Bolivia: Emergency Recovery and Disaster Management Project Latin America and the Caribbean

Document of The World Bank

Report No: 41069 - BO

Public Disclosure Authorized

EMERGENCY PROJECT PAPER

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 8 MILLION

Public Disclosure Authorized (US$ 12.5 MILLION EQUIVALENT)

TO THE

REPUBLIC OF BOLIVIA

FOR AN

EMERGENCY RECOVERY AND DISASTER MANAGEMENT PROJECT

Public Disclosure Authorized December 4, 2007

Sustainable Development Department Bolivia, Ecuador, Peru, and Venezuela Country Management Unit Latin America and the Caribbean Region

This document has a restricted distribution and may be used by recipients only in the Public Disclosure Authorized performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

CURRENCY EQUIVALENTS (Exchange Rate Effective July 2007) Currency Unit = Bolivianos US$1 = Bs.7.5 US$.005 = Bs.1

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

CAF Andean Development Corporation, Corporación Andina de Fomento CAS Country Assistance Strategy CONARADE National Council for Risk Reduction and Response to Emergencies and/or Disasters, Consejo Nacional para la Reducción de Riesgos y Atención de Desastres y Emergencias DRIPAD Unit for Integrated and Participatory Rural Development in Depressed Areas, Programa de Desarrollo Rural Integrado y Participativo en Áreas Deprimidas DRVRP Disaster Recovery and Vulnerability Reduction Project DUF Unified Directorate of Funds, Directorio Único de Fondos EA Environmental Assessment ECLAC Economic Commission for Latin America and the Caribbean EDIMO Honorable and Labor Intensive Employment, Empleo Digno e Intensivo de Mano de Obra EMP Environment Management Plan ERC Emergency Recovery Credit ERDMP Emergency Recovery and Disaster Management Project ERL Emergency Recovery Loan EU European Union FM Financial Management FORADE Risk Management Fund, Fondo de Fideicomiso para la Reducción de Riesgos y Atención de Desastres FPS National Fund for Productive and Social Investment, Fondo Nacional de Inversión Productiva y Social FY Fiscal year GDP Gross Domestic Product GFDRR Global Facility for Disaster Reduction and Recovery GNI Gross National Income GNP Gross National Product GoB Government of Bolivia IBRD International Bank for Reconstruction and Development ICR Implementation Completion Report IDA International Development Association IDB Inter-American Development Bank IDH Direct Tax on Hydrocarbons, Impuesto Directo a los Hidrocarburos IFR Interim Financial Report ISDR International Strategy for Disaster Reduction ISN Interim Strategy Note MD Ministry of Defense, Ministerio de Defensa MDGs Millennium Development Goals MDRAMA Ministry of Rural Development, Agriculture, and the Environment, Ministerio de Desarrollo Rural, Agropecuario y Medio Ambiente MPD Ministry of Planning for Development, Ministerio de Planificación del Desarrollo OP/BP Operational Policy/ Bank Procedure PCU Project Coordination and Management Unit PDCRII Rural Participatory Investment Project II PFM Public Financial Management PND National Development Plan, Plan Nacional de Desarrollo PRRES National Plan for Sustainable Rehabilitation and Reconstruction, Plan Nacional de Rehabilitación y Reconstrucción Sostenible SENADECI National Civil Defense Service, Servicio Nacional de Defensa Civil SENAMHI National Meteorology and Hydrology Service, Servicio Nacional de Meteorología e Hidrología SIGMA Integrated System of Management and Administrative Modernization, Sistema Integrado de Gestión y Modernización. Administrativa SINAGER National Information System on Risk Management, Sistema Nacional Integrado de Información para la Gestión. del Riesgo SISIN Investment Information System, Sistema de Información Sobre Inversiones SISPLAN National System of Public Investment, Sistema Nacional de Inversión Pública SISRADE National System for Risk Reduction and Disaster and Emergency Response, Sistema Nacional para la Reducción de Riesgos y Atención de Desastres y/o Emergencias SNID National Information System for Sustainable Development, Sistema Nacional de Información para el Desarrollo Sostenible TGN National Treasury, Tesoro General de la Nación UNDAC United Nations Disaster and Coordination Team UNDP United Nations Development Programme UPRRD Unit for Disaster Risk Prevention and Reduction, Unidad de Prevencion y Reduccion de Riesgos de Desastres VCT Vice Ministry on Science and Technology, Viceministerio de Ciencia y Tecnología VIDECICODI Vice Ministry of Civil Defense and Cooperation for Integral Development, Viceministerio de Defensa Civil y Cooperación al Desarrollo Integral VPC Vice Ministry for Planning and Coordination, Viceministerio de Planificación y Coordinación VPEP Vice Ministry of Strategic Long-Term Planning, Ministry of Planning for Development (MPD), Viceministerio de Planificación Estratégica Plurianual VIPFE Vice Ministry of Public Investment and External Financing, Viceministerio de Inversión Pública y Financiamiento Externo VPTA Vice Ministry of Territorial Planning and the Environment, Viceministerio de Planificación Territorial y Ambiental WB World Bank WFP World Food Program

Vice President: Pamela Cox Country Director: Carlos Felipe Jaramillo Sector Director Laura Tuck Acting Sector Manager: Anna Wellenstein Task Team Leader: Joaquin Toro Table of Contents Introduction...... 8 A. Emergency Challenge: Country Context, Recovery Strategy, and Project Rationale . 9 Country Context...... 9 Emergency Situation...... 9 Sector-Specific Needs and Priorities ...... 11 Government Response ...... 13 Donor Strategies/Programs ...... 15 B. Bank Response: The Project ...... 17 Brief Description of Bank’s Strategy of Emergency Support ...... 17 Project Development Objectives...... 18 Summary of Project Components ...... 19 Consistency with Country Assistance Strategy (CAS) or Interim Strategy Note (ISN)20 Expected Outcomes ...... 21 C. Appraisal of Project Activities ...... 21 Economic ...... 21 Technical...... 21 Institutional ...... 22 Financial Management...... 22 Environmental...... 23 Social...... 24 Exceptions to Bank Policies...... 24 Lessons Learned...... 25 D. Implementation Arrangements and Financing Plan...... 26 Project Coordination and Management ...... 26 Activity Implementation ...... 26 Project Supervision ...... 30 E. Project Risks and Mitigating Measures...... 31 F. Terms and Conditions for Project Financing...... 32 Annex 1. Detailed Description of Project Components...... 33 Annex 2. Results Framework and Monitoring...... 40 Annex 3. Summary of Estimated Project Costs...... 46 Annex 4. Financial Management and Disbursement Arrangements ...... 47 Annex 5. Procurement Arrangements...... 62 Annex 6. Implementation and Monitoring Arrangements...... 70 Annex 7. Project Preparation and Appraisal Team Members...... 87 Annex 8. Environmental and Social Safeguards Framework ...... 88 Annex 9. List of Identified Works ...... 92 Annex 10. Statement of Loans and Credits ...... 98 Annex 11. Country at a Glance...... 100 Annex 12. Map IBRD 33374...... 102

EMERGENCY OPERATION PROJECT PAPER DATA SHEET Bolivia: Emergency Recovery and Disaster Management Project Latin America and the Caribbean

Date: December 4, 2007 Team Leader: Joaquin Toro Country Director: Carlos Felipe Jaramillo Sectors: Flood Protection Sector Director: Laura Tuck Themes: Hazard Risk Management Acting Sector Manager: Anna Wellenstein Environmental screening category: B Lending instrument: Emergency Operation Safeguard screening category: B Project ID (s): P106449 Emergency Recovery and Disaster Management Project Type of Operation: New Operation [ X ] Additional Financing [ ] Existing Financing (restructuring) [ ] Financing type: Loan [ ] Credit [ X ] IDA Grant [ ] Other [ ] Project ID(s): P106449 – Emergency Recovery Total Amount: SDR 8 million and Disaster Management Project (US$ 12.5 Equivalent) Proposed terms: Standard with 35 years of maturity Expected implementation period: 3 years Expected effectiveness date: 01/31/2008 Expected/revised closing date: 12/31/2010 Borrower: Republic of Bolivia Responsible agency: Ministry of Planning for Development (MPD), through the Vice Ministry of Territorial Planning and the Environment (VPTA) Development Objective: In support of the implementation of the National Plan for Sustainable Rehabilitation and Reconstruction (PRRES), the project will contribute to restore access to basic infrastructure1 for a portion of the affected population in five target regions, and to strengthen the Government’s ability at the national, sectoral, and municipal levels throughout the country to respond to future disasters.

Short Description:

These objectives will be achieved through (a) Strengthening the National System for Risk Management through capacity building at the national, sectoral, and subnational levels; and (b) Rehabilitation, Reconstruction, and Small Mitigation Works.

At project completion, the following will have been achieved: (a) validation, identification, and implementation of small works by the PRRES; (b) development of a draft policy framework to guide future rehabilitation and reconstruction programs; and (c) increased capacity for disaster response, reconstruction, and prevention at the national, local, and sector levels.

Financing Plan (US$ m) Source Local Foreign Total Total IBRD/IDA SDR 8 million SDR 8 million Total SDR 8 million SDR 8 million Estimated Disbursements (Bank FY/US$ m) 2007 2008 2009 2010 2011 2012 Total IBRD/IDA 0 3 5.5 4

1 Including, inter alia, rehabilitation of water and sewage systems; repairs to basic infrastructure in schools, housing, and small health centers; bridge and road repairs; and investments in water intakes, small earthen irrigation structures, riverbank protection, filtration galleries, and related activities

Does the emergency operation require any exceptions from Bank policies? Yes [ ] No [X] Have these been approved by Bank management? Yes [ ] No [ ] Are there any critical risks rated “substantial” or “high”? Yes [X] No [ ] What safeguard policies are triggered, if any? OP/BP 4.01 - OP/BP 4.11 - OP/BP 4.10 Significant, nonstandard conditions, if any: Conditions for effectiveness are: a) Signing of Subsidiary Agreement between the Government and FPS, and b) Formal adoption of the Operations Manual through letter from Vice-Minister of VPTA.

Introduction

1. This Project Paper seeks the approval of the Executive Directors to provide a credit in the amount of SDR 8 million to Bolivia for an Emergency Recovery and Disaster Management Project (ERDMP).

2. The proposed credit will help finance the costs associated with the implementation of the Government of Bolivia’s (GoB) response to the catastrophic flooding, drought, and abnormal cold weather that affected Bolivia as a result of the El Niño event that occurred in early 2007. This credit will be used by the GoB to fund an ERDMP that will include the execution of a portfolio of emergency small works identified in the National Plan for Sustainable Rehabilitation and Reconstruction (PRRES), small mitigation works, and improvements to the national disaster preparedness, planning, and prevention policy framework. At the conclusion of the project, the following objectives will have been achieved: (a) validation, identification, and implementation of small works by the PRRES; (b) development of a draft policy framework to guide future rehabilitation and reconstruction programs; and (c) increased capacity for disaster response, reconstruction, and prevention at the national, local, and sector levels.

A. Emergency Challenge: Country Context, Recovery Strategy, and Project Rationale

Country Context

3. Bolivia is highly exposed to adverse natural conditions, a situation exacerbated by an important proportion of the poor living in vulnerable and isolated areas. The country experienced particularly large losses in 2006-07 due to the El Niño phenomenon, an abnormal weather pattern that occurs at irregular intervals. The scale of this year’s El Niño occurrence has overwhelmed the ability of both the central and local governments to adequately respond to rehabilitation and recovery needs.

Box 1. What is El Niño?

El Niño is an abnormally warm tropical Pacific Ocean weather pattern that occurs at irregular intervals. The phenomenon is characterized by an above-average increase in surface water temperatures along the coast of South America and westward through the Equatorial Pacific Ocean. The result of this ocean warming is a significant increase in rainfall over some areas and drought in others. It also induces abnormal weather patterns that can provoke changes in seasonal temperatures, with unusually cold patterns occurring in susceptible areas. These changes in weather and local climate are caused by the interaction between the ocean surface and the atmosphere over a large portion of the Pacific Ocean. This interaction influences global wind patterns, affecting a large portion of the planet in varied and insidious ways, especially the Andean region of South America, depending on the location and topography of the land surface.

With a wide range of topographic diversity, Bolivia suffers from many adverse impacts during El Niño events: The geographic and climatic features of the country make it prone both to very high levels of rainfall and resultant floods in the plains of the Oriental and to drought conditions in the high Andean plains and the valleys in the north and east of the country. Ironically, this is sometimes manifested by both floods and drought in different parts of the same department.

4. The 2006–07 El Niño phenomenon produced exceptionally high rainfall, which coupled with a generally poor maintenance of infrastructure, has led to widespread flood- related damage. These effects have compounded the socioeconomic dislocation in a country with an already very high level of poverty. The combination of crop loss, infrastructure damage, and disease outbreak has also led to significant social dislocation and rural-urban migration.

5. In a recent summit in La Paz of the International Center for Research of the El Niño Phenomenon (Centro Internacional para la Investigación del Fenómeno de El Niño, CIIFEN), La Niña event was confirmed.2 The negative effects from La Niña could worsen the current emergency if no measures are taken.

Emergency Situation

2 Final Conclusions from the VII South American West Climate Forum. La Paz, Bolivia, October 31 2007. International Center for Research of the El Niño Phenomenon (Centro Internacional para la Investigación del Fenómeno de El Niño, CIIFEN).

6. Between November 2006 and May–June 2007, extreme climatic events due to the El Niño phenomenon have affected eight of the nine departments of Bolivia. Floods and landslides (in the midlands and lowlands), as well as drought, hail, and freezing temperatures (in the highlands), have caused loss of life, injury, population displacement, and loss of income. The housing, infrastructure, and agricultural sectors suffered major damage. In the most vulnerable communities, rehabilitation and reconstruction works have yet to be undertaken. According to the Bolivian authorities, the impact in the Bolivian northeast — where the population has increased considerably due to the expansion of livestock in the area and the boom in the economy — is worse now than the impact from the last major El Niño event, a decade ago. Heavy rains, overflowing rivers, and hurricane-force winds persisted for months in the region, while drought, hail, and frost affected the western portions of the country until late June.

7. A recently completed Economic Commission for Latin America and the Caribbean (ECLAC) damage and needs assessment estimates that the recent El Niño event led to the following impacts: (a) 34 deaths, (b) 51,692 affected households (258,460 persons), and (c) 16,700 displaced persons. The overall complexity of events has affected the majority of the Bolivian territory through flooding, landslides, flash floods, drought, and severe frosts. The resulting losses to infrastructure, particularly roads, and to the agricultural sector have amounted to over US$440 million nationally, equivalent to almost 4 percent of gross domestic product (GDP) (Table 1).3

Table 1. Consolidated Summary of the Impact of the El Niño Disaster — First Trimester of 2007 (in millions of US$) Total Impact Damage Loss TOTALS 443.27 242.85 200.21 Infrastructure 171.71 167.24 4.47 Roads, paths, transport tracks 171.38 166.98 4.40 Water and sanitation 0.07 0.07 Telecommunications 0.19 0.19 Energy (electricity 0.08 0.08 hydrocarbons) Social sectors 95.54 51.74 43.80 Housing and human settlements 52.40 41.40 11.00 Health 6.78 0.07 6.71 Education 10.27 10.27 Productive sectors 138.67 23.87 114.80 Agriculture, livestock, fishing, 133.07 23.41 109.66 forestry production

3 Impact of El Niño 2006–07 in Bolivia; ECLAC Evaluation, April 2007. See also “National Capacity Evaluation for Disaster Response,” United Nations Disaster Assessments and Coordination team mission in Bolivia, March 2007.

Tourism 5.60 0.46 5.14 Small and micro enterprise 0.00 Environment 0.20 Protected areas, environmental 0.20 0.20 services (water retention, C02 sequestration, etc.) Other (including 37.14 37.14 expenditures and income for the emergency) Source: “Damage and Needs Assessment,” ECLAC, Bolivia, April 2007.

Sector-Specific Needs and Priorities

Agricultural Sector 8. Roughly 50 percent of the economic losses relate to agriculture. Agricultural production, which accounts for 15 percent of GDP, was the most severely affected sector by El Niño. Damage to agricultural outputs and productive capacity were caused not only by excess water, severe hailstorms, and heavy frost, but also by water shortages in certain areas. The Beni and Santa Cruz departments suffered disproportionately with respect to agriculture, with Beni, Santa Cruz, Oruro, La Paz, and Potosí suffering the greatest proportion of losses.

Water and Sanitation 9. The supply of drinking water throughout the affected areas was greatly reduced by the El Niño effect. Droughts struck central reservoirs in some areas, and floods damaged water quality, sources, and treatment/distribution infrastructure. Contamination due to chemicals (pesticides, garbage, and human waste) drawn in from flooded streams was particularly harmful: Damage to water supplies increased the probability of the transmission of waterborne disease, because people resorted to using contaminated water in the absence of sufficient supplies of clean drinking water. Floods and warmer weather also produced favorable environmental conditions for the reproduction of the malaria, yellow fever, and dengue fever vectors

Transport Sector 10. The transport sector incurred over 45 percent of total damages, with primary, secondary, and local roads suffering major stress. Particular attention has been given to the rehabilitation of this sector, due to the importance of communication networks for economic and social activity and for restoration efforts. The costs for repair and reconstruction of the road infrastructure are estimated to exceed 1.5 percent of GDP.

Institutional Capacity for Disaster Risk Management

11. In addition to addressing reconstruction and recovery needs, a key objective of the ERDMP is to strengthen the capacity of national and local risk-management institutions and structures to reduce disaster vulnerability, and to increase their ability to respond to, rehabilitate, and reconstruct in response to emergencies through efficiently. Several

institutional weaknesses have been identified regarding the capacity within the central and local governments to implement recovery projects and ensure their sustainability with regular maintenance. Strengthening these institutions is at the core of the ERDMP. Another key issue is the absence of an early-warning system for national emergencies and of an institution to plan for and manage an emergency response. The Government of Bolivia (GoB), in its request for the project, has suggested the need for a longer-term Disaster Recovery and Vulnerability Reduction Project (DRVRP) to address the lack of a well-defined program for minimizing vulnerability to recurrent, periodic and catastrophic events. The Bank recognizes this need and will work with the country in this regard.4

Box 2: Institutional Context for Disaster Management in the Country5

Risk Reduction and Emergency Response in Bolivia is guided by Law 2140 (October 2000; modified by Law 2335 (March 2002)), which establishes the National System for Risk Reduction and Disaster and Emergency Response (SISRADE), including planning into development processes, and assigning responsibilities at the national and local levels. The SISRADE is composed of the National Council for Risk Reduction and Response to Emergencies and/or Disasters (CONARADE), public and private institutions, and civil society organizations at the national, departmental, and municipal levels linked to Risk Reduction and Emergency/Disaster Response. The SISRADE also includes institutions advising on technical and coordination issues.

The CONARADE is the decision-making and coordination body of first instance of the SISRADE; its mandate is executed by the Ministry of Defense and the Ministry of Sustainable Development and Planning (now Ministry of Planning for Development). The Ministry of Defense holds the Technical Secretariat of the CONARADE, according to SD 26973. It meets upon convocation by the President or by means of the Technical Secretariat to solve problems arising in Risk Management. The Council is chaired by the President and is composed of the Ministry of Defense, the Ministry of Planning, the Ministry of Government, the Ministry of Health and Sports, the Ministry of Rural, Agricultural and Indigenous Affairs, the Ministry of Economic Development, and the Ministry of Basic Services and Public Works. The Council may summon other ministries in accordance to the nature and effects of the Disaster/Emergency. Depending on the circumstance and for the compliance of its attributes, the CONARADE may summon public and private institutions as well as civil society organizations linked to Risk Reduction and Emergency/Disaster Response at the national level.

At the municipal level, this law establishes the mayor as the guiding authority in emergencies and disasters. It also states that he/she should assign to a functional unit in the Municipal Government structure the responsibility of assuming activities in these fields.6

One of the main problems with this legal framework is the lack of clarity regarding the roles and responsibilities of the institutions involved. This has created tensions among them, as some laws give

4 There is a clear tradeoff between the Long Term and the Short Term. As per OP/BP8.00’s emphasis on the need for rapid implementation, the Emergency Project focuses essentially on emergency reconstruction. However, a small component has been added to learn from the current experience and strengthen the response capacity of the Bolivian Government during implementation. Dialogue is already underway for a longer term Disaster Reduction and Vulnerability Reduction Project (DRVRP). 5 Bolivia: some lessons learned for the implementation of a risk management approach. International Strategy for Disaster Reduction (ISDR), Latin America and the Caribbean, 2006; and Informe Nacional Sobre Reducción de Desastres en Bolivia, UN-ISDR (http://www.unisdr.org/eng/mdgs-drr/national- reports/Bolivia-report.pdf). 6 Preparación y Respuesta Frente a Situaciones de Desastres y/o Emergencias: Guía para el Nivel Municipal. Proyecto Dipecho-Chaco - Fortalecimiento de capacidades locales para la preparación y respuesta ante situaciones de emergencia en el Chaco boliviano. Bolivia 2006.

powers to some institutions that are taken away by other laws or decrees. It is important to support clarity on these issues.

Performance during the Emergency - Context in Which the PRRES Is Formulated

12. The Government of Bolivia (GoB), with support from the United Nations, developed a plan for post-emergency recovery in 2005-2006, in accordance with the relevant legal framework highlighted above. Implementation of this plan was minimal when the 2007 El Niño disaster struck, which prompted the government to develop a plan for immediate action, and new plan with an established timeframe under the Ministry of Planning and Development (as per Supreme Decree 29040) to lead the rehabilitation and reconstruction effort. The plan for immediate action was headed by the sectors (housing, health, water and sanitation, etc), and the respective local governments.7

13. The MPD developed the technical specifications and requested regions to identify and propose projects to include in the National Plan for Sustainable Rehabilitation and Reconstruction (Plan Nacional de Rehabilitación y Reconstrucción Sostenible, PRRES). At first, this mechanism encountered some friction in some regions that proposed the development of departmental plans for rehabilitation and reconstruction with a different view on planning and reconstruction. However, given the context and the urgency of the situation, the process continued. Examining how this program was established will help to adequately consider local level participation in the project’s development. This has been taken into account throughout the project, and specifically in Component 1 in order to bring the Technical Assistance in line with these issues. The goal is to strengthen the system (not only clarification of the legal framework) at the national, sectoral and local levels.

Government Response

14. Confronted with the dramatic losses caused by the recent El Niño event, the President of the Republic of Bolivia declared a “State of National Emergency” through Supreme Decree 29013 (January 28, 2007), and announced five complementary decrees to mitigate the crisis:

• Decree 29017, directing US$5.5 million for support in the recovery of the primary roads network • Decree 29035, authorizing the Governors to use additional resources (from the Direct Tax on Hydrocarbons [Impuesto Directo a los Hidrocarburos, IDH]) • Decree 29040, declaring a National Disaster Situation, approving the use of financial resources amounting to 1 percent of the National Budget • Decree 29056, mobilizing the Trans-Territorial Command Unit to address the emergency situation in the Beni department

7 Report from the UN.

• Law 3606, (Short Law) February 27, 2007, authorizing the prefectures and mayors to make budgetary modifications and reallocations, including the resources of the IDH, to finance emergency expenses.

