AFRICA DEVELOPMENT BANK GROUP

NDENDE-DOLISIE ROAD AND LIBREVILLE-BRAZZAVILLE CORRIDOR TRANSPORT FACILITATION PROJECT - PHASE I

COUNTRY: GABONESE REPUBLIC/REPUBLIC OF CONGO

PROJECT APPRAISAL REPORT

OITC DEPARTMENT

December 2013

Translated Document

TABLE OF CONTENTS

PROJECT INFORMATION SHEET, CURRENCY EQUIVALENTS, ACRONYMS AND ABBREVIATIONS, LIST OF ANNEXES AND TABLES, BASIC DATA, PROGRAMME LOGICAL FRAMEWORK, IMPLEMENTATION SCHEDULE, EXECUTIVE SUMMARY………………………………………………………………………………………..……………..………………………..I - IX

1 PROJECT STRATEGIC THRUST AND RATIONALE ...... 1 1.1 Key Development Constraints ...... 1 1.2 Project Linkages with Regional and National Strategies and Objectives ...... 1 1.3 Rationale for Bank Involvement ...... 2 1.4 Aid Coordination ...... 2

2 PROJECT DESCRIPTION ...... 3 2.1 Project Objectives and Components ...... 3 2.2 Technical Solutions Retained and Other Alternatives Explored ...... 4 2.3 Project Type ...... 5 2.4 Project Cost Estimates and Financing Arrangements ...... 5 2.5 Project Areas and Beneficiaries ...... 6 2.6 Participatory Process for Project Identification, Design and Implementation ...... 8 2.7 Bank Group Experience and Lessons Reflected in Project Design ...... 8 2.8 Key Performance Indicators ...... 9

3 PROJECT FEASIBILITY ...... 9 3.1 Economic and Financial Performance ...... 9 3.2 Environmental and Social Impacts ...... 9

4 IMPLEMENTATION ...... 13 4.1 Implementation Arrangements ...... 13 4.2 Monitoring and Evaluation ...... 15 4.3 Governance ...... 16 4.4 Sustainability ...... 17 4.5 Risk Management ...... 18 4.6 Knowledge Building ...... 18

5 LEGAL FRAMEWORK ...... 18 5.1 Legal Instrument ...... 18 5.2 Conditions Associated with Bank Intervention ...... 18 5.3 Compliance with Bank Policies ...... 19

6 RECOMMENDATION ...... 19

APPENDIX I: COMPARATIVE SOCIO-ECONOMIC INDICATORS APPENDIX II: TABLES OF BANK PORTFOLIOS IN GABON AND CONGO APPENDIX III: MAJOR RELATED PROJECTS FINANCED BY THE BANK AND OTHER DEVELOPMENT PARTNERS IN GABON AND CONGO APPENDIX IV: MAP OF PROJECT AREA

LIST OF TABLES Page Table 2.1 - Project Components ...... 4 Table 2.2 - Alternative Solutions Explored and Reasons for their Rejection ...... 5 Table 2.3 - Summary of Cost Estimates by Project Component ...... 5 Table 2.4 - Summary of Cost Estimates by Expenditure Category ...... 6 Table 2.5 - Financing Plan by Project Component ...... 6 Table 2.6 - Project Sources of Financing ...... 6 Table 2.7 - Project Expenditure Schedule by Component ...... 6 Table 3.1 - Summary of Economic Analysis ...... 9

LIST OF ANNEXES

A.1. Detailed Project Costs A.2. Rationale for Amount of Gabonese Counterpart Contribution to the Project’s Financing A.3. Procurement of Goods, Works and Services A.4. Economic and Financial Analysis

Currency Equivalents September 2013 UA 1 = CFAF 751.005 UA 1 = EUR 1.14490

Fiscal Year 1 January - 31 December

Weights and Measures 1 metric tonne = 2 204 pounds (lbs) 1 kilogramme (kg) = 2.200 lbs 1 metre (m) = 3.281 feet (ft) 1 millimetre (mm) = 0.03937 inch 1 kilometre (km) = 0.621 mile 1 hectare (ha) = 2.471 acres

Acronyms and Abbreviations AFD : French Development Agency AADT : Annual Average Daily Traffic ABEDA : Arab Bank for Economic Development in Africa AC : Asphalt Concrete ADB : African Development Bank ADF : African Development Fund BD : Bidding Documents BPW : Building and Public Works CEMAC : Central African Economic and Monetary Community CFAF : African Financial Community Franc CSP : Country Strategy Paper DGEC : General Directorate of Equipment and Construction DGGT : General Delegation for Major Works DGR : General Directorate of Roads EA : Executing Agency ECCAS : Economic Community of Central African States ERR : Economic Rate of Return EU : European Union GBV : Gender based violence ICB : International Competitive Bidding ICT : Information and Communication Technologies INSEED : National Institute of Statistics, Economic Surveys and Development JMC : Joint Monitoring Committee LTS : Long-Term Strategy (African Development Bank) MPITPTHTAT : Ministry of Investment Promotion, Public Works, Transport, Housing and Tourism in charge of Regional Development MTP : Ministry of Public Works NCB : National Competitive Bidding NEPAD : New Partnership for Africa’s Development NPV : Net Present Value NTDP : National Transport Development Plan OSBP : One-Stop Border Post PA : Project Area PIDA : Programme for Infrastructure Development in Africa RF : Road Fund RISP : Regional Integration Strategy Paper RMF : Road Maintenance Fund i

STD : Sexually Transmitted Diseases STI : Sexually Transmitted Infections UA : Unit of Account USD : United States Dollar Veh/d : Vehicles per day VOC : Vehicle Operating Costs WB : World Bank

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Project Information Sheet Client Information BORROWERS: Gabonese Republic & Republic of Congo PROJECT NAME: Ndendé-Dolisie Road and Libreville-Brazzaville Corridor Transport Facilitation Project – Phase 1 LOCATION: Ngounié Province in Gabon and Niari Department in Congo EXECUTING AGENCIES: (i) Ministry of Investment Promotion, Public Works, Transport, Housing and Tourism in charge of Regional Development (MPITPTHTAT) in Gabon; (ii) General Delegation for Major Works (DGGT) in Congo; (iii) Economic Community of West African States (ECCAS), for the project’s overall coordination. Financing Plan

Amounts in Million UA Sources of Financing Instrument Gabon Congo Total ADF-12 Loan (country allocation) 12.34 12.34 Project Loan ADF-12 Loan (regional operations envelope) 18.15 18.15 Project Loan ADB Loan (regional operations envelope) 70.00 70.00 Project Loan EU-Africa Infrastructure Trust Fund Grant 2.97 2.97 Grant Government of Gabon 18.94 18.94 Investment Budget Government of Congo 95.41 95.41 Investment Budget TOTAL 88.94 128.87 217.81

Key Financing Information on ADB Loan

Loan Currency: Euros (EUR) Loan Interest Type: Floating Interest Rate: Base Rate (6-month EURIBOR) + Bank Funding Margin + Contractual Lending Spread (60 bp) Commitment Fee: N/A Other Charges: N/A Maturities: Six months Tenor: 20 years Grace Period: 60 months NPV (baseline scenario) : CFAF107.31 billion ERR (baseline scenario) : 20.08%

Key Financing Information on the ADF Loan

Loan Currency: Unit of Account (UA) Loan Interest Type: 1% (fixed) Interest Rate Spread: Not Applicable Service Charge: 0.75% per annum on the amount disbursed and outstanding Commitment Fee: 0.5% on the undisbursed loan amount 120 days from the signing of the Loan Agreement Other Charges: Not Applicable Tenor : 30 years Grace Period: 8 years from the date of signature of the Loan Agreement

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FRR, NPV (baseline scenario) : Not Applicable ERR, NPV (baseline scenario) : 20.08% and CFAF 107.31billion

Timeframe – Main Milestones (expected)

Concept Note Approval: August 2013 Project Approval: December 2013 Effectiveness : June 2014 Completion : December 2018 Deadline for Last Disbursement: June 2019 Last Repayment: June 2044

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EXECUTIVE SUMMARY

Project Overview

1. This project concerns the Libreville-Pointe Noire-Brazzaville Corridor, which is a focus of policy, social, economic and integration challenges in Central Africa and even continent-wide. This section is located on the Tripoli/Windhoek Trans-African Highway, identified as a priority of the Programme for Infrastructure Development in Africa (PIDA). This project is also consistent with the transport sector visions and policies of the Economic Community of Central African States (ECCAS) and the Central African Economic and Monetary Community (CEMAC). Its implementation is also in line with the Central African Consensual Transport Master Plan (PDCT-AC) adopted in January 2004 under the aegis of ECCAS.

2. Gabon and Congo are two Central African countries sharing over 1,900 km of borders but are not, however, linked by any year-round, all-weather roads. The main road linking Libreville to Brazzaville (1,098 km) comprises 592 km of missing sections, 74 km of which are being constructed in Gabon and 245km in Congo. The poor condition of roads is a major obstacle to trade between the two countries and in the region. The 274km Ndendé-Doussala- Dolisie section is the missing link on this corridor. In June 2010, the two countries signed a Memorandum of Understanding to rehabilitate the different sections of this corridor, and entrusted ECCAS General Secretariat with the responsibility of ensuring the project’s overall coordination.

3. Niari Department in Congo and Ngounié Province in Gabon, which are the project areas, have vast areas of unexploited agricultural land mainly because of the bad condition of transport infrastructure, and also have significant mineral deposits and natural forest reserves as well as high tourism potential. Improved infrastructure quality and lower transport costs will allow for access to these resources, whose exploitation will lead to diversification of the economy, as well as green and inclusive growth for the benefit of the populations of the two countries concerned.

4. Development of the missing link is scheduled in two phases. The proposed Phase 1 mainly concerns the paving of 144km and rehabilitation of 130km of the Kibangou-Ngongo earth road section, as well as the implementation of transport facilitation measures. Phase 2 will cover paving of the remaining 130 km, construction of the Pointe Noire by-pass, and implementation of transport facilitation measures focused on effective enforcement of the Transit Agreement between the two countries.

5. The expected outcomes of the project are: (i) improved service levels on the corridor, as well as increased traffic and trade in Central Africa; (ii) lower transport and logistics costs; and (iii) improved living conditions of the local communities and their access to basic social services (drinking water, schools, etc.).

6. The project implementation period is 60 months and its total cost, exclusive of taxes and customs duties, is estimated at UA 217.81 million. The Bank’s contribution amounts to UA 100.49 million, i.e. 46.14% of the total project cost. The other sources of financing are the EU- Africa Infrastructure Trust Fund and the two Governments.

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7. The economic and social benefits directly or indirectly concern all the Corridor’s users, but mainly those involved in agricultural production activities faced with tremendous difficulties regarding input supplies and marketing of their products due to the non-motorable condition of the roads in the area. Agriculture in the project area (PA), recognized as the granary of Congo and Gabon, is the main source of income for the population living in the area. It mainly concerns crops such as cassava, groundnut, maize, yam, banana, cocoyam, beans, pigeon pea, as well as fruit and market garden crops. The cultivated area covers a little over 20,000 ha out of 90,000 ha of arable land, i.e. a proportion of 22.5%. The agricultural work force is estimated at about 102,000 people, with ages ranging from 17 to 59, i.e. almost 40% of the population. Agricultural products are marketed either from Dolisie to Congo’s main urban centres such as Pointe-Noire and Brazzaville, or bordering countries such as Gabon, Angola and DRC. Completion of this link will also increase trade between the countries of the region.

Needs Assessment

7. The main road linking Libreville to Brazzaville (1,098 km) comprises 592 km of missing sections, 74 km of which are being constructed in Gabon and 245km in Congo. The poor condition of this road, as well as the non-physical barriers constitute a major obstacle to trade between the two countries and beyond in the Central African sub-region. Thus, Gabon and Congo have submitted to the Bank, in its capacity as PIDA leader, a joint request, supported by ECCAS, for the financing of this project. The project is consistent with Congo’s 2004-2018 National Transport Plan (NTP), as well as Gabon’s 1998-2015 Intermodal Transport Master Plan (PDIT). It is also in line with the Bank’s 2013-2022 Long-Term Strategy (LST), which prioritizes infrastructure, regional development and the private sector. The Bank’s intervention, through this project, will respond to the critical need to open up entire production areas in the two countries concerned, and help to improve the competitiveness and diversification of the economy, as well as reduce poverty in the PAI.

Bank’s Added Value

8. Under Phase 1 of the Road Programme (PR1), the Bank has already financed some sections of the corridor, and has therefore acquired appropriate operational and technical expertise to implement this project. By contributing to the development of the missing links on the Libreville-Brazzaville Corridor, the Bank will consolidate its leadership role for PIDA’s implementation and thereby help to make the corridor Africa’s main transit and trade route. The project will also provide local communities with access to basic infrastructure and facilitate the sale of their produce, thereby creating inclusive growth in the areas concerned.

Knowledge Management

9. In order to learn useful lessons from the project, a monitoring mechanism will be established which will document its outcomes and impacts. The lessons will be consolidated through: (i) monitoring/evaluation reports on the project’s socio-economic and transport facilitation impacts to be produced by a specifically recruited consulting firm; (ii) assessment by the project beneficiaries on its completion; and (iii) activity reports of ECCAS and the executing agencies in the two countries.

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Results-Based Logical Framework

Country and Project Name: Gabon/Congo Multinational - Ndendé-Dolisie Road and Libreville-Brazzaville Corridor Transport Facilitation Project Project Goal: Improve service levels of the transport logistics chain on the Libreville-Brazzaville Corridor, as well as the living conditions of the PA population.

PERFORMANCE INDICATORS RISKS/ RESULTS CHAIN Indicators MEANS OF VERIFICATION Baseline Situation Target MITIGATION MEASURES (including CSI) Inter-State land transport system a) Percentage of ECCAS intra- a) 1% in 2012 a) 3% in 2019 i.e. 200% growth Source: Ministries of Trade,

improved and regional trade community trade in relation to Ministry of the Economy, and enhanced overall trade Public Works, DGS, CES, and ECCAS IMPACT b) Ratio of inter-State paved b) 25% in 2019 network in good condition b) 15% in 2012.

Fluidity of movement of goods Percentage of transit traffic 5% in 2013 35% in 2019 Source : Ministries of Trade, Risks and people improved on the Truck travel time from Ndendé to National Transport, in charge (i) Change in Gabonese government’s priorities. 3 days in 2013 4.5 h in 2019 section and at the border crossing Dolisie of women’s advancement, of (ii) Failure to ensure timely mobilization of health, Directorates of counterpart funds. PA population’s living conditions Rural access index 20% in 2013 30% in 2019 transport, DGS, CES, Mitigation Measures improved Customs, Socio-Economic (i) Issuance of project certificate of conformity by Average income per household CFAF 328,000 /year in CFAF 426 400/yr in Ndendé and Impact Assessment Reports the Presidency of the Republic of Gabon ; and Ndendé and CFAF 125,000 CFAF 162 500/yr in Nyanga in (ii) Government commitment to speeding up the /yr in Nyanga in 2013 2019 ratification process.

Increase in revenues generated by 0 in 2013 women’s incomes increase by at (iii) Evidence that the annual counterpart women from agricultural activities least 30% contribution has been included in the countries’ Percentage of women experiencing In 2013 : In 2019 : government budgets. gender-based violence 71,3% in Niari (Congo); 51% in Niari (Congo); OUTCOMES 67% in Ngounié (Gabon). 43% in Ngounié (Gabon). Household drinking water access 9.4 % in 2012 23% in 2019 rate in Niari Number person/job/days created 0 in 2013 1000 full-time jobs for young for young people and women on people (40% of which for women) labour intensive sites in 2019 Transportation costs reduced Vehicle operating costs (VOC) of In 2013 : In 2019 : heavy-duty vehicles (HDV) Congo : CFAF 875 /km ; Congo : CFAF 492/km ; Gabon : CFAF 1.456 /km. Gabon : CFAF/km.

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Output 1: Paved road sections km of paved roads; km of rural roads In 2013: 0 In 2019 : 144 km, of which 49km in Source : Reports of Ministries Risks and related improvements carried developed; parking areas created; Gabon, 93km in Congo and 2km in charge of Public Works, (i) Slippage on project implementation; out number of boreholes drilled; linking to the border bridge ; 130 km control, supervision mission (ii) Increased transport costs; number of schools rehabilitated; of earth roads rehabilitated ; 103 km reports, PCR (iii) Divergence on OSBP management; number of jobs created; number of of rural roads developed; one Mitigation Measures people sensitized on gender-based parking area created; 20 boreholes (i) EA capacity building; violence, HIV/AIDS, early established; 9 schools rehabilitated; (ii) Provision of technical assistance; pregnancies and their consequences; 900 jobs created; 20% of PA (iii) Reducing the time gap between design and storage shed and tillage equipment population sensitized on gender- works; realistic cost assessment on the basis of for women’s groups based violence, HIV/AIDS, early current market unit prices; and provision for pregnancies and their consequences; contingencies; 2 storage sheds built and 42 lots of (iv) Memorandum of Understanding on OSBP tillage equipment for women’s management signed by the two countries. groups.

