Document of The World Bank
FOR OFFICIAL USE ONLY
Public Disclosure Authorized Report No: ICR00004910
IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD75890 AND IBRD83520)
ON A
LOAN
IN THE AMOUNT OF US$150 MILLION
TO THE
Public Disclosure Authorized REPUBLIC OF BELARUS
FOR THE WATER SUPPLY AND SANITATION PROJECT
JANUARY 31, 2020
Public Disclosure Authorized
Water Global Practice Europe and Central Asia Region
Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
CURRENCY EQUIVALENTS
(Exchange Rate Effective January 29, 2020)
Currency Unit = Belarusian Ruble (BYN) BYN 2.13 = US$1 US$0.47 = BYN 1
FISCAL YEAR January 1 – December 31
Regional Vice President: Cyril E. Muller Country Director: Satu Kristiina J. Kähkönen Regional Director: Steven N. Schonberger Practice Manager: David Michaud Task Team Leader(s): Stjepan Gabric, Ivaylo Hristov Kolev ICR Main Contributor: Amelia Midgley
ABBREVIATIONS AND ACRONYMS
AF Additional Financing BOD Biochemical Oxygen Demand CBA Cost-Benefit Analysis CAPEX Capital Expenditure CPF Country Partnership Framework DG Directorate-General EA Environmental Assessment ERR Economic Rate of Return FM Financial Management FMR Financial Monitoring Report GoB Government of Belarus GRM Grievance Redress Mechanism IBNET International Benchmarking Network for Water and Sanitation Utilities ICB International Competitive Bidding ICR Implementation Completion and Results Report IFI International Financial Institution IP Implementation Progress IRP Iron Removal Plant ISR Implementation Status and Results Report M&E Monitoring and Evaluation MHU Ministry of Housing and Utilities NCB National Competitive Bidding NPV Net Present Value O&M Operations and Maintenance OCC Operational Cost Coverage PAD Project Appraisal Document PE Person equivalent PDO Project Development Objective PIU Project Implementation Unit RAP Resettlement Action Plan RF Results Framework ToC Theory of Change WHO World Health Organization WSS Water Supply and Sanitation WSSP Water Supply and Sanitation Project WWTP Wastewater Treatment Plant
TABLE OF CONTENTS DATA SHEET ...... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ...... 6 A. CONTEXT AT APPRAISAL ...... 6 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION ...... 9 II. OUTCOME ...... 11 A. RELEVANCE OF PDOs ...... 11 B. ACHIEVEMENT OF PDOs (EFFICACY) ...... 12 C. EFFICIENCY ...... 18 D. JUSTIFICATION OF OVERALL OUTCOME RATING ...... 20 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ...... 20 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ...... 21 A. KEY FACTORS DURING PREPARATION ...... 21 B. KEY FACTORS DURING IMPLEMENTATION ...... 22 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 23 A. QUALITY OF MONITORING AND EVALUATION (M&E) ...... 24 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ...... 24 C. BANK PERFORMANCE ...... 25 D. RISK TO DEVELOPMENT OUTCOME ...... 26 V. LESSONS AND RECOMMENDATIONS ...... 27 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ...... 28 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ...... 43 ANNEX 4. EFFICIENCY ANALYSIS ...... 46 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 51 ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) ...... 61 ANNEX 7. UPDATED THEORY OF CHANGE ...... 62 ANNEX 8. PDO INDICATORS AND OUTCOME TARGETS ...... 63 ANNEX 9. FEASIBILITY STUDIES CARRIED OUT AS PART OF PROJECT ...... 64 ANNEX 10. DETAILED EFFICACY ANALYSIS ...... 65 ANNEX 11. FLOWCHART ON INVESTMENT PROCESS ...... 73 ANNEX 12. MAP ...... 74
The World Bank Water Supply and Sanitation Project (P101190)
DATA SHEET
BASIC INFORMATION
Product Information Project ID Project Name
P101190 Water Supply and Sanitation Project
Country Financing Instrument
Belarus Investment Project Financing
Original EA Category Revised EA Category
Partial Assessment (B) Partial Assessment (B)
Organizations
Borrower Implementing Agency
Republic of Belarus Ministry of Housing and Utilities
Project Development Objective (PDO)
Original PDO The project development objective is to improve the quality, efficiency and sustainability of water supply and wastewater treatmentservices in six participating oblasts covering about 1.7 million consumers.
Revised PDO To increase access to water supply services and to improve the quality of water supply and wastewater services in selected urbanareas in all six (6) oblasts of the Borrower.
PDO as stated in the legal agreement The objective of the Project is to improve the quality, efficiency and sustainability of water supply and wastewater treatment services in six (6) participating Project oblasts of the Borrower.
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FINANCING
Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing
60,000,000 60,000,000 60,000,000 IBRD-75890
90,000,000 90,000,000 89,580,402 IBRD-83520 Total 150,000,000 150,000,000 149,580,402
Non-World Bank Financing 0 0 0 Borrower/Recipient 0 0 0 Total 0 0 0 Total Project Cost 150,000,000 150,000,000 149,580,402
KEY DATES
Approval Effectiveness MTR Review Original Closing Actual Closing 30-Sep-2008 17-Feb-2009 16-May-2011 30-Jun-2013 31-Jul-2019
RESTRUCTURING AND/OR ADDITIONAL FINANCING
Date(s) Amount Disbursed (US$M) Key Revisions 20-Dec-2012 19.98 Change in Project Development Objectives Change in Results Framework Change in Loan Closing Date(s) Change in Safeguard Policies Triggered 03-Mar-2014 38.01 Additional Financing Change in Project Development Objectives Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) 19-Dec-2014 48.30 Change in Results Framework Change in Loan Closing Date(s) 08-Jun-2018 117.35 Change in Loan Closing Date(s)
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KEY RATINGS
Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Modest
RATINGS OF PROJECT PERFORMANCE IN ISRs
Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 17-Oct-2008 Satisfactory Satisfactory 0
02 09-May-2009 Satisfactory Satisfactory 0
03 02-Oct-2009 Satisfactory Satisfactory 0
04 10-May-2010 Satisfactory Satisfactory 1.10
05 25-Jan-2011 Satisfactory Satisfactory 12.46
06 10-Jul-2011 Satisfactory Satisfactory 16.75 Moderately 07 17-Apr-2012 Moderately Satisfactory 18.84 Unsatisfactory Moderately 08 24-Dec-2012 Moderately Satisfactory 19.98 Unsatisfactory 09 28-Jan-2013 Moderately Satisfactory Moderately Satisfactory 20.28
10 25-Jun-2013 Moderately Satisfactory Moderately Satisfactory 24.42
11 28-Dec-2013 Moderately Satisfactory Moderately Satisfactory 34.03
12 12-Jul-2014 Moderately Satisfactory Moderately Unsatisfactory 42.51
13 12-Dec-2014 Moderately Satisfactory Moderately Satisfactory 48.30
14 12-May-2015 Moderately Satisfactory Moderately Satisfactory 49.30
15 11-Nov-2015 Moderately Satisfactory Moderately Satisfactory 56.00
16 12-May-2016 Moderately Satisfactory Moderately Satisfactory 63.46
17 23-Sep-2016 Moderately Satisfactory Moderately Satisfactory 75.84
18 16-Mar-2017 Moderately Satisfactory Satisfactory 85.15
19 21-Sep-2017 Moderately Satisfactory Satisfactory 95.15
20 04-Apr-2018 Moderately Satisfactory Satisfactory 113.35
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21 03-Oct-2018 Moderately Satisfactory Satisfactory 135.83
22 06-Apr-2019 Moderately Satisfactory Satisfactory 144.53
23 27-Jul-2019 Moderately Satisfactory Satisfactory 147.93
SECTORS AND THEMES
Sectors Major Sector/Sector (%)
Water, Sanitation and Waste Management 100 Sanitation 53 Water Supply 37 Public Administration - Water, Sanitation and Waste 10 Management
Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%)
Urban and Rural Development 100
Urban Development 50
Urban Infrastructure and Service Delivery 50
Rural Development 50
Rural Infrastructure and service delivery 50
ADM STAFF
Role At Approval At ICR
Regional Vice President: Shigeo Katsu Cyril E Muller Satu Kristiina Jyrintytaer Country Director: Paul G. Bermingham Kahkonen Director: Peter D. Thomson Steven N. Schonberger
Practice Manager: Sumter Lee Travers David Michaud Stjepan Gabric, Ivaylo Hristov Task Team Leader(s): Kanthan Shankar Kolev ICR Contributing Author: Amelia Midgley
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The World Bank Water Supply and Sanitation Project (P101190)
I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES
A. CONTEXT AT APPRAISAL
Context 1. Country background. After its independence in 1991, Belarus faced challenges similar to those of other Commonwealth of Independent States countries: the transition from planned to market economies, the change in the political process, and the continued delivery of basic services in an environment of enormous change. In the presence of high-energy subsidies from Russia and the fast growth of its trade partners, Belarus was able to avoid the sharp drop in per capita incomes experienced by many of its neighbors. At the time of the project’s approval in 2008, the country had one of the highest income levels among its neighbors, with gross national income per capita increasing from US$1,610 in 2002 to US$3,980 in 2007 and absolute poverty declining from 30 percent to 5 percent between 2002 and 2009 (Country Partnership Strategy FY14–FY17 Report no: 77458). While Belarus undertook limited reforms in an increasingly benign external environment to deliver services to its population, despite global liberalization trends, Belarus maintained its tightly controlled and highly centralized system of economic management.
2. Sector context. Water services were strictly regulated and vertically integrated from municipal to Central Government level. The decentralization attempt of the mid-1990s, when full responsibility was delegated to the local level, was considered unsuccessful and the old system was reinstated in 1999.1 The Ministry of Housing and Utilities (MHU) was responsible for consolidating investment programs developed by oblasts,2 which are the recipients of Central Government funds for communal services (not earmarked for water or sanitation). Utilities themselves had limited autonomy in the selection and design of projects but were responsible for technical and commercial operations of service, where assets were owned by the municipality but transferred to utilities for their economic management (see annex 11 for a detailed flowchart of the investment planning process).
3. Since the 1990s, significant national investment programs enabled Belarus to improve the quality of water and wastewater services—water supply and sewerage coverage reached 88 percent and 74 percent respectively in 2008 and reliability of services improved steadily, particularly in urban areas. Water consumption, known to still be much higher in former Soviet Union countries than in Western European countries, had decreased significantly from 360 L per capita per day to 210 L per capita per day between 2000 and 2008.3 However, major challenges remained, as summarized in the following paragraphs.
4. Inadequate investment planning. Investment planning was not oriented toward efficiency, and design norms often led to excessive costs. Additionally, investments were not always aligned to master plans, and projects were appraised without clear and transparent procedures.
5. Maintenance and investment backlog. A general lack of investment had resulted in high losses, frequent breakdowns, and coverage gaps outside of major cities. Additionally, the country was failing to meet its wastewater nutrients removal policy standards due to inadequate wastewater treatment, largely a result of deteriorated systems. There were also several water supply quality issues; particularly, high iron content due to the local conditions of
1 World Bank. 2008. Project Appraisal Document (P101190). 2 Belarus is divided into six regions (oblasts) and the city of Minsk which has a special status as the capital city. 3 In 2018, water production per capita per day was 180 L per capita per day; IBNET. 2018. Country Profile Belarus.
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groundwater.4 While a high concentration of iron is mostly a matter of aesthetic significance and not a public health hazard, the color and odor of water made it unpalatable for domestic use without treatment.
6. Low levels of performance. Utilities had low levels of technical, operational, and organizational performance and were not commercially oriented. This was largely a result of a lack of national performance requirements for service providers, all of which were public enterprises with limited incentives to improve. Operational subsidies were allocated to service providers on the basis of short-term needs to cover losses without a commitment to improve operational performance. Social accountability mechanisms between utilities and the public were also weak.
7. Many of these challenges were underpinned by institutional weaknesses. Belarus had a highly centralized approach to sector financing, one which was significantly different from that traditionally considered good practice. Among the reasons for financial difficulties were low collection rates, high cross-subsidization of residential consumers, and a tariff policy that did not allow for full cost coverage. Tariffs were based on average costs across the country, putting smaller utilities with higher average costs at a disadvantage.5
8. In response to the above challenges, the Government adopted a National Water Program, Chistaya Voda (‘Clean Water’) for 2006–2010. It specified development priorities for the sector as well as the national list of investment projects and their sources of funding. The total cost of the program was approximately US$291 million, split across the following objectives: (a) uninterrupted supply of high-quality water and expansion of coverage; (b) implementation of new technologies; (c) institutional enhancement to improve service quality and financial status; and (d) cost reduction (energy conservation, optimization of assets, and reduction of non-core costs).
9. Rationale. The WSSP was designed to align with these objectives, building on the Government’s willingness to develop the sector. World Bank engagement in Belarus had been extremely limited. During the early 1990s, the World Bank had an urban water supply and sanitation project (WSSP) under preparation, but this was cancelled as the World Bank suspended its program in Belarus in 1997 following a macroeconomic crisis and a lack of progress on a number of key policy reforms.6 Relations had improved since 2000 and the WSSP marked the first engagement of its kind in the water and sanitation sector. As such, the WSSP was seen as a tool to build trust between the Government, water utilities, users, and the World Bank.
Theory of Change (Results Chain) 10. The project originally sought to improve the quality, efficiency, and sustainability of water supply and wastewater treatment services across all six oblasts of the country by financing priority investments in the water supply and sanitation (WSS) sector. The objectives were to be achieved through rehabilitation and construction of WSS networks and facilities. The project also provided support for the preparation of investments and, in line with a tentative shift toward sector
4 Statistics compiled by MHU indicate that in the 1990s, 29 percent of the population was receiving drinking water not meeting World Health Organization guidelines for chemical indicators and a further 8 percent for bacteriological indicators. The problems related to excess iron from deep wells and nitrates from shallow wells. Groundwater accounted for over 70 percent of urban water supply and was not routinely chlorinated, being treated instead if bacteriological contamination was detected. 5 According to the National Budget in 2008, the tariff for overall utility services was not to exceed 50 percent of its costs, and the total costs to households should not increase by more than US$5 per year. 6 Discussions of the FY1997 Country Economic Memorandum led to a Memorandum of Understanding between the Government and the World Bank. In retrospect, it became clear that the Government was not interested, or did not have a mandate, to implement the provisions of the Memorandum of Understanding. In parallel, discussions with the International Monetary Fund on a possible program did not progress either. With the August 1998 crisis in Russia, the Government came under strong pressure on the external front and resorted to stricter currency controls. This led to a cooling down in relations with international financial institutions (IFIs). See World Bank Country Assistance Strategy for Belarus 2002.
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modernization, financial support for interventions to support utility performance. The Implementation Completion and Results Report (ICR) developed the Theory of Change (ToC) under figure 1 based on the original Results Framework (RF) in the Project Appraisal Document (PAD) because a ToC was not developed during preparation.
Figure 1. Theory of Change
Note: BOD = Biochemical Oxygen Demand; IBNET = International Benchmarking Network for Water and Sanitation Utilities; PIU = Project Implementation Unit; PCT = Project Coordination Team (i.e. PIU)
Project Development Objectives (PDOs) 11. The PDO is to improve the quality, efficiency and sustainability of water supply and wastewater treatment services in six (6) participating Project oblasts of the Borrower.7
Key Expected Outcomes and Outcome Indicators 12. The key indicators selected to measure progress toward the objectives were as follows: Access to a piped water supply Percentage of wastewater discharged with BOD above national specifications Electricity consumption in KWh per m3 of wastewater treated Operating cost coverage ratio Consumer satisfaction with WSS services
7 It should be noted that the PDO in the PAD differs from the one of the Loan Agreement above. The PDO stated in the PAD and Implementation Status and Results Report (ISR) documents is: “The project development objective is to improve the quality, efficiency and sustainability of water supply and wastewater treatment services in six participating oblasts covering about 1.7 million consumers.”
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Components 13. Component A: Rehabilitation of Water Supply and Sanitation Systems. This component financed investments in WSS services. This included rehabilitation and improvements in water supply networks, installation of iron removal stations, and rehabilitation of wastewater treatment plants (WWTPs), associated facilities (pumping stations, sludge dewatering, small laboratories, and so on), and sewerage networks.
14. Component B: Support to the Preparation of Investments and Sector Modernization. This component financed feasibility studies, detailed designs, procurement, and construction supervision.
15. Component C: Project Implementation and Management.8 This component financed auditing and other technical or fiduciary requirements of the PIU. The staffing cost for the PIU was financed by the Government and not by the project.
B. SIGNIFICANT CHANGES DURING IMPLEMENTATION
Revised PDOs and Outcome Targets 16. During the 11 years of the project’s life-span, it underwent four formal restructurings and was scaled up with the inclusion of the additional financing (AF). The PDO underwent one substantive change9 as noted in table 1.
Table 1. Original and Revised PDO Original - October 2008 Restructuring - December 2012 The objective of the project is to improve the quality, The objective of the project is to increase access to water efficiency and sustainability of water supply and supply services and to improve the quality of water wastewater treatment services in six (6) participating supply and wastewater services in selected urban areas Project oblasts of the Borrower. in all six Oblasts of the Borrower.
