The World Bank Ethiopia Sustainable WASH Access Project(P181408) @#&OPS~Doctype~OPS^blank@pidconpfrcoverpage#doctemplate Program Information Document (PID) Concept Stage | Date Prepared/Updated: 13-Feb-2024 | Report No: PIDC36721 Feb 14, 2024 Page 1 of 10 The World Bank Ethiopia Sustainable WASH Access Project(P181408) @#&OPS~Doctype~OPS^dynamics@pidpfrbasicinformation#doctemplate BASIC INFORMATION A. Basic Program Data Project Beneficiary(ies) Region Operation ID Operation Name EASTERN AND SOUTHERN Ethiopia Sustainable WASH Ethiopia, Ethiopia P181408 AFRICA Access Project Financing Instrument Estimated Appraisal Date Estimated Approval Date Practice Area (Lead) Program-for-Results 11-Jul-2024 30-Aug-2024 Water Financing (PforR) Borrower(s) Implementing Agency Ministry of Education, Ministry of Health, Ministry Federal Democratic of Water and Energy, Republic of Ethiopia Water Development Commission, Ethiopia Water Technology Institute Proposed Program Development Objective(s) To increase access to improved water supply, sanitation and hygiene services and strengthen institutional capacity for sustainable and climate-resilient service delivery in rural areas and small towns. @#&OPS~Doctype~OPS^dynamics@pidpfrprojectfinancing#doctemplate COST & FINANCING (US$, Millions) Maximizing Finance for Development Is this an MFD-Enabling Project (MFD-EP)? Is this project Private Capital Enabling (PCE)? SUMMARY Government program Cost 5,600.00 Total Operation Cost 500.00 Total Program Cost 450.00 IPF Component 50.00 Total Financing 500.00 Financing Gap 0.00 Feb 14, 2024 Page 2 of 10 The World Bank Ethiopia Sustainable WASH Access Project(P181408) FINANCING Total World Bank Group Financing 500.00 World Bank Lending 500.00 @#&OPS~Doctype~OPS^dynamics@pidpfrconceptdecision#doctemplate Concept Review Decision The review did authorize the preparation to continue B. Introduction and Context Country Context 1. Ethiopia is one of the fastest-growing economies in the world, but it remains one of the poorest. Ethiopia had remarkable economic growth from 2004 to 2019 with an average growth rate of nearly 10 percent, one of the highest globally. However, Ethiopia remains one of the poorest countries. Ethiopia is the second most populous nation in Africa with 123 million people. Almost 80 percent of its population reside in rural areas. The exceptionally high economic growth over the past decade was primarily driven by public-led investment. Ethiopia’s real GDP growth slowed down to about 6 percent after 2019, due to policy distortions and the overlapping crises of internal conflicts, extreme droughts, the COVID- 19 pandemic, and food price inflation. The distortions have eroded external competitiveness, increased macroeconomic imbalances, and severely constrained the development of private sector. 2. Conflicts in Ethiopia have resulted in humanitarian crises, damaged infrastructure, and limited access to basic services. Recent conflicts have pushed as many as three million people into poverty.1 4.1 million people were internally displaced due to the devastating conflicts in northern Ethiopia and the heightened levels of violence in other parts of the country. Significant infrastructure was damaged in the conflict and violence affected areas, including basic water supply facilities. Safe access to clean water becomes a serious challenge for the displaced people. Women and girls, who are often tasked with water collection, face an increased risk of gender-based violence as they walk to fetch water. The conflicts have undermined economic and social development progress and caused more than US$22.6 billion in damages and US$6 billion in losses. 3. Climate shocks impose significant development challenges and compound humanitarian crises. Ethiopia is highly vulnerable to climate change. Over the past 100 years, Ethiopia had experienced 19 periods of widespread and severe food shortages due to droughts, affecting an average of 1.5 million people annually. Furthermore, climate change projections indicate rising temperature and increasing rainfall variability, which are likely to exacerbate extreme flood and drought events in the future. Ethiopia is one of the most drought-prone countries in the world, and the frequency and intensity of droughts are being exacerbated by climate change. The ongoing drought is the most severe one in the last 1 Ethiopia Resilient Recovery and Planning Framework (ERRRF. Volume B), January 2023 Feb 14, 2024 Page 3 of 10 The World Bank Ethiopia Sustainable WASH Access Project(P181408) forty years. More than 22 million people are food insecure, and 13 million people face insecure access to water. Flooding is also a prevalent hazard in Ethiopia, exacerbated by climate change. Floods affect around 250,000 people annually. Sectoral (or multi-sectoral) and Institutional Context of the Program 4. The access gap to water, sanitation and hygiene (WASH) services in Ethiopia remains one of the highest in the sub-Saharan Africa. The WASH access gap remains significant in Ethiopia. 60 million people still lack access to basic drinking water, 112 million people lack access to basic sanitation, and about 22 million practice open defecation.2 The situation is worse in rural areas, where the access rate to basic drinking water is 42 percent, compared to 83 percent in urban areas. 