Document of The World Bank
FOR OFFICIAL USE ONLY
Public Disclosure Authorized Report No: PAD3478
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
PROJECT PAPER ON A PROPOSED ADDITIONAL LOAN
IN THE AMOUNT OF EUR 18.2 MILLION (US$20.43 MILLION EQUIVALENT)
Public Disclosure Authorized TO
GEORGIA
FOR THE IRRIGATION AND LAND MARKET DEVELOPMENT PROJECT
January 24, 2020
Public Disclosure Authorized
Water Global Practice Europe And Central Asia Region
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized
CURRENCY EQUIVALENTS
(Exchange Rate Effective Dec 31, 2019)
Currency Unit = Euros (EUR)
US$1 = 0.89063057 EUR
FISCAL YEAR January 1 ‐ December 31
Regional Vice President: Cyril E. Muller Country Director: Sebastian‐A Molineus Regional Director: Steven N. Schonberger Practice Manager: David Michaud Task Team Leader(s): Wilfried Hundertmark, Rufiz Vakhid Chirag‐Zade
ABBREVIATIONS AND ACRONYMS
AF Additional Financing BP Bank Procedures CPF Country Partnership Framework DSP Dam Safety Panel EA Environmental Assessment ENPV Economic Net Present Value ESMF Environmental and Social Management Framework FAO Food and Agriculture Organization FIRR Financial Internal Rate of Return FM Financial Management FNPV Financial Net Present Value GA LLC Georgian Amelioration Limited Liability Company GDP Gross Domestic Product GEL Georgian Lari GNERC Georgian National Energy and Water Supply Regulatory Commission GoG Government of Georgia ha hectare IBRD International Bank for Reconstruction and Development IDA International Development Association IFR Interim Un‐audited Financial Reports ILMDP Irrigation and Land Markets Development Project IPRS Immovable Property Registration System IRR Internal Rate of Return IT Information Technology km Kilometer LADM Land Administration Domain Model Land Agency National Agency for Sustainable Land Management and Land Use Monitoring LEPL Legal Entity of Public Law M&E Monitoring and Evaluation MEPA Ministry of Environmental Protection and Agriculture MOJ Ministry of Justice NAPR National Agency of Public Registry NGO Non‐Governmental Organization NPV Net Present Value NSDI National Spatial Data Infrastructure OP Operational Policy OPCS Operations Policy and Country Services PAD Project Appraisal Document PDO Project Development Objective PP Project Paper PPMD Project Planning and Monitoring Division PPSD Project Procurement Strategy for Development RF Results Framework RPF Resettlement Policy Framework
iii
SCD Systematic Country Diagnostic SDR Special Drawing Rights UASCG United Amelioration Service Company for Georgia WB World Bank WUO Water User Organization
iv
Georgia
Additional Financing for Irrigation and Land Market Development Project
TABLE OF CONTENTS I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ...... 6 A. Introduction ...... 6 B. Country Context ...... 6 C. Sector context ...... 9 D. Project Progress Summary and Results to Date ...... 10 E. The Rationale for Additional Financing and Restructuring ...... 12 II. DESCRIPTION OF ADDITIONAL FINANCING ...... 15 III. KEY RISKS ...... 19 IV. APPRAISAL SUMMARY ...... 20 A. Technical ...... 20 B. Economic and Financial Analysis (EFA) ...... 21 C. Financial Management ...... 23 D. Procurement ...... 23 E. Social (including Safeguards) ...... 24 F. Environment (including Safeguards) ...... 25 G. Other Safeguard Policies ...... 25 V. WORLD BANK GRIEVANCE REDRESS ...... 26 VI SUMMARY TABLE OF CHANGES ...... 27 VII DETAILED CHANGE(S) ...... 27 VIII. RESULTS FRAMEWORK AND MONITORING ...... 37 Annex 1: Financial and Economic Analysis ...... 51
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
BASIC INFORMATION – PARENT (Irrigation and Land Market Development Project ‐ P133828)
Country Product Line Team Leader(s) Georgia IBRD/IDA Wilfried Hundertmark
Project ID Financing Instrument Resp CC Req CC Practice Area (Lead) P133828 Investment Project SCAWA (9392) ECCSC (7000) Water Financing
Implementing Agency: Ministry of Environment Protection and Agriculture, Ministry of Justice ADD FIN TBL1 Is this a regionally tagged
project?
No
Bank/IFC Collaboration
No Expected Original Environmental Approval Date Closing Date Guarantee Current EA Category Assessment Category Expiration Date 23‐May‐2014 31‐Jul‐2021 Partial Assessment (B) Partial Assessment (B)
Financing & Implementation Modalities Parent
[ ] Multiphase Programmatic Approach [MPA] [ ] Contingent Emergency Response Component (CERC)
[ ] Series of Projects (SOP) [ ] Fragile State(s)
[ ] Disbursement‐Linked Indicators (DLIs) [ ] Small State(s)
[ ] Financial Intermediaries (FI) [ ] Fragile within a Non‐fragile Country
[ ] Project‐Based Guarantee [ ] Conflict
[ ] Deferred Drawdown [ ] Responding to Natural or Man‐made disaster
[ ] Alternate Procurement Arrangements (APA)
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Development Objective(s)
The Project Development Objective is to (i) improve delivery of irrigation and drainage services in selected areas and (ii) developimproved policies and procedures as a basis for a national program of land registration.
Ratings (from Parent ISR) RATINGNO_DRAFT_
Implementation Latest ISR
10‐Apr‐2017 29‐Nov‐2017 25‐Jun‐2018 01‐Jan‐2019 28‐Jun‐2019 27‐Dec‐2019
Progress towards achievement of MS MU MS MS MS MS
PDO Overall Implementation MS MS MS MS MS MS
Progress (IP) Overall Safeguards S MS MU MS MS MS
Rating
Overall Risk M M M M M M
BASIC INFORMATION – ADDITIONAL FINANCING (Additional Financing for Irrigation and Land Market Development Project ‐ P171796) ADDFIN_TABLE Urgent Need or Capacity Project ID Project Name Additional Financing Type Constraints P171796 Additional Financing for Cost Overrun, Restructuring, No Irrigation and Land Market Scale Up Development Project Financing instrument Product line Approval Date Investment Project IBRD/IDA 20‐Feb‐2020 Financing Projected Date of Full Bank/IFC Collaboration Disbursement 30‐Sep‐2022 No
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Is this a regionally tagged project? No
Financing & Implementation Modalities Child
[ ] Series of Projects (SOP) [ ] Fragile State(s)
[ ] Disbursement‐Linked Indicators (DLIs) [ ] Small State(s)
[ ] Financial Intermediaries (FI) [ ] Fragile within a Non‐fragile Country
[ ] Project‐Based Guarantee [ ] Conflict
[ ] Deferred Drawdown [ ] Responding to Natural or Man‐made disaster
[ ] Alternate Procurement Arrangements (APA)
[ ] Contingent Emergency Response Component (CERC)
Disbursement Summary (from Parent ISR)
Net Source of Funds Total Disbursed Remaining Balance Disbursed Commitments
IBRD %
IDA 50.00 24.22 20.79 54 %
Grants %
PROJECT FINANCING DATA – ADDITIONAL FINANCING (Additional Financing for Irrigation and Land Market Development Project ‐ P171796)
PROJECT FINANCING DATA (US$, Millions)
SUMMARY‐NewFin1
SUMMARY (Total Financing)
Proposed Additional Total Proposed Current Financing Financing Financing Total Project Cost 50.00 20.43 70.43
Total Financing 50.00 20.43 70.43
of which IBRD/IDA 50.00 20.43 70.43
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Financing Gap 0.00 0.00 0.00
DETAILSNewFinEnh1‐ Additional Financing
World Bank Group Financing
International Bank for Reconstruction and Development (IBRD) 20.43
COMPLIANCE
Policy
Does the project depart from the CPF in content or in other significant respects? [ ] Yes [ ✔ ] No
Does the project require any other Policy waiver(s)? [ ] Yes [ ✔ ] No
INSTITUTIONAL DATA
Practice Area (Lead) Water
Contributing Practice Areas Urban, Resilience and Land
Climate Change and Disaster Screening This operation has been screened for short and long‐term climate change and disaster risks
PROJECT TEAM
Bank Staff Name Role Specialization Unit Team Leader (ADM Senior Irrigation and Drainage Wilfried Hundertmark SCAWA Responsible) Specialist Rufiz Vakhid Chirag‐Zade Team Leader Senior Agribusiness Specialist SCAAG Armine Aydinyan Procurement Specialist (ADM Procurement Specialist EECRU
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Responsible) Financial Management Financial Management Djamshid Iriskulov EECG1 Specialist (ADM Responsible) Specialist Financial Management Damir Leljak Finance Officer WFACS Specialist Financial Management Luis M. Schwarz Senior Finance Officer WFACS Specialist Environmental Specialist (ADM Senior Environmental Darejan Kapanadze SCAEN Responsible) Specialist Social Specialist (ADM Senior Social Development Sophia V. Georgieva SCASO Responsible) Specialist Alvaro Federico Barra Team Member Economist SURLN David Jijelava Social Specialist Social Safeguards Consultant SCASO Ekaterine Asatiani Team Member Administrative Support ECCGE Gennady Pilch Counsel Legal LEGOP Senior Irrigation and Drainage Kazuhiro Yoshida Team Member SCAWA Specialist Nadege Orlova Team Member Senior Land Administration SURLN Ntombie Z. Siwale Team Member Operations Analyst SCAWA Prachi Shrikant Tadsare Counsel ET Consultant LEGOP Ruxandra Costache Counsel Legal Counsel LEGLE Sylvie Ngo‐Bodog Team Member Administrative Support SCAWA Vusala Mamed Asadova Procurement Team Procurement ECCAZ Ximing Zhang Team Member Dams Safety Specialist SWAGL
Extended Team Name Title Organization Location
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING
A. Introduction 1. This Project Paper (PP) seeks the approval of the World Bank Board of Executive Directors to provide additional financing (AF) of EUR 18.2 million (equivalent of US$20.43 million) from the International Bank for Reconstruction and Development (the Bank) to Georgia for the Irrigation and Land Market Development Project (the Project; Loan No. IBRD‐9043‐GE). The PP also provides a rationale for restructuring of the parent Project, including modification of the Project Development Objective (PDO) and Results Framework (RF) to capture AF supported activities, reallocation of funds between the Project components, and extension of the Closing Date. The proposed AF responds to the official request received from the Ministry of Finance of Georgia on March 20, 2019. The funds will be used to cover cost‐overruns and support the Project scale‐up, including introduction of new activities. Specifically, under Component 1 (Irrigation and Drainage Improvement), the AF will cover cost‐overruns of the rehabilitation of secondary and tertiary networks of the Tbisi‐Kumisi irrigation scheme and support two new activities: (i) strengthening the institutional capacity of the National Agency for Sustainable Land Management and Land Use Monitoring (Land Agency); and (ii) supporting a feasibility assessment of a proposed East Georgia program for irrigation reservoir rehabilitation and construction. Under Component 2 (Land Market Development) the AF funds will be used to: (i) scale up systematic land registration in irrigated pilot areas; and (ii) finance new activity of upgrading the information technology (IT) system of the National Agency of Public Registry (NAPR). 2. Both the PDO and the RF of the parent Project will be modified to capture the expanded Project scope. The Irrigation and Land Market Development Project, as appraised, applies systematic land registration procedures and policies in the pilot areas and was designed to improve land management aspects and data processing as a basis for a national land management program. The proposed activities for strengthening the Land Agency will expand the Project scope beyond just land registration toward providing a basis for the land use planning and monitoring. Therefore, as a part of the AF, the PDO and Intermediate Results (IR) indicators will be revised, and the target values of PDO and Intermediate results indicators for the existing activities modified. Moreover, new IR indicators will be added to: (i) account for additionally financed activities; (ii) monitor progress of identified gender‐gaps addressing actions; and (iii) inform on the civic engagement progress. 3. This PP also proposes an extension of the parent Project Closing Date by 14 months from July 31, 2021 to September 30, 2022. This extension will secure additional time required for: (i) the installation of piped and pressurized irrigation systems servicing some 15,700 ha of irrigated land; (ii) the successful institutional development of water users’ organizations (WUO); and (iii) an upgrade of the IT system of NAPR. It provides the Bank and the Government reassurance that the Project achieves its PDOs successfully. The extended Project duration is a response to important lessons learned as summarized in Section D “Project Progress and Results to Date” of this PP.
