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Sustainable Coastal Protection and Management Investment Program (Tranche 2)

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Sustainable Coastal Protection and Management Investment Program (Tranche 2) Periodic Financing Request Report Project Number: 40156-033 MFF Number: 0049 July 2017 India: Sustainable Coastal Protection and Management Investment Program (Tranche 2) Distribution of this document is restricted until it has been approved by the Management. Following such approval, ADB will disclose the document to the public in accordance with ADB’s Public Communications Policy 2011. CURRENCY EQUIVALENTS (as of 30 May 2017) Currency Unit – Indian rupee/rupees (₹) ₹1.00 = $0.015 $1.00 = ₹64.54 ABBREVIATIONS ADB – Asian Development Bank CIMU – coastal infrastructure management unit CMIS – coastal management information system EMP – environmental management plan IEE – initial environmental examination km – kilometer PAM – project administration manual PMU – project management unit PWPIWTD – Public Works, Ports and Inland Water Transport Department SMO – shoreline management organization SMP – shoreline management plan TA – technical assistance NOTES (i) The fiscal year (FY) of the Government of India and Karnataka and its agencies ends on 31 March. “FY” before a calendar year denotes the year in which the fiscal year ends, e.g., FY2017 ends on 31 March 2017. (ii) In this report, “$” refers to United States dollars. Vice-President W. Zhang, Operations 1 Director General H. Kim, South Asia Department (SARD) Director M. Oka, Environment, Natural Resources, and Agriculture Division, SARD Team leader R. Yadav, Senior Project Officer (Natural Resources and Agriculture), SARD Team members D. Cruz, Project Officer, SARD R. Jones, Senior Natural Resources and Agriculture Economist, SARD C. Malvicini, Principal Portfolio Management Specialist, SARD T. Morita, Counsel, Office of the General Counsel G. Sinang, Operations Assistant, SARD D. Utami, Principal Safeguards Specialist, SARD Peer reviewer C. Losenno, Senior Climate Change Specialist (Climate Change Adaptation), Sustainable Development and Climate Change Department 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 TRANCHE AT A GLANCE I. BACKGROUND 1 II. ASSESSMENT OF IMPLEMENTATION 2 III. PERIODIC FINANCING REQUEST 3 A. Impact and Outcome 3 B. Outputs 4 C. Investment and Financing Plans 4 D. Implementation Arrangements 5 E. Project Readiness 6 IV. DUE DILIGENCE 6 A. Technical 6 B. Economic and Financial 7 C. Governance 7 D. Poverty, Social, and Gender Dimensions 8 E. Safeguards 8 F. Risks and Mitigating Measures 9 G. Risk Categorization 9 V. ASSURANCES 10 VI. RECOMMENDATION 10 APPENDIXES 1. Design and Monitoring Framework for Project 2 2. Loan Agreement 3. Project Agreement 4. Project Administration Manual 5. Updated Contribution to the ADB Results Framework 6. Economic and Financial Assessments for Project 2 7. Updated Summary of Poverty Reduction and Social Strategy 8. Resettlement Framework 9. Indigenous People Planning Framework 10. Environmental Assessment and Review Framework 11. Initial Environmental Examination 12. Risk Assessment and Risk Management Plan SUPPLEMENTARY APPENDIXES A. Climate Change: Project Adaptation Action Report B. Updated Detailed Project Report including Project Planning and Technical Rationale for Subproject Interventions C. Financial and Economic Assessment D. Climate Risk and Vulnerability Assessment Project Classification Information Status: Complete TRANCHE AT A GLANCE 1. Basic Data Project Number: 40156-033 Project Name Sustainable Coastal Protection and Management Department SARD/SAER Investment Program - Tranche 2 /Division Country India Executing Agency Public Works, Ports & Inland Borrower India Water Transport Dept. 2. Sector Subsector(s) ADB Financing ($ million) Agriculture, natural Water-based natural resources management 65.50 resources and rural development Total 65.50 3. Strategic Agenda Subcomponents Climate Change Information Inclusive economic Pillar 2: Access to economic opportunities, Adaptation ($ million) 50.00 growth (IEG) including jobs, made more inclusive Climate Change impact on the Medium Environmentally Disaster risk management Project sustainable growth Environmental policy and legislation . (ESG) Global and regional transboundary environmental concerns Natural resources conservation 4. Drivers of Change Components Gender Equity and Mainstreaming Knowledge solutions Application and use of new knowledge Some gender elements (SGE) (KNS) solutions in key operational areas Private sector Conducive policy and institutional development (PSD) environment . 5. Poverty and SDG Targeting Location Impact Geographic Targeting No Rural High Household Targeting No Urban Medium SDG Targeting Yes Nation-wide Low SDG Goals SDG9 . 