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The World Bank Document of The World Bank Public Disclosure Authorized Report No: ICR00001904 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-37410 IDA-3741A IDA-H0260) ON A Public Disclosure Authorized CREDIT IN THE AMOUNT OF SDR14.1 MILLION (US$19 MILLION EQUIVALENT) AND GRANT IN THE AMOUNT OF SDR15.5 MILLION (US$21MILLION EQUIVALENT) TO THE Public Disclosure Authorized REPUBLIC OF ZAMBIA FOR A COPPERBELT ENVIRONMENT PROJECT October 22, 2011 Public Disclosure Authorized Sustainable Development Department Zambia – AFCS3 Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective March 31, 2011) Currency Unit = ZMK 1.00 = US$ 0.00021 US$ 1.00 = 4731 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CBA Cost-Benefit Analysis CBE Citizens for a Better Environment CDC Commonwealth Development Corporation CEMP Consolidated Environmental Management Plan CEP Copperbelt Environment Project CIDA Canadian International Development Agency DAA Delegated Authorizing Agency DO Development Objective DPP Detailed Procurement Plan EA Environmental Assessment ECZ Environmental Council of Zambia EIA Environmental Impact Assessment EIS Environmental Impact Statement EMF Environmental Management Fund EMF-SC Environmental Management Fund-Steering Committee EMMS Environmental Management in Mining Sector Project EMP Environmental Management Plan EPA Environmental Protection Agency EPPCA Environmental Protection and Pollution Control Act ERIP Economic Recovery and Investment Promotion ERIPTA Economic Recovery and Investment Promotion Reform Program ESP Environment Support Program FMS Financial Management System FPM Financial Procedures Manual GRZ Government of the Republic of Zambia IBRD International Bank for Reconstruction and Development IDA International Development Agency IFC International Finance Corporation IPPP Industrial Pollution Prevention Programme IRC Interagency Regulatory Committee KAPS Knowledge, Attitude, Practice Surveys KCM Konkola Copper Mines KDMP Konkola Deep Mining Project LRP Labor Reduction Program MCM Mopani Copper Mines M&E Monitoring and Evaluation MENR Ministry of Environment and National Resources MLA Mining License Areas MMA Mines and Minerals Act MMMD Ministry of Mines and Minerals Development 2 MFNP Ministry of Finance and National Planning MOU Memorandum Of Understanding MPAP Mining Pollution Affected Persons MSD Mines Safety Department MTENR Ministry of Tourism, Environment and Natural Resources MUZ Mineworkers Union of Zambia NEAP National Environmental Action Plan NFT Norwegian Pollution Control Authority NOP Nchanga Open Pit NORAD Norwegian Agency for Development Cooperation NPV Net Present Value OP Operational Policy PAD Project Appraisal Document PCB Polychlorinated biphenyls PCD Pollution Control Dam PHRD Policy and Human Resources Development Fund PIM Project Implementation Manual PPF Project Preparation Facility POP Persistent Organic Pollutants PSC Project Steering Committee PSCAP Public Service Capacity Building Project PSREP Public Sector Reform and Export Promotion RAP Resettlement Action Plan RSA Resettlement Action Plan SDB Standard Bidding Document SIL Specific Investment Loan SOE Statements of Expenditures SRK Steffen, Robertson and Kirsten TD Tailings Dam TDS Total Dissolved Solids TLP Tailings Leach Plant TOR Terms of Reference TPM Total Particular Matter TSS Total Soluble Solids USEPA United States Environmental Protection Agency WHO World Health Organization ZCCM Zambia Consolidated Copper Mines Limited ZCCM-IH ZCCM -Investments Holdings Plc ZECU ZCCM-IH Environmental Coordination Unit ZMK Zambian Kwacha Vice President: Obiageli Katryn Ezekwesili Country Director: Kundhavi Kadiresan Sector Manager: Idah Pswarayi-Riddihough Project Team Leader: Martin Fodor ICR Primary Author Sabine Cornelius 3 ZAMBIA Copperbelt Environment Project CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design ........................................................... 1 2. Key Factors Affecting Implementation and Outcomes ........................................................... 8 3. Assessment of Outcomes ...................................................................................................... 17 4. Assessment of Risk to Development Outcome ..................................................................... 29 5. Assessment of Bank and Borrower Performance .................................................................. 