The World Bank FOR OFFICIAL USE ONLY Report No: PAD4102 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 45.2 MILLION (US$60 MILLION EQUIVALENT) AND A PROBLUE GRANT IN THE AMOUNT OF US$3 MILLION TO THE KINGDOM OF CAMBODIA FOR A CAMBODIA: SOLID WASTE AND PLASTIC MANAGEMENT IMPROVEMENT PROJECT April 18, 2023 Environment, Natural Resources and the Blue Economy Global Practice East Asia and Pacific 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 Bank authorization. The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) CURRENCY EQUIVALENTS (Exchange Rate Effective February 28, 2023) Currency Unit = Cambodian Riel (KHR) KHR 4043.02 = US$1 SDR 1.32879 = US$1 FISCAL YEAR January 1 – December 31 Regional Vice President: Manuela V. Ferro Country Director: Mariam J. Sherman Regional Director: Benoit Bosquet Practice Manager: Mona Sur Task Team Leaders: Katelijn Van den Berg, Klaus Sattler, Yewande Awe The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank ASEAN Association of Southeast Asian Nations AWPB Annual Work Plan and Budget CAPEX Capital Expenditure CERC Contingent Emergency Response Component CO2 Carbon Dioxide CPF Country Partnership Framework DA Designated Account DFIL Disbursement and Financial Information Letter DOF Department of Finance DRP Detailed Resettlement Plan EA Executive Agency EIRR Economic Internal Rate of Return ENPV Economic Net Present Value EPR Extended Producer Responsibility ERPA Emissions Reduction Purchase Agreement ESCP Environmental and Social Commitment Plan ESF Environmental and Social Framework ESIA Environmental and Social Impact Assessment ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan E&S Environmental and Social FM Financial Management FMM Financial Management Manual GBV Gender-Based Violence GCRF Global Crisis Response Framework GDP Gross Domestic Product GHG Greenhouse Gas GIS Geographic Information System GRS Grievance Redress Service IA Implementing Agency ICR Implementation Completion and Results Report IDA International Development Association IFR Interim Financial Report IPF Investment Project Financing IPPF Indigenous Peoples Planning Framework ISM Implementation Support Mission KPI Key Performance Indicator LMP Labor Management Procedures MEF Ministry of Economy and Finance MFD Maximizing Finance for Development The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) MOE Ministry of Environment MOI Ministry of Interior MRF Materials Recovery Facility MPWT Ministry of Public Works and Transport MSW Municipal Solid Waste M&E Monitoring and Evaluation NDC Nationally Determined Contribution OHS Occupational, Health and Safety O&M Operation and Maintenance PAD Project Appraisal Document PASA Programmatic Advisory Services and Analytics PDO Project Development Objective P-ESIA Preliminary Environmental and Social Impact Assessment PET Polyethylene Terephthalate PIU Project Implementation Unit PMU Project Management Unit POM Project Operations Manual PP Polypropylene PPSD Project Procurement Strategy for Development RDF Refuse-Derived Fuel RF Results Framework RGC Royal Government of Cambodia RPF Resettlement Policy Framework SC Steering Committee SEA-MAP Southeast Asia Regional Program on Combating Marine Plastics SEP Stakeholder Engagement Plan SOE Statement of Expenditures SOP Series of Projects STEP Systematic Tracking of Exchanges in Procurement SUP Single-Use Plastics SWM Solid Waste Management TF Trust Fund TOR Terms of Reference TSU Technical Support Unit TTL Task Team Leader UNDP United Nations Development Programme WBG World Bank Group The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) TABLE OF CONTENTS DATASHEET ........................................................................................................................... 1 I. STRATEGIC CONTEXT .................................................................................................... 10 A. Global and Country Context ........................................................................................................... 10 B. Sectoral and Institutional Context .................................................................................................. 11 C. Relevance to Higher Level Objectives............................................................................................. 14 II. PROJECT DESCRIPTION.................................................................................................. 16 A. Project Development Objective ..................................................................................................... 16 B. Project Components ....................................................................................................................... 17 C. Project Beneficiaries ....................................................................................................................... 22 D. Results Chain .................................................................................................................................. 23 E. Rationale for Bank Involvement and Role of Partners ................................................................... 25 F. Lessons Learned and Reflected in the Project Design .................................................................... 26 III. IMPLEMENTATION ARRANGEMENTS ............................................................................ 27 A. Institutional and Implementation Arrangements .......................................................................... 27 B. Results Monitoring and Evaluation Arrangements......................................................................... 27 C. Sustainability................................................................................................................................... 27 IV. PROJECT APPRAISAL SUMMARY ................................................................................... 28 A. Technical and Economic Analysis ................................................................................................... 28 B. Fiduciary.......................................................................................................................................... 31 C. Legal Operational Policies ............................................................................................................... 32 D. Environmental and Social ............................................................................................................... 33 V. GRIEVANCE REDRESS SERVICES ..................................................................................... 38 VI. KEY RISKS ..................................................................................................................... 38 VII. RESULTS FRAMEWORK AND MONITORING ................................................................... 41 ANNEX 1: Implementation Arrangements and Support Plan .......................................... 56 ANNEX 2: Project Description and Overview of Provinces and Municipalities/Districts .. 70 ANNEX 3: Project Map .................................................................................................. 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) DATASHEET BASIC INFORMATION BASIC_INFO_TABLE Country(ies) Project Name Cambodia Cambodia: Solid Waste and Plastic Management Improvement Project Project ID Financing Instrument Environmental and Social Risk Classification Investment Project P170976 High Financing Financing & Implementation Modalities [ ] Multiphase Programmatic Approach (MPA) [✓] Contingent Emergency Response Component (CERC) [✓] Series of Projects (SOP) [ ] Fragile State(s) [ ] Performance-Based Conditions (PBCs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster [ ] Alternate Procurement Arrangements (APA) [ ] Hands-on Enhanced Implementation Support (HEIS) Expected Approval Date Expected Closing Date 12-May-2023 30-Apr-2029 Bank/IFC Collaboration No Proposed Development Objective(s) To improve solid waste and plastic management in selected areas, and in case of an Eligible Crisis or Emergency, respond promptly and effectively to it. Components Component Name Cost (US$, millions) Page 1 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Institutional Strengthening for Solid Waste and Plastic Management 4.32 Integrated Solid Waste and Plastic Management, Planning, Monitoring, and Capacity 8.42 Building for Participating Provinces, Municipalities and Districts Solid Waste and Plastic Management Infrastructure 54.56 Contingent Emergency Response 0.00 Organizations Borrower: Kingdom of Cambodia Implementing Agency: Ministry of Environment Ministry of Interior Ministry of Public Works and Transport PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 67.30 Total Financing 67.30 of which IBRD/IDA 60.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Development Association (IDA) 60.00 IDA Credit 60.00 Non-World Bank Group Financing Counterpart Funding 4.30 National Government 4.30 Trust Funds 3.00 PROBLUE MDTF 3.00 Page 2 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) IDA Resources (in US$, Millions) Guarantee Credit Amount Grant Amount SML Amount Total Amount Amount Cambodia 60.00 0.00 0.00 0.00 60.00 National Performance-Based 38.00 0.00 0.00 0.00 38.00 Allocations (PBA) Regional 22.00 0.00 0.00 0.00 22.00 Total 60.00 0.00 0.00 0.00 60.00 Expected Disbursements (in US$, Millions) WB Fiscal Year 2023 2024 2025 2026 2027 2028 2029 2030 Annual 0.00 4.00 4.40 6.90 8.30 13.70 15.70 10.00 Cumulative 0.00 4.00 8.40 15.30 23.60 37.30 53.00 63.00 INSTITUTIONAL DATA Practice Area (Lead) Contributing Practice Areas Environment, Natural Resources & the Blue Urban, Resilience and Land Economy Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating 1. Political and Governance ⚫ Substantial 2. Macroeconomic ⚫ Low 3. Sector Strategies and Policies ⚫ Substantial 4. Technical Design of Project or Program ⚫ Moderate 5. Institutional Capacity for Implementation and Sustainability ⚫ Substantial 6. Fiduciary ⚫ Substantial Page 3 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) 7. Environment and Social ⚫ High 8. Stakeholders ⚫ Substantial 9. Other 10. Overall ⚫ Substantial COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [✓] No Does the project require any waivers of Bank policies? [ ] Yes [✓] No Page 4 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Environmental and Social Standards Relevance Given its Context at the Time of Appraisal E & S Standards Relevance Assessment and Management of Environmental and Social Risks and Impacts Relevant Stakeholder Engagement and Information Disclosure Relevant Labor and Working Conditions Relevant Resource Efficiency and Pollution Prevention and Management Relevant Community Health and Safety Relevant Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Relevant Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Relevant Local Communities Cultural Heritage Relevant Financial Intermediaries Not Currently Relevant NOTE: For further information regarding the World Bank’s due diligence assessment of the Project’s potential environmental and social risks and impacts, please refer to the Project’s Appraisal Environmental and Social Review Summary (ESRS). Legal Covenants Sections and Description Institutional Arrangements (Section I.A.1, Schedule 2 of the Financing Agreement): The Recipient will establish no later than 3 months after the Effective Date and maintain the project management unit (PMU) at MOI, and the project implementation units (PIUs) at MOE and MPWT, with the composition, mandate, functions, staffing and resources satisfactory to the Association, which will be responsible for carrying out its respective Part of the Project, including day-to-day implementation and management, preparation of relevant Annual Work Plans and Budgets and procurement plan(s), monitoring and evaluation, and management of relevant environmental and social management for its respective Part of the Project. The PMU at MOI shall include Technical Support Units (TSUs) at the local government level. Institutional Arrangements (Section 1.A.3, Schedule 2 of the Financing Agreement): The Recipient shall establish within 3 months of Effective Date and thereafter maintain a Steering Committee, chaired by a designated representative of the MOI, which shall include representation from the MOE, MPWT, MEF and respective Page 5 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Participating Provinces and Municipalities. The Steering Committee shall be responsible for, inter alia overall oversight and inter-ministerial coordination of the management and operation of the Project. Sections and Description Project Operations Manual (Section I.B, Schedule 2 of the Financing Agreement): The Recipient shall ensure that the Project is carried out in accordance with the arrangements and procedures set out in POM provided, however, that in the event of any conflict between the arrangements and procedures set out in the POM and the provisions of this Agreement, the provisions of this Agreement shall prevail. The Recipient shall not amend, abrogate, suspend or waive any provision of POM unless the Association has provided its prior approval thereof in writing. Section I.A.4, Schedule 2 of the Financing Agreement: The Recipient shall select the Participating Provinces and Municipalities to be supported under Parts 2 and/or 3 of the Project in accordance with the eligibility criteria as defined in the POM. Sections and Description Environmental and Social Standards (Section I.D, Schedule 2 of the Financing Agreement): The Recipient shall ensure that the Project is carried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Association. The Recipient shall ensure that the Project is implemented in accordance with the Environmental and Social Commitment Plan (“ESCP”), in a manner acceptable to the Association. To this end, the Recipient shall ensure that: (a) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, as provided in the ESCP; (b) sufficient funds are available to cover the costs of implementing the ESCP; (c) policies and procedures are maintained, and qualified and experienced staff in adequate numbers are retained to implement the ESCP, as provided in the ESCP; and (d) the ESCP, or any provision thereof, is not amended, repealed, suspended or waived, except as the Association shall otherwise agree in writing, as specified in the ESCP, and ensure that the revised ESCP is disclosed promptly thereafter. The Recipient shall ensure that: (a) all measures necessary are taken to collect, compile, and furnish to the Association through regular reports, with the frequency specified in the ESCP, and promptly in a separate report or reports, if so requested by the Association, information on the status of compliance with the ESCP and the environmental and social instruments referred to therein, all such reports in form and substance acceptable to the Association, setting out, inter alia: (i) the status of implementation of the ESCP; (ii) conditions, if any, which interfere or threaten to interfere with the implementation of the ESCP; and (iii) corrective and preventive measures taken or required to be taken to address such conditions; and (b) the Association is promptly notified of any incident or accident related to or having an impact on the Project which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers, in accordance with the ESCP, the environmental and social instruments referenced therein and the Environmental and Social Standards. The Recipient shall establish, publicize, maintain and operate an accessible grievance mechanism, to receive and facilitate resolution of concerns and grievances of Project-affected people, and take all measures necessary and appropriate to resolve, or facilitate the resolution of, such concerns and grievances, in a manner acceptable to the Page 6 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Association. The Recipient shall ensure that all bidding documents and contracts for civil works under the Project include the obligation of contractors, subcontractors, and supervising entities to: (a) comply with the relevant aspects of ESCP and the environmental and social instruments referred to therein; and (b) adopt and enforce codes of conduct that should be provided to and signed by all workers, detailing measures to address environmental, social, health and safety risks, and the risks of sexual exploitation and abuse, sexual harassment and violence against children, all as applicable to such civil works commissioned or carried out pursuant to said contracts. Sections and Description Contingent Emergency Response (Section I.E, Schedule 2 of the Financing Agreement): 1. In order to ensure the proper implementation of contingent emergency response activities under Part 4 of the Project (“Contingent Emergency Response Part”), the Recipient shall ensure that: (a) a manual (“CERC Manual”) is prepared and adopted in form and substance acceptable to the Association, which shall set forth detailed implementation arrangements for the Contingent Emergency Response Part, including: (i) any structures or institutional arrangements for coordinating and implementing the Contingent Emergency Response Part; (ii) specific activities which may be included in the Contingent Emergency Response Part, Eligible Expenditures required therefor (“Emergency Expenditures”), and any procedures for such inclusion; (iii) financial management arrangements for the Contingent Emergency Response Part; (iv) procurement methods and procedures for the Contingent Emergency Response Part; (v) documentation required for withdrawals of Financing amounts to finance Emergency Expenditures; (vi) a description of the environmental and social assessment and management arrangements for the Contingent Emergency Response Part; and (vii) a template Emergency Action Plan; (b) the Emergency Action Plan is prepared and adopted in form and substance acceptable to the Association; (c) the Continent Emergency Response Part is carried out in accordance with the CERC Manual and the Emergency Action Plan; provided, however, that in the event of any inconsistency between the provisions of the CERC Manual or the Emergency Action Plan and this Agreement, the provisions of this Agreement shall prevail; and (d) neither the CERC Manual or the Emergency Action Plan is amended, suspended, abrogated, repealed or waived without the prior written approval by the Association. 2. The Recipient shall ensure that the structures and arrangements referred to in the CERC Manual are maintained throughout the implementation of the Contingent Emergency Response Part, with adequate staff and resources satisfactory to Association. 3. The Recipient shall ensure that: (a) the environmental and social instruments required for the Contingent Emergency Response Part are prepared, disclosed and adopted in accordance with the CERC Manual and the ESCP, and in form and substance acceptable to the Association; and (b) the Contingent Emergency Response Part is carried out in accordance with the environmental and social instruments in a manner acceptable to the Association. 4. Activities under the Contingency Emergency Response Part shall be undertaken only after an Eligible Crisis or Emergency has occurred. Sections and Description Annual World Plan and Budget (Section I.C.1, Schedule 2 of the Financing Agreement): The Recipient shall prepare and furnish to the Association for its no-objection not later than November 30 of each fiscal year during the implementation of the Project (or such later date as the Association may agree), an Annual Work Plan and Budget Page 7 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) (“AWPB”) for each Respective Part of the Project as approved by the MEF, containing relevant Project activities and expenditures proposed to be included in the Respective Part of the Project in the following fiscal year, including a specification of the sources of financing and environmental and social management measures taken or planned to be taken in accordance with the provisions of Part D of this Schedule of the LA. Sections and Description Project Reports (Section II.A of the Financing Agreement): The Recipient, through each of MOE, MOI, and MPWT, shall furnish to the Association each Project Report not later than forty-five (45) days after the end of each calendar semester, covering the calendar semester. Sections and Description Mid-term Review (Section II.B of the Financing Agreement):The Recipient shall, no later than thirty (30) months after Effective Date, prepare and furnish to the Association a consolidated mid-term report, in such detail as the Association shall reasonably request. Conditions Type Financing source Description Disbursement IBRD/IDA For payments made prior to the Signature Date For Emergency Expenditures under Category (4), unless and until all of the following conditions have been met in respect of said expenditures: (i) (A) The Recipient has determined that an Eligible Crisis or Emergency has occurred, and has furnished to the Association a request to withdraw Financing amounts under Category (4); and (B) The Association has agreed with such determination, accepted said request and notified the Recipient thereof; and (ii) The Recipient has adopted the CERC Manual and Emergency Action Plan, in form and substance acceptable to the Association. Type Financing source Description Effectiveness IBRD/IDA The Additional Condition of Effectiveness consists of the following, namely that the Grant Agreement has been executed and delivered and all conditions precedent to its effectiveness or to the right of the Recipient to make withdrawals under it (other than the effectiveness of this Agreement) have been fulfilled. Type Financing source Description Effectiveness Trust Funds This Agreement shall not become effective until evidence Page 8 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) satisfactory to the Bank has been furnished to the Bank that the following condition has been satisfied, namely that the Financing Agreement has been executed and delivered and all conditions precedent to its effectiveness or to the right of the Recipient to make withdrawals under it (other than the effectiveness of this Agreement) have been fulfilled. Page 9 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) I. STRATEGIC CONTEXT A. Global and Country Context 1. Cambodia has experienced remarkable economic growth over the past two decades, attaining lower- middle-income status in 2015 and aspiring to attain upper-middle-income status by 2030. Tourism, real estate development, garment manufacturing, and agriculture were the main drivers of growth that sustained an average gross domestic product (GDP) growth rate of 7.6 percent between 1995 and 2019. Before the pandemic, growth was inclusive, with consumption per capita for the poorest 40 percent of the population growing by an average of 2 percent per year, and the poverty headcount ratio falling from 33.8 percent to 17.8 percent between 2009 and 2019.1 Roughly 18 percent of the population was identified as poor, with 4.2 percent in Phnom Penh, 12.6 percent in other urban areas, and 22.8 percent in rural areas.2 The COVID-19 shock, exacerbated by falling global demand, supply chain disruptions, and nationwide lockdowns, severely affected Cambodia’s economic activities. It reversed two years of Cambodia’s poverty reduction progress, increasing the poverty rate by 2.8 percentage points and pushing around 460,000 individuals into poverty.3 GDP growth fell sharply to around 3.0 percent in 2020 and 2021; the growth forecast as of November 2022 was 4.8 percent and growth is expected to further increase in subsequent years, though not to the pre- pandemic levels. 