COUNTRY : GABONESE REPUBLIC
APPRAISAL REPORT
Public Disclosure Authorized DATE: 3 SEPTEMBER 2018
GABONESE REPUBLIC: WATER AND SANITATION SECTOR DEVELOPMENT PROGRAMME - FIRST LIBREVILLE INTEGRATED DRINKING WATER SUPPLY AND SANITATION PROGRAMME (PIAEPAL) - DRINKING WATER COMPONENT
Public Disclosure Authorized
RDGC/AHWS/GOGA
September 2018
Translated Document
TABLE OF CONTENTS
I – STRATEGIC THRUST AND OBJECTIVES ...... 1 1.1. PROJECT LINKAGES WITH COUNTRY STRATEGY AND OBJECTIVES ...... 1 1.2. RATIONALE FOR BANK’S INVOLVEMENT ...... 1 1.3. AID COORDINATION ...... 2 II – PROJECT DESCRIPTION ...... 3 2.1. PROJECT COMPONENTS ...... 3 2.2. TECHNICAL SOLUTIONS ADOPTED AND ALTERNATIVES EXPLORED ...... 5 2.3. PROJECT TYPE ...... 6 2.4. PROJECT COST AND FINANCING ARRANGEMENTS ...... 6 2.5. PROJECT AREA AND BENEFICIARIES ...... 7 2.6. PARTICIPATORY PROCESS ...... 7 2.7. BANK GROUP AND EXPERIENCE REFLECTED IN PROJECT DESIGN ...... 8 III – PROJECT FEASIBILITY ...... 8 3.1. PROJECT ECONOMIC AND FINANCIAL PERFORMANCE ...... 8 3.2. ENVIRONMENTAL AND SOCIAL IMPACT ...... 9 IV IMPLEMENTATION ...... 11 4.1. IMPLEMENTATION ARRANGEMENTS ...... 11 4.2. MONITORING ...... 14 4.3. GOVERNANCE ...... 14 4.4. SUSTAINABILITY ...... 15 4.5. RISK MANAGEMENT ...... 16 4.6. KNOWLEDGE BUILDING ...... 16 V – LEGAL FRAMEWORK ...... 16 5.1. LEGAL INSTRUMENT ...... 17 5.2. CONDITIONS FOR BANK INVOLVEMENT ...... 17 5.3. COMPLIANCE WITH THE BANK POLICIES ...... 18 5.4. RECOMMENDATION ...... 18
Annex 1: Comparative Socio-economic Indicators of the Country Annex 2: Key Related Projects Financed by the Bank and other Development Partners Annex 3: Map of the Project Area Annex 4: Justification for Reducing Gabon's Counterpart Funding Annex 5: Logical Framework for the Drinking Water Supply and Sanitation Sector Development Programme in Gabon
Currency Equivalents (June 2018) Currency Unit UA 1 = CFAF 794.31 UA 1 = CFAF 1.21092 EUR 1 = CFAF 655.00
Fiscal Year
1 January – 31 December
Weights and Measures
1 tonne (t) = 2204 pounds 1 millimetre (mm) = 0.03937 inches 1 cubic metre (m³) = 1000 litters 1 kilometre (km) = 0.62 mile 1 metre (m) = 3.28 feet 1 hectare (ha) = 2.471 acres
Acronyms and Abbreviations
ADF : African Development Fund AFD : French Development Agency AfDB : African Development Bank ARSEE : Water and Electricity Sector Regulation Agency CNEE : National Water and Electricity Council DWS : Drinking Water Supply DWSS : Drinking Water Supply and Sanitation EU : European Union ESMP : Environmental and Social Management Plan IWRM : Integrated Water Resources Management NGO : Non-Governmental Organization PCU : Project Coordination Unit PD : Preliminary Design PGRHA : Water Resources Management and Sanitation Programme PIAEPAL : Libreville Integrated Water Supply and Sanitation Programme PSGE : Emerging Gabon Strategic Plan SEEG : Société d’Energie et d'Eau du Gabon (Gabon Water and Power Utility) SP : Société de Patrimoine (Assets Company) STEP : Treatment and Purification Plant TFP : Technical and Financial Partners UA : Unit of Account WB : World Bank WHO : World Health Organization
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PROJECT INFORMATION
Client Information DONEE/BORROWER : Government of the Gabonese Republic
EXECUTING AGENCY : Ministry of Water and Energy 852 Boulevard Triomphal Libreville B.P. 1172 Libreville Gabonese Republic Tel: (241) 01721514 Email: [email protected]
Financing Plan Source Amount (UA) Instrument AfDB 96.95 million Loan
TOTAL COST 96.95 million
AfDB's Key Financial Information ______Loan Currency Euro (EUR) [or any other acceptable currency]
Type of Loan Fully flexible loan
Maturity 20 years
Deferred amortization 5 years
Weighted Average 12.75 years Maturity**
Reimbursements Half-yearly payments at the end of the deferred amortization period.
Interest Rate Base rate + Funding margin + Lending spread + Maturity premium. This interest rate must be above or equal to zero.
Base Rate: Floating (EURIBOR 6 months revised every 1st February and 1st August), with a free floating base rate option.
Financing Cost Margin The Bank's financing cost margin revised every 1st January and 1st July and applied every 1st February and 1st August with the base rate.
Lending Spread 0 basis points (0.8%)
Maturity Premium 0.00%
Front-end Fees 0.25% of the loan amount payable latest on the date of signature of the loan Agreement.
Commitment Fee 0.25% per year on the undisbursed amount. It shall become effective 60 days following the date of signature of the loan agreement and shall be payable on the due dates.
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Base Rate Conversion Besides the free fixing option, the Borrower may revert to the Option* floating rate or reset the rate on all or part of the disbursed amount of its loan. Transaction fees apply.
Rate Cap or Collar Option* The Borrower may cap or collar the base rate for all or part of the disbursed amount of its loan. Transaction fees apply.
Loan Currency Conversion The Borrower may change the currency of all or part of its loan, Option* : whether disbursed or not, into another loan currency of the Bank. Transaction fees apply.
FRR, NPV (base case CFAF 10,401.70 billion at 12% discount rate scenario)
ERR (base case scenario) 13.59%
*where applicable
Timeframe-Main Milestones (expected)
Concept Note Approval May 2018 Project Approval September 2018 Effectiveness December 2018 Last Disbursement June 2023 Completion December 2022
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Executive Summary
1. Project Overview: Libreville's first Integrated Water Supply and Sanitation Sub- Programme is part of Government's programme to develop the Drinking Water Supply and Sanitation (DWSS) sector. The achievements envisaged under this vast programme stem from the ambition to guarantee, by 2025, sustainable universal access to drinking water and sanitation in a healthy and improved living environment nationwide. PIAEPAL aims to strengthen and improve drinking water and sanitation services in Greater Libreville. It will cost UA 200 million. The Government requested funding from the Bank for the drinking water component of this sub-programme, which involves building the institutional capacity of the DWSS sector, reinforcement and a 280-kilometre extension of the drinking water network in Greater Libreville comprising the Libreville, Akanda, Owendo and Ntoum municipalities, and preparation of the next phase in the form of a project. The total cost of the component to be financed by the Bank is UA 96.95 million. It is scheduled to be implemented over a 4-year period.
2. The project will generate considerable and tangible positive socio-economic and environmental benefits for the 920,000 inhabitants of Greater Libreville and the natural environment: (i) a regular supply of safe drinking water in sufficient quantities; (ii) time savings especially for women who are often forced to wait long hours at night to fetch water; and (iii) significant savings on household budgets as a result of fewer incidents of waterborne diseases, malaria and the improvement of living conditions in general. Stakeholder involvement is crucial for investment sustainability. Initiated during the project identification and preparation missions, this process continued through the ESIA, including public consultations and meetings with the appraisal mission, and will be maintained during the implementation phase.
3 Needs Assessment. The city's current drinking water production capacity is 230 000 m3/d against a production need of 280 000 m3/d, i.e. a deficit of 50 000 m3/d. To meet Greater Libreville's water needs up to 2035, the Drinking Water Master Plan prepared in March 2016 recommended the completion of work on the future Ntoum 7 drinking water production plant. The Government plans to start work on the plant in early 2019 through a public/private partnership. The facility is expected to provide an additional 140 000 m3/d. Unfortunately, poor management of the sub-sector and the current state of the drinking water distribution network, characterized by a low rate of return due to the obsolescence of the pipes, render such an additional supply unprofitable. The drinking water distribution network in Greater Libreville risks further deterioration if measures are not taken to improve its rate of return. Building the institutional and organizational capacity of key stakeholders, and partial network renewal and consolidation will help to improve the rate of unbilled drinking water, as it will drop from around 48% to 5%, and to provide drinking water to several uncovered areas of Greater Libreville.
4. Bank's Value-added. This is the first major operation in the water sector in Gabon, which is a key and visible human development sector for the country. Moreover, the Bank, through the African Water Facility, had financed a rainwater sanitation study in Libreville and another study as part of the integrated water resources management in Central Africa. All this will give the Bank a clear comparative edge.
5. Knowledge Building. A monitoring and evaluation system will be set up within the Ministry of Water and Power to provide input to populate the geo-referenced database of water resources and drinking water supply structures.
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In light of the needs expressed, the expected project outputs will contain the health risk linked to the population's lack of access to drinking water in Libreville. Similarly, the Bank will support the Government by providing guidance on the reforms needed to transform the water and sanitation sector. Therefore, it is recommended that the Bank grant a loan of EUR 117.40 million (UA 96.95 million) from the ADB window to the Gabonese Republic to finance the consolidation and extension of the drinking water supply network under the Libreville Integrated Drinking Water Supply and Sanitation Programme (PIAEPAL).