30 6. Lessons Learned .................................................................................................................... 35 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ....................... 36 Annex 1. Project Costs and Financing ...................................................................................... 38 Annex 2. Outputs by Component .............................................................................................. 39 Annex 3. Economic and Financial Analysis ............................................................................. 56 Annex 4. Bank Lending and Implementation Support/Supervision Processes ......................... 60 Annex 5. Beneficiary Survey Results ....................................................................................... 62 Annex 6. Stakeholder Workshop Report and Results ............................................................... 63 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ................................. 64 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ................................... 79 Annex 9. List of Supporting Documents................................................................................... 81 MAP IBRD 32243, IBRD 32244 4 A. Basic Information Zambia Copperbelt Country: Zambia Project Name: Environment Project (CEP) IDA-37410, IDA- Project ID: P070962 L/C/TF Number(s): 3741A, IDA-H0260 ICR Date: 10/31/2011 ICR Type: Core ICR GOVERNMENT Lending Instrument: SIL Borrower: REPUBLIC OF ZAMBIA Original Commitment: XDR 29.60M Disbursed Amount: XDR 24.46M Revised Amount: XDR 29.60M Environmental Category: A Implementing Agencies: Environmental Council of Zambia Zambia Consolidated Copper Mines - Investment Holdings (ZCCM-IH) Cofinanciers and Other External Partners: Nordic Development Fund (NDF) B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 09/19/2000 Effectiveness: 09/25/2003 09/25/2003 Appraisal: 03/11/2002 Restructuring(s): 05/28/2010 Approval: 03/20/2003 Mid-term Review: 08/31/2005 Closing: 08/01/2008 03/31/2011 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Substantial Bank Performance: Unsatisfactory Borrower Performance: Moderately Unsatisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Moderately Quality at Entry: Moderately Satisfactory Government: Unsatisfactory Implementing Moderately Quality of Supervision: Unsatisfactory Agency/Agencies: Unsatisfactory Overall Bank Overall Borrower Moderately Unsatisfactory Performance: Performance: Unsatisfactory i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry Yes None at any time (Yes/No): (QEA): Problem Project at any Quality of No Satisfactory time (Yes/No): Supervision (QSA): DO rating before Moderately Closing/Inactive status: Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Mining and other extractive 100 100 Theme Code (as % of total Bank financing) Environmental policies and institutions 50 10 Pollution management and environmental health 50 90 E. Bank Staff Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Callisto E. Madavo Country Director: Kundhavi Kadiresan Christiaan J. Poortman Sector Manager: Idah Z. Pswarayi-Riddihough Marjory-Anne Bromhead Project Team Leader: Martin Fodor Yves Andre Prevost ICR Team Leader: Martin Fodor ICR Primary Author: Sabine Cornelius F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The Project Development Objectives (PDOs), as stated in the Project Appraisal Document (PAD), were to: (i) address environmental liabilities associated with the mining sector, following the privatization of the mining assets; and (ii) improve future compliance of the mining sector with environmental and social regulations. The wording of the PDOs in the PAD differed from that in the Development Financing Agreement (DFA) between IDA and the Republic of Zambia, according to which the Project aimed to assist the Borrower's efforts in: (a) addressing environmental liabilities and obligations associated with the mining sector, following the privatization of the ii mining assets of ZCCM; and (b) strengthening the capacity of its environmental regulatory institutions to improve future-compliance of the mining sector with environmental and social regulations. Given that the PDOs in the DFA were, in addition to being more specific and achievable, the Objectives negotiated and signed by both parties, the assessment of Project Results in this ICR is based on the DFA version of the PDOs. Revised Project Development
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