4 Since November 2021, the Government has relaxed travel restrictions, reopened the country for business and adopted a strategy of ‘living with COVID-19’,5 enabling a broad-based economic recovery to take shape6 though there are concerns related to inflation and other global/regional crises. 2. The continuous growth of municipalities and increasing urbanization require higher levels of infrastructure investments and municipal services to sustain economic growth. Despite improvements in public infrastructure (roads, water and electricity supply), municipalities and districts generally suffer from under- investment and municipal services need to improve to keep pace with increasing urbanization, population growth, and tourism. Cambodia’s urbanization level of 24.26 percent (2021) is comparatively low but growing rapidly at 0.4 percent per year.7 While Phnom Penh is the main urban center of Cambodia, the country’s secondary municipalities are also urbanizing substantially. The lack of adequate investments in municipal infrastructure and services, combined with limited spatial/urban development planning and weak institutional capacity, provides a significant risk of hampering economic growth in the country. 3. Inadequate management of solid waste in many areas in Cambodia contributes to plastic leakage into the environment, waterways, and eventually the oceans. The Mekong has been identified as one of the top 10 1 Ministry of Planning. 2021. Poverty in Cambodia -Setting the poverty line. Phnom Penh. 2https://www.worldbank.org/en/country/cambodia/overview#:~:text=Cambodia%20has%20recently%20redefined%20the,rate )%20per%20person%20per%20day. 3 World Bank. 2022. Program Document for the first Cambodia Growth and Resilience Development Policy Financing Series. 4 World Bank (2022). World Bank East Asia and Pacific Economic Update: Reforms for Recovery. Washington, DC. World Bank: https://openknowledge.worldbank.org/handle/10986/38053. See Section 2 for a detailed discussion on baseline and downside scenarios. 5 Strategic framework and programs for economic recovery and to promote Cambodia's economic growth in living with COVID- 19 in the new normal for 2021-2022, Economic and Financial Policy Committee. 6 https://www.worldbank.org/en/country/cambodia/publication/cambodia-country-economic-update-december-2021- cambodia-is-now-living-with-covid-19 7 https://www.statista.com/statistics/455789/urbanization-in-cambodia/ Page 10 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) major rivers globally contributing to plastic pollution in oceans.8 There are no data on marine plastic leakage at a country scale in Cambodia; however, the high levels of plastic consumption paired with solid waste management (SWM) deficiencies, leave little doubt that substantial amounts of plastic end up in Cambodia’s environment and rivers. With Phnom Penh and other major municipalities situated along the Mekong River or its tributaries, Cambodia’s cities are considered major sources of plastic pollution in the Mekong—and ultimately the South China Sea. In Siem Reap, plastic bags were responsible for 60 percent of the waste obstructing wastewater runoff.9 It is estimated that 41 percent of used plastic bags are burnt and 48 percent end up in the sea.10 Studies conducted in Sihanoukville, and Koh Rong and Koh Sdach islands revealed that plastic accounted for 80 percent of coastal pollution found on their beaches.11 B. Sectoral and Institutional Context 4. Solid waste generation has increased substantially over the years as a result of economic growth, urbanization, increases in tourism, and changing lifestyles. Reliable waste data for Cambodia is limited. Total waste generation is estimated to be 4 million tons12 per year, equal to 0.73 kg per person per day.13 Due to poor collection and handling, municipal solid waste (MSW) is typically disposed of at open dumpsites, with some 164 dumpsites operating countrywide in 2021. 14 In urban centers, 50-60 percent of the waste is estimated to be organic, with plastic accounting for over 20 percent and increasing in share.15 16 5. Inadequate solid waste management is associated with a variety of social, environmental and economic impacts. When solid waste is not collected, it is often openly burned, informally buried, or disposed of in the environment and waterways. Uncollected waste leads to increased pest populations and disease outbreaks while waste burning can be a significant and costly source of air pollution in urban areas, contributing to respiratory illness and other health complications. The resulting loss of productivity severely affects all sectors while increasing health-related expenditure. Uncollected waste also lowers property values, damages tourism attractiveness, and increases flooding by obstructing canals and drains. Ecosystems are also damaged from uncontrolled waste leakage. Tourism is estimated to have accounted for about 18.7 percent of GDP in 2019. A functioning SWM system is critical to protect sensitive tourism assets and attractions, including Siem Reap, with its world-famous Angkor Wat, which received approximately 1.7 million visitors annually by air alone before COVID-19.17 6. The Royal Government of Cambodia (RGC) acknowledges that poor SWM is a critical bottleneck to the country’s economic and social development and improving SWM is therefore high on the national agenda. Several legislative documents have been adopted, such as Cambodia’s Law on Environmental Protection and 8 https://www.sea-circular.org/news/world-environment-day-2020-plastic-pollution-threatens-marine-biodiversity-in-south- east-asia/. 9 EU. 2019. Circular Economy and Plastics: A Gap-Analysis in ASEAN Member States. 10 EuroCham. 2019. “Breakfast Talk on the Plastic Challenges and its Solutions - Private Sector Perspective.” 11 Fauna and Flora International. 2018. Sihanoukville Plastics Study. 12 Ton is metric tonne. 13 EU (European Union). 2019. Circular Economy and Plastics: A Gap-Analysis in ASEAN Member States; World Bank; 2020. What a Waste 2.0. Per person waste generation in line with countries of similar economic status. 14 Pheakdey, D.V.; Quan, N.V.; Khanh, T.D.; Xuan, T.D. Challenges and Priorities of Municipal Solid Waste Management in Cambodia. Int. J. Environ. Res. Public Health 2022, 19, 8458. https://doi.org/10.3390/ijerph19148458. 15 World Bank staff calculations based on the project preparation pre-feasibility study. 16 Pheakdey et al. 2022. 17 https://www.nagacorp.com/eng/ir/tourism/tourism_statistics_201912.pdf. Page 11 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Natural Resource Management (1996) which designates the Ministry of Environment (MOE) as the lead agency for SWM policy making, regulations, and sector coordination. Sub-Decree No. 113 (2015) is the country’s primary legal basis for municipal SWM, which aims to enhance the effectiveness, transparency, and accountability of waste services and management, and protect public health, environmental and landscape aesthetics in Cambodia. It covers separation, storing, cleaning, collecting, transporting and recycling of waste, and the management of landfills in Cambodia. It supports efforts to (a) strengthen responsibilities of line ministries (Ministry of Interior [MOI], MOE, and Ministry of Public Works and Transport [MPWT]), municipal SWM units, and other stakeholders; (b) delegate urban SWM to municipal, city, and district administrations; and (c) determine necessary measures to improve efficiency and safety in SWM. The MOI is the key agency for supporting the delegation of urban SWM to municipal, city and district administrations and the MPWT is the key agency for public works construction. In addition, the National Waste Strategy and Action Plan for Cambodia (2018–2030) defines a roadmap for improving waste management practices. 7. Despite the strategies to improve solid waste and plastic management—most notably including issuance of Sub-Decree No. 113—proper waste collection, recovery, treatment, and disposal remain a challenge in Cambodia. The Waste Management Strategy and Action Plan of Phnom Penh 2018-2035 reports an average citywide collection rate of 75 percent.18 World Bank SWM assessments in secondary municipalities, such as Siem Reap, Kandal, and Kampong Speu suggest collection rates are significantly below 75 percent (which mainly applies to urban centers and businesses) but is often below 50 percent for households. Organized solid waste collection outside of urban centers is almost non-existent. The low collection rates result in street littering, dumping of waste in the environment and waterways, and the widespread practice of burning of waste. Even when solid waste is collected, waste treatment and disposal remain a major challenge as disposal of waste is largely through uncontrolled dumpsites. 8. The SWM sector requires substantial investments in capital and operating expenditures to ensure proper waste services and sustainability in the near and long term. Operating costs for SWM are substantially higher than capital costs, 19 making it difficult for the sector to operate and grow as a viable business. There are examples internationally where SWM systems have collapsed due to unsustainable financing mechanisms. Establishing reliable revenue streams is therefore a priority to ensure operating cost recovery and financial sustainability. Fee collection for waste services is typically the responsibility of municipalities based on a municipal ordinance and supporting regulations. Fee collection needs to be supported by the establishment of a financial management (FM) and waste accounting system and local governments that have the staffing and technical capacity to plan and regulate waste service delivery. 9. The privatization of waste services with inadequate regulatory frameworks, policies, and enabling conditions has limited the efficacy of waste management efforts. In Cambodia, solid waste services are fully outsourced to the private sector with limited or no regulatory oversight. Contracts do not include key performance benchmarks and indicators and lack clarity on service areas, equipment requirements, and many other essential contractual conditions, standards and payments. Private waste companies are allowed to collect fees for waste services themselves, but do not have the ability to enforce fee collection. Consequently, companies focus their services on more profitable customers, such as institutions, the commercial sector, and wealthier communities, where payments are more dependable. Due to limited 18 Phnom Penh Waste Management Strategy and Action Plan of Phnom Penh 2018–2035. 19 World Bank, What a Waste 2.0, 2020. Solid Waste Management is labor-intensive and requires operation of environmental mitigation measures such as leachate treatment and landfill gas capture. Page 12 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) willingness to pay and lack of state funding, waste collection companies work with outdated equipment, resulting in frequent service interruptions. 10. The waste recovery and recycling industry in Cambodia is dominated by the informal sector. In urban areas, around 20-30 percent of waste is estimated to be recyclable. 20 Cambodia has few small-scale recycling factories and exports most recyclable waste to Thailand and Vietnam, although these countries are now restricting plastic waste imports. Despite the high share of organic waste, ranging between 40 to 60 percent, composting facilities are lacking. Waste pickers are estimated to be responsible for 8 percent of total waste collection.21 Countrywide, it is estimated that nearly 3,000 informal waste pickers operate in open dumps.22 Moreover, waste picking at open dumpsites traditionally attracts disadvantaged and vulnerable groups, including women and children. Their contributions to the recovery and recycling of valuable plastic and other materials in the face of underdeveloped formal systems are largely overlooked and unsupported.23 11. The drastic increase of single-use plastics (SUPs) puts immense pressure on waste management services and requires urgent policy measures to reduce plastic pollution through reduction, reuse, and recycling. While exact numbers are absent, anecdotal evidence shows that consumption of SUPs has increased in Cambodia over the last decade with plastic waste making up 20 percent of total garbage in urban areas.24 Around 10 million plastic bags are used in Phnom Penh every day, and urban Cambodians use more than 2,000 plastic bags per person annually.25 In some areas, plastic waste makes up 80 percent of the debris found on Cambodia’s beaches.26 12. Priorities for the improvement of SWM in Cambodia include: (a) strengthening of institutional capacity, policies, and regulations at the national and local government levels in line with Sub-Decree No. 113; (b) infrastructure investments for collection, transport, sorting/treatment, and disposal at sanitary landfills; (c) enhancing private sector performance for waste services and enabling conditions; (d) improving waste fee schemes to increase financial sustainability of SWM; (e) integration of waste pickers in the solid waste sector; and (f) regulation of priority SUPs to reduce plastics and increase recyclable materials recovery to feed into recycled products. 13. The Cambodia: Solid Waste and Plastic Management Improvement Project has been designed to address these priorities and to strengthen the institutional capacity for SWM at the national and sub-national level, enhance the performance of the private sector engaged in waste services and improve waste fee systems to sustain improved solid waste operations that are environmentally, financially, and socially sustainable. The project design incorporates qualifying criteria to select municipalities for participation in the project and ensure the readiness of the participating municipalities to sustain investments. A flexible approach allows for tailored support to municipalities, depending on available capacities and infrastructure and allows for additional municipalities to be considered for participation in the project over time. 20 World Bank staff estimates. 21 https://cambodiainvestmentreview.com/2022/08/15/2022-waste-summit-highlights-the-informal-sector-of-cambodias- waste-management-ecosystem/. 22 https://globalrec.org/law-report/cambodia/. 23 https://cambodianess.com/article/waste-collectors-cambodias-recycling-heroes. 24 https://www.khmertimeskh.com/50648444/ministry-warns-of-rise-in-single-use-plastic-waste-2/. 25 https://www.phnompenhpost.com/opinion/cambodias-plastic-problem. 26 https://asiatimes.com/2020/12/japan-undp-help-cambodia-reduce-marine-plastic-litter/. Page 13 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) C. Relevance to Higher Level Objectives 14. The proposed project is fully aligned with Objective III ‘Expand and improve sustainable infrastructure services’ in the World Bank Group (WBG) Country Partnership Framework (CPF) for Cambodia for the period FY2019–FY2024. 27 The CPF states that the WBG support will focus on water, sanitation, waste management, and roads to improve connectivity and access to basic infrastructure services in rural and urban areas during the CPF period. The project will also contribute to the twin goals of poverty reduction and shared prosperity as inadequate solid waste management impacts health and human development outcomes and impacts the environment and the competitiveness of Cambodia’s growing tourism sector. 15. The project aligns with Pillar 4 of the World Bank’s Global Crisis Response Framework (GCRF) on ‘Strengthening Policies, Institutions and Investments for Rebuilding Better ’. The project will support green and sustainable growth through solid waste and plastic management policies and investments that will improve environmental conditions and reduce pollution from waste management, improve resource efficiency, and support waste and plastic recovery and treatment under component 3. Institutional strengthening and capacity building is supported under all project components, with multiple activities under component 1 focusing on strengthening national level institutions, and activities under component 2 focusing on strengthening municipal-level institutions. 16. The policies, regulations, and implementation support for waste and plastic reduction and reuse and for supporting the move towards a circular economy are aligned with regional ASEAN initiatives to combat marine debris according to the adopted Bangkok Declaration on Combating Marine Debris in ASEAN Region.28 The accompanying ASEAN Framework of Action on Marine Debris articulates the need for regional and national actions along four key pillars: (a) policy support and planning; (b) research, innovation, and capacity building; (c) public awareness, education, and outreach; and (d) private sector engagement. The ASEAN Regional Action Plan for Combating Marine Debris sets out the priority actions for the ASEAN Member States across these four pillars. 17. The project is the first among the national level projects in the World Bank-financed Southeast Asia Regional Program on Combating Marine Plastics (SEA-MAP)29 series of projects (SOP) to support marine plastic solutions at the national level. Marine plastic pollution is a transboundary issue, with shared river systems acting as conduits for plastic waste, and shared coastlines receiving plastic waste carried by ocean currents. Accordingly, single country solutions to manage marine litter carry the risk of not being sufficient; there is a need for regional collaboration to combat marine plastic pollution in critical countries with currently undermanaged plastic waste. The development objective of the SEA-MAP program is to reduce plastic consumption, increase recycling, and minimize leakages to prevent land- and sea-based marine plastic pollution in Southeast Asia. The program follows a SOP approach under two pillars: Pillar 1 includes a US$20 million regional IDA-financed project that will help strengthen institutional capacity, harmonize standards and guidelines, and promote innovative financing and technological solutions. Pillar 2 focuses on plastic- related investments and policy support at national levels. The regional IDA-financed SEA-MAP project under Pillar 1 was approved in June 2022. In addition to the US$67 million Cambodia Solid Waste and Plastic 27 World Bank Group. 2019. Cambodia: Performance and Learning Review of the WBG Country Partnership Framework for the period FY19-FY24. Report Number 169297-KH. 28 ASEAN. 2019. “Bangkok Declaration on Combatting Marine Debris in ASEAN Region.” Details can be found in Annex 2. 29 Approved in June 2022, the SEA-MAP supports marine plastic solutions in Southeast Asia at the regional level, and national plastic-related investments and policies. Page 14 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Management Improvement Project, Pillar 2 of the SOP also foresees the Lao PDR Environmental and Waste Management Project, currently under preparation.30 Cambodia will draw from the IDA Regional Window to support reduction of (marine) plastics, along with ASEAN and Lao PDR. The common results indicator for Pillar 2 projects is ‘Number of plastics policies, guidelines, or standards established and aligned with the ASEAN Regional Action Plan’. 18. Regional benefits of strengthening plastic policies and reducing plastic pollution. The project will create regional benefits in reduced pollution through multiple upstream and downstream measures. The plastic leakage into the environment and waterways creates substantial environmental and riverine plastic pollution, contributing to the Mekong river being one of the major contributors to plastic pollution in oceans.31 All project components include measures that contribute to the reduction of environmental and riverine plastic pollution, and consequently regional plastic pollution into the South China Sea.32 Relevant activities include (a) development of policies, guidelines or standards for reduction of (single use) plastics and increased recycling (component 1); (b) enhancement of capacities of participating provinces, municipalities and districts, resulting in increased collection and recovery of plastics, and reduction of leakage of plastics to waterways (component 2); and (c) investments in increased plastics recovery and sanitary disposal (component 3). Regional benefits in reduced plastic pollution will be measured through the indicators: (i) plastics policies, guidelines, or standards developed / of which in alignment with the ASEAN Regional Action Plan; and (ii) proportion of population in selected areas with regular household waste collection/ including reporting on the reduction of leakage of plastics to the environment. Specific information on activities with benefits of reduced regional plastic pollution is provided in the components section. 19. The project supports the enforcement of Cambodia’s Sub-Decree No. 113, and the updated nationally and the reduction of methane.33 Project interventions are built around Article 9 of Sub-Decree No. 113 that states “it is the cities and district administration that have the role to manage urban garbage and solid waste within their jurisdiction”. Cambodia has made commitments to reduce GHG emissions by 42 percent by 2030 compared to a business-as-usual scenario. Of these GHG reductions, the sectoral share of the waste sector is expected to grow to 2.1 percent of overall GHG emissions or 3.3 million tons of CO2e in 2030 in a business- as-usual scenario. In the NDC mitigation scenario, the waste sector is foreseen to reduce GHG emissions by 600,000 tons of CO2e by 2030.34 The project will support a substantial reduction of GHG emissions in the waste sector as a result of a reduction in waste dumping, closure of dumpsites along with installation of landfill gas management systems (targeting an important source of methane), introduction of source segregation, and secondary sorting to extract organics and dry recyclables and treatment of organic waste. Over the economic lifetime of the project, the estimated GHG emission reductions of the project are 4 million tons of CO2-equivalent. 