Output 2 : Cross-border transit One stop border post (OSBP) In 2013 : 0 In 2019: 1 OSBP operational at the Source: Reports of Ministries transport and transit facilitation constructed, equipped and Gabon/Congo border; goods in charge of Public Works, structure commissioned commissioned at the border; goods tracking system operational on the control mission reports, study

tracking system installed; corridor Brazzaville-Pointe Noire road; reports, supervision mission management system put in place. corridor management system reports, mid-term review operational. reports, PCR.

OUTPUTS

Output 3 : Institutional capacity Study Reports produced and In 2013 : 0 In 2019: Study reports produced of executive agencies validated; long term experts posted and validated on: the Pointe Noire strengthened and project to ECCAS and MPITPTHTAT; Bypass, and the road safety audit on management carried out short term expert hired to the Lambaréné-Mouila section; 3 long DGSR; audits reports produced; term experts posted to ECCAS and monitoring and evaluation reports; 2 long term experts posted to and quarterly reports of project MPITPTHTAT; 1 short term expert implementation produced; posted to the DGSR; audits reports produced for 2014, 2015, 2016, 2017, 2018 et 2019 ; the report on the baseline case is available in 2014; monitoring and evaluation reports produced;1 impact report available in 2019; and quarterly project implementation reports produced; COMPONENTS RESOURCES (UA MILLION)

A. Road Works Component A :185.53 B. Related Works Component B : 7.49 C. Transport Facilitation Component C : 13.51 D. Transport Sector Institutional Support Component D : 6.51 E. Project Management and Monitoring Component E : 4.77

KEY ACTIVITIES KEY TOTAL RESOURCES : 217.81

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Gabon/Congo - Ndendé-Dolisie Road and Libreville-Brazzaville Corridor Transport Facilitation Project – Phase 1

IMPLEMENTATION SCHEDULE

Task Name 1- GENERAL ACTIVITIES Project approval Publication of the General Procurement Notice Loan signature Loan effectiveness 2- GOODS AND WORKS 2.1 - Contract awards for road works 2.2 - Contract award for installation of tracking system 2.3 - Contract award for related works 2.4 - Execution of works and installation of tracking system 3- WORKS AND STUDIES SUPERVISION 3.1 - Cantract awards for works supervision 3.2 - Contract awards for studies 3.3 - Delivery of works supervision and studies services 4 - IMPACTS MONITORING & SUPERVISION AND SENSITIZATION 4.1 - Contract award for impacts monitoring-supervision 4.2 - Contract award for sensitization of the population 4.3 -Delivery of monitoring-evaluation services 4.4 - Delivery of sensitization services 4 - IMPACTS MONITORING & SUPERVISION AND SENSITIZATION 1 4 - IMPACTS MONITORING & SUPERVISION AND SENSITIZATION 2 4 - IMPACTS MONITORING & SUPERVISION AND SENSITIZATION 3 5- TECHNICAL ASSISTANCE 5.1 - Contract award process for TA up to notification 5.2 - Delivery of TA services 6- AUDIT 6.1 - Procurement process 6.2 - Conduct of audit 7 - PROJECT MANAGEMENT AND MONITORING 7.1 - Monitoring of technical implementation 7.2 - Monitoring of financial and accounting implementation

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REPORT AND RECOMMENDATION OF MANAGEMENT TO THE BOARDS OF DIRECTORS CONCERNING LOANS TO GABON AND CONGO TO FINANCE THE NDENDÉ-DOLISIE ROAD AND LIBREVILLE–BRAZZAVLLE CORRIDOR TRANSPORT FACILITATION PROJECT – PHASE I Management submits this report and these recommendations on the award of an ADB loan of EUR 80.14 million (equivalent to MUA 70) to the Gabonese Republic and an ADF loan of MUA 30.49 to the Republic of Congo to finance the Ndendé-Dolisie Road and Libreville-Brazzaville Corridor Transport Facilitation Project-Phase I. 1 PROJECT STRATEGIC THRUST AND RATIONALE 1.1 Key Development Constraints 1.1.1 With a volume of trade equivalent to between 0.5 and 1% of its member countries’ total trade, the Central African Economic and Monetary Community (CEMAC) remains the least integrated sub- region in Sub-Saharan Africa, lagging far behind the West African Economic and Monetary Union (WAEMU) with a rate of 15%. It is also the least inter-connected sub-region due to severe discontinuities of the land transport networks. Thus, despite the fact that they share over 1,900km of common border, Gabon and Congo are not linked by any year-round, all-weather road infrastructure. The main road linking Libreville to Brazzaville (1,098 km) comprises 592 km of missing sections, 74 km of which are being developed in Gabon and 245 km in Congo. The poor condition of this road is a major obstacle to trade between the two countries, and in the entire Central African sub-region. 1.1.2 The economies of the two countries remain heavily dependent on oil revenue, which requires them to design and implement diversification strategies. To that end, the Governments of the two countries have prepared strategic plans aimed at allowing both of them to become emerging countries in the medium term. The plans mainly concern the mining and agricultural potential of Niari Department in Congo and Ngoumie Province in Gabon, which constitute the project area (PA). These two regions have vast unfarmed agricultural areas mainly because of the bad condition of transport infrastructure, contain significant mineral deposits and natural forest reserves, and have strong tourism potential. Improved infrastructure quality and lower transport costs will allow access to these resources, the tapping of which will lead to diversification of the economy and green and inclusive growth for the benefit of the populations of the two countries concerned. It will also help to improve trade between the countries of the sub-region. 1.1.3 The existence of non-tariff barriers is a major obstacle to the development of trade between the two countries, and consequently for regional integration. These barriers are chiefly reflected in the plethora and duplication of road controls on the inter-State corridors, as well as in the complexity of procedures and long delays at border crossing and in port turnaround times. This creates a real problem of road governance, which must be resolved to maximize the expected benefits of the improved infrastructure. Inclusion in this project of facilitation measures (One-Stop-Border Post, removal of non- physical barriers, etc.) will contribute to a reduction in transport costs and lead to a significant increase in the volume of trade in the region by speeding up the movement of goods and people. 1.2 Project Linkages with Regional and National Strategies and Objectives 1.2.1 The Ndendé-Dolisie Road and Libreville-Brazzaville Corridor Transport Facilitation Project is fully consistent with the stated objective of the governments of Gabon and Congo to strengthen regional integration by providing year-round, all-weather links between the two capitals. In this respect, the Ndendé-Doussala-Dolisie section is a key missing link of the Yaoundé-Libreville-Brazzaville road which forms part of the Tripoli-Windhoek Trans-African Highway. This corridor is one of the priority projects of the Programme for Infrastructure Development in Africa (PIDA), whose Priority Action Plan (PAP-PIDA) was validated at the January 2012 meeting of the African Union (UA) Heads of State and Government. The objective of the corridor is to create an integrated continent where transport infrastructure and services allow for free circulation of goods and people. The project is also in line 1

with the Central African Consensual Transport Master Plan (PDCT-AC) adopted in January 2004 under the aegis of ECCAS, which focuses mainly on regional infrastructure and, in the short-term, aims to ensure travel on a paved road from one capital of the community to another. 1.2.2 The project is consistent with the 2011-2015 Strategic Plan for an Emerging Gabon (PSGE) a priority thrust of which is transport sector operations, especially links with neighbouring countries (Pillar 4). It is also in line with the strategic guideline of the sector policy and the 1998-2015 Intermodal Transport Master Plan. In Congo, the project, which is included in the 2004-2018 National Transport Plan (NTP), is consistent with the priorities expressed in the “development of economic and social infrastructure” Pillar of the 2012-2016 Growth, Employment and Poverty Reduction Strategy Paper (GEPRSP). This pillar underscores the importance of developing the road infrastructure so as to help open up the rural areas, reduce poverty, ensure economic growth, as well as provide access to basic social services and promote regional integration. 1.3 Rationale for Bank Involvement 1.3.1 This project is aligned on the key objectives of the Bank’s Ten-Year Strategy (2013-2022), namely inclusive growth and gradual transition towards green growth, as well as on the operational priorities underpinning it, including infrastructure development. It is also justified by the fact that the Libreville-Brazzaville road link is one of the main Trans-African Corridors promoted by the AU Commission as essential backbones for the continent’s development. Furthermore, the Bank, which has solid experience in implementing regional transport projects, plays a leadership role in the implementation of NEPAD activities. The Bank is also involved in financing the feasibility studies on the missing section to be constructed/rehabilitated under this operation. This project is consistent with Gabon’s 2011-2015 CSP, Pillar 2 of which seeks to enhance the country’s transport infrastructure so as to improve the competitiveness of its economy and access to high quality services. The CSP mid-term review, nearing completion, has reconfirmed the priority nature of this operation. In Congo, the project, retained in the 2013-2017 CSP, is aligned on Pillar 1 of the strategy aimed at developing regional infrastructure to release the economy’s potential and strengthen its competitiveness. Finally, the project is in line with the priorities defined in the Central Africa Regional Integration Strategy Paper (2011- 2015 RISP), the first pillar of which is “development of regional infrastructure”. 1.3.2 The project was appraised following a joint request to the Bank in December 2012 by the Governments of Gabon and Congo, backed up by a similar request for its financing from ECCAS. 1.4 Aid Coordination 1.4.1 In Gabon, aid is coordinated by the Joint Government/Technical and Financial Partners’ (TFP) Committee, which is chaired at the highest level by the Prime Minister. Eight Thematic Groups (TG), covering all the TFP areas of intervention, are operational and offer a positive framework for consultation among the TFPs. The Bank actively participates in these exchanges, especially as Lead and Co-Lead of the TG on aid effectiveness. The Bank takes part in the activities of the Infrastructure TG led by the European Union (EU) alongside others such as the World Bank (WB) and French Development Agency (AFD). In the infrastructure sector, EU assistance under EDF 10 prioritizes road maintenance improvement, while AFD’s intervention strategy in Gabon for the 2012-2015 period focuses on rehabilitation of the Ndjolé-Médoumane Road (on the Yaoundé-Libreville-Brazzaville corridor) and the productive sector. The WB is financing the procurement and installation of fibre optic cables, while the Islamic Development Bank focuses on road development (Larara-Ovan and Akiéni- Okondja sections). In the context of this coordination, this project’s preparation and appraisal missions provided opportunities for meetings with the main TFPs represented in Libreville (WB, AFD and EU) for exchanges of relevant information that would provide greater consistency and complementarity in the different transport sector operations, especially in the road sub-sector. However, the main donor remains the Government of Gabon which finances most of the ongoing projects from its own resources, followed by the Bank.

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1.4.2 In Congo, the establishment of the TFP Consultation Framework and 13 Thematic Groups has helped to strengthen collaboration among the TFPs. Aid is coordinated by the Ministry of the Economy, Finance, Planning, Public Portfolio and Integration (MEFPPPI). The MEFPPI is responsible for preparing general guidelines as well as medium and long-term development strategies, and for monitoring their implementation. In particular, it ensures consistency of development sector studies with the overall development and poverty reduction framework, centralizes and manages the pipeline of projects, and promotes public investments. Congo’s main active financial partners are: AFD, WB, ADF, EU and, more recently, the People’s Republic of China with the entry into force of a Cooperation Framework to finance infrastructure projects. In the transport sector, the European Union, which plays a coordinating role (leader) among the donors, has financed the National Transport Plan covering the 2004-2018 period. This plan defines an effective and coherent intervention programme and identifies the investments and priority rehabilitation and maintenance measures to be implemented in the sector, including the Dolisie- Doussala road. EU assistance under EDF 2008-2013 focuses particularly on national infrastructure (construction of the Mindouli-Kinkala road which is the extension of the Ndendé-Dolisie road towards Brazzaville, improvement of navigability on the Congo River, and rehabilitation of Brazzaville Port). Over the 2012-2015 period, AFD’s intervention strategy is focusing mainly on river infrastructure. The World Bank intervenes in railway infrastructure, health, education, governance and the private sector. China’s interventions mainly concern national infrastructure, with the modernization of Brazzaville Airport as well as the development and paving of the Pointe Noire-Brazzaville National Road. China remains Congo’s principal partner in the transport sector. 1.4.3 During this project’s implementation, coordination will continue: (i) with the participation of GAFO in the TG meetings of the TFPs operating in the transport sector, (ii) during the different supervision missions, and (iii) with stakeholder involvement in the validation of the different reports on the planned studies. 2 PROJECT DESCRIPTION 2.1 Project Objectives and Components Objectives and Rationale of the Main Components 2.1.1 Transformation of the entire Libreville-Pointe Noire-Brazzaville corridor into a viable trade route requires an integrated approach that takes into account all construction or upgrading of physical infrastructure, including equipment for transit facilities as well as policy and operational changes to facilitate trade and transport. Furthermore, the corridor’s development is programmed in two phases in view of the scale of the programme that requires leveraging of substantial financial resources. 2.1.2 Phase 1, proposed at this stage, mainly concerns: (i) the paving of 49 km (Ndendé-Doussala) in Gabon and 93 km (Dolisie-Kibangou) in Congo, and rehabilitation of 130 km of the Kibangou- Ngongo (Gabon border) earth road section; (ii) related improvement works on the main road sections; and (iii) implementation of transport facilitation measures. Phase II will cover the following operations: (i) paving of the remaining Kibangou-Ngongo earth section; (ii) construction of the Pointe Noire by- pass road; (iii) construction of dry ports in Dolisie (Congo) and Ndendé (Gabon); and (iv) implementation of transport facilitation measures concerning mainly effective application of the transit agreement between the two countries. 2.1.3 The overall goal of the project is to boost trade between the two countries and contribute to regional integration within ECCAS. Its specific objective is to improve service levels of the transport logistics chain on the Libreville-Brazzaville Corridor, as well as the population’s living conditions in the PA. The project is organized around the components described in the following Table along with the corresponding costs.

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Table 2.1 – Project Components No Cost Components Component Description (MUA) A ROAD WORKS Gabon: (i) Paving of the Ndendé-Doussala section (49km) with ducts for fibre optic cables; (ii) Works inspection and supervision; (iii) sensitization campaigns on HIV/AIDS, GBV, the environmental and road safety. Congo : (i) Rehabilitation of the Ngongo-Kibangou earth road section (130km) and 185.53 paving of the Kibangou-Dolisie section (93km) with ducts for fibre optic cables; (ii) works inspection and supervision; (v) sensitization campaigns on HIV/AIDS, GBV, the environmental and road safety. Gabon/Congo border: (i) Development of border bridge and road linking it to the border (2km); (ii) works inspection B RELATED WORKS Gabon: (i) Rehabilitation of 50 km of rural roads linked to the road; (ii) Rehabilitation of socio-economic infrastructure; (iii) drilling of 4 boreholes; (iv) works inspection and supervision. 7.49 Congo: (i) Rehabilitation of 53 km of rural roads linked to the road; (ii) Rehabilitation of socio-economic infrastructure; (iii) drilling of 16 boreholes; (iv) works inspection and supervision (v) construction of a forestry and wildlife control post. C TRANSPORT (i) Study to assess operationalization of a one-stop border post (OSBP) and on the FACILITATION establishment of a corridor management system; (ii) Construction and equipping of an OSBP at the Gabonese border, including a weighing station and parking area; (iii) Works inspection and supervision, training of border services and sensitization of 13.51 users; (iv) Installation of a pilot goods tracking and radio-communication system on the Pointe Noire-Brazzaville road; (v) Study on harmonization of customs procedures in both countries; (vi) support for operationalization of the One-Stop-Shop for Cross- Border Operations (OSCBO) at Pointe Noire; (vii) Feasibility study on the Ndende Dry Port; and (viii) Feasibility study on the Dolisie Dry Port. D INSTITUTIONAL Gabon : (i) Technical assistance (TA) to the executing agency (EA); (ii) Road safety SUPPORT FOR THE audit on the Lambaréné-Mouila paved section; (iii) Support for the General Directorate TRANSPORT of Road Safety; and (iv) support for the General Directorate of Equipment and SECTOR 6.87 Construction (LI component of youth employment programme). Congo : (i) Feasibility study on the Pointe Noire by-pass road; ECCAS: (i) TA to ECCAS to implement the facilitation component. (ii) support for implementation of human-elephant conflict mitigation measures E PROJECT Gabon/Congo: (i) Monitoring-evaluation of project socio-economic impacts; (ii) MANAGEMENT 4.77 Financial and accounting audit; (iii) Operating costs of the EAs; (iv) Operating costs of the Joint Monitoring Committee (JMC).

2.2 Technical Solutions Retained and Other Alternatives Explored 2.2.1 In Gabon, the engineering designs were finalized in 2012 on Bank financing under the RP1. In compliance with existing standards, the pavement structure and geometric characteristics of the horizontal alignment of the upstream section (Fougamou-Mouila-Ndendé) have been retained. The proposed technical solution in the open countryside includes a 7m-wide two-way pavement and a 1.5 metre-wide shoulder on each side, as well as fibre optic ducts. The pavement comprises a 5 cm thick asphalt concrete wearing course (AC), a 10 cm thick base course of road base asphalt concrete, a 20 cm thick crushed gravel (CG) sub-base, and a 20 cm thick sub-grade of borrow materials. 2.2.2 In Congo, the engineering designs were finalized in 2012 on Bank financing (NEPAD-IPPF). The cross-section retained complies with existing standards, and in the open countryside provides for a 7.5 m-wide two-way pavement (including two 0.25 m guideways) and a 2 metre wide shoulder on each side, as well as fibre optic ducts. The pavement retained for the Kibangou-Dolisie section comprises a 5 cm thick layer of AC, a 20 cm thick CG (grade aggregate 0/31.5) base course, a 15 cm thick sub-base of natural laterite gravel, and a 20 cm thick sub-grade of borrow materials. 2.2.3 The proposed minimal improvement works on the Ngongo-Kibangou earth section comprise brush clearing, leveling and compacting the platform, clearing and rehabilitation of ditches and outlets, localized drainage, as well as the application of a crushed laterite wearing course. 2.2.4 The alternative solutions explored and the reasons for their rejection are summarized in Table 2.2 below.

