Report and Recommendation of the President to the Board of Directors

Project Number: 52195-001 September 2020

Proposed Loan, Grant, and Technical Assistance Grant : Priority River Basins Flood Risk Management Project

Distribution of this document is restricted until it has been approved by the Board of Directors. Following such approval, ADB will disclose the document to the public in accordance with ADB's Access to Information Policy.

CURRENCY EQUIVALENTS (as of 11 August 2020)

Currency unit – Nepalese rupee/s (NRe/NRs) NRe1.00 = $0.00834 $1.00 = NRs119.90000

ABBREVIATIONS

ADB – Asian Development Bank CBDRM – community-based disaster risk management COVID-19 – coronavirus disease DHM – Department of Hydrology and Meteorology DWRI – Department of Water Resources and Irrigation EIRR – economic internal rate of return EMP – environmental management plan FFEWS – flood forecasting and early warning system GESI-AP – Gender Equality and Social Inclusion Action Plan ha – hectare IED – Independent Evaluation Department IEE – initial environmental examination MEWRI – Ministry of Energy, Water Resources and Irrigation O&M – operation and maintenance PAM – project administration manual PIC – project implementation consultant PMU – project management unit TA – technical assistance

NOTES

(i) The fiscal year (FY) of the Government of Nepal and its agencies ends on 15 July. “FY” before the calendar year denotes the year in which the fiscal year ends, e.g., FY2020 ends on 15 July 2020.

(ii) In this report, “$” refers to United States dollars.

Vice-President Shixin Chen, Operations 1 Director General Kenichi Yokoyama, South Asia Department (SARD) Director Mio Oka, Environment, Natural Resources and Agriculture Division (SAER), SARD

Team leader Suzanne Marsh, Water Resources Specialist, SAER, SARD Team members Mikael Andersson; Financial Management Specialist, Portfolio, Results, and Quality Control Unit, SARD Angelique Dawn A. Badelles, Associate Safeguards Officer (Resettlement), Office of the Director General, SARD Arnaud Cauchois, Principal Water Resources Specialist, SAER, SARDa Katrina L. Magpatoc, Operations Assistant, SAER, SARD Rachel F. Mendinueto, Associate Project Analyst, SAER, SARD Soma Misra, Procurement Specialist, Procurement Division 1, Procurement, Portfolio, and Financial Management Department Roshan Ouseph, Senior Counsel, Office of the General Counsel Deepak Singh, Senior Environment Officer, Nepal Resident Mission (NRM), SARD Suman Subba, Senior Social Development Officer (Gender), NRM, SARD Peer reviewer Geoffrey Wilson, Senior Water Resources Specialist, Water Sector Group, Sustainable Development and Climate Change Department a Outposted to the India Resident Mission.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page PROJECT AT A GLANCE MAP I. THE PROPOSAL 1 II. THE PROJECT 1 A. Rationale 1 B. Project Description 3 C. Value Added by ADB 4 D. Summary Cost Estimates and Financing Plan 4 E. Implementation Arrangements 6 III. ATTACHED TECHNICAL ASSISTANCE 7 IV. DUE DILIGENCE 7 A. Technical 7 B. Economic and Financial Viability 8 C. Sustainability 9 D. Governance 9 E. Poverty, Social, and Gender 10 F. Safeguards 10 G. Summary of Risk Assessment and Risk Management Plan 11 V. ASSURANCES 12 VI. RECOMMENDATION 12 APPENDIXES 1. Design and Monitoring Framework 13 2. List of Linked Documents 16

Project Classification Information Status: Complete

PROJECT AT A GLANCE

1. Basic Data Project Number: 52195-001 Project Name Priority River Basins Flood Risk Management Department/Division SARD/SAER Project Country Nepal Executing Agency Ministry of Energy, Water Borrower Government of Nepal Resources and Irrigation

Country Economic https://www.adb.org/Documents/LinkedDocs/ Indicators ?id=52195-001-CEI Portfolio at a Glance https://www.adb.org/Documents/LinkedDocs/ ?id=52195-001-PortAtaGlance

2. Sector Subsector(s) ADB Financing ($ million) Agriculture, natural Rural flood protection 40.00 resources and rural Rural water policy, institutional and capacity development 10.00 development Total 50.00 3. Operational Priorities Climate Change Information Addressing remaining poverty and reducing inequalities GHG reductions (tons per annum) 0 Accelerating progress in gender equality Climate Change impact on the High Tackling climate change, building climate and disaster resilience, and Project enhancing environmental sustainability Promoting rural development and food security ADB Financing Strengthening governance and institutional capacity Adaptation ($ million) 7.00 Mitigation ($ million) 0.00

Cofinancing Adaptation ($ million) 0.00 Mitigation ($ million) 0.00 Sustainable Development Goals Gender Equity and Mainstreaming SDG 1.5 Effective gender mainstreaming (EGM) SDG 2.4 SDG 5.5 Poverty Targeting SDG 13.a General Intervention on Poverty

4. Risk Categorization: Low . 5. Safeguard Categorization Environment: B Involuntary Resettlement: C Indigenous Peoples: B

. 6. Financing Modality and Sources Amount ($ million) ADB 50.00 Sovereign Project grant: Asian Development Fund 10.00 Sovereign Project (Concessional Loan): Ordinary capital resources 40.00 Cofinancing 0.00 None 0.00 Counterpart 13.00 Government 13.00 Total 63.00 Note: An attached technical assistance will be financed on a grant basis by the Technical Assistance Special Fund (TASF-6) in the amount of $500,000; Water Financing Partnership Facility-NET TF in the amount of $750,000.

Currency of ADB Financing: US Dollar, Nepalese Rupee

Source: Asian Development Bank This document must only be generated in eOps. 25032020123619031705 Generated Date: 04-Sep-2020 18:14:51 PM NEPAL PRIORITY RIVER BASINS FLOOD RISK MANAGEMENT PROJECT SSimikotimikot

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Kimri CChainpurhainpur BBaitadiaitadi Kolti GGamgadhiamgadhi Patan DDadeldhuraadeldhura MartadiMartadi Silgarhi JJumlaumla Bhatkanda DDipayalipayal MangalsenMangalsen MManmaanma DDunaiunai Banbasa BheemdattBheemdatt GGodawariodawari DDailekhailekh JJomsomomsom JJajarkotajarkot Babiyachour CChamehame DDhangadhihangadhi MMusikotusikot BBirendranagarirendranagar BBenieni