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Project Implementation Schedule
Years 2018 2019 2020 2021 2022 2023 Activities / Month T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 Prior to start-up Board Presentation/Approval Publication of General Procurement Notice Signature of Loan Agreement Effectiveness Conditions precedent to first disbursement Launch mission Activities related to DWS works in Libreville
Monitoring and control of renovation works Works to renovate existing network Supervision and control of new works New works (extension and reinforcement) Repair of leakages in administrative buildings Implementation and Monitoring of the ESMP and Compensation IEC Activities related to stakeholder capacity building Procurement of vehicles, IT hardware and office Variousequipment trainings for sector stakeholders Institutional and Tariff Sector Study So cio - Eco n o m ic an d Gen der Sect o r St udy Libreville Rainwater Drainage Study Study on the Operationalization of Solid Waste AssetsManagement Management Study of Urban DWSS Works Maps of Water Resources and WATER-GIS Coordination and Management Activities Technical assistance to the PCU Preparation of procedures manuals Annual audit of accounts Final audit of accounts Completion Report From Gabon From AfDB
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Results-Based Logical Framework GABON: GABON INTEGRATED DRINKING WATER SUPPLY AND SANITATION PROGRAMME - First Libreville Integrated Drinking Water Supply and Sanitation Sub-Programme (PIAEPAL) - Drinking Water Component Programme Goal: Contribute to improving access to drinking water for the people of Gabon. PERFORMANCE INDICATORS RISKS/ RESULTS CHAIN Indicator MEANS OF VERIFICATION Baseline Situation Target MITIGATION MEASURES (including ISC)
Contribute to improving the living conditions of the 1. Prevalence rate of waterborne 1. 45% in 2018 1. Below 20% in 2025 Sources: PRE, Survey 1-2-3, MICS, Gabonese people diseases EDS Méthode: National Surveys and
IMPACT Reports
Outcome 1: Drinking water supply in Libreville has 1.1 Drinking water access rate; 1.1 55% for drinking water 1.1 75% in 2022 for drinking water; Sources: Reports of the Ministry of Risks improved as a result of work under Component I of the 1.2 Rate of unbilled drinking water in 2018; 1.2 5% unbilled drinking water rate in 2022; Water, SEEG activity reports, project Lack of experience by the Ministry of Water in PIAEPAL programme. 1.3 Population with access to 1.2 Rate of unbilled 1.2 300 000 additional people will be connected activity and Bank supervision reports carrying out programme activities and issues of drinking water drinking water in in 2022; coordination between the various stakeholders within 2018- 48%.
the integrated water resources management system. 1.3 550 000 people Mitigation Measures connected in 2018. Preparation of the Water Code. Capacity-building
measures to strengthen the administrative capacity of the Ministry of Water and Energy through technical OUTCOMES assistance. A Programme Steering Committee should Outcome 2: Libreville residents have a better living 2.1 Cumulative duration of floods 2.1 70 days of flooding in 2.1 Not exceeding 38 days of flooding in 2022 Sources: Reports of the Ministry of be established to bring together all the parties environment because of the decrease in the frequency of 2.2 Population affected by floods 2017 2.2 No one is affected by flooding following Water, Reports of the Office of involved and coordination activated among them floods after the network rehabilitation works. following low rainfall 2.2 35 000 people affected low rainfall in 2022; Meteorology and the Libreville City within the framework of IWRM. by floods following Council low rainfall in 2017.
Component 1: Infrastructure Development 1.1 Network length in kilometres; 1.1 175 km of drinking water network restored; Risks 1.2 Linear length of the rehabilitated 1.2 131 km of drinking water network extended; Delays due to unfamiliarity with the Bank's rules of Output 1.1. Drinking water system extension; network in kilometres; 1.4. 2 200 temporary jobs created, of which procedure Output 1.2. Drinking water system renovation; 1.4 Number of temporary jobs 25% for women. Mitigation Measures Output 1.4 Temporary jobs created; created Training on the Bank's rules of procedure
Component 2 : Improve Sector Governance and Build 2.1 Number of office equipment 2.1 8 Vehicles; 90 office equipment; 50 IT Sources Reports of the Ministry of Capacity procured and supplied; equipment; Water and Energy, Project Activity Output 2.1 The ministries involved in project activities 2.2 Number of Management Unit 2.2 Members of the Management Unit trained; and Bank Supervision Reports equipped and strengthened; members trained; (30% women?) Output 2.2 Members of the Management Unit are 2.3 Number of sector stakeholders 2.3 10 persons drawn from sector stakeholders trained in procurement, financial management and trained; trained; (30% women?) project management with a gender perspective; 2.4 Number of service quality 2.4 2 Instruments (management contract and Output 2.3 Sector stakeholders (SP, SEEG, Ministry of monitoring tools prepared; sector roadmap prepared); Water) trained; 2.5 Number of studies carried out 2.5 (07) Studies conducted; Output 2.4 Tools for monitoring the quality of public with action plans implemented; 2.6 6 Offices rehabilitated and equipped.
OUTPUTS water services developed and operational; 2.6 Number of offices rehabilitated Output 2.5 Studies conducted (storm water drainage and equipped. infrastructure, wastewater, tariffs, etc.) Output 2.6 The DG-WATER work environment improved.
Component 3 : Project Management 3.1 Number of progress reports; 3.1 18 Progress reports with a gender, Output 3.1.Project management activities ensured 3.2. Number of audit reports participation and inclusion perspective Output 3.2. Accounts Audit accepted; 3.2 5 Audit reports Output 3.3. Financial Monitoring 3.3. Number of financial reports 3.3 18 Reports Output 3.4. Monitoring of the ESMP implementation 3.4 Number of monitoring missions 3.4 8 Monitoring missions
COMPONENTS RESOURCES
COMPONENT 1 : Infrastructure Development : 89.06 (%) UA 86.34 million COMPONENT 2 : Improve Sector Governance and Build Capacity : 7.69 (%) UA 7.46 million COMPONENT 3 : Project Management : 3.25 (%) UA 3.15 million Total Project Cost: UA 96.95 million ADB UA 96.95 million MAIN ACTIVITIES
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REPORT AND RECOMMENDATION OF BANK MANAGEMENT TO THE BOARD OF DIRECTORS CONCERNING A PROPOSAL TO GRANT A LOAN TO THE GABONESE REPUBLIC TO FINANCE THE DRINKING WATER COMPONENT OF THE LIBREVILLE INTEGRATED DRINKING WATER SUPPLY AND SANITATION PROGRAMME (PIAEPAL)
Management hereby submits this report concerning a proposal to grant a loan of EUR 117.40 million (UA 96.95 million) from the ADB window to the Gabonese Republic to finance the consolidation and extension of the drinking water supply network component under the Libreville Integrated Drinking Water Supply and Sanitation Programme (PIAEPAL).
I. STRATEGIC THRUST AND OBJECTIVES
1.1 Project Linkages with Country Strategy and Objectives
1.1.1 Gabon’s Integrated Drinking Water Supply and Sanitation Programme is in line with the Emerging Gabon Strategic Plan (PSGE 2011-2025), which is structured around four main thrusts: (i) sustainable human development; (ii) governance; (iii) human capital; and (iv) infrastructure. It is in compliance with the 2014 Social Pact, which focuses on economic redistribution and inclusion as part of the fight against poverty, particularly in terms of access to minimum social standards. This Pact is based on the strategic objectives and priority actions under PSGE's Water and Sanitation Sector Plan, in particular Objective 19 aimed at guaranteeing universal access to drinking water and sanitation services. The project is consistent with the expected achievements of the PIAEPAL Programme, which include improving drinking water supply by upgrading the water distribution and storage network in Libreville, and strengthening the capacity of public drinking water supply and sanitation services at various levels to ensure Gabon’s integrated water resources management.
1.1.2 The programme aligns with the Bank's intervention strategy in Gabon (CSP 2016-2020), particularly under Pillar 2: Support to the human development strategy. Improving the living environment, particularly through access to drinking water supply and sanitation services, contributes to human resources development. The programme is consistent with the orientations of the Bank's Ten- Year Strategy 2013-2022, which focuses on infrastructure development for inclusive growth. It also plugs into the Bank's Urban Development Strategy and the five operational priorities (the High 5s, especially as concerns improving the quality of life for the people of Africa), which reinforce the Ten-Year Strategy. Furthermore, the programme supports women’s integration and empowerment, through the conduct and implementation of findings of a social and gender study, and the creation of temporary jobs for women during the implementation phase.
1.2. Rationale for Bank’s Involvement
1.2.1 The current situation of the water and sanitation sector in Gabon is of concern: (i) despite the provision of approximately 128 000 m3 of fresh water per person per year, less than 55% of the population has access to drinking water in urban areas; (ii) the urban sanitation access rate is estimated at 45.70%; (iii) the rural access rate to these basic services is still low (less than 40% of rural dwellers); (iv) whereas SEEG’s total losses (technical and commercial) in 2010 were estimated at 33% (63 million m3 sold compared to 82 million m3 produced), 2017 projections stand at 48%. The sector's organisation is weak and the network is extremely outdated. Moreover, (a) less than 9% of the urban population benefits from a social connection (out of 175,421 subscribers, only 15,677 are social subscribers and the others, i.e. 159,744, are normal subscribers), and (b) nationwide, drinking water supply has been
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structurally deficient for about ten years, resulting in "water stress throughout the country, and especially in Port-Gentil and Libreville".
1.2.2 To operationalise the PSGE, the Government prepared a Water and Sanitation Sector Plan with the following objectives: (i) achieve integrated water resources management; (ii) ensure universal and sustainable access to safe drinking water and sanitation services in Gabon; (iii) provide quality services; (iv) improve users' habits to take sustainable development into account; and (v) consider the drinking water supply and sanitation sector as a significant vector for the country's economic development. A Multi-Year Water Resources Management and Sanitation Programme (PGRHA) with targets and indicators for 2012-2020 was also developed. Through this programme, the Government is shifting from a policy of managing works to that of integrated management of the country's water resources. Although the implementation of the PGRHA began between 2012 and 2014, it could not attain its objective due to lack of financial resources: of the CFAF 34.68 billion requested as budget for the PGRHA in 2014, only CFAF 18.72 billion was committed, drastically reducing the investment scope. No funding was provided between 2015 and 2018. The Ministry of Water and Energy simply updates the programme sheets.
1.2.3 Meanwhile, the performance of the Libreville DWS network installed during the early years of independence has been on the decline. It has continued to deteriorate and is quite outdated, with a current output of 52%. From September to December 2014, SEEG detected 273 leakages on the network. From January to March 2015, the leakages rose exponentially to 1029. According to data from the Laboratory of Public Buildings and Works (Laboratoire des Bâtiments et Travaux Publics du Gabon), the capital's sandy subsoil is saturated with water in all season because of these leakages, which exacerbate the frequency of flooding even after light rains. The Government is of the view that there is an urgent need to invest in the rehabilitation of Libreville's drinking water network. Moreover, given the current institutional difficulties linked to the departure of Veolia Environnement, the French service provider (water, waste management, energy and transport), and the weakness of certain key sector stakeholders, the rehabilitation can no longer be deferred without exposing the capital to a very critical health situation.