30 Both projects have an implementation timeline of six years as expected completion timeline. 31 https://www.sea-circular.org/news/world-environment-day-2020-plastic-pollution-threatens-marine-biodiversity-in-south- east-asia/. 32 Studies estimate that 80 percent of marine plastic pollution comes from in-land sources. https://ourworldindata.org/ocean- plastics 33 Methane is a powerful but short-lived climate pollutant that accounts for about half of the net rise in global average temperature since the pre-industrial era. Rapidly reducing methane emissions from energy, agriculture, and waste can achieve near-term gains in this decade. According to the Intergovernmental Panel on Climate Change, methane emissions must be cut with at least 30 percent by 2030 to keep the 1.5°C temperature limit within reach. Cambodia has joined the Global Methane Pledge which was launched at the 2021 United Nations Climate Change Conference. https://www.globalmethanepledge.org. 34 Kingdom of Cambodia, Cambodia’s updated Nationally Determined Contribution, 2020 Page 15 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) 20. Climate change adaptation. The project target provinces are prone to flooding, have a high groundwater table, and face increased vulnerability due to climate change. Risk reduction measures have been incorporated to reduce climate risks and limit exposure and vulnerability to the impacts of climate change. Specifically, project locations have been screened for potential threats to site integrity from natural hazards such as floods, landslides, and earthquake, in line with the requirements of the Environmental, Health, and Safety Guidelines for Waste Management Facilities under the Environmental and Social Framework (ESF) (see site suitability assessment) and climate change risks. The planning, engineering design, and operation of the new/rehabilitated/expanded SWM facilities will take further resilience issues into account. Specifically, designs under Component 3 will take climate risks into account. Best practices on climate resilient infrastructure design and management will be applied to increase climate resilience. Clogging of canals during rainy season is a key issue in Cambodian urban areas, including project target municipalities. 35 Reduced plastics leakage of priority plastic items due to plastic policies (component 1) and improved collection with an increased proportion of households with regular access to waste collection (component 2 and 3) will contribute to reduced flooding risks in targeted urban areas.36 21. Maximizing Finance for Development (MFD). The project will support the legislation, regulations, and strengthened institutions to ensure a better-performing private solid waste sector and make investments in the sector more sustainable. Collection of waste fees and increasing the willingness to pay due to the provision of better waste services will ensure that the SWM sector can generate the revenue required to pay private businesses for consistent, reliable services that can expand with changing socioeconomic needs. Ensuring that contracts with private waste companies include robust, yet fair and achievable terms, conditions and performance indicators will enable the government to better regulate and monitor the sector. II. PROJECT DESCRIPTION A. Project Development Objective PDO Statement 22. The Project Development Objective (PDO) is to improve solid waste and plastic management in selected areas, and in case of an Eligible Crisis or Emergency, respond promptly and effectively to it. PDO Level Indicators (a) Proportion of population in selected areas with regular household waste collection (percentage) (b) Landfill disposal capacity operational per defined criteria (cubic meters [m3]) (c) Plastics policies, guidelines, or standards developed (of which in alignment with the ASEAN Regional Action Plan) (number) (d) Municipal solid waste (MSW) recovered, recycled, composted and/or treated with other techniques in selected areas (percentage) 35 https://www.khmertimeskh.com/50854488/call-to-stop-throwing-rubbish-into-waterways/ https://www.phnompenhpost.com/national/clean-sihanoukville-after-flood-floats-rubbish-creeks-and-canals 36 The reduction of leakage of plastics to the environment will be reported as part of the project’s intermediate indicators. Page 16 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) B. Project Components 23. The project will support policy development, regulatory improvements, and monitoring tools and systems at the national level that deal with waste management. At the sub-national level, the project will help enable the local governments to manage solid waste services in line with international good practice 37 through improvements to waste collection services, treatment and disposal, and related infrastructure investments. 24. The project is designed along four components: Component 1. Institutional Strengthening for Solid Waste and Plastic Management (US$4.32 million, of which PROBLUE Trust Fund (TF) US$2.1 million, IDA US$1.42 million, and RGC US$0.8 million) – implemented by the MOE 25. Sub-component 1A: Strengthening of institutions, legislation, policies, and regulations for solid waste and plastic management (PROBLUE TF US$2.1 million). The sub-component will finance technical assistance and capacity building, including consultancy services and training to: (a) strengthen national regulations for solid waste planning, management and waste services (waste classification, planning and management capacity building and guidelines, collection, treatment and disposal service performance indicators, monitoring and reporting guidelines, and service contract templates). Waste classification will require establishing a definition of MSW and a waste catalog describing the different waste fractions.38 Planning and management capacity building will include criteria and guidelines for regional landfills, serving the entire province or several municipalities/districts; (b) establish national landfill guidelines (landfill design, construction, operation, closure and aftercare, and operational manuals, landfill gas extraction, abatement and recyclables management, among others); (c) support public awareness, outreach, training, citizen engagement (nationally and in participating municipalities) including activities for the staged introduction of source- segregation and recycling;39 (d) strengthen plastics policies, regulations, and guidelines, among others, on (plastic) waste reduction, recovery, and recycling (both nationally and in participating municipalities).40 This includes policy support for staged introduction of priority source-segregated waste collection, transport and treatment.41 These activities are aligned with the institutional strengthening and capacity building thematic area under GCRF Pillar 4. 37 The waste management system should be guided by appropriate legislation and controlled at the national, regional, and local levels, while local governments should be responsible for actual solid waste service delivery and implementation. 38 This is necessary to define which wastes are to be collected as part of the general waste fee and for which waste types/fractions separate contracts with distinct fees might be applicable to increase revenues from SWM. 39 Awareness raising activities are included in component 1 as these activities fall under the mandate of the MOE, there are also awareness raising activities at the municipal level through component 2. The role of municipal government in awareness raising will also be strengthened under the project under component 2 and by the waste collection companies in line with the revised waste collection system and waste fee collection system. 40 The project will support the government in (a) the establishment of policies, regulations, and fiscal mechanisms to reduce, reuse, and recycle plastic products; (b) stimulate the use of alternatives for identified top 10 plastic priority items; (c) explore introduction of private sector extended producer responsibility (EPR); (d) aim to increase separate collection of recyclable plastic to create an enabling environment for financially viable recycling industries; and (e) support the MOE in the implementation of the developed Plastic Action Plan and Roadmap. 41 It is estimated that around 25-35 percent of the waste stream consists of eligible materials for recycling, including plastics at 15-20 percent, and around 40-60 percent. Page 17 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) 26. This sub-component will generate regional benefits through reduced riverine plastic pollution due to upstream (single use) plastics reduction and enhanced recovery. This will be achieved through the plastics policies, guidelines or standards developed under the sub-component. 27. Sub-component 1B: Strengthening of waste information, cost calculations of solid waste services, and reporting systems (IDA US$1.42 million). This sub-component will finance technical assistance, consultancy services, goods and training to: (a) develop guidelines and strengthen the national waste information database (including data on segregated waste and recovered materials); (b) develop guidelines for waste service cost calculations, 42 waste fees setting, landfill gate fees and reporting, including costs for staged introduction of source-segregation collection, transport and material recovery; and (c) project management and associated operating costs, monitoring and evaluation (M&E), procurement, FM and disbursement, environmental and social (E&S) risk management, as well as capacity building, actions to address gender gaps, and training. The activities under this sub-component will help build the institutional capacity needed to calculate costs for different waste services and increase cost-recovery of waste collection and disposal services through appropriate waste fee setting. They will further help improve the performance of waste service providers and strengthen the enabling environment for private sector service delivery by enabling payment for waste services. These activities are aligned with the institutional strengthening and capacity building thematic area under GCRF Pillar 4. Component 2: Integrated Solid Waste and Plastic Management, Planning, Monitoring, and Capacity Building for Participating Provinces, Municipalities, and Districts (US$8.42 million, of which PROBLUE TF US$0.9 million, IDA US$5.52 million and RGC US$2.0 million)- implemented by the MOI. 28. Component 2 will finance activities in eligible provinces, municipalities and districts including Siem Reap, Kampong Speu, Kandal, Battambang and Sihanoukville.43 The eligibility criteria for component 2 include: (a) confirmation that the municipality/district will take responsibility for SWM in line with Sub-Decree No. 113; (b) agreement to reform waste operations, including revision of contracts with service providers to include key performance indicators (KPIs) and expanded waste collection areas, 44 operational plans, reporting requirements, and monitoring of operations; (c) agreement to take responsibility for waste fee collection and (arrange to) pay service providers for waste collection and disposal according to contracts; and (d) development of operating cost recovery plans for solid waste services. Adherence to the eligibility criteria by participating provinces and municipalities will be reconfirmed during the first sixteen months of project implementation as evidenced by the adoption of the KPIs and accompanying payments for waste services in the waste service contracts. Transaction advisory services will support MOI, the participating provinces and municipalities/districts to define the KPIs plus accompanying payments and support their incorporation into the waste collection contracts (see Annex 2 for detailed criteria and arrangements). The improvement of waste collection contracts is needed to improve the performance of waste collection services and expand the waste collection service areas in the participating municipalities in order to achieve PDO results indicator 42 For example, guidelines for cost calculation of solid waste services (collection, treatment/recycling, landfilling, and street cleaning) and fee setting to establish transparent calculation methods of waste fees, as well as guidelines on establishing a cost recovery plan for solid waste services to determine which services must be covered by waste fees; with potential for other local government revenues and urban/environment planning. 43 These provinces and municipalities are eligible, in principle, for receiving support under component 2 (and have expressed interest in participating in the project through a Letter of Intent from the provincial government to MOI submitted in 2019). 44 Improved collection with an increased area where households have regular access to waste collection will contribute to reduced flooding risks in targeted urban areas. Page 18 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) 1. The improvements in solid waste and plastic management, planning, and monitoring through activities in this component will contribute to reduced regional plastic pollution by increasing plastics collection, recovery and reduced plastic leakage into the environment in the participating provinces and municipalities. 29. Sub-component 2A: Strengthening the capacity of participating provinces, municipalities and districts in managing and monitoring waste services and improving solid waste and cleanliness conditions (PROBLUE TF US$0.9 million). This sub-component will finance technical assistance, consultancy services and training to support the MOI and municipalities to: (a) better manage and monitor waste collection, treatment and disposal services by waste companies, and staged introduction of segregated waste streams, with the aim of improving cleanliness and reducing plastic leakage into the environment and waterways, and (b) enhance economic opportunities and provide support for disadvantaged and vulnerable groups, specifically (female) waste pickers and children. These activities are aligned with GCRF Pillar 4: Institutional strengthening and capacity building. 30. Specific activities include: (a) SWM support and institutional strengthening through, among others (i) technical, financial, and other support to better plan, manage, monitor, and inspect (segregated) waste collection, cleanliness services, and landfill management contracts; (ii) citizen engagement surveys; and (iii) support for the establishment of grievance management systems; (b) support for enhancement of economic opportunities for poor and vulnerable groups, specifically (female) waste pickers and children, through (i) providing continued access to waste resources by integrating informal and/or vulnerable waste pickers in waste recovery activities and skills training, specifically for female waste pickers, and (ii) providing additional support measures to support children staying in school and with additional skills training for children above 14 years in non-hazardous contexts, when work does not interfere with schooling.45 31. Sub-component 2B: Providing transaction advisory services and developing geospatial waste information systems to enable improved waste collection and disposal services (IDA US$5.52 million). This sub- component will finance technical assistance, consultancy services, goods and training. 32. The sub-component will include the following activities: (a) transaction advisory services for the MOI and participating municipalities and districts to: (i) determine costs of waste collection and treatment/disposal services; (ii) develop a waste fee model; (iii) develop contract performance indicators; (iv) determine phasing and payment for waste collection, treatment, and disposal operations; (v) support inclusion of performance indicators and payments in waste contracts and estimation of financial pollution liabilities at existing dumpsites; including arrangements with the aim of introducing waste segregation and recycling/recovery; (b) establishment of a municipal geospatial waste information system for fee collection and waste/urban/environment planning. 46 Municipalities/districts will need (to arrange) to pay the (private) waste collection and disposal companies for their services in order to be able to include KPIs in the contracts and establish a gate fee at the landfills. The municipal geospatial waste information and payment system will 45 Additional support measures such as: (a) skills training for waste sorting and improving occupational, health and safety (OHS) conditions, that is, hygiene, health, use of personal protection equipment, identifying of dangerous medical or electronic waste and safety, and first aid training; (b) plastic recover y and recycling markets; (c) skills training for composting and compost use; and (d) other skills training focused on vulnerable sections of society, such as women and child waste pickers above 14 years. Work related support measures apply only to adult waste pickers and children above 14 years in non-hazardous contexts, when work does not interfere with schooling. 46 It will create an opportunity for broader urban planning and revenue-generating activities that require integrated location- based information as part of the spatial data infrastructure. Page 19 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) provide the basis for integrated planning, implementation, fee collection, staged introduction of waste segregation and recycling/recovery, and monitoring of SWM services and activities 47 and (c) project management and associated operating costs, M&E, procurement, FM and disbursement, E&S management, as well as capacity building, actions to address gender gaps and training. These activities are aligned with the institutional strengthening and capacity building thematic area under GCRF Pillar 4. Component 3: Solid Waste and Plastic Management Infrastructure (US$54.56 million, of which IDA US$53.06 million and RGC US$1.5 million) – implemented by the MPWT 33. The component supports reducing waste (including plastic) leakage to the environment, improving resource efficiency and reducing environmental pollution in participating provinces and municipalities. It focuses on: (a) increasing landfill disposal capacities; (b) reducing E&S impacts of waste disposal and disposal sites; (c) reducing the volume of GHG emissions from the solid waste sector due to staged introduction of segregated collection, material recovery and recycling, as well as disposal with landfill gas collection and abatement; and (d) increasing the quantity of waste and plastic recovered, recycled, and composted. These activities are aligned with the green and sustainable growth thematic area under GCRF Pillar 4. 34. Provinces that are envisaged to receive investment financing under component 3 are: (a) Siem Reap, (b) Kampong Speu, and (c) Kandal. Battambang and Sihanoukville have existing constructed sanitary landfills, but the project could support other infrastructure including transfer stations and materials recovery facilities (MRFs) in these two provinces. Eligibility of all provinces for support under this component will be reviewed and reconfirmed in the first sixteen months of project implementation. 35. Every province receiving financing under component 3 will be supported with related technical assistance and capacity building under component 2 to increase the quality of solid waste services and to enhance the sustainability of investments. Eligibility criteria for provinces to receive financing under component 3 are: (a) size of the municipality (100,000 of more residents) or the volume of municipal waste generation is at least equivalent to the volume that would be generated by 100,000 residents. This is necessary to ensure the cost- effectiveness of investments; (b) cost recovery plans developed to recover, at minimum, the operating costs of newly constructed landfills; (c) revision of contracts to include performance indicators for landfills and waste treatment management and operations; and (d) land availability for landfills, other waste treatment infrastructure and closure of related dumpsites, in line with Environmental and Social Framework (ESF) requirements. 36. The project has adopted a framework approach for this component to accommodate site selection for waste infrastructure development during the first sixteen months of project implementation. An Environmental and Social Management Framework (ESMF) and a Stakeholder Engagement Plan (SEP) have been prepared, together with other applicable ESF documents. For the site assessed as suitable in Siem Reap, a preliminary Environmental and Social Impact Assessment (P-ESIA)/Environmental and Social Management Plan (ESMP) has been prepared. This includes consultations with stakeholders, preliminary assessment of E&S impacts of the facility and related waste management activities; social, economic, gender and cultural surveys for waste pickers at the current dumpsite; and alternative suitable site options. For Kandal and Kampong Speu, sites were also assessed as suitable for waste infrastructure development. The selection and 47 Compatibility with the system currently being implemented in Phnom Penh will be ensured. The system will also be suitable for use in other (local) revenue collection and spatial planning, including environmental risk planning and flood risk planning, as it will be based on a spatial database of all housing and commercial properties in the municipality. Page 20 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) administrative formalization of project sites will be completed during the first sixteen months of project implementation. This will be done with the support of the transaction advisory services financed under component 2, the detailed design engineer, 48 the needs assessment and subsequent support for disadvantaged and vulnerable groups, and the environment and social consultants. Procurement of these key consultancies will commence after signing of the Financing Agreement. For these activities, reimbursement of expenses before effectiveness has been included in the FM and disbursement section in Annex 1. Formalization of the site selection and land acquisition will be based on the final land demarcation as confirmed in the detailed design in accordance with the RGC’s standard operating procedures for land acquisition and involuntary resettlement.49 The formalization of site selection and land acquisition will also include either closure of current dumpsites or rehabilitation with landfill expansion. Financial liabilities due to pollution at current dumpsites will be factored into the formalization of site selection and land transfer and acquisition as informed by the transaction advisory services. 