value of contracts. Benefits from this investment include annual energy saving of 3.74 GWh (in 2019 it was 2.64 GWh) and improved/reliable irrigation services on 686 ha. Per hectare investment cost in this scheme is about AMD 5.15 million (equivalent to about US$ 10,800 per ha).
4. Bagramyan-Norakert Gravity Irrigation Scheme. The construction of the scheme has been completed and the system tested. The system will be in operation after the tertiary pressurized distribution network becomes functional. The civil works of the latter were implemented under the ISEP Additional Financing (AF). One contractor under one civil works contract implemented the works. The scheme will provide water to former command area of three pumping stations non-operational at least for the last 30 years (Norakert No.1, No.2 and Baghramyan). The works consisted of rehabilitation of feeder canal from Tkahan canal and a pipeline with a total length of 8.38 km. The cost of this investment is about AMD 507.2 million. Full value of the contract was paid to the contractor. Benefits from this investment will include revitalization of irrigated agriculture on an area of about 573 ha. Currently only some 45 ha of vineyard of the command area is irrigated by gravity but with significant water losses from other sources.
5. Under the AF agreement a total amount of US$ 2.5 million (US$ 2 million from IBRD loan and US$ 0.5 million as a Government contribution) was allocated to support the construction of a pressurized tertiary distribution network under the completed Baghramyan-Norakert gravity scheme.
6. The original design solution consisted of polyethylene pipeline network with diameters varying from 63 to 315 mm. Land parcels were grouped in a way that from each of about 85 hydrant units 6 to 12 farmers could connect. Consequently, each hydrant unit consisted of 6 to 12 individual electromagnetic valves and water meters. These hydrant units were designed to be managed and controlled by the “Aragatsotn” WUA from the central control office to be constructed under the project next to the manhole where the entire gravity system starts. From each connection point the pipelines were designed to be placed up to the individual farm gates. It will be then farmers’ responsibility to invest in on-farm laterals and drip tubing and connect to the system at farm gate point. Designed pressure in connecting points was 2-2.5 bars that is sufficient for low pressure drip systems. The water to be filtered by a coarse centrifugal filters at a filter station to be constructed next to the central control office at the entrance to the system and then by fine sand filters at three filter stations located in each main branch. Thus, farmers would be provided with pressurized and fine filtered water at their farm gates. The design of modernized tertiary networks in Baghramyan and Norakert also proposed some changes in cultivated crops.
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7. To facilitate land consolidation approach declared by the Government, a decision was made to exclude individual electromagnetic valves, water meters and pipelines to farm gates from design. They were replaced with one electromagnetic valve and one water meter in each hydrant unit for its command area (in average 6.5ha). Another change in design was the replacement of proposed sand filters with screen filters. These reduced the original contract value. The construction was completed by the end of December 2019. The cost of this investment is about AMD 461 million of which 89.7% was paid to the contractor and supervision companies. The remaining unpaid invoices submitted by the Contractors and Consultants by December 30, 2019, will be paid by end of June, 2020.
8. According to the Agricultural Projects Implementation Department of the RA Ministry of Economy the project “Development of Irrigated Agriculture in Ararat and Armavir Marzes (provinces)” funded by the EU and supported by the AFD (French Development Agency) will probably start in July 2020. The Project will include the component of irrigation infrastructures modernization (application of drip and sprinkler irrigation methods) on 2,000 ha of lands in Ararat and Armavir (Baghramyan and Norakert communities are in Armavir Marz) marzes.
9. Geghardalich Gravity Irrigation Scheme. The Geghardalich gravity irrigation scheme (Lot 1, 2 and 3) aimed to replace three existing pump stations (Azat 4th stage, Hatsavan and Geghadir) with a gravity supply from the Geghardalich reservoir through a pipeline and enhance irrigation deliveries to 1,449 ha of land. This would allow to save annually some 10.05 kw/h of energy. The main works included raising the dam height from 13.9 m to 15.5 (about 1.6 m) to increase the storage volume of the reservoir from 2.4 million cub.m to 3.4 cub.m, and construction of 33.37 km of pressure pipeline and related ancillary structures. The works on this scheme were implemented by three contractors under three civil works contracts. Two contracts (Lots 1 and 3) were fully completed, while works under the Lot 2 contract were terminated and the contract closed without completion of the scheme.