B. Country Context 4. Georgia became an upper‐middle income country in 2019, and over the past decade, Georgia’s economy has grown robustly at an average annual rate of 4.0 percent. Over this period, growth was driven by consumption and high rates of investment. This was despite numerous shocks, including the global financial
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
crisis of 2007‐08, territorial disputes, and falling commodity prices since 2014. Like several countries in the region, Georgia has seen a decline in population ‐ about 16 percent‐ since the country regained independence in 1991. Currently, the country has a population of 3.7 million people. In recent years, most of the decline has taken place in rural areas where about 50 percent of the population live; between the 2002 and 2014 census cycles, urban and rural areas shrank by 6 and 24 percent, respectively. 5. Rapid economic growth in the last decade was accompanied by a significant poverty reduction. According to the national absolute poverty line, the poverty rate declined from 34.3 to 20.1 percent between 2004 and 2018. In 2018, preliminary estimates indicate that 4.5 percent of the population faces extreme poverty, as measured by the US$1.9 purchasing power parities 2011 international poverty line, and 15.7 percent of the population lives under the US$3.2 poverty line (19.1 percent for rural areas and 13.7 percent for urban areas). The expansion of economic opportunities and social programs helped lift Georgians out of poverty and improve the overall well‐being of the population. Poverty reduction has been driven by increased labor market opportunities. Pensions, social assistance, and agricultural incomes have also been key drivers of poverty reductions, though to lesser importance than labor market income. 6. The agricultural sector remains a significant source of income, employment and export earnings for Georgia. Approximately 46 percent of the total population currently lives in rural areas and the sector still provides 45 percent of total employment1. However, sector growth has been slow, due to the low priority given to sector development. Agricultural GDP growth averaged 0.6 percent per annum in real terms between 2009‐2018, versus 4.0 percent for the overall economy. This slow sector growth has also inhibited rural poverty reduction, with rural poverty rates still doubling those in the urban areas (FAO, 2018)2. 7. There is a productivity gap between non‐irrigated and irrigated crop production which needs to be closed. Baseline data prepared under the parent Project suggests that average crop yields for medium to large, and small to marginal farms are generally low under partially irrigated and non‐irrigated conditions (e.g. wheat yields range from 2.20 to 2.50 tons/ha). In contrast, the productivity of irrigated crops is significantly higher for all types of annual and perennial crops. Under fully irrigated conditions, increases in crop productivity will principally arise from the increased supply of irrigation water (following rehabilitation of the irrigation infrastructure), as well as the adoption of enhanced agronomic practices such as improved fertilizer application, better weed control, and integrated pest management. It is therefore anticipated that crop yields would increase by between 45 and 50 percent for wheat, beans and fodder crops, which are mainly rain‐fed at present, while the yields of partially irrigated crops (e.g. maize, vegetables, orchard crops, and grapes) are expected to increase by between 20 to 25 percent with the provision of an adequate, timely and reliable supply of irrigation water. 8. Georgia has a total land area of 6.97 million ha of which 36 percent is classified as agricultural land, and only a small part of agricultural land is officially registered. Agricultural production in Georgia is concentrated among small‐scale farming households. There are 642 thousand agricultural holdings in the country; 572 thousand households operate agricultural land. Little of Georgia’s agricultural land has been officially registered. Nevertheless, most land owners do possess documents that prove their property rights. One‐third of the agricultural land is privatized, one‐third is leased by the State to private persons, and the rest is land of low productivity (pastures, mowing land) in public ownership. There are up to 4 million parcels,
1 World Development Indicators, WDI 2018 2 FAO. 2018. Gender, agriculture and rural development in Georgia – Country Gender Assessment Series. Rome
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
which amount to approximately 1 million ha in private hands. The average area of a land parcel in private ownership amounts to 0.25 ha, and land owners have approximately 4‐5 parcels in ownership each. The farms covering less than 0.9 ha represent 94.5 percent of agricultural farms. 5.4 percent of farms are 10 ha, and 0.1 percent out of them are farms of 90 ha and more (FAO, 2018)3. 9. Women have limited access to ownership and management of land and other assets, and they are less actively involved in representative roles. According to data provided by NAPR dated 2019, only 38 percent of land owners or co‐owners in the irrigated areas are female. The national average of female land owner or co‐owner is however at 42 percent. Moreover, the percentage of female water users i.e. land owners who have entered into irrigation service contracts is just 3.7 percent, which presents a gender gap with respect to access to irrigation and secure land tenure. The Project will contribute to closing the gender gap through the following ways: First, all land owners and co‐owners of land parcels within the irrigation schemes will be systematically registered by NAPR. The percentage of registered female land owners and co‐owners is expected to increase at least to 42 percent, and possibly to 45 percent (which is higher than the national average). Second, with national WUO legislation in place, up to 16 WUOs will be established within the pilot irrigation schemes and all registered land owners and land users will become members of the WUOs, thus enjoying equal rights and responsibilities. The number of female water users with access to irrigation services is expected to increase from currently 86 (3.7 percent) to 2,400 (38 percent). To further promote active involvement of all members of the WUO including male and female, the WUO Support unit of Georgian Amelioration Limited Liability Company (GA LLC) – a privately incorporated and 100 percent State‐owned entity – will play a critical role through social mobilization practices to ensure high levels of female participation in the governance bodies of WUOs and other local institutions. Under Component 2 the Project will ensure the inclusion of female land owners in the pilot registration. Recommended policies and procedures for the registration have already incorporated gender aspects; an emphasis will be made on the gender‐targeted awareness actions (e.g. targeting local schools), ensuring that women are fully informed about co‐ownership benefits, and are empowered to register land without discrimination, particularly in relation to transfers relating to joint ownership and inheritance of land. 10. Georgia has abundant water resources but insufficient storage capacity to meet future supply needs for irrigation. Flow rates of most rivers in Eastern Georgia peak in April and May and are low in July and August, when most crops need irrigation. As an example, the Tedzami River has high flow rates in spring and very limited flow rate during the rest of the year. There are nine irrigation canals diverting water from the river to schemes. If all schemes are fully operational, monthly irrigation supply needs increase to as much as 3 million cubic meters during the months of July and August when average monthly flows represent only 2.5 to 3.5 million cubic meters. To alleviate supply deficits to irrigation, the Government of Georgia (GoG) considers the construction of the Tedzami reservoir, which would provide reliable irrigation supplies to some 7,000 ha of irrigated land. Elsewhere, more storage capacity will be needed to off‐set the climate change effects on river flow impacting water supplies. Overall, the demand for irrigation is expected to rise from 150 million cubic meters in 2015 to 900 million cubic meters by 2025.4 Out of 33 irrigation reservoirs previously constructed, only seven – managed by GA LLC – are currently considered operational. . GA LLC plans to gradually rehabilitate its non‐operational reservoirs and thereby restore the storage capacity substantially. GA LLC also considers the construction of new reservoirs, which were previously planned and
3 Gender, Agriculture and Rural Development in Georgia Report, 2018, Food and Agriculture Organization 4 Irrigation strategy for Georgia, 2017‐2025, MEPA
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
never developed. 11. Climate change has aggravated supply deficits in Georgia. Temperatures throughout Georgia have been consistently increasing since 1961. Temperatures in the west warmed by 0.3°C, while the mean annual temperature increased by 0.4–0.5°C in the east. Temperature increase and change of precipitation are two of the highest risks for agriculture. Near‐term impacts will be an earlier start for vegetation seasons and a reduction in water availability for key agricultural zones. Decreased rainfall and warmer days in summer are likely to place an increasing pressure to shift from rain‐fed agriculture to irrigation. However, changes in river flow patterns are a significant concern for Georgia’s long‐term surface water supply availability and the ability to deliver irrigation services. Given the likely effects of climate change on the river flow rates, periodic water shortages are expected to be more frequent, impacting the tenuous balance between supply and demand during these months. Thus, more strategic management of reservoirs, water storage options, and rehabilitation of irrigation infrastructure are paramount for decreasing risks from climate change and other pressures – which this AF will help to begin to address.
C. Sector context 12. Georgia has a complex institutional change history in the irrigation and drainage sector. Primary irrigation and drainage canals and most secondary canals (off‐farm systems) were owned and managed by the Department for Amelioration Scheme Management of the former Ministry of Agriculture until 2006, when the GoG abolished and replaced it with four regional state‐owned limited liability companies (LLCs). Attempts to privatize these LLCs started in 2010, but did not attract enough interest. In March 2012 these four regional companies were merged into a single state‐owned entity called the United Amelioration Service Company for Georgia (UASCG), which in 2015 was renamed to GA LLC and is currently responsible for irrigation infrastructures’ management in Georgia. 13. An Irrigation Sector Strategy (2017‐2025) was formulated and approved by the GoG in 2017 to restore the irrigable area to 200,000 hectares by 2025. If fully implemented, annual water demands will increase from around 150 million cubic meters currently to around 900 million cubic meters, a value still well within the annual supply of water available in Eastern Georgia. However, a lack of overall storage and a progressive loss of snowpack storage, in particular, may cause shortages later in growing seasons when demand is high and river flows are at their minimums. The strategy prescribes that GA LLC continues operating as a single private corporation over the medium term, taking advantage of the financial discipline and results‐ orientation which typically characterize such entities. As long as it is publicly‐owned, GA LLC will aim to operate at a financial break‐even point, covering all operation and maintenance, administrative, and depreciation costs, with return on capital (profit) set to zero. GA LLC is expected to assume the role of bulk water supplier to local level organizations, which will distribute water and operate local facilities supplying individual farms. To facilitate this process, a recently formed WUO Support Unit takes the lead in forming and supporting local level organizations, which provide service to individual users. The primary local level organization responsible for managing water delivery to individual farms will be a farmer‐governed WUO. On December 17, 2019, a the law for water user organizations in Georgia has been approved by Parliament. Since GA LLC is a monopoly for‐profit service provider, the new law provides for the Georgian National Energy and Water Supply Regulatory Commission (GNERC) to regulate irrigation tariffs. GNERC will assume its role fully after a four‐year inception period.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
D. Project Progress Summary and Results to Date 14. The World Bank is providing support to the GoG efforts in improving irrigation and land management through the ongoing Irrigation and Land Market Development Project (ILMDP). The credit was approved by the World Bank Board of Executive Directors on May 23, 2014 in the amount of US$50 million and became effective on May 13, 2015. The initial Closing Date was July 31, 2019. In June 2018 the Project was restructured and the Closing Date extended for two years, from July 31, 2019 to July 31, 2021, to compensate for the initial delays with the operation effectiveness and the slow implementation start of Component 1 “Irrigation and Drainage Improvement”. 15. The PDO of the parent Project is: (i) to improve delivery of irrigation and drainage services in selected areas; and (ii) to develop improved policies and procedures as a basis for a national program of land registration. The Project has three Components: (1) Irrigation and Drainage Improvement; (2) Land Market Development; and (3) Project Management. 16. Implementation and progress towards PDO are both Moderately Satisfactory. With just US$24.1 million (54 percent of the total credit amount) disbursed and US$3.0 million committed to date, the Project remains behind its original implementation plan. However, the disbursement of remaining funds is likely to have a late spurt by the end of FY2020, when major contracts under Component 1 are tendered and start to be executed. To date, PDO indicators are beginning to register progress in terms of increased volume of water delivered (substantially achieved with 91 million cubic meters, against a target value of 95 million cubic meters). However, only a quarter of the target irrigable area is currently irrigated (4,713 ha). As part of achievement of the Project objective on development of improved policies to lay a basis for a national land registration program, improved procedures and new guidelines for the national systematic land registration program have been adopted by the NAPR in May 2017. Additionally, the new legislative package containing amendments for systematic land registration procedures and policy following the pilot completion was adopted by the Parliament on December 10, 2019. Despite these trends in key areas, both implementation progress (IP) and progress towards achievement of PDO ratings remain Moderately Satisfactory ‐ mainly due to the delays in the WUO law enactment and only moderately satisfactory pace of Component 1 implementation. Key progress till date for each of the Project components is summarized below. 17. Component 1: Irrigation and Drainage Improvement (US$45.65 million) implements irrigation infrastructure rehabilitation in 2 batches. Investments under batch 1 focus on improving the primary infrastructure conveyance capacity, including the rehabilitation of headworks, canals, syphons, as well as outlets and cross‐regulators, while works under batch 2 aim to: rehabilitate secondary and tertiary canal networks and connect these levels. By the time of the Project mid‐term review (in July 2017), batch 1 construction works were seriously delayed due to weak engineering designs that were prepared locally prior to the Project effectiveness. To overcome these challenges and to compensate for the delays with Project effectiveness, the Project was restructured with the Closing Date extended by two years to July 31, 2021. Concurrently, the target value of the PDO indicator “Total area supplied with irrigation and drainage services” was revised from 26,000 to 20,000 ha to account for nearly US$4 million loss resulting from SDR5/USD exchange fluctuations accumulated at that moment. While all signed contracts for batch 1 works on the primary infrastructure are now complete, not all the existing deficiencies on primary infrastructure have been fully addressed. These additional primary canal works are proposed to be included in the batch 2 bidding documents and financed as part of the AF. By November 2019, preliminary cost estimates became
5 SDR‐Special Drawing Rights
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