Revised PDO Indicators 17. PDO indicators were modified a number of times to better monitor project progress, as reflected in table 8.1 in annex 8.10 The outcome targets were increased in accordance with the AF: targets for two core outcome indicators were increased, namely (a) number of people provided with access to improved water sources from 7,910 to 9,800 and (b) number of people provided with access to drinking water compliant with national quality standards11 from 307,300 to 324,000. Wastewater indicators were revised to better quantify actual benefits in terms of treated effluent and to be consistent with the core sector indicator.
8 The estimated component costs, with the addition of a front-end fee add up to the total project cost. 9 In reality, the PDO was updated twice, where initially the word ‘all’ was omitted. It was later updated to clarify that there were only six oblasts in Belarus, all of which participated in the project. This is assumed to have not changed its scope but was done for clarity. 10 Changes occurred during project restructuring and were reflected in Restructuring Papers in 2012, 2014 (March), and 2018. In December 2014, a further restructuring extended the closing date of the original loan. The main Restructuring Paper text states that there is no change in the RF. The annex had an error which was corrected in the subsequent ISR. The addition of ‘urban’ to the access indicator was included as a core indicator requirement and did not require a restructuring, a change that was reflected in ISRs from 2017 onward. 11 Iron levels below 0.3 mg/L.
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Revised Components 18. The project’s components were revised as part of the AF in December 2014. The overall amount of the AF was US$90 million (refer to annex 3 for a detailed breakdown of costs across components). The AF was consistent with the original project but expanded the description of the project’s three components as follows:
19. Component A: Editorial changes to this component to clarify that it would finance goods, works, and consultants’ services, which was not made clear by the original project. Component B: Expanded scope to include the development of a benchmarking system and review of design norms and energy audits. Component C: Renamed to Capacity Building, Project Management, Monitoring and Evaluation (from Project Implementation and Management), indicating a shift to a higher level of ambition. Component C was expanded to include strengthening accountability mechanisms (communication plans and/or information displayed publicly on premises, and grievance redress mechanisms [GRMs]).
Other Changes
20. The project’s closing date was extended a number of times as shown in table 2.
Table 2. Change in Loan Closing Date(s) Original: Restructuring 1: Restructuring 2 & Restructuring 3: Restructuring 4: September 2008 December 2012 AF: March 2014 December 2014 June 2018 Original Loan June 30, 2013 December 31, — December 31, — 2014 2016 AF — — September 20, 2018 — July 31, 2019
21. First restructuring: December 4, 2012. Three years after effectiveness, the project faced implementation difficulties caused by changes in inflation and exchange rates in 2011,12 which prompted the cancellation of two contracts and the need for re-bidding of three construction activities. They were also caused by late submission of a number of engineering studies due to underperformance of contractors. Details are provided later in the section ‘Key Implementation Challenges’. Additionally, the PDO and RF were not aligned with the project activities. These issues were addressed by a level-one restructuring, the implications of which are discussed in the following section: Rationale for Changes and Their Implication on the Original ToC. Additional safeguard policies were also triggered. While the Environmental and Social Impact Assessment carried out during preparation did not identify any specific resettlement issues at the time, an engineering design for one subproject required the displacement of one household. As such, the application of Safeguard Policy (OP/BP 4.12) on involuntary resettlement was triggered. OP/BP 4.12 was also used again in 2016–2017 when construction activities for the main sewerage collector in Mogilev required preparation of a site-specific Resettlement Action Plan (RAP). The Operational Policy on Physical Cultural Resources (OP/BP 4.11) was triggered following the identification of physical cultural resources in one subproject.
22. Second restructuring and AF: March 5, 2014. The AF was undertaken as a means of scaling up the project’s impact with the inclusion of 10 subprojects. Their designs were prepared under the original loan and scope was expanded to encompass strengthening social accountability mechanisms and activities to increase overall sectoral performance (see section Revised Components). During the first project restructuring, the project had been refocused on physical investments. The AF, which followed the World Bank Municipal Water Sector Review (2013), reidentified the need to
12 After a significant loss of reserves at the beginning of 2011, confidence in the Belarusian ruble collapsed, sparking a foreign exchange crisis. By December 2011, the Belarusian ruble had lost 70 percent of its value to the U.S. dollar and inflation soared to 109 percent.
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foster sector efficiency and sustainability. As such, it included the review of design norms and energy efficiency in service providers and their benchmarking. The increase in outcome targets is illustrated in table 8.1 in annex 8.
23. Third restructuring: December 18, 2014. There were some changes made to the outcome indicators as an attempt to better measure the project’s outcomes (see annex 8). The RF was also aligned with the extended closing date (table 2). Outcome targets were decreased to pre-AF target values13 but reverted to the higher AF targets from ISR17 onwards. The changes in target values were an oversight as the main text in the Restructuring Paper clearly stated that there are no changes to the RF except for aligning the project closing date to the extension closing date.
24. Fourth restructuring: June 30, 2018. By the time of the fourth restructuring, the number of subprojects had substantively increased. Depreciation of the local currency and an overestimation of subproject costs during feasibility meant that US$40 million from the AF remained unallocated. Funds were allocated to an additional 13 subprojects, bringing the total number of the subproject sites to 44 compared to the original number of 33 financed from the original loan and AF. The addition of subprojects did not result in an updated RF, although—as will be discussed under the section Efficacy—their inclusion had a substantial impact on the project’s impact.
Rationale for Changes and Their Implication on the Original Theory of Change 25. During the level one restructuring of 2012 and in recognition of the limited impact that the project would have on efficiency and sustainability, project outcomes were more realistically framed in terms of delivering physical infrastructure to improve water quality and expand access, as well as to improve wastewater collection and treatment. With limited government ownership of large-scale sectoral reform and an unwillingness to borrow to finance such interventions, subprojects had focused exclusively on high-priority physical investments. Having not worked with stakeholders in the sector previously—and given limited engagement in the country generally—meant that these priorities only emerged during implementation and required adjustment by the World Bank team. While the planned project investments were likely to benefit utilities’ operational and financial performance through the modernization of their networks and treatment facilities, improving operational and financial performance in a measurable way would require substantial efforts at a higher policy level to address systemic causes of inefficiencies. While the change in PDOs did not stem from a change in planned activities, it did reduce the ambition of the project.
26. The updated PDO also signaled that the project’s impact would be limited to selected urban areas, and impacts should not be expected at the oblast level. Further adjustments were made to include water supply service coverage which had originally been overlooked and, on the wastewater side, to encompass collection and transfer systems in addition to treatment. These changes streamlined the PDOs as follows: (a) increased access to water supply services, (b) improved the quality of water supply services, and (c) improved the quality of wastewater supply services. The updated PDOs had an implication for the ToC, (see annex 7 for the updated diagram of the ToC). Subsequent restructurings and the AF did not affect the ToC.
II. OUTCOME
A. RELEVANCE OF PDOs
Assessment of Relevance of PDOs and Rating
13 For example, the indicator ‘population provided with access to drinking water compliant with national quality standards’, which had outcome targets of 307,000 and 324,000 pre-AF and post-AF. In the third restructuring, this target decreased to 307,000.
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27. Alignment with strategy. The PDOs are aligned with the current Country Partnership Framework (CPF) for Belarus for FY18–FY22 (Report No. 123321-BY) and are fully consistent with the ‘CPF Focus Area 3: Improving the contribution of infrastructure to climate change management, economic growth, and human development,’ supplemented by a crosscutting theme related to greater use of data and access to information in public decision making. The project contributes directly to the CPF Outcomes ‘Improve access to quality water and sanitation services’ (Objective 3B), which uses the outcome target of the project. Under Focus Area 3, water and sanitation investment constitutes roughly 25 percent of total World Bank financing in the country, with direct reference to the WSSP as a key contributor. The proposed project also contributes to the crosscutting area of greater public access and use of data through benchmarking and social accountability mechanisms.14
28. Alignment with the Government Program. The PDO is aligned with the Program of Socio-Economic Development for 2016–2020, specifically under its ‘Focus Area 4: Promotion of the green economy, sustainable natural resource management, and environmental protection’, which identifies the following as national target actions: preventing surface water pollution by effluents, increasing capacities of water treatment facilities, and reducing health risks by supplying clean potable water. The PDO also aligns with the country’s new Water Strategy, which will run to 2030, and which has focus areas that include the provision of universal access to clean and affordable water and access to adequate sanitation services, improvement in the quality of natural waters by decreasing the share of untreated effluents, and improvement in water-use efficiency.
29. Ratings. The project’s objectives remain substantially relevant with the country’s current development priorities and with current World Bank country and sectoral assistance strategies. While sectoral weaknesses had been identified in sustainability and efficiency, they were dropped to improve the PDO’s alignment with project activities, and capture outcomes (that is, access and quality) which were more realistically framed and achievable during the project duration.
B. ACHIEVEMENT OF PDOs (EFFICACY)
Assessment of Achievement of Each Objective/Outcome 30. Approach taken in this ICR. Although the project had four restructurings, only one of these was associated with a decrease in the project’s scope (first restructuring, 2012). A split assessment is undertaken to assess the project’s efficacy using both pre- and post-restructuring objectives and outcome targets. Subsequent restructurings and the AF are not treated with split assessments because the restructurings concerned extensions to the closing date and changes to indicators rather than changes in scope. The AF increased the outcome targets which are used to evaluate the project’s efficacy.
31. Initially the PDO was structured around five objectives: (a) improved quality of water supply services (PDO1), (b) improved quality of wastewater treatment services (PDO2), (c) improved efficiency of water supply services (PDO3), (d) improved efficiency of wastewater treatment services (PDO4), and (e) improved sustainability of water supply services and wastewater treatment services (PDO5). Later, the PDOs were streamlined into three objectives: (a) improved quality of water supply services (carried over from initial design PDO1), (b) improved quality of wastewater services (carried over
14 As part of the AF, consumer access to information was introduced as a measure to improve social accountability between utilities and customers. Information on services provided; water quality parameters; rights and responsibilities; mechanisms for dealing with complaints, addresses, and phone numbers; working hours of responsible persons; and detailed disaggregated information on tariffs were provided by participating utilities.
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from initial design PDO2), and (c) increased access to water supply services (PDO6). The achievement of each objective is discussed in detail in the following paragraphs.
PDO1: Improved quality of water supply services 32. Quality of water supply services is not explicitly defined in the PAD or subsequent Restructuring Papers. To assess the project’s outcomes, intended objectives are inferred from the project’s key associated outcome targets which refer to people benefiting from improved quality of water supplied. Quality of water supply services is, in this ICR, interpreted as an improvement in water quality to comply with potability standards particularly with regard to iron contamination.15 Water quality improvements were measured by the PDO indicator ‘population benefiting from improved quality of water supplied’, which had a target value of 324,000. Based on data provided by the PIU, by the time of project closing, 611,766, people were benefitting from works undertaken by the project, with drinking water produced being compliant with national quality standards. The project significantly exceeded its target for quality of water supplied due to the successful construction and commissioning of all planned projects, as well as the addition of subprojects due to cost savings. Interventions included development of new well fields, water treatment plants with iron removal stations, and associated infrastructure. See table 9.2 in annex 9 for a detailed breakdown.
33. The PDO indicator was supplemented by the intermediate indicator ‘percentage of produced water effectively treated with iron content below 0.3 mg/L’. According to information provided by the PIU, all nine sites that were monitored achieved higher than target levels by closing. Targets were set between 46 percent and 95 percent for water supplied meeting national regulatory standards, and final results ranged between 75 percent and 100 percent. See annex 1 for a detailed breakdown of outputs. The project also sought to monitor service progress through three further metrics (intermediate indicators): (a) number of utilities/service providers supported, (b) consumer complaints addressed to the utility and related to the quality of supplied water, and (c) consumer access to information. In total, 32 utilities and 8 other service providers were supported by the project, exceeding the targets of 17 and 4 respectively. 30 of these utilities used a benchmarking system under the project to monitor their performance. The number of customer complaints decreased by approximately 20 percent from baseline values (which were as high as 53 complaints annually in one utility), while all participating utilities had achieved at least level 2 in access to information.16 Access to information improved the transparency and social accountability of participating utilities, which previously did not report important information to their customers (details about how water bills are calculated, information on utility expenditure, schedules for planned works, and so on). Given challenges with regard to citizen engagement and transparency, this was a significant and positive impact attributed to the project.
34. Ratings. Given the overachievement of corresponding indicators, the rating for PDO1 is considered High before and after the 2012 restructuring.
PDO2: Improved quality of wastewater treatment services 35. The quality of wastewater services was measured by (a) volume of BOD-5 removed by the treatment plants supported under the project, (b) volume of phosphorus pollution loads removed by the treatment plants supported under the project, and (c) volume of nitrogen pollution loads removed by the treatment plants supported under the project. Based on available information, the volume of BOD pollution loads removed by the treatment plants supported under the project was 13,613 tons per year at project closing compared to a target value of 15,500 tons per year. The volume of
15 Typically, indicators used for water service quality are (a) continuity of the water supply, (b) delivery pressure, (c) bacteriological water quality, and (d) chemical water quality. However, based on project activities, a narrow definition of quality is used. 16 The indicator is measured on a scale from 1 to 3 where a score of 3 indicates key information displayed on a website and updated regularly; a score of 2 indicates where this same information can be accessed via telephone; and a score of 1 indicates where this information is publicly displayed on the premises of a utility.
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phosphorus removed was 215 tons per year compared to a target value of 340 tons per year. In terms of nitrogen, volume removed was 1,428 tons per year compared to a target of 1,500 tons per year. All three indicators had been steadily increasing since their inclusion in the RF (table 3).17 The details of values by subproject is included in table 10.3 and figures 10.2 and 10.3 in annex 10.
Table 3. Impact on Pollution Removed by Wastewater Plants for Selected Years (tons per year)
Baseline Target 2014 2015 2016 2017 2018 2019 BOD 14,750 15,400 8,269 10,076 9,225 11,771 12,301 13,613 Phosphorus 220 330 90 106 98 198 185 215 Nitrogen 1,300 1,500 875 995 964 1,008 1,276 1,428 Source: IBNET 2019. Note: Definitions: P = Phosphorus; N = Nitrogen
36. In the final ISR, it was reported that baseline values for these indicators had been overestimated at project design stage and should have been 8,960, 99.4, and 919 tons per year for BOD, phosphorus, and nitrogen removed respectively. ICR interviews highlighted that this was a methodological error identified by the PIU when assessing the project’s impact, and it resulted in targets being set at a level higher than they should have been.18
37. Quality of wastewater services was also measured by the PDO indicator ‘reduced volume of BOD pollution loads transported in unreliable sewerage transmission systems’ which measured the project’s impact on wastewater networks rather than WWTPs themselves. The reduced volume of BOD pollution loads was 21,218 tons per year by project closing, exceeding the target value of 15,200 tons per year. This indicator was based on sewerage network rehabilitation works in five subprojects (Grodno, Mogilev, Borisov, Bobruisk, and Bykhov). Two related intermediate indicators captured extensions to the sewerage network (km of wastewater collectors laid; access to improved sanitation services). A total of 96 km of pipelines were placed, exceeding the target value of 54 km. 47,520 people were provided with access to improved sanitation services, significantly exceeding the target of 1,000.
38. Ratings. Given the significant progress over the project in pollution loads achieved as well as sewerage networks completed, the rating for PDO2 is considered Substantial before and after the 2012 restructuring. Although lower baselines and targets may have resulted in a rating of High, a conservative approach to the rating is applied, and the rating is given irrespective of errors in baselines and associated targets.
17 Nitrogen was included as an output indicator whereas the other three were included as PDO indicators. Pollution reduction impacts were achieved through the completion and commissioning of six wastewater subprojects under the original loan and 13 under the AF—six of which were additional sites due to cost savings. In all existing sites, networks and infrastructure had been built in the 1970s and were in a dire state of disrepair, with effluents being discharged into rudimentary systems or discharged raw. 18 It should be noted that all data on outcomes related to the project were provided by the PIU to the project team in the form of an aggregated Excel datasheet. Additional quality assessment of impacts could have been strengthened by third-party verification or an M&E specialist (technical audits were not carried out), as is discussed later under M&E implementation. For BOD removed, if using the updated value provided in ISR 23, the resultant increase in pollution load removed is 4,653 tons per year (13,613 − 8,960 = 4,653), which is larger than the increase from the original baseline value to the target value (15,500 − 14,750 =750 tons per year). For phosphorus removed, suggested updated baselines of 99.4 tons per year would result in removal of 172.5 tons per year as opposed to 120 tons per year, while for nitrogen, suggested updated baselines of 919 tons per year would result in loads removed of 920 tons per year as opposed to 509 tons per year. Methodological errors are discussed later on in this ICR in the context of World Bank performance. Errors in baseline calculations and their late identification reflect poorly on the M&E and World Bank performance, as is discussed later.