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Table 2.2: Alternative Solutions Explored and Reasons for their Rejection

Alternative Solutions Brief Description Reasons for Rejection Option (section to be Two-layer surface coating consisting of a Limited pavement life span due to: (i) the volume repaved): Construction of a wearing course of two hydro-carbonated and aggressiveness of heavy traffic (log trucks) to be two layer pavement binders and aggregates applied carried; and (ii) high rainfall in the area. structure. successively. Option (earth section): Execution of earth works to construct a Technical solution not advantageous due to: (i) Construction of a modern waterproof platform with geometric heavy traffic; (ii) high rainfall in the area; and (iii) earth road. characteristics compatible with a reference existing road maintenance conditions in Congo. speed of 80 km/h and the construction of Also this solution is economically less viable permanent road structures and hydraulic because of the high investment cost. facilities. 2.3 Project Type 2.3.1 This project is an investment operation. It is the most appropriate financing instrument for the Bank’s intervention in this multilateral operation. Donor interventions in transport infrastructure in Gabon and Congo have adopted this type of operation. 2.4 Project Cost Estimates and Financing Arrangements Project Costs by Component 2.4.1 The total project cost, exclusive of taxes and customs duties, is UA 217.81 million, equivalent to CFAF 163.58 billion at the Bank foreign exchange rate in September 2013 (UA 1 = CFAF 751.005). The provision for contingencies represents 10% of the base cost, while the provision for financial contingencies is equivalent to 4.37% of the sum of the base cost and provision for physical contingencies. The summaries of the project cost estimates by component and by expenditure category are presented in Tables 2.3 and 2.4 below. The detailed cost estimates are presented in Annex A.1. Table 2.3–Summary Cost Estimates by Components for the Entire Project CFAF Million UA Million PROJECT COMPONENTS FE LC Total FE LC Total A. ROAD WORKS 94 859.80 26 504.95 121 364.75 126.31 35.29 161.60 B. RELATED WORKS 1 469.70 3 429.30 4 899.01 1.96 4.57 6.52 C. TRANSPORT FACILITATION 7 072.00 1 768.00 8 840.00 9.42 2.35 11.77 D. INSTITUTIONAL SUPPORT 3 404.85 851.21 4 256.06 4.53 1.13 5.67 E. PROJECT MANAGEMENT AND MONITORING 752.22 2 370.84 3 123.05 1.00 3.16 4.16 BASE COST 107 659.06 34 924.30 142 482.86 143.22 46.50 189.72 Physical Contingencies 10 755.86 3 492.43 14 248.29 14.32 4.65 18.97 Financial Contingencies 5 171.17 1 679.08 6 850.25 6.89 2.23 9.12 TOTAL 123 485.59 40 095.81 163 581.40 164.43 53.38 217.81

Table 2.4–Summary Cost Estimates by Expenditure Category for the Entire Project CFAF Million UA Million EXPENDITURE CATEGORIES FE LC Total FE LC Total 1. GOODS 560.00 140.00 700.00 0.75 0.19 0.93 2. WORKS 97 565.58 29 770.83 127 336.41 129.91 39.64 169.55 3. CONSULTING SERVICES 9 021.68 2 854.77 11 876.45 12.01 3.80 15.81 4. OTHERS 411.30 2 158.70 2 570.00 0.55 2.87 3.42 BASE COST 107 558.56 34 924.30 142 482.86 143.22 46.50 189.72 Physical Contingencies 10 755.86 3 492.43 14 248.29 14.32 4.65 18.97 Financial Contingencies 5 171.17 1 679.08 6 850.25 6.89 2.23 9.12 TOTAL COST 123 485.59 40 095.81 163 581.40 164.43 53.38 217.81 Financing Arrangements 2.4.2 The proposed project will be jointly financed by the Bank, the EU-Africa Trust Fund, as well as the Governments of Gabon and Congo, as indicated in Tables 2.5 and 2.6 below. The Bank will finance the project to the tune of UA 100.49 million, i.e. 46.14% of the total project cost through a UA 70 million ADB loan to Gabon and a UA 30.49 million ADF loan to Congo. For Gabon, the ADB loan represents 78.70% of the total project cost, exclusive of taxes and customs duties, while the Government contribution for an amount of UA 18.95 million represents 21.30%. The criteria stipulated in the Policy

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on Expenditure Eligible for Bank Group Financing to justify this level of counterpart funding are set out in detail in Annex A.2. 2.4.3 In Congo, the ADF loan represents 23.66% of the total project cost, exclusive of taxes and customs duties, while the Government contribution for an amount of UA 95.14 million represents 74.03%. The ADF resources will be provided from the ADF country allocation (UA 12.34 million) and ADF resources allocated to regional operations (UA 18.15 million). The Bank’s recent experience in financing transport projects in Congo shows that the raising of counterpart funds does not pose any particular problem in that country. Indeed, it has to be noted that its budget has a surplus balance since 2010 and, that the perspectives provide an annual average surplus of 930 billion of FCFA from 2014 to 2018 (IMF Report No.13/282, August 2013). Table 2.5 - Sources of Financing by Project Component (in UA million)

ADF ADB EU-AFRICA Fund GABON CONGO Total PROJECT COMPONENTS FE LC Total FE LC Total FE LC Total FE LC Total FE LC Total A. Road Works 22.71 0.09 22.80 47.65 2.54 50.30 - - - 3.28 10.22 13.50 52.86 22.14 75.00 161.60 B. Related Works - - - 0.97 1.60 2.57 - - - - 0.65 0.65 1.00 2.31 3.31 6.53 C. Transport Facilitation 3.21 0.19 3.40 4.83 0.16 4.99 0.58 0.14 0.72 - - - 0.80 1.86 2.66 11.77 D. Institutional Support - - - 2.19 0.54 2.73 1.50 0.37 1.87 - - - 0.85 0.21 1.07 5.67 Project Management and E. 0.22 0.14 0.36 0.23 0.14 0.37 - - - - 2.35 2.35 - 1.07 1.07 4.16 Monitoring BASE COST 26.14 0.42 26.56 55.86 5.11 60.97 2.08 0.51 2.59 3.28 13.22 16.50 55.51 27.59 83.10 189.72 Physical Contingencies 2.61 0.04 2.65 5.59 0.51 6.10 0.21 0.05 0.26 0.33 1.32 1.65 5.55 2.76 8.31 18.97 Financial Contingencies 1.26 0.02 1.28 2.69 0.24 2.93 0.10 0.02 0.12 0.16 0.64 0.80 2.67 1.33 4.00 9.12 TOTAL COST 30.01 0.48 30.49 64.14 5.86 70.00 2.39 0.58 2.97 3.77 15.18 18.95 63.73 31.68 95.41 217.81

Table 2.6 – Project Sources of Financing (in UA million) UA Million SOURCES OF FINANCING % FE LC Total ADF Loan 30.01 0.48 30.49 14.00% ADB Loan 64.49 5.51 70.00 32.14% EU-AFRICA Fund 2.38 0.59 2.97 1.36% GOVERNMENT OF GABON 3.77 15.17 18.94 8.70% GOVERNMENT OF CONGO 63.78 31.63 95.41 43.80% TOTAL COST 164.43 53.38 217.81 100%

2.4.4 The expenditure schedule for the entire project is presented in Table 2.7 below. Table 2.7–Project Expenditure Schedule by Component (in UA million) PROJECT COMPONENTS 2014 2015 2016 2017 2018 Total A. ROAD WORKS 29.63 47.96 65.17 18.85 0.00 161.60 B. RELATED WORKS 0.00 2.58 3.23 0.71 0.00 6.52 C. TRANSPORT FACILITATION 0.00 4.21 5.05 2.52 0.00 11.77 D. INSTITUTIONAL SUPPORT 0.73 1.94 1.98 0.85 0.16 5.67 E. PROJECT MANAGEMENT AND MONITORING 0.82 0.80 0.85 0.80 0.89 4.16 BASE COST 31.18 57.48 76.27 23.73 1.06 189.72 Physical Contingencies 3.12 5.75 7.63 2.37 0.11 18.97 Financial Contingencies 1.50 2.76 3.67 1.14 0.05 9.12 TOTAL COST 35.80 66.00 87.56 27.25 1.21 217.81 Total in % 16.44% 30.30% 40.20% 12.51% 0.56% 100%

2.5 Project Areas and Beneficiaries 2.5.1 In view of the regional character of this project, the extended project area covers all 10 countries of Central Africa. However, the project’s direct area of influence mainly concerns Niari Department (Dolisie town and Louvakou, Kibangou and Nyanga Districts) in Congo and over 50 km, Ngounié Province in Gabon. It should be noted that Niari Department occupies a strategic position for trade since it borders on the Congolese Departments of Kouilou (in which Pointe-Noire is located), Bouenza and Lekoumou as well as Gabon and the Democratic Republic of Congo. Generally, the Ndendé-Doussala-Dolisie road passes through a landscape of grassy savannah dominated by agriculture and suitable for stock breeding. Along the route, there are also sparse forest areas in wetlands and along

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water courses. The PA has an extensive network of waterways, mainly comprising two large rivers, the Niari and the Nyanga, and their tributaries, and this creates difficulties regarding access to some areas. The climate is equatorial, hot and humid, with frequent and abundant rainfall. The climatic cycle can be divided into two distinct seasons: (a) a rainy season of about eight (8) months from October to May, and (b) a dry season from June to September, i.e. 4 months. 2.5.2 About 351,012 people living in the PA will benefit from the project. The project area in Gabon covers Ngounié Province with a population of 101,415 people, 52% of whom are women. In 2010, Niari Department, the project area in Congo, had a population of 249,597 inhabitants, made up of 122,007 men (48.9%) and 127,591 women (51.1%). The majority of the population are women, especially youths under 25 years old (62%), who are severely affected by unemployment and under- employment. 2.5.3 Despite abundant natural resources, the incidence of poverty is high throughout the PA. The findings of the second Congo Household Survey (ECOM 2011) show that monetary poverty affects 54.2% of Niari households (compared to 18.2% of households in Pointe-Noire), representing 66.6% of the Congolese population. According to the surveys carried out in 2007 during the Congo GPRSP, the incidence of poverty was 64.8% in the PA compared to 33.55% for Pointe-Noire. The findings of the 2011 Congo DHS show that the wealthiest segments of the population are concentrated in urban areas, especially in Brazzaville and Pointe Noire, while one third of Niari’s population is classified in the poorest quintile. In Gabon, the findings of the 2005 EGEP indicated a poverty index of 58.9% in the Gabonese part of the PA compared to 33% at national level. According to the Gabon 2012 DHS, 60% of Ngounié’s population was classified in the lowest quintile of economic well-being compared to 20% of the country’s total population. This rural poverty, which obtains throughout the PA, is largely due to its remoteness and the population’s lack of access to basic socio-economic infrastructure. Since the road to be developed by this project and most of the feeder roads are non-motorable, especially in the rainy season, farmers in the PA experience considerable difficulty in selling their produce, and remain dependent on the rare buyers who venture there. This precarious situation of the rural community has, over the years, led to massive population displacement to the towns and abandonment of agricultural land, especially in Gabon. Indeed, 62% of Congolese are urban dwellers and 73% of the Gabonese population lives in urban areas with 50% in Libreville and Port-Gentil. 2.5.4 The project’s main beneficiaries are farmers who experience difficulties regarding the supply of inputs and marketing of their produce due to poor road conditions. Agriculture is the main source of income for the Congolese part of the PA which is the granary of Gabon and Congo (Niari valley is classified among the most fertile land in Sub-Saharan Africa). Farming is dominated by crops such as cassava, groundnut, maize, yam, banana, cocoyam, pigeon pea, fruit crops, market garden crops, and beans. The cultivated area is 20,268 ha out of 90,000 ha of arable land, i.e. a proportion of 22.5%. The number of farmers is estimated at about 102,000 between 17 and 59 years old, i.e. almost 40% of the population. Agricultural products are marketed either from Dolisie to Congo’s main urban centres such as Pointe-Noire and Brazzaville, or to bordering neighbouring countries such as Gabon, Angola and DRC. Pointe Noire’s traders-hauliers often obtain supplies of the main agricultural products benefiting from the improved transport conditions now provided by the paving of the Pointe Noire-Dolisie road. 2.5.5 Dolisie market is mainly supplied by the town’s periphery and only to a small extent by the surrounding villages due to the poor condition of the roads, including the project road (Dolisie- Louvakou-Kibangou-Nyanga-Ngongo/Doussala-Ndendé). Indeed, from Louvakou, which is 30 km from Dolisie, most of the PA’s agricultural production is transported to Gabon. Like the other regions of Gabon, agriculture in Ngounié only barely reaches producer self-sufficiency levels. The low level of agriculture is, moreover, one of the factors of poverty in the Gabonese rural community, which relies on it for most of its financial resources. Indeed, the poor conditions of agricultural feeder roads has created rural-urban migration and resulted in a drop in agricultural production. At national level, local production only covers 20% of Gabon’s food requirements. Consequently, the country imports vast amounts of food products from its neighbouring countries such as Congo and Cameroun. Agricultural 7

production in Congo’s Niari Department plays a major role in supplying Gabonese markets with agricultural products. However, the poor condition of the Dolisie-Louvakou-Kibangou-Nyanga- Ngongo/Doussala-Ndendé road and 8 months of rainy season make conditions difficult for the marketing of goods and increase the prices of products at the markets. The PA subsoil is rich in minerals (iron, manganese, gold, etc.). Furthermore, the timber industry is the main industrial component in the PA. About 98% of Niari’s exports is timber (logs) which is transported by road from Niari region (more specifically Mila Mila) to the Pointe Noire port. The industrial fabric will be strengthened in Niari Region by the implementation of some projects, including the construction of a new plant for processing iron ore, as well as agro-industries (maize, oil mill, etc.). The other project beneficiaries will therefore be manufacturers, loggers, hauliers, and shippers, whose operating and logistics costs will be drastically cut by the develop of the main road and rural roads. 2.5.6 Thus, the project should allow the increase of agricultural production, facilitate the marketing of products, and contribute to the implementation of agro-industry. These declined above effects will have a strong transformational impact on agricultural and industrial activities of the ZIP and the sub region, by creating substantial added value. 2.6 Participatory Process for Project Identification, Design and Implementation 2.6.1 In compliance with the Bank’s policy and the regulations of Congo and Gabon, a participatory process was adopted in all the project’s stages. The various stakeholders were consulted both during the studies and during project preparation and appraisal. Participatory meetings were held with the PA population in Congo and Gabon. These plenary sessions to inform and consult the general public involved the participation of the administrative and political authorities, staff of deconcentrated technical services, customary authorities, opinion leaders, economic operators, as well as representatives of NGOs and women’s associations. About 2,000 people, 40% of whom were women, participated in these consultations. The meetings made it possible to give more specific consideration to the opinions, needs and expectations of the PA population, as well as to determine the related improvements to be made under the project (see details in Table 1.5 in Technical Annex B.1). This participatory process will continue during project implementation. 2.7 Bank Group Experience and Lessons Reflected in Project Design 2.7.1 The Bank’s portfolio in Gabon contains 11 operations, representing a volume of UA 612 million, with UA 465 million for nine (9) public sector operations and UA 146 million for three (3) private sector projects. The road sub-sector accounts for 72% of public sector operations. The main difficulties encountered are: (i) changes in government priorities with requests to readjust or cancel approved projects; (ii) significant slippage on loan effectiveness; (iii) long public procurement lead- times; and (iv) delays in the payment of counterpart funds. 2.7.2 In Congo, the active portfolio comprises 7 operations, including 2 regional projects for total net commitments of UA 105.30 million. Of this total, 4 infrastructure projects account for 81.77% of the total commitments, i.e. an amount of UA 86.1 million. The portfolio review identified the following project implementation weaknesses: (a) poor quality at entry due to lack of technical studies and inaccurate cost estimates; (b) fairly long time frames for effectiveness and fulfillment of the conditions precedent to first disbursement; (c) weak capacities of executing agencies (EA); (d) lack of familiarity with the Bank’s procurement and financial management procedures; and (e) weak capacity of works contractors or service providers. The project has drawn on the positive lessons of transport sector projects, which are efficiently implemented in the two countries, namely (i) early release of the Congolese counterpart, and (ii) the key role of TA to the EA in Gabon. 2.7.3 This project has drawn on the Bank’s experience in the implementation of multinational infrastructure projects, whose main difficulties concern: (i) the plethora of actors with generally weak technical and operational capacities; (ii) procurement and performance monitoring shortcomings; and (iii) weak performance of RIUs in implementing transport facilitation-related components.