10. The works for construction of about 1.95 km of pipeline under Lot 2 contract to connect the irrigation outlet of the reservoir with the completed sections of the pipeline under the Lot 3 were not completed. Simultaneously with the launch of civil works of Geghardalich gravity irrigation scheme, some inhabitants of the project affected Gogt community expressed concerns regarding the sufficiency of irrigation water. Although the project had passed through all the procedures set by the Armenian legislation and the WB operation policies and all the required consultations, positive conclusions and agreements were received, some protests were held by a group of farmers from Goght village expressing their concerns with regard to availability of enough water in the reservoir for the anticipated command area of the other communities considered under the gravity conversion. During several meetings in the community it was agreed that Gilanlar canal would ensure availability of more water in the reservoir. Following discussions and organized public hearings with protesting farmers the WSPIU reviewed the design and included construction of an intake structure and Gilanlar canal to provide additional floodwater for the reservoir. All the hydrological estimations and calculations proved availability of sufficient amount of water to meet the requirements of the proposed scheme. However, the protesting group was not convinced, and the contract was closed without completion of the scheme due to ISEP completion date.
11. Over 90% of the civil works of Geghardalich gravity scheme are completed. Within the period 2017-2018 several visits were paid to Goght community by officials of different layers, including WB missions and WSPIU representatives, to negotiate the matter with the community members. More efforts of community outreach were conducted in the period of June-October 2019 after the request of the RA Government in June 2019 to
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
direct the remaining funds from ISEP AF to completion of the Geghardalich gravity scheme was accepted by the WB. However, the community remained irrevocable and the civil works did not restart since 2017.
12. The negotiations with the community will go on and in case of reaching an agreement with the community, the construction of Geghardalich gravity scheme will be completed in the frames of the Irrigation System Modernization Project (ISMP) by the funds of Eurasian Development Band (EDB). The investments under ISEP in this scheme are valued at AMD 3.36 billion. Actual payment under these contracts as of the 31 March 2019 is AMD 3.36 billion or 100% of actually completed works.
13. Kaghtsrashen Gravity Irrigation Scheme. The original design was to construct an intake weir on Azat River and lay a pipeline to deliver irrigation water by gravity to the area receiving irrigation supply from Kaghtsrashen pump station. There were protests in Garni community against the project. After deliberation with the community leaders, the Government/WSPIU changed the original design to use an existing weir structure 5.2 km downstream of the originally proposed location. Due to the loss in elevation, a new pumping station with three pumps was constructed at the new location to provide required pressure to make the scheme function. Thus, the scheme continues to depend on energy to deliver irrigation water to the beneficiary communities. The estimated energy consumption for the new pump station will be 2 million kw/h per year, resulting in saving of only 8 million kw/h as compared to the originally anticipated 10 million kw/h.
14. The construction of this scheme was completed in April 2018. The works consisted of rehabilitation of an intake structure on Azat River, construction of a new pumping station and a pressure pipeline of 22.63 km. The details about the scheme are provided in the Annexes 1, 2 and 3. Three contractors under three civil works contracts implemented the works. The aggregate cost of these investments is about AMD 3.99 billion. Hundred percent of total value of contracts was paid to contractors due to project completion. However, for 2.5% (maintenance period payment) relevant bank guaranties were provided by the contractors to the WSPIU. Benefits from this investment will include annual energy saving of 8.0 million kw/h and improved/reliable irrigation services to 1,232 ha. The below table indicates the crops patterns and the crops yield.
15. However, the newly constructed glass-fibre reinforced plastic (GRP) pipeline section of 16.6 km (9.1 km under the Lot 2 and 7.5 km under the Lot 3) had failed the testing; there were leakages from the pipeline joints. All the damages were repaired by contractors at their own expenses; but during the second round of testing in 2019 it failed again. The thorough review and the site inspection by the task team revealed several possible reasons for damages. These include: (i) design issues (need for additional some 24 missing storm-water overflow structures to protect pipeline backfill layer, replacement of 55 installed 50 mm air-valves with 150 mm, and automated valve at the end of pipeline to synchronize water inflow and outflow for the entire pipeline); (ii) quality of pipes joint sections and with no pre-fabricated fitting units; and (iii) works implementation as per the requirements of technical specifications (this is relevant mainly to Lot 2, as only 2 leakages were observed in Lot 3 section so far).