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PDO3: Improved efficiency of water supply services 39. Efficiency of water supply services is not defined in the PAD or subsequent restructuring packages. It is inferred by the expected outcomes that this relates specifically to energy efficiency. No PDO indicator was included to capture changes in efficiency in water supply and during implementation, although the rehabilitation of old systems was expected to yield positive benefits on energy usage and leakage. The limited impact that the project had on efficiency was recognized during the 2012 restructuring in which efficiency was removed as a PDO. An energy audit was planned under Component 2 of the AF but was also dropped at the request of the Government of Belarus (GoB). While energy efficiency was not measured during the project, data had been collected for select utilities as part of the IBNET database for 2015 to 2018. For 15 utilities participating under the project and in the database, average electricity consumption per cubic meter of drinking water sold was 0.67 kWh in 2018, decreasing from 0.74 kWh per m3 in 2015 (see table 10.4 in annex 10). While data are not available for previous years or from before project interventions, the average energy consumption across all Belarusian utilities in the database in 2018 is significantly higher, at 1.04 kWh per m3, while the Western Europe average is 0.48 kWh per m3.19
40. Ratings. While energy consumption per cubic meter sold in utilities supported by the project is lower than country averages, achievement of PDO3 is rated as Negligible because project-level results were not monitored, and the general lack of data makes these results inconclusive.
PDO4: Improved efficiency of wastewater treatment services 41. As with water supply, efficiency of wastewater treatment services is assumed to refer to energy efficiency. A PDO indicator was included (electricity consumption in kWh per m3 of wastewater treated). Baseline and target values were not defined in the PAD but were established three years into implementation with the baseline energy usage of 2.5 kWh per m3 treated and target usage less than 1.5 kWh per m3 treated.20 During the 2012 restructuring, this PDO was removed and energy usage was not measured directly by the project. However, as with water supply, data on electricity consumption are included in the IBNET database from 2015 to 2018. For utilities supported with wastewater interventions under the project, average electricity consumption per cubic meter supplied was 0.83 kWh in 2018, increasing from 0.78 kWh per m3 in 2015 (table 5), while average energy consumption across all Belarusian utilities in the database in 2018 is higher, at 0.99 kWh per m3 treated. These values are significantly lower than the target value of greater than 1.5 kWh per m3 and within the benchmark range: the average energy usage for wastewater treatment ranges from 0.41 to 0.87 kWh per m3 depending on treatment plant size.21
Table 4. Electricity Consumption, Wastewater for Selected Years Baseline Target 2015 2016 2018 Average across 13 utilities (kWh per m3) 2.5 <1.5 0.78 0.76 0.83
42. Ratings. Data between 2015 and 2018 indicate that energy usage was lower than the target value of 1.5 kWh per m3. However, achievement of PDO3 is rated Modest because project-level results were not monitored and the lack of data before 2015 prevents an assessment of how these have changed over time. This PDO was removed after restructuring in 2012.
19 European Benchmarking Co-operation. 2017. Learning from International Best Practices. Online: https://www.ib- net.org/docs/PublicReportIB2016.pdf. 20 ISR 6. 21 Gandiglio, M. Andrea Lanzini, Alicia Soto, Pierluigi Leone, and Massimo Santarelli. 2017. “Enhancing the Energy Efficiency of Wastewater Treatment Plants through Co-digestion and Fuel Cell Systems.” Environmental Science October 30, 2017. https://doi.org/10.3389/fenvs.2017.00070.
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PDO5: Improved sustainability of water supply and wastewater treatment services 43. Although sustainability in the PAD was not defined, the PDO indicator ‘operating cost coverage ratio’ indicates that it aimed to improve the financial sustainability of utilities. The target, established three years into implementation, was an operational cost coverage (OCC) ratio of above 1, although the baseline was not indicated. Data from IBNET are available from 2008 to 2018 and suggest that, for utilities supported under the project, OCC was 1.37 by 2018. For all utilities in the database with data on OCC (37), average OCC was 1.23 in 2018 (see table 6 and annex 10 for a more detailed breakdown of these results).
Table 5. Operational Cost Recovery Baseline Target 2008 2010 2011 2012 2015 2016 2018 Average across 21 utilities Not established >1 1.09 1.04 1.09 1.15 0.81 1.16 1.37
44. Ratings. Available data indicate that there was a 26 percent increase in the average OCC of utilities supported by the project from 2008 to 2018, and that the average OCC was above the target of 1; however, given lack of project-level data available, a rating of Modest is given before the 2012 restructuring and dropped thereafter.
PDO6: Increased access to water supply services 45. Access to improved water sources was measured by the PDO indicator ‘people provided with access to improved water sources under the Project,’ which had the target value of 9,800. In the PAD, access was defined as ‘access to piped water supply’ but this was revised during restructuring. Based on information provided by the PIU, by 2017, 7,390 beneficiaries had been provided access to improved water supply due to the project. Between ISR 18 and ISR 19, this number increased dramatically from 7,390 to 126,580, while the target remained the same. This represented a broadening of the interpretation of this indicator to include access to improved water supply services. A final figure of 445,938 people is given for those benefiting by the end of the project, a significantly large portion (5 percent) of Belarus’ total population. A clear upward trend in access to safely managed drinking water coverage was observed in the country following the start of the project in 2008, increasing from 88 percent to 94 percent, although the full extent of the impact of the project on this trend is not clear due to the change in the way this indicator was measured (see figure 10.4 in annex 10). As indicated in the Borrower’s ICR Report (see annex 5), this indicator was measured for all subprojects that involved the rehabilitation and/or expansion of water supply networks. Hence, while the higher figure of 445,938 represents a significant number of people which, as a result of the project, had access to upgraded water supply networks, it does not reflect the number of people additional people who previously did not have improved water sources. Data on access in the narrower sense were not available.
46. Increased access to water supply services was supported by the intermediate indicator ‘km of transmission and distribution pipelines laid/replaced’, with the target of 60 km laid/replaced. By the time of closing, 154 km had been laid, surpassing of the target value by more than double.
47. Ratings. Given the way in which this indicator was interpreted in the on-going monitoring of project outcomes, the figure of 7,390 was used as the most reliable - although conservative – estimate of access in the narrow sense. Against a target value post-2012 restructuring of 9,800, this achievement yields a Substantial rating.
Justification of Overall Efficacy Rating 48. Ratings. While the project delivered significant outcomes to its beneficiaries in terms of water quality, wastewater services, and access, outcomes were modest in other areas such as efficiency and sustainability. Restructurings improved the project’s outcome ratings by focusing its objectives on the delivery of improved services and increased access. Overall efficacy is therefore rated Modest and Substantial before and after the 2012 restructuring, respectively.
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Table 6. Summary of Efficacy Results Before AFa PDO AF (March 2014) onwards (December 2014) To increase access to water supply services and to improve the quality of water To improve the quality, efficiency and sustainability of water supply and wastewater treatment supply and wastewater services in six (6) participating Project oblasts of the Borrower. services in selected urban areas in all six Oblasts of the Borrower. Efficacy (PDO) Modest Substantial PDO1: Improved quality of water supply services Target 307,300 324,000 1. Population benefiting from improved quality of water supplied Outcome 611,766 Efficacy High PDO2: Improved quality of wastewater treatment services Not defined 15,200 1. Reduced volume of BOD pollution loads transported in Not defined 15,500 Target unreliable sewerage transmission systems (tons/year) Not defined 340 2. Volume of BOD pollution loads removed by treatment plants Not defined 1,300 supported under the project (tons/year) 22,218 3. Volume of Phosphorus pollution loads removed by treatment 13,613 Outcome plants supported under the project (tons/year) 215
4. Volume of Nitrogen pollution loads removed by treatment 1,428 plants supported under the project (tons/year) Efficacy Substantial PDO3: Improved efficiency of water supply services Target Not defined PDO indicator not included – assumed “electricity consumption Outcome 0.67b kWh/m3 in KWh/m3 of water supplied” Removed after 2012 Efficacy Negligible PDO4: Improved efficiency of wastewater treatment services Target <1.5 kWh/m3 3 Electricity consumption in KWh/m of wastewater treated Outcome 0.83 kWh/m3 Removed after 2012 Efficacy Modest PDO5: Improved sustainability of water supply and wastewater Target >1.0 treatment services Outcome 1.37 Operating Cost Coverage (OCC) Ratio Removed after 2012 Efficacy Modest PDO6: Increased access to water supply services Target 9,800 People provided with access to improved water sources under Outcome 7,390c the Project
New PDO Efficacy Substantial Note: a. After first restructuring in December 2012. b. Limited data available in IBNET for years 2015 – 2018 c. The final figure is reported as 445,938 but the definition of which changed to encompass a wider group of beneficiaries. Refer to section PDO7 for a discussion of these changes.
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C. EFFICIENCY
Assessment of Efficiency and Rating 49. The project was implemented for more than a decade, spanning eight years for the original loan but with the scale-up of activities during the AF. By closing, over 99 percent of total funds had been utilized. Additionally, a significantly higher number of subprojects were financed under the project than had been originally planned (54 compared to 28) due to lower costs than had initially been estimated and resulting in a number of outcome targets being exceeded. This positive comparison of actual with predicted financial out-turns was fortuitous: partly due to costs having been overestimated and partly due to exchange rate movements.
50. Per capita costs were US$128 for a wastewater services subproject in the PAD (rehabilitation of WWTP in the city of Rogachev). Using updated capital costs and population figures, the actual cost was US$276. Higher per capita costs were due to higher capital costs for the subproject (US$9.8 million compared to US$4.2 million estimated in the PAD). Per capita costs of US$396 were estimated in the 2012 Restructuring Paper for a subproject concerning access to drinking water (extension of water supply network in the town of Sharkovschina). Per capita costs were in fact US$854, again driven by larger costs. The European Commission Directorate-General for Environment (DG Environment) suggests that within the European context, per capita wastewater costs should range between US$127 for secondary treatment and US$254 for advanced treatment.22, For water supply subprojects, benchmark per-capita costs are in the range of US$200– US$250.23 Both wastewater and water supply per capita costs were higher than benchmarks, although it should be noted that because of a lack of detailed data on project costs available at the time of ICR drafting, costs used were aggregated subproject costs, which may include additional project elements.
51. In the PAD, a cost-benefit analysis (CBA) was included for three subprojects. The appraisal documents clearly indicate that much of the operational, technical, and financial data required for the analysis were very limited or contradictory, making the CBA speculative to a large degree. A data collection system was planned by the PIU to provide the necessary information to allow better assessments of economic benefits. While some data were collected, a lack of adequate monitoring and evaluation (M&E) hindered the collection and use of this data, as is discussed under the section World Bank Performance.
52. The economic analysis in this ICR applies the same methodology and assumptions as the PAD to assess, ex post, the same sample of subprojects. Refer to annex 4 for a breakdown of these. In Bobruisk, which involved improvements in water quality, the subproject had originally been assessed to have a net present value (NPV) of US$2.0 million and economic rate of return (ERR) of 21 percent. Benefits were driven by savings to households, where it was suggested that households discarded 10 percent of their water due to excess iron. An ex post analysis of the subproject suggests that its capital costs were almost half those in the PAD (US$1.4 million compared to US$2.5 million) and served a larger population than had been estimated. As such, the ex post NPV was US$5.8 million and ERR 36 percent, indicating a higher efficiency than the original estimate, even with the inclusion of operations and maintenance (O&M) costs which were not included in the PAD. Evidence on coping mechanisms with regard to high iron levels is limited. As such, carrying out a sensitivity assessment on the assumption regarding the proportion of water discarded is required. At 2.5 percent as opposed to 10 percent, the subproject is not economically justified, with a negative NPV of −US$0.6 million and ERR of 4.9 percent. A Social Assessment Survey in 2007 suggests that in fact, households rely on bottled water or household water filters, with
22 European Commission DG Environment. 2010. Compliance Costs of the Urban Wastewater Treatment Directive. The unit cost for a secondary treatment plant above 100,000-person equivalent (PE) is EUR 115 while the investment costs for an advanced (3NP) plant is EUR 230 per PE. The estimated investment cost would therefore be EUR 115 per PE in case the requirement is advanced treatment and currently only secondary treatment is in place. 23 World Bank. 2016. The Costs of Meeting the SDG Targets on Drinking Water, Sanitation, & Hygiene.
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costs five to ten times their average household water bill. These results support the positive assessment of benefits to households from the subproject, although further investigation would be necessary to quantify them more precisely.
53. The second subproject was that of a new trunk collector conveying effluents to a new treatment plant in Mogilev. The economic assessment in the PAD suggested an NPV of US$2.2 million and ERR of 21 percent, driven by an estimated reduction in operating costs by 15 percent. The subproject’s actual capital costs were higher than had been estimated (US$9.5 million compared to US$6.1 million), resulting in a negative NPV of −US$1.4 million and ERR of 3 percent. As is discussed under the section of Efficacy, efficiency was dropped during restructuring, and limited data make it difficult to reliably estimate whether the subproject had an impact on the utility. Using data from IBNET, the average operational cost for wastewater produced in the Mogilev utility fell from US$0.75 to US$0.5 per m3 between 2012 and 2016, although data from 2018 indicate that it rose again from 2016 to 2018 to US$0.74 per m3. It is thus unlikely that the 15 percent savings was realized. However, the intervention was expected to have a material impact on reducing the rate of sewerage blockages, although these had not been included in the original CBA as a benefit stream. Data from IBNET indicate that for the Mogilev utility, sewer blockages fell from 6.33 to 0 km per year between 2012 and 2018.
54. The third subproject was that of wastewater system modernization in Grodno through the replacement of pumps and wastewater mains, with estimated savings of US$20,000 per year that would flow to the utility. IBNET data suggest that since 2015, energy costs per cubic meter have been relatively flat (US$0.63 to US$0.75 for water supplied; US$0.55 to US$0.54 for wastewater). It can be concluded that these benefits did not materialize, as was recognized during restructuring, but would instead improve system reliability since the existing pumping station is overloaded.
55. The project had several benefits that were not included in the original economic assessment. For projects that expanded access to safely managed water supply, benefits would include time savings for households which would previously rely on wells and health benefits associated with better and more reliable water supply (7,390 people), while improvements in water quality would be associated with a reduced financial burden of purchasing bottled water (611,766 people). For wastewater service improvements, benefits include environmental health improvements due to additional pollution adequately treated (13,613 tons per year of BOD, 229 tons per year of phosphorous, and 1,276 tons per year of nitrogen removed) and a reduction in greenhouse gas emissions. Additionally, economic benefits associated with access to improved sanitation would include time and health savings, as well as decreased financial burden for households relying on septic tanks.
56. Though some of the results from the economic evaluation are positive, there are also cases where costs are large and not economically justified based on data available. Additionally, several factors influenced the administrative and operational efficiency of the project, leading to a number of closing date extensions. However, the AF also scaled up activities to enhance the impact of the project, and resulted in significantly larger project benefits (see section Efficacy).
57. Ratings. Due to the results of the analysis and the influence of these factors on project efficiency, the rating assigned is Modest.
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D. JUSTIFICATION OF OVERALL OUTCOME RATING
Table 7. Split Evaluation Before Restructuring With Restructuring Relevance of PDOs Substantial Efficacy Modest Substantial PDO1 High High PDO2 Substantial Substantial PDO3 Negligible — PDO4 Modest — PDO5 Modest — PDO6 — Substantial Efficiency Modest 1 Outcome ratings Moderately Unsatisfactory Moderately Satisfactory 2 Numerical value of outcome ratings 3 4 3 Disbursement US$19.98 million US$129.49 million 4 Share of disbursements 13% 87% 5 Weighted value of outcome ratings 0.39 3.48 6 Final Outcome Rating Moderately Satisfactory (0.39 + 3.48 = 3.87 rounding it to 4.0)
E. OTHER OUTCOMES AND IMPACTS (IF ANY)
Gender 58. The project was not originally designed to have a direct gender dimension, although during the AF, gender was identified as an area where disaggregation of data on outcomes should be measured. A gender filter was introduced to measure the distribution of benefits of improved quality of water, although this was not done on the PDO for access, and activities were not designed to target women or disadvantaged groups directly. At project closing, the sub-indicator target was not met (54 percent actual versus 56 percent), although this is largely a function of the way this was calculated. The percentage was given as a share of the population according to the National Statistical Commission statistics and was not measured through surveys.
Institutional Strengthening 59. This project was the first of its kind in the country. ICR interviews revealed that because of this project, training and capacity building were given to a wide array of stakeholders including the PIU, utilities, and contractors. While site- specific trainings were given to utilities, it is not clear to what extent utilities benefited from institutional strengthening efforts. The PIU on the other hand, was the recipient of the majority of this training, which comprised both formal and on- the-job training, as well as hands-on support during the project’s implementation and the support of a procurement consultant. For example, in 2015, the PIU participated in the International Purchase Management Course organized by the International Training Center of the International Labour Organization. Additional procurement training was carried out in 2009, 2010, 2013, and 2018.24 Coming from a low base (reflected in serious implementation delays in the first four years of implementation and only 13 percent disbursement of funds), the PIU gained significant expertise over the course of the project. For example, disbursements of around US$10 million were made in FY11 alone and US$40 million in FY18.
24 Topics covered: Procurement (International Competitive Bidding [ICB], National Competitive Bidding [NCB], and Shopping; Quality- and Cost-Based Selection [QCBS]; time based and lump sum contracts; bid evaluation; and so on); safeguards; and fiduciary management.