available for all three schemes, which indicated a possible cost overrun if all three schemes were equipped with piped secondary and tertiary networks. However, these cost estimates were subject to significant uncertainty, especially in the case of the Tbisi‐Kumisi irrigation scheme, depending on preferences and alternative options in terms of the system design, choice technology, layout, construction effort and estimated pricing of system components such as pipeline material, air valves, flow control structures, and gates. At the stage of the AF pre‐appraisal, a modified cost estimate suggested that US$7 million AF would be sufficient to economically restore 4,200 ha of the currently unirrigated land of the Tbisi‐Kumisi irrigation scheme without additional investment into primary canal networks. A full set of detailed irrigation system bidding documents for works on primary, secondary and tertiary irrigation networks is expected to become available in early 2020. Field works are scheduled to start as early as June 2020. 18. Component 2: Land Markets Development (US$2.25 million) finances systematic land registration in 12 pilot areas, to redefine and test the policies and procedures for systematic land registration. By May 2017, the Component already achieved its objective with respect to updating policies and procedures as a basis for a national systematic registration program. It also surpassed its IR target values by 12.8 percent registering 38,375 land titles. The Component provided 8,000 females with land ownership or co‐ownership rights (and overpassed the initial IR target by 60 percent). It critically evaluated the systematic land registration processes based on thorough stakeholder consultation and analysis of pilot project results. It prepared a package of recommendations for legislative amendments, which was approved by the Parliament on December 10, 2019. 19. Component 3: Project Management (US$ 2.1 million) finances project management activities implemented by the project implementation units (PIUs) of MEPA and the Ministry of Justice through NAPR. Both PIUs are adequately staffed and fully operational to support day‐to‐day project implementation. The Project progress reports are provided on time. 20. The Project experienced no fiduciary or safeguard issues of concern except for some relays to the dam safety aspect. The Sioni dam serves the Kvemo Samgori scheme and the Algeti dam serves the Tbisi‐Kumisi scheme covered under the Project. While the Project does not finance any works related to dam rehabilitation, both dams have been identified as subject to a potential dam safety risk of resurgences. While an international consultancy firm found no major structural deficiencies so far, dams safety inspections must be repeated when water levels behind the dam wall reach critical levels. Early warning systems to prevent possible damage from the dam’s sudden overflow will be updated by the dam safety panel (DSP). DSP was created by Ministerial Order No. 2‐102 of MEPA dated April 30, 2015 , as amended by Ministerial Order No. 2‐495, dated June 6, 2019 with broader functions. The DSP has eleven members and is chaired by the MEPA Deputy Minister. Its main responsibilities include to: (i) provide oversight of inspections and evaluations of the safety status of the existing dams, their appurtenances, and their performance history; (ii) review early warning system and emergency preparedness plans, and (ii) ensure appropriate stakeholder consultations and disclosure of all relevant instructions to them. 21. Lessons learned. In retrospective, the Project provides important lessons, which have informed the identification and structure of the proposed AF operation. Component 1 (Irrigation and Drainage Improvement). From the beginning, the MEPA underestimated the importance of proper system designs for the successful implementation of primary irrigation rehabilitation works contracts. The insufficient quality of designs prepared at the local level prior to the Project effectiveness has caused significant delays and led to cost overruns. Lesson learned from Project
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
implementation suggest that all civil works contracts must be based on high quality engineering designs that would help to make better cost estimates and ensure needed quality of built infrastructure, and consider irrigation rehabilitation and modernization plans which are agreed beforehand by all stakeholders. It must allow sufficient time for unfavorable weather conditions and other unforeseen circumstances such as design changes. It is also important to implement all reforms foreseen by the Irrigation Strategy 2017‐2025 including legal, institutional and policy reforms related to irrigation. Moreover, water rights and supplies from rivers and reservoirs must be ensured to be able to deliver reliable irrigation services to WUOs. Finally, to reach the highest possible degree of water user participation, all land owners and water users must be known, and their property rights fully registered. Component 2 (Land Market Development). By GoG decision Component 2 activities extended to twelve pilot areas in Georgia, which resulted in improved procedures and process for systematic land registration in Georgia. Key lessons learned suggest that the national private sector cannot provide the full range of land registration services, due to: (i) its lack of capacity for legal registration documents preparation and data collection; and (ii) too small size of surveying companies to meet the requirements of large‐scale systematic demarcation operations. To overcome these shortcoming, a hybrid approach shall be applied, combining: (i) NAPR in‐house resources for the preparation of registration packages; and (ii) sourcing of field works from private sector services providers. To cope with the increased load of incoming applications, NAPR’s processing capacity needs upgrading in terms of staff, systems, data processing, and process monitoring capacity. Component 3 (Project Management). An important lesson learned is that the implementation of complex irrigation and land registration activities requires swift procurement and professional contract management and supervision capacity in place, which ensures pro‐active responses on day‐to‐day project implementation challenges.
E. The Rationale for Additional Financing and Restructuring 22. The AF is needed to allow the Project to achieve its irrigation‐related PDO indicators, and it also provides an opportunity to scale‐up and expand the already achieved and successful land‐related PDO indicators. AF funds will be used to: (i) finance the cost‐overruns for the rehabilitation of secondary and tertiary networks; (ii) prevent the future national irrigation program from insufficient access to reliable water supplies from small‐and medium‐sized reservoirs; (iii) fully exploit the synergistic effects of land registration and irrigation development in pilot areas; and (iv) put in place systems for national authorities to fulfill their role in land registration and land management. Also, due to exchange rate fluctuations between the SDR and US$, the parent Project currently experiences a deficit of US$2.97 million.6 23. The parent Project Financing Agreement will be amended to inter alia: (i) reallocate original Credit funds between Project Components; and (ii) align the parent Project with the AF‐related changes. The Borrower and the Bank agreed to reallocate the original Credit funds from Part A (Component 1) to Part B (Component 2), and from Part C.1 to Part C.2 (Component 3) to enable NAPR to continue its activities under the parent Project during the AF preparation period. The text of the Project Financing Agreement will also be modified to reflect institutional changes related to the: (i) merging of two ministries into MEPA; and (ii) creation of GA LLC from the former UASCG; and (iii) recognition of NAPR as Implementing Agency under supervision
6 During Project preparation the exchange rate were 1.547 for SDR/US$ and 1.733 for GEL/US$. Currently, the exchange rate is 1.376 for SDR/US$ and 2.966 for GEL/US$.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
the MOJ. In addition, these alignment changes will also reflect: (i) 14 months extension of the Closing Date from July 31, 2021 to September 30, 2022; (ii) the revision of the PDO as per the AF proposal; and (iii) updating of safeguard‐related clauses. The amendment is expected to come into effect when the AF loan agreement is declared effective. Table 1:The AF funds breakdown by Component
Reference Implementing Amount [EUR Amount [US$ Component Description Number Agency million] million equivalent]
1.1 Irrigation rehabilitation and modernization MEPA 6.899 € $7.746
Strengthening of National Agency for 1.3 Sustainable Land Management and Land Use MEPA 0.364 € $0.409 Component 1 Monitoring
Feasibilty assessment of the proposed program 1.4 for irrigation reservoir rehabilitation and MEPA 0.909 € $1.021 construction
2.2 Land registration in irrigated areas NAPR 5.800 € $6.512 Component 2 2.4 NAPR information system upgrade NAPR 3.365 € $3.778
3.1 Project management (MEPA) MEPA 0.318 € $0.357 Component 3 3.2 Project management (NAPR) NAPR 0.500 € $0.561
Total AF 1) 18.2 € $20.43
1) Note: Total amount includes Front‐end Fee of 0.0455 million EUR and US$0.051 million respectively 24. The proposed AF is aligned with Focus Area 1 “Enhance Inclusive Growth and Competitiveness” of the WB‐Georgia Country Partnership Framework FY19‐FY22.7 The proposed activities contribute to the achievement of Objective 1.1 “Support agricultural modernization and access to markets” in Georgia. The AF activities are also aligned to the Strategy for Agricultural Development in Georgia 2015‐2020 (Measure 3.1.3‐ Developing agricultural land market and introducing modern approaches in land use). Registering irrigated land parcels will provide land tenure security and enable landowners to access commercial credits, and enhance their eligibility for agricultural support programs. Furthermore, support for land administration institutional capacity building and improved land policies and procedures are expected to contribute to increased land consolidation, efficient land use, and rural livelihoods improvement in the Project areas (e.g. through the creation of employment opportunities). 25. The AF will allow closing the financing gap concerned with the full rehabilitation of secondary and tertiary irrigation canal networks which, however, will still be only partially done compared to the original plan to restore 20,000 ha of irrigated land as part of the Project. The GoG has prioritized areas to be fully rehabilitated on the basis of technical, economic and social considerations. Available funds, in the amount of US$28.0 million (including AF), are sufficient to fully cover the Kvemo Samgori and Zeda Ru schemes’ rehabilitation cost, but they will still be insufficient to rehabilitate the Tbisi‐Kumisi irrigation entirely. While for the two former schemes restoration of some 11,500 ha of irrigation land has been found technically and
7 Report Number: 121853
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
economically feasible, indicative cost estimates suggest that full rehabilitation of the Tbisi‐Kumisi is technically and economically marginal due to the high cost of additional works needed to bring the primary infrastructure back to its full potential. Currently, the area contracted for irrigation amounts to just 850 out of 8,964 hectares. However, informally, the effectively irrigated area is much larger. GA LLC reckons that up to 5,000 ha of land could be restored without adding more works to the main canal. With these AF funds, the Project will restore some 4,200 ha of irrigated land at Tbisi‐Kumisi, focusing on the rehabilitation of secondary and tertiary networks, which supply irrigation to areas with a high likelihood of irrigation uptake.8 With this, the total area rehabilitated by the Project, including under the AF, will amount to 15,700 ha. The target value of the corresponding PDO indicator will be revised accordingly. 26. The AF is a strong opportunity to build upon the already successfully achieved PDO for Component 2 Land Market Development. With the successful and timely completion of the land plots registration activities, there is now an opportunity to systematically register land in irrigated pilot areas of the Project9 through: Upscaling systematic land registration procedures to the irrigated pilot areas and thereby realigning the Project with its initial design, and supporting MEPA National Irrigation Strategy Action Plan implementation. Registering irrigated land parcels will provide the land tenure security and enable landowners to access commercial credits and enhance their eligibility for future agricultural support programs. It will greatly complement the rehabilitation of secondary and tertiary irrigation networks under Component 1 and facilitate the successful institutional development of WUOs in these areas. Supporting NAPR’s plans to improve its Land Information System through upgrading the IT hard‐ and software and thereby preparing for a national systematic land registration program, as well as to support NAPR’s role as a host of National Spatial Data Infrastructure (NSDI) through the implementation of a comprehensive Information Technology Development and Investment Plan, which is fully aligned with national IT policies. With an increasing number of land registrations, the current NAPR IT System has already reached its limits in terms of storage, processing time, capacity for generation of standard reports and statistics. The annual number of transactions raised from 40,000 in 2006 to over 1 million in 2018, without system architecture redesign and with only minor hardware upgrades. The existing NAPR IT system requires a major upgrade to efficiently support AF‐ funded systematic registration activities and national systematic land registration program. Strengthening the Land Agency in its future role in the sustainable management of agricultural land. In 2019, the Parliament of Georgia adopted revised land legislation: Law of Georgia on Target Land Designation and Sustainable Management of Agricultural Land. The new legislation provides for the resumption of a land inventory process, which had been ceased in 2004. According to the new law, the National Agency for Sustainable Land Use and Management Monitoring will be established as a Legal Entity of Public Law (LEPL) under the MEPA. It will start operation as of January 2020. The Land Agency will be responsible for the creation of a comprehensive land use information and accounting system. Specific land accounts describe the area of land over an accounting period by land use
8 Works under the original Project have successfully restored the hydraulic integrity and functionality of the primary canal network of the Tbisi‐Kumisi scheme, even though its hydraulic performance remains below its potential. 9 Initial project design was built upon an assumption that a combination of effective irrigation and drainage services and security of land tenure would provide a foundation for greater private investment in high value irrigated agriculture. However, upon GoG decision, systematic land registration procedures were tested within other twelve pilot areas, none of which included irrigated land. Therefore, a synergetic effect of private investments leveraging into irrigated land could not be demonstrated yet.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
categories (e.g. arable land, irrigated, non‐irrigated, pasture, perennial, etc.). They show the various additions and reductions in land stocks associated with the agricultural processes. Besides, the agency will play major roles in the following areas: (i) regulation of the agricultural land market; (ii) definition of the eligibility criteria for foreign investors; and (iii) the provision of land mobility services, while matching investor business plans with land market opportunities. This AF will primarily be used to support essential organizational functions and thus build a foundation for future increased land consolidation, efficient land use, and rural livelihoods improvement in the Project areas. 27. The AF will also contribute to increasing Georgia’s water security for irrigation by assessing the feasibility of a proposed East Georgia reservoir rehabilitation and construction program. While the Project had initially focused investments on improving the quality and efficiency of irrigation services, the GoG has come to realize that overall water storage capacity needs to increase to ensure long‐term water security. Georgia has some 33 reservoirs designated for irrigation purposes, most of them being considered small to medium‐ sized10. Among them, only seven reservoirs are considered operational, while 23 are non‐operational. Construction of the three reservoirs started before 1990, but these were never completed and thus are not operational. There are another 11 sites identified for a potential for reservoir construction, where the works never began. Rehabilitation and construction of all reservoirs including operational, non‐operational and potential would raise the total storage volume for irrigation purposes from currently 555 million cubic meters to 992 million cubic meters, which represents a 66 percent increase. If compared to the mean annual outflow of Kura river (6,220 million cubic meters), the program would increase the storage coefficient11 from currently 8.8 percent to 15.9 percent. This activity would strengthen resilience to climate shocks (drought, changes in precipitation timing, etc.) through improved storage capacity.
