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Kayonza Irrigation and Integrated Watershed Management Project (KIIWP1)

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Kayonza Irrigation and Integrated Watershed Management Project (KIIWP1) Rwanda Kayonza Irrigation and Integrated Watershed Management Project (KIIWP1) Project Design Report (PDR) Project ID: 2000002229 Report Number: 5007-RW Document Date: 14 March, 2019 Table of Contents Currency equivalents ...................................................................................... ii Weights and measures .................................................................................... ii Abbreviations and Acronyms ........................................................................... iii Map of the Project Area ................................................................................... v 1. Context ........................................................................................................ 1 National context and rationale for IFAD involvement .............................................. 1 Lessons learned ................................................................................................. 6 2. Project description ...................................................................................... 7 Project objectives, geographic area of intervention and target groups ...................... 7 Components/outcomes and activities .................................................................. 12 Theory of Change ............................................................................................ 17 Alignment, ownership and partnerships .............................................................. 18 Benefits, costs and financing ............................................................................. 21 3. Risk ........................................................................................................... 29 Project risks and mitigation measures ................................................................ 29 Environment and social category ....................................................................... 30 Climate risk classification .................................................................................. 30 4. Implementation ......................................................................................... 31 Organisational Framework ................................................................................ 31 Planning, M&E, Learning, KM and Communications Plans ...................................... 34 Implementation readiness and start-up plans ...................................................... 35 Annex 1: Logical Framework (all phases with KIIWP 1 highlighted in green) ........ 38 Annex 2: Theory of Change ........................................................................... 41 Annex 3: Project cost and financing: Detailed costs tables ................................. 42 Annex 4: Economic and Financial Analysis ...................................................... 53 Annex 5: Social Environment and Climate Assessment (SECAP) Review Note ...... 64 Annex 6: First Annual Work Plan and Budget (AWPB) ....................................... 77 Annex 7: Procurement Plan for first 18 months ............................................... 82 Annex 8: Draft Project Implementation Manual (PIM) ........................................ 85 Annex 9: Integrated Risk Framework (IRF) ..................................................... 86 Annex 10: Exit Strategy ................................................................................ 89 Annex 11: Linkages between the core indicators in KIIWP, the IFAD Strategic Framework (2016 – 2025) and SDG targets ...................................... 91 Annex 12: Information on KIIWP 2 ................................................................. 93 Annex 13: Partnerships foreseen in KIIWP 2 .................................................. 113 Annex 14: Project risks and mitigation measures foreseen in KIIWP2 ................ 116 Annex 15: Key milestones for moving to KIIWP 2 ........................................... 