Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 40986-NE PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT Public Disclosure Authorized IN THE AMOUNT OF SDR 18.3 MILLION (US$30 MILLION EQUIVALENT) TO THE REPUBLIC OF NIGER FOR A LOCAL URBAN INFRASTRUCTURE DEVELOPMENT PROJECT Public Disclosure Authorized April 23,2008 Water and Urban I1 Country Department AFCF1 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Public Disclosure Authorized Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective March 2008) Currency Unit = CFA Francs (CFAF) CFAF 1,000 = US$2.37 US$1 = CFAF421 US$1.64663 = SDR1 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AAP Africa Action Plan AFD French Development Agency (Agencefranqaise de Dheloppement) AfDB African Development Bank ARMP National Procurement Regulatory Agency (Agence de Re'gulation des Marche's Publics) BEEEI Environment Assessment Bureau (Bureau d 'Evaluation Environnementale et des Etudes d 'Impact) BNC National Coordination Bureau (Bureau National de Coordination) CAS Country Assistance Strategy CDD Community Driven Development CDS City Development Strategy COA Contract Award and Bid Opening Commission CTEO Technical Commission for Bids Evaluations (Commission Technique d 'Evaluation des Offres) CUN Urban Community ofNiamey (Communaute' Urbaine de Niamey) CUM Urban Community ofMaradi (Communautb Urbaine de Maradi) DAN Sanitation and Urban Infrastructure Department (Direction de 1 'Assainissement et des Infrastructures Urbaines) DGAT Directorate for Land Administration (Direction Ge'ne'rale de 1 'Administration Territoriale) DGCMP General Directorate for Procurement (Direction Ge'ne'rale de la Commission des Marche's Publics) DGF General Directorate ofFinances (Direction Ge'ne'rale des Financements) DGI General Directorate ofTaxes (Direction GLne'rale des ImpGts) DPL Development Policy Loan DSDARP Poverty Reduction and Accelerated Growth Strategy Paper DUD Urban and Land Department (Direction de 1 'Urbanisme et des Domaines) EA Environmental Assessment EDF European Development Fund EMP Environmental Management Plan ERR Economic Rate ofReturn ESMF Environmental and Social Management Framework ESW Economic Sector Work FM Financial Management GDP Gross Domestic Product GoN Government ofNiger GTZ German Technical Cooperation ICB International Competitive Bidding FOR OFFICIAL USE ONLY ICR Implementation Completion Report IDA International Development Association IEC Information, Education and Communication FR InterimUn-Audited Financial Report KfW KreditAnstalt Fur WiederAufbau LOUAF Urban and Land Management Orientation Law (Loi d 'Orientation sur I 'Urbanisme et I 'Ame'nagementFoncier) MDG Millennium Development Goal M&E Monitoring and Evaluation MPPM Manual ofLocal Government Procurement Procedures (Manuel de proce'dures de passation des marche's publics) MTPCD Ministry ofTerritorial Planning and Community Development MTR Mid-Term Review NCB National Competitive Bidding NEPAD New Economic Partnership for Africa's Development NGO Non-Governmental Organization NIGETIP Public Works Agency ofNiger (Agence Nigdrienne de Travaux d 'Inte'r&t Public) NPV Net Present Value O&M Operations and Maintenance OPEC Organization ofPetroleum Exporting Countries PADUM Urban and Municipal Development Project PAPST Transport Sector Program Support Project PARCCUN Capacity Building Project for the Urban Community ofNiamey (Projet d 'Amdnagement et de Renforcement des Capacite's de la Communautd Urbaine de Niamey) PDIL Local Urban Infrastructure Development Project (Projet de De'veloppement et d 'Infrastructures Locales) PDO Project Development Objective PEMFAR Public Expenditure Management and Financial Accountability Review PFM Public Financial Management PPF Project Preparation Facility PRnr Urban Infrastructure Rehabilitation Program (Programme de Rdhabilitation des Infrastructures Urbaines) RAP Resettlement Action Plan RPF Resettlement Policy Framework SBQC Selection Based on Quality and Cost sc Steering Committee SDR Special Drawing Rights SEEN Urban Water Supply Private Operating Company (Socie'te' d 'Exploitation des Eaux du Niger) SIL Sector Investment Loan SME Small- and Medium- Scale Enterprises UEMOA West African Economic and Monetary Union (Union Economique et Mone'taire Ouest Africaine) UNDP United Nations Development Program Vice President: Obiageli K. Ezekwesili Country Director: Madani M. Tall Country Manager Ousmane Diagana Sector Manager: Eustache Ouayoro Task Team Leader: Christian Diou ~ This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. NIGER Local Urban Infrastructure Development Project CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 A . Country and sector issues.................................................................................................... 1 B. Rationale for Bank involvement ......................................................................................... 4 C . Higher level objectives to which the project contributes .................................................... 6 I1. PROJECT DESCRIPTION ............................................................................................. 6 A . Lending instrument ............................................................................................................. 6 B. Project development objective and key indicators.............................................................. 7 C . Project components ............................................................................................................. 7 D. Lessons learned and reflected in the project design.......................................................... 13 E. Alternatives considered and reasons for rejection ............................................................ 14 I11. IMPLEMENTATION.................................................................................................... 15 A . Partnership arrangements.. ................................................................................................ 15 B. Institutional and implementation arrangements. ............................................................... 15 C . Monitoring and evaluation ofoutcomeshesults ................................................................ 17 ... D. Sustainability..................................................................................................................... 18 E. Critical risks and possible controversial aspects., ............................................................. 19 F. Loadcredit conditions and covenants ............................................................................... 20 IV. APPRAISAL SUMMARY ............................................................................................. 21 A . Economic and financial analysis ....................................................................................... 21 B. Technical. .......................................................................................................................... 22 C . Fiduciary ........................................................................................................................... 22 D. Social................................................................................................................................. 24 E. Environment ...................................................................................................................... 25 F. Safeguard policies ............................................................................................................. 26 G. Policy Exceptions and Readiness ...................................................................................... 27 ... 111 Annex 1: Country and Sector or Program Background......................................................... 28 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 34 Annex 3: Results Framework and Monitoring ........................................................................ 35 Annex 4: Detailed Project Description...................................................................................... 39 Annex 5: Project Costs ............................................................................................................... 50 Annex 6: Implementation Arrangements ................................................................................. 55 Annex 7: Financial Management and Disbursement Arrangements ..................................... 58 Annex 8: Procurement Arrangements ...................................................................................... 69 Annex 9: Economic and Financial Analysis ............................................................................. 78 Annex 10: Safeguard Policy Issues ............................................................................................ 83 Annex 11: Project Preparation and Supervision ..................................................................... 85 Annex 12: Documents in the Project File ................................................................................. 87 Annex 13: Statement of