II. DESCRIPTION OF ADDITIONAL FINANCING
28. The key changes under the AF, as explained in more details below, relate to: (i) providing the needed funds to cover cost‐overruns under Component 1; (ii) scaling up activities under Components 1 and 2, including introduction of some new activities; (ii) modifying the PDO and Results Framework to capture the AF supported activities; and (iii) extending the Project Closing Date to enable successful implementation of the AF supported activities and full achievement of the project objectives. 29. The proposed language of the revised PDOs are to: (a) improve delivery of the irrigation and drainage services in selected areas; and (b) develop improved policies, procedures, and systems as a basis for a national land management program. Whereas the parent Project’s PDO remains relevant, broadening of its scope is required to capture the expanded range of the Project activities outreaching beyond land registration that will be supported from the AF funds. Therefore, the revised PDO not only mentions development of the improved policies and procedures to form a basis for a national land management system, but also includes development of systems to encompass an upgrade of the NAPR IT System. Furthermore, with “land registration” replaced by “land management”, the revised PDO formulation starts to capture strengthening of the new land management agency. 30. Breakdown structure. This AF will be used to support the following activities which respond to the Project
10 Small reservoirs have a storage capacity of up to 100,000 cubic meters; reservoirs with a storage capacity of 100,000 and 1,000,000 cubic meters are medium‐sized reservoirs. 11 The storage coefficient describes the ratio between live storage and mean annual river discharge.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
needs and rationale and are presented below by Project Components: Component 1: Irrigation and Drainage Improvement (EUR 8.19 million; US$9.20 million equivalent) 31. Cost Overrun: Restoration of the secondary and tertiary networks. Taking into account available funds of about US$22 million for Sub‐Component 1.1 Irrigation and Drainage Rehabilitation and Modernization,12 it is envisaged to fully restore secondary and tertiary networks at Kvemo Samgori and Zeda irrigation schemes, while respective networks at Tbisi‐Kumisi would be restored only partially (4,200 ha). Altogether the area providing access to piped and pressurized networks would amount to 15,700 ha. Completion of this activity will build resilience against climate‐driven shocks of water variability. 32. New activity: Strengthening of the Land Agency. The AF will support the capacity of the new Land Agency, which is created under MEPA on January 1, 2020. The key functions of the Land Agency will include the preparation of a land resource inventory, the creation of a land (and water) use information & management system to assess annual land use budgets.13 The Project will support consultancies in areas such as: (i) creation of spatial land use and land management system; (ii) preparation of land use legislation; (iii) economic valuation of land markets; and (iv) monitoring of land use through remote sensing. This activity will support the procurement of essential equipment for agency operations (IT equipment including a server as part of client architecture and workstations used for high‐end GIS and remote sensing applications). The activity will be implemented by MEPA as the responsible institution for land management in Georgia. Other functions and objectives of the Land Agency will be further supported through annual national budgeting processes. 33. New activity: Feasibility assessment (FA) of a proposed East Georgia program for irrigation reservoir rehabilitation and construction. This activity supports the implementation of Georgia’s irrigation strategy, which was prepared under Component 1 and approved by GoG in 2017. The Strategy highlights the need to build the irrigation sector’s resilience to climate change through better water storage. As such, the FA of the proposed East Georgia program for irrigation reservoir rehabilitation and reconstruction will involve the recruitment of a multi‐disciplinary team of national and international experts in the field of river hydrology, geo‐hydrology and geo technical engineering, dam engineering as well as irrigation, agronomy, and Project economics. The FA will be implemented in five phases, including a macro‐level assessment, and will assess a longlist of 44 reservoirs by means of multi‐criteria analysis. The FA will cover technical, economic, and financial aspects of the proposed program, including hydrological, geo‐technical, structural and non‐ structural engineering investigations. Furthermore, the FA will include assessment of the downstream irrigation and drainage infrastructure directly or indirectly serviced by the respective reservoirs, determine the scope and normative cost of rehabilitation works, as well as determine agricultural productivity impacts arising from additional / more reliable irrigation services. The study team will also include social and environment experts tasked to carry out an Environmental and Social Impact Assessment. The terms of reference of the feasibility studies will be reviewed by the Bank team to ensure that they include a detailed water balance of the schemes, as well as an examination of any potential riparian issues, both upstream and downstream. Examinations will include hydro‐morphological investigations, which will be evaluated against the assessed ecological status of surface water bodies as per river basin management plans.
12 Incudes commitments of US$ 0.57 million for supervision of works and a dams’ safety program. 13 The Land Agency will be administered by the Hydro‐melioration and Land Management Department of MEPA. Hydro‐melioration refers to land, which is subject to irrigation and drainage infrastructure. This explains why the activity is under Component 1.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Component 2: Land Market Development (EUR 9.19 million; US$10.31 million equivalent) 34. Scale‐up of existing activities: Systematic land registration in irrigated pilot areas. Systematic land registration activities under Component 2 will be conducted in the irrigated areas. Priority will be given to the registration of the parcels within immediate proximity of the irrigation infrastructures. Other parcels within registration zones will be registered as well. It is estimated that completion of this activity will result in an approximately additional 100,000 land titles. The operations will be conducted through hiring of consultants, support staff (appointed in accordance with the regulations of the NAPR) and associated operating costs, private surveyor contracts, procurement of surveying equipment, computer hardware and software, furniture to implement Project activities. Key activities include inter alia: (i) training and workshops for staff and surveyors; (ii) social mobilization campaigns, including dissemination of branded materials for local communities, to raise their awareness and Project visibility, extensive national and local public information campaigns, conducted through public meetings and mass media, aimed at maximizing local population participation and cooperation in the process and maintaining high level of transparency ‐ essential element for credibility for ensuring the credibility of the Project’s registration process; (iii) land title documents’ collection; (iv) field data collection; (v) surveying and digitalizing of land plots; (vi) updating maps and registration documents; (vii) land title registration and/or identification of the interested persons as prescribed by the laws of Georgia; and (viii) development and implementation of the Project M&E plan. Upon systematic registration activities completion by NAPR, the MEPA will have access to the comprehensive information about the location, area, configuration and ownership of land plots, necessary to: (i) identify all irrigation systems’ beneficiaries; (ii) administer the collection of the service fees; (iii) organize the WUOs; (iv) assess their financial sustainability; and (v) manage the drainage of the schemes. Lack of information on land plot owners would significantly hinder the local population participation in the Project and the development of sustainable mechanisms of water use and management for the irrigation schemes.
Table 2 Estimated number of land plots to be registered in the proposed pilot areas14 Total Land Plots Region Number of Total Number Estimated Number of which need Lot (Irrigation Area [ha] Registered of Unregistered Number of Blocks Correction Scheme) Plots Land Plots Registered (40%) Land Plots Kvemo Kartli Lot 1 2,982 40,242 13,876 12,599 5,550 32,025 (Tbisi‐Kumisi) Shida Kartli Lot 2 3,127 23,214 14,678 16,827 5,871 37,376 (Zeda Ru) Kakheti (Kvemo Lot 3 2,887 47,437 16,381 6,352 6,552 29,285 Samgori) Total 8,996 110,893 44,935 35,777 17,974 98,686 35. New activity: NAPR IT System Upgrade. NAPR IT System upgrade is required to: (i) boost NAPR's capacity in processing and storing additional data from systematic registration within the Project; (ii) build readiness for national systematic registration program; (iii) continue providing hosting platform for data, applications
14 According to the systematic registration works statistics from the 12 pilot sites, around 40 percent of plots, where partial information of ownership exists, need to be rectified. There are two main reasons: (i) existing information is incorrect or incomplete, and/or (ii) systematic registration of neighboring plots requires modification of already registered plots.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
and services to more than 240 entities (23,500 professional users and more than one million consultations in 2018); 15 and (iv) fulfill its given role in hosting Georgia’s NSDI and connecting its public and corporate stakeholders. The NAPR will use AF funds to support the development of a robust national land platform. A strategy for upgrading NAPR IT infrastructure and applications will be developed and will include: (i) NAPR immovable property registration program optimization and maintenance; (ii) a new generation of NAPR IT System design preparation; and (iii) NAPR storage and calculation capacity upgrade. Following the recommendations contained in the strategic document, the NAPR will upgrade its IT Systems (hardware and software), including a new Immovable Property Registration System (IPRS) design and development. In particular, NAPR will be supported to upgrade: A client‐based immovable property registration program (LANDREG) and the Web‐based application (NAPRWEB). These programs need the following updates: (i) secure authorization program development; (ii) development of the existing system under the systematic registration project and ensure its compatibility with the NAPR registration software; (iii) functional Modernization of the LANDREG system (development of the registration error failsafe / real time quality control system); (iv) development of the Joint Management System of all existing systems at the NAPR; and (v) development of the Unified Person Identification Database. A document‐turnover electronic system was developed by the NAPR IT department and is widely used as it is implemented in 240 agencies and municipalities throughout Georgia and delivers services to approximately 20,000 users. It enables: (i) electronic communication between the agencies; and (ii) interchange data and other files in real time. The system requires various updates, both on the architecture and Graphical User Interface sides, as the increased system load already led to various problems; and A data processing and statistics capability. Effective data and statistics processing is vital for analysis, monitoring and provision of the quality data reports. NAPR seeks to include the data processing specialist in the development of each new project as this facilitates the smooth production of statistical reports when required by the Project stakeholders. Implementation of the new projects and changes to the existing protocols increased the workload of the Data Processing and Statistics Division of the NAPR IT Service. To maintain the same efficiency level, IT services need additional human resources. 36. In parallel, NAPR will launch a design and implementation process to prepare a new generation of IPRS ready for national roll‐out and based on the principles of electronic governance, built on international standards (ISO 19152:2012 for LADM16) and leveraging latest IT technologies (e.g. smart contract, cloud storage, and blockchain). The effective upgrade implementation will follow the recommendations informed by the findings of business area analysis, business process reengineering, and system architecture design. Different options for NAPR IT System Architecture design and implementation approaches will be considered including inter alia: (i) continuation of in‐house development and maintenance; (ii) outsourcing to an external service or system provider for development, with or without subsequent maintenance and upgrades by the in‐house team; and (iii) Private Public Partnership type implementation and financing
15 Currently NAPR IT System hosts data, applications and delivers services to 137 Institutions (2,622 users), that are connected to the NAPR land registration system, including 12 Banks, 2 Microfinance Organizations, 28 LLCs, 70 Community Centers and 25 organizations within the Public Service Hall and 103 Organizations (21,036 users), that are connected to the DES. 16 LADM‐ Land Administration Domain Model
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
following the results of Concept Viability Assessment. All technically viable options will undergo economic and financial analysis with at least 10‐15 years of perspective. NAPR storage and calculation capacity upgrade will be implemented, once an upgrade option is selected. The NAPR will engage additional qualified IT personnel and will improve the qualifications for existing staff through training and capacity building. Component 3: Project Management (EUR 0.82 million; US$0.92 million equivalent) 37. Day‐to‐day project management and institutional arrangements remain unchanged over the entire extended period of the Project. Sub‐Component 3.1 Project Management for MEPA and Sub‐Component 3.2 Project Management for NAPR under the supervision of Ministry of Justice (MOJ), continue to finance project management respectively, including coordination and technical supervision of the implementation, financial management, procurement, monitoring, evaluation and progress reporting, relating to Components 1 and 2. Previously, monitoring and evaluation of the impact on PDO and Intermediate Results indicators have been undertaken through a baseline and intermediate surveys. The implementing agency for Component 1 ‐ Irrigation and Drainage Improvement will be MEPA. The implementing agency for Component 2 – Land Market Development will be NAPR under the supervision of MOJ. Previously, the implementing agency for the component has been the MOJ through the NAPR.
III. KEY RISKS
38. The overall risk rating for the proposed AF is “Substantial” as assessed in the Systematic Operations Risk Rating Tool (SORT). The following key risks have been identified: Technical Design of Project or Program is considered “Substantial”. The development of a new IT system to support country‐wide land registration is a complex endeavor. The full upgrade of the NAPR IT system bears a substantial procurement risk, which requires NAPR to fully engage in the technical and organizational process, as well as backing from the highest management and political levels. In addition, the Bank will support the implementation closely and share expertise, documentation, and experiences from countries in the region including detailed technical specifications for IT design and procurement of consulting services. Project Closing Date extension by 14 months mitigates most of the risks associated with possible implementation delay. The institutional capacity for implementation and sustainability risk is considered “Substantial”. The Project Appraisal Document (PAD) for the parent Project highlighted poor maintenance of irrigation and drainage systems risks as a result of: (i) insufficient progress on establishing irrigation and drainage institutions for the management of on‐farm irrigation and drainage systems; (ii) low willingness to pay for irrigation; and (iii) inadequate GoG funding. With the new water user legislation in place, the risk of poor maintenance has been considerably reduced. The new law provides for the establishment of WUO, tariff reform, and the regulation of pricing for bulk water supplies to WUOs through GNERC. While irrigation system maintenance risks are reduced, the challenges associated with project implementation process persist ꟷespecially in terms of unfavorable weather conditions, restrictions during the irrigation season and multiple sites’ construction management. Cost overruns are partially a result of: (i) a previous poor designs legacy; and (ii) a significant loss of GA technical and organizational capacity. While the Project is providing material and organizational support to GA, probably the most effective technical and organizational risks’ mitigation action is already addressed with the recruitment of an international consultancy firm tasked to prepare detailed design and
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
overall construction management plans. This will help to install secondary and tertiary networks year‐ round while minimizing irrigation supplies’ disruption during the irrigation season. The environmental and social risk of the parent Project was assessed as “Moderate” and remains unchanged for the AF. Environmental risks associated with physical works have decreased as compared to the early stages of parent Project implementation. Resettlement Action Plans (RAPs) for irrigation rehabilitation works are currently implemented by the authorities. This involves negotiation of servitude arrangements with individual land owners including the compensation payment agreements’ settlement prior to the construction works’ start. The stakeholder risk is rated as “Substantial” as the full participation of farmers in WUO activities is critical to the successful implementation of works and management of the systems. Land owners and users of land plots within the service area of a WUO will become WUO members. They are expected to actively engage and contribute to the successful fulfillment of WUO responsibilities. During the construction period, WUO members are expected to tolerate possible short‐term disruption of supplies and adjust irrigation practices. During operation of the systems, WUO members will be expected to make payments for the provision of irrigation services to ensure long‐ term sustainability. Systematic registration of land property rights in the irrigated areas covered under Component 2 will substantially mitigate the risk of irrigation water users escaping from their responsibilities to become active members of WUOs. To mitigate the stakeholder risks, the Bank team will engage more pro‐actively with the WUO Support Unit of GA LLC to fully engage with local stakeholders.