118 i Currency equivalents Currency Unit US$1.0 = RWF 855 Weights and measures 1 kilogram = 1000 g 1 000 kg = 2.204 lb. 1 kilometre (km) = 0.62 mile 1 metre = 1.09 yards 1 square metre = 10.76 square feet 1 acre = 0.405 hectare 1 hectare = 2.47 acres ii Abbreviations and Acronyms AfDB African Development Bank AFR Access to Finance Rwanda AH Animal Husbandry AIDS Acquired Immune Deficiency Syndrome AWPB Annual Work Plan and Budget BDF Business Development Fund BDSP Business Development Service Provider CESB Rwanda Capacity Development and Employment Services Board COSOP Country Strategic Opportunities Programme CSA Climate Smart Agriculture DFID Department for International Development EDPRS Economic Development and Poverty Reduction Strategy EFA Economic and Financial Analysis EIRR Economic Internal Rate of Return ESIA Environmental and Social Impact Assessment ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan FaaB Farming as a Business FAO Food and Agriculture Organization FE Foreign Exchange FFS Farmer Field School FIRR Financial Internal Rate of Return FS Feasibility Study GALS Gender Action Learning System GAP Good Agricultural Practices GDP Gross Domestic Product GHG Greenhouse Gas GIS Geographic Information System GoR Government of Rwanda KWAMP Kirehe community-based Watershed Management Project HH Households HIV Human Immunodeficiency Virus HoReCO Horticulture in Reality Cooperative IFAD International Fund for Agricultural Development IFMIS Integrated Financial Management Information Systems IMF International Monetary Fund IMTA Irrigation Management Transfer Agreement IWMI International Water Management Institute IWUO Irrigation Water User Organisation KM Knowledge Management KOICA Korean International Cooperation Agency LPA Lead Project Agency LWH Land husbandry, Water harvesting and Hillside irrigation project M&E Monitoring and Evaluation MIDIMAR Ministry of Disaster Management and Refugees Affairs MINAGRI Ministry of Agriculture and Animal Resources MINECOFIN Ministry of Finance and Economic Planning MINIRENA Ministry of Lands, Environment, Forestry, Water and Mines MoU Memorandum of Understanding MPCI Multi Peril Crop Insurance MT Metric Ton MTR Mid Term Review NCCLCD National Strategy on Climate Change and Low-Carbon iii Development NAEB National Agriculture Export development Board NGO Non Governmental Organisation NRM Natural Resources Management OFID OPEC Fund for International Development ORMS Operational Results Management System O&M Operation and Maintenance p.a. Per Annuum PA Priority Area PASP Climate-resilient Post-harvest and Agribusiness Support Programme PEFA Public Expenditure and Financial Accountability PPP Purchasing Power Parity PRICE Project for Rural Income through Exports PSC Project Steering Committee PSTA Strategic Plan for the Transformation of Agriculture in Rwanda 4P Public Private Producers Partnership RAB Rwanda Agriculture Board RCA Rwanda Cooperative Agency RDDP Rwanda Dairy Development Project REMA Rwanda Environment Management Authority RNRA Rwanda National Resources Authority RSSP Rural Sector Support Programme RWF Rwandan Franc RWFA Rwanda Water and Forestry Authority RYAF Rwanda Youth in Agribusiness Forum SCC Sub-Catchment Committee SDG Sustainable Development Goal SECAP Social, Environmental and Climate Assessment Procedures SOE Statement of Expenditure SPIU Single Project Implementation Unit SSIT Small-Scale Irrigation Technology STARS Strengthening African Rural Smallholders SUN Scaling Up Nutrition SWC Soil and Water Conservation TBD To Be Determined TOC Theory of Change ToT Training of Trainers UNEP United Nations Environment Programme USD United States Dollar VC Value Chain WoP Without Project WP With Project WLUO Water for Livestock User Organisation WUO Water User Organisation iv Map of the Project Area Kayonza Irrigation and Integrated Watershed Management Project v Executive Summary 1. Political and economic background. Small and landlocked, Rwanda is a low- income country, with a densely packed population of about 12.5 million people1 who are mostly under 20-year old, and a total land area of 26,338 km2 of which 68.7 per cent is classified as arable agriculture land. From a tragically low starting point in 1994, Rwanda has enjoyed political stability in the last two decades which, combined with good governance and policy consistency, has created an enabling policy environment ensuring successful delivery of development programs. Since the turn of the century, Rwanda’s Gross Domestic Product (GDP) per capita has increased from US$242 to US$729, and poverty has been reduced from 60.3 per cent to 39.1 per cent of the population. 2. Rwanda’s growth in 2016 and early 2017, while below historical standards, remained robust relative to the region, with 2017 growth estimated at 5.2 per cent. Consumer price inflation has continued to decline since February 2017, reflecting improving food supply conditions and declining transport costs. Performance under the PSI-supported program (Policy Support Instrument) and Standby Credit Facility arrangement remained strong, with most quantitative targets and structural reform benchmarks being met. In the most recent debt sustainability analysis by the International Monetary Fund (IMF), Rwanda is assessed to be at low risk of debt distress. Rwanda’s external debt portfolio remains mostly constituted of concessional loans2, and this is expected to continue being the main source of funding for public projects going forward. 3. Poverty and rural development context. While Rwanda has an impressive
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