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African Development Bank Angola Institutional AFRICAN DEVELOPMENT BANK Public Disclosure Authorized Disclosure Public ANGOLA INSTITUTIONAL SUPPORT FOR THE SUSTAINABILITY OF URBAN WATER SUPPLY AND SANITATION SERVICE DELIVERY OWAS DEPARTMENT Public Disclosure Authorized Authorized Disclosure Public March 2015 TABLE OF CONTENTS I– STRATEGIC THRUST & RATIONALE ....................................................................................................... 1 1.1. PROJECT LINKAGES WITH COUNTRY STRATEGY AND OBJECTIVES ............................................................... 1 1.2. RATIONALE FOR BANK’S INVOLVEMENT ...................................................................................................... 2 1.3. DONOR COORDINATION ................................................................................................................................ 3 II. PROJECT DESCRIPTION ............................................................................................................................ 4 2.1 DETAILED PROJECT COMPONENTS ................................................................................................................ 4 2.2 TECHNICAL SOLUTION RETAINED AND OTHER ALTERNATIVES EXPLORED .................................................. 5 2.3 PROJECT TYPE .............................................................................................................................................. 5 2.4 PROJECT COST AND FINANCING ARRANGEMENTS ........................................................................................ 6 2.5 PROJECT’S TARGET AREA AND POPULATION ................................................................................................ 7 2.6 PARTICIPATORY PROCESS FOR PROJECT IDENTIFICATION, DESIGN AND IMPLEMENTATION .......................... 8 2.7 BANK GROUP EXPERIENCE, LESSONS REFLECTED IN PROJECT DESIGN ........................................................ 8 2.8 KEY PERFORMANCE INDICATORS .................................................................................................................. 9 III – PROJECT FEASIBILITY ........................................................................................................................... 9 3.1 ECONOMIC PERFORMANCE ............................................................................................................................ 9 3.2 ENVIRONMENTAL AND SOCIAL IMPACTS..................................................................................................... 10 IV – IMPLEMENTATION ................................................................................................................................ 14 4.1 IMPLEMENTATION ARRANGEMENTS ............................................................................................................ 14 4.2 MONITORING .............................................................................................................................................. 16 4.3 GOVERNANCE ............................................................................................................................................. 16 4.4 SUSTAINABILITY ......................................................................................................................................... 17 4.5 RISK MANAGEMENT .................................................................................................................................... 18 4.6 KNOWLEDGE BUILDING .............................................................................................................................. 19 V – LEGAL INSTRUMENTS AND AUTHORITY .......................................................................................... 19 5.1 LEGAL INSTRUMENT ................................................................................................................................... 19 5.2 CONDITIONS ASSOCIATED WITH BANK’S INTERVENTION ............................................................................ 19 5.3 COMPLIANCE WITH BANK POLICIES ............................................................................................................ 20 VI – RECOMMENDATION .............................................................................................................................. 