15. Supreme Decree 29040, which this emergency projects sets its legal bases, establishes the Ministry of Planning for Development (Ministerio de Planificación del Desarrollo, MPD) as the institution responsible for presenting a national plan for rehabilitation and reconstruction. Under this decree, resource allocation priority was given to the Department of Beni and to the municipalities where the biggest impacts occurred.

16. Responding to this Decree, the MPD prepared and in April 2007 presented the National Plan for Sustainable Rehabilitation and Reconstruction (Plan Nacional de Rehabilitación y Reconstrucción Sostenible, PRRES).8 This plan was designed based on two underlying principles. First, recovery activities should focus on conducting emergency rehabilitation/reconstruction in order to restore productivity—that is, income- generating activities—to the sectors affected, including transportation and national delivery and provisioning systems. Second, the recovery effort should be implemented in a way that reduces the country’s vulnerability to future extreme events through improved design and construction integrating risk mitigation and prevention strategies. In addition to providing a framework for these more immediate actions, the PRRES also calls for the development of clear guidelines and policies for the integration of disaster reduction/prevention in future development activities at the sectoral, subnational, and local levels.

17. As noted above, in preparation for emergency rehabilitation and reconstruction, the MPD requested regions to identify and propose projects to include in the plan. The PRRES initially received a total list of 2138 projects, with an estimated cost of US$2,536,024,945. Included in this list were projects that were not eligible for financing under the El Niño emergency, so the government decided to undergo a validation process to identify eligible and urgent works. The MPD prioritized these projects on the basis of their relation to El Niño (if the damage related directly to the recent event), their location (if the project was located in one of the most affected areas), and poverty levels (projects in areas of lowest income were also prioritized). After the prioritization of the five most affected regions, the PRRES consolidated a list of 452 projects, for a total of US$41,403,219. This last list was divided between projects costing less than US$20,000 each and those costing more than US$20,000 each, as detailed in Section D and Annex 6. Works under US$20,000 are ready for immediate execution under the project. Currently there are National funds to finance the group of works costing less than US$5,000 each, as well as funds for the validation process of works costing between US$5,000 and US$20,000.

8 Ministerio de Planificación del Desarrollo, República de Bolivia, April 2007. The Plan is the result of a comprehensive, community-based assessment that took place only after flood water in most areas had receded and efforts shifted from relief to recovery and rehabilitation.

18. In a letter dated September 4, 2007, the Government of Bolivia (GoB) asked the World Bank for help in implementing the PRRES, particularly for the reconstruction of small and urgent projects. Apart from actual construction, and given the magnitude of the reconstruction and rehabilitation effort, the Government has also asked the Bank for technical assistance implementing the reconstruction program.9

Donor Strategies/Programs

19. Table 2 highlights the emergency response effort. Total international efforts surpassed US$37 million, thus contributing more to this response than to past emergency loans. Table 3 shows funds available as of today for the PRRES, totaling US$18 million.

Table 2. Financial Contributions to the Recovery (US$) Source Grant In-kind Total International 30,134,117 6,261,399 36,395,516 Civil Defense 22,989,432 428,600 23,418,032 UNDP 1,853,993 1,853,993 Other agencies and countries 5,290,692 5,832,799 11,123,491 National 25,416 723,000 748,416 Civil Defense 25,416 25,416 Red Cross 723,000 723,000 TOTAL 30,159,533 6,984,399 37,143,932 Source: Civil Defense.

Table 3. National Plan for Sustainable Rehabilitation and Reconstruction (PRRES) (US$ Thousands) Fund Availability Source of Funds Immediate Medium Long Term Term “Contravalor” Funds 4,000 CAF (Grant) Community Road Infrastructure 2,000 World Bank ERDMP 1,500 11,000 TOTAL 6,000 1,500 18,500 TOTAL AVAILABLE Source: PRRES

9 One of the main challenges in the recovery post-disaster in 2006-07 was the lack of an adequate mechanism for damage and needs assessment. The lack of standard formats and training--among many other factors--excessively delayed the consolidation of a scenario of the damage. It is very important to strengthen the capacity for quick and efficient damage and needs assessment.

Table 4: Sustainable Rehabilitation and Reconstruction Plan – PRRES

Received demands per Considered demands Projects for Projects for later Project Department* in the 5 prioritized immediate execution contribution regions ** execution (under US$20,000***) Number Total cost Number Total cost Number Total Number Total cost (US$) of (US$) of (US$) of cost of (US$) Departments projects projects projects (US$) projects BENI 320 1,915,560,247 CHUQUISACA 250 7,798,345 COCHABAMBA 393 434,733,582 LA PAZ 236 64,077,439 ORURO 30 3,895,724 PANDO 6 1,028,020 POTOSI 455 22,166,981 SANTA CRUZ 391 68,176,543 TARIJA 57 18,588,064 Total 2138 2,536,024,945

Prioritized Regions 1. Central Beni 101 12,120,885 34 258,292 66 11,857,216 2. Communities in action 107 5,298,043 42 452,560 65 4,845,483 3. La Paz- Oruro 6 1,043,124 1 7,682 5 1,035,442 4. Integrated North Santa Cruz 215 20,839,599 119 881,723 97 19,962,998 5. Tropic ccba 23 2,101,567 13 51,532 10 2,050,035 452 41,403,219 209 1,651,788 243 39,751,175 12,500,000 Source: VPEP * Total Demand for rehabilitation and reconstruction sent by Departmental governments, municipal governments and social organizations. Includes: duplicated and redefined projects ** Projects considered in the prioritized regions, agricultural projects not included, which will be attended to by the Ministry of Agricultural Development and Environment *** Projects considered in the five prioritized regions with investment amounts less than US$20,000. These are only indicative and can be modified during the validation process.

Prevention of La Niña

20. According to the latest report from the World Meteorological Organization, La Niña conditions are now well established across the central and eastern Equatorial Pacific, and La Niña conditions are most likely to continue at least through the first quarter of 2008. 10 Although the development of this event has been unusual and somewhat delayed (the majority of La Niña events show initial indications earlier in the year) it is now clear that local conditions should be monitored carefully and prevention measures should be taken.

10 El Niño/La Niña Update. World Meteorological Organization (WMO). October 31, 2007.

Box 3: What is La Niña?

La Niña, characterized by unusually cold (instead of warm for El Niño) ocean temperatures in the Equatorial Pacific, is essentially the opposite of El Niño. Its impacts on the global climate tend also to be opposite to El Niño impacts. La Niña is usually accompanied by stronger tail winds from the east that push the ocean water away from the equator in each hemisphere (this is caused by the rotation of the earth.). Cold water from below rises to replace the warm surface water which has moved away from the equator and acts as an impediment to the formation of clouds and tropical thunderstorms in the overlying air. This suppression of rain-producing clouds leads to dry conditions on the equator in the Pacific Ocean from the Date Line east to South America.11

During the period from November 2007 to January 2008, La Niña could bring Bolivia precipitations below normal in most of the Llanos Orientales (Oriental Plains), except for some areas that tend to receive higher precipitation than average (Riberalta y Rurrenabaque); rains above normal in the valleys; precipitations above or close to normal in the Altiplano; and precipitations above normal in the Low Lands of the Chaco Boliviano.12

21. The government has requested making provisions to identify contingency measures under a sub-component of this project and to implement a portion of the small mitigation works identified if necessary to avoid worsening of the conditions for the reconstruction from the 2007 El Niño event.

B. Bank Response: The Project

Brief Description of Bank’s Strategy of Emergency Support

22. The two sectors most affected by the El Niño phenomenon are transport and agriculture, with significant impacts on potable water, sewerage treatment, and other critical infrastructure at the local level (Figure 1).

11 National Oceanic and Atmospheric Administration (NOOA). 12 Seasonal precipitation forecast for the months of November, December 2007 and January 2008. SENAMHI. La Paz, Bolivia, November 5 2007.

SectorsFigure Affected1. Sectors Affected by the by the2006-2007 2006–07 El NiñoEl Nino Event Event

W ater and E nvironm ent 0.05% S anitation A griculture 0.02% and Livestock 35.04% Transport 45.21%

Tourism Health Housing 1.48% 1.79% E ducation 13.84% 2.57%

23. In March 2007, the Bank reallocated US$8 million from the Road Rehabilitation and Maintenance Project (BO-3630) to address needs in the transport sector. These funds already support (a) the repair of four roads in the prefecture of Beni, (b) the rehabilitation of a road in the Pando region, and (c) the rehabilitation of five roads in Cochabamba and Santa Cruz that were already slated for repair.

24. The proposed project seeks to address basic infrastructure rehabilitation, local road reconstruction, and agriculture needs resulting from the El Niño-related damage, and to strengthen the Government’s institutional capacity to prepare for, and respond to, similar events in the future.

Project Development Objectives

25. In support of the implementation of the National Plan for Sustainable Rehabilitation and Reconstruction (PRRES), the project will contribute to restore access to basic infrastructure13 for a portion of the affected population in five target regions, and to strengthen the Government’s ability at the national, sectoral, and municipal levels throughout the country to respond to future disasters.

26. These objectives will be achieved through (a) Strengthening the National System for Risk Management through capacity building at the national, sectoral, and subnational levels; and (b) Rehabilitation, Reconstruction, and Small Mitigation Works.

27. At project completion, the following will have been achieved: (a) validation, identification, and implementation of small works by the PRRES; (b) development of a draft policy framework to guide future rehabilitation and reconstruction programs; and

13 Including, inter alia, rehabilitation of water and sewage systems; repairs to basic infrastructure in schools, housing, and small health centers; bridge and road repairs; and investments in water intakes, small earthen irrigation structures, riverbank protection, filtration galleries, and related activities

Summary of Project Components

28. The project is divided into two components:

• Component 1: Strengthening the National System for Risk Management – US$2,300,000 • Component 2: Rehabilitation, Reconstruction, and Small Mitigation Works – US$10,200,000

29. These components are designed to support the current emergency recovery program under the PRRES and assist with the strengthening of institutional capacity for the management of recovery activities in preparation of future disaster events. These components are based on current needs and are complementary to the current United Nations Development Programme (UNDP) for institutional strengthening in disaster risk reduction. A detailed description of the project components is presented in Annex 1.

Component 1: Strengthening the National System for Risk Management – US$2,300,000

30. Activities under this component will be focused on the development of strategic plans and norms relating to reconstruction/rehabilitation and risk mitigation, and on the integration of the various sectors in an emergency recovery framework.

31. Efforts will focus on what is required to implement the reconstruction activities executed under the PRRES, and to identify necessary small mitigation measures for La Niña. These activities include the development of norms, legislation, and information systems required to support disaster recovery operations, as an initial approach to the long-term integration of improved procedures and mechanisms for disaster rehabilitation/reconstruction. Efforts will also support the development of a potential Risk Management Fund (FORADE).

32. This component will build on the experiences of the current reconstruction program to improve and formalize the recovery operation model and integrate associated sectors in a structured recovery framework for use in future disaster situations. This will be accomplished, in part, by providing capacity-building workshops to strengthen institutional capacity and coordination within and among sectors.

33. There are two subcomponents: (a) Policy Development for Sustainable Reconstruction (US$1,500,000) and (b) Institutional Strengthening (US$800,000).

Component 2: Rehabilitation, Reconstruction, and Small Mitigation Works – US$10,200,000

34. A series of rehabilitation/reconstruction works will be undertaken in an effort to restore damaged infrastructure. These works will be financed in specific areas determined to have been particularly affected by El Niño. The average cost of the proposed works is estimated to be less than US$100,000, with a large quantity of the identified works costing less than US$20,000.

35. These works include, inter alia, rehabilitation of water and sewage systems; repairs to basic infrastructure in small schools, housing, and small health centers; bridge and road repairs; and investments in water intakes, small earthen irrigation structures, riverbank protection, filtration galleries, and related activities.

36. Physical works under this component have been identified by local communities and submitted by municipalities, prefectures, and related sectoral agencies. A preliminary list of pre-identified works can be found in Annex 9. The selection process for the identified works is described in Annexes 1 and 8. To ensure full compliance with environmental guidelines and ensure the quality of the work, the project will also finance the Accompanying Technical Supervision for the Execution of the Works. Under Component 1, a contingency plan including a list of small mitigation works for La Niña will be identified as needed and will be partially implemented under this component, following the same screening, selection, and implementation arrangements.

37. There are three subcomponents: (a) Execution of Rehabilitation and Reconstruction Works (US$8,580,000), (b) Accompanying Technical Supervision for the Execution of the Works (US$620,000), and (c) Execution of Small Mitigation and Rehabilitation Works (US$1,000,000).

Consistency with Country Assistance Strategy (CAS) or Interim Strategy Note (ISN)

38. Substantial gains related to the Millennium Development Goals (MDGs) have been achieved in Bolivia through improvements in living conditions, access to basic social services, and social indicators during the 1990s. Urban poverty rates dropped from 52 percent to 46 percent during 1993–99. Child and infant mortality rates declined by over 30 percent, and net enrollment in primary education increased to nearly 100 percent. The number of households lacking safe water and adequate sanitation fell from 50 percent to 30 percent. However the most recent El Niño has hindered Bolivia’s progress toward achieving the MDGs, through the deterioration in living conditions, the reduction of access to social services and to safe water for months, and an increase in poverty. If national and local agencies are not strengthened and mitigation measures are not implemented, Bolivia will remain in its current institutional environment, with the recurring El Niño effect continuing to exacerbate poverty and put development gains at risk.

39. The Bank and the Government have already taken into consideration the importance of Disaster Risk Management and Vulnerability Reduction activities, and intend on launching a study on natural disaster vulnerability reduction during FY08. The importance of this issue was also highlighted during the Bank-financed 1998 El Niño

Emergency Assistance Project, whose primary objective was to support immediate prevention and reconstruction activities arising from the emergency situation. Although it wasn’t a main objective, the 1998 project included some activities for improving medium-term capacity for monitoring local impact and response to El Niño events, and for initiating preparation of a long-term system to coordinate disaster risk reduction and mitigation activities. According to the Implementation Completion Report (ICR), “by the end of the project significant progress had been made towards the development of a national capacity to respond to natural disasters.” The sustainability of outcomes related to these activities was considered unlikely however, due to lack of financial commitment and the political/institutional context. The importance of addressing these challenges is highlighted at present.

40. Although this is an emergency recovery activity, and therefore could not be predicted, the current Emergency Recovery and Disaster Management Project (ERDMP) is consistent with the current Interim Strategy Note (ISN). The project seeks to help clarify the legal framework governing disaster risk management and response, in accordance with the goal of enhancing good governance and transparency, and it will involve the implementation of small works aimed at reducing the impact of future adverse natural events that can jeopardize the development of the country.

Expected Outcomes

41. The project seeks to achieve two key intermediate outcomes. First, emergency rehabilitation works will be undertaken to restore basic infrastructure. Second, the project will strengthen the capacity of national and local risk management institutions and structures to reduce disaster vulnerability and to increase their ability to mitigate, respond to, rehabilitate, and reconstruct in response to emergencies through more timely responses and better planning of mitigation and reconstruction efforts. See Annex 2 for more details on project outcomes.

C. Appraisal of Project Activities

Economic

42. An economic analysis of the operation is not possible until the investments to be financed through the operation are known. Subprojects to be financed under this operation would be limited to the most urgent and effective prevention works, and all reconstruction projects to be approved would be evaluated on the basis of economic criteria as well.

Technical

43. Subprojects to be financed will follow local technical and environmental standards to strengthen, rebuild, or rehabilitate infrastructure. They would also follow current economically acceptable best practices to ensure their ability to withstand similar events in the future and to minimize their environmental impact. A list of preliminary

selection criteria for the execution of urgent works can be found in Annexes 1 and 8. These will be spelled out in more detail in the Project Operational Manual. Proposed investments will have to meet these criteria. Annex 9 provides an indicative prioritized list of identified works that meet the preliminary selection criteria. Urgent works are expected to be undertaken soon after project approval.

Institutional

44. Bolivia is a country of geographic contrasts, with a highly dispersed population and a strong tradition of decentralized government. But project implementation experience in Bolivia has shown that the decentralized implementing agencies tend to be weak. At present, the lack of clear guidelines and procedures for emergency response, especially for implementation of necessary rehabilitation and reconstruction works, is delaying recovery. It is thus important to strengthen the institutional capacity at all levels in order to adequately respond to and recover from emergencies, and to reduce vulnerabilities to natural disasters.

45. A critical goal of the project is to strengthen the institutional capacity of the government, at the central and the local levels, to both ensure effective implementation of the current recovery effort and prepare for future events. The project will also seek to clarify the legal framework for disaster management.

Financial Management

46. As part of the preparation process of the Emergency Recovery and Disaster Management Project (ERDMP), preliminary discussions have been held with the Borrower’s team, to define the financial management arrangements under both implementing entities, the National Fund for Productive and Social Investment (FPS) and the Unit for Disaster Risk Prevention and Reduction (UPRRD) within the VPTA. Based on these discussions, the Bank’s knowledge of the proposed entities and the country’s Financial Management (FM) arrangements, a preliminary assessment was made in accordance with Operational Policy/ Bank Procedure/ (OP/BP) 10.02 and the Manual “Financial Management Practices in World Bank Financed Investment Operations” and Guidelines: Financial Management Aspects of Emergency Operations Processed Under OP/BP 8.00. The objectives of the assessment were to determine the adequacy of the proposed FM arrangements —mainly in the short term— as well as UPRRD’s capacity to properly manage and account for all project proceeds and to produce timely, accurate, and reliable financial statements for general and Bank special purposes, in relation to Component 1.

47. It is important to mention that the financial management capacity assessment of FPS, the entity that will implement Component 2 of the project, is based on the results of the Operational Review conducted with the support of the Bank at end of FY07, under the Rural Participatory Investment Project II (PDCR II) project —complemented, as appropriate, to reflect any specific requirement under an Emergency Recovery Loan (ERL) type of operation. As a result of such review, FPS agreed on a time-bound action

plan including mitigating measures to address identified external and internal risks, as well as to strengthen its operational performance, including the internal control environment.

Procurement

48. A procurement capacity assessment has been carried out. The VPTA requested that the Unit for Disaster Risk Prevention and Reduction (UPRRD) be responsible for implementing Component 1, and the National Fund for Productive and Social Investment (FPS) be responsible for implementing Component 2, given its experience with multilateral financing.

49. The assessment examined (a) organization, (b) facilities and support capacity, (c) staffing, (d) professional experience, (e) record-keeping and filing systems, (f) procurement planning and monitoring/control systems used, and (g) capacity to meet the Bank’s procurement reporting requirements. The findings supported using both the UPRRD and the FPS for project implementation.

Environmental

50. This project is considered a Category B partial assessment. Currently, works proposed under the project are considered Category C; however, additional works may be proposed for inclusion that will require environmental screening, such as the small mitigation works if necessary. Works envisioned under the project will be aimed at repairing damaged infrastructure and improving flood protection. Impacts resulting from these projects are limited to the construction period, and environmental impacts relate to recovery of damaged systems. These impacts are largely positive but will be managed within the environmental framework presented in Annex 8.

51. Apart from the environmental framework, the Project Operational Manual will include the guidelines and requirements for environmental management within the project.

Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X

Social

52. Subprojects have been identified by local communities, municipalities, prefectures, and the national government. Projects are prioritized under a process involving an open dialogue between the affected parties, technical feasibility, and availability of funds. This is managed under the PRRES, with input from local communities. The small works have been identified based on the processes presented in Annexes 1 and 6. These works will be implemented nationwide and will have a positive impact on those affected by the rehabilitation efforts.

53. All works will be undertaken on public lands, so the acquisition of private land will not be necessary.

54. No involuntary resettlement is planned under this project, and no such plan exists within any of the relevant ministries of the Government of Bolivia (GoB). During implementation, the project will explore the possibility of helping the Government develop a resettlement framework for people living in non-mitigable risk areas as a project activity within the subcomponent on territorial planning. The Government is in the early stages of territorial planning and lacks the capacity to carry out a well-defined resettlement plan as a risk-reduction strategy. The Government will benefit from hazard and vulnerability mapping for its future territorial planning exercises.

Indigenous Peoples Framework and Social Assessment (OP/BP 4.10) 55. All reconstruction and rehabilitation works will benefit the indigenous populations and municipalities within the Project area, given that according to the 2001 National Census, 67% of the Bolivian Population identifies itself as belonging to some indigenous group. The remaining 33% of the population will also benefit from the emergency works, and those persons living within the project area will benefit equally

from the project. (Annex 8 provides a more detailed Environmental and Social Safeguards Assessment).

56. More specifically, if some of the civil emergency works are executed in Territorios Comunitarios de Origen (TCOs), the OP/BP 4.10 and the national law which it establishes will apply. Within the framework of ILOs Convenio 169, there will be an indigenous people consultation process, for which the unit implementing the project will draft a Rapid Social Assessment to establish the area’s characteristics, carry out a stakeholder analysis and prepare elaborate adequate measures to ensure that the indigenous people receive culturally appropriate benefits. Should there be any potential negative effects, these must be identified and avoided, minimized or mitigated.

Exceptions to Bank Policies

57. The project has been prepared as an Emergency Recovery Operation and is therefore governed by the new OP/BP 8.0.

Lessons Learned14

58. Various past projects in Bolivia and/or in this area of hazard risk management have shown the following.

• It is important for the Government to maintain a core capacity for prevention, disaster response, and mitigation. However, long-term funding for this purpose is likely to be limited, and therefore, permanent disaster management capacity should consist only of the highest priority skills (e.g., coordination and management of multi-sector activities, risk assessment, and public sector management) and fit within a realistic and sustainable budget envelope. As natural disasters occur, specialized consultant services can be contracted as needed. The project seeks to address this need by focusing significant efforts on strengthening specific sector, prefectures, and institutions leading the National System for Risk Reduction and Disaster Response (SISRADE).

• In countries with decentralized government structures, such as Bolivia, it is necessary to strike a balance between the financial and coordinating responsibilities of the national and local governments. Flexibility is required at the implementation level to reflect differences in capacities and resources of local and regional governments. The project will focus on strengthening and improving coordination and policy leadership at the national level while working to improve local implementation capacity, particularly in the stronger prefectures.

• Prevention measures can have a substantial impact on the reduction of social and economic loss. Countries with a history of El Niño/La Niña–type phenomena should undertake contingency planning and preventive measures, including

14 Implementation Completion Report (ICR) of previous El Niño Project.

routine maintenance. Many of these types of investments should be incorporated into normal sector investment programs during non-emergency periods.

• International experience demonstrates that the benefits of long-term natural disaster prevention are well justified in the context of potential disaster scenarios that may recur in the absence of such measures. The project aims to improve the Government’s ability to plan for and manage future emergencies.

• Project design should be flexible in order to best respond to evolving emergency needs. At the same time, project implementation has historically been delayed because project documentation has been vague on specific interventions, so as to ensure flexibility. The project seeks to strike a balance between speed and flexibility and clarity to allow for effective project implementation. The project has made provisions to incorporate, if needed, small contingency works for the effects from La Niña.

D. Implementation Arrangements and Financing Plan

Project Coordination and Management

59. The project will be coordinated and managed by the Ministry of Planning for Development (MPD), through the Unit for Disaster Risk Prevention and Reduction (UPRRD) at the Vice Ministry of Territorial Planning and the Environment (VPTA). The UPRRD, recently created by the Vice Ministry of Strategic Long-Term Planning (VPEP), with assistance from the United Nations Development Programme (UNDP) and the Bank, has been transferred to the VPTA and will manage and coordinate hazard risk management activities and projects. It will also function as the technical and fiduciary entity for this Emergency Recovery Credit (ERC), and receive capacity building support from the project. VIDECICODI will be a co-executor of the project, but their role will be limited to providing technical expertise in the design and supervision of small reconstruction and mitigation activities, with no direct financial involvement. An Inter- ministerial Steering Committee including the Vice Ministry of Territorial Planning and the Environment and VIDECICODI was created to allow for better coordination between the various agencies involved in the project.