16. In July 2019 the design for additional works to eliminate the problems was prepared under ISEP AF and new contracts were signed with the Contractors of Lot 2 and Lot 3 for additional works which were completed by the end of December 2019. The aggregate cost of the additional investments was about AMD 112.6 million of which 40.1% was paid to the contractors and supervision companies. The remaining unpaid invoices submitted by the Contractors and Consultants by December 30, 2019, will be paid by June 2020 after a new testing of the system is performed (planned for April 2020). All stakeholders will be invited to participate in the testing including the
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
representatives of the WSA responsible for the operation of the scheme, the Water Committee, the WUA, the Design and Technical Supervision Consultants, etc.
17. Rehabilitation of Outlet and Diversion Canals. The Project rehabilitated 57.3 km (against 52 km originally planned) of diversion and outlet canals in 13 selected pump-based schemes to minimize losses saving about 23 million cub.m of water and 14.7 million kw/h of energy annually. All these works have been completed and the canals are operational. Four contractors under four civil works contracts implemented the works. The aggregate cost of these investments is about AMD 3.05 billion. The actual payment to contractors under these contracts is 100%. The total command area under these investments is 8,851 ha.
18. The data provided by the WUAs on the pumped water amount and consumed energy of the year preceding the design works were considered as baseline. The estimation of annual energy saving of 14.78 million kw/h in the project documents under this subcomponent is based on the efficiency assumptions made by the designer for considered supply and outlet canals before and after rehabilitation, command area under the pumping stations and irrigation norms. The amount of water to be pumped before and after rehabilitation was calculated and the difference considered as water saving. Then the estimated specific use of energy for pumping of 1 cub.m of water was applied and energy saving was estimated for each pumping station. For its assessment the WB mission in 2018 used the same design efficiency data as no efficiency measurement for the rehabilitated canals has been conducted. For the specific use of energy for each pumping station the mission used actual amount of water provided in 2018 and energy used for that. Based on this assumption the actual saving of energy in 2018 was up to 10.4 GWh vs. 14.78 GWh estimated in the project documents. Furthermore, energy considered for saving from rehabilitation of feeder canals (in 2 out of 3 canals) to pumping station was excluded from the estimation, as it is practically not the case.
19. Conducting Technical Investigations. The pilot project of “Investigation of the Technical State of Irrigation System and Assessment of Required Investments (for 2 WUAs)” evaluated the existing technical state of the irrigation system in two WUAs in March-June 2016. A software tool with corresponding database was developed where the Consultant put together all the data, estimates and corresponding plan layers. The developed tool also allowed for ongoing accounting of the technical state of the irrigation system and getting detailed information on the technical state at any time.
20. Within the period of November 2017-June 2018 the current technical state of irrigation system and the required priority investments (including for construction and rehabilitation) was evaluated. The works were implemented for 13 WUAs.
21. In particular the study included the assessment of 233 pump stations to collect the following information: water sources of the pump stations, dates of construction and rehabilitation, the technical condition of the building, installed pumps and engines, their brands, manufacture dates, productivity, pumping and exhaust elevations, diameters of pumping and exhaust pipes, automatic control capacity of the pump stations, the condition of the electrical system and presence of hydro-mechanical equipment; 219 deep wells fixing their location coordinates, the presence of electrical parts, the brand and operational depth of the deep pumps, the volume of pumped water as well as revealing that some deep wells did not function due to drop of groundwater levels. The study results also included collection of data on reservoirs as well as geometric, logistical and technical condition of the canals. In particular, the canals were classified by type (main canal, on-farm canal, pipeline), by structure (water pipeline, tunnel, distributor, outlet canal, syphon, aqueduct, gauging station and etc.), by sections
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
(rectangular, trapezium, pipe, semi-pipe, chutes), by material (concrete, reinforced concrete, earth, iron, asbestos). In addition the capacities of the WUAs, their staffs and resources were assessed. A software instrument has been created with corresponding database where the Consultant collected all the data and conducted assessments. The data on technical state of irrigation system can be basis for prioritizing the infrastructures that require urgent construction and rehabilitation and making decisions for investments.