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Having the majority of capacity building efforts channeled towards the PIU, the staff of which are consultants, meant that the impact on Government’s long-term capacity building was limited.
Poverty Reduction and Shared Prosperity 60. The distributional impacts of the project were not measured, and it is unclear to what extent its benefits accrued to the poor or increased shared prosperity (see map in annex 12 for locations of subprojects).
Other Unintended Outcomes and Impacts 61. The project improved the transparency and social accountability of participating utilities. Previously there was limited information in the public domain (in particular, no details were provided about how water bills are calculated and structured, information on utilities budgets and expenditures, and schedules for planned public works). ICR interviews suggested that by providing this information, the public perception of service providers improved, along with establishing mechanisms for managing inquiries and complaints that were previously nonexistent.
III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME
A. KEY FACTORS DURING PREPARATION
62. The WSSP was the first World Bank-supported project in the sector and emerged from a period of limited borrowing from IFIs and a difficult operational context. The WSSP was the first World Bank engagement in the sector in Belarus and, as a result, required significant support during preparation. Previous engagement had been limited, with the WSSP marking the end of a period of disengagement that had been on-going since 1997. The WSSP was part of a gradual process of re-engagement, which partly explains its focus on physical infrastructure. While efficiency and sustainability objectives were included in the PDO as potential entry points to address sectoral weaknesses, larger efforts toward sectoral reform were limited in the project’s design in light of the difficult operational context. Tension between project ambition and country context meant that the WSSP needed to strike a balance between delivering direct results to beneficiaries and improving the sector more generally, with an understanding of government priorities only emerging during implementation. Efforts were required to build trust between stakeholders, as well as the capacity to navigate the preparation of an investment in a manner significantly different to others used in the country at the time.
63. Counterparts’ limited capacity and experience of working with the World Bank led to an absence of some baseline values, unreliable cost estimates, and small sized contracts. Only once further subproject selection had been done was it possible to establish baseline and target values. Cost estimates included in preparation documents differed from the actual costs uncovered during procurement, where under the original loan cost estimates were underestimated, while in the AF cost estimates had been overestimated. This was particularly the case for subprojects prepared by the State Design Institute. The packaging of subprojects into smaller contracts for technical and financial reasons limited potential interest from international contractors, while the local contractor market was dominated by state-owned companies that were often not eligible to engage in World Bank tenders. Belarus had only an extremely nascent private sector and limited foreign presence at the time of preparation.
64. The country’s highly centralized approach to service delivery meant that utilities themselves were not active decision makers during project preparation. Water utilities were largely considered the recipients of infrastructure investments rather than key stakeholders in the selection, design, or implementation of subprojects (see annex 11 for a flow chart depicting the investment process). There was no on-lending to utilities and the project was designed to be managed centrally (through the PIU). This was an unusual approach and meant that building the capacity of utilities toward
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commercial financing was not possible, and an assessment of the financial implication of the project on service providers was not carried out.
65. A robust approach to risk identification meant that the World Bank team was largely able to manage and mitigate risks. The overall risk rating was Substantial, driven by limited experience of agencies in implementing World Bank projects and lack of fiduciary and procurement staff in the PIU identified at design. Risk mitigation measures were effectively used throughout implementation and included additional checks carried out by the PIU at the level of director, as well as regular monitoring visits by the team and rigorous review systems. These resulted in satisfactory delivery on procurement and financial management (FM) aspects.
B. KEY FACTORS DURING IMPLEMENTATION
(a) Factors subject to the control of the government and/or implementing entities
66. Identifying sectoral weaknesses such as inefficiency and low performance during design meant that these agendas were given visibility throughout the project’s life, although delivering only limited benefits to utilities directly. Increased levels of ambition were recognized during the design of a new WSS project that was approved in 2019 which has efficiency at its core. However, in the face of limited interest from national stakeholders, the inclusion of sector modernization in the WSSP’s design delivered only limited results itself to beneficiaries, and efficiency and sustainability objectives were removed during implementation (see Efficacy section for a detailed discussion). Eventually, the project focused largely on ‘brick-and-mortar’ infrastructure with lower-level ambitions for the sector more generally and more aligned with the Government’s original preferences.
67. Procurement issues slowed initial implementation. At the start of the project, procurement and FM capacity were low in the PIU which had limited experience of World Bank processes and lacked key personnel. For example, hiring of the project engineer was only completed in October 2013, after the original closing date of the project. Delays in hiring PIU staff were, in part, a result of unattractive terms offered to employees. Initially, overall procurement risk was determined as high due to ambitious plans to complete a large number of NCB and ICB tenders and the complexity of local legislation. However, once the PIU gained familiarity with the approach, much steadier implementation was observed. The PIU worked closely with the six municipalities of Minsk, Brest, Vitebsk, Gomel, Grodno, and Mogilev, as well as 32 WSS/multi-utilities and 8 other service providers to address and overcome challenges.
68. The MHU was slow to accept the precedence of World Bank procurement guidelines. During implementation, it became clear that ownership, coordination, and engagement between the MHU and PIU were a challenge and a cause of delay to project implementation. The PIU, as per the Loan Agreement, was required to abide by World Bank procurement processes, whereas the MHU was reluctant to move away from Belarusian processes. In one instance, competitive bidding was used to determine the cost of a subproject package, but costs were higher than the ex-ante estimates provided by the State Control Committee. The PIU followed World Bank procedures in choosing the lowest eligible bidder, who later faced criminal investigation because the contract price was higher than those allowed by Belarusian procedures. The PIU’s support of the decision to hire the bidder meant that they faced pressure from the MHU.
69. The PIU did not have in-house translation expertise and did not speak in English. This hampered communication between the World Bank team and the PIU. Additionally, the PIU faced difficulties in attracting skilled professionals due to low wages that were paid by the GoB, which were outside the project’s scope.
(b) Factors subject to the control of the World Bank
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70. Lack of clarity on PDOs and outcome targets posed a serious obstacle to effective implementation. Some objectives were not clearly defined during preparation (for example, efficiency of water supply) which posed a material challenge to the effective monitoring of outcomes.
71. The team followed a pragmatic approach to delivering benefits. The World Bank team made proactive use of restructuring. During the first restructuring, the project capitalized on areas where there was clear mandate from the Government and removed objectives which were met with limited Government appetite, such as higher-level sector modernization. Instead, the team focused its efforts on ensuring progress of works and disbursement of funds where there was a clear mandate and ownership in country.
72. The team proactively utilized emerging research to direct project activities. The project used emerging lessons from analytical research in the sector and incorporated these into the design of the AF. The Belarus Municipal Water Sector Review (2013) identified the need to review design sizing norms because they often led to excessive investment and operating costs, as well as highlighting performance of service providers as a key obstacle, both of which were included as areas for support under the AF. A review of design norms was carried out under the project and presented to Government.
73. Over time, the World Bank team lowered its own expectations on project ambition. Due to difficulties in pushing efficiency and sustainability, expectations on the ability of the project to tackle challenges at the utility-level were lowered, and toward the end of the project the team focused on delivering physical infrastructure works. This was also due in part to multiple changes in task team leadership, with five task team leaders functioning over the duration of the project. This lowered the World Bank’s institutional memory and resulted in a loss of some specific learnings and project ambitions. For example, the use of utility performance monitoring, which had been carried out initially, was not embedded into the project’s continued implementation but might have improved the quality of its M&E utilization.
(c) Factors outside the control of the Government and/or implementing entities
74. There was a continued lack of interest from contractors throughout the project. This was a persistent challenge throughout implementation, driven by limited availability of contractors on the ground, local contractors not understanding World Bank procurement procedures or being unaware of invitations to bid, and small contract values of subprojects not fostering interest from international contractors beyond Lithuania. The World Bank team provided training to bidders as a means of mitigating these challenges although they persisted throughout the project’s implementation.
75. Belarus experienced a macroeconomic crisis during the project’s implementation. Three years after effectiveness, the project faced implementation difficulties caused by high inflation and significant currency exchange rate changes. This prompted the cancellation of two contracts and the need for re-bidding of three construction activities.
76. Weather disruptions played a role in delaying project activities. The project suffered construction delays caused by a number of exceptionally cold and unfavorable weather conditions impeding construction activities in a number of winters (2013, 2015, and so on).
IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME
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A. QUALITY OF MONITORING AND EVALUATION (M&E)
M&E Design 77. At design, the RF and associated M&E system had some shortcomings. The indicators did not reflect all the PDO elements, in part due to water supply and wastewater treatment services being grouped together. As a result, while there was an efficiency indicator included for wastewater (electricity consumption per m3 wastewater treated), one did not exist for water supply. Additionally, baselines and targets were missing for a large number of PDO and intermediate indicators. A clear link from activities to outputs to outcomes was not made, and while intermediate indicators covered some of the gaps in the PDO indicators, they were incomplete. Later, the RF was much improved after restructuring. However, there were still minor shortcomings. Access to sanitation was not included as a PDO but was included as an output indicator. Additionally, baseline values for PDO indicators measuring progress on the quality of wastewater services were incorrectly estimated at the time of design.
M&E Implementation 78. The tools proposed for M&E were unrealistic given the resources of the project and limited ownership from the MHU. This refers particularly to the use of results-based M&E to measure the quality of services as detailed in the PAD and the annual customer surveys carried out under the project, although no financing was assigned to their implementation. Reliance on these evaluations to attribute outcomes to the activities could explain some of the shortcomings of the RF. The M&E approach relied fully on the PIU, which lacked staff resources to carry out M&E functions adequately. The World Bank team repeatedly advised the MHU and PIU to submit an updated version of the monitoring framework and suggested possible reforms and actions that could be taken for its improvement. Over time, the RF was improved to better assess project-level results, and ongoing efforts enabled better reporting on project-level activities, outcomes, and outputs. These were reflected timeously in the regular reporting of project ISRs. Baselines and targets were established for some PDO indicators only after restructuring in 2012.
M&E Utilization 79. Limited utilization of M&E suggests that it was not used as a tool to support evidence-based learning, although it did allow course correction during later years when it emerged that results for efficiency and sustainability were not realized. As additional subprojects were added into the project’s portfolio, the RF was not updated to include these, although some indicators were grouped by subproject and not aggregated. Additionally, an error in baseline values was only uncovered in the last ISR.
Justification of Overall Rating of Quality of M&E 80. Ratings. Restructurings improved the RF over time to better reflect the objectives and activities of the project. The quality of M&E is rated Modest.
B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE
81. The project was implemented in compliance with the World Bank’s policies and national procedures, as well as with existing environmental, occupational health, and labor safety requirements. Four safeguards policies were triggered under the project: Environmental Assessment (OP/BP 4.01), Physical Cultural Resources (OP/BP 4.11), Involuntary Resettlement (OP/BP 4.12), and Projects on International Waterways (OP/BP 7.50), although no direct or indirect potential large-scale, significant, and/or irreversible negative impacts were likely under the project. Physical Cultural Resources (OP/BP 4.11) was applied due to possible chance finds in one subproject (Mogilev). The project was assigned Category B, Partial assessment. To safeguard against negative environmental impacts, Environmental and Social Management Plans were developed for subprojects. The PIU carried out monitoring of mitigation measures and occupational health/labor
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safety rules, and reports were submitted to the World Bank. There were no large-scale resettlement activities under the project, and social impacts related to economic and physical displacement were mitigated through preparation of site- specific RAPs. RAPs offered mitigation measures, including compensation measures, that meet the replacement cost standard of the World Bank’s OP/BP 4.12 on Involuntary Resettlement. These compensations were all processed and paid on time. No significant and large-scale negative impacts were registered during the project implementation.
82. During construction works on wastewater treatment facilities there were local short-term impacts on soil and vegetation, but these impacts were mitigated by recultivation upon completion of works. Water supply pipelines and sewage pipes were laid down along roads and had only temporary impacts (removal of topsoil and vegetation, inconvenience for pedestrians, traffic, noise, and exhaust air emissions). Construction of water supply systems was done in the existing facilities and had no impact on the environment. Some violations of labor safety rules (workers not wearing proper personal protective equipment, sub-standard scaffolding, improper fencing of trenches, and open pits) were registered by the PIU, and in most cases corrective measures were implemented by the contractors. Waste management was organized in accordance with the requirements of Belarusian regulations. A project-level GRM operated on the basis of Belarus domestic legislation. Most of the complaints registered and processed through the GRM were related to labor safety rules. No complaints related to social and environmental safeguards were received by the GRM.
83. FM. The project closed with a Satisfactory FM rating, with no pending FM actions. Throughout project implementation, the PIU carried out the FM and disbursement functions satisfactorily. While there was a short period of capacity building and learning at the very initial stages, throughout the major portion of project life FM performance was consistently strong. FM staff of the PIU attended numerous trainings organized by the World Bank in Belarus and other countries and managed their tasks well. Project quarterly reports (Financial Monitoring Reports [FMRs]) were submitted on time and were of satisfactory quality. Annual audits of project financial statements were carried out on time by private auditors acceptable to the World Bank on the basis of agreed terms of references. The auditors issued clean (unmodified) audit opinions and did not note any significant internal control issues.
84. Procurement. Procurement under the project was implemented in accordance with the World Bank’s Procurement and Consultant Guidelines and in accordance with the provisions of the Loan Agreement. In general, all signed contracts were successfully completed. From the beginning of the project, the procurement performance was rated Moderately Satisfactory; then, from 2017 after the quality of the performance was improved and at closing, it was rated Satisfactory. Delays in the signing of several consultants’ contracts related to the lack of available counterpart funds needed to cover value added tax costs. A number of temporary delays in project implementation were caused by the client’s refusal to sign contracts due to the fact that the bid price of the recommended bidder exceeded the approved cost estimate. Another problem that was recognized related to the low quality of preliminary designs used for the preparation of tender documentation, and, as a result, this led to a number of amendments to construction contracts that were already signed. All the abovementioned problems were resolved by the borrower.
C. BANK PERFORMANCE
Quality at Entry 85. The initial design of the project recognized that large-scale reform efforts were not likely to be successfully tackled in the WSSP, and focused rather on project-level interventions that were more palatable to Government. However, there were still fundamental shortcomings in the initial design, where efficiency and sustainability were stated as objectives, but where a model through which these could be targeted was not defined. Financial analyses of WSS service providers were not carried out, making it difficult to establish a clear set of interventions that would be able to tackle these sectoral weaknesses.
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86. The team was upfront about managing expectations on disbursements due to the large number of feasibility studies that would be financed by the project and which were required before construction. Low estimates for the first few years were noted explicitly in the PAD.
87. Risks were adequately identified to mitigate any potential risk due to the WSSP being the first project of its kind in the country. The PAD clearly assessed risks and provided mitigation measures, including procurement and financial risks. Additionally, there was a strong focus on safeguards, with an Environmental Assessment prepared for all subprojects identified at entry, with key safeguard policies identified.
88. The project’s economic and financial assessment was not adequate at entry, with weaknesses being carried through to restructuring in 2012 and AF in 2014. The economic assessment was carried out on only a limited number of subprojects (four out of 23 identified) and used high-level assumptions to make conclusions. A financial assessment of utilities and the sector more generally was not carried out.
Quality of Supervision 89. The World Bank team provided regular implementation support on the project. Over the course of the operation, approximately 22 implementation support missions were carried out. In some cases, the World Bank could not intervene in the complex internal disagreements between the PIU, contractors, MHU, and the State Control Committee other than to reiterate that according to the Loan Agreement, the World Bank procurement processes were to be upheld. This proved difficult for the PIU when not supported by the ministry. However, despite these challenges, strong momentum in procurement enabled the operation to, over the course of its lifetime, overcome initial delays and difficulties and overdeliver on many of its activities.
90. The World Bank team made proactive use of expeditious restructuring, particularly with regard to the first restructuring in 2012. Realigning the PDOs in recognition of more realistic objectives when disbursements remained relatively low meant that the project was not heavily affected by limited outcomes for these objectives. Further restructuring allowed the full completion of works. Given the persistent difficulties in M&E, increasing implementation support with an M&E specialist may have proved to be useful. The World Bank team was delayed in ensuring that baseline and target for indicators were set in a timely manner. Additionally, the team failed to identify incorrect baseline values in some indicators until very late in the project’s implementation.
Justification of Overall Rating of World Bank Performance 91. Overall, the World Bank performance is rated Moderately Satisfactory given the initial design flaws, proactivity of the team in restructuring the project, close supervision particularly during the last two years of project implementation, and the efforts made to bring the PIU the required expertise over the life of the operation.
D. RISK TO DEVELOPMENT OUTCOME
92. Because works in all sites were complete (either operating or under the licensing and commissioning phase), the risk of the infrastructure not being used as designed is low, particularly since subproject sites were identified by the Government, with high ownership and given the current tariffs, there is little to no direct financially related threat to the sustainability of the assets built. There is the long-run risk of inadequate reinvestment in WSS services more generally, particularly since this has been a persistent challenge in the sector, conditioned by availability of public funds due to the particular funding model in Belarus. Tariffs have showed a gradual increase over the past decade in Belarus, with recognition given to achieving operational cost recovery, but further increases may be necessary to cover depreciation and investment costs for the sector sustainably.