Activity Implementation 60. The project will have two implementing agencies, the FPS and UPRRD. The operational justification for having two different implementation agencies is that while having only one agency would be simpler technically, other issues such as coordination, policy dialogue, and ownership do benefit from the involvement of the Ministry of Planning for Development (MPD).

61. The implementation arrangements for activities under both the FPS and UPRRD will be described in detail in Annex 615 of the present document, and in the Operation Manual. This project uses the work done under the preparation of the PDCRII and tailors specific activities for this project. Annex 6 shows the action plan and agreements made during the PDCRII project preparation.

62. The UPRRD will implement Component 1, which will be sub-executed by various sectoral and territorial entities. The unit will also coordinate, supervise, and monitor the execution of Component 2, implemented by FPS under the framework presented in Figure 2.

Figure 2. Institutional Arrangements

Ministry of Planning and Development (MPD) – VPTA-VIDECICODI World Bank

COMPONENT 1 COMPONENT 2 VIPFE, etc. FPS

Other Ministries and Municipalities Vice-Ministries

Communities Sectors

Departments, Municipalities, Communities

63. The Bank has completed its fiduciary (financial, procurement, and disbursement) evaluation of the UPRRD and has made the necessary recommendations so that it fulfills its fiduciary responsibilities for project implementation. The proposed arrangement for

15 The final draft of the Project Operational Manual and drafts of required inter-institutional agreements— such as the agreement between the MPD and the FPS, and the agreements between the respective municipalities and the FPS—will be sent to the Bank for project negotiation.

activities to be undertaken under UPRRD has been deemed acceptable, in particular given the nature of the work to be accomplished and the relatively small amount of funds involved. UPRRD will be further strengthened with additional technical assistance (TA) funds made available by the Global Facility for Disaster Reduction and Recovery (GFDRR).

64. The Productive and Social Investment Fund (Fondo Nacional de Inversión Productiva y Social, FPS) will be the agency in charge of implementing the project’s rehabilitation, reconstruction and small mitigation works component (Component 2). FPS will accompany and supervise the municipalities and/or prefectures in subproject execution. Its role is focused on ensuring subprojects’ technical quality and compliance with safeguards and fiduciary requirements. The Bank carried out an “Operational Review of FPS” with the aid of an international consulting firm, resulting in action plan which forms the basis for strengthening FPS’ administrative and operational capacity and adjusting FPS’ Operational Manual. (See Annex 6 for more information on the detailed Action Plan developed under the Second Participatory Rural Investment PDCRII). FPS will operate under a Subsidiary Agreement signed with MPD establishing, in addition to its legal obligations, clear performance and institutional criteria whereby results will be measured.

65. FPS Regional Offices: The FPS regional offices (one in each department) will carry out subproject ex-ante evaluations, monitor contractual integrity, conduct field supervision, and order payments to contractors. FPS regional offices are staffed by a Departmental Director, a technical team in charge of evaluations, a technical team in charge of field supervision of contracts (aided by consultants); and an administrative team in charge of processing payments.

66. The Bank mission reviewed the process that rehabilitation and reconstruction works must undergo before the execution of works and found it too complicated and lengthy to allow quick action in an emergency. Measures must be implemented to alleviate this bottleneck and to allow quick action. The mission met with the Vice- Minister of Public Investment and External Financing (VIPFE) and the FPS to determine how to simplify this process and how to expedite implementation of the PRRES. It was agreed that the VIPFE, upon receiving full documentation from the FPS, would certify within two days that project funds have been included in the National System of Public Investment (that is, the national budget), in accordance with the emergency requirements of the project. The complete documentation includes (a) a Unified Directorate of Funds (DUF) resolution,16 (b) a technical report, (c) a legal report, and (d) a budget.

67. The FPS has made a commitment to reduce its delays in document preparation. An important step to reduce these delays would be to expedite the DUF resolution: It was suggested that ministers within the DUF delegate decision-making powers to the FPS

16 This resolution must be agreed on by three separate ministries—the Ministry of Finance, the Ministry of the Presidency, and the Ministry of Planning and Development—which is why passage has, in the past, not been as fast as needed in an emergency.

in cases of emergency to speed up the process, as this is one of the most critical bottlenecks identified.

68. Concerning the implementation of prioritized works, the Government of Bolivia (GoB) agreed to an immediate execution strategy for works under US$20,000. These smaller works will be executed directly by the municipalities, with the support of the FPS, which will perform an ex post review in such cases (works under $20,000 will be subdivided into works under $5,000 and works between US$5,000 and $20,000. This will allow immediate execution for those under $5,000 by the municipalities, and very rapid execution of those between US$5,000 and $20,000. For this second batch, that will include validation by the FPS and packaging in groups after classification of types of projects, all this to make the process more efficient, due to the small size of these projects). For those works over US$20,000, the FPS will carry out the validation, profile, and design of works, with the help of a team in charge of the respective field visits. To avoid cumbersome and expensive supervision, all works under US$20,000 will be checked ex post by the FPS. Only works deemed acceptable would be grouped in packages presented to the Bank for reimbursement. This procedure will be detailed in the Operations Manual.

69. Implementation of sub-activities under Component 2 will be carried out by decentralized agencies—prefectures, municipalities, or other local government entities— in conjunction with the FPS provided they have adequate capacity. Eligibility criteria to implement sub-activities will be documented in the Project Operational Manual. Each implementing agency will sign a subsidiary agreement with the FPS and the UPRRD (referred to by the Bank, for this project only, as the Project Management Unit), spelling out their counterpart obligations and responsibilities for activity implementation. Payments for the FPS’ operational costs will be reimbursed as an output-based fee, reflecting FPS operating costs for these activities. This approach has been accepted by the Chief Counsel in the emergency context of the project (other projects that will have similar arrangements will have to provide more detailed calculation and regular review of the proposed fee).

Table 5: Payments for FPS – Projects Under $US 5,000

Stage Output Payment Procurement Subproject contracts signed Subproject execution Subproject closing Subproject completed Fixed payment of Bs. 1,300 only for and administrative subprojects under US$5,000 closing

Table 6: Payments for FPS – Projects Between $US 5,000 and $US20,000

Stage Output Payment Procurement Subproject contracts 2.25% of the total value of the subproject signed

Subproject execution Physical advances and 2.25% of the total value of the subproject payments Subproject closing Subproject completed 0.5% of the total value of the subproject and administrative closing Total of 5% of the value of the subproject

Table 7: Payments for FPS – Projects Above $US20,000

Stage Output Payment Procurement Subproject contracts 2.25% of the total value of the subproject signed Subproject execution Physical advances and 2.25% of the total value of the subproject payments Subproject closing Subproject completed 0.5% of the total value of the subproject and administrative closing Total of 5% of the value of the subproject

70. The team considers it important to coordinate project activities with Civil Defense, under the Vice Ministry of Civil Defense and Cooperation for Integral Development (VIDECICODI) – Ministry of Defense. This is because the legal framework within the country also gives responsibility for the planning and management of emergency activities to this institution. In addition, since local capacity is often weak and therefore may create delays in implementation, the FPS will assist communities and municipalities in the implementation of the works, particularly in areas of low capacity. Finally, the Global Facility for Disaster Reduction and Recovery (GFDRR) grant will also provide support to the local communities by building their capacity to implement the works. The team will coordinate with the Vice Ministry of Decentralization in providing community- level technical assistance.

Project Supervision

71. The proposed project is an emergency operation. In accordance with BP/OP 8.00, the team expects to carry out continuous supervision through frequent missions and support from the local office. Close supervision and FPS strengthening, combined with a GFDRR grant for technical assistance, will ensure strong project implementation support. In addition to the prior review supervision to be carried out by the Bank, the procurement team will carry out an ex post review and provide procurement guidance as needed. See Table 4 for a summary of Project Costs (and Annex 3 for a detailed table).

Table 8: Project Costs

Components Activity Cost in US$

Component 1. Strengthening the National System for Risk 2,300,000 Management Policy Development for Sustainable Reconstruction 1,500,000 Institutional Strengthening 800,000

Component 2. Rehabilitation, Reconstruction, and Small 10,200,000 Mitigation Works Execution of Rehabilitation and Reconstruction 8,580,000 Works Accompanying Technical Supervision for the 620,000 Execution of the Works Execution of Small Mitigation and Rehabilitation 1,000,000 Works

E. Project Risks and Mitigating Measures

Critical Risks Proposed Measures Risk Level Country level Country’s Public Financial Implementation arrangements have been discussed and S Management (PFM) and evaluated. As a result, and in compliance with current Procurement risk rating institutional framework, the largest component will be (including sub-national implemented through the FPS, which has experienced in WB- level) is substantial.17 financed projects and is currently going through an integrated institutional strengthening plan. Regarding the UPRRD, specific arrangements are discussed to strengthen the UPRRD in terms of staffing, and with the design of simplified processes and procedures to quickly undertake the required tasks. The drastic salary reduction The UPRRD, currently under now under VPTA, was M in the public sector limits its established under the VPEP with the support of UNDP and will capacity to attract and be strengthened with the proposed Credit with technical and maintain qualified staff. fiduciary professionals to be selected following Bank procedures. Therefore, the terms of reference for key staff will be approved by the Bank. Although the salary levels will be similar to the ones applied for the rest of the public sector, having an external source of financing can ensure staff stability. Regarding the FPS, key financial management-experienced staff has remained at the Central Office during the last years. The strengthening action plan includes specific training on Bank processes and procedures. There is an ongoing struggle This struggle may be clarified once the Constitutional Assembly S between the national settles on the autonomy of regional governments. The most government and prefectures likely outcome will be that the central government will be in over who should be in charge of national government policies and of rules and

17 2004 Bolivia Country Financial Accountability Assessment

charge of prevention, regulations for sectoral work. preparedness, and To distance itself from the political constraints, the project will rehabilitation. focus on implementation of the National Plan for Sustainable Rehabilitation and Reconstruction (PRRES), which as per Supreme Decree 29049, is under the Ministry of Planning and Development. By focusing its position in this context, the project should be able to avoid excessive politicization. Project level The implementation of FPS is designing specific and streamlined processes and S small works (less than procedures in coordination with the UPRRD, including the $20,000), dispersed in definition of roles and responsibilities of both entities and the different rural municipalities. Detailed work plans will be reviewed and agreed municipalities—most with on with the Bank. scarce capacity—may pose several difficulties and Additional verification and oversight mechanisms are also being challenges in designing discussed. procedures that on the one hand ensure the quality of the work and adequate use of resources, but on the other hand are simplified, smooth, and easy to monitor. Implementation of capacity Close supervision and FPS strengthening as part of the project, M building at FPS. combined with a GFDRR grant for technical assistance, will ensure strong support in project implementation. Delays in the selection of A set of eligibility criteria has been pre-approved. A list of recovery works and priority recovery interventions was also developed during the M vulnerability reduction appraisal mission. activities.

Entity Level FPS: Several weaknesses in With the support of the WB, a thorough Operational Review of S the internal control the FPS has been carried out. Key recommendations of such environment and other review, including mitigating measures, have been included in a deficiencies on FPS time-bound action plan. The Bank has arrangements in place for performance identified as the supervision of FPS’ Action Plan. part of the supervision and other specialized reviews conducted within the last year. Overall Risk S

F. Terms and Conditions for Project Financing

72. The proposed project will be an IDA operation, with the requisite terms and conditions. Conditions for effectiveness are: a) Signing of Subsidiary Agreement between the Government and FPS, and b) Formal adoption of the Operations Manual through letter from Vice-Minister of VPTA.

Annex 1. Detailed Description of Project Components Bolivia: Emergency Recovery and Disaster Management Project

Component 1: Strengthening the National System for Risk Management – US$2,300,000

Under this component, activities will be focused on the development of strategic plans and norms relating to rehabilitation/reconstruction and risk mitigation, and on the integration of the various sectors in an emergency recovery framework.

Efforts will initially focus on what is required to implement the present reconstruction activities to be executed under the National Plan for Sustainable Rehabilitation and Reconstruction (PRRES). These activities include the development of norms, legislation, and information systems required to support disaster recovery operations as an initial approach to the long-term integration of improved procedures and mechanisms for disaster rehabilitation/reconstruction. Efforts will also support the development of a potential Risk Management Fund (FORADE).

In addition, this component will build on the experiences of the current reconstruction program to improve and formalize the recovery operation model and integrate associated sectors in a structured recovery framework for use in future disaster situations. This will be accomplished, in part, by providing capacity-building workshops to strengthen institutional capacity and coordination both within and among sectors.

Subcomponent 1.1 Policy Development for Sustainable Reconstruction – US$1,500,000 This subcomponent will support the following:

1.1.1 Interinstitutional coordination support for disaster reconstruction and rehabilitation under the PRRES (VIDECICODI - VPTA)

This sub-component is designed to provide institutional support for the implementation of the current disaster recovery/reconstruction program. Activities will include prioritization of rehabilitation works, technical assistance with the design and supervision of works, institutional strengthening and capacity building within the municipalities (local and regional workshops/meetings on project prioritization and validation), and support of coordination between national and local government/public entities by enhancing communication.

1.1.2 Incorporation of risk management in the territorial planning processes (VPTA)

This sub-component will include the development and implementation of methodologies for risk management/risk mitigation and the incorporation of these concepts in territorial planning. Activities include a pilot project integrating risk management concepts; drafting a law for the incorporation of risk management into territorial planning; and

development of a national framework for resettlement of people living in areas of recurrent, non-mitigable risk from natural disaster.

1.1.3 Incorporation of risk management in public investments (VIPFE)

Under this sub-component, the project will assist in the integration of risk management/risk management concepts in the planning and execution of public sector investments. Activities will focus on the development of legislation, regulations, and policies designed to improve the performance of public sector investments through vulnerability reduction, and on socialization and incorporation of the concepts of risk prevention into the national development process through workshops and training activities at the sectoral level.

1.1.4 Development support for the National Information System (SNID)

Improvements in the reliability and distribution of information supporting risk management decision-making are critical to the vulnerability reduction process. This sub-component focuses on the development of information collection, management systems, and communication to improve risk identification and management. Activities include the following: strengthening the SNID unit within the MPD, development/strengthening of a risk-management subsystem within the Vice Ministry of Territorial Planning and the Environment (VPTA), development/strengthening of risk management information and analysis within Civil Defense, and support for the National Meteorology and Hydrology Service (SENAMHI) to improve and reactivate the meteorological and hydrological network by improving and/or adding observation stations and enhancing data collection and distribution systems for risk analysis and early warning. Particular importance will also be given to strengthening the generation and administration of information at the local (departmental) level. Decentralization of the information system has been one of the recommendations from previous operations, and the Government of Bolivia (GoB) has stated that local governments are asking for this.

1.1.5 Preliminary studies for the development of a risk-financing strategy (VPTA)

The recent emergency has revealed weaknesses in the legal framework, allowing for the financing of recovery activities. This subcomponent will assist with improvements of the recovery financing framework, including some preliminary analysis of risk-financing strategies and legal framework.

Activities include assistance with the development of disaster recovery policies and the legal framework, revision of enabling legislation for financial vulnerability reduction complementing efforts already supported by the United Nations Development Programme (UNDP), development of regulations for the management and execution of the Risk Management Fund (FORADE), and training and workshops on risk financing.

1.1.6 Technical assistance for the development of a contingency plan for La Niña (VIDECICODI)

A contingency plan for La Niña will be developed. Small mitigation works will be identified as needed to be partially implemented under component 2, following the same screening, selection, and implementation arrangements.

Subcomponent 1.2 Institutional Strengthening – US$800,000 This subcomponent will support the following.

1.2.1 Strengthening of the National Risk Management System through implementation of Component 1 recommendations (VIDECICODI)

Using the experience gained under the current recovery effort, this subcomponent will systematize and analyze PRRES experiences, develop draft legislation to formalize recovery operations responsibilities and authorities at the national level, develop a methodology and implementation model for the execution of emergency work (through workshops and training events within and across sectors), and hold workshops and training events to include cross-sectoral and intersectoral considerations. As stated in sub-component 1.1.4, emphasis will be placed on generation and administration of information at the local (departmental) level, in line with the goal of decentralizing the information system.

1.2.2 Strengthening of risk management in sectors and territorial entities (VPTA)

To advance the integration of sectoral risk management units in the recovery management framework, this sub-component will provide institutional support at the sectoral and territorial levels to improve communication and participation in future recovery operations. Activities will include technical assistance for the organization and development of sectoral risk management units (nine target sectors)18; strengthening and developing disaster risk units at the territorial level; assistance to the VPTA for the organization, design development, and integration of a sectoral-focused program for risk management; and building the capacity of the risk management units through training and workshops.

1.2.3 Project administration and management support (VPTA)

As the responsible entity for the project, the VPTA will be in charge of the technical, financial, procurement, and disbursement supervision of the project. More specifically, for Component 1, the VPTA will be directly responsible for all technical and fiduciary documents. (For Component 2, the VPTA will be responsible for supervising the work of the National Fund for Productive Social Investment [FPS], which will be responsible for implementation of this component.)

18 Agricultural, transport, housing, basic sanitation, watersheds, irrigation, decentralization, civil defense, and treasury.

This subcomponent will provide consulting support to the FPS and the VPTA to include validation, implementation, and supervision in the five regions where rehabilitation and reconstruction works have been prioritized, and procurement, disbursement, and financial management support.

In addition, equipment will be provided in support of project implementation to include limited procurement equipment (goods), such as computers and desks.

The VPTA will also administer the citizen report cards, training needs assessments, skills tests for the monitoring and evaluation of the works and institutional strengthening in the project.

Component 2: Rehabilitation, Reconstruction, and Small Mitigation Works – US$10,200,000

After the Declaration of Emergency, the Government of Bolivia (GoB) prepared the PRRES. The first objective is to conduct emergency rehabilitation/reconstruction in order to restore productivity to sectors affected—that is, income-generating activities— and transportation and national supply systems. The second objective is to rebuild the physical, social, and supportive infrastructure affected by El Niño, in a manner reducing the country’s vulnerability to future extreme events through improved design and construction integrating risk mitigation and prevention strategies. Beyond providing a framework for these more immediate actions, the PRRES is also working on a plan for producing clear guidelines and policies for the integration of disaster reduction/prevention in future development activities at the sectoral, sub-national, and local levels.

A series of rehabilitation/reconstruction works will be undertaken in an effort to restore damaged infrastructure. Such reconstruction works will be financed only in specific areas determined to have been particularly affected by El Niño. Most are less than US$100,000, and a large majority is less than US$20,000.

Activities to be financed include, inter alia, rehabilitation of water and sewage systems; repairs to basic infrastructure in small schools, housing, and small and health centers; bridge and road repairs; and investments in water intakes, small earthen irrigation structures, riverbank protection, filtration galleries, and related activities

Physical works under this component have been identified by local communities and submitted by municipalities, prefectures, and related sectoral agencies. See Annex 9 for a preliminary list of pre-identified works.

Under the PRRES, five regions have been prioritized on the basis of poverty level and extent of damage from the most recent El Niño event. Of the total list of project proposals submitted by communities and municipalities, the PRRES and the FPS have identified and prioritized a list of 261 projects. Regions will be treated equally. Priorities

have been established within the regions in order to respond to the worst-affected municipalities.

All works under US$20,000 will be executed based on the following criteria: Works must be responses to damages from El Niño, they should each be under US$20,000, and the municipality should be able to control and supervise the works, with assistance from the FPS as needed. If the municipality fails to comply with these criteria, it must pay for the works itself. These works will be subject to ex post review, and the FPS will provide technical assistance for supervision and the review.

For individual works above US$20,000, the FPS will conduct a more extensive process of evaluation in which the area of the proposed project/small work will be visited in order to validate the proposal, corroborate that it is in response to an El Niño effect, prepare the designs, and prioritize the project with the municipality. The specific criteria for prioritization of these works will be developed during the project.

The works contemplated under this project are of small scale or fall under the category of technical assistance (TA). Specifically:

• Works will not occur in protected areas. • Works will not include any new construction or expansion of existing infrastructure such as treatment plants, water intakes, or transportation facilities. • Works are designed to rehabilitate and strengthen damaged infrastructure or agricultural production facilities. • Works will occur only in existing areas of production. • No relocations will occur as a result of the project and none are planned in the project areas by any relevant Bolivian Government Ministry.

As part of its ex post review procedures and validation process, the FPS will make sure that the works to be executed have undergone a proper consultation process among the relevant stakeholders.

Subcomponent 2.1 Execution of Rehabilitation and Reconstruction Works – US$8,580,000

Rehabilitation works comprise those works in which damaged infrastructure is to be repaired and restored to its original operational capacity. In some cases, modifications will be made to improve disaster resistance based on a review of vulnerability, and in accordance with any changes observed in the location of the works resulting from the disaster, such as river bank erosion or rechanneling resulting from flood activity or the increased landslide vulnerability created by erosive forces. Typically, works of this nature require an initial assessment, development of a scope of activities, and development of a bill of quantities after which works are contracted.

Reconstruction works are slightly more complex in that they may require the production of engineering designs prior to contracting, and some basic realignment to restore

function and improve resistance to disaster. In rare cases they may require demolition and reconstruction in a more secure location.

Activities under this sub-component include the execution of works primarily through the municipalities, and the purchase of materials to support local rehabilitation efforts.

This subcomponent will finance direct and indirect operating costs incurred by FPS in the administration of the Productive Investments component. Payments will be based on outputs and will not exceed 5% of the total subproject cost. The methodology for payment is summarized in the following tables:

Table A.1.1: Subproject Stages, Outputs and Payments for FPS

Projects Under $US5,000

Projects Between $US5,000 and $US20,000

Projects Above $US20,000

The payment methodology is designed to provide FPS with adequate liquidity to maintain proper operations during project execution, while producing incentives for speeding up

subproject implementation. A fixed amount is paid for sub-project profiles since not all of them will be viable and thus proceed to subsequent stages. The amount paid for profiles is included under the ceiling of 5% in all other cases. The payment methodology and the total percentage paid to FPS will be reviewed at project mid-term on the basis of a study to be financed by the project.

Sub-component 2.2 Accompanying Technical Supervision for the Execution of the Works – US$620,000

Activities under this sub-component are designed to provide technical and engineering support to the PRRES and appropriate municipalities to assist with the planning, design, and supervision of works. Engineering consultants or firm(s) will be contracted to support the PRRES with, among other things: (a) evaluation of works and development of specifications and bills of quantities; (b) development of terms of reference, specifications, and contract and bidding packages; (c) production of designs and engineering assessments; (d) supervision of large works and assistance to municipalities in works execution; and (e) quality assurance and inspection assistance.

Subcomponent 2.3 Execution of Small Mitigation and Rehabilitation Works - US$1,000,000 A list of small mitigation works for La Niña will be identified as needed under component 1 to be partially implemented under component 2, following the same screening, selection, validation, and implementation arrangements as the rehabilitation and reconstruction works.