22. Installation of a Supervisory Control and Data Acquisition (SCADA) System. Initially it was proposed to purchase and equip 71 observation stations. However, during project implementation it became possible to purchase more stations. Having analyzed the need for such stations during irrigation period the WSPIU agreed with the Supplier to purchase additional ultrasonic level meters with batteries.
23. Furthermore, during installation and equipment of 71 observation stations 12 less chambers were used due to the selection of better and more efficient locations of the stations. Ten of these chambers were used during installation and equipment of the additional observation stations. During the training conducted by the Supplier the WSPIU engineers gained sufficient knowledge and skills, and the additionally purchased water meters were installed by the WSPIU engineers thus saving the funds required for installation works.
24. The total number of installed devices by the Project was 82. When SCADA system was fully operational it enabled the Water Committee to fully register water distribution, consumption and water intake. The devices being removed each “off-season” to avoid being stolen. Currently the installed devices are operated by WUAs and the WSA: 50 devices are in operational condition and are used. Two of the devices installed on Garni canal and Getashen canal were stolen; 4 devices are not re-installed and 28 devices operate partially or fail to operate. Mostly the data are monitored online apart from a few cases when there is no mobile connection and/or the device operates partially conducting measurement and failing to transfer data from the field to the server. In a few cases the devices have some technical and/or regulation issues which in 2017-2019 were solved and/or supported by the WSPIU support team. The SCADA system will be recovered by the WC funds.
25. Project Management. The overall project management included coordination of the implementation process, preparation of preliminary and detailed design documents, coordination and monitoring of technical supervision of civil works, preparation of tender documents and management of the procurement process, monitoring project activities, and reporting on progress in project implementation. With the commencement of ISEP in July 2013 the WSPIU reorganized the staff to fit the project needs, hired qualified specialists to fill in the vacant positions (including Environmental, Social and Communication Specialists), and formed a WUA Support Group.
26. WUAs Support Group. This subcomponent within the ISEP aimed to strengthen the activities of the WUAs through the WUAs’ SG and to expand them with the addition of specific activities targeting at the WUAs’ executive bodies and water users. The WUA SG consisted of 13 employees: group coordinator, financial management specialist, institutional development specialist, accountant, accountant/economist, operation and maintenance engineer, legal expert, GIS specialist, water accounting specialist and WUAs’ governance bodies’ coordinator, water measurement specialist, communication specialist and electricity and pump station specialist. Each of the members of the WUAs’ SG covered a specific area of interest for the WUAs. In 2014 the WSPIU conducted a short survey with the efforts of WUAs’ SG in water users of “Masis” WUA to reveal the existing problems in water sector and obstacles in the operation of the existing irrigation system; to identify the level of water users’ satisfaction with the provided water amount during the previous irrigation season; to assess
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the level of water users’ awareness of their rights and responsibilities as members of the WUA and their participation in WUA management and decision making processes as WUA members, etc. The number of survey participants was 324 (30% of participants were women) from 11 communities.
27. In 2015 the project facilitated a conference with participation of WSPIU and WUAs’ representatives to present the main activities of WUAs, to summarize their achievements, to introduce the challenges in their routine performance, and to identify means and ways for improvement of WUAs’ operation and management. The results of the above mentioned survey were presented during the conference by the Social Safeguards Specialist for the knowledge of WUA’s managements and improvement of their operations and performance to increase the level of water users’ satisfaction. However, in 2015 by another Government Decree the functions of the Executive Body of the Regulatory Council were passed to the WC.
28. Capacity building of WUAs' Executive Bodies. The WSPIU organized a series of trainings for WUAs in Yerevan as well as in different regions of WUAs to upgrade the knowledge and to refresh the skills of the WUAs personnel, to introduce the rules and principles for the operation and maintenance of drainages, P/S (at Mkhchayn) and reservoirs (at Azat & Aparan) (in 2014 the number of WUAs were 42). The trainings were on: • “Operations and Maintenance (O&M) techniques” with participation of 64 trainees (54 men and 10 women) • “Preparing reports according to IFRS” with participation of 42 accountants (20 men and 22 women) • “Dispute Settlement” with participation 58 Dispute Settlement Committee members (54 men and 4 women) • “Audit” with participation of 64 or WUAs’ Audit Committee members (54 men and 10 women)
29. The Project supported 42 WUAs in acquisition of numbers for hotline system to operate as a separate hotline enabling more quick response to the issues raised by water users. A new software package which allows storage and classification of data provided through the hotline was developed. The hotline established a system of early response to issues emerged during irrigation season to improve water delivery service.