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V. LESSONS AND RECOMMENDATIONS
93. Balancing infrastructure investment with sector reform to deliver the right mix of results is difficult, and client ownership is paramount. Projects that pursue delivery of physical infrastructure can also seek to advance a reform agenda. However, client ownership is paramount to successful delivery of reforms. In the WSSP, the inclusion of efficiency and sustainability agendas was largely World Bank driven, while limited previous engagement indicated a need to better understand the client’s own approach and expectations for the project. A risk assessment of the pathways to delivering benefits would have allowed the team to explore scenarios of varying client ownership and resultant impacts on development outcomes and in this way, ambition for sector reform could have been more pragmatically aligned with country realities.
94. Building trust between Governments and the World Bank takes time in contexts of limited previous engagement, and an opportunistic approach is necessary when exploring potential areas for support. Infrastructure investment is a useful starting point, whereas more complex reform agendas take time to mature. In the WSSP, some early steps were taken to explore ways to reform the sector more generally but resulted in low levels of achievement. To build trust and understanding, a focus on delivering physical infrastructure was more successful. Now that these links have been established, a more complex reform agenda may be more successful as part of the new operation.
95. Unless the approach to sector reform is embedded in project design, these elements can too easily be ignored. As such, the reform agenda should be embedded in the overall design of the project rather than tagged on as a separate element. In the WSSP, the inclusion of efficiency and sustainability objectives were closely linked to subproject interventions, where the rehabilitation of aging infrastructure and modernization of water and sewerage networks would have contributed to sector performance more generally. Finding a way to embed these objectives better in the design, and evaluate their impacts, may have demonstrated benefits while not requiring large-scale changes to the choice of subprojects.
96. Projects must be ready for implementation at appraisal to maximize outcomes and avoid delays. Though the justification for a framework approach made sense at the time of preparation of the WSSP, implementation faced unforeseen risks due to the lack of robust technical studies and unreliable estimates. Relying on a framework approach to speed up preparation time created additional transaction costs and delays.
97. When engaging in a new country, teams should invest more effort in understanding the sector financing model and the Government’s policy vision in that regard and ensure that it provides the basis for the sustainability of project outcome. While sustainability of development outcomes should be a key objective of any World Bank project, a focus on the financial sustainability of utilities is a means to that end. In Belarus, strong centralization of the WSS sector, although fundamentally different from the approach taken in some other European countries, ensures sector sustainability to a large degree. However, because implementation was centralized through the ministry and PIU rather than with utilities, the project was not able to assess and manage its financial implications and risks at the level of service provider. An understanding of these nuances at design might have encouraged a different approach to assessing utility-level performance and supporting technical and financial capacity building in utilities.
.
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ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS
A. RESULTS INDICATORS
A.1 PDO Indicators
Objective/Outcome: Upgrading of water supply systems Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion People provided with access Number 0.00 7910.00 9800.00 7390.00 to Improved Water Sources under the Project - urban 10-Jan-2008 04-Dec-2012 04-Mar-2014 31-Jul-2019
Comments (achievements against targets): 81% of target achieved
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Population benefiting from Number 0.00 307300.00 324000.00 611766.00 improved quality of water supplied 10-Jan-2008 04-Dec-2012 05-Mar-2014 01-May-2018
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Of which female Percentage 0.00 56.00 53.40
Comments (achievements against targets): 189% of target achieved
Objective/Outcome: Upgrading and modernization of wastewater treatment facilities Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Volume (mass) of Phosphorus Tones/year 0.00 340.00 215.00 pollution loads removed by the treatment plants 10-Jan-2008 05-Mar-2014 31-Jul-2019 supported under the project
Comments (achievements against targets): 63% of target achieved
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Volume (mass) of BOD Tones/year 0.00 15500.00 13613.58
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pollution loads removed by 10-Jan-2008 05-Mar-2014 31-Jul-2019 the treatment plants supported under the project
Comments (achievements against targets): 88% of target achieved
Objective/Outcome: Rehabilitation of sewerage systems Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Reduced volume (mass) of Tones/year 0.00 15200.00 22218.00 BOD pollution loads transported in unreliable 10-Jan-2008 05-Mar-2014 31-Jul-2019 sewerage transmission systems
Comments (achievements against targets): 146% of target achieved
A.2 Intermediate Results Indicators
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Component: Rehabilitation of Water Supply and Sanitation Systems
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion % of produced water Percentage 0.00 0.00 0.00 effectively treated with iron content below 0.3 mg/l 10-Jan-2008 05-Mar-2014 31-Jul-2019 (regulatory water samplings)
Baranovichi Percentage 94.00 95.00 99.80
Bogushevsk Percentage 0.00 95.00 95.00
Sharkovchina Percentage 0.00 46.00 75.00
Rogachev Percentage 75.50 96.00 100.00
Mar'ina Gorka Percentage 0.00 95.00 100.00
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Smolevichy Percentage 0.00 95.00 95.00
Bobruisk Percentage 30.00 95.00 95.00
Polotsk (Borovukha) Percentage 0.00 95.00 100.00
Shklov Percentage 85.00 95.00 95.00
Comments (achievements against targets): Not available at aggregate level. See individual.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of km of Kilometers 0.00 60.00 154.00 transmission and distribution pipelines laid/replaced 10-Jan-2008 05-Mar-2014 31-Jul-2019
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Comments (achievements against targets): 257% of target achieved
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion People provided with access Number 0.00 1000.00 47520.00 to improved sanitation facilities under the Project - 10-Jan-2008 05-Mar-2014 31-Jul-2019 urban
Comments (achievements against targets): 4,752% of target achieved
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion
Volume (mass) of Nitrogen Tones/year 919.00 2220.00 1428.26
10-Jan-2008 05-Mar-2014 01-May-2018
Comments (achievements against targets): 64% of target achieved
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Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of km of wastewater Kilometers 0.00 58.86 96.09 collectors laid/ replaced 10-Jan-2008 05-Mar-2014 31-Jul-2019
Comments (achievements against targets): 163% of target achieved
Component: Support to the Preparation of Investments and Sector Modernization
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Utilities using benchmarking Number 0.00 30.00 30.00 system 10-Jan-2008 05-Mar-2014 31-Jul-2019
Comments (achievements against targets): 100% of target achieved
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Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Review of design norms Yes/No N Y Y completed and discussed with the Government 10-Jan-2008 05-Mar-2014 31-Jul-2019
Comments (achievements against targets): 100% of target achieved
Component: Project Implementation and Management
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Consumers complaints Number 0.00 0.00 0.00 addressed to the utility and related to the quality of 31-Dec-2013 05-Mar-2014 31-Jul-2019 supplied water
Baranovichi Number 10.00 3.00 1.00
Bogushevsk Number 0.00 0.00 0.00
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Sharkovchina Number 0.00 2.00 1.00
Rogachev Number 16.00 3.00 2.00
Mar'ina Gorka Number 1.00 2.00 2.00
Smolevichy Number 2.00 2.00 2.00
Bobruisk Number 53.00 15.00 1.00
Polotsk (Borovukha) Number 0.00 0.00 1.00
Comments (achievements against targets):
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Not available at aggregate level. See individual sub-projects
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Consumer access to Text NR NR NR information 10-Jan-2008 05-Mar-2014 31-Jul-2019
Berezino Text No index Index 3 Index 2
Gantsevitchi Text No index Index 3 Index 3
Glubokoe Text No index Index 3 Index 2
Grodno Text No index Index 3 Index 3
Mogilev Text No index Index 3 Index 3
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Rogachev Text No Index Index 3 Index 3
Shklov Text No index Index 3 Index 3
Verkhndevinsk Text No index Index 3 Index 2
Comments (achievements against targets): Not available at aggregate level. See sub-project results.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Water utilities the Project is Number 0.00 17.00 32.00 supporting 10-Jan-2008 05-Mar-2014 31-Jul-2019
Comments (achievements against targets):
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188% of target achieved
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Other water service Number 0.00 4.00 8.00 providers the Project is supporting 10-Jan-2008 05-Mar-2014 31-Jul-2019
Comments (achievements against targets): 200% of target achieved
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A. A. KEY OUTPUTS BY COMPONENT
Rehabilitation of Water Supply Systems 1. People provided with access to Improved Water Sources under the Project - Outcome Indicators urban 2. Population benefiting from improved quality of water supplied 1. % of produced water treated with iron content below 0.3 mg/L Intermediate Results Indicators 2. Number of km of transmission and distribution pipelines laid/replaced 1. % of produced water treated with iron content below 0.3 mg/L i. 99.8% - Baranovichi ii. 95% - Bogushevsk iii. 75% - Sharkovchina iv. 100%- Rogachev Key Outputs by Component v. 100% - Mar'ina Gorka (linked to the achievement of the Objective/Outcome 1) vi. 95% - Smolevichy vii. 95% - Bobruisk viii. 100% - Polotsk (Borovukha) ix. 95% - Shklov 2. 154 km of transmission and distribution lines laid/replaced
Rehabilitation of Wastewater Systems
1. Reduced volume (mass) of BOD pollution loads transported in unreliable sewerage transmission systems 2. Volume (mass) of BOD pollution loads removed by the treatment plants Outcome Indicators supported under the project 3. Volume (mass) of Phosphorus pollution loads removed by the treatment plants supported under the project
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1. People provided with access to improved sanitation services under the Project - urban Intermediate Results Indicators 2. Volume (mass) of Nitrogen pollution loads removed by the treatment plants supported under the project 3. Number of km of wastewater collectors laid/replaced 1. 47,520 people provided with access to improved sanitation services Key Outputs by Component 2. 1,428 tons of nitrogen removed by treatment plants (linked to the achievement of the Objective/Outcome 2) 3. 96 km of wastewater collectors laid/replaced
Support to the Preparation of Investments and Sector Modernization
Outcome Indicators No outcome indicator
1. Utilities using benchmarking system 2. Review of design norms completed and discussed with the Government 3. Number of sub-projects for which feasibility studies and detailed designs have Intermediate Results Indicators been completeda 4. PIU can independently appraise, monitor, supervise and report on sub- projectsb 1. 30 utilities using benchmarking system (pilot completed in July 2019) Key Outputs by Component 2. Yes (completed in July 2019) (linked to the achievement of the Objective/Outcome 3) 3. 20 feasibility studies/detailed design carried out 4. Yes (fulfilled 2012)
Project Implementation and Management
Outcome Indicators No outcome indicator
1. Consumers complaints addressed to the utility and related to the quality of supplied waterc Intermediate Results Indicators 2. Consumer access to information 3. Water utilities the Project is supporting 4. Other water service providers the Project is supporting
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1. Consumers complaints addressed to the utility and related to the quality of supplied water i. 1 - Baranovichi ii. 0 - Bogushevsk iii. 1 - Sharkovchina iv. 2 - Rogachev v. 2 - Mar'ina Gorka vi. 2 - Smolevichy vii. 1 - Bobruisk viii. 1 - Polotsk (Borovukha) Key Outputs by Component 2. Consumer access to information (linked to the achievement of the Objective/Outcome 4) i. Index level 2 - Berezino ii. Index level 3 - Gantsevitchi iii. Index level 2 - Glubokoe iv. Index level 3 - Grodno v. Index level 3 - Mogilev vi. Index level 3 - Rogachev vii. Index level 3 – Shlov viii. Index level 2 – Verkhndevinsk 3. 32 water utilities supported 4. 8 other service providers supported Note: a. Old outcome indicator from prior to 2012 restructuring. b. Old outcome indicator from prior to 2012 restructuring. c. This is measured on a scale from 1 to 3 where a score of 3: website of utility is updated on a monthly basis and has information on the services provided by the utility, water quality parameters, the rights and responsibilities of customers, the mechanisms for dealing with complaints, addresses and phone numbers, working hours of responsible persons, and detailed disaggregated information on tariffs; a score of 2: the same information can be accessed by telephone, and this information is publicly displayed at the utility’s premises; a score of 1: this information is publicly displayed at the utility’s premises.
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ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION
Name Role Preparation
Kanthan Shankar Task Team Leader, Snr. Water and Santiation Specialist Alexander Danilenko, Shelley McMillan, Aliaksandr Technical Specialist(s) Water And Sanitation Adzinets, Andre Vardomatsky, Igor Tchoulba, Jaroslav Kozel, Arben Bakllamaja Anarkan Akerova Legal
Anne Ranasinghe, Gurcharan Singh Procurement Specialist(s)
Elena Klochan Operations Specialist(s)
Irina Babich Financial Management Specialist(s)
Maria Amelina Social Safeguard Specialist(s)
Maria Teresa Lim Program Assistant(s)
Nicholay Chistyakov Finance Officer(s)
Ruxandra Maria Floroiu Environmental Engineer(s)
Supervision/ICR Stjepan Gabric, Ivaylo Hristov Kolev, Maha Armaly, Maria Task Team Leader(s) Angelica Sotomayor, Stephane Dahan Alexander Balakov, Mari Gurcharan Singh, Salih Kemal Procurement Specialist(s) Kalyoncu, Irina Shmeliova, Alexander Rukavishnikov, Barbara Ziolkowska, Vladislav Krasikov, Anastasia Soltis, Mohammad Ilyas Butt, Daria Gulei Irina Babich Financial Management Specialist(s) Arcadii Capcelea, Volodymyr Tykhyy Environmental Safeguard Specialist(s) Jaroslav Kozel, Vladimir Anufriev Technical Specialist(s) Water And Sanitation Tamara Sulukhia Program Leader(s) Carolina Abigail Delgadillo Medina, Hanna Shvanok Program Assistant(s) Toma Alexandrov Yanakiev, Irina Voitekhovitch Operations Specialist(s) Aimonchok Tashieva, Mohamed Ghani Razaa Social Safeguard Specialist(s) Amelia Midgley ICR author; Economist
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A. STAFF TIME AND COST
Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY07 18.935 103,847.65 FY08 36.075 212,191.68 FY09 2.858 22,575.48
Total 57.87 338,614.81
Supervision/ICR FY09 11.423 64,347.85 FY10 21.808 103,402.86 FY11 25.360 112,817.38 FY12 28.271 118,953.63 FY13 42.507 178,822.29 FY14 42.490 121,137.82 FY15 27.853 84,254.84 FY16 24.362 72,294.58 FY17 19.575 100,721.87 FY18 18.100 89,789.14 FY19 12.525 48,988.14 FY20 17.551 73,528.33 Total 291.83 1,169,058.73
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Components Amount at Approval Actual at Project Percentage of (US$, millions) Closing (US$, millions) Approval (%) Rehabilitation of Water Supply and Sanitation 138.53 142.79 103.00 Systems Support to the preparation of 10.65 5.26 49.00 investments Capacity Building, Project Management, 0.45 0.17 38.00 Monitoring and Evaluation Front-end fee 0.37 0.38 101.00 Total 150.00 148.60 99.00
Revised components as per AF
Component Original cost (US$, AF (US$, millions) Revised Total Amount millions) (US$, millions) Rehabilitation of Water 53.60 84.93 138.53 Supply and Sanitation Systems Support to the 6.05 4.60 10.65 preparation of investments and sector modernization Project 0.20 0.25 0.45 Implementation and Management Front-end Fee 0.15 0.22 0.37
Total 60.00 90.00 150.00
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ANNEX 4. EFFICIENCY ANALYSIS
1. The WSSP consisted of 44 subprojects in total, 23 of which were carried out as part of the original loan and 21 as part of the AF. A total of 11 of these subprojects were added into the project due to fortuitous cost savings in the implementation of projects in AF. In addition, 9 feasibility studies were carried out under the project. In total, US$142.8 million was spent on physical infrastructure, approximately 60 percent of which was used to finance investments in wastewater treatment, while the other 40 percent financed water quality improvements, primarily iron removal from groundwater (table 9.2). The project was implemented for more than a decade, spanning eight years for the original loan and with the addition of AF.
Table 4.1. Key Project Information Total financing US$148.2 million Financing on physical infrastructure US$142.8 (96.3%) Split Water supply (39%) and Wastewater (61%) Feasibility studies, design norms, and benchmarking US$5.3 million (3.5%)
2. In the PAD, a CBA was included for a representative sample of the physical rehabilitation investments. The CBA is a methodology for appraising the economic value of investment projects or proposals. It is a test that involves weighing the implicit and explicit positive and negative impacts (costs and benefits) of a public project, in terms of its contribution to social welfare. The analysis finds, quantifies, and adds all the positive factors (benefits) and then identifies, quantifies, and subtracts all the negatives (costs). The difference between the two indicates whether the planned action has a net benefit and is therefore advisable or should be altered or discarded.
3. The subprojects that were assessed in the PAD were (a) water quality improvement in the town of Bobruisk, (b) cost reduction and wastewater service improvement in the town of Mogilev, and (c) energy efficiency improvements in the town of Grodno. A fourth subproject, wastewater treatment improvements in Rogachev, was assessed for its per capita cost, estimated to be US$128. The CBA in the PAD indicated ERRs between 14 percent and 21 percent and NPVs between US$0.4 million andUS$2.2 million. However, the appraisal documents clearly indicated that most of the operational, technical, and financial data required for this analysis were very limited or contradictory when different sources were compared. This lack of data made the CBA speculative to a large degree, while the level of detail of assessment was coarse. A data collection system was planned to be installed by the PIU to provide the necessary information to allow better assessments of economic benefits.