Annex 2. Results Framework and Monitoring Bolivia: Emergency Recovery and Disaster Management Project

Project Development Outcome Indicators Use of Outcome Information Objectives In support to the implementation of the (a) Number of infrastructure facilities • To allow midterm review to monitor for National Plan for Sustainable restored and number of beneficiaries application and relevance of PRRES Rehabilitation and with restored access. plan implementation. Reconstruction (PRRES), the project will contribute to (i) (b) Disaster Risk Management Units • To inform the midterm review of the restore access to basic established in 9 target sectors and 9 success of training and workshops held infrastructure19 for a portion of departments; staff trained; staff of units to strengthen capacities within sectors the affected population in five fully paid by respective entities; in future recovery operations. target regions, and (ii) submission by all 9 sectors of sectoral strengthen capacity for the risk management strategies to MPD. • To inform the national government of government to respond to progress on the implementation of future disasters. validated activities of the PRRES. Intermediate Results Results Indicators Use of Results Monitoring for Each Component Component 1: To track progress of plans, strategies, and Strengthening the National institutional norms relating to System for Risk reconstruction/rehabilitation and risk Management mitigation in response to natural disaster, and to strengthen the institutional capacity of the country for the long-term integration of improved procedures and mechanisms for disaster reconstruction and rehabilitation. (a) Inter-institutional Recommendations (see Comp 1.1) for a coordination for disaster National Risk Management System reconstruction and submitted to the MPD for consideration. rehabilitation supported. (b) Risk management - Number of territories implementing incorporated within territorial pilot projects that integrate risk planning processes. management concepts. - Draft of legislation for incorporation of risk management in territorial planning submitted to the MPD for consideration. (c) Risk management - Draft legislation for implementation of incorporated in public sector vulnerability reduction strategies in investments. public investments submitted to the MPD for consideration.

19 Including, inter alia, rehabilitation of water and sewage systems; repairs to basic infrastructure in schools, housing, and small health centers; bridge and road repairs; and investments in water intakes, small earthen irrigation structures, riverbank protection, filtration galleries, and related activities

- % trainees scoring above 75% in skills test administered post training in risk prevention and vulnerability reduction at the sectoral and departmental levels (d) Development support - % of trained territorial planning vice provided for the National ministry personnel and personnel in 9 Information System (SNID) target sectors responding above 75% to and the National Meteorology skills test administered post training and Hydrology Service (SENAMHI). (e) Preliminary studies for - Draft of national risk-financing strategy risk-financing strategy submitted to the MPD for consideration. developed. (f) The National Risk - Draft legislation to formalize recovery Management System operations responsibilities and strengthened (through authorities submitted to the MPD for implementation of Component approval. 1.1 recommendations). (g) Risk management - % trainees scoring above 75% in skills strengthened in sectors. test administered post training in risk prevention and vulnerability reduction in the sectoral risk management units

Component 2: To implement the Plan for Sustainable Rehabilitation, Rehabilitation and Reconstruction relating Reconstruction, and Small to damage caused as a result of the 2006–07 Mitigation Works El Niño event. (a) Rehabilitation and - % of affected population reporting reconstruction of prioritized improved access to basic infrastructure works in the 5 regions in 5 regions (through standard citizen executed. report cards issued once works implementation has begun). (b) Accompanying technical - Citizen report cards (see above) and support for works execution team supervision visits to random sample provided. sites will also report on quality of improved infrastructure.

Monitoring and evaluation has been mainstreamed into all project components and will be conducted at three levels: (a) contract compliance, (b) impact monitoring, and (c) project implementation. With the assistance of the Bank team, the Vice Ministry of Territorial Planning and Environment (VPTA) will assess the progress achieved on a semiannual basis.

The Bank will closely coordinate with the VPTA and retain the services of experienced environmental and social specialists to ensure that the respective frameworks are adhered to at all times. In addition, the Bank team will conduct frequent supervision missions to assess progress made in the implementation of project activities. Supervision missions will draw lessons learned to date and provide guidance to the project team. In addition, the Bank will conduct a midterm evaluation of project execution. The midterm review will be conducted no later than a year and a half after the first project disbursement. The midterm review will focus on (a) progress in achieving project outcomes, (b) institutional arrangements for project implementation, (c) effectiveness and suitability of the monitoring system, and (d) review of both the project implementation plan and the Project Operational Manual.

A final evaluation will be conducted in the last semester of project execution. The key objectives of this evaluation will be to assess attainment of the expected project results and to draw lessons learned from project implementation.

(a) Number of infrastructure Inventory 30% of 70% of 100% of facilities restored and being affected affected affected number of beneficiaries with carried out; population population population Semiannual FPS Progress FPS restored access. expected report cards report cards report cards Reports completion report report report end March satisfactory satisfactory satisfactory 2008. improvement improvement improvement

(b) Disaster Risk 0 of 9 9 9 9 Management Units 0 of 9 9 9 9 established in 9 target sectors and 9 departments;

Unit staff trained; 0 50% 100% 100% VPTA Semiannual VPTA Progress Unit staff fully paid by Reports respective sectors and 0 0 50% 100% departments;

Submission by all 9 sectors of sectoral risk management 0 0 0 Submitted strategies to MPD.

Component 1: Strengthening the National System for Risk Management Recommendations (see Comp 1.1) for a National VPTA Risk Management System 0 0 100% 100% Semiannual Progress VPTA submitted to the MPD for reports consideration. - Number of territories VPTA implementing pilot projects 0 0 1 1 Semiannual Progress VPTA that integrate risk reports management concepts. - Draft of law for incorporation of risk VPTA Draft management in territorial 0 0 1st draft Semiannual Progress VPTA submitted planning submitted to the reports MPD for consideration. - Draft legislation for implementation of VIPFE vulnerability reduction Draft 0 0 1st draft Semiannual Progress VIPFE strategies in public submitted reports investments submitted to the MPD for consideration. Trained territorial planning vice ministry personnel and VPTA personnel in 9 target sectors 0 30% 70% 100% Semiannual Progress VPTA scoring above 75% in skills reports test administered post training - Draft of national risk 0 0 1st draft Draft Semiannual VPTA VPTA

Arrangements for Results Monitoring Target Values Data Collection and Reporting Data Responsibility Frequency Collection for Data Outcome Indicators Baseline YR1 YR2 YR3 and Reports Instruments Collection Financing strategy Submitted Progress submitted to the MPD for reports consideration. - Draft legislation to formalize recovery VPTA Draft operations responsibilities 0 0 1st draft Semiannual Progress VPTA submitted and authorities submitted to reports the MPD for approval. Trainees scored above 75% to skills test administered VPTA post training in risk 0 30% 70% 100% Semiannual Progress VPTA prevention and vulnerability reports reduction, in the sectoral risk management units

Component 2: Implementation of Rehabilitation, Reconstruction, and Small Mitigation Works - % of validated rehabilitation and FPS Progress 0 10% 60% 100% Semiannual FPS reconstruction works reports implemented. Citizen report cards reporting satisfactory FPS Progress 0 10% 60% 100% Semiannual FPS quality of improved reports infrastructure

Annex 3. Summary of Estimated Project Costs Bolivia: Emergency Recovery and Disaster Management Project

Table A3.1. Project Cost Detail

Components Activity Cost in US$

Component 1. Strengthening the National System for Risk 2,300,000 Management Policy Development for Sustainable Reconstruction 1,500,000 Interinstitutional coordination support for disaster 54,000 reconstruction and rehabilitation under the PRRES

Incorporation of risk management in the territorial 432,700 planning processes Incorporation of risk management in public 14,500 investments Development support for the National Information 454,675 System (SNID) Preliminary studies for the development of a risk- 344,000 financing strategy Technical assistance for the development of a 200,125 contingency plan for La Niña Institutional Strengthening 800,000

Strengthening of the National Risk Management 37,000 System through implementation of Component 1 recommendations Strengthening of risk management in sectors and 456,000 territorial entities Project administration and management support 307,000

Annex 4. Financial Management and Disbursement Arrangements Bolivia: Emergency Recovery and Disaster Management Project

Executive Summary

As part of the preparation process of the Disaster Recovery and Vulnerability Reduction Project, a financial management assessment was performed to determine the adequacy of the financial management arrangements to support project implementation for each of the implementing entities, UPRRD within the Viceministry of Territorial Planning and the Environment (VPTA) and the Fund for Social and Productive Investment (FPS). These assessments were performed in accordance with OP/BP 10.02 and the Manual “Financial Management Practices in World Bank Financed Investment Operations”, and Guidelines: Financial Management Aspects of Emergency Operations Processed Under OP/BP 8.00. Therefore, and to the extent possible, existing arrangements are being used, and the objectives of the assessment were to determine the adequacy of the proposed or existing FM arrangements –mainly in the short term-, and to determine the adequacy of each entity’s capacity to properly manage and account for all project proceeds and to produce timely, accurate and reliable financial statements for general and Bank special purposes.

The financial management capacity assessment of FPS –reflected in this PAD- is based on the results of the FPS Operational Review conducted with the support of the Bank at end of FY07, and it fully reflects the agreements reached with FPS for the implementation of WB-financed operations –complementing them, as necessary, to address any specific requirement under an ERL type of operation. As a result of such review, a time-bound action plan including mitigating measures to address identified external and internal risks has been agreed with FPS to strengthen its operational performance, including the internal control environment.

Overall Conclusion

Bolivia’s country Public Financial Management (PFM) risk rating is substantial. The advances reached towards improving the PFM, have been offset by several weaknesses found in the uneven application of the legal framework, particularly with regard to financial reporting and internal control environment. The situation at sub-national level is not very different.

Taking into consideration, the nature of the operation, the FM review has been focused on the design of essential FM controls and arrangements that are simple, flexible and easy to monitor, but that at the same time can ensure that associated risks are adequately being addressed and that the implementing entities will be able to provide the Bank, the Borrower and other interested parties with accurate and timely information regarding project resources, expenditures and activities. Under those principles, and to the extent possible, project design and implementation arrangements will rely –for the largest Component- on existing arrangements and entities, like FPS, a functional entity, that has experience in implementation of WB financed projects and that is currently going through an integral strengthening action plan agreed with the Bank. Those actions are

mainly related to the adjustments of: subproject cycle, operational policies, including internal controls and management information system. As of the date of this PAD, those actions are in progress and their completion is being followed –and secured- through the Second Participatory Rural Investment Project.

Regarding UPRRD, and taking into account the nature of the activities they will be implementing, simplified financial management arrangements have been agreed, and their effective operation will be monitored through out project implementation.

The project inherent and control risk are rated as substantial. Consequently, the project’s overall FM risk rating is substantial. Downgrading this rating will highly depend on the successful implementation of the FPS’ and UPRRD’s action plans. However, the risk profile on the project can be adversely affected if the implementing entities are not able to maintain the proposed arrangements, including qualified staff, throughout the project’s life.

On the basis of the review performed and progress achieved so far by both entities, the financial management team concludes that the proposed arrangements –as designed- can be considered acceptable to the Bank, subject to their effective and successful implementation.

SUMMARY OF FINANCIAL MANAGEMENT ASSESSMENT

The following sections summarize the results of the assessment of the proposed financial management arrangements to be followed by the Unit for Disaster Risk Prevention and Reduction (UPRRD) within the VPTA, and the agreements reached for the implementation of World Bank-financed projects implemented by FPS, following the recommendations of FPS Operational Review20.

Risk Assessment and Mitigation

The risk assessment presented below, constitutes a summary of the issues related to the project as a whole, as of the date of the capacity assessment for both entities, UPRRD and FPS.

Risk Risk Risk Mitigating Measure Incorporated Condition of Residual into Project Design Negotiations, Board or Rating Effectiveness (Y/N) INHERENT RISK Country level Country’s PFM risk rating Implementation arrangements have been Draft Ministerial (including sub-national level) S discussed and evaluated. As a result, and in Resolution formalizing is substantial.21 compliance with current institutional the establishment of framework, the largest component will be UPRRD and delegating implemented through FPS, which has Project Implementation. experienced in WB-financed projects and is

20 Operational Review of FPS, June 29, 2007 (Draft Report). 21 2004 Bolivia Country Financial Accountability Assessment

currently going through an integrated Negotiations (Y) institutional strengthening action plan. Regarding the UPRRD, specific arrangements have been agreed to strengthen the Unit, not only in terms of staffing, but also with the design of simplified processes and procedures to quickly undertake the required tasks. The drastic salary reduction UPRRD, preliminary established under Finance and done in the whole public M VPEP with the support of a UNDP Administrative Officer sector, limits the capacity to Program, and now under VPTA, will be within UPRRD has been attract and maintain qualified strengthened with the proposed Credit with appointed. staff. technical and fiduciary professionals –as Negotiations (Y) required- to be selected following Bank procedures,. Therefore ToRs of key staff will be approved by the Bank. Although the salary levels will be similar to the ones applied for the rest of the public sector, having an external source of financing can ensure staff stability. Regarding FPS, key FM experienced staff - at Central Office- have been maintained during the last years. The strengthening action plan includes specific training on Bank processes and procedures. Entity level The VPTA and UPRRD have The implementation of the activities under Simplified processes and limited capacity and no S Component 1 assigned to UPRRD are procedures have been experience in external- simple, clearly defined and do not require agreed for the financed projects. complex FM arrangements. implementation of those activities. Negotiations (Y)

FPS: Several weaknesses in An Operational Review of FPS was carried Compliance with key the internal control S out by external consultants, financed and actions is being followed environment and other directly contracted by the Bank. As result through the Second deficiencies on FPS of the review, an integral strengthening Participatory Rural performance identified as part action plan has been agreed with FPS. Key Investment Project. of the supervision and other issues and mitigating measures include a specialized reviews conducted streamlined sub-project cycle, better within the last year. defined roles and responsibilities of different actors (e.g. municipal governments), establishment of a monitoring & control unit, and a strengthened information system, with emphasis in the control environment.

Institutional strengthening actions are being implemented through a Project Preparation Advance approved under the Second Participatory Rural Investment Project. Project level The implementation of small Specific and streamlined processes and Agreed processes and works (between $1,000 and S procedures and detailed workflows have procedures, including $20,000), dispersed in been designed by FPS in coordination with draft agreements will be different rural municipalities – UPRRD, including the definition of roles reflected in the

most with scarce capacity-, and responsibilities of FPS, municipalities Operational Manual may pose several difficulties and UPRRD for the implementation of and challenges to design small works. Effectiveness (Y) procedures that on one side ensure the quality of the work, and adequate use of resources, but on the other side are simplified, smooth and easy to monitor. CONTROL RISK Budget: FPS’ current FPS has prepared specific procedures for Compliance with the budgetary procedures establish M the preparation of operational and required actions is being that budget modifications be financial programming. Those procedures followed through the approved by DUF. Experience will be assisted with a customized Second Participatory has demonstrated that such programming module to be included in Rural Investment Project process may considerably SAP (FPS’ information system), that will (PDCR II). delay the implementation of allow Regional Offices to prepare detailed sub-projects, when a budget program and budget allocation at sub- modification is required. project level. This enhanced programming process, if properly implemented, should diminish considerably the number of budget modifications required for the Project.

This being an emergency project, it was DUF’s approval of budget preliminarily agreed that DUF’s approving modifications formally role for budget modifications would be delegated to FPS delegated to FPS’ Executive Director. Executive Director.

Budget (other than FPS budget Both entities have worked on specific Simplified processes and modifications) S streamlined budgeting, and accounting, procedures in terms of Accounting processes and procedures in the framework budgeting, accounting, Internal Control of existing local requirements and internal control, and strengthening them as needed, including the financial reporting have design and implementation of punctual been agreed with the internal control mechanisms. Bank, and will be reflected in the Those processes will be also supported by a Operational Manual. strengthened information system within FPS (SAP) and SIGMA under UPRRD. Compliance with actions required under FPS is On the basis of former experience, a being followed through Monitoring & Control Unit will be the Second Participatory established within FPS, which among other Rural Investment Project. tasks will perform specific control activities over the Regional Offices –and as required- at the central office, to ensure compliance with procedures agreed Funds Flow In the framework of the procedures set by M SIGMA and the Single Treasury Account, funds flow arrangements have been defined for different components. Those procedures avoid unnecessary layers. As the specific regulations for the operation of the Single Treasury Account in US dollars are issued, the flow of funds would need to be adjusted

accordingly. Financial Reporting Format and content of Interim Financial Reports are issued Reports and Financial Statements have automatically from SAP M been agreed with the Bank. In the case of system for FPS. FPS, the necessary arrangements are being made to ensure that those reports are directly issued from SAP. In relation to UPRRD, IFRs will be prepared on the basis of the information kept in Excel spreadsheets duly reconciled with SIGMA budget reports. Required internal control mechanisms have been agreed to ensure comprehensiveness of the information.

Auditing The audit ToRs will provide for interim Audit ToRs for FPS and M visits, including the review on internal UPRRD agreed with the controls and on-site visits to a sample of Bank before Negotiations. civil works. Negotiations (Y) An acceptable audit firm selected six month after effectiveness. Overall FM Risk S

WEAKNESSES AND ACTION PLAN

All actions related to FPS are being addressed through the Second Participatory Rural Investment Project, in the framework of the strengthening action plan agreed with FPS. In relation to UPRRD, key actions have already been defined and agreed. However, those procedures need to be confirmed through the formal adoption of the Operational Manual and the Ministerial Resolution establishing the creation, structure and competences of UPRRD.

IMPLEMENTING ENTITIES

Following the implementation arrangements defined in section [D] of this document, it has been agreed that the financial management tasks would be undertaken by: a) UPRRD for Component 1, Institutional Strengthening for Sustainable Reconstruction; and b) FPS for Component 2, Implementation of PRRES – Rehabilitation, Reconstruction and Small Mitigation Works. Under such arrangements, the following sections describe the proposed financial management arrangements for each entity, identifying, as appropriate, the required additional actions to complete the design of acceptable financial management arrangements.

UNIT Disaster Risk Prevention and Reduction (UPRRD)

The UPRRD is a specialized unit created under the Vice Ministry of Territorial Planning and the Environment (VPTA). The main objective of the unit will be to coordinate the implementation of the PRRES (Sustainable Rehabilitation and Reconstruction Plan) with all relevant stakeholders. The UPRRD has been preliminary established with the support of a UNDP Program, and it is currently staffed with a Unit Chief, Finance and

Administrative Officer and two technicians. However, its structure, mandate and level of delegation still need to be formalized through the corresponding Ministerial Resolution to be issued by the Minister of Planning. Taking into consideration, the nature of this operation, it is expected that UPRRD will be granted certain level of administrative – fiduciary- autonomy in order to undertake the implementation of this ERL project following streamlined and simplified procedures.

Overall financial management tasks will be undertaken by the Finance-Administrative Officer. Given the size and volume of activities that will be directly implemented by UPRRD -from the financial management perspective- the current structure and staffing arrangements can be considered appropriate. However, in case the volume of activities increases -additional resources- the team may need to be strengthened.

Programming and Budget

The preparation of the annual program and budget will follow local regulations established by the Ministry of Finance22, and specific regulations and instructions issued by the Ministry of Planning, through its Administrative Unit, or any other specific procedure approved for emergency operations, as appropriate. Streamlined procedures for the preparation of annual budgets and budget modifications have been designed. Those procedures will also consider the following issues in order to allow for an adequate budget control: 1) timely preparation of programming, budget and procurement plan, establishing a clear relation among them; 2) proper recording of the approved budget in the financial management system, not only following Government required classification (partidas por objeto del gasto), but also a classification by project component and cost category (as needed); and 3) timely recording of commitments, payments and accruals as needed, to allow an adequate budget monitoring and also provide accurate information on project commitments for programming purposes. Given the nature of the operation, project monitoring will fully benefit from the budgetary controls included in SIGMA.

Accounting

UPRRD has to comply with the Governmental Accounting Standards. Therefore, the project would use the Chart of Accounts established by the Accountant’s General Office, followed by SIGMA (Government’s integrated financial management system). However, such chart of accounts will need to be complemented with a more functional classification including project components/sub-components and cost categories as needed. Project transactions and preparation of financial statements will follow the cash basis of accounting.

The project will benefit from the use of SIGMA, and the Single Treasury Account (CUT) to process payments. However, in order to address its information needs to ensure an adequate monitoring of project activities, the use of SIGMA requires to be complemented by the use of an additional tool that allows the use of a more customized classification of

22 Law No. 2042, Supreme Decree No. 27849 dated November 12, 2004 – Regulations for Budgetary Modification.

project expenditures. Taking into consideration the nature, size and reduced number of activities to be implemented by the UPRRD, –consultant services, limited purchase of goods and workshops- initially, project activities will be also recorded in an Excel Data Base, specifically designed to allow recording of project expenditures by project component and cost categories. Specific procedures have been established to ensure integrity and reliability of the information, including timely reconciliation with the budget information provided by SIGMA, to ensure the quality and reliability of the information. As project implementation progresses and UPRRD is strengthened and consolidated, within the Ministry of Planning, specific arrangements in terms of information system would be discussed.

Internal control and internal audit

Simplified workflows have been designed basically to reflect the payment processes and procedures for different types of expenditures -consultant services, goods and workshops- both within the Ministry of Planning and in relation to other beneficiary entities. Those procedures clearly identify responsible parties, internal controls mechanisms in terms of authorization and approval, and specific documentation required in each step.

Financial reporting

Taking into account the considerations made in the accounting section, interim financial reports (IFRs) will be prepared manually on the basis of the information available in the excel spreadsheets, duly reconciled with information on SIGMA’s budget module. The specific content and format of the Interim Financial Reports has been agreed and they will specify sources and applications of project resources and a statement of investment by project component, reporting the current quarter and the accumulated operations against ongoing plans. The reports will include credit proceeds, and local funds, as applicable. Those reports will be prepared on a quarterly basis and submitted to the Bank within 45 days of quarter end. The reports submitted to the Bank will be accompanied by the budget execution report issued by SIGMA.

Auditing

Annual audit reports on project financial statements, including management letter should be submitted to the Bank, within six months of the end of the Borrower’s fiscal year (December 31). The audit should be conducted by an independent audit firm acceptable to the Bank and under terms of reference approved by the Bank. Audit cost will be financed out of credit proceeds and selection would follow standard Bank procedures. The scope of the audit will be defined by UPRRD in agreement with the Bank based on project specific requirements and responding, as appropriate to identified risks. Given the nature of the operation and the proposed arrangements for the preparation of the SOEs, a special opinion of the Statement of SOEs, will be required.

Audit Report Due Date 1) Project specific financial statements June 30 2) Special opinions

SOE June 30.

FUND FOR SOCIAL AND PRODUCTIVE INVESTMENT (FONDO NACIONAL DE INVERSION PRODUCTIVA Y SOCIAL) (FPS)

FPS will be the agency in charge of implementing the project’s rehabilitation and reconstruction works. Likewise the rest of the projects for which FPS undertakes the municipal infrastructure components, FPS subproject cycle will rely on municipalities for execution of subprojects. Under such arrangements, FPS’ role will focus on ensuring technical quality of subprojects and compliance with fiduciary requirements. These tasks will be performed through FPS’ existing institutional and financial management arrangements, both at central and regional level, strengthening them as needed23.

Within FPS structure, the Finance Management Unit will assume overall responsibility for financial management tasks, through specialized staff, both at central and regional offices. Although FPS has gained sufficient experience in external financed projects, under different sources of financing –WB, IDB, and others- additional guidance would be required at the regional offices, given staff rotation, especially concerning the policy and procedure changes that will take place.