IV. APPRAISAL SUMMARY
A. Technical 39. All activities proposed under this AF represent innovative features, either by use of advanced IT technologies, supporting continuous optimization of systematic land registration procedures, as well as introducing new institutional arrangements for WUOs. For example, an NAPR IT system upgrade from in‐ house servers to cloud‐based data storage and processing would boost calculation capacity significantly, while keeping operational costs at reasonable levels. The data storage question will be key, as nowadays storage capacity (servers) can be outsourced. In‐house storage capacity is not required unless for very specific reasons. Nowadays several governments elaborate and implement strategies for transferring their data to the cloud.17 Building on their experience, at least the following points should be taken into account, while considering the feasibility: (i) cloud provider evaluation and certification; (ii) elaboration and prior signature of customized Service Level Agreement (SLA); (iii) implementation of data encryption mechanisms, where encryption key is kept with the data owner; and (iv) disaster recovery/service disconnection strategy. The effective implementation of applications’ upgrades will depend on: (i) NAPR and other stakeholders' requirements assessment; and (ii) the findings and recommendations of the “NAPR IT infrastructure and applications upgrade strategy”. The AF activity would be focused on system architecture design, workflow analysis and eventually re‐engineering of business process for an upcoming National Land Information System upgrade. In parallel the NAPR IT department would be supported to
17 Examples include Estonia, Australia, New Zealand and United States.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
optimize the existing applications and databases, and to improve task‐processing time and process monitoring and report‐generation for AF Project purposes (i.e. systematic registration of irrigated land parcels). The procurement of data storage capacity would seamlessly integrate with the National e‐ Government infrastructure. It would provide the host for a platform for other governmental stakeholders (currently more than 45 other applications from different administration are hosted by NAPR data center). 40. New irrigation system designs will facilitate uptake of advanced field irrigation technology such as drip and sprinkler irrigation systems. All three irrigation schemes supported under this Project will, where feasible, convert from open secondary and tertiary canals to buried and piped irrigation distribution systems. Moreover, secondary pipe networks will be connected to primary canals, filled and pressurized by using natural gravity hydraulic pressure. This type of system allows farmers to connect via hydrants, which are sufficiently spaced to serve an area of 8‐10 ha each. Water users will be trained to use these hydrants collectively. Institutional arrangements will be created, by which operational procedures are agreed and system maintenance plans prepared and implemented. Once fully established, WUOs will take over the management responsibility for operational plans implementation. They will obtain irrigation services in bulk from GA and provide retail services to their members. While WUOs will be charged for bulk deliveries, they are expected to collect irrigation service fees from their members. Tariffs for the bulk services will be regulated by GNERC. 41. Strengthening of National Agency for Sustainable Land Management and Land Use Monitoring will take land market development beyond the registration of land plots. The agency’s land (and water) use information management system will be linked to the NAPR’s central database. The innovation for Georgia will be the preparation of a remotely‐sensed land use map, which, for the first time since 2004, will allow the preparation of thematic maps and categorized land use accounts. Remote‐sensing will also allow to regularly monitor land use and provide updated agricultural water use information. Besides, the AF will support the agency’s land mobility service provision functions. This requires capacity in the analysis of investment proposals and facilitation of lease agreements and other land market transactions. As part of the land registration process in irrigated areas, NAPR and MEPA will conduct a land use and land consolidation survey, which will subsequently inform land management policy analysis on irrigated land. It will also help facilitate the analysis of a land consolidation policy in conjunction with the adoption of guidelines and good international land consolidation practices.
B. Economic and Financial Analysis (EFA) 42. The Project is expected to generate substantial benefits for farmers in the form of incremental annual gross margin of US$739 per farm household arising from improved irrigation and drainage services.18 These benefits are attributable to: (i) irrigated land restoration and return of unused arable land to production; (ii) land use efficiency optimization by increasing cropping intensity and crop yields; and (iii) diversification into higher value crops. Key assumptions include the following: (i) a return of about 11,300 ha of unutilized arable land to production (about 65 percent of the command areas were out of production due to the lack of irrigation water supply); (ii) significant increases in crop yields by 20 to 30 percent for all crops (except grains) and by 55 percent for wheat and maize (present yields are very low); and (iii) an
18 At parent Project appraisal, the EFA calculated the net present value (NPV) only focusing on the expected benefits from irrigation activities. As the AF has a stronger Land Component, the methodology was adjusted to account for incremental benefits arising from rising prices for irrigated land.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
increase in cropping intensity from 100 percent to 115 percent due to double cropping. 43. In addition the Project generates benefits from land titling of over 183,585 ha of land. The expected economic benefits from land titling of approximately 150,000 plots are driven by clarity over land holding and land ownership rights and enhancing tenure security. It also facilitates identification of beneficiaries of the irrigation systems, and the establishment of WUOs, including the assessment of their financial sustainability, as well as implement works to manage the irrigation schemes. Other benefits include: (i) tenure rights and their transferability and consequently land market development; (ii) agriculture productivity increase, inter alia, due to the progressive land cover change towards perennial crops; (iii) facilitating access to land for investments; and (iv) environmental protection and conservation. 44. Land related benefits are typically measured by using the mean differences in the price of land parcels with and without the Project. If data is available, an econometric technique of hedonic pricing model is used to isolate the many factors that affect land prices besides land titling (family characteristics, consumption per capita, education level, age, and gender of the household head, etc.). However, due to limited land statistics data available, the team assumed a very conservative additional increase of 7.5 percent in land values over a 17 years period (0.43 percent per year) based on previous land projects experiences. 45. Overall, the financial net present value (FNPV) of the AF Project is estimated at US$17.2 million and the financial internal rate of return (FIRR) is estimated at 15.3 percent (see Table 3). A four‐year implementation period (2020 – 2023) assumed along with a fifteen‐year post‐Project period (2023‐2038). It also assumes a discount rate of 10 percent. The economic net present value (ENPV) and the economic internal rate of return (EIRR) are estimated at US$15.8 million and 14.9 percent respectively. Since both the FNPV and ENPV are positive and the FIRR and EIRR are greater than the discount rate of 10 percent, the Project is considered financially viable and also beneficial to the Georgian Economy. On a per‐hectare basis, a FNPV of US$4,834 per ha is attributable to irrigation activities, while a FNPV of US$394.8 is attributable to land registration. Similarly, an ENPV of US$4,612 per ha is attributable to irrigation, while an ENPV of US$394.8 is attributable to land registration, assuming there is no significant difference between financial and economic land values. More information on EFA is provided in the Annex 1. Table 3: Summary of financial and economic project performance indicators Economic or Financial Indicator Values Financial results FNPV financial net incremental benefits (US$) (Discount rate 10 percent) $17,185,066
FNPV financial net incremental benefits per ha (US$/ha) (Discount rate 10 $4,833.59 percent) attributable to the irrigation of 15,701 ha of land
FNPV financial net incremental benefits per ha (US$/ha) (Discount rate 10 $394.8 percent) attributable to the titling of 183,585 ha of land FIRR (Percent) 15.3 Discounted benefit‐to‐cost ratio (Discount rate of 10 percent) 3.8 Economic results
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
ENPV financial net incremental benefits (US$) (Discount rate 10 percent) $15,824,832
ENPV financial net incremental benefits per ha (US$/ha) (Discount rate 10 $4,611.61 percent) attributable to the irrigation of 15,701 ha of land
ENPV financial net incremental benefits per ha (US$/ha) (Discount rate 10 $394.8 percent) attributable to the titling of 183,585 ha of land EIRR (Percent) 14.9 Discounted benefit‐to‐cost ratio (Discount rate of 10 percent) 3.71
C. Financial Management 46. NAPR and MEPA will continue to be responsible for financial management (FM) of the proposed AF. NAPR and MEPA will be responsible for the flow of funds, budgeting, accounting, reporting, and auditing. Both implementing agencies have solid experience in the implementation of World Bank‐financed Projects, including the currently ongoing Irrigation and Land Market Development Project. NAPR and MEPA do meet World Bank requirements in respect of staffing, planning, budgeting, accounting, financial reporting, funds flow, internal controls, and auditing. All key FM and disbursement arrangements are in place, and the Project is in compliance with Bank fiduciary requirements. FM and disbursement arrangements for this AF will be identical to arrangements that are in place for the ongoing Irrigation and Land Market Development Project. Particularly, the annual audited Project financial statements together with the auditor’s opinion and the management letter will be provided to the Bank within six months after the end of each fiscal year and at the closing of the Project. The MEPA will be responsible for the selection and appointment of the Project auditor, according to the Terms of Reference acceptable to the Bank. The NAPR will produce a full set of Interim Un‐audited Financial Reports (IFR) every calendar semester and submit it to MEPA, which will be responsible for submitting consolidated semi‐annual IFRs to the Bank within 45 days following the end of each calendar semester.
D. Procurement 47. The AF will be subject to the New Procurement Framework, and all procurement/selection arrangements will follow the “WB Procurement Regulations for IPF Borrowers” issued as of July 2016 and revised as of November 2017 and August 2018. The Bank will exercise its procurement oversight through a risk‐based approach comprising Procurement Due Diligence (ex‐ante or ex‐post). In both project implementation units, procurement specialists are in place with sufficient experience and adequate experience in the Bank‐funded projects (one expert in NAPR and two in MEPA, including one specialist and one procurement assistant).19 Considering the increasing number of procurements envisaged under AF‐Component 2, an additional procurement staff (consultant) could be required for its implementation. The AF will be implemented using the parent Project’s STEP profile. New procurement arrangements will be agreed in the frame of a single Project Procurement Strategy for Development (PPSD) covering the entire Project. The PPSD includes the list of advance procurement activities for the Project. The Project implementation support personnel will be hired following requirement 7.32 of the Procurement Regulations for IPF Borrowers (the respective staff list
19 A procurement assistant has recently passed the procurement training organized by ILO (Turin).
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
will be specified in advance). 48. Recent procurement and contract management risks were rated as “Moderate” with the performance rated as “Satisfactory”. Provided that no change in the staffing and nature of procurement/selection processes are expected (only adjustment of some arrangements and bidding documents) the initial risk for AF project could be kept unchanged. Selection of consultancy, non‐consultancy services and procurement of non‐complex goods are envisaged in the frame of the AF, which requires due diligence on the implementation of the prepared PPSD and plans.