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2.7.4 To address these shortcomings, this project makes provision for: (i) the establishment of a Joint Monitoring Committee (JMC) responsible for coordinating the project at regional level under the aegis of ECCAS; (ii) targeted support (technical assistance and works control bureau) to project EAs; (iii) training in the Bank’s procurement and financial management rules and procedures; (iv) the use of Advance Procurement Action (APA); and (v) a works implementation period compatible with the complexity of the structures. 2.8 Key Performance Indicators 2.8.1 The key performance indicators and the expected outcomes on project completion as set out in the results-based logical framework are as follows: (i) in terms of impact at ECCAS level, the volume of intra-community trade, the proportion of the paved inter-State road network in good condition; (ii) in terms of outcomes on the Dolisie-Ndendé section, the percentage of transit traffic, average travel time for heavy duty vehicles, heavy duty vehicle operating costs, the percentage of the rural population in the PA living within 2 km walking distance of an all-weather road (rural access index), percentage of the population living in the PA with access to drinking water, average household income, and the number of jobs created for young people by LI works. In addition, other performance indicators relating to project implementation will be established and monitored, in terms of: (i) time required to fulfill conditions precedent to the first loan and grant disbursement; (ii) procurement periods; (iii) implementation periods, and (iv) the trend of disbursement rates based on the expenditure schedule. 2.8.2 The baseline situation for the key outcome indicators will be fine-tuned prior to works start- up, and an evaluation carried out at project completion by a consulting firm to be recruited by ECCAS for the entire project. During project monitoring, a video-documentary will be produced on the outcomes and performance of this project. 3 PROJECT FEASIBILITY 3.1 Economic and Financial Performance 3.1.1 The economic analysis was conducted using the HDM.4 model on the sections from Ndendé to Dolisie, i.e. 274 km, which concern this project; furthermore, it should be noted that the sections between Ngongo (Gabon Border) and Kibangou (132 km) will not be paved during this phase, but will receive minimal improvements. A 12% discount rate and residual value equivalent to about 37% of the cost of works (including the border bridge) were used for the economic calculation. For the purposes of the economic analysis, the quantifiable benefits were identified on the basis of the ‘without project’ and ‘with project’ scenarios over a 20-year period for the main road. The costs taken into account are the economic investment costs, routine and periodic maintenance costs, and vehicle operating costs. The project’s economic benefits are broken down as follows: (i) savings on road maintenance costs; (ii) direct benefits for transport activities (reduction of vehicle operating costs and travel times), and (iii) indirect benefits from the different social and economic activities. 3.1.2 The above-mentioned analysis produced an economic rate of return (ERR) of 20.08%. A summary of the economic analysis is presented in the following Table. Table 3.1–Summary of Economic and Financial Analysis ERR NPV Baseline Scenario 20.08% CFAF 107.31 billion Assumption of 20% reduction in accumulated benefits 19 . 91% CFAF 105 . 79 billion Assumption of 20% increase in investment and recurrent costs 17.31% CFAF 81.29 billion Assumption of combined 20% increase in investment costs and 20% reduction in 17.00% CFAF 79.78 billion traffic Thus, by conducting a sensitivity test (20% increase in project cost and 20% reduction in benefits), the ERR finally settles at 17%, with a positive net present value of over CFAF 79.78 billion. This rate exceeds the opportunity cost of capital estimated at 12%. The project is therefore economically viable for the local community.

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3.2 Environmental and Social Impacts Environment 3.2.1 The project was classified in category 1 on the basis of the scale of the works (over 50 km) and the main environmental and social risks identified. The detailed Environmental and Social Impact Assessment (ESIA) and Full Resettlement and Compensation Plan (RCP) were finalized in June 2013. The ESIA and RCP summaries were published on the Bank’s Website on 12/08/2013. 3.2.2 The main positive environmental impacts are: (i) a reduction in airborne dust pollution; (ii) a reduction in the risks of flooding and erosion due to appropriate sizing of hydraulic and road sanitation structures; (iii) facilitation of forest wardens’ movements. The project’s main negative impacts concern: (i) the destruction of plant cover over an area equivalent to 607 ha; (ii) the risks of water and soil pollution; (iii) the risks of accidents involving elephants at crossing areas; (iv) the risks of increase in the illegal exploitation of forest and wildlife resources. These negative impacts can be mitigated by the following mitigation measures: (i) planting of alignment and compensation trees in the ratio of five (5) trees planted for each tree felled; (ii) strict enforcement of the measures in the contractor’s Site Environmental Protection Plan (SEPP), Safety and Hygiene/Health Insurance Plan for the contractor’s personnel; (iii) construction and equipping of a forestry and wildlife control post at Mila-Mila; (vi) construction of speed bumps and installation of road signs at elephant crossing areas; (vii) support for the establishment of a forest exploitation monitoring and control system in the project area during works and especially after the road’s commissioning; (vii) implementation of measures to reduce human- wildlife conflict in the project area; and (viii) sensitization of local residents and contractor’s personnel on environmental protection. In light of the constraints identified in Technical Annex B.4, the project includes a capacity building component for implementation of the ESMP. The cost estimates for the ESMP measures stand at CFAF 2.289 billion. Climate Change 3.2.3 The main challenges identified are as follows: (i) risks of flooding; (ii) production of greenhouse gas (GHG) emissions. The proposed adaptation actions include appropriate sizing of hydraulic structures, taking into account maximum peak flows for selected return periods, which is 20 to 50 years for culverts and 100 years for bridges. The main mitigation measures are: (i) creating smoother traffic flows and introducing speed limits which could reduce CO2 emissions by 15% along the road; and (ii) tree planting. Gender 3.2.4 Gender disparities exist in both countries despite the fact that the principle of gender equality is enshrined in their respective constitutions and that national gender strategies have been prepared. In Niari, women represent 51.2% of the population, while in Ngounié they represent 52%. 3.2.5 Subsistence agriculture and the marketing of surplus produce are women’s main activities in the PA. Agri-food production is often marked by a gender division of labour. Women’s activities are focused on site cleaning, ploughing, sowing, weeding and processing, product storage and conservation, transportation of harvest and selling produce. Females account for 63% of the agricultural labour force, provide 60% to 80% of food production and almost 100% of traditional agricultural produce processing. Females cover 60% of fish smoking, drying, salting and marketing activities, and 64% of informal sector activities. Time management matrices shows that a woman’s working day is 17 hours compared to 8 for a man. However, this effort seems invisible and little valued, not to mention the virtual inaccessibility of production areas and basic socio-economic infrastructure. Women-headed households are more exposed to poverty (58.2%) than those headed by men (48.8%). 3.2.6 On the health front, public health coverage is poor in particular in the Congolese part of the PA because the operation of the two existing health centres over 223 km i.e. between Dolisie and Ngongo is stifled by their inaccessibility due to the non-motorized state of the road. This situation also accounts for the shortage of health care workers. On the social front, PA’s women are particularly vulnerable to gender-based violence (GBV). The findings of the DHS show that in Gabon, over half of 10

all women (55.8 %) declared that they had, since the age of 15, been subjected to acts of physical violence at some point in their life. From a geographical standpoint, the results show 17% of women subjected to acts of physical violence during pregnancy in Ngounié, while 67% of women have been victims of physical, emotional or sexual acts of violence. In Niari, the proportion of women and men who approve marital violence is 71.3% and 66% respectively. 3.2.7 In view of the situation described above, the project intends to increase the revenues and improve the women’s living conditions in the PA. Thus, the project gender dimension is broken in the following areas: (i) Activities with a direct impact on women revenues during the project implementation period. An increase of at least 30% of these revenues for women is expected at the end of the project implementation. These activities are related to the rehabilitation of several km of feeder roads, rehabilitation of socio-economic infrastructure, the construction of boreholes, construction of storage and market sheds, and the acquisition of cultivation equipment for women's groups. In the operational phase, it is expected higher income for women as a result of easier transportation of goods, supply of inputs, as well as reducing post-harvest losses; (ii) Actions with a positive impact on women’s status by facilitating access to socio-economic infrastructure, especially health centers. Indeed, the development of the road will allow PA’s women to reach Dolisie hospital more quickly and under better conditions. In addition, health- care workers will also be recruited more easily for the health centres once the logistic constraints are removed; (iii) Sensitization programs to be led by women and targeting mostly women. In its sensitization modules, the project will lay particular emphasis on GBV, on early pregnancies and their consequences, on HIV-AIDS awareness with condoms distribution and voluntary testing. These modules will be anchored on the ongoing sensitization and training of trainers’ activities initiated by the Congolese and Gabonese Ministries in charge of Women’s Advancement and Health. Thus, it is projected at the end the project, a reduction in the proportion of women who have experienced GBV from 71.3% to 51% in the Niari and from 67% to 47% in Ngounié; (iv) Finally, it is important to note that a number of activities which are not “stricto sensu” gender oriented will highlight the important contributions and involvement of women in this project. This includes their participation in labor-based works of feeder roads and the rehabilitation of the earth road. The project support for women will involve inclusion of incentive measures to use local women labour at site level. In addition, the road maintenance mechanisms will take into account contracts to be signed with women’s associations for non–mechanized routine maintenance.

Social and Youth Employment 3.2.8 The education system in the two countries is marked by a high literacy rate. In the Gabonese part of the PA, it exceeds 80% according to the 2012 DHS. According to the 2011 ECOM, the literacy rate in Niari was 72.7%, which is fairly high, even though it is below the national average of 80%. Access to primary education stands at 91.3%, with the satisfaction rate fairly low in primary and secondary education at 30.8% and 22.9% respectively. 78% of children are dissatisfied with school service delivery. The main reasons for this dissatisfaction are related to the degree of remoteness and inaccessibility of the PA: lack of textbooks and supplies (62.9%), absence or irregularity of teachers (43.8%), and the dilapidated state of education institutions (35.3%). Development of the road and rehabilitation of 9 schools in the PA will therefore help to improve the degree of satisfaction of pupils and students and their parents in the PA. 3.2.9 The health status in the PA is marked by the following problems: (i) the predominance of communicable diseases, the resurgence of previously controlled diseases (tuberculosis, trypanosomiasis, and schistosomiasis) and the alarming spread of HIV/AIDS with prevalence 11

exceeding the national average: i.e. 9.4% in Dolisie compared to 4.2% at national level and 4.9% in Ngounié compared to 4.1% for Gabon; (ii) malaria remains the highest cause of mortality in the PA; 5,130 cases of malaria were recorded in 2010 in Niari, affecting under-14 children very severely; (iii) acute respiratory infections, the second leading cause of consultations by under-5 children; (iv) diarrhoeal diseases, the third leading cause of consultations with a prevalence rate of 70.7% of cases. This is due to the lack and obsolescence of health-care facilities and equipment, shortage of health care workers, irregular supply of pharmaceutical products to health centres, and lack of access to drinking water. Over one-third of households in the PA (36%) still use marshlands or unprotected wells as sources of drinking water. The project will therefore have a positive impact on the population’s health at several levels: (i) the paving of the road will allow for faster and more comfortable evacuation to referral health centres in neighbouring towns for the most serious cases. Pharmacies and other drug depositories in the project could be more easily supplied. The paved road will also significantly reduce the risks of respiratory diseases as clouds of dust will no longer be raised by passing vehicles, as well as eliminate stagnant water (breeding ground for the vector of malaria, i.e. mosquitoes) in potholes; (ii) the construction of about 30 boreholes will improve the population’s access to drinking water and will therefore reduce the number of waterborne diseases. To mitigate the impact of the increase in traffic on the corridor on the spread of HIV/AIDS and other STDs, as well as of the increased number of accidents on the road in the area, sensitization campaigns will be organized by the project on environmental protection, road safety, HIV/AIDS and STD as well as on compliance with axle load. 3.2.10 The employment indicators in Congo indicate that unemployment is mainly an urban phenomenon. The national unemployment rate is estimated at 6.9% and the activity rate is 63.2%. Unemployment affects urban areas (10.0%) more than rural areas (1.7%). Much lower figures are observed in Niari, the Congolese part of the PA, which is mainly rural with 3.9% for the employment rate and 71% for the activity rate. In Gabon, the activity rate is higher in urban areas (50.8%) than in rural areas (38.7%), and the unemployment rate is close to 15% nationwide and in Ngounié. Overall, the youth unemployment situation is a cause for concern in both countries. The under-30 youth unemployment rate varies between 20% and 40%, and is rising in urban centres because of massive rural-urban migration. Construction of the road under the project will open up the area and therefore lead to an increase in economic activity and drop in unemployment, especially youth unemployment. 3.2.11 The project support is aligned on national youth employment promotion strategies, particularly in BPW which absorbs a high proportion of both countries’ investment budgets and should therefore contribute significantly to facilitating young people’s access to decent employment and improving youth employability through adequate training and the possibility of acquiring professional experience. The project support for youth employment will involve: (i) inclusion of incentive measures to use local labour in bidding documents for the works; (ii) inclusion of contracts of sizes that would allow national SMEs to participate in bidding for procurement of related works for which the total amount allocated is CFAF 4.9 billion; (iii) support to 1,000 youths, especially the most vulnerable (school drop outs) and/or those with no qualifications (40% of whom are young women) through ‘work schools’ as part of the rehabilitation and maintenance of main roads and rural roads. To ensure sustainability of employment and integration of the young people who will be trained, the road maintenance mechanisms will incorporate, in their annual road maintenance programmes, contracts to be signed with youth and women’s associations for non–mechanized routine maintenance. Road Safety 3.2.12 On the Libreville-Brazzaville Corridor and, in particular, National Road No.1 in Gabon, road safety represents a real problem in light of the number of accidents on recently paved sections, lack of sensitization, and difficulties in evacuating the injured. To help improve road safety on the sections to be constructed, the project design includes: (i) compliance with regulations and technical standards regarding signs, gradients, slopes and diversions; (ii) support for the General Directorate of Road Safety; (iii) road safety sensitization campaigns for users and local residents; and (iv) a road safety audit on the Lambaréné-Mouila sections.

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Involuntary Resettlement 3.2.13 The development and paving of the Ndendé-Dolisie section will affect 1,024 people. Damage caused will concern: (i) 254 buildings located in 36 villages; (ii) 4,886 trees in 47 villages; (iii) 1,106 tombs in 28 villages, split between cemeteries and private tombs erected in front of dwellings; and (iv) 0.48 hectares of agricultural land. The abbreviated RCP posted on the Bank’s website on 12 August 2013 provides all information on: (i) the assessment of property, (ii) complaint settlement mechanisms and monitoring-evaluation of the RCP’s implementation. Total compensation costs for the entire section are estimated at CFAF 1.767 billion, comprising CFAF 23 million to be paid by Gabon and CFAF 1.743 billion by Congo. The RCP will be implemented in line with the phasing of the works. 3.2.14 Consequently, the proposed Phase 1 will involve: (i) in Congo: the displacement of 114 people and 433 tombs in 17 villages for the paving of the Kibangou-Dolisie section; and (ii) in Gabon: compensation for one cassava farm. The cost of compensation for the implementation of Phase 1 of the project is estimated at CFA 486 million, comprising CFAF 9 million to be paid by Gabon and 477 million by Congo. Prior to works start-up, the RCP with the amounts, property and persons concerned will be updated and submitted to the Bank. Submission to the Bank of the updated RCP as well as evidence of payment of the aforementioned compensation by the Governments of Gabon and Congo will be a loan condition. 4 IMPLEMENTATION 4.1 Implementation Arrangements Executing Agencies 4.1.1 This project will be implemented under the joint responsibility of Gabon and Congo, with ECCAS support. Gabon and Congo have agreed to entrust the project’s overall coordination and monitoring of the implementation of the ‘Transport and Transit Facilitation’ component to the ECCAS General Secretariat, through its Department in charge of Physical, Economic and Monetary Integration (DIPEM). In 2010, both countries signed a Memorandum of Understanding (MoU) delegating to ECCAS a number of activities including the overall coordination of the development of the Libreville- Brazzaville road link and the role of EA for the Doussala-Dolisie road study and the transport facilitation programme for that road. The two countries will, under this project, therefore sign an Additional Instrument entrusting ECCAS with the tasks of EA for the OSBP, the border bridge, the study on the OSBP’s operationalization and establishment of a corridor management system, and the study on harmonization of customs procedures. ECCAS will also play a leadership role on the Joint Monitoring Committee (JMC) to be established pursuant to Decision No. 06/ECCAS/CCEG/ XII/05 on the establishment of Monitoring and Implementation Committees for NEPAD priority projects in Central Africa. 4.1.2 ECCAS has within the DIPEM, an Infrastructure and Transport Facilitation Programme Coordination Unit which is the implementing agency of the regional projects sponsored by the Bank. This unit comprises a Senior Civil Engineer, a Transport Engineer, an Administrative and Financial Assistant, and a Secretary. To enable it to satisfactorily perform the duties assigned to it by the two countries, a Coordinator and Administrative and Financial Officer, acceptable to the Bank, will be appointed by ECCAS to strengthen the Unit’s project management capacities. 4.1.3 In Congo, the role of project EA will be assigned to the General Delegation for Major Works (DGGT). A Project Implementation Unit for the development of the Ketta-Djoum road between Congo and Cameroon, partially financed by the Bank, has already been established and is operational at the DGGT Technical Coordination Department. This project will rely on the Unit, which will be strengthened with a Road Engineer and a Structural Engineer. The implementation unit’s operating costs are included in the Government counterpart contribution to the project financing. 4.1.4 In Gabon, the role of project EA will be entrusted to the Ministry of Investment Promotion, Public Works Transport, Housing and Tourism in charge of Regional Development (MPITPTHTAT),