As a result of FPS Operational Review conducted with support of the Bank, a time-bound action plan has been agreed to strengthen FPS operational performance, including the internal control environment and mitigating measures to address identified external and internal risks. Key financial managements arrangements are detailed below, indicating, as appropriate, the specific arrangements agreed with the Bank.

Programming and Budget

The preparation of the annual program and budget will follow local regulations established by the Ministry of Finance24, and specific regulations and instructions issued by VIPFE for public investment, and Ministry of Finance and Directorio Único de Fondos (DUF), as applicable. In addition to the requirements and tools available in SIGMA and SISIN for the recording and control of municipal subprojects; a customized programming module is being developed as part of FPS information system (SAP). This tool will assist FPS in preparing a detailed program and budget allocation at the subproject level, which will also be used for monitoring purposes. On the basis of its former experience, FPS will have to issue specific procedures and guidance for Regional Offices to ensure an efficient and smooth administration of sub-project budget and an adequate control and monitoring of budget execution. While defining those procedures, the following issues will need to be considered in order to allow an adequate budget

23 Strengthening of FPS has been agreed in the framework of the preparation of other WB-financed projects, and key activities are in progress. 24 Law No. 2042, Supreme Decree No. 27849 dated November 12, 2004 – Regulations for Budgetary Modification.

control: 1) timely preparation of programming, budget and procurement plan, establishing a clear relation among them; 2) proper recording of the approved budget in the financial management system, not only following Government required classification (partidas por objeto del gasto), but also a classification by project component and cost category (as needed); and 3) timely recording of commitments, payments and accruals to allow an adequate budget monitoring and also provide accurate information on project commitments for programming purposes.

Different from other programs and recognizing the importance of being able to provide response on a timely basis, there is a preliminary agreement with authorities from the Ministry of Planning so as to simplify the current arrangements adopted by DUF for budget modifications, by delegating those approvals to FPS’ Executive Director.

Counterpart funding

In relation to counterpart funding provided by the municipal governments, FPS has in place a long-standing arrangement which is acceptable to the Bank. However the treatment and recording of counterpart contributions for small works will slightly vary from this standard procedure, given the different modalities established for their financing. Those specific arrangements are detailed in the Operational Manual.

Accounting

In compliance with Government Accounting Standards, FPS uses the Chart of Accounts established by the Accountant’s General Office, followed by SIGMA (Government’s integrated financial management system). Being a decentralized entity, FPS is able to issue consolidated general purpose financial statements (balance sheet, and statement of income and expenditures). However, and although SIGMA allows registration at subproject level, such chart of accounts will need to be complemented with a more functional classification including project components/sub-components and cost categories, as needed. Given the nature of the entity and its information needs, FPS has developed an information system (SAP for its name in Spanish) that allows the recording of every single subproject through out its subproject cycle. The interface developed between SAP and SIGMA allows that each advance certificate (planilla) approved in SAP, automatically generates a record in SIGMA. Following the procedures established in SIGMA, upon completing the required approval and authorization process, payments are executed through the Single Treasury Account (CUT in local currency). Project transactions are therefore recorded in both systems, SIGMA following the accounting and budgeting classification used by the Government and in SAP, following a more functional classification of project activities by components/subcomponents.

On the basis of the recommendations emerging from the Operational Review, FPS is currently working in strengthening its information system (SAP), to ensure that it meets the requirements in terms of internal controls, programming, and financial reporting.

Internal control and internal audit

Following the recommendations of the Operational Review, FPS is in the process of reviewing and adjusting, as appropriate, its operational processes and procedures, including fiduciary arrangements –both financial management and procurement- with the main purpose of strengthening the internal control environment and, at the same time, ensuring an efficient and smooth implementation of subprojects. As part of this process, the sub-project cycle has been streamlined, and roles and responsibilities of different parties involved in the implementation of subprojects –municipalities, sectors, prefectures – throughout the cycle have been clarified to avoid duplication and enhance accountability.

Key internal control mechanisms and additional mitigating measures to address identified risks have also been discussed and agreed as part of FPS’ institutional strengthening action plan (resulting from the Operational Review). Interim progress of the implementation of key actions is being followed through the Second Participatory Rural Investment Project.

Implementation of small works

Taking into consideration the size and nature of the civil works to be implemented, FPS and UPRRD have agreed on specific simplified procedures for the processing and financing of small works, under US$20,000.

• Civil works estimated to cost less than US$5,000 will be pre-financed by municipal governments, following the guidelines prepared by FPS. Upon verifying on-site the completion of the work under the specifications agreed, FPS would proceed reimbursing the municipal government the amount agreed.

• For civil works estimated to cost between US$5,001 and US$20,000, first payment will be made directly by the municipality with counterpart contributions. The rest of payments (maximum two) would be processed by FPS, on the basis of progress certificates approved by external supervisors.

In accordance with local regulations, project is also subject to FPS’ Internal Audit Unit, as per the annual audit program defined by this unit approved by the Comptroller’s General Office.

Financial Reporting

Taking into account the considerations made in the accounting section, it has been agreed that SAP will also be adjusted to allow the direct issuance of specific interim financial reports and financial statements. Those interim financial reports should specify sources and applications of project resources and a statement of investment by project component, reporting the current quarter and the accumulated operations against ongoing

plans. The reports will include credit proceeds, and counterpart contributions as applicable. Although core content of financial reports has been agreed, specific content and format still need to be defined, reviewed and finally developed in the information system. The final format and content of Interim Financial Reports have been agreed with the Bank. Those reports would be prepared on a quarterly basis and submitted to the Bank within 45 days of quarter end.

Auditing

Annual audit reports on specific project financial statements, including management letter should be submitted to the Bank, within six months of the end of the Borrower’s fiscal year (December 31). The audit will be conducted by an independent audit firm acceptable to the Bank and under terms of reference approved by the Bank. Audit cost would be financed out of credit proceeds and selection would follow standard Bank procedures. It has been agreed that scope of the audit would include interim visits to review the operation of specific internal control arrangements, as appropriate, especially at the regional level, including on-sites visits to construction works.

Audit Report Due Date 1) Continuing entity financial statements June 30 2) Project specific financial statements June 30 3) Special opinions SOE June 30 Compliance with Operational Manual June 30

FUNDS FLOW AND DISBURSEMENT ARRANGEMENTS

Considering the results of the assessments, the following disbursement methods may be used to withdraw funds from the credit: (a) reimbursement, (b) advance, and (c) direct payment.

Under the advance method and to facilitate project implementation, each implementing entity - FPS and UPRRD- will have access to a Designated Account (DA) in US dollars which will be opened and maintained in the Central Bank of Bolivia in the name of the project, for each implementing entity. These accounts would be managed by UPRRD and, by FPS, respectively. Therefore, they will have direct access to funds advanced by the Bank to these DAs. Funds deposited into the DAs as advances, would follow Bank’s disbursement policies and procedures, as described in the Disbursement Letter and Disbursement Guidelines.

Currently the Designated Accounts in the Central Bank of Bolivia are separated for each operation (i.e credit or Trust Fund) financed with multilateral or donor funds. However, the Bolivian Government has issued a Supreme Decree25 that establishes the operation of a Single Treasury Account in US dollars (CUT-ME) in the Central Bank of Bolivia. With the establishment of the CUT-ME, the proposal is that credit proceeds are directly

25 Supreme Decree No 29236.dated August 22, 2007.

deposited in this account, and similar to the CUT in Bolivianos, the CUT-ME would allow the opening of individual Libretas (savings accounts) under the name of the project from which they will have direct access to funds advanced by the Bank to be used for project eligible expenditures.

Under the arrangement described above for the CUT-ME, it is expected that implementing entities will be able to process payments in US dollars from the Libreta in the CUT-ME when required; however, to process payments in local currency, funds would still need to be transferred from the CUT-ME to the corresponding Libreta en Bolivianos, following the procedure described above.

As of the time of this assessment, specific regulations for the operation of the CUT-ME are still being worked out by the Viceministry of Treasury and have not been issued yet by the Ministry of Finance. Therefore, any changes to current arrangements regarding the Designated Account for each implementing entity will be reflected through an amendment to the Disbursement Letter as appropriate in the near future.

Taking into consideration that both implementing entities use SIGMA and the Single Treasury Account (CUT) in local currency, in compliance with local regulations, a specific Libreta within the CUT in local currency would be exclusively opened for credit funds and it would be used to process payments in local currency, following the established mechanism, which has proved to function efficiently for other projects.

Disbursements from the WB and supporting documentation for withdrawal applications

UPRRD

The ceiling for advances to be made into the DA would be US$300,000. The reporting period to document eligible expenditures paid out of the DA is expected to be on a monthly basis.

Supporting documentation for documenting project expenditures under advances and reimbursement methods would be records evidencing eligible expenditures (e.g. copies of receipts, invoices) for payments for consultant services against contracts valued at US$100,000 or more for firms, and US$25,000 or more for individuals; for payments for goods against contracts valued at US$200,000. For all other expenditures below these thresholds, supporting documentation for documenting project expenditures will be Statements of Expenditures (SOEs).

All consolidated SOEs documentation will be maintained for post-review and audit purposes for up to one year after the final withdrawal from the credit account. Direct Payments supporting documentation will consist of records (e.g.: copies of receipts, supplier/ contractors invoices). The minimum value for applications for direct payments and reimbursements will be US$50.000.

FPS

The ceiling for advances to be made into the DA would be US$1,000,000. The reporting period to document eligible expenditures paid out of the DA is expected to be on a monthly basis.

Supporting documentation for documenting project expenditures under advances and reimbursement methods would be records evidencing eligible expenditures (e.g. copies of receipts, invoices) for payments for consultant services against contracts valued at US$100,000 or more for firms, and US$25,000 or more for individuals; for payments for civil works against contracts valued at US$3,000,000; for payments for goods against contracts valued at US$200,000. For all other expenditures below these thresholds, documentation for documenting project expenditures will be Statements of Expenditures (SOEs). Customized SOEs would be used for reporting FPS administrative costs.

All consolidated SOEs documentation will be maintained for post-review and audit purposes for up to one year after the final withdrawal from the credit account.

Direct Payments supporting documentation will consist of records (e.g.: copies of receipts, supplier/ contractors invoices). The minimum value for applications for direct payments and reimbursements will be US$100,000.

Disbursement of FPS’ administrative costs

Following the recommendations of the Operational Review, FPS’ administrative costs will be disbursed following an output-based disbursement mechanism, which consists of disbursing on the basis of outputs up to 5% on the total cost of the sub-project. In the past, a similar mechanism was followed, except that disbursements were based only on payments. However, this mechanism was distorted creating a negative incentive that would affect the quality of the sub-projects.

This 5% will be disbursed as follows:

Table A.4.1: Subproject Stages, Outputs and Payments for FPS

Projects Under $US5,000

Projects Between $US5,000 and $US20,000

Stage Output Payment

Procurement Subproject contracts 2,25% of the total value of the subproject signed Subproject execution Physical advances and 2,25% of the total value of the subproject payments Subproject closing Subproject completed 0,5% of the total value of the subproject and administrative closing Total of 5% of the value of the subproject

Projects Above $US20,000

Stage Output Payment Procurement Subproject contracts 2,25% of the total value of the subproject signed Subproject execution Physical advances and 2,25% of the total value of the subproject payments Subproject closing Subproject completed 0,5% of the total value of the subproject and administrative closing Total of 5% of the value of the subproject

To this end, FPS will prepare customized SOE report detailing: i) the list of sub-projects under US$5,000 completed and reimbursed; ii) the list of sub-projects with contracts signed; iii) the amounts disbursed for each subproject under execution for a defined period of time; iv) the list of sub-projects completed with administrative closing. These reports will be submitted periodically to UPRRD, which would express conformity on the outputs completed by FPS, per an agreed upon procedure.

Table A.4.2: Credit Proceeds

Amount of the Credit Percentage of Expenditures Allocated to be Financed Category (expressed in SDR) (inclusive of Taxes)

(1) Goods, consultants’ 100% services, Training and VPTA Operating Costs under Part 1 1,350,000 of the Project, including audits

(2) (a) Works under Part 2 (a) (i) of the Project; 1,050,000 100% (b) works and consultants 2,000,000 services under Part 2 (a) (ii) of the Project, including audits; and 400,000 100%

(c) FPS Operating Costs under Part 2 of the Project 5% of the total cost of the civil works under Part 2 of the Project paid in tranches as set forth in the Operational Manual

(3) Refund of Project 3,200,000 Amount payable pursuant to Preparation Advance Section 2.07 of the General Conditions TOTAL AMOUNT 8,000,000

SUPERVISION PLAN

On the basis of the results of the assessments, identified risks and recommendations of the Operational Review of FPS, project supervision will include desk review of IFRs and annual audited financial statements; and on site visits to be performed on a semi-annual basis during the first year of the project, both for UPRRD and FPS. The FM supervision will also include visits to FPS Regional Offices. From the third year, supervision would be performed on an annual basis, unless otherwise required.

Annex 5. Procurement Arrangements Bolivia: Emergency Recovery and Disaster Management Project

A. General

The Vice Ministry of Territorial Planning and the Environment (VPTA), through its Unit Disaster Risk Prevention and Reduction (UPRRD) and the National Fund for Productive Social Investment (FPS) will be responsible for ensuring that procurement for the proposed project is carried out in accordance with the World Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits,” published in May 2004 and revised in October 2006; the “Guidelines: Selection and Employment of Consultants by World Bank Borrowers,” published by the Bank in May 2004 and revised in October 2006; and the provisions stipulated in the Credit Agreement.

B. Assessment of Capacity to Implement Procurement

A procurement capacity assessment was carried out by a LCSPT staff. Following the implementation arrangements defined in Section D of this document, procurement is proposed to be carried out by: (i) UPRRD for Component 1 (Institutional Strengthening for Sustainable Reconstruction); and (ii) FPS in conjunction with eligible decentralized agencies—prefectures, municipalities, or other local government entities for Component 2 (Implementation of PRRES – Rehabilitation, Reconstruction and Small Mitigation Works). The implementation details for activities are described in Annex 6 of the present document, and in the Operational Manual.

The capacity assessment relied on work done under the preparation of the PDCRII and the FPS Operational Review document. The Bank carried out an “Operational Review of FPS” with the aid of an international consulting firm. The findings from this review encouraged FPS to produce an Action Plan focused on three areas: a) consolidating operational processes and controls in the subproject cycle; b) modernization of the Subproject Administration System; and c) organizational strengthening. The Action Plan is included in Annex 6. The Action Plan has been budgeted and will be financed in full by the Project under Component 1. Organizational strengthening of FPS will focus on: a) the reinforcement of fiduciary capacities; b) the strengthening of FPS’ environmental unit; and c) carrying out a program of systematic training of personnel according to capacities and institutional needs.

The assessment reviewed the procurement arrangements proposed in the Procurement Plan. It looked also into UPRRD’s and FPS’: (a) organization, (b) facilities and support capacity, (c) staffing, (d) professional experience, (e) record-keeping and filing systems, (f) procurement planning and monitoring/control systems used, and (g) capacity to meet the Bank’s procurement reporting requirements. The findings support conformity with the Bank procurement guidelines and for using both the UPRRD and the FPS for project procurement implementation as follows:

Component 1: Strengthening the National System for Risk Management

The key issues and risks concerning project procurement have been identified and include: (i) an organizational structure at the UPRRD, and the proposed structure within FPS to be implemented before effectiveness; (ii) the risk of not knowing upfront the qualifications and experience of the staff that will work in procurement in the different agencies and their capacity; (iii) UPRRD staff lack experience in implementing substantive procurement following Bank’s procedures may make effective supervision of the procurement procedures difficult; (vi) UPRRD lacks of adequate control systems to monitor project implementation and filing procurement and contract management documents.

Individual consultants will be retained to (a) help develop plans, strategies, and institutional norms relating to reconstruction and rehabilitation and risk mitigation for works executed in response to adverse natural events and develop a long-term strategy for the implementation of reconstruction activities in future disasters; (b) prepare master plans and technical designs, and supervise works; and (c) prepare dissemination materials and conduct workshops for project prioritization and validation.

Individual consultants will also be retained to (a) provide consulting support to the VPTA for validation, implementation, and supervision in the five regions where works have been prioritized; (b) assist with the supervision of the FPS’ rehabilitation and reconstruction works; and (c) provide fiduciary support on procurement, financial management, and disbursement under Bank guidelines and policies.

Goods procured under this project would include: vehicles, furniture, computer equipment, and office supplies to support UPRRD’s and VPTA’s activities as project implementation unit. The procurement will be done using the Bank’s SBD for ICB and SBD agreed with or satisfactory to the Bank for NCB and Request for Quotations (RQ).

Non-consulting Services under this project would include: communication campaigns, logistics support for workshops and training (transport, materials and rental facilities), and the services for horizontal exchanges between local actors to disseminate good practices. The procurement of non-consulting services will be done using SBDs agreed with or satisfactory to the Bank.

Component 2: Rehabilitation, Reconstruction, and Small Mitigation Works

Municipal governments (MGs) will be in charge of maintaining most of the investments financed by the project. MGs will be in charge of the following: (i) selecting and managing consultants for strengthening activities; (ii) identifying investment priorities; (iii) carrying out procurement of works, goods and services for investment subprojects; and (iv) managing subproject contracts.

Simple Civil Works of Small Value. Procurement of works will be required to repair and restore damaged infrastructure to its original operational capacity, including the following: (a) rehabilitation and construction of riverbank defenses and restoration of potable water systems and sewage systems, including ground wells; and (b) realignment,

demolition, and reconstruction works to restore function and improve resistance to disaster. Procurement of works under US$20,000 will be conducted directly by the municipalities, with the support of the FPS. For works over US$20,000, the FPS will carry out the validation, profile, and design of works, with the help of a team in charge of the respective field visits. To avoid cumbersome and expensive supervision, works under US$20,000 will be ex-post reviewed by the FPS. Only works deemed acceptable would be grouped in packages presented to the Bank for reimbursement. Payment will be made by FPS in accordance with outputs delivered. Reductions from payments (or retentions) may be made for lower-quality level of outputs. The municipality and FPS will be free to propose the most appropriate solution to the contractors, based on quality specified in the specifications.

Shopping, based on comparing price quotations obtained from a minimum of three contractors, is assessed as the most suitable method. Single source can be used for extension of existing contracts. Record keeping for verification and audit is required. Requests for quotations must indicate the description of specifications of works and completion time. An evaluation of quotations must be provided, and the terms of the accepted offer be incorporated in a brief contract.

Municipalities can also rely on the participation of local community groups or individuals and small local private sector entities, in the delivery of works through negotiated contracts on the basis of specified schedule of prices and simplified specifications. The selection criteria and contracts will be provided in the operational manual.

FPS will provide oversight of the whole process on the basis of the level of risk represented by the municipality (as measured by a set of agreed indicators), and the size and complexity of the subproject’s procurement. In high-risk cases, FPS will conduct ex ante reviews of procurement and field visits to ensure every payment is supported by the level of physical implementation and quality specifications. In low-risk cases, FPS will conduct ex post procurement reviews, and field visits will be limited to subproject launch, and when subproject execution reaches 50% and 80% of disbursements. FPS will publish all contract awards on its web page. Information to be published will include at a minimum: the names of bidding companies, the company that was awarded the contract, and the contract amount.

Consultants. FPS will procure individual consultants to (a) provide consulting support to the FPS for technical assessments, development of scope of activities, and development of bill of quantities, terms of reference, specifications, contracts, and bidding packages; and (e) technical supervision quality assurance and inspection for the execution of the works. FPS will procure these consultants following its own selection procedures. The cost will be borne by FPS and will be included in an output-based fee to be disbursed to FPS on the basis of quality of procurement and timely contract execution delivery.

A description of remaining project preparation activities is presented in the table below.

Action Responsible Completion 1. Finalize the Procurement Plan. UPRRD By negotiations 2. Finalize the draft procurement section of the UPRRD By negotiations project operational manual. 3. Finalize draft ToRs and short list of UPRRD By effectiveness consultants. 4. Contract external auditors, based on short list UPRRD 3 months after satisfactory to the Bank. effectiveness

C. Risk Assessment

The overall project risk for procurement is substantial. Once there is evidence that the mitigating measures have been implemented and are working as intended, the level of risk for this project will be reassessed and revised accordingly. The table below presents the risk assessment, and the risk-mitigating measures incorporated into the design of the project, and the procurement management implementation arrangements.

Risk Issue Mitigating Action UPRRD has limited capacity and no The implementation of the activities under Component 1 experience in procurement in external- assigned to UPRRD are simple, clearly defined and do not financed projects. require complex procurement arrangements. However, UPRRD will be strengthened by retaining a procurement specialist to be selected following Bank procedures. This staff will be trained on Bank procurement procedures and policies. FPS has weaknesses in the internal The implementation of the activities under Component 2 control environment and contract represents the largest and logistically more complex to supervision. procure. FPS has procurement staff at Central Office who has been retained for the past years. The procurement unit has experience in WB-financed projects. However, under an integrated institutional strengthening action plan, staff will be trained on Bank procurement procedures and policies. Compliance with key actions will be monitored through the Second Participatory Rural Investment Project. Under Component 2, a significant FPS will provide technical and administrative assistance to number of small works (between municipalities and communities. An output-based fee will US$1,000 and US$20,000), will be be disbursed to FPS on the basis of quality of procurement executed by selected rural municipalities and timely contract execution delivery. Specific and and local communities. Procurement will streamlined processes and procedures and detailed be conducted following local procedures workflows have been designed by FPS in coordination with not assessed by the Bank, but with FPS UPRRD, including the definition of roles and oversight. responsibilities of FPS, municipalities and UPRRD for the implementation of small works.

D. Procurement Processing of Goods and Works

Procurement of Works: Procurement of works will be done using Shopping procedures based on comparing price quotations obtained from several contractors, with a minimum of three, is also an appropriate method for procuring simple civil works of small value. Requests for quotations shall indicate the specifications and completion time. The evaluation of quotations shall follow the same principles as of open bidding. The terms of

the accepted offer shall be incorporated in a purchase order or brief contract. Negotiated contracts for participation of local community groups or individuals and small local private sector entities in the delivery of works is also allowed on the basis of specified schedule of prices and simplified specifications.

Procurement of Goods: Procurement of goods will be done using the Bank’s Standard Bidding Documents (SBD) as procured using National Competitive Bidding (NCB) and Shopping procedures agreed upon as satisfactory to the Bank.

Project Costs by Procurement Arrangements (US$) Goods and Works Procurement Method Expenditure Category ICB NCB Shopping N.B.F Total 26 27 Cost 1. Works 9,780,000 9,780,000

2. Goods 60,000 608,620 668,620

Total 60,000 9,568,620 10,448,620

Selection of Consultants: Consulting Services under this project will be procured exclusively by the UPRRD. This will include services to be provided by individual consultants, such as the following: (a) auditing services, (b) UPRRD staff, and (c) advisory services under Component 1. The following selection procedures would be used for Consulting Services:

(a) Quality and Cost-Based Selection (QCBS): QCBS may be used for contracts estimated to cost more than US$100,000 equivalent for complex assignments for advisory services under the project. (b) Consultant’s Qualification Selection (CQS): CQS may be used for contracts estimated to cost less than US$100,000 equivalent for auditing, monitoring, and supervision of works, and small and simple assignments for advisory and training services under the project. (c) Individuals: Consultant contracts for specialized advisory services for the project to be provided by individual consultants and with an estimated cost under US$30,000 shall be selected through comparison of qualifications of three consultants. Consultant services contracted with individual consultants shall meet the requirements set forth in paragraphs 5.1 through 5.3 of the Consultant Guidelines.

