Integrated Urban Environmental Management in the Tonle Sap Basin Project (RRP CAM 42285-013) CLIMATE RESILIENCE MEASURES A. Introduction 1. The project will contribute to increased economic activities and environmental protection in towns in the Tonle Sap Basin. It responds to the need of the municipal governments for integrated urban environmental management in urban areas around the Tonle Sap Lake. The project will improve urban services and enhance climate change resilience in Kampong Chhnang and Pursat municipalities through five strategic and integrated outputs: (i) Kampong Chhnang urban environmental improvements (river embankment reinforcement and construction, and solid waste management); (ii) Pursat urban environmental improvements (river embankment protection, drainage improvements, and solid waste management); (iii) community mobilization and environmental improvements (household latrines for the urban poor, climate change and hygiene promotion and community-driven infrastructure grants); (iv) strengthened sector coordination an operations; and (v) strengthened capacity for project implementation, operation and maintenance (O&M). The project is aligned and consistent with the Tonle Sap Urban Areas Development Framework (TSUADF) and Kampong Chhnang and Pursat urban development strategies to 2030.1 The project also is in line with the government’s development strategies, including the Cambodia Climate Change Strategic Plan 2014–2023, and the National Adaptation Programme of Action for Climate Change. This linked document illustrates the climate resilience measures integrated into the Project. B. Pilot Program for Climate Resilience 2. The Royal Government of Cambodia (RGC) is one of the pilot countries participating in the Pilot Program for Climate Resilience (PPCR). In June 2011, the PPCR sub-committee endorsed RGC’s Strategic Program for Climate Resilience (SPCR) and in August 2011 reconfirmed its commitment for funding envelope of up to $86 million ($50 million in grants and up to $36 million in concessional credit). Of this, an allocation of $10 million ($5 million concessional credit and $5 million grant) was agreed for the Integrated Urban Environmental Management in the Tonle Sap Basin Project (the Project or IUEMTSP). The RGC did not avail of the approved $600,000 of the $5 million grant for project preparations and preferred that it be included in the grant funding envelop of the project. 3. In November 2013, the RGC and the Asian Development Bank (ADB) submitted a revised SPCR for endorsement, which reflected the evolving situation and project design of the proposed project. The revision was endorsed by the sub-committee on 28 January 2014. 4. The base investment for the proposed Project is $37 million loan from ADB’s Special Funds resources. The loan will have a 32-year term, including a grace period of 8 years, an interest rate of 1.0% per annum during the grace period and 1.5% per annum thereafter, and such other terms and conditions set forth in the draft loan and project agreements. While the base design already incorporates climate resilient measures for urban environmental improvement infrastructure in Kampong Chhnang and Pursat municipalities. 5. The original scope of Component III — Climate Proofing of Infrastructure, Project 3: Flood-resilient infrastructure development in Sisopohon, Siem Riep, Kampong Thom, Battambang, Pursat and Kampong Chhnang was envisioned as part of the project on Sustainable Urban Development in the Tonle Sap Basin Project. Since then, the proposed 1 An inter-ministerial prakas for the TSUADF is pending. Urban strategies approved on 31 July 2014 (MPWT Letter No. 009 PMU/MPWT/IEUMTB/14/30 July 2014 for Kampong Chhnang and No. 008 PMU/MPWT/IUEMTB/14/30 July 2014 for Pursat). 2 project has been renamed to the current name and the project area has been focused to provide infrastructure financing for the two provinces of Kampong Chhnang and Pursat. 6. The project includes: (i) mainstream adaptation concerns into urban infrastructure planning in selected provinces, and (ii) enhance climate resilience of urban areas by strengthening river banks, solid waste disposal and other sanitation systems, to minimize the impacts of floods. It aims to improve urban services and enhance enhanced climate change resilience of urban infrastructure to floods in Kampong Chhnang and Pursat municipalities. 