1.3 Aid Coordination
1.3.1 There is no formal aid coordination in the water and sanitation sector. Occasional meetings are sometimes organised during various missions. It is worth noting that most of the Technical and Financial Partners (TFPs) are currently not active in the sector. However, discussions with AFD during the preparation of this operation provided an opportunity to agree on the need to strengthen coordination through quarterly meetings during which possibilities for collaboration and harmonisation of interventions in the sector will be explored. Similarly, the Government supports the idea of setting up a sector think tank with AfDB and World Bank support. This group will bring together all key players in the sector and will initially address issues related to sector reforms. It will lay the foundations for the establishment of a "water and electricity" thematic group. The Bank's role in the sector is strengthened by its efforts in coordinating the sector, both with sector officials and other TFPs.
1.3.2 The consultation helped to explore possibilities for complementarity of actions envisaged under this operation with those underway or planned by other donors. The World Bank has agreed to support the Government in its reflection on sector reforms through the recruitment of consultants to lead focus group discussions. The French Development Agency (AFD) is examining the feasibility of participating in financing some of the activities selected under this first PIAEPAL sub-programme. UNESCO and WHO will take part in activities related to water resources assessment and the IWRM Action Plan. Efforts are being made to attract other partners.
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Table 1.1: TFP Financing in the Water and Sanitation Sector Sector/Sub-Sector GDP Export Labour Water and Sanitation - - -
Stakeholders – Annual Public Expenditure in EUR Million (Average 2012-2017) Government/ AFD EIB WB IsDB AfDB Others (UN Beneficiaries (AWF) System, etc.) 45.00 110.00 72.00 53.70 45.00 1.60 0.01 Level of Aid Coordination Existence of Thematic Working Groups (Water and Sanitation) NO Existence of a Comprehensive Sector Programme (Water and Sanitation) YES
II. PROJECT DESCRIPTION
2.1. Project Components
2.1.1 The project is structured around the following main components: (A) development of DWS infrastructure including: (i) renovation of 149 km of the Libreville water supply network, (ii) reinforcement and extension of 131 km of the Libreville water supply network; and (iii) repair of leakages in administrative buildings; (B) improvement of sector governance and capacity building, including : (i) equipping beneficiary ministries; (ii) training the main stakeholders; (iii) technical studies for infrastructure development and knowledge of water resources; (iv) sector studies and assistance for institutional reform of the sector; and (C) project coordination and management, including: (i) equipment for the Coordination Unit; (ii) technical assistance for project implementation; and (iii) operating costs. Details of the components and sub-components are shown in Table 2.1 below.
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Table 2.1 : Project Components and Cost
Name of Component / Sub- Estimated Cost Estimated Cost Component (CFAF billion) (UA million) Component Description A Development of DWS 68.95 86.81 Infrastructure Sub-Component A.1 37.20 46.83 141,520 lm network renewal, including tanks Renewal of the existing network and accessories
Sub-Component A2 21.88 27.55 Network strengthening and extension on Strengthening and 131,000 lm, including tanks and accessories extension of the DWS network Sub-Component A3 4.22 5.43 Repair of leakages in administrative buildings Repair of leakages in administrative and installation of 1318 connections and 60 buildings standpipes Sub-Component A4 1.09 1.37 Monitoring and control of network renewal Monitoring and control of renovation works works Sub-Component A5 0.89 1.12 Monitoring and control of reinforcement and Supervision and control of new works extension works Sub-Component A6 0.20 0.25 Information, education, communication and IEC and gender campaigns gender campaigns Sub-Component A7 0.12 0.19 Implementation of ESMP activities Implementation of the ESMP
B Improvement of Sector 5.14 6.47 Governance and Capacity Building
Sub-Component B1 0.21 0.24 Computer hardware, furniture and vehicles Equipping beneficiary Ministries
Sub-Component B2 0.20 0.43 Training of several Gabonese stakeholders Training Sub-Component B3 4.46 5.61 Technical and sector (institutional) studies, and Sector reform studies and assistance assistance for the implementation of the water policy Sub-Component B4 0.35 0.44 Rehabilitation of the annex building of the Rehabilitation of the DG-Water Directorate General for Water for the Project Annex for the CU Coordination Unit
C Project Coordination and 2.92 3.68 Management Sub-Component C1 0.41 0.652 PCU computer equipment, furniture and PCU Equipment vehicles Sub-Component C2 0.48 0.61 Consultancy services to support project Support Consultants Fees management and coordination Sub-Component C3 0.06 0.07 Project audit services and preparation of Audits and Procedure Manuals procedure manuals Sub-Component C4 1.20 1.50 Allowances for local staff assigned to the PCU Personal allowances project Sub-Component C5 0.20 0.25 Costs of missions to monitor activities Mission expenses Sub-Component C6 0.07 0.9 PCU vehicle fuel and maintenance costs Vehicle operating costs Sub-Component C7 0.31 0.33 Various management costs (paper, telephone, Miscellaneous printing, etc.) management/coordination charges 4
2.2 Technical Solutions Adopted and Alternatives Explored
2.2.1 The project's technical design is based on: (i) the studies of the Greater Libreville Drinking Water Supply Master Plan up to 2035 finalised in 2017; and (ii) the detailed technical studies carried out by SEEG in 2018 to determine the volume of renewal and extension/reinforcement works required at an initial phase. Several alternative technical scenarios were examined to ensure a sustainable service at the best possible cost for the Greater Libreville DWS. The following technical solutions were selected after modelling: (i) supply Ntoum Centre and the Ntoum-Libreville line up to PK 9 by segmenting the DN 450 line into three pressure ranges with a 1,500 m3 tank at the head of the network fed by the DN 1200 line, the rehabilitation of an existing 1,000 m3 tank in Nzembourg and the rehabilitation of the existing 1,000 m3 tank, the construction of one (1) new tank in Bikélé with a total capacity of 1,500 m3, the construction of a 200 m3 water tower in Meba (Ntoum Municipality) and finally the closure of all bypasses between the DN 450 and DN 800 pipelines; (ii) extend the network in areas where it already exists but lacks a tertiary or even secondary network, where network densification and connections are problematic; (iii) limit storage autonomy to 6.5 hours.
Table 2.2: Alternative Solutions Explored and Reasons for Rejection Alternative Brief Description Reason for Rejection
Maintain distribution The distribution of drinking water from Modelling has shown the inefficiency of this at Ntoum Centre and Ntoum Centre and the Ntoum-Libreville system, which cannot ensure either the flows or on the Ntoum- axis to PK 9 is ensured by the DN 450 the pressures required in the area considered Libreville axis as is. pipeline, fed by the DN 800 pipeline. The over the project time frame. two pipelines are connected.
Use local water Supply Cap Esterias and Cap Santa Clara Even though it represents only 5% of sources with groundwater from 17 boreholes 100 Libreville's total consumption, the supply of m deep in the sandstone area. drinking water to the northern districts of the city from local water resources presents a real risk. The water in this area can be easily contaminated on the surface and its use poses the risk of upwelling brackish water.
Ignore areas with low Districts connected to the network but The outcome of a study carried out on the network without sufficient densification. Nomba Octra pilot sector revealed a significant densification and loss after meters were installed on the expand only in new “spaghetti” HDPE connections in the sector. areas
Ensure a 12-hour This solution requires the construction of This solution entails an additional cost of storage autonomy a 76,000 m3 capacity storage and CFAF 35.5 billion and was not retained under accessory works. this project.
2.3. Project Type
This is a standalone operation in the form of a loan from the ADB window for an investment project. Its expected duration is 48 months.
2.4. Project Cost and Financing Arrangements
2.4.1 The project's estimated cost, excluding taxes and customs duties, is EUR 117.40 million (UA 96.95 million), of which 81.3% in foreign exchange and 18.7% in local currency. It includes provisions 5
for physical contingencies (5%) and an annual price escalation of 2%. Detailed costs by component and expenditure category are provided in the technical annexes attached to this report. The People’s Bank of China through AGTF has shown interest in co-financing up to 50.86 million EURO project activities (UA 42.00 million). The cost table will be refitted if necessary.
Table 2.3: Estimated Cost by Component (excluding taxes and customs duties)
Components CFAF billion UA million Foreign L.C. Foreign Total L.C. Foreign Total Exchange Exchange Exchange %
Component A – Infrastructure 13.79 55.16 64.45 11.68 69.45 81.13 71.63 Development Component B – Improve Sector Governance 0.56 4.58 4.81 1.15 4.90 6.05 89.09 and Capacity Building Component C – Project 2.82 0.10 2.73 3.55 0.11 3.44 4.41 Coordination and Management Total Base Cost 14.29 57.70 71.99 16.38 74.46 90.62 81.79 Provision for Physical Contingencies 0.71 2.88 3.60 0.82 3.72 4.52 76.37 Provision for Price Escalation 0.28 1.54 1.43 0.33 1.49 1.81 76.79 Total Project Cost 15.28 61.73 77.02 17.28 79.67 96.95 81.23
Table 2.4: Sources of Financing Sources of Financing CFAF billion UA million Total L.C. Foreign Total L.C. Foreign Total % Exchange Exchange ADB 15.28 61.73 77.02 17.28 79.67 96.95 100 Total Project Cost 15.28 61.73 77.02 17.28 79.67 96.95 100
Table 2.5: Project Cost by Expenditure Category for the Part Financed by the Bank
Expenditure Categories CFAF billion UA million Foreign L.C. Foreign Total L.C. Foreign Total Exchange Exchange Exchange %
Goods 0.06 0.15 0.21 0.07 0.717 0.24 91.57 Works 15.64 48.81 64.45 19.68 61.45 81.13 78.23 Services 0.79 3.7 4.46 0.99 4.62 5.61 89.02 Operation 1.78 - 1.78 2.24 - 2.24 0 Total Base Cost 14.29 57.70 71.99 16.38 74.46 90.62 81.79 Provision for Physical 0.71 2.88 3.60 0.82 3.72 4.52 76.37 Contingencies Provision for Price Escalation 0.28 1.54 1.43 0.33 1.49 1.81 76.79 Total Project Cost 15.28 61.73 77.02 17.28 79.67 96.95 81.23
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2.4.2 The project will be financed by an ADB loan of EUR 117.40 million (UA 96.95 million). In view of Gabon's financial situation, the counterpart funding has been limited to the provision of premises for project management. The rationale is presented as an annex. Activity details are provided in Technical Annexes B2.3 to B2.6.