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which is also the project owner. MPITPTHTAT is currently implementing the PR1 satisfactorily. MPITPTHTAT will manage the project through its General Secretariat (GS). The GS will be supported by the General Directorate of Transport Infrastructure (DGIT) and the General Directorate of Infrastructure Studies (DGEI). A Road Engineer will be appointed at the GS and will be responsible for coordinating all the project’s activities. He/she will work under the authority of the GS. An Accounting Officer will also be assigned to the project, and will be responsible for maintaining and managing the accounts for all the project’s activities in Gabon. The EA’s operating costs are included in the Government counterpart contribution to the project. In addition, the National Public Works Agency will provide support to MPITPTHTAT to monitor the project implementation. Institutional Arrangements 4.1.5 A Joint Monitoring Committee (JMC) will also be established to coordinate the monitoring of project activities. The JMC will comprise, in addition to the project EAs, one (1) representative of the following administrations of the two countries: (i) Finance; (ii) Regional Integration/Cooperation; (iii) Public Works; (iv) Land Transport; (v) Environment; (vi) Customs; (vii) Immigration Police; and (viii) the project managers from each country. The civil society will be represented on the JMC by one (1) representative from among: (i) the shippers; and (ii) road hauliers. CEMAC Commission will be represented on the JMC. ECCAS will provide secretarial services to the JMC. The JMC’s mission will be to coordinate implementation of this project and resolve any problems that might hamper its smooth implementation in the two countries. It will meet at least on a quarterly basis, alternating between Gabon and Congo. JMC’s operating costs are included in the project costs and charged in equal amounts to the national counterpart funds of the two countries. 4.1.6 In order to build their technical and operational capacities, ECCAS and MPITPTHTAT will each receive technical assistance support, comprising two long-term experts and two periodic experts. This assistance will be provided to ECCAS and MPITPTHTAT for the procurement process and monitoring of the implementation of the components concerned. In addition, experienced and highly qualified consulting firms will be recruited for works inspection and supervision. Procurement Arrangements 4.1.7 The procurement of goods. works and services financed by ADF, ADB and the EU-Africa Fund will be made in accordance with the Bank’s Rules of Procedure for the Procurement of Goods and Works, or as required, the Bank’s Rules and Procedures for the Use of Consultants (May 2008 Editions, revised in July 2012) using the Bank’s appropriate standard bidding documents. Procurements totally financed by the counterpart funds of the Gabonese and Congolese Governments will be made in accordance with the countries’ and ECCAS procedures. 4.1.8 The Bank has authorized the countries to use APA for works, inspection and supervision, and monitoring-evaluation. The draft procurement plans prepared by the various EAs for procurements for which they are responsible were submitted to the Bank for review and approval before the negotiations. The arrangements relating to procurement methods, review procedures, national procurement systems, and the evaluation of EAs are described in detail in Technical Annex B.5. Financial Management and Auditing 4.1.9 The financial management will be entrusted to DGGT (Congo), MPITPTHTAT (Gabon), and ECCAS concerning the project components to be implemented by each entity. The capacities of these three structures were assessed and considered inadequate to ensure project financial management that meets the Bank’s requirements. The risks relating to financial management at project entry are considered substantial for Congo and ECCAS, but high for Gabon. Implementation of the measures proposed in the financial management action plan prepared for each EA (Technical Annex B.6) will mitigate these residual risks to a moderate and acceptable level during the project implementation phase. 4.1.10 The following financial management arrangements will be adopted prior to project start-up: (i) in Congo, the implementation unit will be strengthened with the installation of new software adapted to project financial management, the publication of a procedures manual based on the development 14

projects procedures handbook being approved by the Government, and the appointment of an Administrative and Financial Officer (AFO) in order to split up the existing accounting tasks. This officer, whose qualifications require the Bank’s prior approval, will be selected on the basis of three CVs; (ii) in Gabon, the General Secretariat at MPITPTHTAT will be strengthened with the installation of a financial management software, preparation of a procedures manual, and the appointment of a civil servant to supervise the financial management activities for project components implemented under its responsibility. This officer, whose qualifications will require the Bank’s prior approval, will be selected on the basis of three CVs; (iii) furthermore, ECCAS, which is already implementing several projects financed by the Bank, will be strengthened by the capacity building activities already initiated by the Bank through, for example, the PARCI project. The AFO, whose contract is being finalized for the PARCI project, will supervise the financial management of all Bank-financed projects within ECCAS. The Administrative and Financial Assistant at DIPEM will work under his/her technical supervision. The TOMPRO financial management software used by ECCAS will be configured and used for the project’s financial management. The procedures manual being prepared at DIPEM or under the PARCI project will be updated to factor in the specificities of the new project. 4.1.11 An audit firm will be recruited by ECCAS, in consultation with the other project EAs and in compliance with Bank procedures, not later than six (6) months following project effectiveness. The terms of reference of the project’s external audit will be harmonized to take into account the specificities of each EA, and approved during negotiations to recruit an independent firm with experience in the auditing of Bank-financed projects. The audit report for each fiscal year, based on the annual financial statements of each EA accompanied by a Management Letter, will be submitted to the Bank within six months following each fiscal year. The auditor’s missions will be planned on the basis of the project status in each country so as to submit all the audit reports simultaneously within the stipulated timeframe. The auditor’s opinion will also be extended to all the project accounts opened for payment of the Government counterpart funds. Disbursement 4.1.12 Project disbursements will be made in compliance with the provisions of the Bank’s Disbursement Handbook. Only the direct payment method has been adopted for the disbursement of the Bank’s resources allocated to the project. This method will be used to settle suppliers’ and contractors’ invoices on the basis of contracts signed between them and the Governments or ECCAS. These disbursements will be made in compliance with the project expenditure schedule, as well as the list of goods and services and Bank’s rules and procedures. A disbursement letter defining all the disbursement guidelines will be reviewed and accepted by the parties during the loan negotiation. 4.1.13 Disbursements in respect of the counterpart funds will be made by annual installments included in the State Budgets for the fiscal year concerned, in compliance with the project’s annual work plan and budget as prepared and approved by each EA. In each country, the counterpart funds will be deposited in accounts opened in banks considered acceptable by the Bank. The countries will also replenish the account opened in the name of ECCAS for the payment of resources to finance: (i) the works on the common border post (including inspection and supervision); (ii) the border bridge works (including inspection and supervision); (iii) the operating costs of coordination and the JMC; as well as (iv) conduct of the study on the operationalization of OSBP and establishment of the corridor Management Committee (including the study validation workshop). 4.2 Monitoring and Evaluation 4.2.1 Project monitoring-evaluation will comprise two components: (i) monitoring of project activities, and (ii) monitoring of the project outcome indicators. 4.2.2 Project monitoring will comprise both internal and external monitoring, the Bank’s supervision missions, a mid-term review, and final evaluation including the completion report of the EAs. Monthly and quarterly reports will be prepared by the works inspection and supervision firms on

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the works implementation. The EAs will provide the Bank with quarterly implementation reports. Reports will also be prepared and submitted by the joint monitoring committee. 4.2.3 Monitoring the outcome indicators will help to assess the level of achievement of the project’s development objectives. To that end, a consulting firm will be recruited and will support ECCAS in monitoring/evaluation of the socio-economic impacts in the entire PA, as well as transport facilitation as a result of this project. The firm will be assigned the following duties: (i) fine-tune the outcome indicators to be monitored for the entire PA (both in Congo and Gabon) specifying the different data to be compiled for both the socio-economic aspects and transport facilitation issues; (ii) establish, prior to works start-up, the baseline situation for all the indicators agreed upon with ECCAS and the EAs in both countries; (iii) conduct an assessment of the impacts at project completion; and (iv) prepare a video report comparing the baseline situation with the main results of this project. The video report will also contain statements by the project’s main beneficiaries on the changes in their environment which they attribute to the project implementation. 4.3 Governance 4.3.1 In Gabon, the business climate evaluation shows the country’s progress for all the indicators. The 2014 "Doing Business" report ranks Gabon 163rd in the world out of 189 economies i.e. a 6 point improvement in comparison to the 2013 report. Further efforts are therefore required to improve registering of property, getting credit, resolving insolvency, protecting investors and trading across borders in a region considered as very poorly integrated. According to the 2012 report of the NGO, Transparency International, Gabon is ranked 102nd out of 176 countries in the world in the corruption perceptions index. This persisting situation, despite the establishment in 2010 of a National Commission to Fight against Illicit Enrichment (CNLCEI), challenges the Authorities who are anxious to attract foreign investors to the two “Special Economic Zones” (SEZ) which are being constructed. In addition, over the past few years, the country has initiated reform of its public procurement systems particularly: (i) through modernization of the Public Procurement Code with the adoption of a new Code in 2012 aligned on international good practices; (ii) the gradual implementation of a procurement decentralization policy to enhance procurement efficiency; and (iii) the establishment of a public procurement regulatory agency to separate public transactions from their control. The country has also initiated public financial management reforms. 4.3.2 In Congo, progress has been made in governance, but more efforts are required to significantly improve the related indicators. The 2014 "Doing Business" report ranks Congo 185th in the world out of 189 countries, i.e. one position better than in the 2013 ranking. In Africa, the country was ranked 40th out of 53 countries according to the 2011 Mo Ibrahim Index. With the assistance of partners including the Bank, the Government Financial Management Improvement Action Plan (PAGGFP) has been underway since 2008. Its implementation has helped to improve public financial management with: (i) the adoption of the new Law on Public Procurement in compliance with international best practices, followed by the establishment of the Public Procurement Regulatory Authority (ARMP) in 2009; (ii) the adoption of a budget nomenclature in compliance with international standards; and (iii) the reorganization of the public expenditure chain. The Anti-Corruption Framework has been reinforced with the establishment of the Anti-Corruption Commission and adoption of an Anti-Corruption Law in 2009. Transparency in the management of oil resources was improved by through quarterly certification by international firms and the publication of reconciliation reports on the Ministry of Finance website. Thus, on 27 February 2013, Congo was listed as a compliant country under the Extractive Industries Transparency Initiative (EITI) whose implementation in Congo is supported by a grant from the Governance Trust Fund. 4.3.3 Under EDF 10, the EU is providing both countries with support to improve governance in the road sub-sector through: (i) the Sector Governance Support Project (PAGOS) in Gabon; and (ii) the Governance and Road Maintenance Support Project (PAGER) in Congo. These two operations aim to improve road management, particularly road maintenance, through good governance and capacity building for the administrations concerned and private sector actors (SMEs and consulting firms). 16

4.3.4 The main governance risks likely to be incurred by the project implementation are those relating to the procurement process and the use of financial resources. The specific measures taken to mitigate these risks are: (i) the introduction, at project start-up, of an administrative, accounting and financial procedures manual; (ii) training of the project team in Bank procedures; (iii) review and prior approval by the Bank of all procurements under the project; (iv) Bank supervision missions to confirm conformity between the specifications and the works effectively carried out; (v) systematic inventory of project assets at the end of each fiscal year; (vi) recruitment of an independent firm of financial auditors to ensure rational use of funds for the intended purposes; and (vii) use of the direct payment method for disbursements to transfer funds directly to the suppliers, contractors and service providers. 4.4 Sustainability 4.4.1 Sustainability of the roads will depend on the following key factors: (i) the quality of technical studies; (ii) the quality of works implemented; (iii) the operation of the infrastructure; and (iv) the level and quality of maintenance. 4.4.2 Comprehensive technical studies were conducted on the project in 2013 in Gabon and Congo. The technical solutions retained for the various project sections were determined on the basis of projected traffic density, topography and climate and, are consistent with the technical and road safety standards in force in the countries and within ECCAS. These solutions are deemed satisfactory, and the technical studies have identified high quality materials in the project areas that can be used. Contractors will be selected through international competitive bidding on the basis of BDs validated by the Bank. The technical specifications will specify the materials to be used, as well as the works acceptance criteria. The contractors selected will prepare and submit working documents to the control mission for approval. To ensure compliance with quality standards, the works will be inspected and supervised by engineering consulting firms selected from among the most qualified and familiar with similar projects, in compliance with the Bank’s Rules and Procedures. Finally, project supervision by the Bank and the specific monitoring missions that will be undertaken by independent consultants will help to improve the technical monitoring of works implementation and mitigate the risk of poor workmanship. 4.4.3 As regards operation of infrastructure, especially the pavement and ancillary structures, both countries have legal and regulatory texts governing the protection of their property. Thus, both countries have undertaken to effectively conduct the technical inspection of vehicles and control of axle loads in order to preserve their road networks. 4.4.4 With respect to road maintenance, the measures taken by the Government of Gabon have increased the road maintenance window of the Road Fund (RF) budget from CFAF 33 billion in 2011 to CFAF 40 billion in 2013, following removal of the annual budget ceiling. This level of resources should provide acceptable routine and periodic maintenance of the classified road network including the project road and feeder roads. The additional cost estimates for maintenance of the project section averaged CFAF 245 million per year, i.e. 0.61% of the RF’s current budget. The Republic of Congo’s Road Fund is a public establishment of an administrative nature created in 2005 to guarantee the financing of routine and periodic maintenance works on the urban, inter-urban and rural priority classified road network. Over half of Congo’s Road Fund is replenished through direct transfers from the State budget, and about 15% from taxes and levies on commercial forestry activities and VAT on sales of oil products. Road user charges (tolls, driving license and vehicle registration, vehicle MOT test) account for only about 3% of all the Road Fund resources. Despite the fact they are regularly collected, the proceeds of these taxes and charges are not systematically and fully paid into the Road Fund. As a result, Government-allocated resources continue to increase, and rose from CFAF 8.6 billion in 2005 to CFAF 47.6 billion in 2012, which should allow them to cover the routine maintenance requirements of the classified road network including the project road and feeder roads. The estimated additional costs for routine maintenance of the Ngongo-Dolisie section stand at an average of CFAF 1,135 million/year, i.e. 2.38% of the Congo Road Fund Budget.

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4.4.5 Concerning the OSBP, it is expected to provide management to private or semi-private organizations which will be responsible for their maintenance and equipment’s restoration. The proposed study on its operationalization will define the terms and conditions for its management and maintenance. As for the schools and water points, their operation and management will be assigned to Districts. 4.5 Risk Management 4.5.1 The main risks that could hamper achievement of the project objectives concern: (i) changes in the Gabonese Government’s priorities; (ii) failure to ensure timely mobilization of counterpart funds by the two countries; and (iii) slippage on implementation. 4.5.2 The risk relating to changes in priorities by Gabon is mitigated by: (i) the signing in 2010 of a MoU between the Governments of Congo and Gabon for the development of the missing link on the Libreville-Brazzaville corridor and management of OSBP; (ii) issuance of the project Certificate of Conformity by the Presidency of the Gabonese Republic ; and (iii) the Government’s commitment to speed up the ratification process. 4.5.3 The risk relating to the failure to ensure timely mobilization of counterpart funds is mitigated by inclusion of the counterpart funds in the national budgets. Regarding the predominant share of the Congolese counterpart funds, the risk is mitigated by the fact that the project is a priority of the Government and that the latter has always honoured its commitments in relation to other transport projects. 4.5.4 The risk relating to slippage on implementation is mitigated by: (i) EA capacity building in procurement and technical works monitoring; and (ii) regular supervision and close monitoring missions by GAFO. 4.6 Knowledge Building 4.6.1 In order to learn useful lessons from the project, a monitoring/evaluation mechanism will be established to document its outcomes and impacts. It will therefore be possible to learn all the lessons both in terms of project implementation performance and achievement of the expected outcomes and impacts. Assessment of the project’s impact by the beneficiaries will provide information on the population’s appreciation of the results achieved and the degree to which their expectations regarding the project have been met. This knowledge and the lessons learned will be posted on OITC’s website and presented in reports and publications as well as at workshops and seminars. 5 LEGAL FRAMEWORK 5.1 Legal Instrument The Bank will grant an ADB loan to the Gabonese Republic and an ADF Loan to the Republic of Congo to contribute to the financing of this project. 5.2 Conditions Associated with Bank Intervention A. Conditions precedent to effectiveness of the ADB and ADF Loans Effectiveness of the ADB and ADF loans shall be subject to fulfillment, by the Borrowers, of the conditions stipulated in Section 12.01 of the General Conditions applicable to Loan Agreements and Guarantee Agreements. B. Conditions precedent to first disbursement of the ADB and ADF Loans The first loan disbursement shall be conditional up on the entry into force of the loans agreements. C. Other Conditions for the ADB and ADF Loans (i) provide the Bank not later than 30 June 2014, with evidence of the appointment of the EA accounting officers or administrative and financial officers to be assigned to the project and whose CVs would have been approved beforehand by the Bank ;

18

(ii) provide the Bank not later than 30 June 2014, with evidence of the signing of an Additional Instrument entrusting ECCAS with the management of activities relating to the Transport Facilitation component; (iii) provide the Bank, before the start-up of construction work of every road section, with the updated RCP and evidence that all project affected persons have been compensated; (iv) provide the Bank, not later than 31 March of each fiscal year, with evidence of inclusion of the national counterpart contribution to the project in the Finance Law for the fiscal year ; (v) submit to the Bank, not later than 31 March of each year, the road maintenance budget for the concerned year as well as the budget execution report for the previous fiscal year. 5.3 Compliance with Bank Policies This project complies with all applicable Bank policies. 6 RECOMMENDATION Management recommends that the Board of Directors approve the proposal for: (i) an ADB loan of EUR 80.14 million (equivalent to UA 70 million) to the Gabonese Republic ; and (ii) an ADF loan of UA 30.49 million to the Republic of Congo for the implementation of this project, subject to the terms and conditions stipulated in this report.