4. After the 2012 restructuring, efficiency and sustainability were removed as project outcomes, affecting the subproject economic assessment of subprojects (a) and (c) above. However, with the inclusion of PDO6—access to improved water—an additional subproject was assessed. The subproject concerned extending water supply distribution networks to 2,460 additional people who had previously relied on private shallow wells for water consumption in the town of Sharkovschina. A CBA was not carried out, but it was reported that an assessment of technical options had confirmed that this was a least-cost solution to supply this population with safe drinking water, although only the capital costs were assessed, indicating that the full life cycle costs of the two alternative designs were not compared.
5. To evaluate these same subprojects, an ex post assessment was carried out using the same assumptions and approach, but updating inputs where possible (project costs, beneficiaries, and so on) which were available in the RF; however, limited data availability at project closing was also a constraint to a more detailed assessment. A summary of results is presented in table 4.2.
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Table 4.2. Comparison of Results Ex Ante and Ex Post Objective Subproject PAD Restructuring Paper ICR 2012 Water quality Bobruisk ERR: 21% n.a. ERR: 36% improvement Population: 218,000 NPV (US$): 2.07 NPV (US$): 5.8 million million CAPEX (US$): 2.5 CAPEX (US$): 1.2 million million Sewerage Mogilev ERR: 21% n.a. No/low results collection Population: 354,000 NPV (US$): 2.2 achieved for networks milliona efficiencyb CAPEX (US$): 6.1 million Efficiency Grodno ERR: 14% ERR: –14%c No/low results Population: 33,000 NPV (US$): 0.39 NPV (US$): –2.8 achieved for million million efficiencyd CAPEX (US$): 2.5 CAPEX (US$): 2.5 million Wastewater Rogachev CAPEX (US$): 4.15 n.a. CAPEX (US$): 9.6 treatment Population: 34,825 million million Per capita cost: Per capita cost: US$128 US$276 Increasing access Sharkovschina n.a. Per capita cost Per capita CAPEX to water supply Population: 7,500 (US$): 396 costs (US$): 854 services Note: CAPEX = Capital expenditure. a. Cost savings from reduced spillage of wastewater due to system overcapacity were reported at US$163,000 per day of occurrence for Mogilev (Restructuring Paper March 2014). b. Energy usage data were recorded between 2008 and 2012; however, the project was only commissioned in March 2016, hence its impact on the utility’s efficiency cannot be assess with currently available data. c. The ERR and NPV were not directly calculated but were done using the same assumptions and approach but with the stated savings (10 percent of those estimated initially). d. Cost savings from reduced spillage of wastewater due to system overcapacity were reported at US$24,000 per day of occurrence for Grodno (Restructuring Paper, March 2014).
6. In the case of Bobruisk, higher economic efficiency is the result of lower costs than expected (US$1.2 million compared to US$2.5 million), as well as a higher beneficiary population than expected. Both these impacts increase the subproject’s outcomes even when O&M costs are included, which had not been done in the PAD. The high ERR of 35 percent and positive NPV suggests that the subproject is highly efficient. These results are driven by savings to households because of the improved quality of water supplied, where it was suggested that households would discard 10 percent of their water when it was dark in color. Given the limited data available on the household-level impact of interventions, a sensitivity assessment on this assumption was carried out in the ICR. The subproject remains economically justified when more than 2.5 percent of total water billed is discarded based on current household tariffs for water; however, at 2.5 percent, the subproject has a negative NPV of –US$0.6 million and an ERR of 4.9 percent. Additionally, subproject benefits are proportioned in line with quality improvements according to the RF, where change in quality according to the intermediate indicator ‘percentage of
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produced water effectively treated’, is used per subproject site (see annex 1 for a detailed breakdown of outputs). A Social Assessment Survey in 2007 suggests that households rely on bottled water or household water filters to cope with high iron levels, with costs five to ten times their average household water bill. These results support the positive assessment of benefits to households from the subproject, although further investigation should be carried out to quantify them more precisely.
7. In the case of Rogachev, the lower economic efficiency is the result of significantly higher capital costs than were expected at design (US$9.6 million compared to US$4.15 million). With the inclusion of O&M costs in the assessment, the result is much lower economic efficiency than was expected.
8. In the case of Mogilev and Grodno, efficiency was calculated ex ante based on the expected operational savings from the specific utility. Data limitations on operational efficiency are discussed in the ICR under Efficacy and prevent an ex post assessment of whether these savings were realized. Because efficiency and sustainability were dropped as PDOs after 2012, it is assumed that these economic benefits were not realized.
9. In the case of Sharkovschina, the ex-ante capital cost per capita was estimated at US$396, whereas the actual per capita cost for the subproject was US$854, indicating a lower value for money than expected.
10. The main assumptions used in the ex post analysis are given in table 4.3, while the economic analysis is presented in table 4.4.
Table 4.3. Main Assumptions Input Unit Value Source GENERAL Oanda 2019, see Exchange rate EUR/US$ 1.11 https://www1.oanda.com/currency/converter/ Oanda 2019, see Exchange rate (old BYR) US$/BYR 8,640 https://www1.oanda.com/currency/converter/ Discount rate % 5 World Bank standard discount rate applied O&M % of CAPEX 5 Assumption Additional costs are expected to be US$0.30 per cubic meter treated. This includes costs for assets O&M US$/m3 0.3 maintenance, labor, energy consumption, and sludge disposal. Useful life Years 20 Assumption IBNET 2019; Belarus tariff 2018, see Average water tariff US$ 0.58 https://database.ib- net.org/Country_Profile?ctry=36 IBNET 2019; Belarus tariff 2008–2018, see Tariff increase per year % 5 https://database.ib- net.org/Country_Profile?ctry=36 Average household size Number 2.4 United Nations 2018; Population figures, Belarus. Liters per IBNET. 2018; Belarus country profile, see Water usage capita per 220 https://database.ib- day net.org/Country_Profile?ctry=36 Water discarded due to % of total 10 Social Survey 2007, Restructuring Paper 2012 high iron content water billed BOBRUISK
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Input Unit Value Source Population served, Number 211,170 RF, May 2019 Bobruisk 2013 Population served, Number 216,415 RF, May 2019 Bobruisk 2019 Population 2008 Number 218,415 United Nations Population data Population change over % –0.20 Calculation time Water quality (% meeting regulatory standards) % 0.30 RF, May 2019 2008 Water quality (% meeting regulatory standards) % 0.95 RF, May 2019 2019 Incremental change in % 0.65 Calculation water quality ROGACHEV Population Number 34,825 RF, May 2019 National Average for Belarus, see Population change over % 0.0003 https://www.worldometers.info/world- time population/belarus-population/ Water quality (% meeting regulatory standards) % 0.75 RF, May 2019 2008 Water quality (% meeting regulatory standards) % 1.00 RF, May 2019 2019 Incremental change in % 0.25 Calculation water quality Water loss without iron % 10.00 Social Survey 2007, Restructuring Paper 2012 removal SHARKOVSCHINA Investment cost US$ 9,500,000 Aide Memoire 2013; also see Population Number 7,500 http://bycity.org/sharkovschina/
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Table 4.4. Economic Analysis
Construction of the iron removal station for 25,000 m3 a day in the city of Bobruisk PAD 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Item Unit 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Investment in iron station US$ - 1,000,000 1,000,000 500,000 ------O&M ------Water billed m3 20,700,000 20,230,000 19,630,000 19,116,667 18,581,667 18,046,667 17,511,667 16,976,667 16,441,667 15,906,667 15,371,667 14,836,667 14,301,667 13,766,667 13,231,667 12,696,667 12,161,667 11,626,667 11,091,667 10,556,667 10,021,667 Water billed in project area m3 10,350,000 10,120,000 9,890,000 9,660,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 9,430,000 Water loss without project m3 1,035,000 1,012,000 989,000 966,000 943,000 943,000 943,000 943,000 943,000 943,000 943,000 943,000 943,000 943,000 943,000 943,000 943,000 943,000 943,000 943,000 943,000 Water tariff US$/m3 0.6000000 0.63 0.66 0.69 0.73 0.77 0.80 0.84 0.89 0.93 0.98 1.03 1.08 1.13 1.19 1.25 1.31 1.38 1.44 1.52 1.59 Loss without project US$ 621,000 637,560 654,224 670,959 687,733 722,120 758,226 796,137 835,944 877,742 921,629 967,710 1,016,096 1,066,900 1,120,245 1,176,258 1,235,070 1,296,824 1,361,665 1,429,748 1,501,236 Savings due to project US$ - - - - 447,026.73 649,908 682,404 716,524 752,350 789,967 829,466 870,939 914,486 960,210 1,008,221 1,058,632 1,111,563 1,167,142 1,225,499 1,286,774 1,351,112 Unused water % 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 Net benefits USD - (1,000,000) (1,000,000) (500,000) 447,027 649,908 682,404 716,524 752,350 789,967 829,466 870,939 914,486 960,210 1,008,221 1,058,632 1,111,563 1,167,142 1,225,499 1,286,774 1,351,112 NPV 6,223,961 IRR 22%
ICR Investment in iron station US$ 500,000 500,000 400,000 O&M US$ - - - - 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 Population Number 218,415 217,940 217,466 216,993 216,521 216,050 215,580 215,112 214,644 214,177 213,711 213,246 212,783 212,320 211,858 211,397 210,938 210,479 210,021 209,564 209,109 Population served Number - - - - 211,170 211,170 211,170 211,170 211,170 211,170 211,170 213,246 212,783 212,320 211,858 211,397 210,938 210,479 210,021 209,564 209,109 Project water billed m3 - - - - 16,956,951 16,956,951 16,956,951 16,956,951 16,956,951 16,956,951 16,956,951 17,123,690 17,086,450 17,049,291 17,012,213 16,975,215 16,938,298 16,901,462 16,864,705 16,828,028 16,791,431 Water loss without project m3 - - - - 1,695,695 1,695,695 1,695,695 1,695,695 1,695,695 1,695,695 1,695,695 1,712,369 1,708,645 1,704,929 1,701,221 1,697,522 1,693,830 1,690,146 1,686,470 1,682,803 1,679,143 Incremental change of quality water treated% - - - - 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.65 Water tariff US$/m3 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 0.73 Loss without project (savings) US$ - - - - 801,010 801,010 801,010 801,010 801,010 801,010 801,010 808,886 807,127 805,372 803,620 801,873 800,129 798,389 796,652 794,920 793,191 Net benefits US$ - (500,000) (500,000) (400,000) 731,010 731,010 731,010 731,010 731,010 731,010 731,010 738,886 737,127 735,372 733,620 731,873 730,129 728,389 726,652 724,920 723,191 NPV 5,847,381 IRR 36.2% Table 4.5. Economic Analysis: Rogachev
Rogachev Capex/capita US$ (PAD) 128 Capex cost 9,600,000 Population 34,825 Capex/capita US$ 276
Table 4.6. Economic Analysis: Sharkovschina Sharkovschina Capex/capita US$ (RP 2012) 396 Capex cost 2,100,000 Population 2,460 Capex/capita US$ 854
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ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS
The Borrower confirmed they have no comments on the ICR, however, a Borrower’s ICR was prepared in January 2020, a summary of which is presented below.
INTRODUCTION
Project Rationale 1. At the time of preparation of the Project, there were a number of concerns in the water supply and sanitation sector: Insufficient provision of the population with piped water supply; Substandard quality of drinking water supplied to consumers in terms of chemical parameters (iron content) due to the increased iron content in natural groundwater used for drinking water supply, and the lack of drinking water treatment facilities (iron removal plants) within piped drinking water supply systems; Quality of effluents treated at municipal wastewater treatment facilities (wwtf) below the established standards for discharge of pollutants into water bodies; Non-compliance of the wastewater treatment technologies at the existing WWTFs with international requirements for nutrients removal (nitrogen and phosphorus compounds) from treated wastewater.
2. Supplying the population with high-quality drinking water and creating favorable sanitary and environmental living conditions through sustainable collection and treatment of wastewater is a priority socio-economic objective for the Republic of Belarus. Starting from 2002, it has been addressed in the framework of the National Water Supply and Sanitation Program Clean Water (the Program), which includes the most important projects on construction, expansion and reconstruction of water supply and sanitation facilities in residential communities in the country, nominated by regional executive committees and the Minsk City Executive Committee.
3. During the preparation of the World Bank’s (the Bank) Post-Chernobyl Recovery Project, it was determined that problems related to water supply and wastewater collection and treatment are relevant not only for the contaminated areas affected by the Chernobyl disaster. With this in mind, when preparing proposals for the development of water supply systems for inclusion in the proposed Project, the Republic of Belarus and the Bank achieved mutual understanding regarding the need and possibilities for including in the Project water supply and sanitation facilities in other oblasts and raions of Belarus.
4. Since the original project included 23 subprojects with an unknown budget (there were no design specifications and estimates for 11 subprojects, and the remaining subprojects had incomplete design specifications and estimates), in the course of the project implementation, as the design specifications and estimates and feasibility studies for investments were developed, it became clear that the envisaged level of funding for 3 subprojects was sufficient only to cover the preparation of design specification and estimates, and 6 subprojects had to be broken down into start-up packages, since there was not enough funds in the loan to ensure full and complete implementation of the subprojects. In this regard, it was decided to mobilize an additional IBRD loan to complete the initiated investment subprojects (about 94% of the Additional Financing (AF) loan), support the preparation and sustainability of the investments, including the development of design specifications and estimates and measures aimed at improving the performance of water utilities, as well as to provide technical and financial support to the PIU, including annual financial audits and management. As of August 2017, the estimated savings under the subprojects financed from the AF loan amounted to US$41.7 million. In order to utilize the full amount of funds allocated for the implementation of the Project, the MHU
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developed a List of Additional Subprojects to be Financed from the Reserve Funds of the IBRD AF Loan.
Sources of Financing for the Project 5. Due to the Bank’s willingness to finance up to 100% of the Project costs, including the development of design specifications and estimates, no Belarusian co-financing was envisaged for the Project. PIU staff salaries and other PIU maintenance expenses were financed from the national budget.
PROJECT IMPLEMENTATION
Data Collection, Monitoring and Evaluation of Project Results 6. In accordance with the Loan Agreement, the Borrower shall monitor and evaluate the progress of the Project on the basis of indicators agreed with the Bank and prepare Project Reports twice per year in accordance with the provisions of Section 5.08 of the General Conditions. The indicators serve as the basis for the Borrower to monitor and evaluate the progress of the implementation of this Project and the degree to which its objectives have been achieved. As a result of the first restructuring of the Project on May 13, 2013, the monitoring indicators of October 21, 2008 were replaced by an expanded list of monitoring indicators; baseline and target values were introduced in the Results Framework. When signing the AF Loan Agreement dated April 8, 2014, the Project adopted a Results Framework (RF) in which the indicators were divided into core and supplementary indicators; the RF was supplemented by a gender-based indicator, and indicators for technical assistance and social accountability. The RF includes baseline values of the indicators at the beginning of the Project, progress achieved (2013) and cumulative target values for 2014-2018, inclusive of the AF loan. The PIU collects and aggregates the monitoring data and submits consolidated reports to the Bank on the basis of information received from the Project beneficiaries. Under the Project (original and AF loans), 126 tenders for procurement of contracts were prepared and conducted, including: Construction and installation works – 80 tenders; Consultants’ services – 18 tenders; Goods – 9 tenders; Project implementation and management services – 19 tenders. Component a: rehabilitation of water supply and sanitation systems
7. As part of the implementation of Component A, 80 tenders for procurement of construction and installation works for rehabilitation of water supply and sanitation systems were prepared and conducted, including: Under the original loan – 38 tenders; Under the AF loan – 42 tenders.
8. In the course of the Project implementation, environmental protection activities were carried out in strict compliance with the developed Environmental Management Plan. The relevant authorities of the Republic of Belarus exercised their mandate and used their powers to provide mitigation and remediation measures as required by the Belarusian legislation. The main PDO indicators for the Project’s Component A (original and AF loans) and their levels of achievement under the Project are given in Table 5.1.