Project Costs by Procurement Arrangements (US$ thousands) Consultant Services Procurement Method Expenditure Category QCBS CQS Other N.B.F. Total Cost

26 This may include community participation through negotiated contracts. 27 Non-Bank Funding.

A. Firms 400,000 400,000 B. Individuals 1,631,380 55,000 1,176,380 Total 400,000 1,176,380 55,000 1,197,580

Operating Costs: Operating costs such as office rental, utilities, communications, and salaries of incremental staff will be financed by the Credit in accordance with an annual plan agreed upon with the Bank. All such operating costs will be procured using the UPRRD and the FPS administrative procedures, which were reviewed and found acceptable to the Bank.

E. Details of the Procurement Arrangements Involving International Competition

1. Goods, Works, and Non-Consulting Services (a) List of contract packages to be procured following ICB and direct contracting:

1 2 3 4 5 6 7 8 9 Ref. Contract Estimated Procurement P-Q Domestic Review by Expected Comment No. (Description) Cost Method Preference Bank Bid- (yes/no) (Prior/Post) Opening Date None None None None None None None None None

(b) No ICB contracts for works and goods are foreseen. The first two NCB contracts for goods and the first two contracts for Shopping for works and goods each year will be subject to prior review by the Bank. All direct contracting will be subject to prior review by the Bank.

2. Consulting Services (a) List of consulting assignments with short-list of international firms.

1 2 3 4 5 6 7 Ref. Description of Estimated Selection Review by Expected Comments No. Assignment Cost Method Bank Proposals (Prior/Post) Submission Date None None None None None None

(b) Consultancy services (firms) costing above US$100,000 will be subject to prior review by the Bank. Consultant services (individuals) costing above US$25,000 will be subject to prior review by the Bank. All single source selection of consultants will be subject to prior review by the Bank.

(c) Short lists composed entirely of national consultants: Services estimated to cost less than US$100,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.

F. Advertisement

Procurement notices, expressions of interest for developing short lists of consulting firms and for selecting individual consultants shall be advertised on the project website, the government website, and at least in one local newspaper of national circulation.

G. Procurement Plan

In accordance with OP/BP 8.0, a Simplified Six-Month Procurement Plan has been drafted by the UPRRD, including Component 1 and for the subprojects (Component 2) on the basis of the sub-projects submitted by the municipalities and communities. The Plan was reviewed and cleared by the project procurement specialist at negotiations, and includes (a) the different procurement methods and consultant selection methods, (b) estimated costs, (c) prior review thresholds requirements, and (d) implementation time frame.

The Plan will be updated and submitted to the Bank for prior review and no objection every six months of each year of project implementation. Upon delivery of no objection, the UPRRD shall advertise the agreed plan in Development Business, newspapers, and other relevant publications.

H. Frequency of Procurement Supervision Missions

The Bank will assist the UPRRD in the start-up activities by providing training to key staff in procurement under Bank procedures. Nevertheless, it is recommended that the Bank carry out frequent procurement supervision, especially during the first year of project implementation. In addition to prior review of supervision tasks, the capacity assessment recommends a supervision mission every six months.

I. Thresholds for Procurement Methods and Prior Review

Thresholds recommended for the use of the procurement methods specified in the project procurement plan are identified in the table below, which also establishes thresholds for prior review.

Contract Value Expenditure (Threshold) Procurement Bank Prior Review Category (US$000) Method 1. Works = > 3,000 ICB All 3,000 < 250 NCB First two each year and twice-yearly of procurement plan, if required.

< 250 Shopping (Price First two each year Comparison) and twice-yearly of procurement plan, if required. 2. Goods 200 < 50 NCB First two each year and twice-yearly of procurement plan, if required. < 50 Shopping (Price First two each year Comparison) and twice-yearly procurement plan, if required. 3. Consultant Services Firms = > 100 QCBS Contracts = > 100 (including TOR, Short list, technical and final combined evaluation reports, and draft contracts < 100 QCBS, CQ, and TOR and all SSS contracts awarded under SSS Individuals = > 25 CI TOR, CVs and terms and conditions of contract and all contracts awarded under SSS < 25 CI and SSS TOR only and all contracts awarded under SSS

Note: NCB = National Competitive Bidding QCBS = Quality- and Cost-Based Selection CQS = Selection Based on Consultants' Qualifications SSS = Sole Source Selection

Annex 6. Implementation and Monitoring Arrangements Bolivia: Emergency Recovery and Disaster Management Project

Project Coordination and Management

The project will be coordinated and managed by the Ministry of Planning for Development (MPD), through the Unit for Disaster Risk Prevention and Reduction (UPRRD) at the Vice Ministry of Territorial Planning and the Environment (VPTA). The UPRRD, recently created by the Vice Ministry of Strategic Long-Term Planning (VPEP), with assistance from the United Nations Development Programme (UNDP) and the Bank, has been transferred to the VPTA and will manage and coordinate hazard risk management activities and projects. It will also function as the technical and fiduciary entity for this Emergency Recovery Credit (ERC), and receive capacity building support from the project. VIDECICODI will be a co-executor of the project, but their role will be limited to providing technical expertise in the design and supervision of small reconstruction and mitigation activities, with no direct financial involvement. An Inter- ministerial Steering Committee including the Vice Ministry of Territorial Planning and the Environment and VIDECICODI was created to allow for better coordination between the various agencies involved in the project.

The project will have two implementing agencies, the FPS and UPRRD. The operational justification for having two different implementation agencies is that while having only one agency would be simpler technically, other issues such as coordination, policy dialogue, and ownership do benefit from the involvement of the Ministry of Planning for Development (MPD).

Activity Implementation

The UPRRD will implement Component 1, which will be sub-executed by various sectoral and territorial entities. The UPRRD will also coordinate, supervise, and monitor the execution of Component 2, which will be under the implementing responsibility of the National Fund for Productive Social Investment (FPS) under the framework presented in Figure A6.2.

The Productive and Social Investment Fund (FPS) will be the agency in charge of implementing the project’s second component. The Ministries of Planning, in the name of the Republic of Bolivia, will transfer this responsibility to FPS through a subsidiary agreement. All subprojects will be procured and managed by municipal governments. FPS ensures that subprojects are eligible, conform to acceptable technical standards, and are managed according to the fiduciary provisions of the Financial Agreements and the project’s operational manual.

The Bank has completed its fiduciary (financial, procurement, and disbursement) evaluation of the UPRRD and has made the necessary recommendations so that it fulfills its fiduciary responsibilities for project implementation. The proposed arrangement for activities to be undertaken under UPRRD has been deemed acceptable, in particular

given the nature of the work to be accomplished and the relatively small amount of funds they represent. UPRRD will be further strengthened with additional technical assistance (TA) funds made available by the Global Facility for Disaster Reduction and Recovery (GFDRR).

Figure A6.1. UPRRD Flow Chart* [Please note: the unit has been transferred to VPTA)

Figure A6.2. Institutional Arrangements

Ministry of Planning and Development (MPD) - VPTA – VIDECICODI- World Bank UPRRD COMPONENT 1 COMPONENT 2 VPTA, VIPFE, etc. FPS

Other Ministries and Municipalities Vice-Ministries

Communities Sectors

Departments, Municipalities, Communities

The Bank mission reviewed the process that rehabilitation and reconstruction works must undergo before the execution of works and found it too complicated and lengthy to allow quick action in an emergency. Measures must be implemented to alleviate this bottleneck and to allow quick action. The mission met with the Vice-Minister of Public Investment and External Financing (VIPFE) and the FPS to determine how to simplify this process and how to expedite implementation of the PRRES. It was agreed that the VIPFE, upon receiving full documentation from the FPS, would certify within two days that funds for the project have been included in the National System of Public Investment (that is, the national budget), in accordance with the emergency requirements of the project. The complete documentation includes (a) a Unified Directorate of Funds (DUF) resolution, (b) a technical report, (c) a legal report, and (d) a budget.

The FPS has made a commitment to reduce its delays in document preparation. An important step to reduce these delays would be to expedite the DUF resolution: It was suggested that ministers within the DUF delegate decision-making powers to the FPS in cases of emergency to speed up the process, as this is one of the most critical bottlenecks identified.

Concerning the implementation of prioritized works, the Government of Bolivia (GoB) agreed to an immediate execution strategy for works under US$20,000. These smaller

works will be executed directly by the municipalities, with the support of the FPS, which will perform an ex post review in such cases (works under $20,000 will be subdivided into works under $5,000 and works above $5,000 but below $20,000. This will allow immediate execution for those under $5,000 by the municipalities, and very rapid execution of those above $5,000 and below $20,000, but that will include validation by the FPS and packaging in groups after classification of types of projects, all this to make the process more efficient, as these are very small projects). For those works over US$20,000, the FPS will carry out the validation, profile, and design of works, with the help of a team in charge of the respective field visits. To avoid cumbersome and expensive supervision of very small works proposed under the project, works under US$20,000 will be checked ex post by the FPS. Only works deemed acceptable would be grouped in packages presented to the Bank for reimbursement. This procedure will be detailed in the Operations Manual.

Implementation of sub-activities under Component 2 will be carried out by the FPS in conjunction with the decentralized agencies—prefectures, municipalities, or other local government entities—provided they have adequate capacity. Eligibility criteria to implement subactivities will be documented in the Project Operational Manual. Each implementing agency will sign a subsidiary agreement with the FPS and the UPRRD (referred to by the Bank, for this project only, as the Project Management Unit), spelling out their counterpart obligations and responsibilities for activity implementation. Payments for the FPS’ operational costs will be reimbursed as an output-based fee, reflecting FPS operating costs for these activities. This approach has been accepted by the Chief Counsel in the emergency context of the project (other projects that will have similar arrangements will have to provide more detailed calculation and regular review of the proposed fee).

The team considers it important to coordinate project activities with Civil Defense, under the Vice Ministry of Civil Defense and Cooperation for Integral Development (VIDECICODI) – Ministry of Defense. This is because the legal framework within the country also gives responsibility for the planning and management of emergency activities to this institution. VIDECICODI will be a co-executor of the project, but their role will be limited to providing technical expertise in the design and supervision of small reconstruction and mitigation activities, with no direct financial involvement. An Inter- ministerial Steering Committee including the Vice Ministry of Territorial Planning and the Environment and VIDECICODI was created to allow for better coordination between the various agencies involved in the project. In addition, since local capacity is often weak and therefore may create delays in implementation, the FPS will assist communities and municipalities in the implementation of the works, particularly in areas of low capacity. Finally, the Global Facility for Disaster Reduction and Recovery (GFDRR) grant will also provide support to the local communities by building their capacity to implement the works. The team will coordinate with the Vice Ministry of Decentralization in providing community-level technical assistance.

Subprojects Implementation (FPS):

FPS has a central office in charge of administrative matters, quality control, coordination, monitoring and oversight. It has one office in each department of the Borrower, which will be responsible for operating the subproject cycle. They will carry out subproject ex- ante evaluations, monitor contractual integrity, conduct field supervision (together with local actors), and will order payments to contractors and consultants. FPS regional offices are staffed by: a Departmental Director, a technical team in charge of evaluations, including specialists in eligible subprojects; a technical team in charge of field oversight of contracts; and an administrative team in charge of processing payment documentation. Disbursements are executed directly from the national office. FPS’ subproject cycle, agreed with the Bank under the PDCRII, is described in Table A6.1.

Table A6.1. FPS subproject cycle

Stage Output Responsibility Identification Project ideas -MG through plan Reception Registration by FPS -MG requests -FPS-D registers and classifies Pre-feasibility Subproject profiles -FPS-D generates profiles of eligible ideas Feasibility Complete subproject designs -MG selects consultant, supervises and approves payments -FPS-D reviews product, approves, requests disbursement and monitors -FPS-N disburses directly to consultant Ex-ante evaluation Subproject approval -FPS-D’s Departmental Committee for Project Approval approves -FPS-N assigns funds Financing arrangements Sub-grant agreement -MG, prefecture and FPS-D sign Procurement Subproject contracts -MG awards works and consultant contracts -FPS-D monitors (ex ante or ex post, depending on risk) Subproject execution Physical advances and -MG and prefecture deposit counterparts payments -MG awards contracts, supervises and approves payments -FPS-D reviews, approves, requests disbursement and monitors (field oversight intensity depending on risk) -FPS-N disburses directly to provider Subproject closing Legal, administrative and -MG and beneficiaries accept subproject financial closing documents -FPS-D prepares all documentation complete -FPS-N closes in system Ex post evaluation Assessment of subproject -FPS-N, in dialogue with FPS-D, MG and beneficiaries achievements O&M Sustainable use MG, community or producer group MG: municipal government; FPS-D: departmental office of FPS; FPS-N: National office of FPS.

FPS was created in 2001 under the National Dialogue Law with the objective of managing all national co-financing for municipalities under an equalization policy. Since then, its role has been widened to include financing of community investments under the government’s Social Protection policy and financing post-disaster reconstruction and rehabilitation works. Since its creation it has managed a large number of donor-financed projects (national financing for FPS has been negligible), including projects financed by the World Bank, IDB, OPEC, and bilateral agencies. FPS has been able to retain a core of

well-qualified personnel, in contrast with most agencies, and turnover has been relatively well managed to maintain capacity. It currently employs a total of 228 people, of whom 62 have more than 5 years of experience in the institution, 48 between 2 and 5 years of experience, and 118 have been hired by the current administration. Technical and administrative personnel occupy 36% of all positions each, the remainder consisting of support personnel. Sixty-one percent of all FPS functionaries are located in departmental offices.

For the ERDM project two other sub cycles in order to expedite implementation of sub works have been included, subproject under US$5,000 and subprojects between US$5,001 to US$20,000.

Figure A6.3 shows the project cycle for all projects under US$5,000 from the five target regions within the PRRES (more details will be provided in the Operations Manual).

Figure A6.3. Project Cycle for Projects Under US$5,000

UPRRD REUNION Analysis of Project reports are: Submits MG, UPRRD projects - Approved prioritized VPTA and portfolio - Rejected projects FPS submitted to - Substituted portfolio and MG’s And portfolio is guide to MG approved for each A of the participating municipalities.

Legal, FPS verifies Project administrative works completed implemented and closing and authorizes and Begin documents corresponding municipality is implementation completed and reimbursement responsible for phase submitted by up to US$5,000 implementation the MGs, the community and FPS B

Project closure

MG: Municipal Government.

(A)The Ministry of Planning and Development (MPD) will create a Coordination Committee (CC) involving UPRRD and the FPS. The CC will organize regional reunions with the municipal governments (MGs) to promote coordination, and to gradually join the prioritized projects portfolio from the municipalities and the financial operations guide. An official record will be produced at the end of each reunion, which will be used in the approval document for the projects portfolio. (B) At the departmental level, FPS management is responsible for the verification of works completion and approval for reimbursement to the MGs.

Figure A6.4 shows the project cycle for all projects between US$5,000 and US$20,000 from the five target regions within the PRRES.

The process begins with UPRRD, which under VPTA, submits the prioritized projects portfolio to the municipal governments. Once the portfolios have been received in all the participating MGs, a coordination reunion is organized, bringing together the various MGs, UPRRD and FPS representatives, to analyze the portfolio. Based on this reunion, projects are approved, rejected or substituted, and each MG receives an updated version of their previous portfolio. Then an act of procedures is written, and the MG’s applications are formalized with FPS. This brings the cycle to the project reports validation phase, which involves both field and desk work, to establish the budget, technical specifications, and other details. If everything is in order, the portfolio is sent to the FPS departmental committee (CDAP) for approval. Once approval has been granted, the MGs will issue an implementation contract for each project, as well as a disbursement chronogram. The MGs will also disburse 20% of the anticipated principal. This marks the beginning of project implementation, which includes field and desk work. FPS verifies the implementation processes and authorizes the cancellation of established payments. It can also cancel the account. Once the project is executed, it is closed.

Figure A6.4. Project Cycle for Projects Between US$5,000 and US$20,000

UPRRD? REUNION: Projects portfolio Act of UPRRD submits prioritized MGs, UPRRD submitted to MGs procedures VPTA portfolio and VPTA, FPS is analyzed elaborated FPS guide to MG A MGs applications formalized with FPS

Doesn’t correspond Field work Definition of: Beginning - Budget phase of - Technical project Specifications reports - Advance forms Desk work validation - Profile elaboration CDAP and/or final project C design Corresponds - Implementation plan

- FPS verifies good implementation of Field work the works and Requirements: authorizes - Project execution cancellation of Project contract Begin project established implemented implementation phase - Implementation payments and payments Desk work chronogram - FPS cancels the - MG disburses 20% account Project closure of anticipated principal with own 79 resources

CDAP: FPS Departmental Committee

(B) Field work: FPS will validate the project by verifying its beginning implementation, its advance, and its definite delivery time.

(C) Cabinet work: FPS will Approve and begin the transfers Verify works process through activities noted in the module procedures. Generate supporting documents that will allow the transfers to the municipality Verify the writing of the Final Record before project closure. Elaborate a framework for works execution. Close the project in coordination with the designated supervisor Verify that the following documents exist a) Financing contract for direct administration, b) Contracts subscribed by the MG, c) Advance forms, d) Simple financial report, e) Book of warrants, f) C31 of transfers to the MG, g) Beginning works report, and h) Final official report.

FPS Action Plan

A case of corruption was uncovered in one of the Bank’s projects implemented by FPS some years ago. Due to the Bank’s concern with another occurrence of corruption in FPS, the Bank has carried out an “Operational Review of FPS” with the aid of an international consulting firm. While the findings from this review revealed rather negative aspects of FPS internal management, they encouraged the agency to produce an Action Plan in coordination with the Bank project team (more details can be obtained in the PDCRII project). The Action Plan focuses on three areas: a) consolidating operational processes and controls in the subproject cycle; b) modernization of the Subproject Administration System; and c) organizational strengthening. The Action Plan has been approved by FPS’ Board and is now mandatory. The Action Plan is included in Annex 6. By agreement between the Bank and the Bolivian Government, the bulk of the activities required to strengthen FPS will be carried out under this project, even though key components of another three Bank-financed projects under preparation will be executed by FPS. The Action Plan has been budgeted and will be financed in full by the Project (see Component 1). Key elements of this plan were incorporated as covenants in the Credit Agreement during appraisal and negotiations.

FPS’ subproject cycle has been streamlined and controls will be restored at every stage. Key changes to be introduced include:

a. A clear separation of roles and functions between FPS and municipalities. Municipalities will be in charge of procurement and contract administration; they will hire subproject supervisors who will report to them; and they will approve payments on the basis of certificates of physical progress issued by these supervisors. FPS will provide oversight (fiscalización) of the whole process on the basis of the level of risk represented by the municipality (as measured by a set of agreed indicators), and the size and complexity of the subproject. In high-risk cases, FPS will conduct ex ante reviews of procurement and field visits to ensure every payment is supported by the level of physical implementation and quality specifications. In low-risk cases, FPS will conduct ex post procurement reviews, and field visits will be limited to subproject launch, and when subproject execution reaches 50% and 80% of disbursements.

b. FPS will publish all contract awards on its web page. Information to be published will include at a minimum: the names of bidding companies, the company that was awarded the contract, the contract amount.

c. FPS will create a Monitoring and Control Unit in its national office. This Unit will work directly under the supervision of the Executive Director and its role will be to ensure that FPS complies with the fiduciary and safeguard rules adopted in the operational manual. The Unit will be staffed by qualified personnel, selected in an open, competitive, and merit-based process. The Unit will monitor, among others, the correspondence between oversight activities and risk levels, a set of agreed indicators that will be produced automatically by the Subproject Administration System (for example, delays in execution and payments) and the procurement web page. Field visits will be conducted on the basis of alerts generated by this process and a random selection of subprojects.

d. Local communities will be systematically engaged in monitoring of subprojects. At subproject launch, beneficiary communities will receive a full explanation of the works and TA involved, as well as the schedule for execution. Companies executing contracts will be required to keep a community book on site, for communities to register all observations in writing, and FPS personnel will be required to answer all observations and to register all responses in the community book.

Key changes to be introduced in the Subproject Administration System include: a) the installation of a web-based, real-time system; b) the introduction of a programming module which will allow automatic monitoring of subproject progress; c) the introduction of standardized requirements for each step in the subproject cycle and the clarification of roles of each operator; d) the generation of automatic reports on financing per source; e) the generation of alert indicators related to processing compliance; f) the capacity to scan all support documentation as proof of compliance; and g) the generation of automatic reports for management on the basis of agreed indicators. Other agencies of the government as well as donors will be able to access the system in order to monitor agreed progress indicators.

Organizational strengthening of FPS will focus on: a) the reinforcement of fiduciary capacities; b) the strengthening of FPS’ environmental unit; and c) carrying out a program of systematic training of personnel according to capacities and institutional needs.

Figure A6.5. National Fund for Productive Social Investment (FPS) Institutional Arrangement

FPS Executive Direction

Internal Audit Legal Assessment

Unit of Policy and International Management Analysis and Local Relations Institutional Communication

Financial National Operations Administration and Management Management Systems Management

Santa Cruz Cochabamba La Paz Dept. Dept. Dept. Office of Office of Consensus Systems Management Management Management Management

Chuquisaca Office of Human Office of Institutional Beni Dept. Oruro Dept. Management Dept. Resources and Finance Management Management Management Pando Dept. Office of Collections Management Tarija Dept. Potosí Dept. Office of Management Management Management Administration

Project Supervision The proposed project is an emergency operation. In accordance with BP/OP 8.00, the team is required to increase the frequency of project supervision. Therefore, the team expects to carry out continuous supervision through frequent missions and support from the local office. In addition to the prior review supervision to be carried out by the Bank, the procurement team will carry out an ex post review and provide procurement guidance as needed.

In order to monitor and evaluate the quality and efficiency of works and institutional strengthening, several instruments will be designed and used. For the works, a baseline will be created based on the short list of prioritized projects provided by the FPS in the first year of project implementation. Once the baseline is obtained, target values will be established for years 2 and 3. Next, citizen report cards will be designed and issued to a random sample of the affected population in the five targeted regions, once works have started. Inhabitants will then be able to report on the quality as well as the timeliness of the works delivered.

Regarding the training element of the project, two instruments will be used: first, a training- needs assessment will be conducted for the individuals (or a random sample of the individuals) who will be trained in the nine departments and nine sectors. This will not only help target their capacity needs, but also provide information on their current level of knowledge on risk prevention, management, and vulnerability reduction. This needs assessment will therefore be designed in such a way as to create a baseline for training. Once training has begun, two skills tests will be administered to the participants. They will be similar, although the final test will be more comprehensive than the midterm. The tests will be announced at the beginning of the training, and will provide information on whether participants’ levels of knowledge are increasing through training. The midterm test scores will serve as guidance to adapt the second half of the training course to further unaddressed needs, or to go more in depth on subjects in which participants obtained weaker scores.

Institutions in Depth

The Ministry of Planning and Development (MPD) is in charge of developing the country’s strategic development plans, including those regarding financial and territorial planning. This also includes developing policies and coordinating activities for vulnerability reduction, and coordinating the insertion of policies on risk reduction into the Public Investment Plan. This ministry formulates, coordinates, and directs strategic planning and defines its scope through the framework of sustainable social and economic development. It also coordinates the preparation and implementation of sustainable development strategies, including those pertaining to risk reduction, at the national, regional, and local level. The MPD develops the National Development Plan (PND), providing the foundations and framework for the country’s development.