37. This component will finance investments in solid waste infrastructure and equipment for transfer, sorting and recovery, treatment, and disposal of waste.50 Investments in landfills will include closure (including remediation) or rehabilitation and extension of existing dumpsites to minimize their current E&S impacts. Landfills supported under the project will are aimed to have sufficient capacity for about a 10-year life span and potential site expansion for a 20-year life span. Investments will include leachate and landfill gas capture and abatement systems, as well as other landfill infrastructure as appropriate to the site, including possibly access roads. Investments in transfer stations will increase collection efficiencies and increase landfill coverage areas to enable regional landfills serving municipalities and neighboring districts. This regional landfill concept will ensure collaboration with more (rural) districts, thereby expanding waste coverage areas and the cost-effectiveness of landfills. Other districts disposing waste in regional landfills will be able to continue doing so by paying gate fees. 38. Investments aimed at waste reduction and recovery will include MRFs, composting facilities and, possibly, refuse-derived fuel (RDF) production. These facilities will enable: (a) separation of recyclable material from mixed waste;51 (b) recovery and reuse of recyclable materials; (c) continuation of waste-based livelihoods; (d) a reduction in the volume of waste disposed in landfills; (e) production of compost and, possibly, biogas; and (f) reduction in GHG emissions. These facilities will be installed at transfer stations and/or landfill sites. 39. This component will generate regional benefits on reduced plastic pollution due to improved collection, recovery and disposal of plastic waste. Currently, uncollected waste is leaking into the environment and rivers or being openly burned, with downstream regional impacts. Collected waste, including plastics, is 48 The development of national landfill guidelines will inform, and be informed, by the detailed design and site specific ESIAs. 49 Royal Government of Cambodia, Land Acquisition and Involuntary Resettlement, Standard Operating Procedures for Externally Financed Projects in Cambodia, 2018. 50 Including limited amount of collection equipment, including for priority source segregated waste streams. 51 Segregation at source ensures recyclables have the least degree of contamination, but a concerted program of public education and buy-in is required for source segregation and materials recovery to be effective. Primary (private sector) collectors often sort out recyclable materials during collection. It follows that if recyclable materials cannot be recovered at source, it is better to sort waste for recovery/recycling at a transfer station. Transfer stations can be located closer to sources of waste production rather than near landfills. This has the dual advantage of being closer to potential off-takers for recyclable materials and of reducing onward transport requirements to final disposal sites for non-recoverable waste. At the same time, significant materials recovery operations commonly take place at current dumpsites, often by unregulated waste pickers under dangerous conditions. Therefore, establishment of materials recovery/recycling facilities at landfills will also serve to increase materials recovery and provide safe working conditions for waste pickers. Page 21 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) deposited at uncontrolled dumpsites with risks of leakage into the environment and waterways and burning. Around 20 percent of the waste stream is plastics, of which five percent is currently recovered. Investments in MRFs and sanitary landfills are key project activities contributing to reduced plastic pollution (and greenhouse gas emissions) by increasing collection, sorting, treatment, recovery and recycling, and sanitary disposal ensuring no subsequent plastic leakage into the environment and waterways or burning of plastics. 40. This component will finance technical assistance, consultancy services, goods, civils works and training . The component will include the following activities: (a) detailed design preparation, site-specific ESIAs with ESMPs and other ESF documents, bidding documents for works, goods, and consultancy assignments; (b) civil works and goods; and (c) and construction supervision. This component will also finance project management and associated operating costs, M&E, procurement, FM and disbursement, E&S risk management, as well as capacity building, actions to address gender gaps, and training. Component 4. Contingent Emergency Response (US$0) 41. This zero-dollar component will provide immediate response to an Eligible Crisis or Emergency, as needed. A contingent emergency response component (CERC) Annex is included in the draft Project Operations Manual (POM), which specifies implementation arrangements, including its activation process, roles and responsibilities of implementing agencies (IAs), the positive list of activities that may be financed, E&S aspects, and fiduciary arrangements. 42. Estimated financing sources. The project’s financing sources per component are shown in Table 1. Table 1: Estimated financing breakdown for TF and IDA financing sources Total ProBlue Nat. IDA IDA RW IDA TF Total 60 38 22 3 Component 1: Institutional Strengthening for Solid Waste and Plastic Management 1.42 0.42 1 2.10 Component 2 - Integrated Solid Waste and Plastic Management, Planning, Monitoring, and Capacity Building for Participating Provinces, Municipalities, and Districts 5.52 3.52 2 0.90 Component 3 - Solid Waste and Plastic Management Infrastructure 53.06 34.06 19 0 Component 4 – Contingent Emergency Response 0 0 C. Project Beneficiaries 43. Direct and indirect beneficiaries of the project are the inhabitants of Cambodia, estimated to be 16 million people according to the last census. 52 Benefits will be realized from improved policies, regulations, monitoring and enforcement, legislation, strengthened institutions, and increased capacities of SWM departments at the national level supported under components 1 and 2 of this project. Direct beneficiaries from improved waste management services and increased environmental sustainability include the residents 52 https://www.nis.gov.kh/index.php/en/15-gpc/79-press-release-of-the-2019-cambodia-general-population-census. Page 22 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) of participating municipalities as well as surrounding districts under components 2 and 3. The estimated number of project beneficiaries will be updated throughout project implementation as eligible provinces and their participating municipalities as well as surrounding districts are reconfirmed in the sixteen months of project Implementation. Furthermore, significant regional and global beneficiaries are expected from improved environmental conditions resulting from decreases in (plastic) waste polluting waterways and entering oceans as well as air pollution and GHG releases to the atmosphere. 44. Approximately 530,000 residents of Siem Reap municipality and its surrounding districts (Puok and Dam Daek) and communes (Sasar Sdam and Chan Sar) are estimated to directly benefit from waste infrastructure investments in the collection, treatment, transport, and disposal of waste under component 3 and increased capacities at the provincial level under component 2. For the other Provinces, the estimated beneficiaries are as follows: (a) Kampong Speu, specifically: Chbar Mon and Samraong Tong (105,000), (b) Kandal: specifically: Ta Khmau (140,000), (c) Battambang: specifically: Bavel and Thma Koul districts (370,000) and (d) Sihanoukville, specifically tourism hotspots and islands (200,000). 45. Poor people, living in Siem Reap, Kampong Speu and Kandal provinces, are likely to experience significant positive impacts of collected waste, decreased waste burning, and reduced pollution. Housing areas near existing dumpsites typically comprise higher than average poverty rates and will be key beneficiaries of improvements to waste disposal sites. Job opportunities along the SWM chain, and particularly at landfill sites, will arise for nearby residents. Improved solid waste collection and cleanliness are also anticipated to benefit the tourism industry, which accounts for a major share of jobs in Siem Reap. 46. Women and vulnerable groups are currently involved in informal and formal waste collection, sorting, and recycling activities at open dumpsites. Socioeconomic surveys and gender (gap) assessments undertaken for waste pickers in Siem Reap showed that the majority were female (64 percent), 12 percent were under the age of 14, and 10 percent were between the ages of 14 and 18. Waste pickers currently work at the dumpsite under hazardous and unsanitary conditions without adequate protection and safety. There is specific focus on waste pickers who are female to ensure that they benefit from skills development and training opportunities as well as children to support staying in school. D. Results Chain 47. The project results chain is presented in Figure 1. The theory of change built around the PDO underpins an integrated approach to addressing solid waste and plastic leakage into the environment through policies, regulations, and capacity building at the national and local government levels and improvement of solid waste and plastic management and investments in participating provinces and municipalities. It includes improvements to the whole system of waste and plastic management in terms of financial and environmental sustainability in key urban regions in Cambodia, integration of urban and rural SWM systems, and a balance between investments in infrastructure and technical assistance/capacity building. Page 23 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Figure 1. Results Chain (Theory of Change) Page 24 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) E. Rationale for Bank Involvement and Role of Partners 48. The project builds on the extensive analytical work undertaken for solid waste and plastic in Cambodia and experience with supporting preparation and implementation of similar solid waste and plastic projects in the region and projects in Cambodia. These include the following: (a) The completed Cambodia: Sustainable Solid Waste and Plastic Management Programmatic Advisory Services and Analytics (P169925), part of the analytical and advisory services on Enhancing Environmental Sustainability and Resilience in Cambodia (P168687). This study (i) analyzed the solid waste sector in Cambodia and sector challenges and bottlenecks, (ii) provided recommendations to improve the financial and environmental sustainability of the solid waste sector as well as recommendations on strengthening national and local government capacities in line with Sub- Decree No. 113, (iii) analyzed the priority plastic products responsible for plastic pollution in the country, and (iv) developed a Plastic Action Plan and Roadmap to reduce plastic pollution and improve reuse and recycling. (b) Past and recent World Bank investment lending experience in Cambodia and analytical work including: (i) the Water Supply and Sanitation Improvement project for improving service delivery of municipal service providers (P163876); (ii) the Cambodia: Road Connectivity Improvement (P169930) project for experience with implementation of the ESF in Cambodia; and (iii) the PROBLUE project preparation TF aimed at further improving knowledge about the solid waste sector, institutional and regulatory policies related to solid waste and plastic management and capacity building and investments needed to improve solid waste and plastic management. (c) The international and regional experience on SWM and plastic reduction with comprehensive national SWM programs ranging from investments in waste treatment and disposal facilities to institutional capacity building, operational management, waste and plastic reduction/recovery and service delivery. The World Bank is actively working on this agenda in countries such as Indonesia, China, Vietnam and the Philippines. Specifically: (i) the Indonesia Improvement of Solid Waste Management to Support Regional and Metropolitan Cities (P157245) project (2019) which supports a combination of institutional and policy development at the national level and planning and capacity support for local governments and solid waste infrastructure in selected cities. (ii) the China Plastic Waste Reduction (P174267) Project (2021) which supports policy strengthening and resource efficiency and pollution reduction in selected urban centers; (iii) the China Ningbo Municipal Solid Waste Minimization and Recycling (P123323) Project (2013) which supported waste segregation and minimization and public-private partnerships in the waste sector; and (iv) the China Plastic Waste Reduction (P176989) Project (Shaanxi) (2022) which seeks to reduce plastic pollution from MSW. 49. The World Bank has been working with other development partners and international organizations to provide technical assistance and capacity building on solid waste infrastructure financing. In Cambodia, the draft Plastics Action Plan and Roadmap has been used as input by the United Nations Development Programme (UNDP) to support the UNDP’s project on ‘Combatting Marine Plastic Litter in Cambodia’ aimed at prevention and reduction of plastic waste pollution on land and in the ocean by promoting a 4R (Refuse, Reduce, Reuse, and Recycle) framework and to support the MOE in the development of a plastics sub-decree. Furthermore, the World Bank has been coordinating with the Asian Development Bank (ADB) on solid waste Page 25 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) infrastructure investments in various municipalities in Cambodia to ensure coordinated investments across Cambodia’s provinces and municipalities. F. Lessons Learned and Reflected in the Project Design 50. Local governments should be responsible for SWM. Although Sub-Decree No. 113 specifies that SWM is the responsibility of the local government, there has been no transfer of resources, institutional capacity building, investments in human resources, or adequate oversight and monitoring to go along with this decentralization. Empowering local governments through (a) regulatory and policy measures, (b) capacity building, and (c) improvement of monitoring, waste fee collection and enforcement to manage and pay (private) solid waste sector companies is key to the success of improved SWM, waste infrastructure, and service delivery. Therefore, component 2 in the project has been designed to provide a comprehensive package of technical assistance for all participating municipalities to strengthen their capacity for solid waste management. 51. Financial sustainability, particularly operating cost recovery, is essential for SWM. SWM systems differ from other public services (such as water supply, and wastewater collection and treatment) as operating costs are higher than capital costs and investments. The lack of financial sustainability is one of the root causes of insufficient and infrequent waste collection services and the resulting littering and lack of cleanliness in municipalities in Cambodia. It is vital to ensure adequate funding for waste management system operations, preferably from revenues from fees for waste services collected from waste generators, (households and commercial entities). The incorporation of KPIs in contracts with (private) waste management companies, including requirements for regular financial reporting, is crucial for obtaining an insight into the costs and effectiveness of waste operations. To improve financial sustainability, the project will: (a) support the transfer of responsibility for waste fee collection from (private sector) waste management companies to local governments that are better able to enforce waste fee collection; and (b) establish (waste) fee payment systems to improve cost recovery. 52. Waste reduction and (plastic) recovery/recycling are high priorities, but these alone will not solve existing waste collection and disposal problems and the lack of (operating) cost recovery. Too often, waste and plastic recycling is pursued on the basis of unrealistic expectations of its potential to both reduce the volume of waste going into disposal facilities and to generate income. International experience shows that such expectations tend not to materialize. If there is money to be made in waste recycling (for example, higher- value recyclables), there is a good chance that informal operators are already active in these niches and large- scale recycling based on waste segregation at source tends to be at best, cost-neutral due to the expenses of complex logistics and management efforts. Also, volume reduction is limited unless significant efforts are made, which are typically expensive to implement. In developed countries, high recycling rates are possible because there are high fees in place at landfills for waste disposal. This project is designed not only to support waste and plastics policies and regulations to prevent, reuse, and recover waste and plastic but also to focus on the importance of robust basic solid waste management systems, including adequate waste collection, transport, and disposal facilities and systems strengthening to improve the revenue streams (collection of waste fees from waste generators) and environmental and financial sustainability. 53. Collaboration to properly structure the waste sector and investments among the national government, local governments, and communities is essential and will support better performance of the private waste service companies. Experience from other World Bank urban and solid waste projects highlights the importance of effective collaboration among the national government, local governments, and communities Page 26 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) for ensuring smooth program execution and accountability and for building capacity at both the national and local levels through regulations, policies, and systems. III. IMPLEMENTATION ARRANGEMENTS A. Institutional and Implementation Arrangements 54. The project will be implemented by existing sector institutions in alignment with sector institutional mandates and in accordance with the government’s Standard Operating Procedures on project management for all externally financed projects/programs in Cambodia.53 An inter-ministerial steering committee (SC) will be established to ensure inter-ministerial collaboration and coordination across all components and with local administrations. The SC will be chaired by the MOI and comprise high-level representation from the MOE, MPWT, and Ministry of Economy and Finance (MEF) and respective governors and mayors of the project provinces and municipalities. The MOI will be the executive agency (EA) of the project and provide overall coordination, and the consolidated audit. According to the Standard Operating Procedures on project management for all externally-financed projects in Cambodia, when more than one line ministry is involved in the implementation of a project, one line ministry is designated as the EA while the others are the implementing agencies (IAs). The MOI will establish the project management unit at MOI at the national level as the EA and to implement component 2, and with Technical Support Units (TSUs) in the participating provinces and municipalities under the PMU at MOI. The IAs will establish project implementation units (PIUs), the MOE will establish PIU-MOE and the MPWT will establish PIU-MPWT. The IAs will be responsible for the implementation of the respective components that they are leading as IAs and in line with their respective legal mandates. The TSUs will support the implementation, M&E, and sustainability of the full range of project activities at the provincial and municipal level, under the overall management of the MOI. The TSUs will also support PIU-MOE and PIU-MPWT. These are further elaborated in the POM. B. Results Monitoring and Evaluation Arrangements 55. PIU-MOE, PMU at MOI and PIU-MPWT under MOE, MOI and MPWT respectively are responsible for collecting and reporting data/indicators relevant to their respective components and will submit six- monthly progress reports to the MOI and the World Bank that would record implementation progress and highlight issues that need attention (including E&S compliance and mitigation actions). PDO-level indicators and the intermediate results indicators by components, including the definition, baseline, cumulative target value, reporting frequency, methodology for data collection, and responsibility for data collection are described in the Results Framework (RF, Section VII). The M&E reporting requirements will apply to both the IDA Financing and the PROBLUE Grant. A mid-term review of project performance will be carried out by the MOE, MOI, MPWT and the World Bank in accordance with the Legal Agreement. C. Sustainability 56. Project sustainability will be ensured because of strong commitment and ownership, the focus of the project on improving financial sustainability, the strong focus on E&S management and inclusion and participation of key stakeholders at national and local level. The main premise of the project is to improve environmental and financial sustainability of SWM through the combination of investments, capacity building and technical 53Royal Government of Cambodia, Standard Operating Procedures on Project Management for All Externally Financed Projects/Programs in Cambodia, 2019. Page 27 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) assistance at the national and sub-national level. There is strong government commitment and ownership for this approach. Improvement of SWM is a key government priority and there is strong buy-in from key sector ministries (MOI, MOE, MPWT, and provincial/municipal administrations). During project preparation, Ministries and provinces played a prominent role in designing the project by readily demonstrating their demand for capacity building and institutional strengthening, infrastructure investments, and participating in the preliminarily selection of municipalities. Furthermore, strengthened capacities and expanded responsibilities of provincial and municipal governments will help contribute to SWM sustainability and is, thus, a key focus of the project (specifically under component 2). 