SSalyanalyan Sittalpat PPokharaokhara DDhunchehunche LLiwangiwang BBaglungaglung BBesisaharesisahar GGulariyaulariya Kohalpur KKusmausma Tulsipur PPyuthanyuthan GGorkhaorkha BBiduridur TTamghasamghas SSyangjayangja CChautarahautara SSandhikharkaandhikharka DDamauliamauli NNepalganjepalganj GGhorahihorahi Waling Mugling Kakani Barhabise Lamahi DDhadingbesihadingbesi CCharikotharikot MOHANA KHUTIYA TTansenansen Thankot BBhaktapurhaktapur BButwalutwal BBharatpurharatpur Dakshinkali Meghauli LLalitpuralitpur SSallerialleri TTaulihawaaulihawa KKhandbarihandbari TTaplejungaplejung WEST RAPTI Bhairahawa PParasiarasi Baruwa Bhimphedi BBhojpurhojpur HHetaudaetauda RRamecchapamecchap Krishnanagar DDikteliktel Lohathar OOkhaldhungakhaldhunga PPhidimhidim Lumbini SSindhulimadiindhulimadi Basantpur TTerhanthumerhanthum Pathlaiya DDhankutahankuta IlamIlam BirgunjBirgunj Dhalkebar N EAST RAPTI KKalaiyaalaiya MMalangawaalangawa GGaighataighat DDharanharan Kakarbhitta GGauraur JJanakpuranakpur Maikhola Lahan Itahari SSirahairaha CChandragadhihandragadhi 0 20 40 60 80 100 RRajbirajajbiraj BBiratnagariratnagar JJaleswaraleswar Rangeli Kilometers LAKHANDEI

Priority Basin BAKRAHA MAWA RATUWA River National Capital Provincial Capital District Headquarters Town/Market Center National Highway

194311 19NEP ABV Feeder/District Road This map was produced by the cartography unit of the Asian Development Bank. District Boundary The boundaries, colors, denominations, and any other information shown on this Provincial Boundary map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, Boundaries areInternational not necessarily Boundary authoritative. colors, denominations, or information.

I. THE PROPOSAL

1. I submit for your approval the following report and recommendation on a proposed loan and a proposed grant to Nepal for the Priority River Basins Flood Risk Management Project. The report also describes proposed technical assistance (TA) for the Implementation Support for the Priority River Basin Flood Risk Management Project, and if the Board approves the proposed loan and grant, I, acting under the authority delegated to me by the Board, approve the TA.1

2. The project will improve the resilience of communities to flooding in six river basins (para. 9) in the Terai region (Map).2 It is in line with Nepal’s National Water Plan, 2002–2027 to reduce social and economic losses from water-induced disasters through blending structural and nonstructural measures.3 The project will protect agricultural land and households in priority areas from a 1-in-50-year return period flood by constructing flood embankments, spurs, and outlet structures. The local response to flooding will be strengthened through the installation of flood forecasting and early warning systems (FFEWS) and community-based disaster risk management (CBDRM).

II. THE PROJECT

A. Rationale

3. Strategic context. Nepal’s comparatively low level of development in South Asia and complex geography render the country vulnerable to climate change impacts and prone to natural hazards.4 During the monsoon season (June–September), Nepal receives 80% of the country’s annual rainfall, resulting in widespread inundation in low-lying areas. Underlying flood risk drivers include (i) increasing frequency and intensity of precipitation events and flooding in the Terai region; (ii) unplanned population growth from the mountain and hill regions, drawn by productive agricultural and commercial land; (iii) inadequate and deteriorated flood protection infrastructure; and (iv) the inability of communities and local governments to anticipate for and quickly respond to flooding. With climate change, flooding events are expected to increase in intensity and frequency, and the associated increasing damage costs threaten the country’s economic development. Disasters disproportionally affect the poor and marginalized because they occupy the most hazard-exposed areas, and this will undermine the country’s progress toward poverty reduction. This is compounded with the recent coronavirus disease (COVID-19) outbreak as rural poor are the most vulnerable and less resilient to impacts to their livelihoods.

4. The Terai is particularly vulnerable to flood events, and damage from flooding in the region can have a significant impact on the rest of the country, as it is Nepal’s largest producer of agricultural produce. The region has only 17% of Nepal’s total land area, but accounts for 51% of the 2.64 million hectares (ha) of cultivable land. The total damage by the 2017 Terai

1 Of which (i) $500,000 will be provided by the Technical Assistance Special Fund (TASF 6) of the Asian Development Bank (ADB) and (ii) $750,000 will be provided by the Netherlands Trust Fund under the Water Financing Partnership Facility and administered by ADB. 2 The Terai region is a lowland region in southern Nepal. 3 Government of Nepal, Water and Energy Commission Secretariat. 2002. Nepal National Water Plan, 2002–2027. Kathmandu. 4 As of 2018, Nepal’s human development index of 0.574 was below the average of 0.638 for countries in South Asia. United Nations Development Program. 2018. Human Development Indices and Indicators: 2018 Statistical Update. Washington, DC.

2 flood event was estimated at $584.70 million, almost 3% of Nepal’s gross domestic product. The region is witnessing significant male outward migration to urban areas and overseas in search of economic opportunities. This has led to a situation where women take additional primary responsibilities, including flood response, in addition to household responsibilities.

5. Flood risk management. Several government agencies are involved in flood risk management.5 However, there are both structural and nonstructural challenges, such as lack of financial investment in construction and maintenance of flood protection assets; and limited technical capacity of national and local government agencies in planning and prioritizing infrastructure requested by communities. The Department of Water Resources and Irrigation (DWRI) is responsible for all infrastructure protection works for water-induced disasters. However, the DWRI does not have comprehensive flood risk mitigation planning, which results in nonoptimal construction of embankment works. Further, gaps in Nepal’s hydrometeorological stations, operated by the Department of Hydrology and Meteorology (DHM), and a lack of flood forecasting models result in local communities and local governments having little or no warning of potential flooding events. Further, communities are not fully prepared for flooding because of limited warnings of impending flood events.

6. Policy framework. The government acknowledges the country’s flooding challenges and has developed key policy directives and goals that seek to reduce the vulnerability of communities by increasing their adaptive capacity to manage flood risks. Specifically, the National Water Plan promotes risk reduction for severe flooding through improved infrastructure, functional water-induced disaster warning systems, integrated water resources management, and community-level disaster preparedness programs (footnote 3).6 The National Strategy for Disaster Risk Management supports the development of modern hydrometeorological and early warning systems.7 The Constitution of Nepal 2015 and the Disaster Risk Reduction and Management Act 2017 establish the governance and administrative structure for disaster risk management under the federal structure. At the local level, CBDRM committees are responsible for engaging the whole community in disaster preparedness. At the municipality level, local disaster management committees provide the platform to effectively implement CBDRM activities by providing the linkages between local and national risk mitigation measures.

