Somalia Infrastructure Fund
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SOMALIA INFRASTRUCTURE FUND Administrator: Multi-Partner Fund Annual Report Volume 1 │ January–December 2017 About This Report Acronyms This Annual Report, from January to AfDB African Development Bank December 2017, cover the ADF African Development Fund activities and funding of the BRA Benadir Regional Authority Somalia Infrastructure Fund (SIF), DFID Department For International Development during its first year of operations. It EFGISP Economic and Financial Governance comprises of the following sections: Institutional Support Project EU European Union Introduction (p.2) FGS Federal Government of Somalia Background (p.2) ICT Information and Communication Operating Environment (p.3) Technology Operations (p.5) IOM International Organization for Migration Project Updates (p.10) MoEWR Ministry of Energy and Water Resources Results Framework (p.16) MPWR&H Ministry of Public Works, Reconstruction and Financial Update (p.19) Housing NDP National Development Plan SDRF Somalia Development and Reconstruction Facility SIF Somalia Infrastructure Fund Gabriel Negatu TSF Transitional Support Facility Director General UNOPS United Nations Office for Project Services [email protected] Tel.: +254 20 299 8232 Nnenna Nwabufo About The SIF Deputy Director General & Country Manager for Somalia The Somalia Infrastructure Fund (SIF, is a Multi-Partner [email protected] Fund with the overall goal of supporting Somalia to Tel.: +254 20 299 8343 rebuild institutions, rehabilitate key infrastructure, and reinforce economic governance. It is administered by Charles Muthuthi the African Development Bank (AfDB). Economist for Somalia (Consultant) [email protected] Tel.: +254 20 299 8354 The SIF aims to contribute to the efforts of Somalia and its development partners to consolidate peace, Desma Tunya establish the basic institutions of a functioning state, SIF Programme Officer (Consultant) and to accelerate inclusive and sustainable [email protected] economic recovery and development. It operates Tel.: +254 20 299 8299 within the framework of the AfDB’s Strategy for Addressing Fragility and Building Resilience in Africa. 1. Introduction Figure I illustrate the three components of the SIF. The main component relates to The total contributions to the Somalia the financing of infrastructure Infrastructure Fund (SIF), since its investments in transport, energy, water & inception in October 2016 reached US$ sanitation, and the information and 54.3 million in 2017. This includes US$ 3.7 communication technology (ICT) million from Italy and the United sectors. Capacity building is also Kingdom, and US$ 50.6 from the Bank’s supported with the aim of strengthening internal financial sources and internally the country’s ownership of infrastructure managed trust funds. The political investments and to be a catalyst for developments in the Gulf countries in driving and sustaining change efforts. mid-2017 disparaged efforts to mobilize Capacity building initiatives are aimed substantial resources to finance the SIF at public institutions at both federal and pipeline of projects. It is however states levels, and at local communities expected that prospects for resource and the private sector. Private sector mobilization for the SIF pipeline will actors will be targeted through improve going forward. infrastructure project operations to ensure that, in the medium term, they are This report reviews the 2017 activities of capacitated to effectively engage in the SIF in the backdrop of funding construction and maintenance of constraints. The review not only cover the infrastructure assets. achievements of the SIF portfolio, but also the financial position of the Fund. Figure 1: Components and Goals of the SIF The report also introduces the objectives of one project that is under preparation. In the next two Sections, the report presents background information on the SIF, and then an outline of the external events that impacted the Fund’s operations in 2017. 2. Background Since its approval in October 2016 under the Bank’s Transitional Support Facility (TSF), the SIF has evolved into an important pillar of the funding windows under the Somalia Development and Reconstruction Facility (SDRF). Because of the SDRF’s common governance arrangements, the SIF’s activities are Further, there are plans for on-ground complementary to, and are aligned with implementation of skill development the other two multi-partner funding initiatives for the youth. These will aim to windows that are separately managed equip the youth with skills sets required to by the United Nations and the World enhance their employability and to Bank. promote the development of micro and small enterprises. Finally, there is a financing and governance