57. Improving financial sustainability with a focus on operating cost-recovery. Municipalities will be strengthened in line with Sub-Decree No. 113 and supported to take responsibility for waste fee collection as a municipal service and pay (private) waste collection companies. In turn, key performance benchmarks will be incorporated in the solid waste service contracts. The project emphasizes strengthening the ability of local and national governments to effectively increase revenues for waste management. Cost recovery plans will be mandatory for participating municipalities. Investments will focus on adequate lower-cost technologies in line with financial capacities, and respective waste fee models will be developed. 58. E&S sustainability. E&S management will be mainstreamed in the project documents and project implementation and will involve strong participatory mechanisms at the municipal and national ministry levels. Sub-projects financed under the project will include a detailed assessment of potential E&S impacts and preparation and implementation of acceptable E&S instruments for mitigation measures based on inclusive and participatory consultations, including disadvantaged and vulnerable groups. E&S training will be provided regularly as part of the program’s capacity-building activities to key stakeholders, including project staff of participating local governments and consultants. By supporting policies and mechanisms for improved waste management, the project seeks to enhance the environmental sustainability of the sector. Sustainability will be further assured through the substantial inclusion and participation of urban and rural communities, as well as local and provincial governments. IV. PROJECT APPRAISAL SUMMARY A. Technical and Economic Analysis Technical Analysis 59. The project will combine policy development, regulatory improvements, and monitoring at the national level with support for enhanced waste service delivery, management, and investments in participating provinces and municipalities. Specifically, it will finance improvements in waste collection, transport, recovery, treatment, and disposal as well as enhance operating cost recovery by improving waste fee collection. The project will also support: the enhancement of monitoring and enforcement in relation to (private) waste management service providers; information availability and reliability; improved OHS working conditions for waste pickers; provision of skills training; citizen engagement and public information. 60. Every participating municipality receiving investment financing will first be supported with capacity building. This is a key aspect of increasing the quality and coverage of solid waste services and ensuring the sustainability of investments.54 The project will increase the technical and organizational capacities of the 54 Not all municipalities receiving technical support and capacity building will receive SWM investments. Page 28 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) participating municipalities to: (a) enhance the performance of (private) solid waste collection services with improved and expanded waste collection and sorting; (b) improve the financial sustainability of SWM through local government regulations and establishment of a system for collection of (waste) fees and focus on operating cost-recovery plan; (c) improve waste planning, financial and environmental evaluation of waste services, procurement, monitoring, inspection, and control; and (d) increase public awareness and citizen engagement for waste management and waste/plastic products prevention, reduction, and recycling as well as cleanliness. 61. The incorporation of performance indicators in waste collection contracts with accompanying (arrangements for) payments is needed to improve the performance of waste collection services (regular and predictable waste collection and cleanliness) and expand waste collection service areas in the participating municipalities. Expansion of the waste collection service areas and hence the proportion of households that have regular household waste collection is the first PDO results indicator. In order to increase the cost-effectiveness of the waste infrastructure, it is necessary to increase the proportion of households that have regular household waste collection and pay waste fees. 62. For waste disposal, the project will include investments in (regional) landfills. Regardless of the effectiveness of waste reduction, segregation, recycling, composting, and advanced treatment in the coming decades, landfills will still be necessary for SWM systems to operate effectively in the foreseeable future. Hence, all municipalities and districts involved in component 3 will need a final waste disposal site. Landfill assets are foreseen to be owned by the national government, and this will be established in the first sixteen months of implementation through the transaction advisory services (see Annex 2). 63. The introduction of pragmatic and effective plastic policies is paramount to reducing plastic pollution and increasing plastic reduction, reuse, and recycling and a key element of the project. The focus will be on reduction of plastic waste consistent with a circular economy approach as well as reduction of plastic waste leakage into the environment including rivers, canals, and the ocean. Economic Analysis 64. A cost-benefit analysis was conducted to assess the economic viability of the project (see Annex 2 for details). Direct quantifiable benefits from the project include: (a) monetary value generated from waste segregation, recycled materials, and composting; (b) monetary value of carbon offsets from reduced GHG emissions; (c) efficiency gains on waste management logistics; (d) environment and related health benefits; and (e) potential increases in (economic) value of the remediated dumpsites and land/properties surrounding current uncontrolled dumpsites due to rehabilitation/closure of these sites.5556 Non-quantifiable benefits include: (a) creation of jobs, including for informal waste pickers, in the local waste economy; (b) reduction of plastic pollution thus avoiding natural capital loss due to plastic littering in the environment and waterways 55 Research into cleanup benefits finds that property values in the vicinity of remediated sites increases by an average of 5.0- 11.5 percent and 15 percent when based on a larger welfare interpretation. (The Value of Brownfield Remediation, Journal of the Association of Environmental and Resource Economists, 2017). 56 In the Zhuzhou Brownfield Remediation Project (P147381), the most important quantifiable benefit is the increase of land (and property) values after remediation and redevelopment. In comparison with the before-project price, the price of commercial land in Zhuzhou’s land market in 2021 increased by 6 percent compared to the 2016 level, industrial land by 43 percent, and residential land by 48 percent. (draft Implementation Completion and Results Report, 2022). In the Kosovo Energy Sector Clean-up and Land Reclamation Project (P096181), the surrounding villages experienced revitalization after the ash dump was remediated and environmental conditions improved. Page 29 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) and benefiting key sectors such as tourism and fishery; (c) reduction in blockages of sanitation pipes, drainage systems, and pumping stations; (d) health benefits due to reduced air pollution from dumpsite fires and open burning of waste; (e) avoided leachate pollution that contaminates ground- and surface waters as well as agricultural and drinking water supplies; and (f) geographic information system (GIS) enabled urban and environmental planning as well as collection of (waste) fees. 65. The project infrastructure for solid waste disposal and intermediate treatment is based on a series of least- cost considerations. Cost-effectiveness is a key priority in the project and low-cost solutions are prioritized. Under the planned investments, a comparison has been carried out with other typical solid waste treatment and disposal costs. The average costs per ton of waste are projected to be US$8 for Siem Reap and US$9 for Kandal and Kampong Speu.57 This is in line with, and on the lower side of, typical waste management costs for sanitary landfills in low-income countries, which typically range from US$10 to US$20 per ton of waste. 66. The project is estimated to generate an economic net present value of US$35 million. The economic internal rate of return of the investment is estimated at 12.6 percent.58 The results indicate that the project is economically viable. Without carbon offsite benefits, the results are US$13.9 million and 8.8 percent, respectively.59 67. Financial analysis. The published national solid waste service fee guideline60 provides a detailed breakdown of different types of waste generators and associated solid waste service rates for waste collection. The financial analysis determined the total average annual waste fee recovery for the three municipalities based on the total operation and maintenance costs for the waste collection, transport and disposal as well as the current applicable waste fees. The purpose of cost recovery analysis is to establish the amount of revenue needed, at a minimum, to match the operation and maintenance costs associated with waste management services, in order to ensure the long term viability of the services. Siem Reap and Ta Khmau municipality are estimated to be able to recover 126 percent and 108 percent respectively of the annual operation and maintenance costs for the new waste disposal services in the project based on the existing waste fees.61 Chbar Mon municipality is estimated to recover only 69 percent of its annual operation and maintenance costs for the new waste disposal services since the current amount of waste generated is relatively small. Chbar Mon municipality and Kampong Speu province have a lot of factories, which are expected to increase the generation of municipal solid waste in the future (in addition to industrial waste). Increased waste fee collection specifically from these industrial waste generators will be needed to ensure operating cost recovery.62 68. The provision of MSW services is a basic public sector function and significant investments and institutional development support are needed to improve waste collection, disposal and treatment capacity, tackle increasing waste generation, and improve the private sector enabling environment. Without improvements 57 Based on typical weighted average waste density of 1 ton per m3 of waste after compaction and decomposition. 58 Economic lifetime of 20 years and social discount rate at 6 percent as recommended in World Bank’s Technical Note on Discounting Costs and Benefits in Economic Analysis of World Bank Projects (2015) for investment projects with substantial public goods provision. 59 Applying a sensitivity analysis to the discount rate, the project economic rate of return and NPV are 15.8 percent and US$44.1 million with a 5 percent discount rate, and 9.8 percent and US$27.4 million with a 7 percent discount rate, respectively. 60 Prakas 195 on Maximum Fee of Garbage and Solid Waste Management Service in Urban Areas, 2018. 61 Meaning that 126 percent of the annual operating and maintenance costs of the new disposal waste systems in Siem Reap and 108 percent of the annual operating and maintenance costs in Ta Khmau can be recovered from the existing waste fees. 62 The transaction advisory services will develop a more detailed waste fee model to support the cost recovery plans, see Annex 2. Page 30 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) in waste collection coverage and waste/plastics recovery and disposal practices, the scale of current environmental impacts will increase markedly. The primary responsibility for setting the overall institutional, policy and legislative framework for municipal waste management lies with the central government. The primary responsibility for providing on-the-ground waste services and for ensuring the controlled management of solid waste, lies with local authorities (whether through local governments providing such services or through organizing such services through private waste companies). There is a funding gap for services and infrastructure and there is a technical and operational gap at all government levels. Financing is the single most critical requirement for sustained operations. National and local governments have an important role to play in securing revenues to pay for waste collection, treatment and disposal services. However, the private sector often lacks confidence in the regulatory and public finance frameworks, ability of government to sustain payments for waste services, and government’s management capacity. The aforementioned factors pose significant barriers to a broader and deeper involvement of the private sector in SWM. As a result, much-needed private capital inflows for investments in the sector are currently lacking in Cambodia. The value added of the World Bank lies in its international and regional experience in supporting investments in waste treatment and disposal facilities 63 combined with institutional capacity building, development of waste policies and regulations, and improvement of waste collection and disposal services. 69. Climate impacts. Carbon benefits can be expected due to reduced GHG emission particularly from measures in landfill improvements such as collection of an estimated 50 percent of generated landfill gas generated and separation and treatment of 15 percent of total organic waste.64 The estimated GHG emissions impact over the six-year project implementation period is a net reduction of 315,000 tons of CO2-equivalent. Over the economic lifetime of the project, the estimated GHG emission reductions of the project are 4 million tons of CO2-equivalent. 70. Over the economic lifetime of the project, the estimated GHG emission reductions are 4 million tons of CO2- equivalent. The potential for voluntary Emissions Reduction Purchase Agreements (ERPA) or monitoring, validation and reporting to meet Cambodia’s NDC exists. Estimated ERPA prices are in the order of US$10/ton of CO2-equivalent. The potential to formally measure, report and verify the GHG emission reductions will be further explored during project implementation. This will help to assess the extent to which the emission reductions can contribute to Cambodia’s NDC or be sold. The value of carbon offsets has been assessed in three scenarios, applying a zero, low, and high shadow carbon price as per World Bank 2017 Shadow Price of Carbon Guidance Note. The climate analysis is presented in more detail in Annex 2. 65 B. Fiduciary Financial Management 71. The FM assessment of the three project IAs (MOE, MOI and MPWT) was conducted during February 3-10, 2023, according to the World Bank Policy and World Bank Directive for Investment Project Financing (IPF). The assessment was carried out to determine whether the IAs have acceptable FM arrangements in place to ensure that the credit proceeds are used only for intended purposes. The World Bank assessment of the project FM arrangements has identified FM-related risks and concerned mitigating measures as elaborated in Annex 1. The FM risk assessment was conducted, and mitigation measures have been agreed by the 63 Including added value in supporting governments in landfill site suitability assessments. 64 Estimations based on international and regional experience and based on the Pre-Feasibility Assessment undertaken for Project preparation. 65 World Bank. 2017. ‘Shadow price of carbon in economic analysis’ , guidance note. Page 31 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) implementing agencies. The FM risk is rated Substantial after incorporating the FM mitigation measures. 72. The project FM arrangements will be embedded in the existing structures of the MOE, MOI, and MPWT aligned with their mandates according to the Government’s Financial Management Manual (FMM) and Standard Operating Procedures for externally-financed projects and programs in Cambodia. The PMU and PIUs are endowed with appropriate fiduciary platforms (staff, accounting system, budgeting, fund flow, reporting, and auditing). PMU and each PIU will open its Designated Accounts (DA) at the National Bank of Cambodia. The disbursement methods of funds from the World Bank are outlined in the Disbursement and Financial Information Letter (DFIL). Based on the FM assessment, it is concluded that the project’s FM and accountability arrangements meet the World Bank's minimum requirements under the World Bank Policy and the World Bank Directive for Investment Project Financing dated October 2018. Procurement 73. Applicable procurement rules and procedures. Procurement under the project will be carried out in accordance with the World Bank Procurement Regulations for IPF Borrowers, dated November 2020, and provisions stipulated in the Financing Agreement. The approaches to national markets (National Procurement and Request for Quotations) will be carried out in accordance with the Kingdom of Cambodia’s Updated Standard Operating Procedures and Procurement Manual for All Externally Financed Projects/Programs (Procurement Manual), promulgated through the Sub-Decree No. 181 ANK/BK, dated December 2, 2019, subject to the additional provisions included in the Procurement Plan. The World Bank planning and tracking tool, Systematic Tracking of Exchanges in Procurement (STEP), will be used to prepare, clear, and update Procurement Plans and conduct all procurement transactions for the project including contract management. 74. Procurement arrangement. The EA and each IA, with the support of individual procurement consultant(s), will carry out procurement activities financed under their respective components of the project. The Borrower, with the support of the World Bank team, has prepared a Project Procurement Strategy for Development (PPSD). The PPSD recommends the procurement approaches to be followed to support project implementation to achieve the PDO and deliver the best value for money. Based on the PPSD, the Borrower has developed a Procurement Plan for the first 18 months. 75. The World Bank team has conducted a project procurement risk assessment for the project and identified the key risks to project procurement. Based on this assessment, the World Bank team recommended specific measures and actions to address the identified risks. The details of the identified risks and proposed risk mitigation measures are presented in Annex 1. Based on the procurement risk assessment and after taking into consideration mitigation measures, the residual overall procurement risk for the project is assessed as Substantial. . C. Legal Operational Policies . Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No . Page 32 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) D. Environmental and Social 76. Overall, the project is expected to generate positive environmental outcomes in terms of improvement of people’s health and safety, reduction of solid waste and plastic wastes load into the environment and ecosystems, savings of energy and raw materials, and reduction in the quantity of waste disposed and associated costs. Although the project is expected to bring positive change, it has the risk of causing diverse and significant E&S impacts. 77. The environmental risks of the project are rated High. The project will address serious environmental management issues and concerns related to the presence of existing dumpsites, which could be substantial sources of contamination within the project areas. Currently, these dumpsites are characterized by lack of engineered cells, uncontrolled leachate discharge and GHG (primarily methane) emissions, and open burning of mixed wastes. The dumpsites could cause substantial contamination of soil and surface and groundwater and pose a serious risk to the environment and health of workers, waste pickers, and surrounding communities. 78. Though the project will reduce pollution and protect and improve the environment, it is possible that potential E&S impacts and risks may arise to varying degrees during project implementation. An assessment of E&S risks and management measures related to anticipated technical assistance activities and infrastructure investments (both during the construction and operation phases of the infrastructure investments) was carried out and is provided in the ESMF. For Siem Reap, a preliminary Environmental and Social Impact Assessment (P-ESIA) 66 has been conducted. The assessments include an analysis of the potential risks together with preliminary mitigation measures. The screening of the activities has been undertaken in line with the World Bank Environmental and Social Risk Classification from High, Substantial, Moderate, and Low risks, based on a range of relevant factors. 79. The project has adopted a framework approach. While sites have been assessed as suitable for the development of waste infrastructure in the three provinces, the selection and administrative formalization of project sites with accompanying land acquisition and land transfer is planned to be completed in the first sixteen months of project implementation. This will be done with support of transaction advisory services, a detailed design engineer, the needs assessment and subsequent support for disadvantaged and vulnerable groups, and environment and social consultants. As part of subsequent project implementation, the scope of work will also include the rehabilitation, with either closure or expansion, of current dumpsites of the participating municipalities. The ESMF and SEP have been prepared, together with other applicable ESF documents. The P-ESIA for the suitable site option in Siem Reap included consultations with stakeholders, preliminary assessment of E&S impacts of the facility and related waste management activities; social, economic, gender and cultural surveys for waste pickers at the current dumpsite; and analysis of alternative site options. 