30. Awareness Raising and Communication Activities. The WSPIU conducted public outreach and communication activities to raise awareness of water users on their rights, responsibilities and obligations; to inform them of irrigation system rehabilitation works, routine operation and maintenance works implemented by WUAs; to identify the existing irrigation related problems and water users’ concerns and satisfaction. In particular, the WSPIU initiated preparation and broadcasting of TV series “Water on Demand”. Within the period of May 2014 – June 2016 two TV broadcasts were filmed and aired each month by a national TV Channel “H2”. Apart from the broadcasts, various video materials were prepared and also aired by different TV channels. All the videos and broadcasts were also spread through social media networks and WSPIU website.
31. Each TV broadcast was devoted to one of the WUAs presenting achievements, raising existing issues, highlighting the progress of civil works executed for construction of gravity schemes and upgrading the outlet canals of pump stations. The broadcasts also regularly covered the issues of institutional development, new technologies and trainings organized under the Project, disseminated the results of social survey in the communities, etc. The broadcasts also present the environmental and social impact of investment projects proposed under ISEP. During broadcasts short videos were shown regularly providing comprehensive
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explanation why irrigation fees should be paid by water users, what are their benefits and the benefits of their WUA, or why they shall save irrigation water and electricity.
32. In the view of concerns with Kaghtsrashen project, a special broadcast was prepared on Kaghtsrashen design where all the parties of the design were presented and all the raised concerns were addressed. The measures to be implemented for improvement of irrigation in Garni also were presented. In order to raise the awareness of water users the WSPIU also developed and printed posters/calendars with highlights on their rights and obligations.
Summary of Client’s Assessment of Technical Support from the Bank
33. In order to address the concerns of the communities several activities were organized with the technical support and recommendations of the technical coordination, safeguards and communication teams of the WB. In particular technical support was provided by the Bank to review water balance calculations presented in the ESIA reports, to develop communication materials to increase the community awareness, to hold a series of focus group discussions in the communities with participation of different target groups. Within the years 2015- 2017 the missions of the WB visited the community several times to meet the local authorities and the active community members to better understand their concerns, to present the solutions and mitigation measures. Another meeting was held in the WB office in Yerevan in March 2016 with participation of the Bank’s Mission members headed by Mr. Winston Yu, WSPIU representatives, inhabitants of Gogt and Garni communities and NGO representatives. The objective of the meeting was to listen to the objections against and opinions on the Kaghtsrashen and Geghardalich gravity schemes and discuss possible futures solutions.
34. In 2019 the WB coordination team again provided support trying to find compromise solutions for completion of Geghardalich gravity scheme and to address the concerns of Baghramyan and Norakert communities in regard with the completed tertiary network construction. In particular the WB Mission headed by Mr. Wilfried Hundertmark visited Goght community and proposed reasonable solution to form a committee with reliable representatives of all stakeholders of the gravity scheme to monitor the water usage, etc. He also participated in a round-table discussion in Baghramyan community held with his recommendation which gathered all stakeholders together in the community and was a good opportunity for all parties to present their views and concerns as well as to introduce the further activities aimed at consolidation of farmers for joint cultivation of their lands.
Summary of Client’s Assessment of Proposed Arrangements for Future Operations/Lessons Learned
35. Areas for Improvement. The critical overview of entire processes of implementation of gravity schemes constructions allows to identify the following areas for improvement: • Stakeholder engagement activities should start at prefeasibility and feasibility stages; • Environmental and social scoping and screening should be conducted very thoroughly and all the concerns of affected communities should be considered at prefeasibility and feasibility stages; • Cost estimates in the frames of detailed design calculations should be prepared with consideration of inflation rates, currency exchange rates, actual market prices, etc.; • Recommendations for the use of construction materials in the frames of design should be based on quality rather than cost;
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The World Bank IRRIGATION SYSTEM ENHANCEMENT PROJECT (P127759)
• Procurement processes can be better scheduled to avoid overlapping; • Purchase and shipment of materials can be appropriately scheduled and civil works can be respectively planned; • Organization of instructional workshops on technical issues, safeguards monitoring, reporting principles, etc. before the commencement of civil works can contribute to improved quality work; • Efficiency of WUAs’ operations can be improved through routine support in the processes of WUAs’ reformation/establishment, dynamic development, enhancement of work efficiency and creating profound ground for participatory governance of WUAs. • Water resources management should be based on planned and calculated water demand from WUAs and other water users facilitated by the WC.