7. ADB experience and lessons. The Asian Development Bank (ADB) is supporting similar flood risk management projects in South Asia,8 including the Bagmati River Basin Improvement Project in Nepal, which incorporates participatory designs, sustainable asset management systems, and high-level technology for FFEWSs.9 Key lessons learned that are applied in the project include: (i) incorporating sustainability of project assets in operation and maintenance (O&M) arrangements, (ii) designs that consider disaster risks and climate

5 Department of Water Resources and Irrigation, Department of Hydrology and Meteorology, Ministry of Home Affairs, Ministry of Defence, and Ministry of Federal Affairs and General Administration. 6 The plan includes evacuation plans, rehearsals and drills, and training with the formation of standing committees. 7 Government of Nepal, Ministry of Home Affairs. 2009. National Strategy for Disaster Risk Management. Kathmandu. 8 ADB. 2010. Report and Recommendation of the President to the Board of Directors: Proposed Multitranche Financing Facility to India for the Assam Integrated Flood and Riverbank Erosion Risk Management Investment Program. Manila, and ADB. 2014. Report and Recommendation of the President to the Board of Directors: Proposed Multitranche Financing Facility to the People’s Republic of Bangladesh for the Flood and Riverbank Erosion Risk Management Investment Program .Manila. 9 ADB. 2013. Report and Recommendation of the President to the Board of Directors: Proposed Loan, Grant, and Administration of Technical Assistance Grant to Nepal for the Bagmati River Basin Improvement Project. Manila.

3 resilience, and (iii) engagement of the local community in the implementation and supervision of flood schemes contributes to the sustainability and ownership of rural infrastructure.10

8. Alignment with ADB priorities. The project supports the operational priorities of ADB’s Strategy 2030 by (i) addressing remaining poverty and reducing inequalities; (ii) tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability; (iii) promoting rural development and food security; (iv) strengthening governance and institutional capacity; and (v) accelerating progress in gender equality by promoting women’s involvement in the CBDRM activities.11 The project outputs also contribute to ADB’s Operational Plan on water, 2011–2020, and Integrated Disaster Risk Management, 2014–2020.12

9. Project area and COVID-19. The project will focus on flood risk management for six priority river basins (subprojects) in the Terai: West Rapti, Mawa Ratuwa, Lakhandei, Mohana Khutiya, East Rapti, and Bakraha.13 These river basins do not have effective flood protection embankments. From 1991 to 2014, these river basins experienced 199 floods that reportedly affected 143,486 people and caused 273 deaths and the destruction of 4,284 houses.The communities that will benefit from this project are those most impacted by this regular flooding. COVID-19 has negatively impacted the Terai region with border restrictions to India and movement across districts controlled. The majority of COVID cases in Nepal are located in the Terai region. Flooding will pose further risk through preventing travel and limiting people’s travel and limiting people’s ability to access essential items and services that help mitigate risks of COVID-19. Public sector support is justified, as flood protection works are communal assets that do not directly generate revenue.

B. Project Description

10. The project is aligned with the following impact: social and economic losses due to water-induced disasters reduced (footnote 3). The project will have the following outcome: resilience of communities to flood risks of selected river basins in the Terai region improved.14

11. Output 1: Flood protection infrastructure and maintenance system improved. The project will reduce direct impacts from flooding through (i) construction of flood control infrastructure (embankments, spurs, and outlet structures); (ii) planning and implementation of bioengineering of river embankments for enhanced flood risk management, using suitable vegetative methods to prevent soil erosion; and (iii) development of maintenance manuals and an asset management system for flood protection infrastructure. The construction works are

10 Independent Evaluation Department (IED). 2016. Validation Report: Secondary Towns Integrated Flood Protection Project (Phase 2) in Bangladesh. Manila: ADB; IED. 2018. Validation Report: Emergency Flood Damage Rehabilitation Project in Nepal. Manila: ADB; and IED. 2019. Validation Report: Emergency Food Assistance Project in Cambodia. Manila: ADB. 11 ADB. 2018. Strategy 2030: Achieving a Prosperous, Inclusive, Resilient, and Sustainable Asia and the Pacific. Manila. 12 ADB. 2011. Water Operational Plan, 2011–2020. Manila. The Water Operational Plan identifies flood and drought mitigation as an urgent challenge to be addressed in the integrated water resource management process. ADB. 2014. Operational Plan for Integrated Disaster Risk Management, 2014–2020. Manila. The project is included as a 2020 firm project in ADB. 2019. Country Operations Business Plan: Nepal, 2020–2022. Manila. 13 The priority river basins were selected from 25 river basins from ADB. 2016. Water Resources Project Preparatory Facility – Flood Hazard Mapping and Preliminary Preparation of Flood Risk Management Projects: Final Report. Manila. Factors such as the following were taken into consideration: likelihood and/or magnitude of flood damage, poverty index, impact on human well-being, loss of life, and equitable distribution of projects between regions. 14 The design and monitoring framework is in Appendix 1.

4 expected to generate employment for at least 10% of the affected households, including indigenous peoples, Dalits and women.

12. Output 2: Flood forecasting and response systems enhanced. The project will support the government and communities in flood-prone areas to improve early flood warning systems through (i) installing about 40 rain gauges and 30 hydrometeorological stations, (ii) developing about 5 FFEWS, and (iii) improving maintenance of FFEWS.

13. Output 3: Flood prevention and preparedness capacity improved. This will be delivered by (i) undertaking an organizational capacity building program on flood risk management and infrastructure planning for the DWRI and local governments (municipalities, village municipalities and provincial governments); (ii) developing the capacity of local communities on disaster preparedness; (iii) constructing about 48 flood shelters with gender- responsive features; and (iv) developing CBDRM plans, in consultation with community stakeholders (including women) and in line with local development plans and budgets that integrate disaster risk information.15

C. Value Added by ADB

14. ADB’s value addition was initiated by supporting the government’s comprehensive study of 25 river basins in the Terai to identify the priority river areas through both flood hazard mapping and hydraulic modeling of whole river systems (footnote 13). The project design includes international best practices for embankment designs, (ii) allowance for climate change and increased flood flows, and (iii) bioengineering and nature-based solutions. The project also builds upon two ADB TA projects: (i) Mainstreaming Climate Change Risk Management in Development; and (ii) Strengthening Integrated Flood Risk Management.16 The project complements the initiatives of other development partners supporting Nepal’s flood risk management and FFEWS. The project closely aligns with the World Bank’s Building Resilience to Climate Related Hazards project, which supports the DHM with institutional strengthening, capacity building, modernization of the observation networks and forecasting, and enhancement of the service delivery system.17

D. Summary Cost Estimates and Financing Plan

15. The project is estimated to cost $63.00 million (Table 1).

15 CBDRM includes developing flood risk maps and supporting implementation of nonstructural measures prioritized in community plans, especially measures related to strengthening livelihood resilience. 16 ADB. 2011. Technical Assistance to Nepal for Mainstreaming Climate Change Risk Management in Development. Manila, that recommended establishing early warning systems and mobilizing community participation in water- induced disaster management; and ADB. 2018. Technical Assistance for Strengthening Integrated Flood Risk Management into Regional Cooperation. Manila, that recommends strengthening the design and implementation of flood risk management solutions. 17 World Bank. 2012. Project Appraisal Document. Building Resilience to Climate Related Hazards. Washington D.C. The project also aligns with Building a Resilient Churia Region in Nepal, a project financed by the Food and Agriculture Organization of the United Nations, which focuses on enhancing the climate resilience of ecosystems and vulnerable communities in the Churia region. Green Climate Fund. 2019. Funding Proposal FP118: Building a Resilient Churia Region in Nepal. Incheon.