E. Social (including Safeguards) 49. The overall social impact of the AF is expected to be highly positive as it will provide further legal security and economic opportunities to the rural population. Any negative social impacts will be limited to the need for servitude agreements and related compensation for the construction of secondary and tertiary irrigation systems. Therefore, the overall social risk has been rated as “Moderate”. Specific aspects of social relevance are summarized below. 50. OP 4.12 Involuntary Resettlement is triggered, and the Resettlement Policy Framework (RPF) prepared for the Parent project remains relevant for the AF. It will be updated by MEPA to cover activities to be supported by the AF. Component 2 activities of systematic land registration will continue to be guided by a “country systems” approach as agreed under the parent Project. The experience of systematic land registration under this Component to date shows that NAPR has been successful in implementing the activities in line with core social principles, such as ensuring broad information disclosure and meaningful consultation, maintaining a functioning Grievance Redress Mechanism (GRM), and promoting gender inclusion whereby registration on the names of both husband and wife is encouraged. 51. A Gender Action Plan will be developed and implemented to further promote gender equality of access to the Project benefits under Components 1 and 2. Preliminary results from the Project implementation confirm, that special attention will need to be paid to gender issues under the Project, especially for the activities under Component 1. There are a relatively high number of female‐headed households in the Project impact areas (up to 10 percent of all households), who are at risk of being excluded from Project benefits. The Project will ensure that women are fully consulted and involved in the WUOs and in the discussions on arrangements for on‐farm water management. Women’s inclusion will be ensured through: (i) gender‐targeted social mobilization practices that ensure high levels of their participation in field level consultation on institutional options; and (ii) encouraging their participation in the WUOs governance structures. Under the Land Market Development Component, the Project will continue ensuring and promoting the inclusion of female land owners in the systematic registration. Recommended policies and procedures for registration are already gender sensitive, ensuring that women are equally able to register land and are not discriminated against, particularly in relation to transfers relating to joint ownership and inheritance of land. The Component aims to increase the percentage of women‐owners or co‐owners from 42 percent to 45 percent. 52. Citizen engagement mechanisms to be applied under the Project will include consultations, local information desks and “public displays”, beneficiary survey, and a GRM. These mechanisms have already been applied by MEPA with some success under the ongoing Project. Other means of engagement include the development of an SMS messaging system to inform citizens of key events, decisions, and deadlines related to the land registration process will be explored with NAPR as per recommendations of the pilot
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
evaluation. The Project will include two beneficiary feedback indicators: (i) share of beneficiaries satisfied with the quality of engagement during the land registration process (collected at the end of the Project during a satisfaction survey); (ii) share of grievances successfully addressed by MEPA and NAPR. 53. The Project will continue using the GRM as operated under the parent Project, with some improvements. Currently, NAPR receives the feedback and grievances over phone or mail and does not maintain a dedicated database for grievances related to the Project. NAPR will strengthen its grievance database to be able to filter more effectively grievances by area, type, and status to ensure that they are followed up on and resolved successfully. Currently, Component 1 has a GRM in place for the Zeda Ru irrigation scheme. This will be updated to reflect the new situation and it will be extended to the other schemes (Kvemo Samgori, Tbisi‐Kumisi). The GRM will be established for all levels – local, Project and any other, if applicable. The decision regarding the most appropriate grievance mechanism will be consulted with the local population (farmers, WUOs, or alternative bodies, local authorities). Ideally, local grievance redress committees will be established and composed of trusted representatives. The committees shall adopt protocols for handling grievances, GRM forms, and records, and be trained prior to the beginning of the Project. The Project‐level GRM and GRM committee would review cases that cannot be resolved at the local level. Additionally, claimants will always have the right to approach the national court system if the Project GRM fails to resolve their concerns.
F. Environment (including Safeguards) 54. The Project is expected to have a positive long‐term environmental impact as the rehabilitation of irrigation schemes will lead to decreasing water losses and improved the efficiency of water supplies, and only limited negative impacts during the construction phase. The AF does not support any additional construction works beyond the initial Project scope. Therefore, the overall risk is “Moderate”. To mitigate possible negative impacts from the construction and operation phases, several safeguard policies are triggered. The Environmental and Social Management Framework (ESMF) and the RPF of the original project have been updated to the satisfaction of the Bank and were both publicly disclosed by MEPA and on the external Bank website on November 22, 2019. 55. OP/BP 4.01 Environmental Assessment is triggered, as the Project will invest in physical works. According to this policy and based on the screening outcome, the Project is classified as environmental Category B. For the purposes of Component 1, the Borrower prepared an ESMF for ILMDP, which was disclosed and discussed with Project stakeholders, and so where the individual Environmental Management Plans. Site‐ specific Environmental and Social Management Plans (ESMPs) will be prepared for the rehabilitation of secondary and tertiary infrastructure of the three target irrigation schemes, disclosed while in draft, and discussed with stakeholders prior to commencement of the works. 56. OP 4.09 Pest Management is triggered because agriculture will intensify in the coverage areas of Project‐ beneficiary irrigation schemes, which could entail more intensive usage of pesticides. A Pest Management Plan is not required because the Project will not finance the purchase and application of pesticides, however, the Project supports raising awareness of good pest and pesticide management practices including Integrated Pest Management, among water uses.
G. Other Safeguard Policies 57. OP/BP 7.50 on International Waterways is triggered as East Georgian irrigation schemes abstract water
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
from rivers that drain into the Kura river basin across the border with Azerbaijan. However, Project design is limited to the rehabilitation of existing irrigation schemes. It was established that the Project‐financed activities would have no impact on the quality and quantity of river flows in the international waterways and the Bank’s Regional Vice President for Europe and Central Asia approved an exception to notification of riparians under OP/BP 7.50 on February 20, 2014 for the parent Project. Given the cost‐overruns and limited business demand for irrigated infrastructure in one of the schemes, the scope of physical activities is decreased under the AF, thus further limiting the overall impact. On the other hand, the AF will the finance a feasibility assessment of the proposed East Georgia irrigation reservoir rehabilitation and construction program involving international waterways. AF‐financed activities and a draft terms of reference for the feasibility assessment include examination of any potential riparian issues. The exception to the notification of riparians was granted for the AF by the Regional Vice President for Europe and Central Asia on December 4, 2019. 58. OP/BP 4.37 Safety of Dams is triggered because two schemes selected for the Project are served by dams (Sioni Dam serves Kvemo Samgori Scheme and Algeti dam serves Tbisi‐Kumisi Scheme). Works to ensure compliance with international dam safety standards are included in the Project design. The Borrower established a dam safety panel (DSP) comprised of 11 members by the GoG’s Decree No. 2‐102 dated March 6, 2015 “On Approval of the Statute of the Ministry of Environment Protection and Agriculture of Georgia”, following the guiding principles of OP/BP 4.37 to oversee compliance with Bank dam safety requirements and to report its findings annually to the Bank. The DSP was re‐established by Ministerial order no. 2‐495 of the MEPA dated June 6, 2019 with broader functions and responsibilities.
V. WORLD BANK GRIEVANCE REDRESS
59. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported Project may submit complaints to existing Project‐level GRM or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address Project‐ related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred or could occur, as a result of WB non‐compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects‐operations/products‐ and‐services/grievance‐redress‐service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
VI SUMMARY TABLE OF CHANGES
Changed Not Changed
Implementing Agency ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Legal Covenants ✔ Procurement ✔ Cancellations Proposed ✔ Safeguard Policies Triggered ✔ EA category ✔ Financial Management ✔ APA Reliance ✔ Other Change(s) ✔
VII DETAILED CHANGE(S)
IMPLEMENTING AGENCY
Implementing Agency Name Type Action Ministry of Environment Protection and Line No Change Agriculture Ministry/Ministerial Department Ministry of Justice No Change National Agency of Public Registry (NAPR) Country/Regional New
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Organization
PROJECT DEVELOPMENT OBJECTIVE
Current PDO The Project Development Objective is to (i) improve delivery of irrigation and drainage services in selected areas and (ii) developimproved policies and procedures as a basis for a national program of land registration.
Proposed New PDO The Project Development Objectives are to: (a) improve delivery of the irrigation and drainage services in selected areas; and (b) develop improved policies, procedures, and systems as a basis for a national land management program.
COMPONENTS Current Component Name Current Cost Action Proposed Component Proposed Cost (US$, (US$, millions) Name millions) Component 1 Irrigation and 45.65 Revised Component 1 Irrigation 54.85 Drainage Improvement and Drainage Improvement Component 2 Land Market 2.25 Revised Component 2 Land 12.56 Development Market Development Component 3 Project 2.10 Revised Component 3 Project 3.02 Management Management TOTAL 50.00 70.43
LOAN CLOSING DATE(S) Ln/Cr/Tf Status Original Closing Current Proposed Proposed Deadline Closing(s) Closing for Withdrawal Applications IDA‐54560 Effective 31‐Jul‐2019 31‐Jul‐2021 30‐Sep‐2022 30‐Jan‐2023
REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed REALLOCATION NEW IDA‐54560‐001 | Currency: XDR
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
iLap Category Sequence No: 1 A Current Expenditure Category: G,W,non‐CS,CS,TR,IOC‐part A 1
27,310,000.00 11,746,327.37 27,310,000.00 100.00 100.00
iLap Category Sequence No: 1 B Current Expenditure Category: G,W,non‐CS,CS,TR,IOC‐part A 2
2,270,000.00 1,593,746.07 2,110,000.00 100.00 100.00
iLap Category Sequence No: 1 C Current Expenditure Category: G,W,non‐CS,CS,TR,IOC‐part C 1
1,250,000.00 945,515.87 1,150,000.00 100.00 100.00
iLap Category Sequence No: 2 A Current Expenditure Category: G,W,non‐CS,CS,TR,IOC‐parts B1,B3,C2
590,000.00 507,245.82 690,000.00 100.00 100.00
iLap Category Sequence No: 2 B Current Expenditure Category: G,W,non‐CS,CS,TR,IOC‐part B 2
980,000.00 979,918.65 1,140,000.00 100.00 100.00
Total 32,400,000.00 15,772,753.78 32,400,000.00
DISBURSEMENT ARRANGEMENTS Change in Disbursement Arrangements Yes
Expected Disbursements (in US$) DISBURSTBL Fiscal Year Annual Cumulative
0000 0.00 0.00
2014 0.00 0.00
2015 1,500,000.00 1,500,000.00
2016 3,978,781.01 5,478,781.01
2017 6,981,699.66 12,460,480.67
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
2018 6,812,396.14 19,272,876.81
2019 4,040,690.67 23,313,567.48
2020 10,800,432.52 34,114,000.00
2021 19,400,000.00 53,514,000.00
2022 11,600,000.00 65,114,000.00
2023 5,316,000.00 70,430,000.00
SYSTEMATIC OPERATIONS RISK‐RATING TOOL (SORT) Risk Category Latest ISR Rating Current Rating
Moderate Moderate Political and Governance Moderate Low Macroeconomic Moderate Moderate Sector Strategies and Policies Moderate Substantial Technical Design of Project or Program Institutional Capacity for Implementation and Substantial Substantial Sustainability Moderate Moderate Fiduciary Moderate Moderate Environment and Social Moderate Substantial Stakeholders
Other Overall Moderate Substantial
LEGAL COVENANTS1 LEGAL COVENANTS – Irrigation and Land Market Development Project (P133828) Loan/Credit/TF Description Status Action LEGAL TBL1 IDA‐54560 Finance Agreement :Financial Complied with Marked for Deletion Management, Financial Reports and Audits | Description :The Recipient shall, through the Ministry of Agriculture, appoint an independent auditor for the Project with terms of reference and qualifications acceptable to the Association, in accordance with the provisions of Section III of this Schedule.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
| Frequency :CONTINUOUS
IDA‐54560 Finance Agreement :Safeguards 1 | Complied with Marked for Deletion Description :The Recipient shall ensure that the Project is carried out in accordance with the provisions of the ESMF, EMP(s), RPF and RAP(s). The Recipient shall not assign, amend, abrogate or waive the ESMF, EMP(s), RPF and/or RAP(s) or any provision thereof, without the prior approval of the Association. | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 2 (a) (i) | Complied with Marked for Deletion Description :For purposes of Part A of the Project, the Recipient shall: (a) prior to the issuance of the bidding documents for the works contract for each irrigation and drainage scheme, prepare and submit to the Association for its approval: (i) the proposed design and sitefor said works and, the related site‐specific EMP in form and substance satisfactory to the Association; | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 2 (a) (ii) Complied with Marked for Deletion and (b) | Description :and (ii) the draft contract for said works to ensure that the provisions of said site‐specific EMP are adequately included in said contract; (b) prior to the signing of the contract for said works, prepare and submit to the Association for its approval the site‐ specific land acquisition and/or resettlement action plan(s) in form and substance satisfactory to the Association; | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 3 (a) and Complied with Marked for Deletion (b) | Description :The Recipient shall: (a) ensure that all activities undertaken for the purpose of carrying out of the Project comply with environmental standards and guidelines satisfactory to the Association; (b) ensure that the
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
selection of any irrigation and drainage scheme under Part A of the Project is done in accordance with the provisions of the ESMF; | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 2 (c) | Complied with Marked for Deletion Description :and (c) prior to the commencement of the works, ensure that the owners and users of the land where said works are to be implementedare fully compensated in accordance with the provisions of the resettlement action plan(s) that have been approved by the Association (RAP(s)). | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 3 (c) | Complied with Marked for Deletion Description :(c) ensure the complete implementation of the EMPs in a manner acceptable to the Association, including all necessary measures to minimize and to mitigate any adverse environmental impacts caused by the implementation of the Project; | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 3 (d) | Complied with Marked for Deletion Description :and (d) maintain the Project Planning and Monitoring Division’s environmental unit with competent staff in adequate numbers and with such responsibilities and functions acceptable to the Association as shall enable the Project Planning and Monitoring Division to manage, coordinate and monitor the implementation of the EMPs. | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 4 (a) | Complied with Marked for Deletion Description :The Recipient shall: (a) ensure that the Project Planning and Monitoring Division prepares RAPs according to the RPF; | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 4 (b) Complied with Marked for Deletion (part 1) | Description :(b) maintain or cause to be maintained by Project