Table 5.1 Subproject PDO Indicator(s) After Project Outcomes Achievement
1. Modernization of WWTF in the Town of - - Volume of treated sludge - Baranovichi with the installation of a – 3.9 tons/day sludge treatment unit
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2. Reconstruction of Schara-2 water intake, Population 176,430 Iron content in water, Target Town of Baranovichi, Brest oblast benefiting from mg/l: before – 0.34, achieved improved quality after – 0.10 of water supplied 3. Reconstruction and expansion of WWTP - - Specific power - in the Town of Pinsk. Reconstruction of consumption rate the pump and air blower house kW/m3: before -0.321, after – 0.269 4. WWTF in the Town of Pinsk. - - A feasibility study was - Modernization of the sludge treatment prepared with a system (dewatering and further proposed economically processing in biogas plants) and environmentally acceptable solution for producing biogas from sewage sludge 5. Reconstruction of municipal WWTF in the Reduced mass of 0.38/ 18.8/ Concentration of Target City of Brest, Phase I, 1st start-up complex BOD5, nitrogen 3.5 pollutants in treated achieved and phosphorus wastewater, in mg/l of pollution load in BOD5, nitrogen and treated phosphorus, respectively wastewater 6. Reconstruction of WWTF in the Town of Same 8.0/ 4.0/ 0.27 Same Target Gantsevichi achieved 7. Construction of a new main WWPS in the - - Increased reliability of - Town of Gantsevichi wastewater transfer by pumping 8. Reconstruction of water intake Population 14,995 Iron content in the water Target “Belenok”in the Town of Drogichin, Phase benefiting from supplied to customers achieved II improved quality reduced from 1.0 mg/l to of water supplied 0.22 mg/l 9. Iron removal plant in the Agritown of Population 4,000 Iron content in the water Target Motol, Ivanovo raion benefiting from supplied to customers achieved improved quality reduced from 1.71 mg/l of water supplied to <0.3 mg/l 10. Water Supply system, Township of Population 5,300 Iron content in the water Target Sharkovschina, Phases I & II benefiting from supplied to customers achieved improved quality reduced from 1.83 mg/l of water supplied to <0.3 mg/l 11. Water Supply system, Township of People provided 5,300 13.7 km of water supply Target Sharkovschina, Phases III, IV & VII with access to networks were built achieved Improved Water Sources under the Project – urban, number 12. Water Supply system, Borovukha-3, City Same 3,413 3.3 km of water supply Target of Polotsk networks were built achieved 13. Water Supply system, Township of People provided 2,532 1.88 km of water supply Target Bogushevsk with access to networks and an iron achieved
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Improved Water removal plant were built. Sources. Iron content: before – Population 1.73 mg/l, after – 0.3 benefiting from mg/l improved quality of water supplied 14. Water supply system in the single-family People provided 520 9.87 km of water supply - dwellings area in the Village of Sokolniki, with access to networks were built Vitebsk raion Improved Water Sources, number 15. Water supply system in the south- Same 5,500 5.13 km of water supply - western part of the Town of Senno with a networks were built loop in Zavodskaya Str. and reconstruction of water intake
16. Construction of water supply networks in Same 303 4.1 km of water supply - the Village of Ekimanj, Polotsk raion networks were built 17. Construction of an iron removal plant in Population 3,500 Iron content: before – 1.6 - the Township of Bolbasovo benefiting from mg/l, after – 0.18 mg/l improved quality of water supplied 18. Iron removal plant in the Township of Same 2,400 Iron content: before – 1.6 - Obol, Shumilino raion mg/l, after – 0.3 mg/l 19. Water supply networks and facilities in Same 2,300 Iron content: before – 1.2 - the Neighborhood of Zabornye Gumny, mg/l, after – 0.3 mg/l Town of Braslav (Phase 2) 20. Construction of an iron removal plant in Population 504 Iron content: before – 2.7 - the Settlement of Usvizh-Buk, Tolochin benefiting from mg/l, after – 0.2 mg/l raion improved quality of water supplied 21. Construction of a water intake with an Same 377 Iron content: before – 4.3 - iron removal plant in the Agritown of mg/l, after – 0.11 mg/l Bogdanovo, Senno raion 22. Reconstruction of 2 deep wells with the Same 276 Iron content: before – - construction of an iron removal plant in 2.12 mg/l, after – 0.2 the Village of Yunki, Postavy Raion mg/l 23. Water intake facilities with an iron Same 424 Iron content: before – - removal plant in the Agritown of 1.3 mg/l, after – 0.17 Borkovichi, Verkhnedvinsk raion (Phase I) mg/l
24. Construction of water supply networks Same 302 Iron content: before – 3.3 - with the construction of an iron removal mg/l, after – 0.11 mg/l plant in the Agritown of Svatoshitsy, Dubrovno raion (Phase I) 25. Construction of a deep well, an iron Same 159 Iron content: before – 1.4 - removal plant, an elevated water tank mg/l, after – 0.23 mg/l and water supply networks in the Village of Koptevichi, Chashniki raion 26. Construction of water supply facilities Same 215 Iron content: before – 3.2 -
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with an iron removal plant in the mg/l, after – 0.19 mg/l Agritown of Zaronovo, Vitebsk raion 27. Reconstruction of the iron removal plant Same 2,413 Iron content: before – - in the Village of Farinovo, Polotsk raion 1.87 mg/l, after – 0.26 mg/l 28. Construction of water supply facilities and Same 6,700 Iron content: before – 2.7 - selection of water treatment technology mg/l, after – 0.3 mg/l in the area of Molodezhnaya Str. and Uritski Str. in the Township of Beshenkovichi 29. Expansion and reconstruction of WWTF in Reduced mass of 20/-/1.33 Concentration of - the Town of Gorodok BOD5, nitrogen pollutants in treated and phosphorus wastewater, in mg/l of pollution load in BOD5, nitrogen and treated phosphorus, respectively wastewater 30. Reconstruction of WWTF, Town of Same 19/16.8/2.44 Same - Dubrovno 31. Wastewater system, Town of Same 7.6/5.87/5.73 Same - Verkhnedvinsk, Phase I 32. Wastewater system, Town of Glubokoye, Same 7.0/13.8/2.45 Same - Phase I 33. Expansion of Luchezhevichi water intake People provided 122,160 15.88 km of water supply - “2nd Elevation Water Conduits” with access to networks were built Improved Water Sources, number 34. Reconstruction and expansion of People provided 34,825 20.7 km of water supply - sewerage networks and facilities in the with access to networks were built and Town of Rogachev Improved Water replaced, an iron removal Sources. plant was reconstructed. Population Iron content: before – benefiting from 0,48 mg/l, after - 0,14 improved quality mg/l of water supplied 35. Construction of an iron removal plant at Population 70,643 Iron content: before – - the main water intake in the Town of benefiting from 0,48 mg/l, after - 0,14 Rechitsa improved quality mg/l of water supplied 36. WWTF in the Town of Rogachev, Phase I Reduced mass of 20/9.45/4.5 Concentration of - BOD5, nitrogen pollutants in treated and phosphorus wastewater, in mg/l of pollution load in BOD5, nitrogen and treated phosphorus, respectively wastewater 37. Water supply system, left-bank part of Population 4,910 17.3 km of water supply - the Town of Mosty benefiting from networks were built improved quality of water supplied 38. Wastewater system reconstruction in the People provided 33,000 19.1 km of sewer -
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sewer basin area of the WWPS No.4 in with access to networks were built, the City of Grodno improved WWPS-4 and WWPS-12 sanitation facilities were reconstructed under the Project – urban, number 39. WWTF in the Town of Svisloch Reduced mass of 20/25/4.5 Concentration of - BOD5, nitrogen pollutants in treated and phosphorus wastewater, in mg/l of pollution load in BOD5, nitrogen and treated phosphorus, respectively wastewater 40. WWTF, Town of Berezino Reduced mass of 278.9/7.78/ Mass of pollutants - BOD5, nitrogen 18.8 removed from treated and phosphorus wastewater, for BOD5, pollution load in nitrogen and phosphorus, treated respectively, tons/year wastewater 41. Construction of a water intake with an People provided 19,654 A water intake, an iron - iron removal plant in the Town of Mar’ina with access to removal plant, and 4.2 Gorka Improved Water km of water supply Sources. networks were built. Iron Population content: <0,3 mg/l in benefiting from 100% regulatory water improved quality samplings of water supplied 42. Water intake with an iron removal plant People provided 9,600/14,220 Wells at the water intake, - in the Town of Smolevichi. Phase II with access to an iron removal plant, Improved Water and 4,2 km of water Sources. supply networks were Population built. Iron content: <0,3 benefiting from mg/l in 95% regulatory improved quality water samplings of water supplied 43. Wastewater system reconstruction in the - - Increased reliability of - Town of Borisov. Phase II. Reconstruction the municipal of two pressure collectors (ND 500mm) wastewater system. from the Main WWPS No. 2 to the WWTF 11.33 km of pressure sewers were built 44. Wastewater system reconstruction in the Reduced mass of 20/15/3 Concentration of - Town of Logoisk, 3rd start-up complex BOD5, nitrogen pollutants in treated and phosphorus wastewater, in mg/l of pollution load in BOD5, nitrogen and treated phosphorus, respectively wastewater 45. Construction of an iron removal plant in People provided 61,000/ Number of people - the Town of Bobruisk with access to 216,414 covered under Indicators (Solomenka water intake) Improved Water 1 and 2. Sources. Iron content: <0,3 mg/l in Population 100% regulatory water benefiting from samplings
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improved quality of water supplied, number 46. Reconstruction of water supply networks People provided 760 20.12 km of water supply - and facilities in the Town of Shklov with access to networks were built Improved Water Sources, number 47. Construction of the main sewage Number of km of 3.095 Increased reliability of - collector in the City of Mogilev wastewater the municipal collectors wastewater system. laid/replaced The new, 3.095 km line of the main sewage collector was built. 48. Construction of water supply networks in People provided 22,450 19.63 km of water supply - the Town of Krichev (Phases I & II) with access to networks were built Improved Water Sources 49. Networks and facilities at Sumarokovo People provided 875 Iron removal plants in 6 - water intake. Iron removal plants in the with access to villages and 1.43 km of Villages of Kniazhitsy, Sumarokovo, Improved Water water supply networks Bobrovichi, Senkovo, Sevastyanovichi, Sources. were built. Schekglitsa, Stashino, Bobrovo- Population Iron content: <0.3 mg/l in Prokshenichi, Gornaya Str., Zaborye. benefiting from 95% regulatory water Phases I, II, III and IV improved quality samplings of water supplied, number 50. Construction of an iron removal plant in Population 702 Iron content: <0.3 mg/l in - the Village of Vyazye, Osipovichi raion benefiting from 95% regulatory water improved quality samplings of water supplied, number 51. Reconstruction of wastewater treatment Reduced mass of Contract canceled - facilities in the Town of Mstislavl BOD5, nitrogen (equipment supplies and installation, pre- and phosphorus commissioning works) pollution load in treated wastewater 52. Reconstruction of sewage collector No.3 Number of km of 2.63 Increased reliability of - from Gorki Str. to WWPS No.3 in the wastewater the municipal Town of Bobruisk, Phase I collectors wastewater system. 2.63 laid/replaced km of sewers were reconstructed (replaced) 53. Reconstruction of sewerage networks Reduced mass of 14/23/5.5 Concentration of - and facilities in the Town of Bykhov BOD5, nitrogen pollutants in treated and phosphorus wastewater, in mg/l of pollution load in BOD5, nitrogen and treated phosphorus, wastewater respectively/ 10.6 km of sewers were replaced
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9. An analysis of the monitoring data shows that the objective of this Project – to increase access to water supply services and to improve the quality of water supply and wastewater services in selected urban areas in all six Oblasts of the Borrower under the Project – has been generally achieved. People’s access to “Improved Water Sources” and “improved sanitation facilities”, and the population benefiting from improved quality of water supplied increased; the target for percentage of regulatory samples of produced water effectively treated with iron content below 0.3 mg/l was achieved.
Component B: Support to the Preparation and Sustainability of Investments 10. The PDO indicators for the Project’s Component B (original and AF loans) and their levels of achievement under the Project are given in Table 5.2.
Table 5.2 Actual achieved, Achievement against PDO Comments July 2019 the target Water utilities the Project is 32 188% Target achieved supporting, number Other water service providers the 8 200% Target achieved Project is supporting, number Utilities using benchmarking 30 100% Target achieved system, number Review of design norms yes Target achieved completed and discussed with the Government
11. The planned targets for Component B have been met: in the framework of the Project, support has been provided to water utilities and other water and sanitation service providers included both in the original Project and the AF; a review of technical design norms for water supply and sanitation facilities has been completed and submitted for consideration to the relevant government agencies; a system of indicative indicators for performance analysis (benchmarking) of water utilities included in the Project has been developed; and water utilities use the benchmarking system. 12. PDO indicators for the Project’s Component C (original and AF loans) and their levels of achievement under the Project are given in Table 5.3.
Table 5.3 PDO Actual achieved, July 2019 Achievement against target Comments Consumers complaints Not available at aggregate The target has not been 1 complaint has been addressed to the utility and level achieved in 1 out of 8 received related to the quality of subprojects included in this supplied water, number target indicator Consumer access to Index 3 was assigned to 5 out The target has not been information of 8 subprojects included in achieved in 3 out of 8 this target indicator subprojects
13. The targets for Component C have been met: there are practically no complaints from the public regarding the quality of supplied water; the social accountability of water supply and sanitation providers has increased as a result of improved consumer access to relevant information.
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KEY IMPLEMENTATION OBSTACLES 14. The Water Supply and Sanitation Project was the first project funded by the Bank in this sector and focused mainly on the development of physical infrastructure. During the implementation of the Project, certain challenges were identified that served as a constraint to its implementation. The key constraints were as follows: Lack of design specifications for many subprojects at the Project commencement, which led to misestimation of the required financial resources for their implementation; Low-quality development of design specifications and estimates by designers, which results in the need to adjust these documents and the work scope; Low-quality preparation of the technical part of bidding documents by Employers (contracting authorities), which delays the preparation of tenders; The need for rebidding on a number of construction projects; Insufficient responsibility and, as a result, low level of proactiveness and laissez-faire approach taken by Employers in a number of subprojects during the Project implementation; Insufficient control over the implementation of subprojects by some local government bodies. Limited experience of the involved government agencies in working with the Bank; discrepancy between the procurement and legal procedures of the World Bank and the Republic of Belarus; limitation of the size of contracts to the estimated cost of subprojects; Lack of interest in participation in tenders on the part of Belarusian contractors during the initial period of the Project implementation up to the economic crisis in 2011, which triggered high inflation and significant exchange rate fluctuations; Termination of two contracts and the need for rebidding on three construction contracts as a result of economic crisis. 15. These factors caused implementation delays and schedule overruns in a number of subprojects.
WORLD BANK’S PERFORMANCE 16. The Bank’s overall performance is rated as Moderately Satisfactory. The Bank's project team provided regular implementation support to the PIU and the MHU. During the implementation of the, the Bank team conducted more than 20 implementation support missions. The Bank team conducted trainings for bidders. The Bank's project team actively facilitated prompt implementation of the Project restructurings, especially in terms of adjusting the PDO in line with more realistic objectives, preparing an Additional Financing loan, extending loan closing dates and the overall. Project closing date, which allowed for completing all the works. The Bank team’s proactive approach to the Project restructuring, careful supervision and the efforts made to provide the necessary advisory services for the PIU throughout the project implementation period contributed to sustainable procurement dynamics and made it possible to overcome problems, delays and challenges in the implementation of the Project, as well as to achieve and exceed the targets for most of the activities.
17. The Bank team had sufficient qualifications, experience and skills to assist the Borrower in achieving the defined objectives. The PIU is satisfied with the level of engagement and cooperation with the Bank project team. The Bank team regularly met with the management and specialists of the PIU, officials at the MHU and the Government, which contributed to successful achievement of the Project results. By the end of the Project, works at all sites had been completed (the facilities had been commissioned or were at the acceptance and commissioning stage).
BORROWER’S PERFORMANCE 18. The Borrower’s overall performance is rated as Moderately Satisfactory. The Government has demonstrated commitment to the Project objectives at all stages of its preparation and implementation. Despite the discrepancy
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between the procurement and legal procedures of the World Bank and the Republic of Belarus, the legislative and regulatory framework available in Belarus at the time of the Project implementation made it possible to implement the Project measures quite effectively. The Ministry of Housing and Utilities monitored the implementation of activities (subprojects) for effectiveness and coordinated the actions of participating government agencies under the Project. The project management and working-level implementation functions were carried out by the Project Implementation Unit – State-owned Enterprise BELKOMTEKHINVEST, which was specially established for these purposes in accordance with Edict of the President of the Republic of Belarus No. 417 dated August 12, 2008.
19. In order to strengthen the responsibility of local executive and administrative bodies (oblast executive committees) and contracting authorities, as per Edict of the President of the Republic of Belarus No. 254 dated May 21, 2009, a list of the key subprojects was included in the National Water Supply and Sanitation Program Clean Water for 2006-2010, approved by Edict of the President of the Republic of Belarus No. 208 dated April 10, 2006. In order to increase the efficiency of implementation of subprojects and the overall Project and resolve emerging issues, the PIU worked closely with the oblast executive committees of six oblasts, the participating and concerned government agencies, as well as 32 water utilities/integrated utility companies and 8 other service providers. Along with the PDO indicators achieved under the Project, transparency and social accountability of participating utilities have increased.
LESSONS LEARNED 20. Based on the experience of preparation and implementation of the Water Supply and Sanitation Project, certain lessons have been learned and used to prepare a new WB-funded Utility Efficiency and Quality Improvement Project in Belarus. Only subprojects with available design specifications have been included in the new project; In order to monitor and evaluate the Project results, monitor the implementation of the Environmental and Social Management Plans (ESMP), and review complaints from the public related to the Project implementation, a corresponding specialist has been added to the PIU staff; The number of procurement specialists in the PIU has also been increased; In order to increase the awareness of contracting authorities and contractors about the Project objectives, preparation of bidding documents, ESMP implementation monitoring and other issues, it is planned to conduct relevant training workshops at the beginning of the Project.