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Table 1: Summary Cost Estimates ($ million) Item Amounta A. Base Costb 1. Output 1: Flood protection infrastructure and maintenance system improved 39.15 2. Output 2: Flood forecasting and response systems enhanced 8.47 3. Output 3: Flood prevention and preparedness capacity improved 4.90 Subtotal (A) 52.52 B. Contingenciesc 8.84 C. Financing Charges During Implementationd 1.64 Total (A+B+C) 63.00 a Includes taxes and duties of $5.30 million. Such amount does not represent an excessive share of the project cost. b In February 2020 prices. c Physical contingencies computed at 5% for civil works, flood forecasting and early warning systems and for equipment, and 4% for consultancy services. Price contingencies computed, on average, at 1.5%–1.6% on foreign exchange costs and 4.6%–6.0% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. d Includes interest and other charges on all sources of financing. Source: Asian Development Bank estimates.

16. The government has requested (i) a concessional loan of $40.00 million from ADB’s ordinary capital resources, and (ii) a grant not exceeding $10.00 million from ADB’s Special Funds resources (Asian Development Fund) to help finance the project. The loan will have a 32- year term, including a grace period of 8 years; an interest rate of 1.0% per year during the grace period and 1.5% per year thereafter; and such other terms and conditions set forth in the draft loan agreement.

17. The summary financing plan is in Table 2. ADB will finance part of the expenditures in relation to civil works, equipment, goods, and consulting services (79.4% of the project cost). The government will finance 20.6% of the project cost; including procurement activities; project management; taxes and duties; part of the civil works; equipment; and consulting services. Detailed cost estimates by expenditure category and by financier are included in the project administration manual (PAM).18

Table 2: Summary Financing Plan Amount Share of Total Source ($ million) (%) Asian Development Bank Ordinary capital resources (concessional loan)a 40.00 63.50 Special Funds resources (ADF grant)b 10.00 15.90 Government of Nepal 13.00 20.60 Total 63.00 100.00 ADF = Asian Development Fund. a Includes $20 million from ADF 12 disaster risk reduction funding b ADF 12 disaster risk reduction grant funding. Source: Asian Development Bank estimates.

18. Climate adaptation is estimated to cost $7.00 million. ADB will finance 100% of adaptation costs.19 The climate change risk is high because of the increased frequency and magnitude of extreme precipitation events. In response to these risks, the project design

18 Project Administration Manual (accessible from the list of linked documents in Appendix 2). 19 Climate Change Assessment (accessible from the list of linked documents in Appendix 2).

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incorporates increased embankment levels to account for increased flood flows and the ability to be increased in height or modified if conditions change.

E. Implementation Arrangements

19. The Ministry of Energy, Water Resources and Irrigation (MEWRI) will serve as the executing agency and the DHM and DWRI, both departments of the MEWRI, will be the implementing agencies. The project will be executed and implemented by the central government in accordance with its federal and administrative arrangements.20 Local participation will include representatives from provincial governments in the project steering committee and the establishment of subproject consultation committees. The implementation arrangements are summarized in Table 3 and described in detail in the PAM (footnote 18).

Table 3: Implementation Arrangements Aspects Arrangements Implementation period September 2020–March 2027 Estimated completion date 31 March 2027 Estimated loan and grant 30 September 2027 closing date Management (i) Oversight body Project Steering Committee: Secretary, MEWRI (chair); Joint secretary, MEWRI; joint secretary, MOF; director general, DWRI; director general, DHM; and representation from MOHA, National Planning Commission, MOFAGA, and provincial governments (members) (ii) Executing agency MEWRI (iii) Key implementing DHM and DWRI agencies (iv) Subproject consultation Formed at each subproject area with representatives from municipalities, committees village municipalities, provincial governments, and DWRI field offices (v) Implementation unit PMU based in Kathmandu DWRI building with 26 staff PIU based in Kathmandu DHM building with 21 staff Field offices in the districts under the DWRI People’s Embankment Program (Dang, Jhapa, Kailali, Makwanpur, Morang, Sarlahi) with 61 project staff Procurement OCB (internationally advertised) 4 contracts $45.4 million OCB (nationally advertised) 4 contracts $7.12 million Request for quotations multiple contracts $1.7 million Consulting services PIC (QCBS 90:10) 57 person-months $2.3 million CBDRM NGO (QCBS 90:10) 87 person-months $0.95 million Community participation multiple contracts $0.25 million Individual multiple contracts $0.1 million Retroactive financing and/or Advance contracting will apply for procurement of civil works and recruitment advance contracting of consultants. The maximum amount of expenditures eligible under the retroactive financing shall not exceed 20% of the total ADB loan amount, which shall have been incurred before loan effectiveness, but not more than 12 months before the signing of the loan agreement. Categories of expenditure eligible for retroactive financing include civil works, FFEWS, and consultants. Disbursement The loan and/or grant proceeds will be disbursed following ADB's Loan Disbursement Handbook (2017, as amended from time to time) and detailed arrangements agreed between the government and ADB.

20 These implementation arrangements align with established federal practice in flood risk management, as reflected in the government’s ongoing People’s Embankment Program. The program is a government scheme in the Terai where communities contribute to the construction of embankments through user associations funded by the DWRI. It is managed by the central government and DWRI field offices are responsible for construction supervision.

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ADB = Asian Development Bank; CBDRM = community-based disaster risk management; DHM = Department of Hydrology and Meteorology; DWRI = Department of Water Resources and Irrigation; FFEWS = flood forecasting and early warning system; MEWRI = Ministry of Energy, Water Resources and Irrigation; MOF = Ministry of Finance; MOFAGA = Ministry of Federal Affairs and General Administration; MOHA = Ministry of Home Affairs; NGO = nongovernment organization; OCB = open competitive bidding; PIC = project implementation consultant; PIU = project implementation unit; PMU = project management unit; QCBS = quality- and cost-based selection. Source: ADB.