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Planning and Monitoring Division, and publicize or cause to be publicized by Project Planning and Monitoring Division, the availability of, grievance procedures to hear and determine fairly and in good faith, in accordance with the RPF, | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 4 (b) Complied with Marked for Deletion (part 2) | Description :all complaints raised in relation to the implementation of the RAPs by those being resettled (as that term is defined in the RAP) or by those in host communities who are adversely affected by the implementation of the RPF, and take all measures necessary to implement the determinations made under such grievance procedures; | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 4 (c) | Partially complied Marked for Deletion Description :(c) through Project Planning with and Monitoring Division, employ a resettlement expert, satisfactory to the Association, to conduct an ex post review of the implementation of the RAPs; | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 4 (d) | Partially complied Marked for Deletion Description :(d) through Project Planning with and Monitoring Division, furnish promptly to the Association the findings and recommendations for follow up action resulting from each such review; and (e) through Project Planning and Monitoring Division, implement all such recommendations for follow up action as are agreed with the Association. | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 5 | Complied with Marked for Deletion Description :For the purpose of carrying out Part A.1 of the Project, the Recipient shall establish a dam safety panel, in accordance with the ESMF prior to commencing any works. | Frequency
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
:CONTINUOUS
IDA‐54560 Finance Agreement :Safeguards 6 (a) | Complied with Marked for Deletion Description :The Recipient shall include in the Project Reports referred to in Section II.A of this Schedule adequate information on the implementation of the ESMF, the RPF, EMPs, and RAPs, giving details of: (a) measures taken in furtherance of the ESMF, the RPF, any environmental assessment or similar safeguard instrument, RAPs and EMPs; | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 6 (b) Complied with Marked for Deletion and (c) | Description :(b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the ESMF, the RPF, any EMP or similar safeguard instrument, and any RAP; and (c) remedial measures taken or required to be taken to address such conditions and to ensure the continued efficient and effective implementation of the ESMF, the RPF, any EMP or similar safeguard instrument, and any RAP. | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 7 (a) | Complied with Marked for Deletion Description :For the purposes of carrying out Part B.2 of the Project, the Recipient shall: (a) furnish to the Association for approval, the draft guidelines for land registration prepared in accordance with terms of reference acceptable to the Bank, including that the guidelines be fully consistent with the Safeguards Documents and the Association’s Safeguard Policies; | Frequency :CONTINUOUS IDA‐54560 Finance Agreement :Safeguards 7 (b) | Complied with Marked for Deletion Description :and (b) upon approval by the Association, implement Part B.2 of the Project according to the provision of the Guidelines for Land Registration. |
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Frequency :CONTINUOUS
LEGAL COVENANTS2
LEGAL COVENANTS – Additional Financing for Irrigation and Land Market Development Project (P171796) Sections and Description Section C : Safeguard Instruments Description :The Borrower shall ensure that the Project is carried out in accordance with the Safeguards Instruments. The Borrower shall not assign, amend, abrogate, or waive the Safeguard Instruments without the prior written approval of the Bank. Section C : Safeguard Instruments Description :The Borrower shall ensure that all bidding documents and contracts for civil works under the Project include the obligation of contractors, subcontractors, and supervising entities to comply with the relevant aspects of Safeguard Instruments. Section C : Safeguard Instruments Description :The Borrower shall: (a) ensure that all activities undertaken for the purpose of carrying out of the Project comply with environmental standards and guidelines satisfactory to the Bank. Section C : Safeguard Instruments Description The Borrower shall: (b) maintain competent environmental and social staff in adequate numbers and with such responsibilities and functions acceptable to the Bank, as shall enable MEPA to manage, coordinate and monitor the implementation of the ESMPs. Section C : Safeguard Instruments Description :For the purpose of carrying out Component 1 of the Project, the Borrower shall maintain the Dam Safety Panel, throughout the Project implementation period. Section C : Safeguard Instruments Description :The Borrower shall include in the Project Reports referred to in Section II.A of this Schedule, adequate information on the implementation of the Safeguard Instruments, giving details of: (c) conditions, if any, which interfere or threaten to interfere with the implementation of the Safeguard Instruments; and Section C : Safeguard Instruments Description : The Borrower shall include in the Project Reports referred to in Section II.A of this Schedule, adequate information on the implementation of the Safeguard Instruments, giving details of: (d) remedial measures taken or required to be taken to address such conditions and to ensure the continued efficient and effective implementation of the Safeguard Instruments. Section C : Safeguard Instruments Description : The Borrower shall include in the Project Reports referred to in Section II.A of this Schedule, adequate information on the implementation of the Safeguard Instruments, giving details of: (b) measures taken in furtherance of the Safeguard Instruments;
Conditions
Type Description Disbursement Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made : (a) for payments made prior to the Signature Date;
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Type Description Disbursement Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made : (b) under Category (1) until the Borrower through MEPA has adopted the Operational Manual for Components 1 and 3.1; Type Description Disbursement Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made : (c) under Category (2) until the Borrower through NAPR has adopted the Operational Manual for Components 2 and 3.2 of the Project.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
VIII. RESULTS FRAMEWORK AND MONITORING
Results Framework COUNTRY: Georgia RESULT NO PDO Additional Financing for Irrigation and Land Market Development Project Project Development Objective(s)
The Project Development Objectives are to: (a) improve delivery of the irrigation and drainage services in selected areas; and (b) develop improved policies, procedures, and systems as a basis for a national land management program.
Project Development Objective Indicators by Objectives/ Outcomes
RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5
To improve delivery of irrigation and drainage services in selected areas
Absolute volume of irrigation water supplied to Project‐rehabilitated 67 million m3 91 million m3 91 million m3 93 million m3 95 million m3 schemes (million m3 to Project schemes) (Text) Rationale: Action: This indicator has The intermediate targets have been revised to take into account already achieved results and remaining Project time. The end target value remains the same. been Revised
Volume of irrigation water effectively supplied to the WUOs in bulk within the Project 0 million m3 0 million m3 0 million m3 25 million m3 66 million m3 rehabilitated schemes (million m3) (Text)
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Rationale: Action: This indicator is This indicator measures a total volume effectively supplied to the WUOs (contracted) in bulk. This indicator measures physical area that is irrigable as a result of New rehabilitation works within the command area. This indicator EXCLUDES any area irrigated or irrigable outside the command area.
Area provided with irrigation and drainage 0.00 7,231.00 8,000.00 12,000.00 services (ha) (CRI, Hectare(Ha)) Rationale: This indicator only reflects the area irrigated by registered consumers i.e. active water users based on contracts concluded with GA LLC, expressed in ha. It Action: This indicator has reflects better operational reality of the Project, where newly designed underground irrigation pipelines replace most of already existing open irrigation been Revised infrastructures.The results include the irrigated area of Udabno almond plantation with an irrigated area of 2,900 Ha, as it uses water brought by the primary canal rehabilitated by the Project. The Udabno almond plantation made a private investment into their irrigation and drainage infrastructures.
Area provided with irrigation and drainage 15,700.00 services ‐ Improved (ha) 0.00 4,713.00 (CRI, Hectare(Ha)) Rationale: This indicator measures the total area of land provided with improved or new irrigation and drainage services rehabilitated or constructed under the Project, Action: This indicator expressed in ha. The target value was adjusted to reflect the final irrigation infrastructure design, which will cover the entirety of the Kvemo‐Samgori (9,200 Ha) has been Revised and the Zeda Ru (2,300 Ha) schemes and 4,200 Ha from the Tbisi‐Kumisi scheme. This indicator represents total irrigable land available as a result of rehabilitation works.
To develop improved policies, procedures and systems as a basis for national land management program (Action: This Objective has been Revised)
Preparation and Updated Recommended Policies and Prepared and The corpus of Implementation of implementation of policies, recommended policies and procedures based on implemented policies registration pilot 12 sites under NAPR IT System is procedures for systematic policies and procedures new legislative and procedures for regulations and Regulation 351 upgraded land registration and NAPR procedures for pilot (legislative package) package systematic registration procedures in place completed IT system upgrade (Text) submitted and for national program implemented in the and upgraded NAPR IT
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 approved. Pilot areas submitted to the AF‐covered areas system. were selected GoG. following Regulation 351. Rationale: The intermediate targets have been updated to align with the project implementation strategy and progress, where additional areas have been added to the Action: This indicator has scope of work and a new set of recommendations to streamline systematic registration procedures based on the first pilot experiences has been prepared and been Revised submitted to the Parliament . The progress of NAPR IT system upgrade based on the new legislation provisions and updated procedures will be also captured under this indicator.
PDO Table SPACE
Intermediate Results Indicators by Components
RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2
Component 1 Irrigation and Drainage Improvement
Water users provided with new/improved irrigation and drainage 0.00 2,307.00 6,400.00 services (number) (Number) Rationale: The update in the Project area where irrigation infrastructures will be repaired impacts the number of water users. This indicator reflects actual indicator monitored the Action: This indicator has been Revised registered customers, i.e. active water users that utilize irrigation services based on contracts with GA LLC. Previously this number of contracts (plots) contracted for irrigation. The definition of water users was clarified and double‐counting of users having contracts for multiple parcels was removed.
Water users provided with irrigation and drainage services ‐ female 0.00 485.00 1,200.00 2,400.00 (Number)
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Rationale: The intermediate targets of the indicator have been adjusted to reflect the actual number of registered female customers of Georgian Amelioration LLC; i.e. active female water users that utilize irrigation services based on the number of service contracts signed with GA LLC. Previously, the reported numbers were incorrect. The correct number must be read 86 instead of 485. With the establishment of Water Users' Action: This indicator has been Organizations Revised With the establishment of WUOs within the pilot irrigation schemes all registered land owners and land users will become members of the WUOs, thus enjoying equal rights and responsibilities. The number of female water users with access to irrigation services is expected to increase significantly from currently 86 (3.7 percent) to 2,400 (38 percent). The WUO Support unit of GA LLC will play a critical role through social mobilization practices to ensure high levels of female participation in the governance bodies of WUOs and other local institutions.
National irrigation and drainage strategy Strategy finalized and endorsed by No strategy prepared and endorsed (Text) government
Action: This indicator has been Revised
Service area locally managed by WUOs 0.00 6,000.00 12,560.00 (Hectare(Ha)) Rationale: Action: This indicator is New This indicator describes the uptake of irrigation management responsibility by the WUOs
Complaints received during the implementation of Component 1 80.00 activities and redressed satisfactorily 0.00 60.00 (Percentage) Rationale: omponent 1 activities' implementation as a part of the Grievance Redress Action: This indicator is New This indicator measures a level of complaints received during C Mechanism operation and resolved.
Readiness of proposed program for Total of 44 small and medium‐sized Reservoir Rehabilitation & Reservoir Rehabilitation & Construction reservoirs selected for pre‐ and Construction Program assessed and (Text) feasibility assessment. prioritized against multiple criteria
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 and verified through stakeholder consultation. Rationale: Action: This indicator is New This indicator describes the content and process of a comprehensive feasibility assessment of small‐ and medium‐sized reservoirs for irrigation.
Total number of beneficiaries, that benefit from new/improved irrigation 7,705.00 21,400.00 services (Number) Rationale: This newly introduced indicator measures a total number of active water users including their household members, that enjoy the benefits of Action: This indicator is New new/improved irrigation services. The figure is calculated based on the number of active water users provided with new/improved irrigation services multiplied by average size of the household in Georgia, which is 3.34 according to the 2014 Geostat Census.
Strengthening of the National Agency for Spatial land use and land No up‐to‐date spatial land use Sustainable Land Management and Land management information updated information within MEPA. Use Monitoring (Text) and used for policy analysis Rationale: provided to the National Agency for Sustainable Land Management and Land Use Action: This indicator is New A new indicator introduced to follow the progress of the support Monitoring.
Component 2 Land Market Development
Land parcels with use or ownership rights 178,000.00 recorded in pilot areas (Number) 41,600.00 Rationale: The target values for the indicator have been updated taking into account additional parcels to be registered in the irrigated areas. The baseline Action: This indicator has been Revised was also updated to take into account land parcels already registered in these new areas.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Target population with use or ownership rights recorded as a result of the Project 0.00 19,000.00 68,000.00 (Number) Rationale: Action: This indicator is New This new indicator was added to measure specifically a number of people, who received land titles as a result of the Project. Previous indicator measured all the beneficiaries under both Project components.
Target population (females) with land use of ownership rights recorded as a 0.00 8,000.00 30,600.00 result of the Project (Number) Rationale: Action: This indicator is New Monitor and facilitate access to land tenure security and registered land rights to women
Complaints received as a result of the systematic registration process and 99.94 99.95 redressed satisfactorily (Percentage) Rationale: As a part of the Project GRM implementation process a number of cases resulting from the activities of systematic registration under Component 2, Action: This indicator is New which go to the court after all the other stages of the reconciliation and mediation within the Project are exhausted is registered.
IT System Design Completion (Yes/No) No Yes
Rationale: The IT System Design Completion creates a milestone allowing to monitor the feasibility of the IT System Upgrade Implementation. The IT System Action: This indicator is New Design includes Business Area Analysis, Capacity Gap analysis, Business Process Reengineering, Preparation of the Terms of Reference for NAPR IT System Upgrade.
Target land area with use or ownership rights recorded as a result of the Project 0.00 180,000.00 (Hectare(Ha))
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Rationale: Action: This indicator is New The introduction of this new indicators allows to follow the progress of the area with registered land use and ownership rights through systematic registration process under the Project.