component 2 that include support to relevant line Bank’s “High 5s” –“Light Up and Power ministries and agencies to reinforce their Africa”, “Feed Africa”, “Industrialize capacities in key areas of public Africa”, “Integrate Africa”, and “Improve financial management, procurement, the Quality of Life for Africans”. and good governance practices, which are essential for proper planning, Bank grants for financing the managing, and funding of projects. “Emergency Humanitarian Relief Program” (approved in April 2017, for US$ The initial SIF pipeline comprised 55 1 million) and the “Short Term Regional projects valued at USD 454 million, which Emergency Response Project (STRERP)” were to be implemented over six years. (approved in July 2017, for US$ 35.4 The pipeline was developed through million) are supporting livelihoods by broad-based multi-stakeholder providing urgent food aid and helping consultations that were informed by in- the country to overcome food insecurity depth analysis of infrastructure needs in challenges that arise from recurring the energy, transport, water & sanitation, droughts. The STRERP, is part of the wider and the ICT sectors. The geopolitical Bank’s “Say No to Famine” framework. tensions in the Gulf countries in 2017 Among other goals, it aims to stimulate stalled efforts to organize a planned growth in the local private sector, while donor conference that was to mobilize reducing cross-border migration of substantial resources for financing persons in search of food, water, pasture, infrastructure investments under the SIF. and livelihoods. Looking forward, the Nevertheless, the Bank and the Federal project will promote resilience of the Government of Somalia are engaged in local communities, and enhance their exploring all possibilities to have the chances of better engaging in the donor conference held this year. The activities of SIF projects. Bank is also engaging partners, including the European Union, to mobilize resources for the rehabilitation of transport infrastructure in Somalia. 3. Operating Environment The Bank is making several interventions in Somalia that have significant potential for creating an enabling environment for Food aid for drought-affected populations in Dollow SIF operations to succeed, while promoting resilient development pathways. In this regard, in December 2017, the Bank had an active portfolio in Somalia that consisted of twelve operations, for a total commitment of US$ 115.3 million that are distributed as follows: agriculture, 58%; water and sanitation sector, 19%; multi-sector, 13%; and social sector, 10%. These projects are contributing to the realization of the Beneficiaries receiving food aid in Baidoa 3 Further, the Bank’s broader interventions are providing entrepreneurial skills to youth. So far, 400 youth have been skilled in hospitality, hairdressing, masonry, construction, and technology through the ongoing “Socio-economic Reintegration of Ex-combatants and Youth-at-Risk Project”. This effort is complementing the SIF’s intervention through the Bank’s financed “Strengthening Institutions for Public Works Project” that is also providing construction and soft skills training with job placement support for 1100 youth, 3- month internships for 35 youth, and 1- Students in Baidoa undergoing vocational training year apprenticeships for 15 youth. Some youth are being equipped with business management skills and financial literacy, and seed capital to start 200 small and medium-sized enterprises. Ultimately, educated youth will be better empowered to effectively participate in SIF supported initiatives. Beyond these operations, the Bank, in 2017, continued to provide technical assistance to reinforce the Federal Government’s debt management A youth beneficiary after receiving three months of systems as a pathway towards Somalia’s business training and a business startup kit access to the Heavily Indebted Poor Countries Multilateral Debt Relief The Bank will continue to support the Initiative (HIPC-MDRI). This included the country to prepare for arrears clearance development of a strategy for arrears and to meet all the structural clearance and access to HIPC-MDRI benchmarks under the International debt relief initiative, and the Monetary Fund (IMF)’s Staff Monitoring reconstruction of Somalia’s external debt Programme (SMP) s under the SIF data. It also involves the setting up and framework through the recently initial capacity building of the country’s approved Economic Financial Debt Management Unit in the Ministry of Governance and Institutional Support Finance. This effort has led to the Project Phase II (EFGISP II). Further, creation of a Somalia debt database in through the African Legal Support the Commonwealth Secretariat Debt Facility (ALSF), the Bank is providing the Recording