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ANNEX 6. SUPPORTING DOCUMENTS (IF ANY)
1. Project Information Document (PID) Appraisal Stage. Dated November 20,2007. Report No.: AB3478
2. Project Appraisal Document (PAD), dated September 4, 2008. Report Number Report No: 41652-BY
3. Restructuring Paper on a Proposed Restructuring of Water Supply and Sanitation Project. Dated December 4, 2012. Report No: RES14428
4. Project Paper on a Proposed Additional Loan in the Amount of US$90 Million and Restructuring to the Republic of Belarus for a Water Supply and Sanitation Project. Dated March 5, 2014. Report No: 80684-BY
5. Restructuring Paper on a Proposed Restructuring of the Water Supply and Sanitation Project. Dated December 18, 2014. Report No: 74110-BY
6. Restructuring Paper on a Proposed Project Restructuring of Water Supply and Sanitation Project to Republic of Belarus. Dated June 2018. Report No.: Res32865
7. Country Assistance Strategy for the Republic of Belarus for the Period FY08–FY11. Dated November 7, 2007. Report No. 40742 – BY
8. Systematic Country Diagnostic: Towards a Competitive, Inclusive and Dynamic Belarus. Dated February 20, 2018
9. Country Partnership Framework for the Republic of Belarus for the Period FY18–FY22. Dated February 21, 2018. Report No. 123321-BY
10. Loan Agreement. (Water Supply and Sanitation Project) between Republic of Belarus and International Bank for Reconstruction and Development. Dated October 21, 2008. Loan Number 7589 BY
11. Loan Agreement. (Additional Financing Water Supply and Sanitation Project) between Republic of Belarus and International Bank for Reconstruction and Development. Dated April 8, 2014. Loan Number 8352-BY
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ANNEX 7. UPDATED THEORY OF CHANGE
Figure 7.1. Updated Theory of Change
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ANNEX 8. PDO INDICATORS AND OUTCOME TARGETS
Table 8.1. Revised PDO Indicators (outcome targets in brackets) Objective Original September 2008 Restructuring December 2012 AF and Restructuring March 2014 Restructuring June 2018 Access Access to a piped water supply People in urban areas provided People in urban areas provided People provided with access to (water (99%) with access to Improved Water with access to Improved Water Improved Water Sources - urban supply) Sources (Core) (7,910) Sources (Core) (9,800) (Custom) (9,800) Quality Population provided with access to Population provided with access to Population benefiting from (water drinking water compliant with drinking water compliant with improved quality of water supply) Not included national quality standards national quality standards supplied (324,000) (307,300) (324,000) Of which female (56%) Of which female (56%) % of wastewater discharged with % of treated wastewater samples Volume of BOD-5 removed by Volume (mass) of BOD pollution BOD above national specifications complying with national BOD-5 treatment plants supported under removed by the treatment plants (100% per site rehabilitated) standards project (tons/year, 15,500) supported under the project (Subproject range 71–95%) (tons/year, 15,500) Not included Not included Volume of Phosphorus removed Volume (mass) of Phosphorus Quality by treatment plants supported removed by the treatment plant (wastewater) under the project (tons/year, 340) supported under the project (tons/year, 340) Not included Not included Reduced volume of BOD pollution Reduced volume of BOD pollution loads transported in unreliable loads transported in unreliable sewerage transmission systems sewerage transmission systems (tons/year, 15,200) (tons/year, 15,200) Energy Electricity consumption in Kwh per Removed Removed Removed efficiency m3 wastewater (< 1.5 kWh/m3) Sustainability Operating Cost Coverage (target Removed Removed Removed and baseline not defined) Customer Consumer satisfaction with WSS Removed Removed Removed satisfaction services (target and baseline not defined)
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ANNEX 9. FEASIBILITY STUDIES CARRIED OUT AS PART OF PROJECT
Table 9.1. Feasibility Studies
Subproject Outputs
WWTF in the Town of Pinsk. Modernization of the sludge treatment system A feasibility study was prepared with a proposed economically and (dewatering and further processing in biogas plants) environmentally acceptable solution for producing biogas from sewage sludge. Wastewater treatment and sewerage system in Borovukha A feasibility study was prepared with a proposed economically and environmentally acceptable solution for wastewater management in Borovukha Reconstruction of water supply system in the Township of Oktiabrski A feasibility study for WS system reconstruction and development in the Township of Oktiabrski was prepared Reconstruction of WWTF in the City of Grodno. Sludge disposal, Phase III During the preparation of the feasibility study, no economically and environmentally acceptable solution for sludge disposal was found. The contract was terminated. Construction of WWTF in the Town of Oshmiany A feasibility study for construction of a new municipal WWTF was prepared. Reconstruction of water supply system with the construction of a water intake A feasibility study for WS system reconstruction with the construction of an iron and an iron removal plant in the Town of Cherven removal plant in the Town of Cherven was prepared. Reconstruction of wastewater system in the Town of Zaslavl A feasibility study for reconstruction of WW system in the Town of Zaslavl was prepared Reconstruction and expansion of WWTF and wastewater system in the Town of Same for the WWTF in the Town of Slutsk Slutsk Reconstruction of WWTF in the Town of Soligorsk. Stage I Same for the WWTF in the Town of Soligorsk
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ANNEX 10. DETAILED EFFICACY ANALYSIS
PDO1: Quality of water supply services
Figure 10.1. People Benefiting from Improved Quality of Water Supplied
700,000
600,000
500,000
400,000
300,000
200,000
100,000 Beneficiaries Beneficiaries (number of people) - 2013 2014 2015 2016 2017 2018
Target Actual
Source: MHU (PIU). RF July 2019. Table 10.1.Detailed Breakdown of Subprojects and Impact on Access to Improved Quality of Water for Selected Years 2013 2014 2015 2016 2017 2018 Subproject Target 324,000 324,000 324,000 324,000 324,000 324,000 Actual 399,534 437,309 474,106 493,004 610,729 611,766 Baranovichi People 175,417 177,264 177,264 176,430 175,853 176,430 Bogushevsk 2,100 2,100 2,100 2,535 2,535 2,535 Sharkovschina 2,460 2,822 3,210 3,610 5,300 5,300 Rogachev — 34,700 34,700 34,825 34,447 34,825 Mosty 4,870 4,890 4,890 4,890 4,910 4,910
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2013 2014 2015 2016 2017 2018 Mar'ina Gorka — — 19,654 19,654 19,654 19,654 Smolevichy — — 12,128 12,128 14,220 14,220 Bobruisk 211,170 212,300 216,700 216,414 216,414 216,414 Polotsk (Borovukha) 3,407 3,123 3,300 3,413 3,413 3,413 Shklov 110 110 160 756 760 760 Drogichin — — — 14,349 14,995 14,995 Motol — — — 4,000 4,000 4,000 Zaronovo — — — — 215 215 Beshenkovichi — — — — 6,700 6,700 Braslav — — — — 2,300 2,300 Verkhndevinsk (Borkovichi) — — — — 424 424 Dubrovno (Svatoshitsy) — — — — 302 302 Orsha (Bolbasovo) — — — — 3,500 3,500 Senno (Bogdanovo) — — — — 377 377 Polotsk (Farinovo) — — — — 2,431 2,413 Tolochin (Usvizh Buk) — — — — 504 504 Postavy (Yunki) — — — — 276 276 Chashniki (Koptevichi) — — — — 159 159 Shumilino (Obol) — — — — 2,400 2,400 Rechitsa — — — — 70,643 70,643 Krichev — — — — 22,450 22,550 Osipovichi (Vyazie) — — — — 702 702 Mogilev (Sumarokovo) — — — — 845 845 Source: MHU (PIU). RF July 2019. Table 10.2. Percentage of Produced Water Effectively Treated for Iron Content Below 0.3 mg/L
Subproject 2014 2015 2016 2017 2018 2019 Target Baranovichi 94.0 95.0 95.0 95.0 95.0 99.8 99.8 95.0 Bogushevsk 0.0 95.0 95.0 95.0 95.0 95.0 95.0 95.0 Sharkovchina 0.0 46.0 46.0 46.0 46.0 75.0 75.0 46.0 Rogachev 75.5 95.0 95.0 95.0 96.0 100.0 100.0 95.0 Mar'ina Gorka 0.0 0.0 0.0 95.0 95.0 100.0 100.0 95.0 Smolevichy 0.0 0.0 95.0 95.0 95.0 95.0 95.0 95.0
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Subproject 2014 2015 2016 2017 2018 2019 Target Bobruisk 30.0 70.0 95.0 95.0 95.0 95.0 95.0 95.0 Polotsk (Borovukha) 0.0 95.0 95.0 95.0 95.0 100.0 100.0 95.0 Shklov 85.0 85.0 85.0 – 95.0 95.0 95.0 95.0 Drogichin 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Motol 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Vitebsk Rayon Zaronovo 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Beshenkovichi 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Braslav 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Verkhndevinsk Rayon_ Borkovichi 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Dubrovno Rayon_Svatoshitsy 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Orsha Rayon_Bolbasovo 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Senno Rayon_Bogdanovo 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Polotsk Rayon_Farinovo 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Tolochin Rayon_Usvizh_Buk 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Postavy Rayon_Unki 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Chashniki Rayon_Koptevichi 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Shumilino Rayon_Obol 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Rechitsa 0.0 0.0 0.0 0.0 0.0 100.0 95.0 Not established Krichev 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Vyazie, Osipovichi Rayon 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Mogilev Rayon_Sumarokovo 0.0 0.0 0.0 0.0 0.0 95.0 95.0 Not established Source: MHU (PIU). RF July 2019.
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PDO2: Improved quality of wastewater supply services
Table 10.3. Detailed Breakdown of Subprojects and Impact on Pollution Reduction (quality of wastewater supply services)
2015 2017 2019 Unit BOD Phosphorus Nitrogen BOD Phosphorus Nitrogen BOD Phosphorus Nitrogen Baseline Tons/year 14,750 220 1,300 14,750 220 1,300 14,750 220 1,300 Target Tons/year 15,400 330 1,500 15,400 330 1,500 15,400 330 1,500 Actual Tons/year 10,076 106 995 11,771 198 1,008 13,614 229 1,426 Brest Tons/year 5,423 53 552 7,597 135 583 7,597 135 796 Gantsevitchi Tons/year 170 5 29 225 6 19 290 7 19 Pinsk Tons/year 4,450 46 409 3,916 42 398 3,900 42 398 Verkhndevinsk Tons/year — — — 20 — 2 20 3 2 Glubokoe Tons/year — — — — — — 183 4 25 Gorodok Tons/year 31 2 3 14 1 4 55 1 4 Dubrovno Tons/year 2 0.3 2 — 1 2 14 1 2 Berezino Tons/year — — — — — — 279 8 19 Logoisk Tons/year — — — — — — 130 2 5 Svisloch Tons/year — — — — — — 139 4 27 Rogachev Tons/year — — — — — — 738 8 109 Bykhov Tons/year — — — — — — 270 1 20 Baranovichi Tons/year — — — — 14 — — 14 — Source: MHU (PIU). RF July 2019.
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Figure 10.2. Reduced Volume of BOD Pollution Loads Removed (tons/year)
18,000
16,000
14,000
12,000
10,000
8,000 BOD BOD (tos) 6,000
4,000
2,000
- 2014 2015 2016 2017 2018 2019
Target Actual
Source: MHU (PIU). RF July 2019. Figure 10.3. Volume of Phosphorus and Nitrogen Pollution Loads Removed by Treatment Plants Supported under the Project (tons/year)
2,500
2,000
1,500
1,000
Pollutionloads (tons) 500
- 2014 2015 2016 2017 2018 2019
Target (phosphorus) Actual (phosphorus) Target (nitrogen) Actual (nitrogen)
Source: MHU (PIU). RF July 2019.
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PDO3 and PDO4: Improved energy efficiency of water supply services and wastewater treatment services Table 10.3. Electricity Consumption, Water Supply for Selected Years Baseline Target 2015 2016 2018 Average across 15 utilities (kWh/m3) Not Not 0.74 0.71 0.67 established established Table 10.4. Energy Costs, Water Supply for Selected Years Electricity Consumption per m3 Sold 2015 2016 2018 Baranovichy 0.69 0.71 0.71 Bobruisk 0.58 0.56 0.55 Bogushevsk — — — Drogitchin — — 0.67 Gantsevichy 0.72 0.67 0.72 Krichev — — 0.62 M. Gorka Vodokanal — 0.55 0.56 Mosty 0.73 — 0.66 Mozyr 0.89 — — Sharkovchina 0.71 0.8 — Shklov 0.63 0.66 Smolevichy 0.97 0.97 0.91 Average 0.74 0.71 0.67 Source: IBNET 2019. Table 10.5. Energy Costs, Wastewater for Selected Years Electricity Consumption per m3 Treated 2015 2016 2018 Baranovichy 0.69 0.71 0.71 Berezino — 1.2 0.72 Bobruisk 0.58 0.56 0.55 Borisov Vodokanal — — 0.68 Brest 0.67 0.69 0.7 Bykhov District Vodokanal — — — Dubrovno 0.62 1.3 — Gantsevichy 0.72 0.67 0.72 Glubokoe 0.63 0.69 0.55 Gorodok 0.86 1.0 Grodno 0.63 0.63 0.75 Logoisk — — — Mogilev 0.66 0.66 0.82 Pinsk 0.48 0.46 — Rogachev — — — Svisloch 1.99 — 1.95 Average 0.78 0.76 0.83 Source: IBNET 2019.
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Table 10.6. Electrical Energy Costs as Percentage of Operational Costs for Selected Years Electrical Energy Costs as Percentage of Operational Costs 2007 (%) 2008 (%) 2010 (%) Baranovichy — — 28.82 Bobruisk 20.75 16.91 — Brest 28.78 25.15 24.67 Dubrovno — — 13.70 Gantsevichy 23.26 18.59 25.01 Glubokoe 12.27 8.67 16.9 Grodno 45.36 38.97 37.67 M. Gorka Vodokanal 18.93 17.63 — Mosty — — 15.17 Mozyr — — 36.87 Pinsk — — 24.41 Rogachev — — 20.83 Sharkovchina — — 10.92 Shklov 24.70 24.17 22.41 Smolevichy — — 28.58 Verkhnedvinsk 21.37 21.19 6.13 Source: IBNET 2019.
PDO5: Improved sustainability of water supply and wastewater treatment services Table 10.7. Operating Cost Coverage (ratio) for Selected Years Operating Cost Coverage 2008 2010 2011 2012 2015 2016 2018 Baranovichy — 1.2 1.15 1.18 0.61 0.7 1.12 Berezino 0.73 0.8 0.79 0.55 0.58 1.06 6.44 Bobruisk 1.22 0.17 1.41 1.23 1.25 0.92 1.16 Bogushevsk — — — — — — 0.96 Brest 1.17 1.17 1.21 1.23 1.12 1.13 1.13 Dubrovno — 0.58 — 1.03 0.43 0.31 — Gantsevichy 1.05 0.7 0.29 0.3 0.32 — 0.96 Glubokoe 1.15 1.1 — 0.75 1.03 1.03 0.8 Gorodok 1.01 0.52 — 1.04 0.66 0.63 Grodno 1.1 1.24 1.25 1.22 1.24 1.29 1.22 M. Gorka Vodokanal 0.82 0.71 1.08 0.53 0.5 0.5 Mogilev — — — 1.25 1.02 1.17 1.26 Mosty — 0.88 1.07 1.07 0.76 0.74 0.82 Mozyr — 1.27 0.91 1.2 1.29 — 1.2 Pinsk 1.15 1.14 1.09 0.98 1.21 1.21 1.23 Rogachev — 3.92 0.98 0.67 0.26 — 0.97 Senno 1.07 1.13 — — — — 0.96 Sharkovchina — 0.94 1.39 0.92 0.79 3.82 — Shklov 1.3 0.85 2.09 5.17 0.66 — 1.55 Smolevichy — 0.97 0.59 0.32 — — 0.85 Verkhnedvinsk 1.28 0.54 0.96 1.2 — — — Average 1.09 1.04 1.09 1.15 0.81 1.16 1.37
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1. Sustainability was also discussed in the PAD in relation to overall sector sustainability and in reference to the fact that investment planning was not oriented toward sustainability. The project supported the development of 8 feasibility studies and 12 detailed designs, as well as the review of design norms. Proposed amendments to norms have not yet been adopted in-country. Additionally, under the AF, a national benchmarking tool was developed for utilities. According to the PAD, sustainability was also measured by the intermediate indicator of ability of the PIU to independently appraise, monitor, supervise, and report on subprojects. By the time of restructuring in 2014, this indicator had been met and was thus dropped.
PDO6: Increased access to water supply services
Figure 10.4. People Using Safely Managed Drinking Water Services (% of population) 2000–2017
100
94% 95
90
85
80 % of % population
75
70
Year
Source: World Health Organization/United Nations Children’s Fund Joint Monitoring Programme for Water Supply, Sanitation and Hygiene.
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ANNEX 11. FLOWCHART ON INVESTMENT PROCESS
Source: World Bank 2013; Belarus: Municipal Water Sector Review.
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ANNEX 12. MAP
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