76 and 39 percent of schools, and 45 and 22 percent of health facilities are without water and sanitation services, respectively. In Ethiopia, 60 to 80 percent of communicable diseases are attributed to unsafe water supply and inadequate sanitation and hygiene practices.3 Lack of access to safely managed WASH services ranks as the second-highest risk factor for death and disability, just behind undernutrition. Additionally, the WASH access gap is widening with the country's large population growth rate and rapid urbanization. Ethiopia’s progress towards achieving the Sustainable Development Goals (SDG) of universal WASH access is considered “Too Slow.� 5. Besides the significant access gap, achieving sustainability of WASH services is a persistent challenge in Ethiopia. From a technical perspective, the development of WASH infrastructure lacks appropriate design and affordable and best- fit technology that optimizes capital and operational costs. The non-functionality rate of rural water supply schemes is 19 percent.4 Some facilities are over-designed, and inappropriate technologies are used, resulting in high construction and operation and maintenance (O&M) costs. From a financial perspective, public expenditure is insufficient in the WASH sector, while private sector participation is very low. Most utilities lack business models to achieve financial sustainability and ensure service continuity. Water is under priced with unsustainable tariff. From an institutional perspective, the country lacks a regulatory body for the WASH sector. Institutional arrangements in the WASH sector are not well established. Capacity development for improving WASH services is needed at all levels from Federal to Kebele levels, as well as the private sector. From an environmental perspective, most drinking water sources are contaminated. Only 16 percent of the population use a water source free from contamination.5 Poor sanitation and wastewater management, in turn, contribute to water pollution. From a social perspective, people have inequities in WASH service access. In rural and pastoral areas, conflicts often involve competition to control water supplies, which become intense during droughts. 6. Climate resilience and sustainable water resources management should be mainstreamed into WASH development. Although Ethiopia has an abundant endowment of water resources, the country lacks water storage infrastructure to better manage its water resources for reliable water supply. In Ethiopia, the resilience of WASH systems to climate change impacts are very low. For instance, during the dry season in 2017, 95 percent of water supply points in Somali region were dry, because most of them are shallow wells and rain harvesting systems which are vulnerable to droughts.6 Lacking resilient water access leads to high emergency response costs and the risk of displacement. Thus, climate resilient technologies should be widely incorporated into WASH design and development. Moreover, WASH and water resources management (WRM) are highly interconnected. WRM should be mainstreamed into WASH planning, design and development to ensure the sustainability of water sources in terms of both water quantity and quality. 2 Joint Monitoring Program (JMP) 2022 3 UNICEF, For every child, clean water (link) 4 Improving rural water supply financing in Ethiopia. (link) 5 Joint Monitoring Program (JMP) 2022 6 One WASH National Program Phase II (link) Feb 14, 2024 Page 4 of 10 The World Bank Ethiopia Sustainable WASH Access Project(P181408) 7. To address these challenges, the Government of Ethiopia (GoE) launched the “One WASH National Programme� (OWNP). The OWNP is the Government’s flagship program with a sector wide approach (SWAp) involving the water, education, health, and finance sectors, as well as the private sector. Phase I of OWNP was launched in 2013, guided by the country’s first Growth and Transformation Plan (GTP I). A Consolidated WASH Account (CWA) was established, where donors pool their resources to finance part of the OWNP and the Ministry of Finance (MoF) manages the fund. OWNP- Phase I comprised four components of Rural and Pastoral WASH, Urban WASH, Institutional WASH,7 and Program Management and Capacity Building. Building on the lessons learned from Phase I, OWNP-Phase II was launched in 2019. In addition to the four components from Phase I, the fifth component of Climate Resilient WASH was introduced to Phase II, recognizing the urgent needs of mainstreaming climate resilience and WRM into WASH development. Relationship to CAS/CPF 8. The proposed Program is fully aligned with the World Bank’s Country Partnership Framework (CPF, FY 2018-22) and the Government’s development priorities. The proposed Program is directly linked to the CPF Focus Area Two of building resilience and inclusiveness, which includes i) Objective 2.3—increased access to improved water and sanitation; ii) Objective 2.5—improved early child nutrition and early learning outcomes, and iii) Objective 2.6—enhanced management of natural resources and climate risks. The Program is also linked to the CPF Focus Area Three, including Objective 3—increased capacity and improved governance in service delivery. The Program are consistent with the country climate commitments, particularly those specified in the Nationally Determined Contribution (NDC). The Program is fully aligned with the Priority 2 of Ethiopia Country Climate and Development Report (CCDR) to build climate resilient infrastructure. In