19

APPENDIX I Page 1 of 2 APPENDIX 1: COMPARATIVE SOCIO-ECONOMIC INDICATORS Comparative Socio-Economic Indicators for Congo

APPENDIX I Page 2 of 2 Comparative Socio-Economic Indicators for Gabon Gabon COMPARATIVE SOCIO-ECONOMIC INDICATORS

Develo- Develo- Year Gabon Africa ping ped Countries Countries Basic Indicators GNI Per Capita US $ Area ( '000 Km²) 2011 268 30 323 98 458 35 811 Total Population (millions) 2012 1,6 1 070,1 0,0 0,0 9000 8000 Urban Population (% of Total) 2012 86,5 40,8 47,1 78,0 7000 Population Density (per Km²) 2012 5,7 34,5 69,8 23,5 6000 5000 GNI per Capita (US $) 2012 10 070 1 604 3 795 37 653 4000 Labor Force Participation - Total (%) 2012 36,4 37,8 68,7 72,0 3000 2000 Labor Force Participation - Female (%) 2012 46,1 42,5 38,9 44,5 1000

Gender -Related Dev elopment Index Value 0

2003

2004

2005

2006

2007

2008

2009 2010 2007-2011 0,748 0,525 0,694 0,911 2011 Human Dev elop. Index (Rank among 187 countries)2008-2012 106 ...... Popul. Liv ing Below $ 1.25 a Day (% of Population)2009-2011 4,8 40,0 20,6 ... Gabon Africa Demographic Indicators Population Grow th Rate - Total (%) 2012 2,4 2,3 1,3 0,3 Population Grow th Rate - Urban (%) 2012 2,8 3,4 2,6 0,7 Population < 15 y ears (%) 2012 38,5 40,0 28,5 16,4 Population >= 65 y ears (%) 2012 5,2 3,6 6,0 16,6 Population Growth Rate (%) Dependency Ratio (%) 2012 64,0 77,3 52,6 49,2 2,5 Sex Ratio (per 100 female) 2012 100,9 100,0 103,3 94,3 2,5 Female Population 15-49 y ears (% of total population) 2012 23,8 49,8 53,3 45,6 Life Ex pectancy at Birth - Total (y ears) 2012 63,1 58,1 68,2 77,7 2,4 Life Ex pectancy at Birth - Female (y ears) 2012 64,1 59,1 70,1 81,1 2,4 Crude Birth Rate (per 1,000) 2012 32,2 33,3 21,4 11,3 2,3

2,3

2004

2005

2006

2007

2008

2009

2010 2011 Crude Death Rate (per 1,000) 2012 9,3 10,9 7,6 10,3 2012 Infant Mortality Rate (per 1,000) 2012 44,2 71,4 40,9 5,6 Child Mortality Rate (per 1,000) 2012 66,3 111,3 57,7 6,7 Total Fertility Rate (per w oman) 2012 4,1 4,2 2,6 1,7 Gabon Africa Maternal Mortality Rate (per 100,000) 2006-2010 230,0 415,3 240,0 16,0 Women Using Contraception (%) 2012 40,2 34,5 62,4 71,4

Health & Nutrition Indicators Phy sicians (per 100,000 people) 2004-2010 29,0 49,2 103,7 291,9 Life Expectancy at Birth Nurses (per 100,000 people)* 2004-2009 502,0 133,0 168,7 734,3 (years) Births attended by Trained Health Personnel (%) 2006-2010 85,5 53,7 64,3 ... Access to Safe Water (% of Population) 2011 87,9 67,8 86,5 99,1 71 61 Access to Health Serv ices (% of Population) 2004 50,2 65,2 80,0 100,0 51 Access to Sanitation (% of Population) 2011 32,9 40,2 56,8 96,1 41 31 Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2011 5,0 4,6 0,9 0,5 21 Incidence of Tuberculosis (per 100,000) 2011 450,0 234,6 146,0 23,0 11

1

2004

2005

2006

2007

2008

2009

2010 2011 Child Immunization Against Tuberculosis (%) 2011 89,0 81,6 83,9 95,4 2012 Child Immunization Against Measles (%) 2011 55,0 76,5 83,7 93,5

Underw eight Children (% of children under 5 y ears) 2006-2011 8,8 19,8 17,0 1,4 Gabon Africa Daily Calorie Supply per Capita 2009 2 745 2 481 2 675 3 285 Public Ex penditure on Health (as % of GDP) 2010-2011 1,7 5,9 2,9 7,4

Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2009-2012 181,7 107,0 107,8 102,7 Infant Mortality Rate Primary School - Female 2009-2012 179,0 103,1 106,2 102,3 ( Per 1000 ) Secondary School - Total 2009-2012 53,1 46,3 66,4 100,4 Secondary School - Female 90 2009-2012 44,3 41,9 65,1 100,0 80 Primary School Female Teaching Staff (% of Total) 2009-2012 52,9 39,2 58,6 81,3 70 60 Adult literacy Rate - Total (%) 2011 89,0 71,5 80,2 … 50 40 Adult literacy Rate - Male (%) 2011 92,3 78,4 85,9 … 30 20 Adult literacy Rate - Female (%) 2011 85,6 64,9 74,8 … 10

0

2004

2005

2006

2007

2008

2009

2010 2011 Percentage of GDP Spent on Education 2008-2010 3,8 5,3 4,5 5,5 2012

Environmental Indicators Land Use (Arable Land as % of Total Land Area) 2011 1,3 7,6 10,7 10,8 Gabon Africa Annual Rate of Deforestation (%) 2000-2009 0,1 0,6 0,4 -0,2 Forest (As % of Land Area) 2011 85,4 23,0 28,7 40,4 Per Capita CO2 Emissions (metric tons) 2009 1,1 1,2 3,0 11,6

Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update : october 2013 UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports. Note : n.a. : Not Applicable ; … : Data Not Available.

APPENDIX II Page 1 of 1 Appendix 2: Bank Portfolio of Ongoing Projects in Gabon (September 2013)

% Amount (UA Signature Effectiven Closing Project Name Approval Age Disburs Million) Date ess Date ed Sector : Transport Road Programme Phase 1 (RP1) Sept. 07 221.9 Oct. 07 Sept. 08 Dec. 13 5.90 72.5 Road Programme Phase 2 (RP2) Sept 11 230.0 March 12 - Dec 16 1.75 0.0 Sector : Agriculture Fisheries and Aquaculture Sector Support Project-PSPA July. 05 14.94 Oct. 05 Sept. 06 Oct 13 7.84 41.69 Study on the Development of Agricultural Production Infrastructure Jan 2011 0.47 March 11 March 11 March 13 2.35 37.32 Sector : Forest-Environment Study on Three Catchment Basins in Libreville June 09 1.48 Feb 10 Feb. 10 Nov. 13 3.96 80.6 Sustainable Forest Resource Management in Gabon 5 2 Sector : Social Study on the Strengthening of the CNAMGS Oct.2010 0.498 Feb 11 Sept 11 June 13 2.96 27.24 Demographic and Health Survey Feb.11 0.5 July 11 Sept 13 Sep 13 1.8 96.0 Private Sector SIAT Gabon Sept.-2007 8.64 Feb.-08 Feb.-08 Dec.-10 4 100 Gabon Fertilizer Company(GFC) Dec.12 98 - - - 0.45 0 CODER HYDRO July 12 48 - - - 0.86 0

Bank Portfolio of Ongoing Projects in Congo (September 2013)

Amount Disbursed No. Project Name Status Approval Date Disbursement Rate (MUA) (MUA) 1 Brazzaville and Pointe Noire Sanitation Ongoing 16-Sept.-09 12.75 5.58 43.74% 2 Rural Electrification Project (PERC) Approved 6-Dec.-12 10.00 - 0.00% 3 Project in Support of the Socio-Economic Re-Integration of Disadvantaged Groups Ongoing 15-March-06 14.80 13.36 90.27% 4 Institutional Support Project to Improve the Business Climate Ongoing 14-Oct.-10 3.44 0.14 4.02% 5 DRC/Congo : Study on the Road-Rail Bridge between Kinshasa and Brazzaville Ongoing 3-Dec.-08 5.00 2.29 45.82% 6 Cameroon/Congo: Ketta-Djoum Road Ongoing 25-Sept.-09 61.90 11.71 18.92% 7 Technical Assistance Project for Public Finance and Strategic Planning Capacity Building Approved 19-July.-13 1.00 - 0.00% 8 TA Project for National Skills Development to Support Growth Sectors Approved 25-July-13 1.25 - 0.00% 9 Multi-sector Targeted Technical Support and Inter-Ministerial Capacity Building Project Ongoing 30-Nov.-10 0.85 0.20 23.55% 10 Grant to finance the operating budget of the FSF Project Implementation Unit Ongoing 7-July.-11 0.13 0.09 67.21% 11 Emergency Humanitarian Assistance Approved 30-May-12 0.65 - 0.00% 12 Multi-Resource Forest Inventory Ongoing 5-Dec.-11 2.13 0.55 25.82% 13 DWSS in Secondary Centres Ongoing 4-Jan.-13 0.96 - 0.00% 14 BDEAC - FAPA GRANT Ongoing 5-Feb.-10 0.65 0.39 60.00%

APPENDIX III Page 1 of 3

Appendix III: Major Related Ongoing Projects in Gabon

Length Amount (in CFAF million) N0 Road Links Type of Works Republic of Financing (Km) T.F.P Total Gabon 1 Watershed Sanitation Project (Management Unit) Studies 200 200 ADB/Gabon 2 Watershed Sanitation Project (Relocation Zone) Development 10 097 10 097 Gabon 3 International Assistance for Sanitation Studies and Works 925 925 Gabon 4 Glass Road (Phase 1) 1.200 Technical Works and Inspection 2 487 2 487 Gabon 5 La Sabliere Road 5.500 Development 769 769 Gabon 6 Libreville Roads and Utility Services Development 22 530 22 530 Gabon 7 Libreville Urban Expressway 23 Development of structures 42 000 42 000 Gabon 8 5 Crossroads on the Libreville Urban Expressway Development of structures 10 000 10 000 Gabon 9 Road Improvements 59.600 Development 10 675 10 675 Gabon 10 Construction of Oloumi Bridge Development 118 655 773 Gabon 11 Urban Motorway Access roads 5.100 Development 956 956 Gabon 12 South Ring Road (RN1 – Owendo) Development 15 400 15 400 Gabon 13 Nkok Ring Road - PK12- Port of Owendo 24 Development 10 000 12 500 22 500 Gabon/India 14 RN1 : PK0 - PK12 (expropriations and resettlement) 12 Development 10 000 10 000 Gabon 15 Cap Estérias Road 17 Development 3 500 3 500 Gabon 16 Cap Estérias Road (dual carriageway) Studies 687 687 Gabon 17 PK12 - Ntoum - Nsilé – Bifoun 105 Rehabilitation 16 000 16 300 32 300 Spain/Gabon 18 PK12 – Bifoun Development 19 678 19 678 Spain/Gabon 19 National Road 1 - Ntoum - Nsilé 65 Technical Works and Inspection 5 625 5 625 Gabon 20 Provincial and Departmental Roads Development 25 000 25 000 Gabon 21 Provincial Capital Subdivisions (Roads and Utility Services) Rehabilitation 10 000 10 000 Gabon 22 Franceville Presidential Palace Construction Works 750 750 Gabon 23 Libreville Sanitation Phase 2 Development 664 3 688 4 352 Gabon 24 Road Programme Phase 1 23 427 23 427 Gabon 25 Road Programme Phase 2 (ADB) 8 880 8 880 Gabon 26 Ntoum—Cocobeach Road 7 890 7 890 Gabon 27 Franceville – Boumango 90 Rehabilitation 500 500 Gabon 28 Akiéni – Okondja 74 Development 1 600 7 920 9 520 IDB 29 Okondja – Andjogo - Franceville 120 Studies 500 500 Gabon 30 Akiéni – Onga 88 Development 8 000 8 000 Gabon/Italy 31 Akiéni – Okondja 74 Development 1 600 9 343 10 943 IDB 32 Alanga – Aboumi 65 Rehabilitation 1 000 1 000 Gabon 33 Moanda – Bakoumba 60 Development 7 500 7 500 Gabon 34 Alembé - Lopé – Mikouyi 315 Development 4 500 49 350 53 850 Gabon 35 Alembé - Lopé – Lastoursville 2 756 2 756 Gabon 36 Okondja – Lastoursville 120 Development 6 245 6 245 Gabon 37 Completion of Lambarene Regional Hospital Access Road Development 750 750 Gabon 38 Ogooué to Lambarene Corniche Road Development 255 255 Gabon 39 Alternative Road to Lambarene Regional Hospital Development 634 634 Gabon

APPENDIX III Page 2 of 3

40 Access Road to Lambarene Sites Development 2 086 2 086 Gabon 41 Ndjolé – Medoumane 47 Development 2 142 11 457 13 599 AFD/Gabon 42 Ogooué to Lambarene Corniche Road Development 255 255 Gabon 43 Fougamou – Mouila Road 111 Development 6 787 6 787 ADB/Gabon 44 Mouila – Ndendé 75 Studies and development 7 500 7 500 Gabon 45 Ndendé – Doussala 46 Studies 541 541 Gabon 46 Mouila - Mimongo 75 Studies 656 656 Gabon 47 Mbigou - Mimongo Development 7 500 7 500 Gabon 48 Lebamba - Mbigou Technical Works and Inspection 3 026 3 026 Gabon 49 Mayumba Tchibanga (incl. the Banio Bridge) Development 15 575 15 575 Italy/Gabon 50 Tchibanga – Mayumba 104 Development 1 250 16 700 17 950 Italy/Gabon 51 Shell (Gamba) – Tchibanga Road 110 Development 15 353 15 353 Gabon 52 Tchibanga DoumangoMoulengui – Bindza –Congo Border Road 130 Development 6 027 6 027 Gabon 53 Ndendé - Tchibanga 91 Development Gabon 54 Ndendé - Lebamba 37 Development 1 526 1 526 ADB/Gabon 55 Lalara – Koumameyong 63 Development 2 364 5 563 7 927 IDB/Gabon 56 Koumameyong - Ovan 53 Studies and development 2 150 7 000 9 150 IDB/Gabon 57 Koumameyong - Booué 40 Studies 1 684 1 684 Gabon 58 Booué – Leroy Crossroads 65,345 Studies Gabon 59 Ovan – Makokou 91,658 Development 8 555 8 555 Gabon 60 Makokou – Mekambo 140 Studies 692 692 Gabon 61 Makokou – Mvadi 76 Rehabilitation 500 500 Gabon 62 Lastoursville – La Leyou 37 Development ADB/Gabon 63 Leroy Crossroads – Mikouyi Crossroads 142 Development 20 709 20 709 Gabon 64 Leroy Crossroads – Lastoursville Development 1 347 1 347 Gabon 65 Mougamou – Iboundji 54 Rehabilitation 750 750 Gabon 66 Koulamoutou – Popa 80 Rehabilitation 5 000 5 000 Gabon 67 Koulamoutou – Pana – Diénga –Lemanassa – Bakoumba 160 Studies 846 846 Gabon 68 Mougamou – Iboundji 54 Rehabilitation 750 750 Gabon 69 Port-Gentil RUS Development 23 099 23 099 Gabon 70 Port -Gentil - Omboué 93 Development 5 092 5 092 Gabon 71 Route Omboué – Ozori 80 Studies 747 747 Gabon 72 Port –Gentil – Mandorové 34 Development 3 128 3 128 Gabon 73 Yombi – Mandji - Omboué 243 Studies Gabon 74 Port-Gentil Stormwater Collection Development 1 294 7 190 8 484 Gabon 75 Kougouleu – Medouneu 163 Development 536 536 Gabon 76 Koumassi – AkamEssatouk 75 Rehabilitation 1 608 1 608 Gabon Total 3 893 376 827 216 012 592 839 Sources:2013 Investment Budget (DGEI)

APPENDIX III Page 3 of 3

Apependix III: Major Related Ongoing Projects in Congo

AMOUNT (in CFAF Million) LENGTH ROADS TYPE OF WORKS REPUBLIC OF FINANCING (KM) T.F.P TOTAL CONGO 1 Brazzaville-Dolisie (RN1) 358 Development and paving 66 700 600 300 667 000 China 2 Ketta-Cameroon Border 312 Paving /Minimal development 61 000 47 000 108 000 ADB 3 Boundji-Ewo 80 Development and paving 67 000 67 000 4 Makoua-Etoumbi 100 Development and paving 71 000 71 000 5 Likouala River Bridge - Construction in RC 19 000 19 000 6 Oyo-Tchikapika 26 Development and paving 12 000 12 000 7 Edou-Bokouélé 48 Development and paving 32 000 32 000 8 Tchikapika-Tongo 26 Development and paving 18 000 18 000 9 Kinkala-Mindouli 60 Development and paving 37 686 37 686 European Union 10 Moouyondzi-Moukoukoulou 29 Development and paving 15 700 15 700 11 Loudima-Sibiti 81 Rehabilitation 31 212 31 212 12 Sibiti-Ibé 57 Development and paving 32 495 32 495 13 Djiri-Ingah (RN2) 86 Rehabilitation 31 258 31 258 14 Etsouali-Ngo (RN2) 60 Rehabilitation 33802 33802 15 Gamboma-Ollombo (RN2) 70 Rehabilitation 60 415 60 415 16 Mambili-Ouesso 199 Development and paving 12 934 116 409 129 343 China 17 Kouilou River Bridge - Reinforcement 6 837 6 837 18 Ngo-Djambala 120 Rehabilitation 39 830 39 830 19 Okoyo-Lékéty-Gabon Border 90 Development and paving 4 071 36 638 40 709 China

Sources: DGGT 2013

APPENDIX IV Map of Project Area

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NB : CetteThis cartemap hasa été been fournie provided par le by personnel the staff ofde thela BanqueAfrican AfricaineDevelopment de Développement Bank exclusively exclusivement for the use ofà l’usagethe readers des oflecteurs the report du rapport to which auquel it is attached. elle est jointe. The names Les dénominations used and the bordersutilisées shown et les dofrontières not imply figurant on the sur part cette of the carte Bank n’impliquentGroup and itsde membersla part du any Groupe judgment de la concerning Banque et thede legalses membres status of aaucun territory jugement nor any concernant approval or le acceptance statut légal of d’un these territoire borders ni aucune approbation ou acceptation de ses frontières.