III. ATTACHED TECHNICAL ASSISTANCE

20. ADB will provide transaction TA for the Implementation Support for the Priority River Basin Flood Risk Management Project.21 The TA will support all three outputs and provide (i) institutional capacity building to the DWRI and local governments on integrated flood risk management; (ii) support for the development of an embankment asset monitoring system and capacity building on O&M, and the defining of roles and responsibilities with respect to financing, provision, and oversight at the federal, provincial, and local levels;22 and (iii) support to the DHM to develop the FFEWS. The TA is proposed to be attached rather than under the loan to better integrate international expertise and best practices into DHM and DWRI operations, leveraging ADB’s experience in other similar TA projects (footnote 16). ADB will recruit an international consulting firm in accordance with the ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time) to carry out the TA activities.

21. The TA is estimated to cost $1.315 million, of which (i) $500,000 will be financed on a grant basis by ADB’s Technical Assistance Special Fund (TASF 6) and (ii) $750,000 will be financed on a grant basis by the Netherlands Trust Fund under the Water Financing Partnership Facility and administered by ADB. The government will provide counterpart support in the form of counterpart staff, office accommodation, office supplies, domestic transportation, and other in-kind contributions.

IV. DUE DILIGENCE

A. Technical

22. Technical due diligence included hydrology, hydraulics, and river morphology assessments of the six subprojects. Feasibility studies were guided by the flood risk hazard mapping prepared under the prefeasibility study (footnote 13). The priority areas were identified through computer modeling incorporating climate change combined with field observations. Detailed designs were completed for Mawa Ratuwa and Mohanna Khutiya for project readiness.

23. Structural interventions include embankments, gabion riverbank and bed protection, and river-training spurs to protect adjacent areas from erosion and flooding. The project design focuses on promoting sustainability, environment-friendly bioengineering, adaptability, and low- cost solutions, and uses locally available materials and similar designs to the current DWRI approach. This allows for relatively simple maintenance that communities and the government can manage. The project will prepare O&M manuals and an asset management system to promote sustainability of the investment. Climate adaptation measures are included in the

21 Attached Technical Assistance Report (accessible from the list of linked documents in Appendix 2). 22 The TA will help (i) develop and disseminate O&M manuals; (ii) provide training in estimating required maintenance needs and preparation of sufficient budget requests; and (iii) develop an up-to-date fixed-asset register with information on the asset location, condition, annual maintenance needs, and past maintenance history.

8 designs, such as provision for increased flows in waterways based on climate change models, and the adaptability of embankments that can be raised in the future.

24. The proposed FFEWS will be compatible with the DHM’s system. Telemetry rain gauges and hydrometric stations will be installed in the project subbasins, from which the data will be used in the hydrological and hydrodynamic flood inundation models developed under the project. The models will then alert the DHM to provide early warnings via mass short messaging service through agreements with local telecommunications providers. Similarly, the CBDRM planning will follow the frameworks set out in the government’s Disaster Risk Reduction and Management Act 2017 utilizing local disaster management committees (para. 6).

B. Economic and Financial Viability

25. Economic analysis. Economic and financial analyses were conducted for the proposed subprojects and entire project. The economic costs include direct investment costs, O&M costs, associated capacity building, and project management costs. Quantified benefits come from the avoided losses (i.e., the damage no longer incurred by flooding) accruing with implementation of the flood protection measures. These benefits include avoided losses from (i) damage and destruction of buildings and public infrastructure; (ii) damage to household contents; (iii) damage to crops; (iv) loss of livestock; and (v) funeral costs and medical care costs of injured people. Quantified benefits also account for continued population growth and increased investment within the flood protected beneficiary area and avoidance of temporary commodity price increases during and immediately following flood events. The project’s economic internal rate of return (EIRR) is estimated at 9.05%. The subproject EIRRs are 9.01% for Mohana Khutiya, 15.24% for Bakraha and 17.96% for West Rapti, with the avoidance of losses to infrastructure being the most significant benefits. The EIRRs for the East Rapti, Lakhandei and Mawa Ratuwa subprojects were assessed to be below the 9% minimum threshold. However, their inclusion is justified to ensure a more equitable distribution of project benefits to highly disadvantaged and poor communities. Implementing these subprojects will contribute to a sense of inclusion in national life as well as harmonious development of the economy in the Terai.24

26. Sensitivity analysis indicates that the results are satisfactory against downside risks, including an increase in project capital costs, an increase in O&M costs, and a decline in project benefits. The project will increase its economic viability even further if unquantifiable benefits, such as environmental improvements or reduced human mortality associated with flood events, are included in the analysis.25

27. Financial sustainability. As the project will not generate revenue, the DHM and DWRI will be responsible for maintaining the assets created under the project. Historic data suggests that the DHM and DWRI may not be able to fully secure maintenance funds, and there is a risk that the project assets will not last for their entire expected economic life. To mitigate this risk, the project design includes the following measures: (i) embankment designs are simple and similar to government practices, (ii) the local communities and adjacent farmers will participate in embankment maintenance, (iii) the FFEWS contract includes a 4-year maintenance period, and (iv) the attached TA will improve asset management and build institutional capacity (para. 20). The loan and grant agreements include covenants to ensure that adequate funds for

24 Ensuring the project extends to marginalized groups, including the indigenous population, is important for political inclusivity, as the Terai has a history of political instability and violence. 25 Economic and Financial Analysis (accessible from the list of linked documents in Appendix 2).

9 maintenance will be provided to the DHM and DWRI throughout the estimated economic life of the improved assets.

C. Sustainability

28. The project supports the sustainability of infrastructure through a multipronged approach comprising (i) an infrastructure asset management information system as a basis of sound monitoring, planning, and implementation of maintenance and adaptation; (ii) adoption of community contracting to support minor maintenance activities; and (iii) capacity building of the DHM, DWRI, and local governments to improve monitoring and maintenance activities.

D. Governance

29. Financial management. A financial management assessment of the DHM and DWRI was conducted according to ADB’s Guidelines for the Financial Management and Analysis of Projects.26 The assessment concluded that the DHM and DWRI have adequate financial management capability to (i) record the required financial transactions, (ii) provide reliable annual financial statements and audit reports in a timely manner, and (iii) safeguard the financial assets. The assessment identified the following risks: (i) frequent project staff turnover in DWRI, (ii) the DHM lacks knowledge and experience with ADB procedures and systems, and (iii) weak internal auditing in both DHM and DWRI. The assessed pre-mitigation financial management risk is moderate. The identified risks will be mitigated by (i) assigning qualified account staff to the project management unit (PMU) and project implementation unit, (ii) engaging a financial management consultant to support project implementation, (iii) providing training in ADB procedures and systems, (iv) including comprehensive financial information in the quarterly project progress reports, and (v) using ADB disbursement systems to reconcile the accounts. Moreover, the project will follow established practice and maintain separate books of accounts following the government’s accounting standards under the cash basis of accounting; additionally, the project financial statements will be audited annually by the Office of the Auditor General in accordance with International Organization of Supreme Audit Institutions standards.