addition, the Program will contribute to Ethiopia’s development priorities, as outlined in the country’s Ten Years Development Plan (2020-2030) of improving access to water supply and sanitation services, expanding climate resilient water supply systems, and ensuring the sustainability of existing water supply facilities. Rationale for Bank Engagement and Choice of Financing Instrument 9. The World Bank has provided significant support to WASH development in Ethiopia. The Bank has supported the GoE to develop the OWNP, shifting from project-based interventions to a more program-based approach. The ongoing One WASH-Consolidated Water Supply, Sanitation, and Hygiene Account Project contributes a major share of the CWA fund (US$300 million) and leverages contributions from six other development partners. It also pilots climate resilient WASH infrastructure. The ongoing Ethiopia Second Urban Water Supply and Sanitation Project focuses on improving sanitation services in Addis Ababa and some selected secondary cities. In addition, several ongoing projects in the WRM sector also contribute to the sustainability and resilience in the WASH sector. For example, the Horn of Africa - Groundwater for Resilience Project is supporting groundwater mapping and development of a more sustainable and reliable water supply. The Ethiopia Flood Management Project is supporting improvement of hydrometeorological monitoring network. The Ethiopia Urban Institutional & Infrastructure Development Program in urban sector also supports the development of water supply and sanitation in urban areas. Resonating with other ongoing efforts, this proposed new Program will use a new program-based and results-based approach to more thoroughly address the WASH challenges in a phased manner, with more focus on service sustainability and climate-resilience, as well as institutionalizing sector capacity building and strengthening enabling environment for private sector participation. 10. Multiphase Programmatic Approach (MPA) is proposed to address the complex, long-term challenges in the WASH sector through a phased approach. The large and widening WASH access gap will require a coherent long-term 7 Institutional WASH covers WASH in schools, health facilities, public offices, prisons, etc. It falls within both rural and urban domains. Feb 14, 2024 Page 5 of 10 The World Bank Ethiopia Sustainable WASH Access Project(P181408) strategic approach. Traditional shorter-term, stand-alone interventions are unlikely to provide the required continuity of support. Fundamental institutional and financing challenges will require an adaptative and programmatic approach as well. The Government’s OWNP program also adopts a phased approach, with the short- to intermediate-term objective of achieving increased and sustained coverage of safely managed water supply and sanitation in rural and urban areas, as well as the long-term objective of achieving universal, sustainable, climate resilient and equitable access to safe and affordable water for all. The MPA aligns with the approved long-term OWNP with strong political commitment. This programmatic approach is important in Ethiopia’s fragility, conflict, and violence (FCV) context, with elements of the Program maintaining equity in funding allocations and generating incentives to promote efficiency. 11. The Program-for-Results (PforR) is the most appropriate instrument to support and scale up the Government’s WASH program, while the Investment Project Financing (IPF) is also applied to enhance sector capacity building and program management. The Government recognizes that the ‘business as usual’ piecemeal project-based approach is not sufficient to achieve universal, sustainable and resilient WASH access. The PforR instrument is proposed, to support the Government further shift from a project-based approach to program-based approach, and to incentivize institutional strengthening and reform. The Government has an ambitious and solid WASH program with strong political commitment. The PforR instrument will leverage the activities and resources of the OWNP program, extending the coverage and impacts of WASH development. The proposed Program is a hybrid PforR, with a complementary IPF component focusing on technical assistance, capacity building, and Program management. C. Program Development Objective(s) (PDO) and PDO Level Results Indicators Program Development Objective(s) 12. To increase access to improved water supply, sanitation and hygiene services and strengthen institutional capacity for sustainable and climate-resilient service delivery in rural areas and small towns. PDO Level Results Indicators 13. PDO level results indicators are: • Number of people with access to improved drinking water services (rural/urban/female) • Number of people with access to improved sanitation services (rural/urban/female) • Proportion of water schemes that are functional in areas under the Program D. Program Description PforR Program Boundary 14. The first phase PforR (referred to as the Program) is anchored in the Government’s OWNP to address significant rural WASH access gaps and improve the sector enabling environment. The PforR geographic boundary will include the Feb 14, 2024 Page 6 of 10 The World Bank Ethiopia Sustainable WASH Access Project(P181408) woredas and small towns selected through the following criteria8: i) woredas/small towns with low access to water