Table 2.6: Expenditure Schedule by Component (in UA million) Component 2019 2020 2021 2022 Total
Component A – Infrastructure Development 8.63 30.32 35.53 12.95 86.34 Component B – Improve Sector Governance and 1.72 2.24 2.24 1.27 7.46 Capacity Building Component C – Project Coordination and 1.26 0.95 0.57 0.38 3.15 Management Total Project Cost 11,61 33.40 37.34 14.60 96.95
2.5. Project Areas and Beneficiaries
The project will cover four Greater Libreville municipalities: Libreville, Akanda, Owendo and Ntoum. Libreville's total population in 2016 was estimated at 967,095. It is expected that 300,000 additional people, or 31% of the city's population, will have access to drinking water as a result of the network extension works. With the project, the drinking water access rate for the Libreville urban population will increase from 55% to 90%. In addition to Libreville residents, the project will benefit local industries and other production and service structures such as government departments, including the Ministry of Water and Energy, the Ministry of Works, barracks, the Service Company, schools and hospitals. Other beneficiaries will include economic operators that will execute works and provide services during project implementation.
2.6. Participatory Process for Project Identification, Design and Implementation, including Active Participation of the Private Sector and Civil Society
2.6.1 The project was prepared on a participatory basis. It is an outcome of priorities established by the Water Master Plan designed in 2015 following a broad socio-economic survey on the priority needs of the Libreville population. The project team carried out field visits and met with various stakeholders in the water and sanitation sector during the preparation mission. Consultations continued with an environmental and social impact assessment, during which public meetings were held in four Greater Libreville municipalities. The concerns expressed were taken into account in the final project design, particularly with regard to the inclusion of the Ntoum sections not covered to date by the project and the coverage of repairs/restoration of all networks removed from the works budget.
2.6.2 The consultation that prevailed during project appraisal will continue during implementation through the steering committee, which will include representatives of all stakeholders in the water, sanitation, local administration and health sectors. The direct project beneficiaries will be involved in the implementation phase, through jobs and awareness campaigns on water saving and hygiene.
2.7. Bank Group Experience and Lessons Reflected in Project Design
2.7.1 The Bank's portfolio review in Gabon in December 2015 revealed the following challenges: (i) weaknesses in project implementation capacity resulting in significant delays in project implementation; (ii) difficulties in mobilising counterpart funds for project financing, which are compounded by recent fiscal constraints; (iii) unexpected cancellations of some operations, sometimes immediately after appraisal; (iv) delays in meeting conditions precedent to first disbursement; and (v) low project quality at
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entry. To strengthen cooperation with Gabon and avoid project cancellations, future operations planned under CSP 2016-2020 have been identified by agreement and align fully with the country's priorities. Regular project performance reviews, jointly with the Government, and the establishment of a formal participatory monitoring and supervision framework were also deemed necessary to identify weaknesses and find appropriate timely solutions to avoid delays. Finally, lessons relating to allotments were drawn from the completion report of the Draft Update on Studies for the Development of the Gué-Gué, Lowé- IAI and Terre Nouvelle Watersheds and taken into account in the design for easy implementation. It should be noted that in the context of this project, the Bank emphasises the need to support sector reforms. A consultant was also recruited to analyse the texts establishing and organising various institutions involved in providing public drinking water services. The analysis concluded that the said texts should be revised and harmonised with future reforms to make the sector more efficient.
2.7.2 Key performance indicators: The sub-programme's performance indicators are the main expected project outcomes, as set out in the logical framework and Table 2.7 below.
Table 2.7: Project Monitoring Indicators Project Effectiveness Indicators by 2022
Linear of the renewed DWS system: 0 lm in 2018 and 149 000 lm in 2022 Linear of the extended and reinforced DWS network: 0 lm in 2018 and 131 000 lm in 2022 Number of water towers built: 0 in 2018 and 3 in 2022 Linear of the network in administrative buildings rehabilitated: 0 lm in 2018 and 20 000 lm in 2022 Number of standpipes installed: 0 in 2018 and 60 in 2022 Number of individual connections made: 0 in 2018 and 1318 in 2022 The volume of unbilled drinking water drops from 48% in 2018 to 5% in 2022 Number of vehicles supplied: 0 in 2018 and 8 in 2022 Number of computers delivered: 0 in 2018 and 55 in 2022
III. PROJECT FEASIBILITY 3.1. Project Economic and Financial Performance
PERFORMANCE INDICATORS BASELINE SCENARIO (2018)
ERR (%) 13.59
IRR (%) 15.42
NPV (in CFAF million) 10,401.70
3.1.1 The estimate of the project's profitability indicators based on baseline scenario assumptions (Technical Annex B.7/Table 8), shows its positive financial returns. With a Net Present Value (NPV) of CFAF 10,401.70 million, the internal rate of return (IRR) of 15.42% compared to the 12% discount rate used to estimate the project's net present value underscores its financial feasibility and capacity to generate reasonable cash flows for the Operator/ Concessionaire, and improve the living conditions of the targeted population (Technical Annex B.7/Table 9). The 13.59% Economic Rate of Return (ERR) is an average rate of the net economic and social benefits provided by the project to the community as a whole, and reflects the economic viability of the institutional and financial model used to manage drinking water supply activities to ensure sustainability (Technical Annex B.7/Table 9). Finally, sensitivity tests reveal that even in the most unfavourable situations and with more drastic assumptions, the net present value remains largely positive and the IRRs and ERRs are well above the 12% opportunity cost of capital (Technical Annex B.7/Table). Based on these results, it is clear that the Project will generate significant economic benefits and will remain viable from all perspectives.
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3.2. Environmental and Social Impact
Environmental Impact
3.2.1 The project is classified under Environmental Category 2. There are no plans to demolish assets, structures or infrastructure. Therefore, no reintegration or resettlement plan is required. Its implementation will also not entail any population displacement. The negative project impacts are mostly temporary (works phase) and easily manageable. An Environmental and Social Management Plan (ESMP) was prepared and is posted on the Bank's website since 2 August 2018 in accordance with AfDB Guidelines and Policies, and Gabon's Regulatory, Legal and Institutional Framework on Environmental and Natural Resource Management. The ESIA Certificate of Compliance was transmitted to the Bank on 30 July 2018. The main environmental impact risks are as follows: (i) production of construction debris, noise and odour, including toxic fumes during asphalting; (ii) disruption of local traffic and the services distribution network (water, sanitation, internet connection, electricity, etc.); and (iii) accidental disruption of the wastewater disposal network, which could pollute groundwater and soil, and thus pose a threat to human health.
3.2.2 The negative effects during the operations phase only concern the increase in wastewater production following better access to water by the urban population. In the case of Libreville, the city's sanitation service is deficient. Although the sanitation master plan was prepared since 2014, it has not yet been implemented due to lack of funds. The negative impacts identified will be mitigated by the implementation of appropriate environmental and social prevention and management measures described in the Environmental and Social Management Plan. The cost of implementing the ESMP is estimated at CFAF 120 million. Most of the measures (repair of possible damages) have been integrated into the works. The ESMP will be implemented by a variety of stakeholders (government, communities, grassroots organisations, etc.). The ESMP will be monitored by the DG-Environment’s focal point within the coordination.
Climate Change
3.2.3 The project is classified under Category 1 in accordance with AfDB's Climate Safeguards System, and may therefore be highly vulnerable to climate change risks. Gabon's coastal area where Libreville is located is especially vulnerable to the rapid rise in sea level, with its indirect repercussions (water salinisation, destruction of habitats and infrastructure, erosion, and flooding). Detailed analysis of climate change risks has been made, including adaptation measures that should be implemented. Integrated risk management and adaptation measures should be incorporated into project design and implementation plans. This context should be taken into account during the construction of drinking water supply structures, particularly for pipelines along the sea. Water resource monitoring is also highly recommended since it has been observed that the watercourse level decreases during low rainfall periods. It is necessary to assess the potential impact of water transfer from other rivers to the Nzeme. Therefore, it is important to build coastal and river flood protection infrastructure near vulnerable water treatment plants; build river flood protection facilities around densely populated areas; consolidate institutional knowledge; collect climate and flood data in the project area and identify infrastructure vulnerable to climate change hazards (drought, flooding, landslides and subsidence); develop contingency plans to deal with drinking water supply losses due to drought or floods; produce evacuation plans for urban areas; develop early warning systems to improve response; and support adaptation policy and strategy. The project provides for an assessment of water resources in the country in general, and in Estuary Province where Libreville is located, in particular. Rehabilitation works on the network should also reduce the frequency of flooding following low rainfall.
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Social Impact
3.2.4 The project aims to meet the drinking water needs of more than 967,095 inhabitants by 2022, 48.04% of whom will be women resident in Libreville, all social categories combined, through the renewal and extension of the drinking water network. The project is expected to improve the well-being of beneficiaries. The positive social benefits expected from the project during the construction phase are mainly the creation of temporary jobs for skilled and unskilled workers, and economic opportunities for local SMEs. Estimates indicate that the number of temporary jobs to be created is approximately 6,615 person-months for pipeline replacement and 6,300 person-months for extensions, i.e. a total of 12,215 person-months. Permanent jobs offered by the operator will be limited to around ten workers, given that works involve the renewal of an existing network and extension in areas partially covered by informal connections. Apart from the disruption of urban life due to the outage of certain public networks and interruption of road traffic, occupational and traffic accidents constitute additional risks.
3.2.5 The main positive impacts during the operational phase are: (i) sustained access to drinking water in sufficient quantity and quality; (ii) elimination of network losses for the operator; (iii) considerable reduction in water bills paid by households; (iv) reduction in waterborne diseases (see health indicators in Annex B8); (v) reduction in the time used in fetching water, especially for women and children; and (vi) the creation of on-demand economic opportunities following the presence of work sites. An examination of average water expenditure (CFAF 12,401/month per connected household of 6 persons) and average household income (CFAF 552,947/month) indicates that the target population will be able to afford the water tariff.
Gender
3.2.6 Gabon is celebrating the Gabonese Women's Decade 2015-2025, and a National Consultation was held to describe the situation, the progress made and challenges outstanding in the legal, socio- cultural, economic and political spheres. A general report1 published in August 2017 states that despite Gabon's ratification of international legislative texts on gender equality (CEDAW, Maputo, Beijing), its Civil Code still contains numerous provisions that discriminate against women. Socio-cultural barriers also pose a major obstacle to women’s effective enjoyment of their acquired rights, including the social tolerance of violence meted out to them.