20 APPENDIX 1: MAP OF ANGOLA AND PROJECT LOCATION APPENDIX 2: ANGOLA’S COMPARATIVE SOCIO-ECONOMIC INDICATORS APPENDIX 3: TABLE OF ADB’S PORTFOLIO IN THE COUNTRY APPENDIX 4: SIMILAR PROJECTS FINANCED BY THE BANK AND OTHER DEVELOPMENT PARTNERS IN THE COUNTRY APPENDIX 5: WAIVER REQUEST FOR FINANCING 80% OF THE PROJECT COST THROUGH AN AN ADB LOAN Currency Equivalents June 2014 1UA = US Dollar (USD) 1.54047 1UA = AON 151.30445 1USD = AON 98.21967 FISCAL YEAR: 1 April – 31 March WEIGHTS AND MEASURES 1 metric tonne = 2204 pounds (lbs) 1 kilogramme (kg) = 2.200 pounds (lbs) 1 metre (m) = 3.28 feet (ft) 1 millimetre (mm) = 0.03937 inch (“) 1 kilometre (km) = 0.62 mile 1 hectare (ha) = 2.471 acres i ACRONYMS AND ABBREVIATIONS ADB African Development Bank MINEA Ministry of Energy and Water ADF African Development Fund MINECON Ministry of Economic Development AOFO AfDB Angola Field Office MINAMB Ministry of Environment AON Angola Kwanza MINFAMU Ministry of Family Affairs and the CPPR Country Portfolio Performance Review Advancement of Women CSP Country Strategy Paper MIS Management Information System CSO Civil Society Organisations M&E Monitoring and Evaluation DNA National Directorate for Water O&M Operation and Maintenance DP Development Partners PDISA Programa de Desenvolvimento ESU Environmental and Social Unit Institucional do Sector de Águas (Water EPAL Luanda Water Supply and Sewerage Sector Institutional Development Program) Company PFM Public Financial Management EU European Union PIU Project Implementation Unit FCMU Financial and Contract Management Unit PCR Project Completion Report FHH Female Headed Households PND National Development Plan FM Financial Management PWSU Provincial Water and Sanitation Utility GGI Gender Gap Index RMC Regional Member Country GOA Government of Angola SISAS Sistema de Informação Sectorial de Água e HDI Human Development Index Saneamento (Water and Sanitation JAS Joint Assistance Strategy Information System) JMP Joint Monitoring Program TA Technical Assistance INAS Instituto Nacional de Água Potável e U5MR Under 5 Mortality Rate Saneamento (Asset Management Entity) UA Unit of Account INARH Instituto Nacional de Recursos Hídricos WSIDC Water Sector Institutional Development (National Institute for Water Resources Commissino Management) WSS Water Supply and Sanitation IPCC Intergovernmental Panel on Climate WWTP Waste Water Treatment Plant Change IRSE Electricity Sector Regulatory Authority ii LOAN INFORMATION Client’s information BORROWER: Republic of Angola (GoA) EXECUTING AGENCY: Ministry of Energy and Water (MINEA) Financing plan Source Amount Instrument USD Million ADB 123.77 US$ Loan GoA 30.94 US$ Counterpart TOTAL COST 154.71US$ ADB’s key financing information Loan (ADB) Currency United States Dollar (USD) Interest type Enhanced variable spread Loan (floating rate with option to fix) Interest rate spread Funding margin+60 bps lending spread Commitment fee None Other fees None Tenor 20 years Grace period 5 Years EIRR (base case) 18.4% Timeframe - Main Milestones (expected) Concept Note Approval May 2014 Project approval May 2015 Effectiveness September 2015 Completion December 2020 Last Disbursement December 2021 Last repayment October 2034 iii Project Summary 1. PROJECT OVERVIEW: The Institutional and Sustainability Support to Urban Water Supply and Sanitation Service Delivery Project aims to improve water sector governance, strengthen institutional capacity and efficiency in the water and sanitation sector institutions at central and provincial level, and improve access to sustainable water supply and sanitation services. The Project will result in the empowerment of people through the capacity development and creation of employment directly within the utilities. The Project focuses in seven provinces of Angola namely: Cabinda, Cunene, Lunda Norte, Lunda Sul, Namibe, Bengo, and Cuanza Sul. Other provinces are being covered by other partners and GOA. 2. The Project’s main outcomes include (i) the establishment and effective functioning of seven Provincial Water Supply and Sanitation Utilities which are autonomous, (ii) enhanced capacity for service provision at the central and provincial levels, and (iii) expanded access to water supply and sanitation. The project is planned to be implemented over a 60 months period beginning January 2016 at a cost of US$ 154.71 million. 3. The Project will directly benefit a total population of 922 thousands immediately and indirectly (but gradually) all the 2.3 million urban population of the seven provinces through improved management and service delivery. The project will in particular increase access to water supply for an additional 338,000 people in peri urban areas of the provincial capitals and an additional 75,000 people having access to safe disposal of wastewater. The project will develop sector gender policy, strategy and action plan and will ensure empowerment of women through capacity development in training and employment generation through the management of water kiosks and fertiliser waste by-products. 4. NEEDS ASSESSMENT: Access stands at 54% for water supply and 60% for sanitation nationally as at 2012. The majority (85% or 6 out of the 7 provinces) of the Project beneficiary provinces have coverage below
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