30. Procurement. All procurement and recruitment of consultants to be financed by the ADB loan and grant will be carried out in accordance with the ADB Procurement Policy and Procurement Regulations for ADB Borrowers. While Nepal’s procurement risk rating is substantial, the implementing agencies are experienced in implementing ADB and other externally assisted projects, and the project procurement risks are moderate. Mitigation measures include: (i) engaging an experienced procurement specialist under the project implementation consultants (PIC); and (ii) the PIC providing on-the-job training in procurement and contract management to the DHM and DWRI, and assisting in developing a database to regularly update and monitor contract management plans.

31. Through strategic market analysis, the project has adopted standard bidding documents to encourage healthy competition and to align with government approval processes.27 Civil works contracts will be awarded on a least-cost basis and abnormally low bids will be either rejected or performance guarantees increased. The turnkey FFEWS package will be procured as goods (under a supply, install, commission, operate, and maintain contract) contributing to achieving value for money. ADB’s Anticorruption Policy (1998, as amended to date) was

26 ADB. 2005. Financial Management and Analysis of Projects. Manila. 27 Strategic Procurement Planning Assessment Report (accessible from the list of linked documents in Appendix 2).

10 explained to and discussed with the government and MEWRI. The specific policy requirements and supplementary measures are described in the PAM (footnote 18).

E. Poverty, Social, and Gender

32. Poverty. The project outputs will benefit poor and marginalized groups, as they are frequently affected by flooding in the region. The project’s poverty and social assessment highlights that beneficiary households experience food insecurity (60%) and earn their livelihood from daily wage work, agricultural labor, construction work, or small businesses.28 Community consultations, conducted as part of the poverty and social assessment, highlight that recurrent flooding affects farmland, crops, livestock, livelihoods, and property. Agricultural and residential lands frequently wash into rivers, causing landlessness and physical displacement. School routines are disrupted during the monsoon season and families abandon land plots for fear of flooding, despite land being a critical livelihood asset. About 65% of the directly impacted population comprises people from marginalized ethnic or caste groups. With the economic disruption caused by COVID-19, vulnerable individuals, particularly those who are just above the poverty line, are likely to be pushed below the poverty line.

33. Gender. The project is categorized effective gender mainstreaming. The project will support marginalized groups (including women), differently abled people, and caste and ethnic minorities through a gender equality and social inclusion action plan (GESI-AP).29 During preparation, over 50 community consultations were held across the subproject areas. About 30% of the 1,595 total participants were women and girls from diverse ethnic and caste groups. Participants expressed that women are disproportionately impacted by flooding events compared with men. Women are greatly burdened during flooding events and post-disaster recovery given their status as primary caregivers. In flood-prone areas, there is a need to address women’s preparedness, responsiveness, and post-flooding recovery. The GESI-AP will mainstream a gender-sensitive and socially inclusive approach to all project activities. For example, the GESI-AP targets (i) at least 15% of construction laborers are women; (ii) all flood shelters and labor camps have adequate facilities (e.g., ramps, separate rooms for women, and separate toilets); and (iii) CDBRM committees have at least 33% women members. GESI-AP activities and implementing arrangements are detailed in the PAM (footnote 18).

F. Safeguards

34. In compliance with ADB’s Safeguard Policy Statement (2009), the project’s safeguard categories are as follows.30

35. Environment (category B). Initial environmental examination (IEEs) were prepared for the six river basins from feasibility studies (para. 22), although the East Rapti subproject involves only construction of flood shelters and development of FFEWS. The IEEs were prepared following the national environmental provisions and ADB’s Safeguard Policy Statement. The IEEs include the environmental management plan (EMP), which identifies the potential environmental impacts and proposes mitigation measures, a monitoring plan, and overall safeguards implementation institutional arrangements. The EMP also requires occupational health and safety measures for project staff and nearby communities, including

28 Poverty and Social Assessment (accessible from the list of linked documents in Appendix 2). The social safeguards due diligence involved more than 50 community consultations and 400 household surveys. 29 Gender Equality and Social Inclusion Action Plan (accessible from the list of linked documents in Appendix 2). 30 ADB. Safeguard Categories.

11 managing the spread of COVID-19. The IEEs will be disclosed on ADB’s website based on the requirements of the Safeguard Policy Statement and ADB’s Access to Information Policy.

36. The project will not encroach upon national parks and buffer zones, protected or sensitive ecosystems, and ancient heritage sites. The project’s key activities that attract environmental concerns are construction of embankments, flood shelters, FFEWS, and quarry operation. The environmental impacts predicted during implementation are mainly restricted to the construction stage and will be site specific, short in duration, reversible, and of low significance, such as temporary dust in the air, sediments in water, and noise pollution.

37. The DHM and DWRI have adequate capacity to manage the potential impacts, and the PIC environmental specialist will provide additional training to DHM and DWRI. The PMU environmental officer will be responsible for addressing overall environmental concerns related to construction. The field offices will oversee the implementation of the IEEs’ recommendations and the EMP, assisted by the PIC environmental specialist. All contractors will have an environmental specialist who will manage environmental impacts related to construction. The project’s safeguards performance will be reported through quarterly progress reports and semiannual environmental compliance monitoring reports during construction, and annual monitoring reports during O&M. Consultation with stakeholders and affected people was carried out during project preparation and will continue during implementation. The project grievance redress mechanism will resolve complaints in a timely and systematic manner.

38. Involuntary resettlement (category C). The social safeguards due diligence confirms that there is no physical or economic displacement because of involuntary land acquisition or involuntary restriction on land use under the project.31 Project infrastructure is estimated to require (i) about 50 ha of land for construction of embankments (with a width of up to 12 meters) across five river basins, (ii) 1.6 ha of land for construction of 48 community flood shelters (about 340 square meters per flood shelter) across six river basins, and (iii) 0.02 ha of land for the 30 rain gauge stations (about five square meters per station). The project will satisfy land use requirements through a combination of government land, negotiated settlement, and voluntary land contributions from direct project beneficiaries.

39. Indigenous peoples (category B). Most project beneficiaries are from ethnically distinct and vulnerable groups. The consultation process identified multiple ethnic groups that are anticipated to benefit from the project activities; these groups include the Bote, Chepang, Gurung, Magar, Madheshi, Newar, Rai, Tamang and Tharus. Consultations confirm that project activities will not adversely affect the dignity, human rights, livelihood systems, culture, territory, natural, or cultural resources of indigenous peoples. As per Appendix 3, para. 17 of ADB's Safeguard Policy Statement, a separate indigenous peoples plan is not required, as indigenous peoples are the majority of direct project beneficiaries, and only positive impacts are identified. The project design has mainstreamed a culturally sensitive approach to information sharing, meaningful consultation, and benefit sharing.