Component 3 Project Management (Action: This Component has been Marked for Deletion)
Direct project beneficiaries (Number) 0.00 7,000.00 50,000.00
Rationale: Action: This indicator has been Marked Direct beneficiaries are people or groups who directly derive benefits from an intervention such as improved irrigation and drainage services for Deletion provided under the Component A and land titles delivery under Component B.
Female beneficiaries (Number) 0.00 15,000.00 20,000.00 30,000.00
Rationale: Action: This indicator has been The indicator provides a gender‐disaggregated total count of project beneficiaries. Marked for Deletion
IO Table SPACE
Monitoring & Evaluation Plan: PDO Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Total volume of irrigation Annual Project water supplied to three collection of progress Collection of information Absolute volume of irrigation water pilot irrigation schemes data on reports from regional GA LLC MEPA, GA LLC supplied to Project‐rehabilitated schemes measured at canal intake water submitted by centers. (million m3 to Project schemes) throughout irrigation delivered to the end of the season. farms after year.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
irrigation season (December).
The data will be collected from each regional center and then aggregated at the Project level by the PIU. The data on the contracts is already available. The regional Regional centers will additionally offices of GA provide data on the area LLC for of the plots under the monitoring of irrigation contracts and Absolute volume of water supply Volume of irrigation water effectively volume of water irrigation water supplied to and number supplied to the WUOs in bulk within Annually supplied, which will MEPA the WUOs who concluded of contracts the Project rehabilitated schemes allow to calculate final irrigation contract for concluded and (million m3) quantities for the water supply with GA LLC NAPR for indicators using cadastral data technical parameters of containing the irrigation schemes. plots' area. Additionally water
meters could be installed at the entry of irrigation canals to each of the WUOs/plots. They would measure an effectively supplied water volume.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Annual collection of data on the Project areas progress Through GA LLC Regional Area provided with irrigation and GA LLC, MEPA, WUOs supplied reports billing centers drainage services (ha) with irrigation services.
Semi‐annually based on the data from GA LLC regional centers on semi‐ Progress number of contracts Area provided with irrigation and MEPA annually reports signed for irrigation and drainage services ‐ Improved (ha) based on the area of the plots signed for irrigation services.
This indicator measures the preparation and NAPR reports, Preparation and implementation of submission to government project Progress reports Annually NAPR policies, procedures for systematic land of a set of improved progress prepared by NAPR.
registration and NAPR IT system upgrade policies and procedures as reports a basis for a national land registration program. ME PDO Table SPACE
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Monitoring & Evaluation Plan: Intermediate Results Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection This indicator measures the Regional centers of GA number of active water LLC provide statistics on users who are provided the number of water with irrigation and users and water drainage services under the Project contracts in their Water users provided with new/improved Project. Water user is a Annually progress MEPA, GA LLC, WUOs respective area of irrigation and drainage services (number) registered customer a reports operations. Once person that uses water and established and has one or more contracts operational, from the with GA LLC depending on WUOs. number of plots he/she
uses and cultivates. Regional centers of GA LLC provide statistics on the number of water users disaggregated by Gender‐disaggregated Project gender and water numbers for the parent Water users provided with irrigation Annually progress contracts in their MEPA, GA LLC indicator measuring and drainage services ‐ female reports respective area of number of active water operations. Once users‐females established and operational, from the WUOs.
The National strategy GA LLC, National irrigation and drainage strategy developed and approved. Annually Project MEPA prepared and endorsed The strategy will define the progress Government’s long term reports
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
vision for national regulation and monitoring of irrigation water delivery, institutional arrangements, water pricing and cost recovery, and rehabilitation and modernization. Number of WU Contracts multiplied by the area for irrigation This indicator describes the MEPA and GA under the contract or by uptake of irrigation Annually GA LLC, MEPA Service area locally managed by WUOs LLC cadastral area of the management responsibility plots, whose owners or by WUOs lessors contract irrigation services
GRM is operational at the GA LLC regional offices, local authorities. The indicator measures a An e‐mail/mail level of satisfactory GRM records Complaints received during the communication channel MEPA, GA LLC, local resolution of complaints annually as per ESMF implementation of Component 1 activities will also be established authorities, received during document and redressed satisfactorily to ensure provision Component 1 of regular statistics to implementation the PIU through the focal contact point.
This indicator describes the Project MEPA, GA LLC will Readiness of proposed program for content and process of a Annually progress monitor assessment and MEPA, Reservoir Rehabilitation & Construction comprehensive feasibility reports readiness progress assessment of small‐ and
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
medium‐sized reservoirs for irrigation. Collected from regional Project Total number of beneficiaries, that GA LLC centers and Annually progress MEPA, GA LLC, WUOs benefit from new/improved irrigation WUOs (once they are report services established).
The indicator will track the progress of the Strengthening of the National Agency for strengthening of land use annually MEPA Progress reports MEPA Sustainable Land Management and Land and management
Use Monitoring information production and maintenance within MEPA This indicator measures the number of land parcels NAPR Queries into the NAPR IT registered in the Project M&E reports, System made quarterly Semi‐ Land parcels with use or ownership rights pilot districts including the Project during implementation NAPR annually recorded in pilot areas baseline values of 14,000 progress of pilot systematic
for initial 12 pilot sites and reports registrations. 27,600 for the areas under Component 1. The indicator measures a NAPR number of people, who database, Queries to NAPR semi‐ Target population with use or ownership received the land title Project database on registration NAPR annually rights recorded as a result of the Project thanks to the systematic progress of land rights
registration activities reports undertaken by the Project. The indicator follows the Target population (females) with land semi‐ NAPR Extraction of data from number of female‐owners NAPR use of ownership rights recorded as a annually database NAPR database and female co‐owners result of the Project (property owned by female
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
owners together with a representative of the opposite sex) of land property NAPR IT M&E of the systematic Percentage of complaints System and registration during Complaints received as a result of the received during the semi‐ M&E of the public display and NAPR systematic registration process and systematic registration annually systematic subsequent steps of the redressed satisfactorily process under Component registration systematic registration 2 and resolved process
The indicator monitors IT Monthly Monthly as System Design Progress. It Webex it is an should be completed by meeting with activity on target date to allow NAPR on the NAPR presentation NAPR IT System Design Completion the Project sufficient time for IT IT System critical System Upgrade design path. development and progress.
implementation. Target land area with use Semi‐ NAPR Queries into the NAPR Target land area with use or ownership or ownership rights NAPR annually database database. rights recorded as a result of the Project recorded as a result of the
Project. Each Project Implementing Unit at Currently there are 18,155 MEPA and at NAPR will PPMD, Project project beneficiaries for count a total number of Direct project beneficiaries LRU, progress Quarterly land markets component. persons deriving UASCG reports benefits from the project activities.
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
The PIU teams at MEPA and NAPR will count separately beneficiaries Based on the assessment under their respective and definition of direct semi‐ Project components and will MEPA, NAPR Female beneficiaries project beneficiaries, annually progress report a total number specify what number of the reports for this indicator beneficiaries are female. disaggregated by gender.
ME IO Table SPACE
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Annex 1: Financial and Economic Analysis 1. A sensitivity analysis shows that even if the project irrigated area decreases by 30 percent from the planned goal, the project would still be economically and financially viable due to the benefits generated by the systematic land registration. The same is valid in a potential scenario where the benefits from both irrigation and land components, are 30 percent less than estimated (FNPV would be US$1.4 million and ENPV would be US$0.4 million). Finally, in the case of a cost overrun of 30 percent, the FIRR will fall to 11.7 percent and the EIRR to 8.1 percent, as such, the project would still be viable, but the Georgian economy would be better off investing in an alternative project. Table 1.1: Summary of financial and economic project performance indicators and their sensitivity to increase or decline.
Irrigated Area (ha) FNPV FIRR ENPV EIRR 8793 $ 4,153,081 11.30% $ 3,391,350 11.10% 12561 $ 11,261,436 13.50% $ 10,173,249 13.20% 14131 $ 14,223,251 14.40% $ 12,999,041 14.10% 15701 (AF target) $ 17,185,066 15.30% $ 15,824,832 14.90% 17271 $ 20,146,880 16.10% $ 18,650,624 15.70% 18841 $ 23,108,695 17.00% $ 21,476,415 16.50% 20411 $ 26,070,510 17.80% $ 24,302,206 17.30% Sensitivity of Project Benefits ‐30% $ 1,424,490 10.50% $ 472,327 10.20% ‐20% $ 6,678,015 12.20% $ 5,589,829 11.90% ‐10% $ 11,931,540 13.80% $ 10,707,330 13.40% Baseline $ 17,185,066 15.30% $ 15,824,832 14.90% 10% $ 22,438,591 16.70% $ 20,942,334 16.30% 20% $ 27,692,116 18.00% $ 26,059,836 17.60% 30% $ 32,945,641 19.30% $ 31,177,338 18.90% Sensitivity of Project Costs ‐30% $ 27,790,121 20.90% $ 33,853,427 27.00% ‐20% $ 24,255,103 18.70% $ 28,550,899 21.90% ‐10% $ 20,720,084 16.80% $ 22,541,368 18.00% Baseline $ 17,185,066 15.30% $ 15,824,832 14.90% 10% $ 13,650,047 13.90% $ 8,401,293 12.30% 20% $ 10,115,028 12.80% $ 270,751 10.10% 30% $ 6,580,010 11.70% $ (8,566,796) 8.10%
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
Table 1.2: Assumed cropping pattern per average farm household in hectares per household (ha/hh)
WOP20 WP21 rainfed irrigated Total irrigated Total 1st crop 2nd crop 1st crop 2nd crop 1 Wheat 0.06 0.02 0.08 0.10 0.10 2 Maize 0.09 0.04 0.13 0.15 0.15 3 Vineyard 0.04 0.09 0.13 0.13 0.13 4 Fruits (apple) 0.01 0.02 0.03 0.03 0.03 5 Fruits (plum) 0.01 0.01 0.02 0.02 0.02 6 Melons and berries 0.06 0.00 0.06 0.18 0.05 0.23 7 Potatoes 0.00 0.01 0.00 0.01 0.05 0.05 0.10 8 Forage crops (lucerne) 0.00 0.00 0.00 0.01 0.01 9 Sunflower 0.01 0.01 0.02 0.03 0.03 10 Haricot beans 0.00 0.01 0.00 0.01 0.06 0.05 0.11 11 Nuts 0.00 0.00 0.00 0.00 12 Vegetables (tomato) ‐ ‐ 0.12 0.12 13 Vegetables (cucumber) ‐ ‐ 0.12 0.12 14 Unused lands 0.50 0.50 ‐ ‐ Total 0.72 0.27 0.01 1.00 1.00 0.15 1.15 Cropping intensity 50% 115%
Table 1.3: Assumed cropping yield assumptions in ton per hectare (t/ha)
WOP WP rainfed irrigated irrigated 1st crop 2nd crop average 1st crop 2nd crop average Incremental 1 Wheat 1700 2500 1940 3000 3000 55% 2 Maize 3000 5000 3600 5500 5500 53% 3 Vineyard 4000 6500 5750 7000 7000 22% 4 Fruits (apple) 4500 7000 6250 8000 8000 28% 5 Fruits (plum) 4500 7000 6250 8000 8000 28% 6 Melons and berries 9000 8000 8984 11000 10000 10773 20% 7 Potatoes 4000 8000 6000 7080 10000 8000 8989 27% 8 Forage crops (lucerne) 4500 4500 5500 5500 22% 9 Sunflower 1500 1500 1800 1800 20% 10 Haricot beans 450 900 600 714 1100 700 932 30% 11 Nuts 1000 1000 1200 1200 20% 12 Vegetables (tomato) 10000 10000 12000 12000 20% 13 Vegetables (cucumber) 10000 10000 12000 12000 20%
20 WOP‐ without project 21 WP‐with project
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The World Bank Additional Financing for Irrigation and Land Markets Development Project in Georgia (P171796)
60. Additional qualitative benefits‐ an example of Maximizing Finance for Development (MFD) in the Project area. In 2016, the Georgian Adjara Group invested in over 5,000 hectares of land in the Eastern region, Kakheti taking water from the Kvemo Samgori primary canal (Udabno project). The group invested into two pumping stations: 1) Pump station with 2 pumps, Q‐200 m3/h each; and 2) Pump station with 2 pumps, Q‐ 750 m3/h each. The water is stored in reservoirs which is later passed through a drip irrigation systems to water the orchard and various crops. The Udabno project has already successfully established: (i) an almond orchard on 2,000 hectares of the irrigated land (planted with over 675,000 trees of Spanish and Italian almond varieties); (ii) a vineyard on 10 hectares with almost 200 different grape varieties endemic to Georgia; and (iii) started growing three types of berries‐strawberries, raspberries and blackberries on a total of 20 hectares. Future developments include building a true farm‐to‐table concept hotel, restaurant, as well as the cultivation of various fruit and vegetables, where guests can visit Udabno, join the whole process and become a farmer for the day. In the next 1‐2 years, the Group will start building the hotel and a processing plant to capture an added value from the harvested fruits and vegetables. 61. Additional qualitative benefits due to a progressive land market development will be quantified during the end of the project survey and will reflect growth of land sale price around the areas of irrigation and certification. It could be noted that there are already some indicative examples of increase in the agricultural land market price from US$ 1,000/ha to almost US$ 3,000/ha for the parcels within the area.
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