3.2.7 In terms of access to drinking water, gender-related social roles put women at a disadvantage. Several districts have not had access to drinking water for several months, sometimes years, and almost all households in Greater Libreville do not have regular access to water. According to the division of roles, women are responsible for taking care of the sick in the family. Women and children are obliged to fetch water on foot from public standpipes, and may sometimes have to wait for hours late at night for water to flow from the tap, with the attendant security risks (night is often the only time water could be available). Fetching water, especially at night, takes up part of women and children’s rest time and productive hours, resulting in lower academic performance and productivity for them. There is a lack of water in public health and education centres (hospitals, schools and universities), further worsening the poor hygiene and sanitation in these centres, including maternity wards. It has been noted that in primary and high schools, girls suffer from the lack of good hygienic conditions especially during menstruation. This increases their absenteeism and dropout rate. The water sector is also highly masculinised, with very few women participating in decision-making and the implementation of water-related works.
3.2.8 To address the above issues and improve the situation, the project will support an enhanced social and gender work around water, led by the Ministry of Water and Energy, including: (i) the urgent
1 http://gabon.unfpa.org/sites/default/files/pub-pdf/Rapport%20d%C3%A9cennie%20de%20la%20femme- version%20finale%201.pdf 10
conduct of a social and economic study, including billing, and a thorough gender study on the size and impact of the lack of drinking water in Greater Libreville, which will be in addition to public consultations with a gender perspective carried out as part of the project's Environmental and Social Impact Assessment; (ii) building the capacity of the Ministry of Water and Energy and sector contractors in social and gender aspects, strengthening the blending of technical and managerial staff of the Ministry of Water and Energy with a gender equality-focused human resources strategy, promoting women's participation in project management and the gender perspective within its Coordination Unit; (iii) prioritising the restoration of access to water in public education and health services buildings, and subsequently in other government departments; and finally (iv) conducting communication and education activities around the water theme (Information, Education and Communication), including water fetching and gender issues.
Involuntary Resettlement
3.2.9 Works to rehabilitate, strengthen and extend the Greater Libreville water supply networks will not involve people displacement. Existing networks are installed along public roads and their replacement or reinforcement requires very little land for the right-of-way. Only assets affected such as various public networks (telephone, optical fibre, roads, etc.) will be restored in compliance with the required technical standards. The restoration cost is included in the project cost. The planned extensions will also be carried out along public roads and will not result in the loss of assets for the release of the right-of-way. However, if a private property or a public building is affected during the works, arrangements will be made to compensate persons involved before continuing work on the section concerned.
IV. IMPLEMENTATION
4.1. Implementation Arrangements
4.1.1 Executing Agency: The Ministry of Water and Energy through its Directorate General for Water (DG-WATER) will be the Project Executing Agency, within which the Project Coordination Unit will be established. The Unit will comprise: (i) a coordinator with a water and/or civil engineering background (the skills profile is provided in the technical annexes to the appraisal report); (ii) an administrative and financial officer (RAF); (iii) an accountant; (iv) a procurement specialist; (v) two civil engineers, of which one seconded by the Assets Company; (vi) two water engineers, of which one seconded by SEEG; (vii) two sanitation engineers, of which one seconded by the Directorate General for Construction and Infrastructure; (viii) an environmentalist seconded by the Directorate General for the Environment and Nature Protection; and (ix) an expert in social development and monitoring/evaluation. The CVs of these Gabonese executives will be submitted to the Bank for prior approval before their secondment to the project. Bank assessment of DG-WATER underscored the need to strengthen its project management, financial management, accounting and procurement capacity. Therefore, the four experts in charge of these components will be recruited to provide the necessary support to project implementation and to ensure skills transfer through mentoring. The project will provide the equipment and related operating expenses to enable all experts to properly conduct their mission. This will be done through the annual provisional budget prepared for the Coordination Unit under the project. A project procedures manual will be prepared and will outline details of the functional relationships between the parties.
4.1.2 Project Steering Committee (CPP): A Project Steering Committee will be set up to guide and monitor project implementation, articulate the synergy between project actions and other sector policies implemented, and strengthen the participatory approach. All sectors covered by project activities will be taken into account in the Committee’s composition, especially the Ministries of Water and Energy, Land
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Transport, Environment, Budget, Construction and Infrastructure, Economy, Public Health, Family, Interior, and Education. Other structures like SEEG, sub-prefects, mayors and consumer associations will also be part of the Steering Committee. The Committee will ensure coordination among all stakeholders for the smooth running of the project, particularly on cross-cutting issues. The Secretary General of the Ministry of Water and Energy will chair the Steering Committee, ensure the proper coordination and execution of project activities, and monitor/evaluate the project. The CPP would also gain by bringing together all project stakeholders and by organising regular meetings to prevent any obstruction to the project’s normal progress. A quarterly interval for the meetings seems the most optimal.
4.1.3 Applicable Procurement Policy and Framework
4.1.3.1 All procurement of goods, works and consultancy services financed with Bank resources shall be made in accordance with the Procurement Policy for Operations Financed by the Bank Group (“AfDB Procurement Policy”), October 2015 Edition, and provisions set out in the Financing Agreement. Pursuant to this Policy and following various assessments conducted, it was decided that: (a) procurement of the following goods and works: vehicles, IT hardware, furniture, office supplies, consumables and GPS, fuel purchase and rehabilitation of the premises of the Project Coordination Unit, will be done in accordance with the national procurement system (“National System”) as contained in Decree No. 000027/PR/MEEPPD on the Public Procurement Code (“PPC”); (b) procurement of the following goods and works: equipment for the wastewater laboratory, renovation of the existing DWS network, strengthening and extension of the DWS network, works to repair leaks in administrative buildings and all consultancy services, will be done in accordance with the Bank’s procurement system (“AfDB System”).
However, the Bank may request the Borrower to use the AfDB System should: (i) Gabon’s public procurement legal framework change and evolve towards a system unsatisfactory to the Bank; (ii) the Executing Agency fail to comply with the provisions in force; or (iii) appropriate risk mitigation measures included in the risk assessment action plan not be respected.
4.1.3.2 The use of the National System for certain procurements will help to improve efficiency without relinquishing the Bank’s fiduciary responsibilities, which shall be exercised through a series of measures put in place and described in paragraph B. 5.7 of Technical Annex B.5. The efficiency improvement will be brought about through the following actions:
Better ownership by the Executing Agency of the procurement system used; and
Time saving due to the absence of a second control (after control by national entities), which the Bank’s à priori review represents.
4.1.3.3 Procurement Capacity and Risk Assessment (PCRA)
Taking project specificities into consideration, the Bank assessed: (i) the national, sector and project risks; and (ii) the capacity of executing agencies. Following these assessments, the procurement risk level was deemed substantial. Appropriate mitigation measures to enable satisfactory project implementation are proposed in paragraph 5.9 of Annex B.5.
4.1.3.4 Special arrangements associated with the use of the National System: the use of the National System requires the implementation of special measures as set out under section B.5.7 of Technical Annex B5.
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4.1.4 Financial Management: The assessment of the capacity of DG-Water, which is under the supervision of the Ministry of Water and Energy, was conducted in accordance with the Policy for Financial Management of Operations Financed by the African Development Bank Group approved in 2014. The overall risk associated with project financial management is deemed substantial. The financial management arrangements proposed follows the establishment of the sub-programme Coordination Unit (CU) within DG-Water. Although the Ministry has recent experience in managing projects financed by donors through the "Access to Basic Services" Project funded by the World Bank, DG-Water is not responsible for that project’s financial management (entrusted to the Ministry of Forward Planning, which hosts the CNTPPE). The establishment of the CU will build on the CNTPPE’s experience to mitigate the risk associated with the financial management of the sub-programme and its continuation. Additional measures have been identified to strengthen DG-Water’s capacity as the sub-programme’s executing agency.
4.1.5 DG-Water will be responsible for the financial management of all programme components, and will carry out all necessary controls to ensure that: (i) project funds are used efficiently and economically; (ii) periodic, accurate, reliable and timely financial reports are prepared; (iii) project assets are protected; and (iv) audit reports are submitted on time. DG-Water's capacity will be strengthened through the services of high-level technical assistance (two individual consultants - a financial management expert and an accounting expert) for a period not exceeding 24 months. This technical assistance will be recruited on a competitive basis and the terms of reference will cover inter alia the capacity-building component of DG-Water and the Central Directorate for Financial Affairs, which will assume the function of controller of the sub-programme's financial activities. Before the first disbursement on the Special Account, the Coordination Unit will be provided with appropriate management tools (manual, software, backup tools) financed from the loan resources.
4.1.6 Disbursements: The loan resources will be disbursed in accordance with the Bank's Disbursement Manual once the loan agreement becomes effective and the conditions precedent to first disbursement are fulfilled. The first disbursement is expected within six months of signature of the Loan Agreement. Disbursements will be made through: (i) the direct payment method for goods and services procurement contracts, including audit costs; (ii) the working capital or special account method (exclusively for operating expenses and payment of project team allowances); and (iii) the reimbursement guarantee method for goods procurement contracts.
4.1.7 Audit: The project’s annual audit financed from loan resources will be undertaken by an independent external audit firm recruited on a competitive basis and in accordance with the Bank's standard Terms of Reference (ToR). Furthermore, the terms of reference of the audit assignment shall be those in use at the Bank and shall require the Bank's prior approval. The annual financial statements will be prepared by the CU in accordance with OHADA standards, based on an effective internal control system that guarantees the proper use of loan resources. The PIU shall forward the audit reports on the accounts and the Management Letter to the Bank within six months following the end of each audited financial year. As an eligibility criterion, the Request for Proposal (RFP) for the recruitment of auditors shall include the submission of: (i) a recent certificate issued by the competent authorities of Gabon (e.g. the Order of Chartered Accountants) certifying that the firm is authorised to conduct audit assignments; and (ii) a recent certificate issued by the National Order of Chartered Accountants of the country of nationality of the firm or the Regional Order, if the country does not have a National Order. The audit service contract will be approved for a maximum period of three (3) years, including a conditional contract validity clause for the second and third years, on the condition that the Bank considers the auditor's performance for the previous year to be satisfactory. Furthermore, the Court of Auditors will integrate sub-programme activities into its work programme under DG-Water missions. The recruitment of the external auditor will be conducted in consultation with the Court of Auditors, which will ascertain the independence of firms listed for recruitment.