G. Summary of Risk Assessment and Risk Management Plan

40. Significant risks and mitigating measures are summarized in Table 4 and described in detail in the risk assessment and risk management plan.32

31 Social Safeguards Due Diligence Report (accessible from the list of linked documents in Appendix 2). 32 Risk Assessment and Risk Management Plan (accessible from the list of linked documents in Appendix 2).

12

Table 4: Summary of Risks and Mitigating Measures Risks Mitigation Measures Political and COVID-19 The prolonged political transition and adoption of a federal system, along with uncertainties may adversely associated potential disruptions, may affect project implementation. This risk is affect project implementation mitigated by aligning the project’s implementation arrangements with those of the ongoing People’s Embankment Program. Measures to control COVID-19 may also slow down construction schedules. Future climate change impact Embankment designs allow for climate change and are adaptable for future exceeds projections and structural changes, as needed. Community-based disaster risk management negatively affects the project plans will also be responsive to mitigating the impacts of climate change. Lack of maintenance funds The government assures an annual budgetary allocation to meet operation for the flood embankment and maintenance needs; this allocation is included in the loan covenants. The structures or the FFEWS FFEWS contract includes a 4-year maintenance period. The attached technical assistance will strengthen maintenance planning and asset management. COVID-19 = coronavirus disease; FFEWS = flood forecasting and early warning system. Source: Asian Development Bank.

V. ASSURANCES

41. The government and MEWRI have assured ADB that implementation of the project shall conform to all applicable ADB requirements, including those concerning anticorruption measures, safeguards, gender, procurement, consulting services, financial management, and disbursement as described in detail in the PAM and loan documents. The government and MEWRI have also agreed with ADB on certain covenants for the project, which are set forth in the draft loan and grant agreements.

VI. RECOMMENDATION

42. I am satisfied that the proposed loan and grant would comply with the Articles of Agreement of the Asian Development Bank (ADB) and recommend that the Board approve (i) the loan of $40,000,000 to Nepal for the Priority River Basins Flood Risk Management Project, from ADB’s ordinary capital resources, in concessional terms, with an interest charge at the rate of 1.0% per year during the grace period and 1.5% per year thereafter; for a term of 32 years, including a grace period of 8 years; and such other terms and conditions as are substantially in accordance with those set forth in the draft loan agreement presented to the Board; and (ii) the grant not exceeding $10,000,000 to Nepal, from ADB’s Special Funds resources (Asian Development Fund), for the Priority River Basins Flood Risk Management Project, on terms and conditions that are substantially in accordance with those set forth in the draft grant agreement presented to the Board.

Masatsugu Asakawa President

7 September 2020

Appendix 1 13

DESIGN AND MONITORING FRAMEWORK Impact the Project is Aligned with Social and economic losses due to water-induced disasters reduced (Nepal National Water Plan, 2002–2027)a Data Sources Performance Indicators with Targets and Results Chain and Reporting Risks Baselines Mechanisms Outcome By 2028: Resilience of a. 2,300 ha of agricultural land and 2,850 a. Project Future climate communities to households protected from 1-in-50-year flood (2019 technical and change impact flood risks of baseline: 0 ha agricultural lands, 0 households) (OP progress reports exceeds selected river 3.2, OP 3.2.1) projections and basins in the Terai results in region improved b. Daily river flow information of five subbasins b. Project extreme displayed on DHM river watch system, and flood risk technical and damage to bulletin based on FFEWS forecasts disseminated to progress reports, properties and communities and relevant agencies in line with FFEWS reports households Nepal’s standard operating procedures (2020 and bulletins baseline: 0 flood warnings)b Outputs By 2026: 1. Flood protection 1a. 36,200 m of resilient flood embankments 1a–b. Project Impact of infrastructure and constructed, 430 spurs and 35 outlets constructed technical and ongoing maintenance (2020 baseline: 0 m of flood embankments progress reports federalization system improved constructed, 0 spurs and 0 outlets) (OP 3.2.5) process or COVID-19 on 1b. 24,000 m of resilient bio-engineered supply chain embankments piloted and recommendations for delays future rollout presented to DWRI (2020 baseline: 0) implementation (OP 3.2.5)c and capacity development 1c. Flood protection O&M plans, manuals, and asset 1c. River basin activities management databases developed for five river planning basins (2020 baseline: Not applicable) (OP 3.2.4)d documents, manuals, database reports, quarterly progress reports

1d. At least 50% of DWRI staff (including 33% 1d. Pre- and post- eligible women) reported knowledge on flood training protection O&M and asset management (2019 assessments baseline: 0) (OP 6.1.1)

1e. At least 10% of those employed on flood 1e. Contractors’ infrastructure rehabilitation and construction works payrolls are indigenous peoples and Dalits, and 15% are women (2019 baseline: 0) 2. Flood By 2027: forecasting and 2a. Additional new 40 rain gauge stations and 30 2a–b. Project response systems hydrometeorological stations commissioned and technical and enhanced operational (2019 baseline: 337 rain gauge stations, progress report 175 hydrometeorological stations) (OP 5.1.1)

2b. Five FFEWS in priority river basins installed and made operational (2019 baseline: 0 FFEWS) (OP 5.1.1)e 2c. Copy of 2c. Annual O&M plan and budget for five FFEWS annual O&M plan prepared and submitted to DHM for endorsement and budget (2019 baseline: Not applicable) (OP 3.2.4) submitted to DHM

14 Appendix 1

Data Sources Performance Indicators with Targets and Results Chain and Reporting Risks Baselines Mechanisms 3. Flood By 2027: prevention and 3a. At least 20% of eligible DWRI and local 3a. Pre- and post- preparedness government staff trained (including 15% eligible training capacity improved women), of which 80% reporting improved skills in evaluations flood risk management (2020 baseline: 0) (OP 6.1.1)

3b. Six gender-inclusive CBDRM plans (one for each river basin area) prepared by the community with 3b. Approved participation of at least 33% women and at least one CBDRM plan, representative from vulnerable groups (2019 progress reports baseline: 0)f

3c. 10 CBDRM committee members per river basin area (or total of 60 committee members, including 3c. Pre- and post- 33% women and girls and at least one training representative from vulnerable groups) trained, of assessments which at least 50% reporting improved knowledge and skills on disaster preparedness (2019 baseline: 0) (OP 2.3, OP 3.2.2, OP 6.2.4)