ANNEX A.1 Table 1.1: Detailed Project Cost Estimates by Component

CFAF Million UA Million PROJECT COMPONENT FE LC Total FE LC Total A. ROAD WORKS 94 859.80 26 504.95 121 364.75 126.31 35.29 161.60 Development of the Ndendé-Doussala section including 1. 34 521.48 8 630.37 43 151.85 45.97 11.49 57.46 environmental measures in Gabon 2. Ndendé-Doussala section works inspection and supervision 1 208.25 302.06 1 510.31 1.61 0.40 2.01 Construction of the border bridge and its connecting road to the 3. 4 695.60 1 173.90 5 869.50 6.25 1.56 7.82 Gabon/Congo border Works inspection and supervision for the border bridge and its 4. 234.78 58.70 293.48 0.31 0.08 0.39 connecting road 5. Rehabilitation of the Ngongo-Kibangou Section 1 181.70 2 757.30 3 939.00 1.57 3.67 5.24 Works inspection and supervision of the Ngongo-Kibangou section 6. 110.29 27.57 137.87 0.15 0.04 0.18 in Congo Development of the Kibangou-Dolisie section incl. environmental 7. 50 966.37 12 741.59 63 707.96 67.86 16.97 84.83 measures in Congo Works inspection and supervision for Kibangou-Dolisie Section in 8. 1 783.82 445.96 2 229.78 2.38 0.59 2.97 Congo Sensitization on HIV/AIDS, road safety and the environment in 9. 52.50 122.50 175.00 0.07 0.16 0.23 Gabon Sensitization on HIV/AIDS, road safety and the environment in 10. 105.00 245.00 350.00 0.14 0.33 0.47 Congo B. RELATED WORKS 1 469.70 3 429.30 4 899.01 1.96 4.57 6.52 1. Rehabilitation of 50km of related rural tracks in Gabon 530.25 1 237.25 1 767.50 0.71 1.65 2.35 2. Rehabilitation of socio-economic infrastructure in Gabon 142.50 332.50 475.00 0.19 0.44 0.63 3. Drilling of 4 boreholes along the road in Gabon 18.00 42.00 60.00 0.02 0.06 0.08 4. Inspection and supervision of related works in Gabon 34.54 80.59 115.13 0.05 0.11 0.15 5. Rehabilitation of 53km of related rural tracks in Congo 321.18 749.42 1 070.60 0.43 1.00 1.43 6. Rehabilitation of socio-economic infrastructure in Congo 277.50 647.50 925.00 0.37 0.86 1.23 7. Drilling of 16 boreholes along the road in Congo 96.00 224.00 320.00 0.13 0.30 0.43 8. Inspection and supervision of related works in Congo 34.73 81.05 115.78 0.05 0.11 0.15 Construction of a forestry and wildlife control post at Mila Mila 9. 15.00 35.00 50.00 0.02 0.05 0.07 (Congo ) C. TRANSPORT FACILITATION 7 072.00 1 768.00 8 840.00 9.42 2.35 11.77 Study on the operationalization of OSBP and implementation of a 1. 336.00 84.00 420.00 0.45 0.11 0.56 corridor management system Construction and equipping of OSBP at Gabon border including a 2. 4 800.00 1 200.00 6 000.00 6.39 1.60 7.99 toll station. Inspection and supervision of OSBP construction works, training of 3. 240.00 60.00 300.00 0.32 0.08 0.40 border units and user sensitization Installation of a pilot goods tracking and radio-communication 4. 560.00 140.00 700.00 0.75 0.19 0.93 system on the PN-BZV road link 5. Study on harmonization of customs procedures in the two countries 96.00 24.00 120.00 0.13 0.03 0.16 6. Support for operationalization of the PNA OSCBO 80.00 20.00 100.00 0.11 0.03 0.13 7. Feasibility study and DD for Ndende dry port in Gabon 480.00 120.00 600.00 0.64 0.16 0.80 8. Feasibility study and DD for Dolisie dry port in Congo 480.00 120.00 600.00 0.64 0.16 0.80 D. INSTITUTIONAL SUPPORT 3 404.85 851.21 4 256.06 4.53 1.13 5.67 1. Feasibility study on Pointe Noire by-pass road in Congo 640.00 160.00 800.00 0.85 0.21 1.07 Audit of road safety on the paved Lambaréné-Mouila section in 2. 72.00 18.00 90.00 0.10 0.02 0.12 Gabon 3. Support to the General Directorate of Road Safety in Gabon 387.84 96.96 484.80 0.52 0.13 0.65 4. Technical Assistance to ECCAS 898.88 224.72 1 123.60 1.20 0.30 1.50 5. Technical Assistance to the Executing Agency in Gabon 1 062.13 265.53 1 327.66 1.41 0.35 1.77 Support for implementation of the human-elephant conflict 6. 224.00 56.00 280.00 0.30 0.07 0.37 measures (Congo & Gabon) Support to the General Directorate of Equipment and Construction 7. 120.00 30.00 150.00 0.16 0.04 0.20 (youth employment LI component) in Gabon E. PROJECT MANAGEMENT AND MONITORING 752.22 2 370.84 3 123.05 1.00 3.16 4.16 1. Project financial and accounting audits in Gabon and Congo 60.92 142.14 203.05 0.08 0.19 0.27 Monitoring of project’s socio-economic impacts in Gabon and 2. 280.00 70.00 350.00 0.37 0.09 0.47 Congo 3. Operating costs of Executing Agency in Gabon 411.30 959.70 1 371.00 0.55 1.28 1.83 4. Operating costs of Executing Agency in Congo 0.00 410.00 410.00 0.00 0.55 0.55 5. Operating costs of the Joint Monitoring Committee (JMC) 0.00 789.00 789.00 0.00 1.05 1.05

BASE COST 107 558.56 34 924.30 142 482.86 143.22 46.50 189.72 Physical Contingencies 10 755.86 3 492.43 14 248.29 14.32 4.65 18.97 Financial Contingencies 5 171.17 1 679.08 6 850.25 6.89 2.23 9.12 TOTAL COST 123 485.59 40 095.81 163 581.40 164.43 53.38 217.81

I

Table 1.2: Detailed Project Cost Estimates by Expenditure Category

CFAF Million UA Million EXPENDITURE CATEGORIES FE LC Total FE LC Total 1. GOODS 560.00 140.00 700.00 0.75 0.19 0.93 Installation of a pilot goods tracking and radio communication 1.1 560.00 140.00 700.00 0.75 0.19 0.93 system on the PN-BZV road link

2. WORKS 97 565.58 29 770.83 127 336.41 129.91 39.64 169.55 Development of the Ndendé-Doussala section, including 2.1 34 521.48 8 630.37 43 151.85 45.97 11.49 57.46 environmental measures in Gabon Construction of the border bridge and its connecting road to the 2.2 4 695.60 1 173.90 5 869.50 6.25 1.56 7.82 Gabon/Congo border 2.3 Rehabilitation of the Ngongo-Kibangou Section 1 181.70 2 757.30 3 939.00 1.57 3.67 5.24 Development of the Kibangou-Dolisie section incl. environmental 2.4 50 966.37 12 741.59 63 707.96 67.86 16.97 84.83 measures in Congo 2.5 Rehabilitation of 50km of related rural tracks in Gabon 530.25 1 237.25 1 767.50 0.71 1.65 2.35 2.6 Rehabilitation of socio-economic infrastructure in Gabon 142.50 332.50 475.00 0.19 0.44 0.63 2.7 Drilling of 4 boreholes along the road in Congo 18.00 42.00 60.00 0.02 0.06 0.08 2.8 Rehabilitation of 53km of related rural tracks in Congo 321.18 749.42 1 070.60 0.43 1.00 1.43 2.9 Rehabilitation of socio-economic infrastructure in Congo 277.50 647.50 925.00 0.37 0.86 1.23 2.10 Drilling of 16 boreholes along the road in Congo 96.00 224.00 320.00 0.13 0.30 0.43 Construction and equipping of OSBP at the Gabon border 2.11 4 800.00 1 200.00 6 000.00 6.39 1.60 7.99 including a toll station. Construction of a forestry and wildlife control post at Mila Mila 2.12 15.00 35.00 50.00 0.02 0.05 0.07 (Congo )

3. CONSULTING SERVICES 9 021.68 2 854.77 11 876.45 12.01 3.80 15.81 3.1 Ndendé-Doussala section works inspection and supervision 1 208.25 302.06 1 510.31 1.61 0.40 2.01 Works inspection and supervision for the border bridge and its 3.2 234.78 58.70 293.48 0.31 0.08 0.39 connecting road Works inspection and supervision of the Ngongo-Kibangou 3.3 110.29 27.57 137.87 0.15 0.04 0.18 section in Congo Works inspection and supervision for Kibangou-Dolisie Section in 3.4 1 783.82 445.96 2 229.78 2.38 0.59 2.97 Congo Sensitization on HIV/AIDS, road safety and the environment in 3.5 52.50 122.50 175.00 0.07 0.16 0.23 Gabon Sensitization on HIV/AIDS, road safety and the environment in 3.6 105.00 245.00 350.00 0.14 0.33 0.47 Congo 3.7 Inspection and supervision of related works in Gabon 34.54 80.59 115.13 0.05 0.11 0.15 3.8 Inspection and supervision of related works in Congo 34.73 81.05 115.78 0.05 0.11 0.15 Study on operationalization of the OSBP and implementation of a 3.9 336.00 84.00 420.00 0.45 0.11 0.56 corridor management system Inspection and supervision of the OSBP construction works, 3.10 240.00 60.00 300.00 0.32 0.08 0.40 training of border units and user sensitization Study on the harmonization of customs procedures in the two 3.11 96.00 24.00 120.00 0.13 0.03 0.16 countries 3.12 Support for operationalization of the PNA OSCBO 80.00 20.00 100.00 0.11 0.03 0.13 3.13 Feasibility study and DD for Ndende dry port in Gabon 480.00 120.00 600.00 0.64 0.16 0.80 3.14 Feasibility study and DD for Dolisie dry port in Congo 480.00 120.00 600.00 0.64 0.16 0.80 3.15 Feasibility study on Pointe Noire by-pass road in Congo 640.00 160.00 800.00 0.85 0.21 1.07 Audit of road safety on the paved Lambaréné-Mouila section in 3.16 72.00 18.00 90.00 0.10 0.02 0.12 Gabon 3.17 Support to the General Directorate of Road Safety in Gabon 387.84 96.96 484.80 0.52 0.13 0.65 3.18 Technical Assistance to ECCAS 898.88 224.72 1 123.60 1.20 0.30 1.50 3.19 Technical Assistance to the Executing Agency in Gabon 1 062.13 265.53 1 327.66 1.41 0.35 1.77 Support for implementation of the human-elephant conflict 3.20 224.00 56.00 280.00 0.30 0.07 0.37 measures (Congo & Gabon) Support to the General Directorate of Equipment and Construction 3.21 120.00 30.00 150.00 0.16 0.04 0.20 (youth employment LI component) in Gabon 3.22 Project financial and accounting audits in Gabon and Congo 60.92 142.14 203.05 0.08 0.19 0.27 Monitoring of project’s socio-economic impacts in Gabon and 3.23 280.00 70.00 350.00 0.37 0.09 0.47 Congo

4. OTHERS 411.30 2 158.70 2 570.00 0.55 2.87 3.42 4.1 Operating costs of the Executing Agency in Gabon 411.30 959.70 1 371.00 0.55 1.28 1.83 4.2 Operating costs of the Executing Agency in Congo 0.00 410.00 410.00 0.00 0.55 0.55 4.3 Operating costs of the Joint Monitoring Committee (JMC) 0.00 789.00 789.00 0.00 1.05 1.05

BASE COST 107 558.56 34 924.30 142 482.86 143.22 46.50 189.72 Physical Contingencies 10 755.86 3 492.43 14 248.29 14.32 4.65 18.97 Financial Contingencies 5 171.17 1 679.08 6 850.25 6.89 2.23 9.12 TOTAL COST 123 485.59 40 095.81 163 581.40 164.43 53.38 217.81

II

ANNEX A.2

RATIONALE FOR AMOUNT OF GABONESE COUNTERPART CONTRIBUTION TO THE PROJECT FINANCING

2.1 In Gabon, the proposed project will be jointly financed by the Bank and Government of Gabon. The Bank’s contribution will cover 78.70% of the total project cost in the country, exclusive of taxes and customs duties, i.e. a loan of UA 70 million, while the Government will contribute 21.30% to the financing, i.e. UA 18.95 million. 2.2 As in the case of the Road Programme 1 approved by the Bank in 2007 and to which the Bank contributed 90% of the total cost, exclusive of taxes and duties, as well as the Road Programme 2, approved by the Bank in 2011 and to which the Bank contributed 86.32% of the total cost, exclusive of taxes and duties, at the request of the Government and in accordance with the provisions in Section 4.2.2 of the Policy on Expenditure Eligible for Bank Group Financing (19 March 2008 Revised Version), the level of national counterpart funding was determined on the basis of the following criteria: 1. Country’s Commitment to Implement its Overall Development Programme Following a period of economic crisis, coupled with a political crisis, the country has successfully embarked on a democratic transition which, in April 2010, enabled the Government to launch the 2011-2015 ESMP which formalizes the first stage of the authorities’ goal of making Gabon an emerging country by 2025. The authorities’ objective, based on the three pillars “Industrial Gabon, Green Gabon and Service-Industry Gabon”, is to very rapidly address the following three major challenges: (i) accelerate growth and diversify resources; (ii) reduce poverty and inequalities; and (iii) ensure sustainable resource management of future generations. The ESMP is underpinned by four pillars, namely sustainable development, governance, human capital and infrastructure development. The total cost of the National Infrastructure Master Plan (SDNI), excluding the health and education budget for the 2011-2025 period, is estimated at CFAF 7403 billion, i.e. an average annual investment budget over 15 years of CFAF 493.53 billion (EUR 751.96 million)1. In view of the low national absorptive capacities and in order to enhance efficacy of the public investments to be mobilized for implementation of the SDNI, the Government has established the National Agency for Major Works (ANGT) which ensures the management and implementation of strategic infrastructure projects.

2. Financing Allocated by the country to sectors targeted by the Bank Assistance The 1998-2015 Intermodal Transport Master Plan (PDIT) 1998-2015 is the reference framework for donor operations in the transport sector through the Road Network Development Programme (PARR). The results for the 2002-2005 period showed that real road investment amounted to CFAF 118.41 billion for the paving of 318.5 km of roads with an estimated Government contribution of CFAF 12.51 billion, i.e. 10.57%. Since 2006, the Government’s share in PARR financing has risen steadily. It should be noted that in 2013, the Government of Gabon is contributing 63.56% of its road investment programme. Over the past few years, the main transport sector donors (AFD, IDB) have financed up to 100% of the total cost of projects, exclusive of tax, in order not to discourage the Government’s efforts and commitment to finance the PARR and road maintenance. The road sub-sector also attracts virtually all the financing leveraged by donors with strong interest in that sub-sector.