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4.2. Monitoring
Monitoring will be through supervision missions and technical and financial audits, with the strong involvement of SNFI and FIFC. COGA will closely monitor project implementation and maintain policy and governance dialogue in the water and sanitation sector. The implementation schedule is presented below:
Activity Responsible Date/Period
Approval and financing AfDB September 2018 Effectiveness AfDB/GVT December 2019 Establishment of a Coordination Team GVT February 2019 BD preparation and bid invitation DGE/AfDB November 2018 Signing of contracts DGE February 2019 Start of consultancy services DGE February 2019 Start of works DGE/Firms March 2019 Physical completion of the project DGE December 2022
4.3 Governance
4.3.1 The Mo Ibrahim Foundation ranked Gabon 23rd out of 52 African countries (2015 edition). The main recommendation following the ranking urged Gabon to make efforts to improve public administration efficiency. To this end, efforts are being made to improve public assets management, notably through the establishment of a National Commission to Fight Corrupt Enrichment (CNLEI) since 2010 and the creation of a National Financial Investigation Agency (ANIF). The authorities have accelerated the deployment of agencies of the Court of Auditors nationwide and the Ministry of Water and Energy is regularly audited. Furthermore, the Government has initiated reforms aimed at rationalising the number of civil servants, reviewing the mission of certain ministries and redirecting public resources towards performance and accountability, all with a view to improving the performance of public departments. Decree No. 00149/PR/MEE of 10 May 2017 redefines the responsibilities of the Ministry of Water and Energy and reorganises it for greater efficiency in designing and monitoring the implementation of government policies in the water and sanitation sector.
4.3.2 Although Gabon’s legal framework and institutional architecture leave room for improvement, they are capable of providing solutions to the sector's governance challenges, in particular: (i) ensuring better control of the hydrological information needed for development planning; (ii) raising awareness and training the people on the responsibility of individual and community management of water resources; and (iii) equipping stakeholders with appropriate IWRM instruments, etc. Gabon has also acceded to the major international initiatives, conventions and agreements on environmental management in general, and water resources management in particular. Even though legal texts exist and institutions for steering activities in the sector have been established, water and sanitation sector governance is still a huge undertaking.
4.3.3 With regard to public water services, Law 024/2016 establishes the legal regime for the production, transport and distribution of drinking water in Gabon. However, an in-depth analysis of the legal texts governing the sector together with an examination of the institutional framework is necessary to ensure the harmonious functioning of all key stakeholders and effective monitoring of the quality of public water services. It is in this context that the Bank and the World Bank have been requested to support tariff studies, the definition of the financial model for the water and electricity sector, and an
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institutional study to determine the most appropriate delegation and managerial training method for various structures within the institutional architecture.
4.4 Sustainability
4.4.1 It will be recalled that the Government had delegated the public water and electricity service to a private operator under a concession contract. Twenty years later, the Government considers that the concession contract has not been satisfactory and has had it terminated. The public operator, Société de l'Eau et de l'Electricité du Gabon (Gabon Water and Electricity Utility - SEEG), has been requisitioned until February 2019 to ensure service continuity. The absence of effective monitoring of the concession contract remains the weak link in the system. The Government intends to extend SEEG's requisition for a necessary and sufficient time to determine the best option for delegating public water services and the framework for their monitoring. Therefore, the investments to be made for this operation will initially improve the quality of drinking water supply in Libreville, and also strengthen the Government by equipping it with tools to better monitor the quality of public service and be in a good position to negotiate more effectively with operators. It will involve carrying out: (i) an institutional study (financed by this project) to help the Government to choose the best option as per the objectives assigned to the sector (management method, geographic distribution, water/electricity bundling or unbundling). It will include a component to “tidy up” the texts and clarify the roles of various stakeholders and a better consideration given to operators' control; and (ii) a tariff study (financed by the World Bank, the results of which are expected by end-December 2018) on the basis of which a financial model of the sector will be developed to serve as a financial regulation tool. The tariff study will be accompanied by a study of people's willingness to pay so that the poor can have access to water.
4.4.2. However, to assess SEEG's financial solidity and its ability to provide the population with drinking water on a sustainable basis, focus was placed on having the "social segment" of the population pay a reduced rate for drinking water consumption. SEEG has emerged as a beneficiary. Therefore, it can be concluded that SEEG is sufficiently secure financially and can regularly supply the population long term, thus safeguarding the project’s sustainability. Cost recovery will be secured by the sale of water to the population, in the form of sales by volume, by consumption bracket, using volumetric metres that will be installed according to the choice of users (in the house, in the yard, etc.). At each sales point, the establishment of the tariff grid will take into account the total cost of water production and equipment renewal, and may be flexible according to trends in the economic and financial results of the water operation works.
4.5. Risk Management
4.5.1 Risks: the project's major risk concerns: (i) the Ministry of Water’s lack of experience in conducting programme activities and the problem of coordination between the various stakeholders within the framework of integrated water resources management; (ii) delays due to lack of knowledge of Bank rules of procedure.
4.5.2 Mitigation Measures: faced with this situation, the project design provides for: (i) capacity building for stakeholders through training on project management, procurement and financial management, accompanied with the procurement and configuration of accounting management software, and the recruitment of technical assistance to support the coordination; (ii) sensitisation and wide dissemination of the opportunities that project operations represent, as well as adoption of an allotment strategy likely to be of interest to the international private sector with the use of ICBs for the critical project work; (iii) opening the Steering Committee to all stakeholders involved to ensure proper coordination; and (iv) supporting the Government in choosing the best options based on studies conducted.
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4.5.3 Finally, the role of the Country Office through close monitoring to ensure the rigorous application of the Bank's procurement and financial management procedures will be crucial to the project's success. Three multidisciplinary supervision missions will be fielded yearly during the first two years of project implementation. Those missions as well as technical and financial audits will serve as regular monitoring and control mechanisms for proposing necessary adjustments.
4.6. Knowledge Building
4.6.1 The monitoring/evaluation system will be set up within the General Directorate of Water of the Ministry of Water and Energy. It will provide input to populate the geo-referenced database of Libreville’s drinking water supply infrastructure. The monitoring and evaluation system will measure the impact of activities carried out under this operation, in particular improvement in the network's rate of return, reduction of the time devoted to fetching water, savings in household expenditure, drop in water-borne diseases and a general reduction in poverty. It will also provide real-time assessment of the progress made by the Ministry in implementing sector programmes. Conclusions following the analysis of losses in Libreville and the options for sector reform revealed during project appraisal will also be fed into the Ministry of Water's database.
4.6.2 The knowledge acquired and lessons learned from implementing this operation will populate the database of the Ministry of Water and Energy and will serve as reference for future operations. In turn, this data will be used to strengthen the future National Statistics Agency, which will henceforth play a key role. Similarly, support is planned for the Directorate of Water Resources Management (DGestRH) to collate existing data. Summaries monitoring the implementation of the Emerging Gabon Emerging Strategic Plan (PSGE) could be posted on the Bank and Government’s websites.
V. LEGAL FRAMEWORK
5.1. Legal Instrument
This is a loan from ADB resources that will be granted to the Gabonese Republic to finance the project.
5.2 Conditions for Bank Involvement
A. Conditions Precedent to Loan Effectiveness:
The effectiveness of the ADB loan agreement is subject to the Borrower’s fulfilment of the conditions set out in Section 12.01 of the General Conditions Applicable to Bank Loan and Guarantee Agreements, to the satisfaction of the Bank.
B. Conditions Precedent to First Disbursement:
In addition to the effectiveness of the loan agreement, the first disbursement of loan resources shall be subject to the Borrower fulfilling the following conditions, to the Bank’s satisfaction:
(i) Provide the Bank with evidence of establishing the Project Coordination Unit comprising: (i) a Coordinator with a water engineering and/or civil engineering profile; (ii) an administrative and financial officer; (iii) an accountant; (iv) a procurement specialist; (v) two civil engineers, one of whom shall be seconded by the Assets Company; (vi) two water engineers, one of whom shall be seconded by SEEG; (vii) two sanitation engineers, one of whom shall be seconded by the DGCE; (viii) an environmentalist seconded by the
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National Directorate in charge of the Environment; and (ix) an expert in social development and monitoring/evaluation. The qualifications and experience of this staff shall have been approved in advance by the Bank; and
(ii) Provide evidence of appointing national managers whose professional qualifications and experience shall have been approved in advance by the Bank.
C. Other Conditions. The Borrower shall, to the Bank’s satisfaction:
(i) Forward to the Bank for approval latest six (6) months following the first disbursement of the loan resources, the Project Implementation, Administrative and Financial Management Procedures Manual;
(ii) Procure and configure the accounting software, and train the financial team as required latest six (6) months following effectiveness of the Loan Agreement and, in any event, prior to first disbursement of loan resources on the special account;
(iii) Recruit four experts in charge of procurement, project management, accounting and financial and administrative management, latest three (3) months following the first disbursement of loan resources;
(iv) Set up a Programme Steering Committee latest three (3) months following effectiveness of the Loan Agreement, to guide and monitor programme implementation. The Committee shall be chaired by the Ministry of Water and Energy, and shall meet at least quarterly;
(v) Set up and organise the operation of the "Water and Electricity" Thematic Group before December 2019; and
(vi) Submit to the Bank, on a quarterly basis, a report on project activities and financial follow- up.
D. Commitments: The Borrower undertakes to:
(i) Execute the project and the Environmental and Social Management Plan (ESMP) and have them executed by its contractors in accordance with the national law, the recommendations, requirements and procedures contained in the ESMP, and the relevant Bank rules and procedures;
(ii) Prepare and submit to the Bank, as part of the Project Report, half-yearly reports on the implementation of the ESMP, including weaknesses identified and corrective measures taken or to be taken; and
(iii) Refrain from any action that would prevent or impede the implementation of the ESMP, including any modification, suspension, waiver and/or cancellation of any provision thereof, in whole or in part, without the prior written consent of the Bank;
(iv) Cooperate fully with the Bank in the event that the implementation of the project or any change in its scope causes unforeseen displacement and/or relocation of people; and undertake not to commence work in the area affected by the project unless all project- affected persons are compensated and/or relocated in accordance with the prepared Resettlement Plan.
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5.3. Compliance with Bank Policies
This project complies with all applicable Bank policies.
VI. RECOMMENDATION
Management recommends that the Board of Directors of the Bank approve the proposal to grant an ADB loan of EUR 117.40 million (UA 96.95 million) to the Gabonese Republic, for the purpose and under the conditions set out in this report.