According to the latest Declarations stemming from the El Niño emergency in 2006–07 (Declaration of National Emergency – D.S. 29013 and Declaration of National Disaster – D.S. 29040), the MPD is in charge of considering, authorizing, and channeling funds, including management of external funds, necessary to respond to emergencies and to conduct

rehabilitation activities to support the respective sectors and affected population. More specifically, through the Declaration of National Disaster, the MPD was given the responsibility of developing the National Plan for Sustainable Rehabilitation and Reconstruction (PRRES), and for giving priority to the worst-affected areas in the Department of Beni.

The MPD consists of five Vice-Ministries: the Vice Ministry of Strategic Long-Term Planning (VPEP), the Vice Ministry of Territorial Planning and the Environment (VPTA), the Vice Ministry of Public Investment and External Financing (VIPFE), the Vice Ministry of Planning and Coordination (VPC), and the Vice Ministry on Science and Technology (VCT). The key roles of the two vice-ministries at the core of risk management in the MPD are described below.

Vice Ministry of Territorial Planning and the Environment (VPTA) The VPTA develops policies, guidelines, and norms on territorial and environmental planning, and establishes the foundations and methodologies for strategic planning for sustainable land use. In coordination with other relevant agencies, the VPTA develops strategies and policies to incorporate risk management strategies into National and Local Territorial Development Plans. It is currently providing training on these issues in an effort to bring hazard risk management and vulnerability reduction into territorial planning in Bolivia.

Vice Ministry of Public Investment and External Financing (VIPFE) The VIPFE is in charge of developing an annual program of public investment and of controlling the implementation of public investment and external financing. It incorporates these investments into the National Budget, under the norms defined in the National Information System (SNID) and the guidelines in the National Strategy for Sustainable Development. This Vice Ministry is also part of the Ministry of Finance, which formulates, implements, and controls public investment policies and monitors pre-investments. During emergencies and reconstruction programs, VIPFE is the agency responsible for incorporating investment projects into the SNID under a streamlined process.

Vice Ministry of Civil Defense and Cooperation for Integral Development (VIDECICODI)

Bolivia’s legal framework for emergencies gives responsibility for the planning and management of emergency activities to the VIDECICODI, which reports to the Vice- Minister of Defense and International Cooperation in the Ministry of Defense. VIDECICODI will be a co-executor of the project, but their role will be limited to providing technical expertise in the design and supervision of small reconstruction and mitigation activities, with no direct financial involvement

Figure A6.6 MPD Flow Chart

Annex 7. Project Preparation and Appraisal Team Members Bolivia: Emergency Recovery and Disaster Management Project

Francis Ghesquiere Regional Hazard Risk Management Coordinator

Joaquin Toro Task Team Leader

Fabiola Altimari Legal

Miriam Cespedes Procurement Analyst

Maricarmen Esquivel Junior Professional Associate

Teddy Landaeta Financial Specialist

Lourdes Linares Sr. Financial Management Specialist

Ruth Llanos Social Specialist

Gerald Meier Environmental Specialist

Nara Meli Monitoring and Evaluation Specialist

Xiomara Morel Sr. Financial Management Specialist

Luis Tineo Procurement Specialist

Kimberly Vilar Social Specialist

Annex 8. Environmental and Social Safeguards Framework Bolivia: Emergency Recovery and Disaster Management Project

General Observations

Involuntary Resettlement

No involuntary resettlement is planned under this project and no such plan exists within any of the relevant ministries of the Government of Bolivia (GoB). During the execution of the project, the possibility of helping the government develop a resettlement framework for people living in areas of non-mitigable risk as a project activity within the subcomponent on territorial planning will be explored.

Environmental Category: B - Partial Assessment

Environmental Assessment (OP/BP 4.01)

Numerous small works will be executed under the project. Individual works will be implemented in locations throughout the country. Individual works will be identified and evaluated for potential environmental impacts. It is expected that most if not all small works activities will likely be classified as Category C for environmental purposes, because they will entail the repair or reconstruction of existing infrastructure damaged or rendered useless as a result of the disaster events, or small mitigation works if needed. In this case, an environmental compliance program will be developed and included in the Project Operational Manual, including the use and enforcement of environmental protection contract clauses to be executed during the construction of the works. As the project is evaluated, an Environmental Assessment (EA) and Environmental Management Plan (EMP) will be developed and submitted in accordance with Bank policies in conjunction with the project preparation process. Should additional environmental requirements be identified, these will be addressed in the EA and included in the EMP.

As part of a long-term risk reduction strategy, an institutional analysis will be conducted to identify where linkages exist between risk reduction and national planning. During the institutional analysis, the concept of population relocation will be explored as a risk reduction strategy with the various entities identified, and assistance will be given toward the development of this concept.

Anticipated Environmental Impacts Physical works under this component have been identified by local communities and submitted by municipalities, prefectures, and related sectoral agencies. The National Fund for Productive Social Investment (FPS) has provided a preliminary list of pre- identified works from the PRRES execution plan. Based on initial review, all projects proposed appear to be Category C under the Environmental Assessment (OP/BP 4.01).

The works contemplated under this project are of small scale or fall under the category of technical assistance. Specifically:

• Works will not occur in protected areas. • Works will not include any new construction or expansion of existing infrastructure such as treatment plants, water intake, or transportation facilities. • Works are designed to rehabilitate and strengthen damaged infrastructure or agricultural production facilities. • Works will occur only in existing areas of production. • No relocations will occur as a result of the project and none are planned in the project areas by any Bolivian Government Ministry.

Environmental Assessment Process for Small Works Under this project, an EA will be conducted jointly by the Bank, the FPS, and the Ministry of Planning. Each works project will be reviewed as final works descriptions are prepared, and as necessary, site visits will be conducted to verify conditions. Given the emergency nature of the project, Bank supervision will be more intensive than typical Bank projects and the project team will participate jointly with the Ministry of Planning in ensuring Bank requirements are met.

Screening An initial screening has been conducted for the projects currently identified and all appear to be well within the threshold of Category C. As more detailed works descriptions are completed, the supervision team will conduct a mission to verify the scope and impact of works. Site visits will be conducted as necessary to verify local conditions and the scope of works. Because there are three basic categories of works, the team will prepare an environmental review of the works proposed by category, and determine environmental contract requirements as presented in the Project Operational Manual.

In the highly unlikely event that exceptions are identified that might promote an activity to Category B, a separate EA will be prepared for the works identified. An EA will be conducted to comply with Bank policy and Bolivian national law to determine the type and nature of impacts anticipated. This will include an Environmental Management Plan (EMP) for the specific activity, together with required public consultation processes. Given the requirements of the EA process and the urgent nature of the works, the decision will be left to the Bolivian government as to whether to pursue the process or remove works from further consideration.

If during the life of the project works meeting Category A criteria are proposed, they will be rejected and not included in the program.

Bolivian Law Under the Ley Ambiental 1333 (Environmental Law), a ficha ambiental (environmental report card) may be required for the works included in the program. In addition to Bank screening and oversight, the Ministry of Planning will be responsible for processing

works under this process and obtaining the ficha ambiental (if required). Apart from fulfilling the requirements of national law, this process adds an additional layer of oversight to the environmental compliance process. No works will proceed without compliance with this process.

Environmental Supervision and Vigilance The Bank project management team and the Government of Bolivia (GoB) will conduct environmental supervision. The Bank supervision team will work closely with the Ministry of Planning and the FPS during the works identification, engineering, and design phases of the work cycle. During these phases, environmental classifications will be determined and contract requirements will be identified. The Bank team will ensure that appropriate environmental control measures are applied to the specific works prior to the issuing of contracts.

During the execution of works, the environmental officer of the prefecture together with the Ministry of Planning will conduct environmental inspections and oversight to ensure contract compliance. The bank supervision team will make spot inspections as needed to ensure the process is being enforced. Acceptance of completed works will be managed by the Ministry of Planning with the municipalities. This will be forwarded to the Bank in the form of an acceptance report together with a Certification of Environmental Compliance for Bank review.

Indigenous Peoples (OP/BP 4.10) Socially, the project impacts are on the whole positive, and while 67 percent of the general population can be classified as indigenous, those persons living within the project area will benefit equally from the project. Because the works program is focused on rehabilitation and reconstruction, no new infrastructure or significant expansion of existing infrastructure will be undertaken. As part of the screening process for individual projects, specific construction activities will be reviewed to ensure that apart from restoration of service and risk-reduction design, no other changes from the original function will be included in specific works. Where works are to occur on lands designated as indigenous, meetings will be held with the relevant indigenous authorities to ensure that the specific works proposed comply with the desires of the affected community.

In the unlikely event that works identified result in a significant change in function or in significant social impacts, a Social Assessment will be prepared in accordance with Bank requirements.

Physical Cultural Resources The project is not expected to have any negative impact on movable or immovable objects, sites, structures, groups of structures, natural features, or landscapes with archeological, paleontological, historical, architectural, religious, aesthetic, or other cultural significance. It would be very unlikely that any project activity will have any negative impact on physical cultural resources. Nevertheless, if during the execution of the activities, any material is discovered on-site that might be considered of historical or

cultural interest, such as evidence of prior settlements, native or historical activities, or evidence of any existence on a site that might be of cultural significance, all work shall stop and the supervising contracting officer shall be notified immediately, as will the National Anthropology Directorate in the Vice Ministry for Culture (Dirección Nacional de Antropología, Viceministerio de Cultura). The area in which the material was discovered shall be marked and the evidence preserved for examination. No work shall resume until after evaluation by these entities.

Safeguard Preparation Plan During the appraisal mission, an Environmental Management Plan (EMP) was developed in collaboration with the Government. While the environmental impacts are expected to be limited to the site and duration of the small works contemplated under Component 2, the final set of works has yet to be agreed upon. Once the EA is completed, a set of contract clauses will be selected for inclusion in the Project Operational Manual to be attached to small works contracts where environmental impacts are identified as category C. In the unlikely event that works include activities with environmental classifications of Category B, an individual EA for that project element will be conducted and an EMP will be prepared. Other provisions relating to appropriate safeguards will be included as needed.

The Social Assessment will be carried out in two phases. The first phase was completed during the pre-appraisal mission prior to Board approval in order to develop a benefit- sharing strategy reflecting stakeholder interests and participation, risk analysis, and communication strategy—though without primary or secondary data collection. Given that no small works should lead to substantial negative social impacts, the second phase will be undertaken by the Government as an activity under Component 2 of the project. As part of a long-term risk reduction strategy, an institutional analysis will be conducted to identify where linkages exist between risk reduction and national planning. During the institutional analysis, the concept of population relocation will be explored as a risk reduction strategy with the various entities identified, and assistance will be given toward the development of this concept. A Social Assessment involving data collection and analysis and consultations with key stakeholders will provide the Vice Ministry of Territorial Planning and the Environment (VPTA) with the tools necessary to begin to study long-term land use policies, including the resettlement of communities highly vulnerable to adverse natural events.

The policy for emergency response, OP 8.00, provides that emergency operations are subject to accelerated, consolidated, and simplified procedures as well as streamlined ex ante requirements. As such, the supervision process regarding procedures such as safeguards is strengthened. The social and environmental specialists currently working with the team will be closely monitoring these procedures and evaluating these processes during supervision.

Annex 9. List of Identified Works Bolivia: Emergency Recovery and Disaster Management Project

ESTIMATED MUNICIPALITY NAME OF PROJECT COST IN US$

GRAL. A.SAAVEDRA SANEAMIENTO BÃSICO - SAAVEDRA 735 OKINAWA UNO (2-1) SANEAMIENTO BÃSICO CAMPAMENTO GUADALUPE 735 OKINAWA UNO (2-1) SANEAMIENTO BÃSICO COMUNIDAD RANCHO CHICO 735 SAN JUAN SANEAMIENTO BÃSICO COMUNIDAD R. MENACHO 735 SAN JUAN SANEAMIENTO BASICO COMUNIDAD ENCONADA 735 SAN PEDRO SANEAMIENTO BÃSICO SAN PEDRO 735 WARNES SANEAMIENTO BÃSICO COMUNIDAD JUAN LATINO 735 WARNES SANEAMIENTO BÃSICO COMUNIDAD LA ESPERANZA 735 WARNES SANEAMIENTO BÃSICO LAS BARRERAS 735 WARNES SANEAMIENTO BÃSICO COMUNIDAD VILLA REYE 735 YAPACANI RECONSTRUCCION VILLA IMPERIAL SUR 1,029 YAPACANI RECOSTRUCCION UNIDAD EDUCATIVA EDUARDO AVAROA KM. 45 1,029 YAPACANI RECONSTRUCCION UNIDAD EDUCATIVA PUERTO PALLAR 1,029 YAPACANI RECONSTRUCCION UNIDAD EDUCATIVA PUERTO TACUARAL 1,029 REPARACION TERRAPLEN Y ALCANTARILLAS Y ACCESO PUENTE PUERTO VILLAROEL JERUSALEM ( P. VILLARROEL) 1,293 REPOSI. DE PLATAFORMA DEL CAMINO Y DRENAJE DE ALCANT. D = 1,000 mm. SAJAMA - CACHI CACHI , ANTOFAGASTA - URKUPIÑA. ( PUERTO PUERTO VILLAROEL VILLARROEL) 1,293 YAPACANI RECONSTRUCCION UNIDAD EDUCATIVA MAJUZAL 2,059 YAPACANI RECONSTRUCCION UNIDAD EDUCATIVA PATUJUSAL 2,059 BUENA VISTA Reconstrucción de Viviendas Carbones 2,092 BUENA VISTA Reconstrucción de Viviendas Palacio 2,615 BUENA VISTA Reconstrucción de Viviendas Potrerito 24 de Septiembre 2,615 SAN PEDRO CONSTRUCCION PUENTE PETA GRANDE 2,615 BUENA VISTA Reconstrucción de Viviendas Candelaria 3,138 BUENA VISTA Reconstrucción de Viviendas Potrero San Rafael 3,138 PRESTO Rehabilitación de Camino Rodeo - Jatun Huayco 3,269 SANTA ROSA DEL SARA PERFORACION DE POZO DE AGUA 3,922 BUENA VISTA Reconstrucción de Viviendas Villa Diego 4,184 SAN IGNACIO REFACCION POSTA SANITARIA 4,184 BUENA VISTA Reconstrucción de Viviendas La Arboleda 4,707 SAN IGNACIO REFACCION POSTA SANITARIA SAN JOSE DE CATIBUTU 4,707 SAN IGNACIO REFACCION POSTA SANITARIA GALILEA 4,968 YAPACANI RECONSTRUCCION UNIDAD EDUCATIVA SANTA CRUZ DE LA SIERRA 5,147 YAPACANI RECONSTRUCCION UNIDAD EDUCATIVA SAN GERMAN III 5,147 BUENA VISTA Reconstrucción de Viviendas Caranda 5,230 SAN IGNACIO REFACCION POSTA SANITARIA ARGENTINA 5,230 SAN IGNACIO REFACCION POSTA SANITARIA MERCEDES DE APERE 5,230 SANTA ANA Refacción Escuela Puerto Junín 5,230

RAVELO (A. MORO CONSTRUCCIÓN DE DEFENSIVOS EN LA COMUNIDAD DE POROMA MORO) GRANDE (VITICHI) 5,263 TINGUIPAYA (ING. GABRIEL VERA) CONSTRUCCIÓN DE DEFENSIVOS EN LA COMUNIDAD DE TOTOCA (VITICHI) 5,263

SAN IGNACIO REFACCION POSTA SANITARIA BERMEO 5,491 TINGUIPAYA (ING. GABRIEL VERA) CONSTRUCCION DE DEFENSIVOS 5,491

SAN IGNACIO REFACCION POSTA SANITARIA trinidasito 6,014 YAMPARAEZ Gaviones en Quebrada Punku 6,157

LORETO REFACCION POSTA SANITARIA MARBAN 6,276 YAMPARAEZ Rehabilitación Gaviones Rancho y Churu 6,497 FERNANDEZ ALONSO RECONSTRUCCION PUENTE FAJA CHOROLQUE 6,537 LORETO REFACCION POSTA SANITARIA CAMIACO 6,537 SANTA ANA Refacción U.E. San Lorenzo 6,537 YAMPARAEZ Gaviones en la Comunidad de Matquina 6,877 FERNANDEZ ALONSO SANEAMIENTO BASICO PIRAÃ 7,060 LORETO REFACCION POSTA SANITARIA SACHOJERE 7,060 TINGUIPAYA (ING. CONSTRUCCION DEFENSIVOS EN LA COMUNIDAD CAQUENA BAJA GABRIEL VERA) (TINGUIPAYA) 7,191 TRINIDAD REFACCIÓN UNIDAD EDUCATIVA HORMANDO ORTIZ CHAVEZ (TRINIDAD) 7,191 ENTRE RIOS REHABILITACION CAMINO BULO BULO - CENTRAL 25 DE ABRIL 7,321

SAN IGNACIO REFACCION POSTA SANITARIA PUERTO SAN LORENZO 7,321 BUENA VISTA Reconstrucción de Viviendas Huaytú 1a, 2a, 3a 7,844 FERNANDEZ ALONSO RECONSTRUCCION PUENTE FAJA BOLIVAR 7,844 LORETO REFACCION POSTA SANITARIA BERMEO 7,844 SAN PEDRO RECONSTRUCCION DE VIVIENDAS SAN PEDRO 7,844 TINGUIPAYA (ING. GABRIEL VERA) RECONSTRUCCION CAMINO CAYCOPAMPA ANCKARA (TINGUIPAYA) 7,844 TINGUIPAYA (ING. GABRIEL VERA) RECONSTRUCCION CAMINO ANCKARA-QUIRPINI-TAPINI (TINGUIPAYA) 7,844

TRINIDAD REFACCIÓN UNIDAD EDUCATIVA CORINA HURTADO (TRINIDAD) 8,367 RECONSTRUCCION DE ALCANTARILLA CAJON SAN PEDRO - LA SAN PEDRO PLANCHADA 8,498 SAN JUAN Mejoramiento camino transversal tramo Sindicato Nuevo Amanecer 8,890 SAN JUAN Mejoramiento camino transversal tramo Santa Fe - Guadalquivir 8,890

TRINIDAD REFACCIÓN UNIDAD EDUCATIVA NUEVA TRINIDAD 9,152 YAMPARAEZ Gaviones en Tunas Mayu 9,374 MONTERO Reconstruccion de viviendas familiares 9,413 SAN PEDRO RECONSTRUCCION ALCANTARILLAS COMUNIDAD LITORAL - MURILLO 9,413 SICAYA Rehabilitación camino capinota sicaya 9,413 SAN JUAN Mejoramiento camino transversal tramo Santa Fe - Guadalquivir 9,806 TINGUIPAYA (ING. CONSTRUCCIÓN DE DEFENSIVOS EN LA COMUNIDAD DE PANICA - GABRIEL VERA) PECAJSI (VITICHI) 10,038

TINGUIPAYA (ING. CONSTRUCCIÓN DE DEFENSIVOS EN LA COMUNIDAD DE AMPA AMPA - GABRIEL VERA) VILLA PACHECO (VITICHI) 10,038 TINGUIPAYA (ING. CONSTRUCCIÓN DE DEFENSIVOS EN LA COMUNIDAD DE ASEQUIA SOTO GABRIEL VERA) (VITICHI) 10,038 SAN PEDRO RECONSTRUCCION UNIDAD EDUCATIVA MURILLO 10,459 TINGUIPAYA (ING. RECONSTRUCCION CAMINO EN LA COMUNIDAD PHISCKASI ANTHURA GABRIEL VERA) (TINGUIPAYA) 10,459 TRINIDAD RECONSTRUCCION SISTEMA DE AGUA 18 DE AGOSTO 10,459 TINGUIPAYA (ING. GABRIEL VERA) CONSTRUCCIÓN DE DEFENSIVOS TOJRA PAMPA BAJA (TINGUIPAYA) 10,982

TINGUIPAYA (ING. CONSTRUCCION DEFENSIVOS EN LA COMUNIDAD DE CATAQUEA GABRIEL VERA) (TINGUIPAYA) 10,982 SAN JUAN Reconstrucción de Puente Vehicular en Sindicato Barrientos 11,113 RECONSTRUCCION PUENTE VEHICULAR SINDICATO CAÑOTO PARALELO SAN JUAN 17 11,113 SAN PEDRO RECONSTRUCCION VIVIENDAS SAGRADO CORAZON 12,551 SANTA ANA Refacción Unidad Educativa Totaizal 12,551 LORETO Reconstrucción Escuela Multigrado Comunidad Marsella 13,074

MOJOCOYA REHABILITACION UNIDAD EDUCATIVA CASA GRANDE 13,074 Reconstrucción del sistema de agua potable de la Junta de Vecinos 18 de Agosto TRINIDAD (zona Plataforma), de la ciudad de Trinidad 13,074 RAVELO (A. MORO MORO) REHABILITACIÓN DEL CAMINO PALCA MAYU (POTOSÍ) 13,728 TINGUIPAYA (ING. GABRIEL VERA) REHABILITACIÒN CAMINO CHEJCHI - VILAPAMPA (TINGUIPAYA) 13,728 TINGUIPAYA (ING. GABRIEL VERA) RECONSTRUCCION CAMINO CHEJCHI - VILAPAMPA (TINGUIPAYA) 13,728 TINGUIPAYA (ING. GABRIEL VERA) REHABILITACION CAMINO CUIZA - SURICHATA (TINGUIPAYA) 13,728 REHABILITACION Y RECONSTRUCCION Y MEJORAMIENTO AL CAMINO REYES COMUNIDAD SAN JUAN (REYES - PROVINCIA BALLIVIAN) 13,859 PRESTO Rehabilitación Escuela "El Palmar" 14,382 OKINAWA UNO (2-1) SANEAMIENTO BÃSICO CAMPAMENTO PUERTO NUEVO 15,061 YAMPARAEZ Gaviones Marapampa 15,061 CONSTRUCCION PUENTE LAS PETAS COMUNIDADES NUEVO HORIZONTE - OKINAWA UNO (2-1) MONTE VERDE 15,112 OKINAWA UNO (2-1) CONSTRUCCION PUENTE PUERTO NUEVO 15,112 SAN CARLOS SANEAMIENTO BÃSICO COMUNIDAD LA FORTUNA 15,689 TARABUCO Defensivos 15,689 RAVELO (A. MORO MORO) CONSTRUCCIÓN DE DEFENSIVOS KASA PATA (RAVELO) 16,062 RAVELO (A. MORO MORO) CONSTRUCCIÓN DE DEFENSIVOS SASANTA (RAVELO) 16,062 UNCIA DEFENSIVOS (EMPLAZAMIENTO DE GAVIONES) MARACA 16,307 FERNANDEZ ALONSO RECONSTRUCCION SISTEMA DE AGUA FERNANDEZ ALONZO 16,473 RAVELO (A. MORO MORO) RECONSTRUCCION SISTEMA MICRO RIEGO KUTURI QUIRPE (RAVELO) 16,473 RAVELO (A. MORO MORO) RECONSTRUCCION ESCUELA SOROSCOPA (RAVELO) 16,473 OKINAWA UNO (2-1) RECONSTRUCCION DE VIVIENDAS OKINAWA UNO 16,735 SICAYA Construcción muro defensivo, comunidad Nueva Esperanza, municipio de Sicaya 17,995 SICAYA Construcción muros defensivos comunidad 16 de julio, municipio Sicaya 17,995 SICAYA Construcción muros de contención comunidad de Sayari, municipio de Sicaya 17,995 SICAYA Construcción muros defensivos comunidad Panteon Pampa, municipio de Sicaya 17,995 SICAYA Construcción de muro defensivo comunidad Kara Kara, municipio de Sicaya 17,995 YAMPARAEZ Gaviones Jatun Khakha 18,003 COLQUECHACA CONSTRUCCION DE DEFENSIVOS MENDOZA RINRAY (COLQUECHACA) 18,101