7. The preparation of the TSUADF has assisted the Government in prioritizing two municipalities Kampong Chhnang and Pursat for infrastructure investments under the project aimed at strengthening the climate resilience of urban areas. The TSUADF provides the rationale for the project and identifies Kampong Chhnang and Pursat municipalities as first priority for investments due to its strategic importance (location and economic importance), climate change and environment protection, synergies with ADB projects on agriculture and rural development, and complementarities with other ADB SCF projects. The preparation of the TSUADF and subsequent town urban development strategies in Kampong Chhnang and Pursat has led to an increased awareness about the importance of incorporating climate resilience features into future urban development projects. The RGC has already requested ADB and the Cities Development Initiative for Asia (CDIA) for a Phase II of this project for two additional towns in 2016; the CDIA has responded favorably to this request to support the pre-feasibility of two additional municipalities around the Tonle Sap—Sisopohon and Serei Saophoan (also the new name for Kampong Thom). 8. It is important to coordinate closely with the PPCR financing for the climate resilience measures in the GMS Flood and Drought Risk Management and Mitigation Project, GMS Southern Economic Corridor Towns Development Project, the Cambodia Provincial Roads Improvement Project.2 The GMS Flood and Drought Risk Management and Mitigation Project focusses on flood control to divert water during flood periods to reduce flooding in Pursat township; and the Cambodia Provincial Roads Improvement Project aims to improve the road embankments and roadside ditches which are susceptible to erosion in Kampong Chhnang township, specifically west and east of National Road 5, on 150B and 151B, and in the western- most section of the road, where water flows off the Phnom Aoral Mountains towards the road across large plains.3 The proposed Project complements these projects in both Pursat and Kampong Chhnang by providing complementary climate resilient infrastructure to further protect these towns from flooding and environmental pollution. 9. PPCR loan ($5.0 million) will finance 82% of the incremental costs associated with ensuring the Kampong Chhnang river embankment reinforcement and construction (output 1.1) is climate resilient or about 23.4% of the estimated cost for the river embankment sub-output. 2 These include: ADB. 2012. GMS Flood and Drought Risk Management and Mitigation Project (L2970/G0330/L8262- REG). Manila (SPCR endorsement June 2011 for $9.96 million; PPCR SC approval October 2012); ADB. 2012. GMS Southern Economic Corridor Towns Development Project (L2983/L8265/G0335/G0334-CAM). Manila (SPCR endorsement $10 million; PPCR SC approval October 2012); ADB. 2011. Cambodia Provincial Roads Improvement Project (G0278/L2839/TA8005/L8254-CAM). Manila (SPCR endorsement $17 million; PPCR SC approval November 2011). 3 Increased climate resilience outputs of all projects are found online. GMS Flood and Drought Risk Management and Mitigation Project (http://www.adb.org/sites/default/files/40190-013-cam-oth-02.pdf); the GMS Southern Economic Corridor Towns Development Project (http://www.adb.org/sites/default/files/43319-033-cam-oth-01.pdf); the Cambodia Provincial Roads Improvement Project (http://www.adb.org/sites/default/files/linked-docs/43309-013- cam-oth-02.pdf); and the technical assistance for Mainstreaming Climate Resilience into Development Planning (http://www.adb.org/sites/default/files/projdocs/2013/45283-001-cam-tar.pdf). 3 Additional cost of climate change measures is about $6.1 million. Measures include: (i) concrete revetment on the slopes on the Tonle Sap side rather than gabions ($2.2 million); (ii) concrete road instead of bitumen (estimated at $1.5 million); and (iii) raising the embankment level by 0.9 meters to 13.00 meters (estimated at $2.4 million). These measures and the increase in cost is justified in two ways: (i) the overtopping of the embankment would be disastrous and with the uncertain climate change consequences a return period of 50 years and a freeboard of 500 mm is justifiable; and (ii) the use of concrete for the road and slopes will increase the longevity of the embankment, enhance resilience to climate change and reduce maintenance costs.4 10. The PPCR grant ($5.0 million) will finance 100% of the incremental costs associated with ensuring that the Pursat drainage improvements (output 2.2) is climate resilient or about 33.3% of the estimated cost for the drainage sub-output. The incremental cost of climate change adaption for the drainage system is estimated at $2.47 million. The PPCR grant also will be partially applied towards output 3 on community mobilization and environmental improvements (about $2.03 million or 47% of the total amount allocated for this output, estimated at $4.34 million). It also will be used to support sector coordination and operations through output 4 (about $0.3 million or 70% of the total amount allocated for this output, estimated at $0.43 million).