6. Risk Categorization: Low . 7. Safeguard Categorization Environment: B Involuntary Resettlement: C Indigenous Peoples: C . 8. Financing Modality and Sources Amount ($ million) ADB 65.50 Sovereign MFF-Tranche (Regular Loan): Ordinary capital resources 65.50 Cofinancing 0.00 None 0.00 Counterpart 28.04 Government 28.04 Total 93.54 . Source: Asian Development Bank 04112016150443091373 This document must only be generated in eOps. Generated Date: 07-Jul-2017 17:52:39 PM TRANCHE AT A GLANCE Date of Receipt by ADB of PFR: 26 May 2016 Tranche Number: 2 . 9. Country Operations Business Plan CPS http://www.adb.org/sites/default/files/institutional-document/34003/files/cps-i nd-2013-2017.pdf COBP http://www.adb.org/sites/default/files/institutional-document/175399/cobp-in d-2016-2018.pdf . 10. Tranche Summary The Sustainable Coastal Protection and Management Investment Program aims to address immediate coastal protection needs and coastal instability using environmentally and socially appropriate solutions, with a focus on softer options such as artificial reefs, beach nourishments, and dune management. The program also aims to protect the coastline from erosion and in so doing enhances income-generating opportunities for coastal communities. Tranche 2 will support nine subprojects consisting of six coastal protection subprojects designed to address the issues of medium to severe coastal erosion and three community subprojects for areas of low erosion resulting in the protection of approximately 54 km of coastline in Karnataka. Activities will include: (i) addressing immediate coastal protection needs; (ii) capacity building and institutional development; (iii) modeling and other analytical works to assess the impacts of climate change on selected sections of the coast; and (iv) comprehensive nearshore sea bed sand resources analysis designed to assess the issues of sand deficits of selected Karnataka beaches. It will continue to support strengthening of the executing agency on the long term activities on coastal planning and management that would continue after the end of the project period. Impact: Improved income and poverty status of coastal communities in the subproject areas of Karnataka. Outcome: Shorelines in Karnataka protected and managed. Outputs: (i) coastal erosion and instability mitigation structures constructed or upgraded, and (ii) capacity for integrated shoreline planning and development enhanced. Implementation Arrangements: Public Works, Ports & Inland Water Transport Dept. will be the executing agency. Project Readiness: The detailed project reports for seven of the nine subprojects with a total value of $48 million or 69% of the total civil work costs are complete. Out of six packages tendered so far, contract for three civil work packages has already been signed in April 2017 which amounts to 45% of total civil works cost, the other two packages for about 23% of the total civil works cost will be signed by July 2017 and the last package for less than a million; will be re-tendered. The remaining sub projects with a value of $21.9 million will be ready for tender by early July 2017 and are programmed to be awarded by December 2017. The project management and design consulting contract has been signed in January 2017 and the consultants have been mobilized. 11. Significant Developments in the MFF and Previous Tranches On 29 September 2010, the Asian Development Bank (ADB) approved a multitranche financing facility (MFF) for the Sustainable Coastal Protection and Management Investment Program for an aggregate amount not exceeding $250 million for the three coastal states of Goa, Karnataka and Maharashtra. Tranche 1 under the investment program was approved by the President on 6 October 2010 for $51.5 million. At the borrower's partial loan cancellation request, the net loan amount was changed to $47.4 million. Tranche 1 became effective on 28 November 2011 and was extended from 31 December 2014 to 30 June 2017 mainly due to design changes of the major civil works. The availability period of the MFF was extended from 31 December 2019 until 28 September 2020. As of 26 May 2017, cumulative contract awards are at $37.1 million and cumulative disbursements are at $26.99 million. The overall physical progress of works under tranche 1 is estimated to be around 85%. A final extension of the loan closing date until 30 June 2018 to complete the offshore reef is under discussion. Of the 26 loan covenants under Tranche 1, 13 have been complied with, 12 are being complied and 1 is not yet due. Of the 14 FFA undertakings, all are generally being complied with, though with delays in implementation of some reforms. 12. Milestones Estimated Approval
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