UNCIA CONSTRUCCION SISTEMA DE MICRORIEGO HUAYLLANI GRANDE 18,957 REHABILITACION Y MEJORAMIENTO DE CAMINO VECINAL CHACAYA - POCOATA AYOMA (POCOATA) 19,350 SANTA ROSA DEL MANTENIMIENTO DE CAMINOS VECINALES Y PUENTE DE LA COMUNIDAD 4 SARA DE MARZO 19,611

LORETO Construcción de Viviendas Sobregiradas 20,396

WARNES Construcción de 2 alcantarillas Camino: Asuzaqui-Esperanza 20,919

COLQUECHACA CONSTRUCCION GAVIONES COMUNIDAD DE HUMAJILA (COLQUECHACA) 20,997 MINEROS RECONSTRUCCION SISTEMA DE AGUA MINERO 21,572 TRINIDAD Reconstrucción Viviendas Asociación de Tejeros El Rodeo 21,572 UNCIA Reconstrucción Riego Huayllani Grande 21,801 BAURES Reconstrucción U.E. Mategua 22,226 BAURES Reconstrucción U.E. Tiquin 22,226 SICAYA Construcción muros defensivos comunidad Challuma municipio Sicaya 22,348 SICAYA Construcción muros defensivos comunidad de Higuerani A, municipio de Sicaya 22,348 UNCIA Reconstrucción camino Cruce Chuquihuta-irpa irpa alta(uncia) 22,553 ZUDAÑEZ Reconstrucción de gaviones de la comunidad de Puca Huasi 22,817 RAVELO (A. MORO MORO) CONSTRUCCION DE GAVIONES EN TOROCA (RAVELO) 23,063 SAN CARLOS RECONSTRUCCION DEL EMPEDRADO ANTOFAGASTA 23,601 UNCIA Refacción de canales de riego Pupsiri 25,004

MINEROS RECONSTRUCCION CAMINO PREFECTURAL SAN MARTIN - LITORAL 25,817

MINEROS RECONSTRUCCION CAMINO VECINAL CHANE BEDOYA - RIO GRANDE 25,817 PRESTO Rehabilitación de Defensivos "La Joya" 26,148 RAVELO (A. MORO MORO) CONSTRUCCIÓN DE GAVIONES TOTORA (RAVELO) 26,148

WARNES CONSTRUCCION DE 4 ALCANTARILLAS LOS OLIVOS 26,148

YAPACANI PROYECTO DE EMERGENCIA RIO ICHILO ZONA LA TEMBLADERA - FASE II 26,148

UNCIA RECONSTRUCCION DE CAMINO TIRANI - LULUNI (BUSTILLO) 26,279 UNCIA Rehabilitación camino Miraflores - socavon Patiño(uncia) 27,063

UNCIA Reconstrucción camino Miraflores - socavon Patiño(uncia) 27,063

ZUDAÑEZ Reconstrucción de gaviones de la comunidad de Sunchu Pampa Pitulillo 27,131 TINGUIPAYA (ING. GABRIEL VERA) CONSTRUCCION DEFENSIVOS CAQUENA ALTA (TINGUIPAYA) 27,194 TINGUIPAYA (ING. ONSTRUCCION DEFENSIVOS EN LA COMUNIDAD DE CHALLVIRI - GABRIEL VERA) CKONAPATI (TINGUIPAYA) 27,194

COLQUECHACA CONSTRUCCION GAVIONES COMUNIDAD CARIPORCO (COLQUECHACA) 27,996 CONSTRUCCION DE GAVIONES COMUNIDAD DE LUCAS KAWA COLQUECHACA (COLQUECHACA) 27,996

COLQUECHACA CONSTRUCCION DE GAVIONES MACHA (COLQUECHACA) 27,996 RECONSTRUCCION PUENTE VEHICULAR QUEQUESANA CAMINO MACHA - COLQUECHACA COLQUECHACA (COLQUECHACA) 28,240 UNCIA Reconstrucción Sistema Riego Laurani 28,525

SAN JUAN RECONSTRUCCION CAMINO PREFECTURAL YESQUERO - PUNTA RIELES 28,763 UNCIA CONSTRUCCION DEFENSIVOS RIO PACULA 28,763 MINEROS RECONSTRUCCION CUATRO AULAS UNIDAD EDUCATIVA LAS PALMAS 29,286 BELEN DE ANDAMARCA Reconstrucción Camino Cr. Belen-Copacabanita 29,809 SANTA ANA Reconstrucción de vivienda en la comunidad 18 de Noviembre 29,809

UNCIA Reconstrucción camino Alta calizaya-chullanquiani(uncia) 30,070 RURRENABAQUE Sistema de Agua Potable Rurrenabaque 30,463

RURRENABAQUE RECONSTRUCCION SISTEMA DE AGUA RURRENABAQUE 30,463

RAVELO (A. MORO MORO) REHABILITACION CAMINO VECINAL ANTORA-PITANTORA (RAVELO) 30,613

TRINIDAD REFACCIÓN UNIDAD EDUCATIVA PUERTO VARADOR 31,378

ZUDAÑEZ Reconstrucción de gaviones de Coilolo, Pasota y Angostura 31,519 RECONSTRUCCION CAMINO VECINAL THACOPALCA - COCHI COCHI UNCIA (BUSTILLO) 31,535

COLQUECHACA CONSTRUCCION DE GAVIONES SALINAS ALTA (COLQUECHACA) 31,916 RAVELO (A. MORO MORO) CONSTRUCCION DE GAVIONES EN SOROSCOPA (RAVELO) 32,685

POCOATA CONSTRUCCIÓN DE DEFENSIVOS TURBERIA (POCOATA) 33,339 UNCIA Reconstrucción camino Qoa qoani-Cuyacahi(uncia) 33,829 UNCIA Reconstrucción camino Uncia-pampoyu(uncia) 34,581

UNCIA CONSTRUCCION DE EBOBEDADO DE RIO ZONA 10 35,039

CHAYANTA Reconstrucción camino Cruce challapata - Choco grande(uncia) 36,085 PRESTO Construcción de Gaviones "Mala Vista" 36,607 TRINIDAD RECONSTRUCCION VIVIENDAS ASOCIACION DE TEJEROS SAN JUAN 36,607

UNCIA Reconstrucción camino Tranca Charcayo-chullunquiani(uncia) 37,588 RAVELO (A. MORO MORO) REHABILITACIÓN DE CAMINOS LEUQUE-CUIRI TEJA MOLINO (RAVELO) 37,968 TRINIDAD LIMPIEZA DE RIOS EN LAS CUENCAS AMAZONICAS 39,165 POCOATA Construcción de Posta Sanitaria 39,222 SANTA ANA Reconstrucción de viviendas en la Comunidad San Jorge del Mapajo 39,222

WARNES MEJORAMIENTO CAMINO LA ESPERANZA - LA REFORMA 39,222 SANTA ANA Refacción U.E. Kennedy, Araúz, Carbalho y Daniel Ribero 41,837

WARNES Construcción 1alcantarilla 3x(4x3,5) Camino:Candelaria - Okinawa 2 y 3 41,837

COLQUECHACA CONSTRUCCION DE DEFENSIVOS SALIMAS ALTA (COLQUECHACA) 43,724 RAVELO (A. MORO MORO) REHABILITACIÓN DE CAMINOS RODEO-CHILLCANI (RAVELO) 43,819 RAVELO (A. MORO RECONSTRUCCION DE BADEN SOBRE EL RIO DE LA COMUNIDAD DE MORO) ZAPATARA (CHAQUI) 43,887 REHABILITACION Y MEJORAMIENTO DE CAMINO VECINAL LLUCHU- OCURI ANCOCALA (OCURI) 43,929 RECONSTRUCCIÓN DE VIVIENDAS UNIFAMILIARES SOBREGIRADAS PARA LORETO LA COMUNIDAD NUEVA COTOCA 45,106

UNCIA Reconstrucción camino Chuquihuta-Ustaya(uncia) 45,181

ZUDAÑEZ Reconstrucción de gaviones en la comunidad de Parajti 45,218 SACACA (C. VILLA RECONSTRUCCION MURO PERIMETRAL Y CANCHA POLIFUNCIONAL SACACA) CHALLUMA (SACACA) 45,733 SAN PEDRO RECONSTRUCCION DE VIVIENDAS SINDICATO SAN SALVADOR 45,733

Rehabilitación de los sistemas de agua potable en 18 comunidades de la TCO- SAN IGNACIO TIMI (Territorio Indígena Multiétnico Ignaciano). 46,021

Rehabilitación de los sistemas de agua potable en 18 comunidades de la TCO - SAN IGNACIO TIMI (Territorio Indígena Multiétnico Ignaciano). 46,021 BUENA VISTA RECONSTRUCCION CAMINO BUENA VISTA - VILLA AQUILES 47,332

YAPACANI RECONSTRUCCION DE SISTEMA DE AGUA YAPACANI 47,590 YAMPARAEZ Gaviones en La Mendoza 47,809 ARQUE (C. VILLA DE RECONSTRUCCIÓN Y MEJORAMIENTO CAMINO VERENGUILA - TITIRI ARQUE) (ARQUE) 48,714

RAVELO (A. MORO MORO) REHABILITACIÓN DE CAMINO RAVELO - TOROCA (RAVELO) 49,619

UNCIA Reconstrucción camino Cruce irpa irpa baja - Belen (uncia) 52,623 TINGUIPAYA (ING. GABRIEL VERA) CONSTRUCCION DE DEFENSIVOS CALAZAYA (TINGUIPAYA) 54,911

BUENA VISTA RECONSTRUCCION CAMINO R408-4148 LAS YUNGAS 55,434

BUENA VISTA REHABILITACION CAMINO R408-4148 LAS YUNGAS 55,434

SANTA ANA RECONSTRUCCION SISTEMA DE AGUA SANTA ANA 58,833

EXALTACION REHABILITACION DEL TERRAPLEN REFUGIO EXALTACION 60,978

LORETO REHABILITACION DEL TERRAPLEN REFUGIO 60,978

SAN IGNACIO REHABILITACION DEL TERRAPLEN REFUGIO SAN FRANCISCO DE MOXOS 60,978

SAN IGNACIO REHABILITACION DEL TERRAPLEN REFUGIO SAN LORENZO DE MOXOS 60,978 RAVELO (A. MORO MORO) REHABILITACIÓN DE CAMINO RAVELO-KELLU KASA (RAVELO) 62,677

Rehabilitación de los sistemas de agua potable en 20 comunidades de la TCO- SAN IGNACIO TIMI (Territorio Indígena Multiétnico Ignaciano). 62,756

Rehabilitación de los sistemas de agua potable en 20 comunidades de la TCO- SAN IGNACIO TIMI (Territorio Indígena Multiétnico Ignaciano). 62,756 TRINIDAD RECONSTRUCCIÓN UNIDAD EDUCATIVA PUERTO ALMACEN 62,756 RECONSTRUCION DE CAMINOS BAURES, EL CARMEN, TRAMO 1 EL CAIRO BAURES LA ASUNTA 65,371 Construcción defensivos río San Mateo Sindicatos San Mateo, San Mateo Alto, 40 VILLA TUNARI Arroyos 65,371 BOLIVAR Mantenimiento camino Bolivar-Wastaca 73,215 BOLIVAR Mantenimiento camino Bolivar-Pacachani 73,215 Reconstrucción de viviendas de las familias que habitan en la Junta de vecinos TRINIDAD (Germán Busch) de la ciudad de Trinidad 78,445 SACACA (C. VILLA SACACA) CONSTRUCCION GAVIONES ITURATA (SACACA) 79,799 LLALLAGUA Construcción sistema de microriego Chamaya-Sauta 82,568

UNCIA Reconstrucción camino Saca saca-Pata pata grande(uncia) 82,739 BAURES RECONSTRUCCION NUCLEO EDUCATIVO HERNAN HERERA DORADOS 83,674 UNCIA DEFENSIVOS (EMPLAZAMIENTO DE GAVIONES) PAMPOYO 86,970 UNCIA Reconstrucción camino Saca saca-Payrumani(uncia) 87,204 BUENA VISTA RECONSTRUCCION CAMINO RUTA 4 EL PALMAR 89,546 BUENA VISTA REHABILITACION CAMINO RUTA 4 EL PALMAR 89,546 UNCIA Reconstrucción camino Cruce Nueva tanga- Saroka(uncia) 90,211 UNCIA CONSTRUCCION DEFENSIVOS RIO CENTENARIO (UNCIA) 91,574 SAN IGNACIO RECONSTRUCCION DE VIVIENDAS COMUNIDAD NAVIDAD 91,780 MINEROS RECONSTRUCCION Y MEJORAMIENTO DE VIVIENDAS MINEROS 94,134 PAPEL PAMPA Mant. De caminos 98,056

Annex 10. Statement of Loans and Credits

BOLIVIA: Emergency Recovery and Disaster Management Project

Difference between Expected and Actual Original Amount in US$ Millions Disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d P083979 2007 BO Urban Infrastructure Project 0.00 30.00 0.00 0.00 0.00 31.19 -0.54 0.00 P083051 2005 BO Rural Alliances 0.00 28.40 0.00 0.00 0.00 27.45 0.86 0.00 P073367 2003 BO Decent Infras for Rural Transformation 0.00 20.00 0.00 0.00 0.00 19.46 16.35 5.68 P068968 2002 BO Road Rehab. & Maintenance Project 0.00 77.00 0.00 0.00 0.00 39.46 23.49 0.00 P074212 2001 BO Health Sector Reform APL II 0.00 35.00 0.00 0.00 0.00 4.42 -1.39 0.00 Total: 0.00 190.40 0.00 0.00 0.00 121.98 38.77 5.68

BOLIVIA STATEMENT OF IFCs Held and Disbursed Portfolio In Millions of US Dollars

Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 1995 BISA 0.00 0.54 0.00 0.00 0.00 0.54 0.00 0.00 1998 BISA 0.00 0.09 0.00 0.00 0.00 0.09 0.00 0.00 2003 Banco Los Andes 6.60 0.00 0.00 0.00 6.60 0.00 0.00 0.00 2003 Banco Sol 4.00 0.00 0.00 0.00 4.00 0.00 0.00 0.00 1999 CBTI 0.00 0.00 0.85 0.00 0.00 0.00 0.85 0.00 1994 COMSUR 0.00 0.00 1.30 0.00 0.00 0.00 1.30 0.00 1991 Central Aguirre 0.00 0.24 0.00 0.00 0.00 0.24 0.00 0.00 2001 Central Aguirre 1.69 0.00 0.00 0.00 1.69 0.00 0.00 0.00 1999 Electropaz 18.04 0.00 0.00 0.00 18.04 0.00 0.00 0.00 2003 FIE 1.25 0.00 0.00 0.00 1.25 0.00 0.00 0.00 1993 GENEX 0.10 0.00 0.00 0.00 0.10 0.00 0.00 0.00 1999 Illimani 3.84 0.00 0.00 0.00 3.84 0.00 0.00 0.00 Minera 0.00 3.40 0.00 0.00 0.00 3.40 0.00 0.00 2001 PQB 10.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2003 PRODEM 2.45 0.00 0.00 0.00 2.45 0.00 0.00 0.00 2003 TDE S.A. 12.72 0.00 15.00 0.00 12.72 0.00 15.00 0.00 TRECO 0.00 1.16 0.00 0.00 0.00 1.16 0.00 0.00 2001 Telecel Bolivia 3.33 0.00 5.00 1.43 3.33 0.00 5.00 1.43 2005 Transierra 45.35 0.00 0.00 86.05 45.35 0.00 0.00 86.05 Total portfolio: 109.87 5.43 22.15 87.48 99.37 5.43 22.15 87.48

Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic.

Total pending commitment: 0.00 0.00 0.00 0.00

Annex 11. Country at a Glance

BOLIVIA: Emergency Recovery and Disaster Management Project Latin Lower- POVERTY and SOCIAL America middle- Development diamond* Bolivia & Carib. income 2006 Population, mid-year (millions) 9.3 556 2,276 Life expectancy GNI per capita (Atlas method, US$) .. 4,767 2,037 GNI (Atlas method, US$ billions) .. 2,650 4,635

Average annual growth, 2000-06 Population (%) 1. 9 1. 3 0 . 9 GNI Gross Labor force (%) 3.1 2.1 1.4 per primary M ost recent estimate (latest year available, 2000-06) capita enrollment Poverty (% of population below national poverty line) ...... Urban population (% of total population) 65 78 47 Life expectancy at birth (years) 65 73 71 Infant mortality (per 1,000 live births) 52 26 31 Child malnutrition (% of children under 5) 8..13 Access to improved water source Access to an improved water source (% of population) 85 91 81 Literacy (% of population age 15+) 87 90 89 Gross primary enrollment (% of school-age population) 113 118 113 Bolivia M ale 113 120 117 Lower-middle-income group F e m a l e 113 116 114

KEY ECONOM IC RATIOS and LONG-TERM TRENDS 1986 1996 2005 2006 Economic ratios* GDP (US$ billions) ...... Gross capital formation/GDP 13.6 16.2 13.8 12.1 Trade Exports of goods and services/GDP 21.3 22.6 36.0 42.5 Gross domestic savings/GDP 9.2 11.5 17.2 21.9 Gross national savings/GDP 3.8 12.7 19.4 26.1 Current account balance/GDP ...... Domestic Capital Interest payments/GDP ...... savings formation To tal debt/GDP ...... Total debt service/exports 34.8 30.0 14.1 .. Present value of debt/GDP ...... Present value of debt/exports .. .. 86.5 .. Indebtedness 1986-96 1996-06 2005 2006 2006-10 (average annual growth) GDP 3.9 2.9 4.0 4.6 4.0 Bolivia GDP per capita 1.6 0.9 2.1 2.8 2.3 Lower-middle-income group Exports of goods and services 8.9 7.1 9.9 9.6 8.6

STRUCTURE of the ECONOMY

100

1986 1996 2005 2006 Growth of capital and GDP (%) (% of GDP) Agriculture 18.3 16.4 14.2 14.0 40 Industry 35.1 32.3 32.0 34.2 20 M anufacturing 20.4 19.0 14.2 14.7 Services 46.5 51.3 53.8 51.9 0 01 02 03 04 05 06 Household final consumption expenditure 81.4 75.1 66.7 63.3 -20 General gov't final consumption expenditure 9.4 13.3 16.2 14.7 Imports of goods and services 25.7 27.3 32.5 32.6 GCF GDP

1986-96 1996-06 2005 2006 Growth of exports and imports (%) (average annual growth) Agriculture 3.2 2.8 4.8 4.5 20 Industry 5.0 2.8 5.9 6.3 M anufacturing 4.1 2.9 2.7 8.1 10 Services 3.4 2.8 1.8 3.3 0 Household final consumption expenditure 2.9 2.7 2.7 3.9 01 02 03 04 05 06 General gov't final consumption expenditure 2.5 3.2 3.4 3.3 -10 Gross capital formation 6.2 -1.8 24.8 -3.8 Exports Imports Imports of goods and services 5.5 3.9 15.4 4.2

Note: 2006 data are preliminary estimates. This table was produced from the Development Economics LDB database. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete.

Bolivia

PRICES and GOVERNM ENT FINANCE 1986 1996 2005 2006 Inflation (%) Domestic prices (% change) 15 Consumer prices 276.3 12.4 5.4 4.3 10 Implicit GDP deflator 230.0 11.6 5.1 12.2 5 Government finance (% of GDP, includes current grants) 0 Current revenue .. 25.7 31.2 35.1 01 02 03 04 05 06 Current budget balance .. 5.9 7.8 15.0 GDP def lator CPI Overall surplus/deficit .. -1.9 -2.3 4.6

TRADE 1986 1996 2005 2006 Export and import levels (US$ mill.) (US$ millions)

Total exports (fob) 588 1,132 2,791 3,863 5,000 Zinc 28 153 200 547 Silver 27 64 92 172 4,000 M anufactures .. 312 401 487 3,000 Total imports (cif) 674 1,536 2,334 2,809 2,000 Fo o d .. 68 98 103 Fuel and energy 3 52 235 264 1, 0 0 0 Capital goods 282 659 565 731 0 00 01 02 03 04 05 06 Export price index (2000=100) 14 4 110 13 4 17 1 Import price index (2000=100) 60 102 127 133 Exports Import s Terms of trade (2000=100) 239 108 106 129

101

IBRD 33374

70°W 65°W BOLIVIA

SELECTED CITIES AND TOWNS BRAZIL DEPARTMENT CAPITALS NATIONAL CAPITAL To RIVERS Porto Velho ã un 10°S Ab MAIN ROADS RAILROADS Miles DEPARTMENT BOUNDARIES PANDOPANDO ios Riberalta Cobija e D INTERNATIONAL BOUNDARIES e d dr Ma

60°W AsunciAsunciónón This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information a t Guaporé shown on this map do not imply, on the part of The World Bank a Group, any judgment on the legal status of any territory, or any PuerPuertoto Heath Y endorsement or acceptance of such boundaries. Lago Lago Rogaguado i Huaitunas did Ma i Magdalena PERU n Lago BENI e B Rogagua Santa Ana Lago de a San Luis cum Ya

é P e r a Reyes S r o r e a a p m n g A a u M á Apolo M TTrinidadrinidad a S r a t San Borja n B í l n 15°S M a n 15°S LA PAZPAZ i c g o

PuertoPuerto l Acosta Lago Nevada Caranavi o a AscenciónAscención Titicaca Ic h To Illampu G Q r Puno (6,362 m) a ConcepciónConcepción u n i d q e e San Ignacio LA PPAZAZ u r (G i a u b Y a Las Petas p a p Nevada e a p a Guaqui ViachaViacha y y Illimani h I a ) C ch c (6,462 m) il a o n COCHABAMBA i Cochabamba Montero SANTASANTA CRUZ Desaguadero San JoséJosé de Chiquitos Oruro Santa Cruz To Nevada Sajama C (6,542 m) o RoboréRoboré Arica r Aiquile C d

o ORURO i l r l Banados del d e Lago r Izozog PuertoPuerto i Sucre Santa l Poopo SuárezSuárez l Salar de Ana e C TarabucoTarabuco c o r Coipasa h a e C n P To PotosPotosíí i t l c n Campo r o a m Grande To a r a l G

Iquique O y 20°S o Salar de 20°S c C CarniriCarniri

c Uyuni H i Uyuni U n d Q U PARAGUAY e I a P S A n C i l a A e y t a To c a POTOSPOTOSÍÍ Mariscal l VillaVilla Montes Estigarribia O CHILE e TTarijaarija d n z TARIJATARIJA a c e r p i To í G L YYucuibaucuiba f Calama ViljazónViljazón i e

d c

a P To Tartagal To BOLIVIA Abra Pampa

0 50 100 150 Kilometers To San Ramón de la Neueva Orán

0 50 100 Miles ARGENTINA

70°W65°W 60°W

SEPTEMBER 2004