80. The ESMF includes the Resettlement Policy Framework (RPF), Labor Management Procedures (LMP), and Indigenous Peoples Planning Framework (IPPF). The Environmental and Social Commitment Plan (ESCP) has been prepared consistent with the ESF requirements. The ESCP reflects the actions and commitments for which the PMU and PIUs are responsible. 66The site-specific E&S assessment will be carried out after sites have been selected and the specific details and detailed engineering design are defined. This will be determined during the first sixteen months of project implementation and be accompanied with the preparation of the Detailed Resettlement Plan (DRP) and census and cut-off date as well as the needs assessment as subsequent support for disadvantaged and vulnerable groups. Page 33 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) 81. General mitigation measures to environmental risks are manifold and laid out in more detail in the ESMF and P-ESIA. Some particularly relevant ones include the installation of landfill gas collection and treatment system, the installation of landfill leachate collection and treatment system, application of daily soil cover, installation of drainage systems, close monitoring of ground- and surface waters and air pollution, installation of lining system, flood protection measures, development of materials recovery and composting facilities, and guidelines for landfill operations. More details and other mitigation measures can be found in the ESMF and P-ESIA for Siem Reap. Mitigation and monitoring measures will be detailed as part of the site-specific ESIAs/ESMPs once sites are selected and formalized. 82. Environmental risks during the construction phase generally relate to air quality, noise, odor, road safety, soil integrity and erosion, unexploded ordinances, topsoil losses, surface and ground water contamination, improper management of wastes, landscape disturbance/visual and aesthetic impacts, disturbance to biodiversity/flora and fauna, and impacts on tangible and intangible cultural heritage. Key risks during the operation phase relate to creation of landfill leachate, ecosystems/water/biodiversity, landfill gas, odor, hazardous waste, visual impacts and aesthetics, and impacts after landfill closure. Groundwater levels can also be high and, thus, potential water pollution from leachate is a particular project concern to be considered during site selection and facilities detailed design. More details can be found in the ESMF and P- ESIA for Siem Reap. 83. Social risks of the project are rated High and are related to the following potential adverse social impacts: (a) potential conflicts with communities that may disagree to extending existing waste dumps with new landfill construction (b) waste pickers who may consider the project activities a threat to their current source of livelihood; (c) impoverishment of vulnerable groups, in the event that measures to avoid impacts to waste based-livelihoods and additional measures are not adequately implemented; (d) exposure of child waste pickers to risks if additional support measures are not properly implemented; (e) detrimental labor, safety, and working conditions that are related to construction works if not appropriately managed; (f) potential increase of heavy traffic (especially garbage trucks) close to new or improved sanitary landfills and related facilities; (g) community exposure to health problems such as legacy pollution issues; (h) temporary labor influx of workers, which might increase the risk of gender-based violence (GBV); and (i) some potential for land grab upon selection of sites for new landfills. 84. Adverse impacts on livelihoods of existing waste pickers will be avoided as the project will allow for continued access to recyclable materials. The project will improve the occupation, health and safety circumstances of waste recovery. The project is likely to involve land acquisition and involuntary resettlement associated with the construction of relevant physical waste disposal and treatment facilities, which may affect some people. However, this will depend on the final sites selected and technological solutions chosen. 85. The P-ESIA for Siem Reap identified the presence of children, including children under the age of 14 years. Children between 14 and 18 years old are only allowed to engage in non-hazardous work and where it will not affect their education and where it is not harmful to their physical, mental or social development. Children under 14 at the landfill are not allowed to work in the project67. While children may be present accompanying their parents at the current open dumpsites, support measures are included in the ESMF to assist them and their parents. These measures include assisting poor waste pickers (those who are solely 67 The minimum age for work is per the project and the applicable LMP to the project. Page 34 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) dependent on waste picking for their livelihoods) to obtain ID-Poor cards 68 , provided that the eligibility criteria for the ID-Poor program are met, and measures to support children to stay in school are implemented. For children under 14 present at the landfill, support will be provided to them to access government social support programs and existing NGO programs. A baseline and needs assessment and accompanying census will be undertaken as part of the site-specific ESIA/ESMPs. There could also be other social risks related to child labor, forced labor, and GBV, for which special interventions may be required. The project could bring risks to community health and safety (both real and perceived) because of increased traffic volumes and inappropriate handling of hazardous wastes. 86. A first round of stakeholder and public consultations and engagement workshops were organized in Siem Reap (with national participation) between November 29 and December 1, 2021; in Kampong Speu on December 7, 2021; and in Kandal on December 9, 2021. A second round of stakeholder and public engagements and consultations on draft ESF documents (ESMF, P-ESIA, RPF, SEP, IPPF, and LMP) were held in Siem Reap (and nationally) on March 2 and 3, 2022, after draft ESF documents were publicly disclosed on the website of the MOI on February 21, 2022. Minutes of consultations were recorded and added to the ESMF. In general, both support and concerns were expressed for the project. Support for the project was based on having a good management system and reduced pollution from new landfills and eliminating pollution and odor from existing dumpsites that are generating substantial complaints. Concerns regarding the project were expressed by waste pickers requesting continued access to waste resources. In addition, there were concerns related to current pollution and its impacts on neighboring communities, odor, traffic safety issues, need for clean water, health impacts from current pollution, and underage waste pickers who should be spending more time in school. During the preparation of the site-specific ESIAs once landfill sites are selected, further series of stakeholder engagement and consultations will be held. Updated ESF documents (ESMF, P-ESIA, RPF and ESCP) were publicly disclosed on the website of the MOI on November 18, 2022, and further updated on March 28, 2023. ESF documents, except SEP and ESCP, were publicly disclosed by the WBG on January 4, 2023, and the SEP and ESCP on February 21, 2023. The updated ESCP was publicly disclosed by the WBG on March 30, 2023. 87. Capacity for ESF implementation in MPWT, the key implementing ministry for landfill and waste infrastructure, is currently limited and will be strengthened as part of the project together with improving capacities of the MOI who is responsible for social risk management including waste-based livelihoods and additional support measures. The General Department of Resettlement under the MEF has substantial experience in land acquisition and resettlement. 88. Gender. While men dominate formal SWM work in Cambodia, women are more concentrated in informal work or unregulated employment. Women work as waste collectors/pickers either by themselves or with other family members, including children. Women waste collectors are often concentrated in the least-paid jobs and not in the formal employment sector as waste management staff in either public or private waste companies. Their current working conditions, including health and safety, are not assured in this informal work.69 68 Access to this ID-Poor cards will enable them to access the government’s social programs. Referral services will be made also made available to them to access other existing social programs provided by the Government/NGOs operating in the respective province. 69 Gender Responsive Guidelines for Marine Plastic Management, April 2021. Page 35 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) 89. The work of sorting and collecting waste is informal and low skilled where, generally involving collection of waste dumped by a truck, followed by sun drying of the collected waste at the dumpsite. Subsequently, the waste-pickers typically transport collected waste to their homes and the dried waste is then segregated and transported to be sold at a junk shop nearby, bought by buyers directly at their homes, or transported to buyers further away. 90. The surveys undertaken for the waste pickers in Siem Reap70 as part of project preparation identified that about two-thirds (64.3 percent) of waste pickers were female, which indicates a higher share of women work in the informal waste picking business than men. From the surveyed waste pickers, 12 percent were children aged 14 years or below and 10 percent were children between 15 and 18 years. This information is consistent with reports on the role of gender in other Asian countries. Women typically represent a small minority of formal waste employees, but significantly dominate the share of waste sorters in informal sectors.71 As such, women’s participation is much higher in the informal SWM sector, where the work allows them to bring young children along and provides flexibility in the working hours. Women also tend to collect lower-value recyclables, leaving heavier, more valuable materials to their male counterparts.72 91. Consultations with female waste pickers and child waste pickers further revealed that many children are at the current open dumpsites due to the absence of after-school care facilities and their mothers working there rather than actively picking waste themselves. This further places women at a disadvantage when pursuing economic opportunities in the SWM or recovery sector or outside the waste sector. There are also suspected health damages from the current waste picking circumstances specifically due to fires at the dumpsite, the contaminated leachate and potential exposure to hazardous waste. 73 These disproportionally negatively affect women as they have a higher representation as informal waste pickers. There are specific measures targeting female waste pickers and children waste pickers under the project to improve economic opportunities, reduce health impacts and improve development benefits for women and children in the solid waste sector. These measures are included under component 2 of the project. 92. Waste pickers who will be registered as eligible waste pickers74 (and as such will have access to the new community MRF and composting facility), will benefit from skills training programs. A detailed needs assessment during the first year of implementation will review: (a) the skills profiles expected to be in demand in the formal waste sector as it develops and in other sectors and (b) women waste pickers’ skills gaps to qualify for those employment opportunities. Targeted trainings will be developed accordingly, helping women acquire new knowledge and skills within the waste recovery and management sector75, and other sectors. Skills acquisition on new technologies and equipment will also increase their opportunities for formal employment in the waste management sector. Other targeted trainings can for example benefit self- employed women, through the acquisition of skills and knowledge that could help women to obtain better prices for the sorted recyclables or by generating additional sources of income from compost production at 70 P-ESIA for Siem Reap, 2022 71 Project Appraisal Document on Improvement of Solid Waste Management to Support Regional and Metropolitan Cities in Indonesia, 2019; GA Circular and Oceans Conservancy 2019: The Role of Women in Waste Management. Gender Perspectives on Waste in India, Indonesia, the Philippines and Vietnam. June 2019. 72 Average prices and quantities sold for high-value recyclables such as PET are generally lower for women in early stages of the material value chain. See information from Indonesia and GA Circular and Oceans Conservancy 2019. 73 Waste pickers complained about the smell and headaches from the work. 74 Eligibility will be determined as part of the census and the site-specific Environmental and Social Impact Assessment once project sites have been selected. 75 Such as value of materials, marketable skills, and access to information. Page 36 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) the new composting facility. Lastly, skills and vocational training, relevant to other sectors (such as tourism), will be provided, based on the results of the needs assessment, and may include for example English language training, basic health and safety training, and basic business skills to allow women to transition into formal employment or self-employment in a different sector. 93. The project will take actions to improve the integration of women in the solid waste sector, improve safety, and reduce health vulnerabilities. Through the general applicable measures, female waste pickers, like the male waste pickers, will benefit from: (a) entry registration, (b) provision of personal protection equipment, (c) training on health and safety risks and measures and (d) provision of health checks. These will disproportionally benefit women who are overrepresented in the informal waste-picking business. At the stakeholder consultations and engagement workshops, female waste pickers frequently reported dirty and odorous conditions, as well as health problems, such as headaches.76 Specific measures to consider the safety and security of women will also be included in the design and management arrangements for the MRF and composting facilities including dedicated and gender-specific showers, washing basins, clean toilets, and changing rooms. 94. Based on the needs assessment in year 1, specific measures will be developed to support children’s school attendance and after-school classes, including activities for children to learn skills, arts, or sports. The provision of care activities for young children, and after-school activities for older children of registered waste pickers will disproportionally benefit women, who to a large extent shoulder the burden of unpaid care work77. On one hand, this will allow them to attend the skills trainings provided by the project, and on the other hand it will allow them to pursue better economic opportunities, including formal employment and spend more time on income-generating activities. 95. The preliminary gender assessment shows that 64.3 percent of current informal waste pickers are women. The project will grant all informal (female) waste pickers access to the community recovery and composting facilities to integrate the (female) waste pickers in the solid waste sector. The project will also provide support measures in terms of registration, core skills training, safety practices, and other related training aimed to increase economic opportunities. The project interventions are also expected to improve the overall employability of female waste pickers in the formal waste sector and beyond. The project expects 10 percent of female waste pickers to transition from informal to formal sector employment (including outside the waste sector).78 The needs assessment performed and the registration process, will help to provide a baseline that will be monitored and updated annually. 96. Citizen engagement. The project is designed to maximize the participation of stakeholders, citizens, and beneficiaries at all levels to ensure better governance and accountability and to improve the quality of implementation. The current community engagement approach is only undertaken by private solid waste 76 The stakeholder consultations with female waste pickers in Kandal, Kampong Speu and Siem Reap revealed that smell and headaches are common among female waste pickers. 77 According to International Labor Organization (2018), in Asia and the Pacific region women do four times more unpaid care work than men. This figure is even higher in Cambodia where men perform only 18 minutes of caring and household services per day, compared to 188 minutes for women. https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/--- publ/documents/publication/wcms_633135.pdf 78 Information from the Implementation Completion and Results Report for the World Bank -financed SWM project in Azerbaijan documented that providing skill training and ensuring safe practices can substantially improve health and safety of working conditions, improve economic opportunities, and support formalization of employment either at the landfill or in the sorting facility. Page 37 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) companies and selectively by local governments. As such, strengthening local government capacity, as part of component 2, includes attention to enhancing processes for public consultations and discussions, information disclosure, civil society participation, and waste collection companies by engaging beneficiaries benefiting from the waste collection services to: (a) understand the minimum performance indicators for waste collection services; (b) monitor and provide feedback on the performance of waste collection and cleanliness services; and (c) establish of a grievance mechanism whereby the public can submit their waste collection grievances. Specifically, beneficiaries’ feedback on the performance of waste collection and cleanliness services will be sought as part of annual surveys and results will be reviewed by the participating municipalities that have a contract with the service providers and with support of MOI and MOE. The GRM will be established by effectiveness and is further detailed in the SEP. The project has two citizen engagement indicators: (i) Grievances responded to within stipulated service standards for response (percentage); and (ii) Beneficiaries’ satisfaction with improved waste collection and cleanliness in participating municipalities (percentage). V. GRIEVANCE REDRESS SERVICES 97. Communities and individuals who believe that they are adversely affected by a World Bank-supported project may submit complaints to project-level grievance redressal mechanisms or the World Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. project-affected communities and individuals may submit their complaints to the World Bank’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of World Bank non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and World Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate GRS, please visit http://www.worldbank.org/en/projects-operations/products-and- services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. VI. KEY RISKS 98. The overall risk for this project is assessed as Substantial. This is largely because of the high E&S risk and substantial risk ratings related to political and governance, stakeholders, sector strategies and policies, institutional capacity, and fiduciary risks that may potentially affect the achievement of the PDO. The project emphasizes the strengthening of institutions and consultative processes and resources to identify the risks and implement mitigation measures. 99. Political and Governance - Substantial. There is a substantial risk that political and governance factors could negatively affect the PDO. There is significant political support for the project across the key national ministries that are part of project preparation and will be part of implementation, with clearly articulated development priorities concerning the solid waste sector. Similar to other large World Bank-financed infrastructure projects, governance risks could be present with insufficient political commitment to resolve governance issues when detected, including selection of sites for waste investments. Key mitigation measures consist of implementation arrangements that include the three key ministries responsible for the various elements in SWM and substantial capacity building and technical assistance, which is part of the project, and for which grant financing has been mobilized. The number of large infrastructure contracts under the project is limited, which facilitates supervision. Page 38 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) 100. Stakeholders - Substantial. Opposition from stakeholders could have a negative impact on the achievement of the PDO. Participation of local governments in the project is voluntary and based on commitments to improve the solid and plastic waste management sector in line with Sub-Decree No. 113. However, the main stakeholders that could oppose this operation are representatives of the informal sector involved in waste recovery and neighboring communities that are opposed to landfills in their vicinity. Businesses and livelihoods of waste pickers will be altered but will be improved with better OHS conditions; this risk is further mitigated by participatory consultations and strong E&S management implementation. Most importantly, the project will place a strong emphasis on integrating informal workers into the solid waste sector and avoiding disruption of access to waste resources. The risk of opposition of neighboring communities to landfill sites is mitigated through an elaborate and transparent site selection process where multiple potential sites are analyzed and extensive stakeholder engagement and consultations explaining environmental protection measures are carried out. In the case of rehabilitation and extension of existing dumpsites, the investment brings substantial environmental benefits, including environmental awareness, and clean-up of current pollution. Furthermore, there may also be some local landowner opposition in the siting of some landfills or waste sorting facilities, but these risks will be reduced if there is public confidence that the design and operation of the landfills are based on international practices and standards and supported by monitoring/enforcement of the national government and strengthened local governments. Current (private) waste collection companies may oppose the revision of contracts for the waste services. These risks will be reduced through the provision of transaction advisory services as part of the project, the payment for waste services by local governments. 