supply (<50% access); ii) woredas/small towns with low access to sanitation (<50% access); iii) availability and confirmation of counterpart funding from woredas or town administrations and regional governments (15-30%); iv) establishment of woreda WASH teams or functioning governance structures (WASH Board and service providers); and v) woredas in drought hot spots. Two Results Areas (RAs) are included: (1) RA 1: Sustainable and Climate-Resilient Rural WASH Development. RA1 will improve WASH access in rural areas, schools, health facilities, and small towns. Climate-resilient practices will be incorporated in WASH design and development, such as multi-village water supply schemes, the improvement of small storage facilities, and the application of renewable energy where feasible. Appropriate technologies will be demonstrated and applied to reduce construction and O&M costs and to enhance sustainability. Potential activities include: • Improve the sustainability of water sources (e.g. mainstream WRM into WASH planning, source assessment, develop small water storage, and rainwater harvesting) • Access to improved rural water supply services • Construct and rehabilitate climate-resilient water supply schemes in drought hot spots • Rehabilitate nonfunctional water supply schemes, and improve distribution network in small towns • Construct or rehabilitate public or communal latrines • Improve access to household sanitation through supporting sanitation market development, and behavior change champion for open defecation free (ODF) • Construct “Full package� WASH services at health facilities and schools • Improve sustainable service delivery (drinking water quality, O&M arrangements, spare part supply chain) (2) RA2: Sector Policy, Institution, and Regulation Development. RA2 will improve the sector enabling environment by strengthening sector policies and regulations and supporting the establishment of the sector regulatory body. Potential activities include: • Establish and operationalize a regulatory body for the WASH sector • Develop and approve a WASH sector financing strategy and tariff policy • Revise and endorse the water sector policy and strategy • Endorse and issue Annual National WASH Inventory (NWI) • Develop and adopt technical guidelines and design standards 15. An IPF component is also included to support capacity building and strengthen program management. • Technical assistance for water utilities in medium- and large-towns to improve credit worthiness and facilitate access to WDF concessional loans • Capacity building for the WDF • Independent Verification Agent (IVA) for disbursement-linked results verification • Support Program management, including hiring a Program Management Consulting Firm (PMC), quality assurance support, and procuring goods for Program management support • Support for the national sanitation behavior change and communication campaign • Support for Ethiopia Water Technology Institute (EWTI) • Support to Ministry of Water and Energy (MoWE) on policy preparation, strategic studies on water storage, operationalization of the WASH management information system (MIS), and support to the regulatory body 8 Phase 1 of the MPA will prioritize the woredas and small towns with the access rate below the national average. According to the criteria, it is estimated that the PforR boundary will include 290 woredas and 110 small towns, covering around 32 percent of the country. The PforR will support the selected woredas and small towns to reach the average access level of the country. The PforR boundary will be confirmed during preparation. Feb 14, 2024 Page 7 of 10 The World Bank Ethiopia Sustainable WASH Access Project(P181408) • Prepare Phase 2 of the MPA for urban WASH, including reviewing and developing feasibility studies and detailed designs for key urban WASH projects • Develop the Gonder city emergency water supply project to demonstrate sustainable urban WASH models for Phase 2 E. Initial Environmental and Social Screening [Potential environmental and social effects; knowledge and general understanding of the Program system to manage environmental and social risks and impacts; and timeframe for launching the E&S systems assessment including consultation on and disclosure of the draft systems assessment] @#&OPS~Doctype~OPS^dynamics@legalpolicyandscreeningrisk#doctemplate Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Area OP 7.60 No Summary of Screening of Environmental and Social Risks and Impacts of the IPF Component 16. The Program-supported activities include the replacement of pumps and generators; rehabilitation of nonfunctional communal water supply points; construction of improved water supply systems, such as rural piped schemes (RPSs); shall wells; spring on spot; construction of full package improved WaSH facilities at HCFs and schools; rehabilitation of non-functional communal water supply points; expansion of water supply to low-income areas from existing water sources; investments on NRW reduction, such as replacement of pipes and water meters; modernization of utility operations and collection and treatment of fecal sludge; small-scale storage, rainwater harvesting, and managed aquifer recharge (MAR), interventions to move towards sustainable and low-cost energy sources; and institutional WaSH facilities and household sanitation. The Program will have various Environment and social benefits directly linked to its development objectives to increase access to sustainable water supply, sanitation, and hygiene services for all residents in its intervention areas. By providing improved and sustainable access to safely managed drinking water and sanitation services, the project is expected to enhance social benefits among others, an increase in household income, particularly for women; a reduction in household health and health-related expenditure, an increase in resilience of targeted communities; and decrease in school absenteeism and improve educational outcomes. 