1 As a reminder, in 2010, total investments amounted to CFAF 732.2 billion, i.e. EUR 732.2 billion III

3. The country’s budget situation and debt level The economic recession due to the global financial crisis resulted in a negative growth rate of -1.4% of GDP in 2009 compared to +2.3% in 2008. To address this situation, the Government took a series of measures which have contributed to economic recovery. Indeed, the country’s macroeconomic indicators have improved with a 5% growth rate in 2010, 2011 and 2012, and a 6% projection for 2013-2014. Under the ESMP, the implementation of an ambitious public investment programme and the upturn in mining sector activities resulted in a significant improvement in the fiscal balance from 0.2% of GDP in 2009 to 4.4% in 2011. This trend continued and, in 2012, the fiscal balance had reached 4.6%. The current account balance was 13.6% of GDP in 2009 and 16.4% in 2011, and it was expected to reach 16.6% of GDP in 2012. The outstanding external debt was estimated at 14.5% of GDP at the end of 2012, and is expected to continue to fall to 11.7% of GDP by the end of 2015. Domestic arrears were fully cleared under the Libreville Club 6 Agreement. Overall, a sound macroeconomic situation has enabled Gabon to obtain a risk level considered by the rating agencies to be moderate among African risk levels.

Table 1: Sovereign Risk Trend (2009 – 2012) Agency 2009 2010 2011 2012 FITCH BB- BB- BB- BB- S&P BB- BB- BB- BB- COFACE B B B B EIU BB BB BB BB Moderate Moderate Low ADB Low Risk Risk Risk Risk

2.3 While it is true that the efforts made by the country have begun to produce positive results, it should be noted that the Gabonese economy is heavily dependent on oil, which alone accounts for about 50% of GDP, 60% of tax revenue, and 80% of exports. This predominance of oil makes the economy vulnerable to external shocks. Furthermore, the sector has little trickledown effect on the rest of the economy (weak links), especially as regards job creation. 2.4 Thus, while Gabon now enjoys relative macro-economic stability, the situation remains fragile and aid continues to remain a major source of support for the country. Consequently, it is recommended to limit the counterpart contribution to 21.30% of the total project costs, exclusive of taxes, to partly finance the road and related works, as well as all the border bridge works and inspection, and operating costs of the executing agency and JMC.

IV

ANNEX A.3 The various procurement methods and contract amounts for the project are presented in Table 3.1 below. Table3.1 –Arrangements for ADB-financed Procurements

UA Million EXPENDITURE CATEGORIES Use of Bank’s Rules and Non-Bank financed Total Procedures Contracts * 1. GOODS Installation of pilot goods tracking & radio communication system on the PN- 1.1 0.93 [0.47] 0.93 [0.47] BZV road

2. WORKS 2.1 Development of the Ndendé-Doussala Section 57.46 [48.06] 57.46 [48.06] 2.2 Development of the border bridge and its connecting road 7.82 7.82 2.3 Rehabilitation of the Ngongo-Kibangou Section 5.24 5.24 2.4 Development of the Kibangou-Dolisie Section 84.83 [21.08] 84.83 [21.08] 2.5 Related Works in Gabon 3.06 [2.46] 3.06 [2.46] 2.6 Related Works in Congo 3.16 3.16 2.7 Construction and equipping of OSBP at the Gabon border 7.99 [5.99] 7.99 [5.99]

3. CONSULTING SERVICES 3.1 Ndendé-Doussala section works inspection and supervision 2.01 [2.01] 2.01 [2.01] 3.2 Works inspection and supervision for the border bridge and its connecting road 0.39 0.39 3.3 Works inspection and supervision of the Ngongo-Kibangou section in Congo 0.18 0.18 3.4 Works inspection and supervision for Kibangou-Dolisie Section in Congo 2.97 [1.48] 2.97 [1.48] 3.5 Sensitization on HIV/AIDS, road safety and the environment in Gabon 0.23 [0.23] 0.23 [0.23] 3.6 Sensitization on HIV/AIDS, road safety and the environment in Congo 0.47 [0.23] 0.47 [0.23] 3.7 Inspection and supervision of related works in Gabon 0.15 [0.12] 0.15 [0.12] 3.8 Inspection and supervision of related works in Congo 0.15 0.15 3.9 Inspection and supervision of the OSBP construction works 0.40 [0.20] 0.40 [0.20] 3.10 Support to the operationalization of the PNA OSCBO 0.13 [0.13] 0.13 [0.13] 3.11 Feasibility study and DD for the Ndende dry port in Gabon 0.80 [0.80] 0.80 [0.80] 3.12 Feasibility study and DD for the Dolisie dry port in Congo 0.80 [0.80] 0.80 [0.80] 3.13 Feasibility study on Pointe Noire by-pass road in Congo 1.07 1.07 3.14 Audit of road safety on the paved Lambaréné-Mouila section in Gabon 0.12 [0.12] 0.12 [0.12] 3.15 Support to the General Directorate of Road Safety in Gabon 0.65 [0.65] 0.65 [0.65]

3.16 Technical Assistance to ECCAS 2.59 [2.59]© 2.59 [2.59]© 3.17 Technical Assistance to the Executing Agency in Gabon 1.77 [1.77] 1.77 [1.77] 3.18 Support to the General Directorate of Equipment and Construction (LIW) 0.20 [0.20] 0.20 [0.20] 3.19 Project financial and accounting audits 0.27 [0.27] 0.27 [0.27] 3.20 Socio-economic impacts of project monitoring/evaluation 0.47 [0.47] 0.47 [0.47]

4. OTHERS 4.1 Operating costs of the Executing Agency in Gabon 1.28 1.83 4.2 Operating costs of the Executing Agency in Congo 0.55 0.55 4.3 Operating costs of the Joint Monitoring Committee (JMC) 1.05 1.05

BASE COST 189.72 [90.12] Physical Contingencies 18.97 [9.01] Financial Contingencies 9.12 [4.33] TOTAL COST 217.81 [103.46]

+ The figures in square brackets are those financed by ADF/ADB *The figures in this column represent amounts financed by the Government © Procurement on EU/Africa Fund Financing will follow Bank Rules and Procedures

Goods Procurements for goods above an amount of UA 200,000 per contract will be made through international competitive bidding using Bank standard bidding documents. This type of procurement concerns the installation of a pilot goods tracking and radio-communication system on the Pointe Noire-Brazzaville (MUA 0.93).

Civil Works Procurements for civil works above an amount of MUA 2 per contract will be made through international competitive bidding (ICB) without prequalification of bidders, using Bank standard bidding documents. The works comprise: 1) in Congo, (i) development of the Kibangou-Dolisie section (MUA 84.83).

V

2) in Gabon, (i) development of the Ndendé-Doussala section (UA 57.46 million), (ii) construction and equipping of an OSBP, including a weighing station (UA 7.99 million), and (iii) development of related works (UA 3.06 million) to be procured in a single lot comprising (a) the rehabilitation of 50 km of rural roads (UA 2.35 million), (b) the rehabilitation of socio-economic infrastructure (UA 0.63 million) and, (c) the drilling of 4 boreholes (UA 0.08 million).

Consultants  Consulting services will be acquired on the basis of a shortlist of consultants using the Quality-and Cost-Based Selection (QCBS) method: (i) Ndendé-Doussala section works inspection and supervision, (ii) Works inspection and supervision for Kibangou-Dolisie section, (iii) Inspection and supervision of related works in Gabon, (iv) Inspection and supervision of the OSBP construction works, (v) the Pointe Noire, Congo, OSCBO, (vi) Feasibility study and DD for Ndende dry port, (vii) Feasibility study and DD for Dolisie dry port, (viii) Feasibility study on Pointe Noire by-pass road, (ix) Audit of road safety on the paved Lambaréné-Mouila section, (x) Support to the General Directorate of Road Safety in Gabon, (xi) Technical Assistance to ECCAS [including the OSBP operationalization study, the study on harmonization of customs procedures and support to the implementation of human-elephant conflict mitigation measures], (xii) Technical Assistance to the Executing Agency in Gabon, (xiii) Support to the General Directorate of Equipment and Construction, and (xiv) Monitoring/evaluation of the project socio- economic impacts.

 The procurement of HIV/AIDS, road safety and environmental sensitization services will be made on the basis of shortlist of sub-regional non-governmental organizations (NGO) using the QCBS method.

 Consulting services for financial audits will be procured on the basis of a shortlist and the Least Cost Selection (LCS) method.

Shortlists for consulting services for amounts above UA 200,000 will be established following publication of an invitation for expressions of interest in UNDB and on the Bank’s Website, those for amounts below UA 100,000 may comprise entirely national consultants in accordance with the provisions of paragraph 2.7 of the Bank’s Rules and Procedures for the Use of Consultants, May 2008 Edition, Revised July 2012. For contracts not exceeding UA 200,000 for firms or UA 50,000 for individual consultants, the Borrower may restrict publication of the invitation for expressions of interest to national or regional newspapers. However, any eligible consultant who may, or may not, be a national of a regional member country may express the wish to be included in the shortlist.

VI

ANNEX A.4

DETAILED ECONOMIC ANALYSIS OF PROJECT

The economic analysis was conducted on the length of road covering the sections from Ndendé to Dolisie, i.e. 274 km, which concern this project; furthermore, it should be noted that the sections between Doussala and Kibangou (132 km) will not be paved during this phase, but will receive minimal improvements. The expected economic benefits of the project concern the impacts of opening up the area, improved mobility on the corridor, and increased agricultural production, as well as the development of commercial activities in the PA. For the purposes of the economic analysis, the benefits were determined on the basis of the “without project” and “with project” scenarios over a 20-year period for the main road. A 12% discount rate and residual value of 33% were used for the economic analysis. The economic analysis was conducted using the HDM.4 model.

The “without project” situation corresponds to the existing condition of the road without any improvements. It takes into account adequate maintenance measures on the existing road that are required to enable it to ensure a minimum continuous traffic flow. The “with project” situation factors in investments to be spread over a three-year period from 2015 to 2018, the year of the road’s commissioning, and a maintenance cycle determined by the model, both on the earth sections and on the sections to be paved. Calculation Assumptions The calculation assumptions used for the project economic analysis are described below. Costs The costs taken adopted for the project economic analysis are as follows: (i) the investment costs; (ii) vehicle operating costs; and (iii) road maintenance costs, comprising routine and periodic maintenance. a. Investment Costs The investment costs arise from the main road development works costs, including the border bridge and its access roads in the “with project” situation. b. Vehicle Operating Costs (VOC) The operating costs of the various categories of vehicles in the “without project” and “with project” situations are calculated using the HDM-IV model on the basis of traffic data and degree of pavement degradation. c. Road Maintenance Costs Road maintenance costs are also calculated on the basis of the HDM-IV model in the “with project” and “without project” situations. Maintenance works in the “with project” situation on the earth road sections between Doussala and Kibangou (132 km) are broken down as follows: (i) routine maintenance works (labour-based maintenance [lengthsman system], periodic actions, leveling); and (ii) periodic maintenance (laterite resurfacing, road structure maintenance). In the “without project” situation, fairly high routine and periodic maintenance costs are required to provide an acceptable level of service on the existing earth road, but it is seriously degraded in some places, especially between Kibangou and Ngongo. Maintenance of the paved sections in the “with project” situation, taking into account the fact that the pavement was sized to support traffic over a 20-year period, is also broken down as follows: (i) routine maintenance work (labour-based maintenance [lengthsman system], filling in potholes); and (ii) periodic maintenance (resurfacing, maintenance of road and hydraulic structures and shoulders). Benefits VII

For the purposes of the economic analysis, the benefits were determined on the basis of the “without project” and “with project” scenarios over a 20-year period for the main road. There are several types of economic benefits: (i) savings on road maintenance costs; (ii) savings on vehicle operating costs (VOC); (iii) savings on motorized traffic journey times; (iv) benefits related to job creation during the works implementation phase; and (v) the agricultural surplus generated. The savings on VOC took into account overall traffic (normal, derived and induced) for each homogeneous road section and the various vehicle operating costs. The traffic studies conducted in February/March 2010 helped to determine the average annual daily traffic (AADT) on the project road link, as well as induced traffic. Traffic in the baseline situation on the basis of the gravity model gives the following results for the Ndendé to Dolisie road section, i.e. 274 km. Table 4.1 : Weighted Average Daly Traffic Light Mid-sized Heavy Articulated Year PV 4x4 Van Minibus Bus Total Truck Truck Truck Truck 2012 82 75 114 2 3 33 12 41 77 439 2013 87 80 121 2 3 35 13 43 81 466 2014 92 84 129 2 3 37 14 46 86 494 2015 98 90 137 3 4 40 14 48 91 524 The projects were based on a growth rate correlated with economic growth, i.e. 6.1% for Light Vehicles (LV) and 6% for heavy vehicles (HV) between 2016 and 2026, and 5.3% and 5.2% respectively for subsequent years. Determination of induced traffic takes into account the state of degradation of some road sections. This traffic induced by an improvement in the technical characteristics of the project road link will be effective as from the commissioning of the structures.

The vehicle operating cost (VOC) savings were estimated using the HDM-IV model and involved determining the difference in VOC in the “with project” and “without project” situations on the basis of corresponding traffic projections. The benefits were calculated by multiplying the annual volume of traffic for each vehicle category by the VOC savings. The savings considered were Savings on road maintenance costs corresponding to the difference between the “without project” maintenance costs and the “with project” costs, and exogenous benefits resulting from income generated by the creation of direct jobs during works implementation and from increased agricultural production in the area, measured in terms of value added for crops such as cassava, groundnut, maize, oil palm, onion, plantain banana, butter fruit trees, cocoyam, citrus fruit, coffee, etc. Other less quantifiable benefits are, nevertheless, factors that enhance the project’s economic viability. These are: (i) the elimination of damage caused by the impassability of the road in the rainy season; (ii) benefits related to the rehabilitation of socio-economic infrastructure; (iii) facilitation of the deployment of units responsible for territorial and forest and wildlife resource surveillance; and (iv) facilitation of access by the population to social and administrative services (education, health, local administrations).

With these different data and cost estimates of works and works supervision, excluding price escalation, annual routine maintenance costs and periodic maintenance costs, an economic rate of return (ERR) of 20.08% corresponding to the baseline scenario was obtained for the project. This rate exceeds the opportunity cost of capital estimated at 12%. The economic rates of return (ERR) and the net present values corresponding to the “without project” and “with project” situations, as well as the results of the project sensitivity tests are presented in the tables below.

Table 4.2: Project Economic outcomes VIII

Exogenous Year Investments Road Maintenance VOC Savings User Time Savings Total Benefits Cost Savings 2015 -66 482 000 000 745 470 000 3 578 265 069 62 158 264 931 2016 -49 861 500 000 745 470 000 2 683 698 802 46 432 331 198 2017 -49 861 500 000 745 470 000 2 683 698 802 46 432 331 198 2018 745 470 000 27 429 876 607 2 088 536 950 61 132 000 30 325 015 556 2019 441 760 000 29 083 224 596 2 215 937 703 61 132 000 31 802 054 300 2020 441 760 000 30 836 234 344 2 351 109 903 61 132 000 33 690 236 247 2021 441 760 000 32 694 913 669 2 494 763 490 61 132 000 35 692 569 159 2022 441 760 000 34 665 632 575 2 646 944 063 61 132 000 37 815 468 638 2023 441 760 000 36 755 145 084 2 808 407 651 61 132 000 40 066 444 735 2024 441 760 000 38 970 612 392 2 979 720 518 61 132 000 42 453 224 910 2025 441 760 000 41 319 627 413 3 161 483 469 61 132 000 44 984 002 882 2026 441 760 000 43 810 240 810 3 354 333 961 61 132 000 47 667 466 771 2027 -21 342 530 000 46 332 888 818 3 532 119 823 61 132 000 28 583 610 641 2028 441 760 000 48 909 056 944 3 719 328 711 61 132 000 53 131 277 655 2029 441 760 000 51 629 107 853 3 916 460 070 61 132 000 56 048 459 922 2030 441 760 000 54 501 114 030 4 124 032 453 61 132 000 59 128 038 484 2031 441 760 000 57 533 602 917 4 342 606 173 61 132 000 62 379 101 091 2032 441 760 000 60 735 582 662 4 572 764 300 61 132 000 65 811 238 963 2033 441 760 000 64 116 569 341 4 815 120 808 61 132 000 69 434 582 149 2034 441 760 000 67 686 615 726 5 070 322 211 61 132 000 73 259 829 937 2035 441 760 000 71 456 341 689 5 339 049 288 61 132 000 77 298 282 977 2036 441 760 000 75 436 966 336 5 622 018 901 61 132 000 81 561 877 237 2037 61 495 850 000 -21 342 530 000 79 640 341 972 5 919 985 902 61 132 000 125 774 779 874 Table 4.3: Summary of Economic Analysis Results IRR NPV Baseline Scenario 20.08% CFAF 107 307 652 516 ERR/Assumption of a 20% reduction in cumulated 19.91% CFAF 105 793 747 292 benefits ERR/assumption of a 20% increase in investment and 17.31% CFAF 81 295 454 743 516 recurrent costs ERR/Assumption of a combined 20% increase in the 17.00% CFAF 79 781 549 519 investment cost and 20% reduction in traffic

Thus, by conducting a sensitivity test (20% increase in the project cost and 20% reduction in benefits), the project ERR finally settles at 17% with a positive net present value of over CFAF 79 billion. This rate exceeds the opportunity cost of capital estimated at 12%. The project is therefore economically viable for the community.

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