101. Sector Strategies and Policies - Substantial. Policies and strategies are not adequately implemented to ensure a well-functioning solid waste sector in Cambodia. To address this risk, trust fund grant resources have been mobilized to support the development and implementation of strategies and policies. Component 1 of the project will support financing the development and implementation of key policies, technical guidelines, and legislative and regulatory support for solid waste and plastics within the MOE and MPWT. Component 2 will do the same in the participating provinces and municipalities. There is strong support from the Government for project activities addressing current institutional policies and capacity gaps in the sector. As waste generation, wealth, and citizens’ expectations for a clean environment continue to increase, it is likely that sector strategies and policies will continue to increase in priority and quality. 102. Institutional Capacity for Implementation and Sustainability - Substantial. Weak institutional capacity for implementing and sustaining solid waste policies and operations may adversely affect the achievement of the PDO. SWM operations are intensive and demanding and require substantial day-to-day financing to sustain service quality levels and prevent breakdowns. The project has been designed with these considerations in mind. All implementing ministries have experience with implementation of World Bank projects and both the MOE and MPWT have relevant solid waste experience. The project includes significant institutional and capacity building and technical assistance activities under components 1, 2, and 3, for which the PROBLUE TF grant has been mobilized. A further risk mitigation mechanism has been the thorough screening and selection process (a key criteria being the willingness to reform the solid waste sector as stipulated under Sub-Decree No. 113). 103. Fiduciary - Substantial. The project’s structures implemented across multiple line ministries requires strong oversight and coordination and poses substantial risk to achievement of the PDO. The project is expected to involve cross-sectoral and partially centralized/decentralized implementation by multiple agencies with varied procurement capacities and different levels of understanding of the World Bank’s Page 39 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) procurement procedures. The implementation arrangements for this project include carefully considered analysis of mandates, core responsibilities, strengths, limitations, and capacity needs of key government stakeholders in the solid waste sector in Cambodia, most notably the MOE, MOI and MPWT. Based on the procurement assessment, the World Bank team recommended specific measures and actions to address the identified risks. The World Bank’s oversight of procurement will be done through increased implementation support as requested by the Borrower. The details of the identified risks and proposed risk mitigation measures are presented in Annex 1. The project FM arrangements will also be embedded into existing structures of the MOE, MOI, and MPWT aligned with their mandates according to the Government’s FMM and Standard Operating Procedures for externally-financed projects and programs in Cambodia. The World Bank assessment of project FM arrangements has identified FM-related risks and mitigating measures as elaborated in Annex 1. Providing the needed capacity support and putting in place internal control mechanisms can mitigate the risks. 104. E&S - High. Although the project is expected to bring positive environmental and social outcomes change, it has the potential to cause diverse and significant E&S impacts. The environmental risks of the project are rated High because of potential adverse environmental impacts, as follows: (a) surface and groundwater pollution from uncollected and untreated waste leachate; (b) air pollution from uncollected landfill gas; (c) risk of affecting ecosystems/biodiversity and cultural heritage in case of improper landfill siting and (d) failure to ensure OHS. The social risks of the project are rated High because of potential adverse social impacts, as follows: (a) conflicts with communities close to existing dumpsites or new landfills; (b) risk to vulnerable and disadvantaged groups (specifically waste pickers); (c) labor, safety, and working condition risks; (d) potential increase of heavy traffic (especially garbage trucks); (e) temporary labor influx of workers, which might increase the risk of GBV; and (f) some potential for land grab if plans to build new landfills are selected. While an IPPF has been prepared, the risk of indigenous peoples being present at potential suitable landfill sites is low. 105. Key E&S mitigation measures consist of: (i) an elaborate and transparent site selection process where multiple potential sites are analyzed and extensive stakeholder engagement and consultations; (ii) integrating informal workers into the solid waste sector and avoiding disruption of access to waste resources, and additional support to children and their parents; and (iii) mobilization of grant resources to support implementation of sector strategies and policies as well as strengthening institutional capacity, including for fiduciary aspects. Mitigation measures to E&S risks are manifold and laid out in more detail in the ESMF and P-ESIA. Further site-specific ESIA and DRP will be prepared for each of the infrastructure investments as detailed in the ESCP. E&S capacity will be built within the MPWT, MOI, and MOE to oversee proper . implementation of E&S instruments. Page 40 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) VII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Cambodia Cambodia: Solid Waste and Plastic Management Improvement Project Project Development Objectives(s) To improve solid waste and plastic management in selected areas, and in case of an Eligible Crisis or Emergency, respond promptly and effectively to it. Project Development Objective Indicators RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 To improve solid waste and plastic management in selected areas. Proportion of population in selected areas with regular 45.00 45.00 55.00 65.00 75.00 household waste collection (Percentage) Landfill disposal capacity operational per defined criteria 0.00 0.00 1,500,000.00 2,500,000.00 3,500,000.00 (Cubic Meter(m3)) Plastics policies, guidelines, or 0.00 2.00 5.00 5.00 standards developed (Number) of which in alignment with the ASEAN Regional Action 0.00 1.00 2.00 3.00 Plan (Number) Page 41 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 Municipal solid waste recovered, recycled, composted and/or treated 5.00 5.00 10.00 13.00 15.00 15.00 with other techniques in selected areas (Percentage) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 Strengthening of Institutions, Legislation, Regulations, Information and Policies Solid waste information Solid waste information Solid waste information Solid waste information Solid waste information system expanded with system expanded with Solid waste information system (Text) system established at system established at system established at regular information from regular information from MOE MOE MOE the participating the participating municipalities municipalities Integrated Solid Waste and Plastic Management, Planning, Monitoring, and Capacity Building Participating municipalities with improved waste collection and landfill management 0.00 0.00 2.00 5.00 5.00 contracts including performance indicators (Number) Participating municipalities with waste fee payment 0.00 0.00 2.00 5.00 5.00 system established and functioning (Number) Page 42 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 Grievances responded to within stipulated service 0.00 25.00 50.00 70.00 standards for response (Percentage) Voluntary integration of informal workers in the solid waste sector in selected areas 0.00 0.00 0.00 70.00 85.00 100.00 with increased economic opportunities (Percentage) of which percentage of female waste pickers to transition from the informal 0.00 0.00 0.00 5.00 8.00 10.00 to the formal sector (Percentage) Beneficiaries’ satisfaction with improved waste collection and cleanliness in participating 0.00 0.00 30.00 50.00 65.00 municipalities (Percentage) Collected waste in selected areas that is properly treated 0.00 0.00 0.00 50.00 100.00 or disposed (Percentage) Solid Waste and Plastic Management Infrastructure Greenhouse gas emissions 0.00 0.00 75,000.00 200,000.00 315,000.00 reduced (tCO2e) (Metric ton) IO Table SPACE UL Table SPACE Page 43 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Baseline information on the Review of semi-annual proportion of population city progress reports on with regular household the basis of information waste collection is based on provided from the the pre-Feasibility Studies (private) sector waste undertaken for Project collection companies preparation. "Regular" that will become a refers to the frequency of requirement to report Semi-annual waste collection. to provinces and reports per municipalities as part of participating In addition to the the contract revisions. municipality proportion of population in Data complemented based on Participating selected areas with regular Semi- with data from the Proportion of population in selected areas reported municipalities; MOI, household waste collection annually waste information with regular household waste collection date from MOE in a percentage, the number system once (private) of households will be established. waste calculated as part of the collection detailed design at which Data will be further be companies. time the PROBLUE complemented with Secretariat will be informed annual surveys on of the numbers. public satisfaction with waste management As part of this indicator, the services and compared reduction of leakage of with estimated volumes plastics to the environment of waste produced by reduced will be reported in households and metric tons and reported to amount of waste Page 44 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) the PROBLUE Secretariat. received at the landfill. The quantity of leakage of plastics to the environment will be assessed in the sixteen months of implementation with information of households with increased waste collection in vicinity of waterways and drains. The first sixteen months of implementation will also determine what regular means for the different participating municipalities and noting potential differences frequencies in solid waste collection in different zones within participating municipalities. The baseline of 45% is based on the Pre-Feasibility Study undertaken for project preparation based on the amounts of wastes generated and interviews with private waste companies on the amount of waste collected. Page 45 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Semi-annual reports of participating provinces/m unicipalities on the basis of information from the MPWT and MOE review The specific defined criteria detailed of semi-annual progress for the landfills will be design and reports on construction designed and agreed during construction of sanitary landfills or the detail design and site supervisor. rehabilitation of specific ESIAs for the Progress will existing waste disposal Participating Provinces landfills during the first Semi- be reported sites including data on and Landfill disposal capacity operational per sixteen months of Project annually for construction completed Municipalities, MPWT, defined criteria implementation as there are the construct in terms of cubic MOE differences between a ion meters disposal landfill at a greenfield site of landfills or capacity created and versus a brownfield site (a rehabilitation environmental and site where an existing of existing social control measures dumpsite is remediated and waste constructed and tested extended into a landfill). disposal sites including data on construction completed in terms of cubic meters disposal capacity Page 46 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) created in line with the criteria as defined in the detailed design and site-specific ESIAs and the identified environment al and social control meas ures constructed and tested. The indicator reflects the Annually, the number of plastics policies, indicator guidelines or standards that progress will will be developed under the Policies and Policy and regulations Ministry of Plastics policies, guidelines, or standards also be project. Three out of the regulations reports Environment developed reported to envisaged five policies, the PROBLUE guidelines or standards will Secretariat. be in alignment with the ASEAN Regional Action Plan. This indicator tracks the development of regional of which in alignment with the ASEAN policies, guidelines and Regional Action Plan standards for plastics reduction and alignment of policies with the framework Page 47 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) of the ASEAN Regional Action Plan. "Alignment" is defined as: a modification of policies/guidelines/standard s to be consistent with regional policies/guidelines/ standards or with that of other ASEAN countries. Data will be obtained from the The waste that will be waste brought to the landfill disposal and will be weighed on the Plastic is a fraction of treatment weighbridge to be municipal solid waste. The companies established. PDO indicator will monitor who will be Information on the and report the municipal reporting this municipal solid waste Participating provinces solid waste that is information and plastics that will be and municipalities on Municipal solid waste recovered, recovered, recycled, Semi- to the recovered, recycled, the basis of information recycled, composted and/or treated with composted and/or treated annually participating composted or from landfill and waste other techniques in selected areas in selected areas. As part of municipalitie otherwise treated will treatment companies, additional information, the s as per the be recorded by the MOI amount of plastic recovered requirements landfill and waste at the material recovery of the treatment companies facilities will be monitored revised and reported to the and reported separately. contracts. participated Data can provinces/municipalitie further be s. obtained from the waste Page 48 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) information systems in participating municipalitie s, once established ME PDO Table SPACE Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Waste information The solid waste information system system established at the established Ministry of Environment will under be expanded with regular Ministry of information from the Environment participating municipalities, with including information from Annually expanded MOE reporting MOE Solid waste information system the weighbridges at the information landfills that provide from information on the amount the participat of waste properly treated ing and disposed. municipalitie s and information from the waste being Page 49 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) treated and disposed at the landfills and treatment facilities. Info rmation reported in the Implementati on Progress reports by MOE. MOI to report as part of Project implementati on reports on the basis of Participating municipalities with improved the progress MOI review of progress waste collection and landfill management Annually MOI Per indicator name of reports contracts including performance establishing indicators improved contracts for waste collection and landfill management contracts. Page 50 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) The improved contracts will include performance indicators for operation and management . MOI to report as per Project As per indicator name. Implementati Participating municipalities with waste fee Functionality of payment on reports Review of annual Participating Annually payment system established and system will be evidenced with input progress reports municipalities; MOE, MOI functioning through receipt of waste from the generator payments. participating provinces/m unicipalities. Implementati Service standards for on progress response for grievances reports from are detailed in the MOE, MOI Environmental and Grievances responded to within stipulated Bi-annually As per indicator name. and MPWT Social Management service standards for response and Framework. MOI and particularly MPWT monitor and MPWT and report for their MOI. respective components Page 51 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) in implementation progress reports with input from the Technical Support Units. Percentage of persons voluntarily integrating from informal work into solid waste sector This does not imply that solid waste sector employment has to occur through an employment contract with the landfill management company. It Implementati does mean an integration of on progress the informal workers, that reports from Voluntary integration of informal workers are eligible as per the MOI with Participating provinces Bi-Annually Monitoring reports in the solid waste sector in selected areas census and interested, will support from and municipalities, MOI with increased economic opportunities be voluntarily integrated in Technical the material recovery facility Support through registration, Units. provision of protective materials, provisions of skill training, widening of recycling opportunities through the composting facility etc. See the E&S and gender section in the PAD for more details. Page 52 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) In addition to the percentage the absolute number of male and female waste pickers at selected sites will be determined during the first sixteen months of implementation and also reported to the PROBLUE Secretariat. Needs assessment and annual The indicator measures the update of share of women registration transitioning to formal data, in sector employment, out of of which percentage of female waste Implementati the total female waste Bi-annually pickers to transition from the informal on Progress pickers integrated in the to the formal sector reports by solid waste sector (who thus MOI with receive skills and other support of employability Technical interventions). Support Units. The indicator measures the Annual Undertaking satisfaction of the surveys in of an annual Beneficiaries’ satisfaction with improved beneficiaries with the participatin satisfaction waste collection and cleanliness in improved waste collection g survey will be participating municipalities services and cleanliness of municipalit part of the the streets following the ies among key Page 53 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) integration of key representa performance performance indicators into tive part of indicators in the waste collection the the waste contracts in the households collection participating municipalities. that contracts. receive Survey waste design and collection results will services. be reviewed and effectuated by the participating municipalitie s with support of MOI and MOE. Waste collection and landfill management The indicator will monitor companies the amount of collected Collected waste in selected areas that is bi-annually through waste that is properly properly treated or disposed participating treated or disposed in provinces selected areas. and municipalitie s Page 54 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Reports by MPWT during construction. During Based on IPCC approved operation by methodology used at MOI/TSUs, appraisal based on MOE review of semi- Greenhouse gas emissions reduced Annually landfill annual city progress Participating cities, MOE (tCO2e) The progress on the management reports indicator will also be companies reported to the PROBLUE reporting Secretariat. due to such requirements in management contracts. ME IO Table SPACE Page 55 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) ANNEX 1: Implementation Arrangements and Support Plan Implementation arrangements 1. The project will be implemented by existing sector institutions in alignment with sector institutional mandates and in accordance with the Government’s Standard Operating Procedures on project management for all externally financed projects/programs in Cambodia.79 2. Steering Committee. An Inter-Ministerial Steering Committee (SC) will be established and chaired by the MOI as the EA of the project to ensure inter-ministerial collaboration and coordination across all components and with local administrations. The SC will oversee and coordinate the management and operations of the project and will include high-level representation from the MOE, MPWT, and MEF and respective provincial governors and municipal mayors of the provinces and municipalities included in the project. The SC will hold semiannual meetings to oversee overall project progress, facilitate inter- ministerial coordination, facilitate policy discussion, and provide strategic guidance. The SC will be supported by the PMU at MOI in undertaking its tasks, including arranging the SC meetings. 3. Executive Agency (EA). The MOI will be the EA of the project providing overall coordination, and (consolidated audit) reporting. As per the Standard Operating Procedures on project Management for all externally-financed projects, when more than one line ministry is involved in the implementation of a project, one line ministry is designated as the EA while the others are the IAs. 4. Project management unit (PMU) and project implementation units (PIUs). The MOI will establish the PMU at MOI at the national level as the EA and to implement component 2, and with Technical Support Units in the participating provinces and municipalities under the PMU at MOI. The IAs will establish PIUs, the MOE will establish PIU-MOE and the MPWT will establish PIU-MPWT. The IAs will be responsible for the implementation of the respective components that they are leading as IAs and in line with their respective legal mandates. The TSU will support the implementation, M&E, and sustainability of the full range of project activities at the provincial and municipal level, under the overall management of the MOI. The TSUs will also support PIU-MOE and PIU-MPWT. MOE, the implementing agency for component 1, will establish project implementation unit MOE (PIU-MOE), managed by its Department of Solid Waste Management under the General Directorate of Environmental Protection. MOI, the implementing agency for component 2, will establish the project management unit (PMU at MOI), managed by its Department of Function and Resources under the General Department of Function and Resources. MPWT, the implementing agency for component 3, will establish project implementation unit MPWT (PIU-MPWT) with participation of relevant technical, procurement, and financial departments and the Environment and Social Office. Staffing with roles and responsibilities of the PMU and PIUs are included in the POM and specialized consultants will further support project implementation and management. 