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Annex 1
Gabon COMPARATIVE SOCIO-ECONOMIC INDICATORS
Develo- Develo- Year Gabon Africa ping ped Countries Countries Basic Indicators GNI Per Capita US $ Area ( '000 Km²) 2017 268 30,067 80,386 53,939 Total Population (millions) 2017 1.8 1,184.5 5,945.0 1,401.5 10000 9000 Urban Population (% of Total) 2017 89.0 39.7 47.0 80.7 8000 7000 Population Density (per Km²) 2017 7.0 40.3 78.5 25.4 6000 GNI per Capita (US $) 2016 7 210 2 045 4 226 38 317 5000 4000 Labor Force Participation *- Total (%) 2017 52.0 66.3 67.7 72.0 3000 Labor Force Participation **- Female (%) 2000 2017 42.4 56.5 53.0 64.5 1000 Sex Ratio (per 100 female) 0 2017 102.4 0.801 0.506 0.792 2000 2005 2010 2011 2012 2013 2014 2015 2016 Human Dev elop. Index (Rank among 187 countries) 2015 109 ...... Popul. Liv ing Below $ 1.90 a Day (% of Population) 2005 8.0 39.6 17.0 ... Gabon Africa Demographic Indicators Population Grow th Rate - Total (%) 2017 2.2 2.6 1.3 0.6 Population Grow th Rate - Urban (%) 2017 2.5 3.6 2.6 0.8 Population < 15 y ears (%) 2017 36.8 41.0 28.3 17.3 Population Growth Rate (%) Population 15-24 y ears (%) 2017 19.3 3.5 6.2 16.0 3.0 Population >= 65 y ears (%) 2017 5.0 80.1 54.6 50.5 2.5 Dependency Ratio (%) 2017 72.1 100.1 102.8 97.4 Female Population 15-49 y ears (% of total population) 2017 24.4 24.0 25.8 23.0 2.0 Life Ex pectancy at Birth - Total (y ears) 2017 65.8 61.2 68.9 79.1 1.5 Life Ex pectancy at Birth - Female (y ears) 2017 66.8 62.6 70.8 82.1 1.0 Crude Birth Rate (per 1,000) 2017 28.7 34.8 21.0 11.6 0.5 Crude Death Rate (per 1,000) 2017 8.0 9.3 7.7 8.8 0.0 Infant Mortality Rate (per 1,000) 2016 34.3 52.2 35.2 5.8 2000 2005 2010 2012 2013 2014 2015 2016 2017 Child Mortality Rate (per 1,000) 2016 47.4 75.5 47.3 6.8 Total Fertility Rate (per w oman) 2017 3.7 4.6 2.6 1.7 Gabon Africa Maternal Mortality Rate (per 100,000) 2015 291.0 411.3 230.0 22.0 Women Using Contraception (%) 2017 35.1 35.3 62.1 ...
Health & Nutrition Indicators Phy sicians (per 100,000 people) 2016 40.6 46.9 118.1 308.0 Life Expectancy at Birth Nurses and midw iv es (per 100,000 people) 2016 289.8 133.4 202.9 857.4 (years) Births attended by Trained Health Personnel (%) 2012 89.3 50.6 67.7 ... 80 Access to Safe Water (% of Population) 2015 93.2 71.6 89.1 99.0 70 60 Access to Sanitation (% of Population) 2015 41.9 51.3 57 69 50 Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 40 2016 3.6 39.4 60.8 96.3 30 Incidence of Tuberculosis (per 100,000) 2016 485.0 3.8 1.2 ... 20 Child Immunization Against Tuberculosis (%) 10 2016 94.0 245.9 149.0 22.0 0 Child Immunization Against Measles (%) 2016 64.0 84.1 90.0 ... 2000 2005 2010 2012 2013 2014 2015 2016 2017 Underw eight Children (% of children under 5 y ears) 2012 6.5 76.0 82.7 93.9
Prev alence of stunding 2012 17.5 20.8 17.0 0.9 Gabon Africa Prev alence of undernourishment (% of pop.) 2015 7. 2 621 2 335 3 416 Public Ex penditure on Health (as % of GDP) 2014 2.4 2.7 3.1 7.3
Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2011 138.7 106.4 109.4 101.3 Primary School - Female 2011 136.6 102.6 107.6 101.1 Infant Mortality Rate Secondary School - Total 2002 53.2 54.6 69.0 100.2 ( Per 1000 ) Secondary School - Female 2012 51.4 67.7 99.9 100 90 Primary School Female Teaching Staff (% of Total) 2011 52.9 45.1 58.1 81.6 80 Adult literacy Rate - Total (%) 2012 82.3 61.8 80.4 99.2 70 60 Adult literacy Rate - Male (%) 2012 84.9 70.7 85.9 99.3 50 Adult literacy Rate - Female (%) 2012 79.9 53.4 75.2 99.0 40 30 Percentage of GDP Spent on Education 2014 2.7 5.3 4.3 5.5 20 10 0 Environmental Indicators 2000 2005 2010 2011 2012 2013 2014 2015 2016 Land Use (Arable Land as % of Total Land Area) 2015 1.3 8.6 11.9 9.4 Agricultural Land (as % of land area) 2015 20.0 43.2 43.4 30.0 Forest (As % of Land Area) 2015 89.3 23.3 28.0 34.5 Gabon Africa Per Capita CO2 Emissions (metric tons) 2014 2.8 1.1 3.0 11.6
Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update : May 2018 UNAIDS; UNSD; WHO, UNICEF, UNDP; Country Reports. Note : n.a. : Not Applicable ; … : Data Not Available. * Labor force participation rate, total (% of total population ages 15+) ** Labor force participation rate, female (% of female population ages 15+) I
Annex 2: Key Related Projects Financed by the Bank and Other Partners
Consistency of the Intervention Donor Cost in EUR million Gué Watershed Development AFD 110.00 LOWE Watershed Development EIB 72.00 “Terre Nouvelle” Watershed Development IsDB 45.00 Improving Access to Basic Services in Rural Areas WB 53.70
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Annex 3: Map of the Project Area (Greater Libreville)
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Annex 4 : Rationale for reducing Gabon’s Counterpart
The Government of Gabon has requested a waiver to its counterpart funding of the project components financed by the Bank. The Bank's contribution estimated at UA 96.95 million exceeds the 50 percent of the project cost required by the Bank Group's Policy on Eligible Expenditures for Financing from the ADB Sovereign Window. Therefore, in accordance with the provision of Section 4.2.2 of the said Policy (Revised version of 19 March 2008), the justification for the level of the counterpart funding is based on the following three criteria: (i) The Country's Commitment to Implement its Comprehensive Development Programme: The programme is in line with the Emerging Gabon Strategic Plan (PSGE 2011-2025), which is structured around four main pillars: (i) sustainable human development; (ii) governance; (iii) human capital; and (iv) infrastructure. It is consistent with the 2014 Social Pact, which focuses on redistribution and economic inclusion issues, as part of the fight against poverty, including access to minimum social services. The Social Pact is based on the strategic objectives and priority actions of the PSGE's Water and Sanitation Sector Plan, in particular Objective 19, which aims to guarantee universal access to drinking water and sanitation services, and Actions 138, 140, 141 and 143. These include the preparation of the Water and Sanitation Sector Development Policy, the upgrade of the water distribution and storage network in Libreville and the strengthening of urban water infrastructure. The aim is to fill the gap and improve the quality and management of water supply and sanitation services in urban areas. (ii) The Country’s Allocation to the Sector Targeted by the Bank’s Assistance: The Government has drawn up a Water and Sanitation Sector Plan to operationalise the PSGE, with the following objectives: (i) achieve integrated water resources management; (ii) make access to drinking water and sanitation services in Gabon universal and sustainable; (iii) provide quality services; (iv) change users' comportment towards sustainable development; (v) make the drinking water supply and sanitation sector a significant vector for the country's economic development. A multi-year Water Resources Management and Sanitation Programme (PGRHA) was developed with targets and indicators between 2012 and 2020. The Government is moving from the policy of managing works to that of integrated management of the country's water resources through this programme. The implementation of the PGRHA began between 2012 and 2014, but the lack of financial resources made it impossible to attain its objectives: out of the CFAF 34.68 billion requested as budget for the PGRHA in 2014, only CFAF 18.72 billion was committed, drastically reducing the investment scope. No funding was set up between 2015 and 2018; the Ministry of Water and Energy simply updated the programme sheets. (iii) The Country’s Fiscal Situation and Debt Level: Gabon has gone through a macroeconomic shock since the adoption of the CSP, which has been extended to public finances. The country has recorded revenue losses since the fall in oil prices, with a negative impact on State finances, the financial sector and the manufacturing sector. Despite adjustment efforts to cope with a large wage bill (nearly 40% of the budget) and support an investment programme linked to the country's emerging vision, the State has accumulated large budget deficits. The relative decline in public investment, coupled with the accumulation of arrears, has had a negative effect on economic growth, job creation and the non-oil sector. The balance of payments is in deficit and the State's reserves with the Central Bank have dropped sharply. However, oil prices began to rebound (+5.9%) to €46.1 per barrel on average since September 2017.
This recovery enabled the Gabonese economy to avert recession with its growth rate positive at 0.8% in 2017 and a debt ratio of 59% of GDP. This economic adjustment and recovery effort resulted in a first successful review of a programme with the IMF at the end of December 2017. Gabon has prepared an Economic Recovery Plan (ERP) and concluded a three-year agreement (2017-2019) with the IMF
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under the Extended Credit Facility (ECF), supported by other international financial partners, including a large budget support from AfDB, the World Bank and the French Development Agency. The fall in oil prices had a significant effect on budgets during the crisis years. The budget balance (commitment basis), which was positive until 2014 (2.5% of GDP), became negative from 2015 (-2.3%) and worsened to - 6.6% in 2016, -3.6% in 2017 and is forecast at -0.2% in 2018. The summary of Gabon's macroeconomic indicators is presented in Table 2.1 below. Gabon’s macroeconomic indicators
2016 2017(e) 2018(p) 2019(p) Real GDP Growth Rate 2.1 0.8 2.7 3.7 Real GDP Per Capita Growth -0.1 -1.4 0.6 1.7 Rate CPI Inflation 2.1 3.0 2.8 2.5 Fiscal Balance (% GDP) -6.6 -3.6 -0.2 1.0 Current Account (% GDP) -10.1 -4.8 -1.5 -1.9
Source: AEO - National Government data; estimates (e) and forecasts (p) based on authors' calculations.
It is obvious from the foregoing that the Gabonese Government is committed to implementing its development programme with priority given to the water and sanitation sector, even though it is having difficulties in increasing its domestic capital expenditure. Furthermore, in view of its macroeconomic imbalance, Gabon has embarked on a series of structural reforms to recreate a positive, inclusive and sustainable growth momentum, especially in the context of its programme with the IMF. These reforms concern public finances, sector-specific measures and improving the business environment. It appears that the budgetary scope to release counterpart funds is extremely limited. At Government's request, it is proposed that the Bank finance 100% of the project costs.