36. Lessons Learned. The main lessons learned during the implementation of ISEP and ISEP AF are as follows:
(a) Stakeholder activities: • Even the best development projects with the highest economic return ratio (ERR) aimed at solution of social-economic issues at local and national level can fail if they face community challenges and remain unsolicited at local level; • A multi-lateral dialogue should be hold with all stakeholders before making decisions because rapid decisions can disrupt the whole process and push back; • An interactive and sincere dialogue should be initiated with the affected communities to better understand the needs and concerns of the affected communities and to better explain the details of the project from the feasibility stage and/or at least from the beginning of the design stage in order to avoid unforeseen obstacles emerging at later stages of project implementation; • Development projects should be implemented in those communities which are open for negotiations and are ready for collaboration to avoid waste of time and resources; (b) Technical issues – GRP pipes: • GRP pipes should not be used on high elevations and slopes, on long distances especially in the areas with high seismicity; • If the design suggests the use of GRP pipes, the joints of the pipes should be factory- manufactured pieces rather than laminated on-site manually; • The designs should consider possible problems at the operation stage while suggesting the usage of GRP pipes; • The staffs of the companies responsible for operation of schemes with GEP pipes should be trained and technically equipped.
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ANNEX 6. SUPPORTING DOCUMENTS
Primary Supporting Documents and Information:
1. Project Appraisal Document (PAD) – dated April 25, 2013.
2. Loan Agreement – dated May 29, 2013.
3. Project Paper for Additional Finance and Restructuring – dated October 20, 2017.
4. Bank Guidance: Implementation Completion and Results Report (ICR) for Investment Project Financing (IPF) Operations – dated July 5, 2017.
5. Implementation Status Reports (numbers 1 - 13).
6. Bank Preparation and Supervision Aide Memoires and Management Letters.
7. Project Information Document (Concept Stage) – dated July 17, 2012.
8. Project Concept Review Minutes.
9. Restructuring Papers.
10. Progress Reports from Implementing Agency.
11. Borrower’s Completion Report – dated April 2020.
12. Country Partnership Strategy (CPS) for FY14-FY17 – dated October 9, 2013.
13. Country Partnership Framework (CPF) for FY19-FY23 – dated February 28, 2019
14. Armenia Development Strategy for 2014‐2025 – dated March 27, 2014.
15. Government of the Republic of Armenia Program (Government Program) – dated February 8, 2019
16. Armenia First Development Policy Operation (Program Document): Report No. 79854-AM – dated August 2013.
17. Armenia First Development Policy Operation (Implementation Completion and Results Report), Report No: ICR00004057 – dated March 27, 2019.
18. Interviews with Bank Task Team members, GoA officials, WSPIU staff, and external partners.
19. Social Study Report: End line Data Analysis – Technical Supervision of Baghramyan Norakert Gravity Irrigation Tertiary Network Construction ISEP/AF/CQS/CS-17/001, November 2019.
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Other Supporting Documents and Information:
20. Project Paper for the Eurasian Development Bank Mastara Reservoir Preparation Project – dated July 29, 2016.
21. Republic of Armenia Agriculture and Rural Development Policy Note. May 29, 2013. World Bank Group. Washington, DC.
22. Governance in Irrigation and Drainage: Concepts, Cases, and Action-Oriented Approaches—A Practitioner’s Resource. Water Global Practice Working Paper, August 2019. World Bank Group. Washington, DC.
23. Millennium Challenge Corporation: National Irrigation Policy – Armenia, October 2009. Millennium Challenge Account, Armenia.
24. Millennium Challenge Corporation Final Report: Institutional Strengthening of Irrigation Management Entities Sub-Activity – September 2008-August 2011, August 2011. Millennium Challenge Account, Armenia.
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ANNEX 7. MAP
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