3d. 48 gender-responsive flood shelters constructed (2019 baseline: 0)g (OP 2.5.2) 3d. Approved CBDRM plan, progress reports Key Activities with Milestones 1. Flood protection infrastructure and maintenance system improved 1.1 Advance contracting and procurement of works (CW-01 and CW-02) by Q4 2020 1.2 Procure project implementation consulting services (CS-01) by Q1 2021 1.3 Prepare detailed engineering designs and bid documents for CW-03–CW-06 by Q4 2022 1.4 Procure works (CW-03, CW-04, and CW-05) by Q2 2022 1.5 Complete construction of CW-01 and CW-02 by Q2 2023 1.6 Complete construction of CW-03, CW-04, and CW-05 by Q2 2025 1.7 Prepare and disseminate O&M manuals for hydraulic structures and monitor performance by Q2 2023 (CW- 01 and CW-02) and by Q2 2026 (CW-03, CW-04, and CW-05) 1.8 Hand over sites to DWRI (CW-01 and CW-02 by Q4 2023; CW-03, CW-04, and CW-05) by Q4 2026

2. Flood forecasting and response systems enhanced 2.1 Procure FFEWS (FF-01) by Q4 2021 2.2 Design, supply, and install FFEWS equipment (FF-01) by Q1 2022 2.3 Verify flood forecast system by Q4 2024 2.4 Develop decision support system for early warning system Q2 2026 2.5 O&M period under contract by Q4 2024 2.6 FFEWS training and handover by Q2 2027

3. Flood prevention and preparedness capacity improved 3.1 Procure nongovernment organization for implementation of CBDRM (CS-02) by Q3 2022 3.2 Procure CW-06 flood shelter houses by Q3 2022 3.3 Inception phase (identify target communities, baseline resilience survey, project plans) by Q2 2023 3.4 Establish community disaster risk management and local disaster risk management committees and prepare plans by Q1 2025 3.5 Construct flood shelters by Q3 2025 3.6 Exit phase (end-line review, project evaluation) by Q2 2027 Project management activities Establish steering committee and project implementation unit (Q4 2020) Prepare annual work plans and ensure 100% of milestones are met (Q4 2020–Q2 2027) Implement and monitor project activities (Q4 2020–Q2 2024) Prepare semiannual progress reports, including inception, midterm, and final reports (Q4 2020–Q4 2027)

Appendix 1 15

Data Sources Performance Indicators with Targets and Results Chain and Reporting Risks Baselines Mechanisms Inputs ADB: $40.00 million (concessional loan) ADB: $10.00 million (Asian Development Fund Disaster Risk Reduction grant) Government of Nepal: $13.00 million Technical assistance (TASF 6): $500,000 (grant) Netherlands Trust Fund under the Water Financing Partnership Facility: $750,000 (grant) Assumptions for Partner Financing Not applicable ADB = Asian Development Bank, CBDRM = community-based disaster risk management, COVID-19 = coronavirus disease, CS = consulting services package, CW = civil works packages, DHM = Department of Hydrology and Meteorology, DWRI = Department of Water Resources and Irrigation, FF = flood forecasting package, FFEWS = flood forecasting and early warning system, ha = hectare, m = meter, O&M = operation and maintenance, OP = operational priority, Q = quarter, TASF = Technical Assistance Special Fund a Government of Nepal, Water and Energy Commission Secretariat. 2002. Nepal National Water Plan, 2002–2027. Kathmandu. b Government of Nepal. 2018, Ministry of Energy, Water Resources and Irrigation; DHM. Standard Operating Procedure (SOP) for Flood Early Warning System in Nepal. Kathmandu. Flood information is disseminated via internet, display boards, and short messaging service when the water level crosses a specified flood watch mark. There are three warning levels: (i) flood watch: be prepared to act; (ii) flood warning: act in response to advisories; and (iii) severe flood warning: act in cooperation with others, including emergency services. c The bio-engineered embankments are a subset of the 36.2 km resilient embankments d Attached Technical Assistance Report (accessible form the list of linked documents in Appendix 2). e Only five subprojects will have a FFEWS as the West Rapti subproject has an existing FFEWS. f Vulnerable groups include indigenous peoples, persons with disability, and excluded and vulnerable groups. g Flood shelters are strong elevated structures that can be used by local residents for refuge during an extreme weather event. Design of flood shelters includes separate toilets and washrooms for women and men, special ramps for persons with disability and elderly persons, and separate rooms for men and women. Contribution to Strategy 2020 Operational Priorities OP 2.3 Women represented in decision-making structures and processes (number). Target: 60 people (based on 60 CBDRM committees being formed). OP 2.5.2 Climate- and disaster-resilient infrastructure assets and/or services for women and girls established or improved Target: 48. OP 3.2 People with strengthened climate and disaster resilience. Target: 2,850 households (14,000 individuals). OP 3.2.1 Area with reduced flood risk (ha). Target: 2,300 ha. OP 3.2.2 Gender-inclusive climate and disaster resilience capacity development initiatives implemented (number). Target: 60 people (based on 60 CBDRM committees being formed). OP 3.2.4 National and subnational disaster risk reduction and/or management plans supported in implementation. Target: 10. OP 3.2.5 New and existing infrastructure assets made climate and disaster resilient (number). Target: 36,200 m of climate- resilient embankments. OP 5.1.1 Rural infrastructure assets established or improved (number). Target: 1. OP 6.1.1 Government officials with increased capacity to design, implement, monitor, and evaluate relevant measures. Target: 10. OP 6.2.4 Citizen engagement mechanisms adopted. Target: 1. Source: ADB.

16 Appendix 2

LIST OF LINKED DOCUMENTS http://www.adb.org/documents/rrps/?id=52195-001-3

1. Loan Agreement 2. Grant Agreement 3. Sector Assessment (Summary): Agriculture, Natural Resources, and Rural Development (Rural Flood Protection) 4. Project Administration Manual 5. Economic and Financial Analysis 6. Summary Poverty Reduction and Social Strategy 7. Risk Assessment and Risk Management Plan 8. Attached Technical Assistance Report 9. Climate Change Assessment 10. Gender Equality and Social Inclusion Action Plan 11. Initial Environmental Examination: Bakraha 12. Initial Environmental Examination: Lakhandei 13. Initial Environmental Examination: Mawa Ratuwa 14. Initial Environmental Examination: Mohana Khutiya 15. Initial Environmental Examination: West Rapti 16. Initial Environmental Examination: East Rapti 17. Social Safeguards Due Diligence Report Supplementary Documents 18. Strategic Procurement Planning Assessment 19. Financial Management Assessment 20. Procurement Risk Assessment 21. Climate and Disaster Risk and Adaptation Assessment 22. Poverty and Social Assessment