17. There are various environmental, health, and safety (EHS) risks and impacts that could result from the Project activities. The EHS risks associated with the Project include (i) Health and Safety Risk: including exposure of project workers to various accidents; pathogen exposure (ii) Pollution and waste from civil works such as noise, waste, construction dust, contamination of soil, solid and liquid waste; contamination of soil with salts, heavy metals, persistent organic compounds, and nutrients from fecal sludge treatment activity; surface and groundwater contamination (iii) Soil erosion, sedimentation, and landscape disturbance; cutting of trees to use as building material; reduced water flow downstream, Overexploitation of aquifers (iv) Community health and safety: poor water provision and quality will affect health; water- Feb 14, 2024 Page 8 of 10 The World Bank Ethiopia Sustainable WASH Access Project(P181408) borne diseases (e.g., malaria, skin diseases, etc.); poor or inefficient design and poor construction (methods and materials); fire risks, road traffic accidents. 18. The social risk of the proposed Program is rated as substantial at this concept stage. The adverse social risks may include physical and/or economic displacement, loss of livelihoods, restriction of access to resources, social exclusion, lack of adequate engagement, compensation, disruptions of services in local communities, potential conflicts/disputes over resource allocation, lack of GRM, etc. Impact on Historically Underserved Peoples in the context of Ethiopia reside in developing states such as Afar, Somali, Benishangul Gumuz, Gambella, and pastoralists in parts of Oromia, and in the former Southern Nations, Nationalities, and the Peoples Regional States and depending on the complexity of the impact, Free Prior and Informed Consent with them may be required based on the criteria set in the ESS7; conflicts due to inequitable access to clean water and sanitation facilities, gender inequality, social discrimination or exclusion and vulnerability of SSAHUTLC as well as other disadvantaged and vulnerable groups in the Project areas. Labor influx and associated risks such as communicable diseases, forced labor, child labor, SEA/SH, or other forms of GBV, etc, particularly in remote/rural and conflict-prone areas. 19. To identify and manage the E&S risks and impacts of the Project, MoWE will develop an Environmental and Social Management Framework (ESMF) including OHS Plan, and SEA/SH Action Plan, LMP by appraisal. In addition, MoWE in coordination with other implementing institutions (MOH, MOE, EWTI) will prepare an Environmental and Social Commitment Plan (ESCP) and Stakeholder Engagement Plan (SEP) including a Grievance Redress Mechanism (GRM) per the requirements of ESS10. A Security Risk Management Plan will be prepared before Project effectiveness. Other-specific E&S risk management instruments and plans (e.g. ESMPs, RPs) will be prepared during project implementation (before the commencement of sub-project activities). For the TA activities that support sector policy revisions, strategy and guideline development, and establishment of the regulatory body, before disbursement, EWTI will prepare and develop a Strategic ESA coupled with institutional capacity assessment as per ESF. The Project Operations Manual (POM) will include an annex with the procedures for triggering and implementing the CERC and the Financing Agreement will set out specific requirements including the preparation and adoption of the CERC Manual, the Emergency Action Plan, and the E&S instruments. @#&OPS~Doctype~OPS^dynamics@contactpoint#doctemplate CONTACT POINT World Bank Iain Menzies Senior Water Supply and Sanitation Specialist Toyoko Kodama Senior Water Supply and Sanitation Specialist Wendwosen Feleke Senior Water Supply and Sanitation Specialist Borrower/Client/Recipient Feb 14, 2024 Page 9 of 10 The World Bank Ethiopia Sustainable WASH Access Project(P181408) Federal Democratic Republic of Ethiopia Semereta Sewasew, State Minister, ssewasew@mofed.gov.et Implementing Agencies Ministry of Education Yohanese Wogasso, Chief Executive Officer, Educational Programming and Quality, yohanesey2@gmail.com Ministry of Health Israel Ataro, Lead Executive Officer, Community Engagement and Primary Hea, israel.ataro@moh.gov.et Ministry of Water and Energy Abiy Girma, Coordinator, National WaSH Coordination Office, girma_abiy@yahoo.com Asfaw Dingamo, State Minister, asfawdingamo@yahoo.com Nuredin Mohammed, Lead Executive Office for Sanitation, Nuredinmohammed@yahoo.com Tamiru Gedefa, Lead Executive Officer for Water Supply, tgwami@gmail.com Water Development Commission Ethiopia Water Technology Institute Tamene Hailu, Director General, tamenehd@yahoo.com FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects Feb 14, 2024 Page 10 of 10