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Project Appraisal Document on A FOR OFFICIAL USE ONLY Report No: PAD3040 Public Disclosure Authorized INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED IDA CREDIT IN THE AMOUNT OF US$49 MILLION PROPOSED IDA SCALE-UP FACILITY FINANCING Public Disclosure Authorized IN THE AMOUNT OF US$190 MILLION AND A PROPOSED GRANT IN THE AMOUNT OF US$7.8 MILLION FROM SWISS STATE SECRETARIAT FOR ECONOMIC AFFAIRS TO THE Public Disclosure Authorized REPUBLIC OF UZBEKISTAN FOR A WATER SERVICES AND INSTITUTIONAL SUPPORT PROJECT February 20, 2020 Water Global Practice Europe And Central Asia Region Public Disclosure Authorized 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. CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2019) Currency Unit = Uzbekistan Som (UZS) UZS 9,507.51 = US$1 FISCAL YEAR January 1 – December 31 Regional Vice President: Cyril E Muller Country Director: Lilia Burunciuc Regional Director: Steven N. Schonberger Global Practice Director: Jennifer J. Sara Practice Manager: David Michaud Task Team Leader(s): David Malcolm Lord; Khairy Al-Jamal ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank BP Bank Procedure CO2eq Carbon dioxide equivalent CPF Country Partnership Framework CRI Corporate Results Indicator DA Designated Account DDCS Detailed Design and Construction Supervision ESCA Energy Savings Capture Account EE Energy Efficiency EIB European Investment Bank EIRR Economic internal rate of return ESMAP Energy Sector Management Assistance Program ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan EU European Union € Euro FIDIC International Federation of Consulting Engineers FIRR Financial rate of return FM Financial Management GBV Gender-based violence GDP Gross Domestic Product GFDRR Global Facility for Disaster Risk Reduction GHG Greenhouse gas GIS Geographic Information System GWh Gigawatt-hour GWSP Global Water Security and Sanitation Partnership HR Human Resources IDA International Development Association IFCA Investment Facility for Central Asia IFI International Financial Institution IFR Interim Financial Report IFRS for SMEs International Financial Reporting Standards for Small and Medium-Sized Entities IPF Investment Project Financing kg Kilogram kWh Kilowatt-hour MFD Maximizing Finance for Development MHCS Ministry of Housing and Communal Services MoF Ministry of Finance MIFT Ministry of Investments and Foreign Trade MIS Management Information System M&E Monitoring and Evaluation M&V Measurement and verification m3 Cubic meter NPV Net present value NRW Non-Revenue Water O&M Operations and Maintenance OP Operational Policy PAD Project Appraisal Document PBA Performance-Based Allocation PCU Project Coordination Unit PDO Project Development Objective PIE Project Implementing Entity PLR Performance and Learning Review PMC Project Management Consultant POM Project Operational Manual PPL Public Procurement Law PPP Public-Private Partnership PPSD Project Procurement Strategy for Development RMS Results Measurement System SECO Swiss State Secretariat for Economic Affairs STEP Systematic Tracking of Exchange in Procurement SUE State Unitary Enterprise SUF Scale-up Facility TA Technical Assistance US$ U.S. Dollar UZS Uzbekistan Som WPP Water Partnership Program WSS Water Supply and Sanitation WWTP Wastewater Treatment Plant The World Bank Water Services and Institutional Support Project (P162263) TABLE OF CONTENTS DATASHEET ........................................................................................................................... 1 I. STRATEGIC CONTEXT ...................................................................................................... 6 A. Country Context................................................................................................................................ 6 B. Sectoral and Institutional Context .................................................................................................... 7 C. Relevance to Higher Level Objectives ............................................................................................. 14 II. PROJECT DESCRIPTION .................................................................................................. 15 A. Project Development Objective ..................................................................................................... 15 B. Project Components ....................................................................................................................... 16 C. Project Beneficiaries ....................................................................................................................... 23 D. Results Chain .................................................................................................................................. 24 E. Rationale for Bank Involvement and Role of Partners ................................................................... 25 F. Lessons Learned and Reflected in the Project Design .................................................................... 25 III. IMPLEMENTATION ARRANGEMENTS ............................................................................ 27 A. Institutional and Implementation Arrangements .......................................................................... 27 B. Results Monitoring and Evaluation Arrangements......................................................................... 30 C. Sustainability ................................................................................................................................... 30 IV. PROJECT APPRAISAL SUMMARY ................................................................................... 32 A. Technical, Economic and Financial Analysis ................................................................................... 32 B. Fiduciary .......................................................................................................................................... 35 C. Safeguards ...................................................................................................................................... 37 D. Citizen Engagement, Gender, and Climate Change ........................................................................ 40 E. Grievance Redress Mechanisms ..................................................................................................... 43 V. KEY RISKS ..................................................................................................................... 43 VI. RESULTS FRAMEWORK AND MONITORING ................................................................... 45 ANNEX 1: Detailed Project Description .......................................................................... 67 ANNEX 2: Implementation Arrangements and Support Plan .......................................... 84 ANNEX 3: Financial and Economic Analysis .................................................................... 93 ANNEX 4: Project Maps ............................................................................................... 103 The World Bank Water Services and Institutional Support Project (P162263) DATASHEET BASIC INFORMATION BASIC_INFO_TABLE Country(ies) Project Name Uzbekistan Water Services and Institutional Support Project Project ID Financing Instrument Environmental Assessment Category Investment Project P162263 B-Partial Assessment Financing Financing & Implementation Modalities [ ] 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) Expected Approval Date Expected Closing Date 12-Mar-2020 30-Jun-2027 Bank/IFC Collaboration No Proposed Development Objective(s) The Project Development Objectives are to: (i) improve coverage, quality and efficiency of water supply and sanitation services in selected project areas; and (ii) strengthen the planning and regulatory capacity of the water supply and sewerage sector. Page 1 of 106 The World Bank Water Services and Institutional Support Project (P162263) Components Component Name Cost (US$, millions) Component 1. Sector policy, regulations and institutions 7.80 Component 2. Energy efficiency financing facility 13.00 Component 3. Regional infrastructure investments 220.00 Component 4. Professionalization of participating water utilities 6.00 Organizations Borrower: Republic of Uzbekistan Implementing Agency: Kommunkhizmat Agency PROJECT FINANCING DATA (US$, Millions) SUMMARY-NewFin1 Total Project Cost 246.80 Total Financing 246.80 of which IBRD/IDA 239.00 Financing Gap 0.00 DETAILS-NewFinEnh1 World Bank Group Financing International Development Association (IDA) 239.00 IDA Credit 239.00 Non-World Bank Group Financing Trust Funds 7.80 Swiss State Secretariat for Economic Affairs 7.80 IDA Resources (in US$, Millions) Credit Amount Grant Amount Guarantee Amount Total Amount Page 2 of 106 The World Bank Water Services and Institutional Support Project (P162263) Uzbekistan 239.00 0.00 0.00 239.00 National PBA 49.00 0.00 0.00 49.00 Scale-up Facility (SUF) 190.00 0.00 0.00 190.00 Total 239.00 0.00 0.00
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