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Annex 5: Logical Framework for the Drinking Water Supply and Sanitation Sector Development Programme in Gabon Programme Objective: Contribute to Sustainable Human Development in Gabon through Water and Sanitation Sector Development Sub-Programmes Expected Outcomes Planned Activities Indicators Total Cost Co-Financing (UA) Sought (UA) The drinking water • Construction of water intake and • A 140,000 m3 water intake access rate increases treatment facilities, rehabilitation of • A 140,000 m3 treatment plant and a supply line from 55% to 75% in drinking water network in Libreville • 149 km of renewed networks Libreville and 10% of and construction of reservoirs, • 7 tanks with a total capacity of 23,500 m3 Sub-Programme 1: the city's sewage pumping stations and water supply and • 175 km of new network built Libreville Integrated sludge is treated distribution pipelines. • 1 sludge treatment plant Water Supply and • Construction of a pilot sewage Sanitation sludge treatment plant Programme The capacity of public • Studies: (i) institutional and • Reports on the sector's performance, (PIAEPAL) water supply and organisational study of the water particularly on the decrease in the volume of 200 000 000 7 500 000 sanitation services at sector; (ii) assessment of Gabon's unbilled water various levels is water resources and IWRM Action • Water Resources Assessment Reports and strengthened to ensure Plan; (iii) urban DWSS sector study IWRM Action Plan integrated with a perspective on participation, • Reports on the Urban DWSS Study management of inclusion and gender; (iv) sanitation • Sanitation subsector study reports Gabon's water subsector study; (v) feasibility and • Summary and Detailed Sketches resources implementation studies of DWSS • Number of staff trained in water resources works planned under sub-programmes management 1 and 2. • Number of staff trained in project and • Training in: (i) water resources programme management with participatory, management; (ii) DWSS project and gender and inclusion dimensions (40% women) programme management; (iii) health • Number of staff trained in hygiene and and sanitation. sanitation (40% women) • Linear length and diameter of DWS networks installed (lm and mm) Rehabilitation, strengthening and • Drinking water production and storage The drinking water extension of existing DWS networks facilities constructed (number and volume in m3) access rate in urban in the 18 urban centres. • Number and capacity of pumping equipment centres increases from supplied 45% to 95%. • Number of buildings rehabilitated or constructed, office automation equipment provided for DWS services Sub-Programme 2: • Number of staff trained in operational Strengthening Urban Rehabilitation, strengthening and management of DWS projects in urban centres Drinking Water and extension of existing water supply (40% women) Sanitation networks in the 18 urban centres. • Number of staff trained in managing the Infrastructure operation of water supply structures in urban 250 000 000 250 000 000 centres (40% women) The sanitation access • Linear length and diameters of sewerage rate in urban areas Rehabilitation, strengthening and networks installed (lm and mm) rises from 32.5% to extension of sanitation infrastructure • Number and capacity of pumping equipment 80%. (wastewater and rainwater). supplied • Number of sludge treatment plants built and equipped • Number of buildings rehabilitated or constructed, office automation equipment provided for sanitation services • Number and level of staff trained in operational Pursuit of capacity building for management of sanitation projects in urban decentralised public sanitation centres (40% women) services. Sub-Programme 3: The drinking water • Rehabilitation of existing DWS • Number of water sources developed, DWS Improving Access to rate in rural areas systems - Construction of improved networks streamlined or other DWS equipment Drinking Water and increases from 25% to water sources, simplified water supply installed Sanitation in Rural 95% networks or other equipment on • Number of licences signed under the public- Areas demand private partnership for drinking water and 100 000 000 45 000 000 • Promotion of public-private sanitation partnership for drinking water and sanitation The sanitation • Construction of latrines and • Number of latrines or septic tanks built services access rate in distribution of individual sanitation • Number of sanitation kits distributed rural areas increases kits on demand • Number of public-private contracts signed for from 10% to 80%. • Promotion of public-private the maintenance of sanitation facilities partnership for the maintenance of sanitation facilities Sub-Programme 4: Gabon's integrated Identifying lessons learned and • Number of strategies, measures and good Knowledge water resource products associated with Integrated practices for strengthening integrated water Management, management Water Resource Management resources management Monitoring & strategies, measures • Number of people with access to strategies, Evaluation with a and good practices are measures and good practices for strengthening Gender Perspective of disseminated integrated water resource management 5 000 000 5 000 000 the IWRM Action Dissemination of lessons learned and • Lessons learned are documented Plan and the associated knowledge products • Knowledge products are disseminated PIAEPAL • Number of people with access to knowledge Programme PIAEPAL monitoring Design of reporting and monitoring/ An outline of the report available for use and evaluation evaluation models with a gender systems are improved perspective Monitoring/evaluation with gender Monitoring and evaluation reports available focus ensured
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PROGRAMME TO DEVELOP THE WATER AND SANITATION SECTOR IN GABON– INITIAL INTEGRATED DRINKING WATER SUPPLY AND SANITATION SUB-PROGRAMME FOR LIBREVILLE (PIAEPAL) – DRINKING WATER COMPONENT
ADDENDUM TO THE PROJECT APPRAISAL REPORT
1. THE PROJECT
1.1 The Government of Gabon has designed an ambitious development programme called the Strategic Plan for an Emerging Gabon (PSGE). PSGE targets the fundamental transformation of Gabonese society as a whole with a view to an emerging Gabon by 2025. In order to operationalise its ambitious programme, a Sector Plan for transformation of the water and sanitation sector has been prepared.
1.2 In accordance with the guidelines of the Strategic Plan for an Emerging Gabon (PSGE), the Government of Gabon in 2016 prepared the Drinking Water Supply Master Plan (SDAEP) and the countrywide action plan in order to address the difficulties of drinking water provision to the population. The same approach was taken for the sanitation sub- sector, which led to the development of the Port-Gentil and Libreville sanitation master plans (SDAL) in 2015. The aim is to assess and identify the shortcomings in the operation of all existing water production, transport and distribution facilities, on the one hand, and to appraise the sanitation situation (floods in rainy periods, wastewater discharges into the natural environment and the fate of solid waste) and propose appropriate solutions to the problems identified in the short, medium and long terms (with target dates ranging from 2030 to 2035), on the other hand. These various documents have enabled the Government of Gabon to establish investment planning tools for the various target dates of 2017, 2020, 2025, 2030 and 2035 in order to renew or build new infrastructure.
1.3 The technical choices planned under the Integrated Drinking Water Supply and Sanitation Programme in Libreville (PIAEPAL) are in line with the investment plan drawn up by the government following the study of the Master Plan. This plan includes two types of works: renewal works and new works. All these works have been integrated and sized in the 2035 mathematical model.
1.4 This programme concerns primarily the priority works of component I, upgrading and extension of the drinking water network of Greater Libreville, the general objective of which is to help improve the living conditions of the populations of Greater Libreville. Specifically, it will contribute to ensuring a better quality of drinking water supply in Libreville by (i) improving the distribution network efficiency rate from 55% to 75% and (ii) building the capacities of the various stakeholders to improve sector governance and transformation.
1.5 On 3 October 2018, the Bank approved a loan of EUR 117.40 million (UA 96.95 million) from the ADB window ("ADB Loan") to the Gabonese Republic to finance the upgrading and extension of the drinking water supply network of the Integrated Drinking Water Supply and Sanitation Programme in Libreville (PIAEPAL).
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1.6 On 17 September 2018, the People's Bank of China (PBOC) notified the Bank of its letter of intent indicating its interest in co-financing the activities of the PIEAPAL. On 28 September 2018, PBOC sent the certificate of approval to the Bank confirming co- financing of EUR 42 million (UA 34.68 million) as part of the resources provided by the Africa Growing Together Fund (AGTF). The purpose of this addendum is to seek Board approval for a loan of EUR 42 million to the Gabonese Republic.
2. REVISED COST BREAKDOWN
2.1 Following the approval by both the Bank and AGTF of the loans to the Gabonese Republic to finance PIAEPAL, there are no additional activities. Only the financing plan and the cost table are redesigned to reflect co-financing.
2.2 The financing plan is modified to take into account the funding of PIAEPAL activities by the two financing sources. Thus, the programme will be financed by an ADB loan of EUR 75.40 million (UA 62.27 million) and an AGTF loan of EUR 42.00 million (UA 34.68 million), for a total amount of EUR 117.40 million (UA 96.95 million).
Table 2.4 : Sources of financing
Sources of financing CFAF billion UA million % LC FE Total LC FE Total total ADB 12.69 36.77 49.46 15.98 46.30 62.27 64.23 AGTF 7.06 20.48 27.55 8.89 25.79 34.68 35.77 Total project cost 19.75 57.25 77.01 24.87 72.08 96.95 100.00
Table 2.5: Project cost by expenditure category for the share financed by the Bank
AfDB (UA million) AGTF (UA million) % Expenditure category Total LC FE Total LC FE Total FE Goods 0.04 0.46 0.51 0.03 0.26 0.28 0.79 91.57 Works 12.64 39.47 52.11 7.04 21.98 29.02 81.13 78.23 Services 0.64 2.97 3.60 0.35 1.65 2.01 5.61 89.02 Operation 1.44 0.00 1.44 0.80 0.00 0.80 2.24 0 Total base cost 14.76 42.90 57.66 8.22 23.89 32.11 89.77 81.79 Physical contingencies 0.92 2.54 3.46 0.51 1.42 1.93 5.73 76.37 Price contingency 0.30 0.86 1.15 0.16 0.48 0.64 1.45 76.79 Total project cost 15.98 46.30 62.27 8.89 25.79 34.68 96.95 81.23
III. CONDITIONS ASSOCIATED WITH BANK INVOLVEMENT
3.1 An AfDB loan agreement and an AGTF loan agreement will be signed between the Gabonese Republic and the Bank.
3.2 The effectiveness of the loan agreements is subject to the Borrower fulfilling, to the Bank's satisfaction, the conditions set out in Section 12.01 of the General Conditions Applicable to the African Development Bank Loan Agreements and Guarantee Agreements (Sovereign Entities)
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3.3 Conditions precedent to the first disbursement of the AGTF loan. The other conditions and commitments will be identical to those provided for under the AfDB Loan.
IV. RECOMMENDATION
4.1 Management recommends that the Bank's Board of Directors approve the reduction of the initial AfDB loan amount and approve the proposal for (a) an AfDB loan of EUR 75.40 million and (b) in its capacity as AGTF administrator, an AGTF loan of EUR 42 million to the Gabonese Republic to finance the Programme under the terms and conditions set forth in this Addendum.
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