5. Technical support unit (TSU). As part of the PMU at MOI, each participating province and municipality will establish a technical support unit (TSU) that will be part of the PMU at MOI and also 79Royal Government of Cambodia, Standard Operating Procedures on Project Management for all externally financed Projects/Programs in Cambodia, 2019. Page 56 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) report to PIU-MOE and PIU-MPWT. The TSU will be support for implementation of project activities at the provincial and municipal level, specifically related to (a) inclusion of key performance indicators in waste collection and landfill management contracts; (b) payment to (private) waste collection companies and landfill management companies for solid waste collection and disposal services; (c) arrangements of collection of waste fees from households and businesses for solid waste municipal services and establishment of a GIS-based (waste) information, monitoring, and payment system (d) implementation of regulations, capacity building, public awareness, and citizen engagement for solid waste and plastic management at the municipal level; (e) support PMU at MOI in project implementation in coordination with and reporting to PIU-MOE and PIU-MPWT, such as E&S monitoring and mitigation measures and GRM establishment and citizen engagement. The staff of the provincial Departments of Public Works and Transport and the Provincial Departments of Environment of the participating provinces and municipalities are also included in the TSUs. The institutional and implementation arrangements for the project are presented in figure 1.1. 6. The roles, responsibilities, and procedures for the project are detailed in the POM. The manual will be maintained and updated from time to time as needed. It details the project management, institutional arrangements with clear roles and responsibilities, financial procedures, fiduciary responsibilities, staff selection and management, M&E, risk assessment and mitigation, E&S management, and any other implementation and reporting requirements of the World Bank and RGC policies. Page 57 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Figure 1.1 Proposed project Institutional and Implementation Arrangements Financing Agreement WB MEF Steering Committee Task: Provide strategic direction and guidance, oversee overall progress, facilitate Municipal Solid Waste - Chair: MOI inter-ministerial coordination and policy discussion. Management - Member: MEF, MOE, MOI, MPWT, Committee others as needed Provinces/municipalities Task: Provide overall coordination between the national and local government institutions and coordination on progress of implementation, including (consolidate Project Executive Agency audit) reporting Project Director: MOI Project Management Unit at MOI - Project Director - Project Manager Project Implementation Unit – MPWT Project Implementation Unit – MOE - Technical Officers, including social officer - Project Director - Project Director - Finance Officer - Project Manager - Project Manager - Procurement Officer - Technical Officers, including environment and social officer - Technical Officers, including environment officer - Finance Officer - Finance Officer - Procurement Officer - Procurement Officer Task: For Component 2, lead project implementation, monitor progress, undertake fiduciary responsibility, sign and manage contracts, prepare progress reports, conduct M&E Task: For Component 1, lead project Task: For Component 3, lead project implementation, monitor progress, implementation, monitor progress, Technical Support Units at participating undertake fiduciary responsibility, sign undertake fiduciary responsibility, sign provinces and municipalities and manage contracts, prepare progress and manage contracts, prepare progress reports, conduct M&E reports, conduct M&E, oversee civil works related to landfill construction Task: Support implementation at the provincial and municipal level, specifically related to site selection for landfill, waste information system, inclusion of KPIs in waste contracts and monitor and enforce contracts with private and public companies (collection and landfill management), arrangements for collection of waste fee, and payment of waste service fees, regulations and citizen engagement at municipal level, support environmental and social monitoring and measures, GRM, and citizen engagement Page 58 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Financial Management and Disbursement 7. A Financial Management Assessment of the three project IAs (MOE, MOI and MPWT) was conducted in accordance with the World Bank Policy and World Bank Directive of the Investment Project Financing dated October 1, 2018. The assessment concluded that the FM arrangements of the proposed entities meet the World Bank minimum requirements.80 Mitigation measures and FM readiness actions for year 1 of the project implementation were identified and incorporated in the project (table 1.1). 8. The FM risk assessment identified several key risks, including some challenges in applying International Public Sector Accounting Standards and cash basis accounting, a shortage of qualified accountants in public bodies, and limited scope of engagement of internal audit services. The key risks are: (a) the inexperience with some designated government FM team procedures may lead to delay FM startup actions until the project FM team gets acquainted with the World Bank procedures; (b) the project involves centralized and decentralized FM arrangements and requires robust FM system and coordination; (c) limited fiduciary knowledge and inadequate FM capacity and experience could delay budget preparation, accounting records, funds flow, bills of payment (to contractors, suppliers, and service providers), financial reporting, and internal control arrangements, non-compliance, and ineligible expenditures; (d) inadequate capacity and experience to handle pooled accounts will lead to delay in accounting set-up, payments, and reporting; and (e) negative impacts of economic downturn and the project’s lower spending and unrealized disbursement against the projected budget. Based on this assessment, the FM risk is rated Substantial after incorporating the FM mitigation measures outlined in the next paragraph. 9. FM mitigation measures will need to be implemented to strengthen the FM system. The FM Action Plan (FM readiness actions), described in Table 1.1, has been developed to mitigate the overall financial management risks to be taken by PMU and PIUs. Table 1.1. Financial Management Action Plan (FM Readiness Actions) Issues Remedial Action and Recommendation Target Date FM conditions Fiduciary consultants Contract national FM specialists for PMU and PIUs with 3 months after n.a. TORs approved by the World Bank. effectiveness Accounting software Procure accounting software (Sage 50) to capture funds 5 months after n.a. received and expenditures, and report as well as train effectiveness fiduciary staff on the use of the software. Chart of accounts Develop chart of accounts to capture sources of funds 5 months after n.a. acceptable to the World Bank. effectiveness FM procedures and Update the existing project FM manual which will include 5 months after n.a. Manual FM and accounting procedures. effectiveness Pooled accounts and Conduct training and orientations on FM and By effectiveness n.a. disbursements disbursement, especially on pooled accounts. and in first year of 80 The designated sector ministries have experience in managing past and ongoing projects funded by the World Bank and other development partners. For World Bank-funded projects, the FM rating was satisfactory, and the audit opinion was clean. The FM entity of MPWT has prior experience with World Bank-funded projects, whereas for the FM entities of MOI and MOE this is a first-time assignment. Page 59 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) project implementation IFR Agree on the format/content of By effectiveness n.a. unaudited IFRs. Audit Appoint an external auditor for the project 6 months after n.a. effectiveness 10. Budget. Budget preparation will follow the national procedures. The Annual Work Plan and Budget (AWPB) reflecting sources of funds and along with the disbursement forecast will be prepared by PMU and each PIU according to the Government budget calendar. The budget preparation should be prudent, and realistic, and made with professional estimates. The AWPBs are reviewed and approved by the MEF before submitting them to the World Bank for no objection no later than November 30 of each fiscal year. The PMU and each PIU will monitor its budget execution and tracking with the accounting software in accordance with the budgeting procedures specified in the FM manual and report on variances, and/or significant underspend by categories along with the unaudited IFR. Low budget utilization in each year should be monitored and needs attention and redress. 11. Counterpart funding from the RGC. The MEF will make cash contributions to the project, and funding will be allocated to the PMU and each PIU to cover only staff costs for government personnel who are working on the project, including annual audit fees for the project. Each IA will need to open a separate DA account (advance account in US dollars) at the National Bank of Cambodia to receive the project’s counterpart funding from the MEF. The counterpart funds will be available in the annual work plans and budgets and the IFR submitted to the World Bank. The annual audited financial statements of the project will be consolidated, and the annual audit fee will be financed under component 2. 12. Accounting. The project adopts the Cambodia Public Account Standards on Cash Basis Accounting issued by the Accounting and Auditing Regulator, former NAC, the MEF according to the Prakas#545 of the MEF dated June 6, 2019. The Imprest accounting system will be setup by the PMU and each PIU according to the Standard Operating Procedures and FM Manual. The chart of accounts will be developed according to the coding structures of the National Treasury of Cambodia to meet the specific needs of the project, including sources and uses of funds, components, and category(ies) for eligible expenditures. All financial transactions will be recorded in the computerized accounting software (Sage 50), which will enable the project to generate the required financial statements in accordance with the said cash basis accounting. The project financial statements will be presented in US dollars. The contract payments terms for goods, works, and services are largely in US dollars. 13. Internal controls. The internal control system of the PMU and each PIU will follow the national procedures and are described in the project FM manual, and the POM (internal controls and financial, administrative, and accounting procedures). Those charged with governance will be responsible for mitigating the risk of ‘override of internal controls’. The finance procedures will adopt the standard conditions of the Financing Agreement, incorporating ineligible expenditures, and will promote good governance practices. The PMU and PIUs internal control shall comprise the entire system of control established by management to (a) carry out the project activities in an orderly and efficient manner, (b) assure adherence to policies and procedures, and (c) safeguard the assets of the project and apply the manuals (budget, accounting, internal audit disbursement, cash management, procurement, and so on). There is segregation of duties at these entities (the functions of preparing, certifying, and approving Page 60 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) payments, and ordering, receiving, and accounting for purchases are clearly segregated). Control over payroll will be ensured; monthly bank reconciliation shall be performed for all bank accounts. Cash count shall be conducted monthly and reconciled with the ledger balance. An inventory (fixed asset and inventory) count shall be conducted once a year and reconciled with the register. The internal controls set-up of PMU and PIUs will enable the internal auditors to visit once a year. 14. Flow of funds. DAs will be opened at the National Bank of Cambodia to receive funds from the World Bank. There will be three accounts (two pooled, and one non-pooled account) for the project, including the MOE (Pooled DA1), the MOI (Pooled DA2), and the MPWT (DA3 non-pooled account). The DA will be opened in the name of the project under ‘current account in US$’. The advance allocation from the World Bank will be made to the DA upon the effectiveness of the project, based on the DA ceiling, and at the request of the PMU and each PIU to the World Bank. Based on the FM risk assessment, the fixed advance ceiling of the DAs and statement of expenditures (SOE) is recommended for the PMU and PIUs. 15. Funds flow. Funds flow for implementation of components 1 and 2 will be made from the World Bank to the pooled DAs (project advance accounts), a fixed Pooled DA1 (IDA and PROBLUE grant) of US$400,000 (IDA US$200,000, and TF US$200,000), a fixed Pooled DA2 (IDA and PROBLUE grant) of US$600,000 (IDA US$500,000, and TF US$100,000). The applicable disbursement methods include (a) advance, (b) reimbursement, (c) direct payment, and (d) special commitment. Reporting of expenditure paid from the DA will be based on SOEs. The frequency of reporting of eligible expenditures made from the DA to the World Bank will be quarterly. Funds flow for the implementation of component 3 will be made from the World Bank to a DA (non-pooled), DA3 with a fixed DA ceiling (project advance account) of US$1.5 million from the IDA fund. The applicable disbursement methods include (a) advance, (b) reimbursement, (c) direct payment, and (d) special commitment. Reporting of expenditure paid from the DA will be based on submission of SOEs. The frequency of reporting of eligible expenditures made from the DA to the World Bank will be quarterly. Considering the involvement of the sub-national level and to ensure better management of component funds, a sub-project advance account is not required as the project is centrally managed by the PMU and PIUs. The expected involvement of the provincial staff of the PMU and PIUs (MOI, MOE and MPWT respectively) related to the project activities will be, but not limited to, site screening/selection, engineering design, and participation in the supervision and monitoring of infrastructure, volume of training/ dissemination activities, and monitoring and coordination. The expected costs of this involvement would be per diem and travel expenses; such expenses can be financed by the respective component funds. The modality of cash advance for activities to the sub-national levels will be documented in the project FM manual/POM, which is subject to the World Bank no objection. The Imprest accounting system for sub-project offices can be set up at the municipality levels under component 2. The PIU-MOE and PIU-MPWT are not required to have the sub-advanced accounts as the project fund is managed centrally by MOE and MPWT. 16. Financial reporting. Each IA will prepare on a bi-annual basis the IFRs for its respective component. These reports will be submitted to the World Bank within 45 days after the end of each calendar semester. The IFRs will be produced based on public sector cash basis reflecting sources of funds of the project. These unaudited IFRs will also prepared on the basis of the status of expenditures following the project implementation progress. The format and contents of such reports were confirmed and agreed with the World Bank. Page 61 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) 17. External audit. The project is required to be audited annually by an independent external auditor. An external auditor will be appointed by the MEF through bundle audit with the approved terms of reference by the World Bank. The external auditor will carry out the audit according to the Cambodia International Standards on Auditing and will cover all sources of funds and all aspects of project activities implemented, including verification of expenditures, eligibility and field visits to sub-project offices, review of contract managements, and physical verification of goods, civil works, and services acquired by the project. The consolidated audited financial statements and management letters will be submitted to the World Bank within six months after the end of each calendar year. The project will comply with the World Bank disclosure policy (Policy on Access to Information). The audited project financial statements will be posted on the website of the MOE, MOI, and MPWT for external use without any restrictions for end users. 18. Closing Date. The closing date of the IDA financing is April 30, 2029; the closing date of the PROBLUE TF is September 30, 2025. 19. FM covenants: (a) maintaining a satisfactory FM system throughout the life of the project, (b) submitting IFRs within 45 days after the end of each semester, (c) submitting AWPB to the World Bank for no objection by end of November, and (d) submitting annual (consolidated) audited project financial statements and management letters within six months of the year-end. Disbursement 20. A parallel financing (IDA and PROBLUE TF) and the project disbursement of funds will be made from the World Bank, as specified in the Financing Agreement, Grant Agreement or the respective DFIL; the electronic withdrawal of funds should be submitted along with the SOE. The project will use electronic delivery of withdrawal of funds from the World Bank along with the supporting documents and will follow the disbursement methods outlined in the additional instructions of the DFIL, Loan Handbook for Bank Borrowers, and disbursement guidelines for IPF. 21. Electronic delivery of withdrawal. The project will use web-based disbursement of funds from the World Bank with the e-Signature platform from the World Bank’s Client Connection website. The FM team of each IA is required to familiarize themselves with the use of the Client Connection. For the delivery of withdrawals, prior approval from the MEF is required before furnishing the electronic applications and supporting documents to the World Bank for processing. 22. Frequency of disbursements. The frequency of submission of withdrawal application to the World Bank is quarterly as specified in the DFIL. The minimum value of each application is US$100,000 equivalent for the MOE, MOI, and MPWT for direct payments, reimbursements, and special commitment. 23. Disbursement table. The PROBLUE TF and IDA Credit proceeds will be disbursed against eligible expenditures, through disbursement methods (advance, reimbursement, direct payment, and special commitment). Table 1.2 shows the disbursement categories, by EA/IAs, and by source of funds in good order. Page 62 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Table 1.2. Costs and Disbursement Categories IDA Credit Amount of the IDA Credit Percentage of Expenditures to be Disbursement category Allocated, in US$ Financed (Inclusive of Taxes) (1) Goods, Non-Consulting Services, Consulting Services, 1,421,800 100 Operating Costs, and Training under project component 1 (B) under MOE (2) Goods, Non-Consulting Services, Consulting Services, 5,520,000 100 Operating Costs, and Training under project component 2 (B) under MOI (3) Goods, Works, Non-Consulting Services, Consulting 53,058,200 100 Services, Operating Costs, and Training under project component 3 under MPWT (4) Emergency Expenditure under component 4 of the project 0 0 Total 60,000,000 - PROBLUE Grant Amount of the PROBLUE TF Percentage of Expenditures to be Disbursement category Grant Allocated, in US$ Financed (Inclusive of Taxes) (1) Non-Consulting Services, Consulting Services and Training 2,100,000 100 for project component 1 (A) under MOE (2) Non-Consulting Services, Consulting Services and Training 900,000 100 for the project component 2 (A) under MOI Total 3,000,000 - 24. Estimated Climate co-benefits. The table below shows the activities contributing to climate change mitigation and respective budgets. The final climate co-benefits will be determined after Board Approval. Page 63 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Table 1.3. Estimated breakdown of IDA financed activities contributing to climate change mitigation IDA US$ Million IDA financed activities under component 1 - National Institutional and Policy Development for Solid Waste and Plastic Management Legislation, regulations, policies 1.42 of which policy work and reach-out activities covering source-segregated waste collection, 0.9 waste reduction, recycling under IDA financing IDA financed activities under component 2 - Integrated Solid Waste and Plastic Management, Planning, Monitoring and Capacity Building for Participating Provinces, Municipalities, and Districts Operational management support, economic support to waste pickers, transaction 5.52 advisory, data systems, tariff systems, training of which for to introduce and support source-segregated waste collection, waste reduction, 2.8 recycling under IDA financing IDA financed activities under component 3 - Solid Waste and Plastic Management Waste treatment and disposal facilities 53.06 of which design and works preparation for waste segregation, recovery, recycling and 2.30 landfill gas capture of which for waste recycling facilities 9.64 of which for landfill gas treatment facilities 3.5 of which works attributing to landfill gas capture from closed dumpsites and new disposal 14.49 cells, waste segregation and waste recycling 25. PROBLUE TF. Grant funding from the PROBLUE TF with a total of US$3 million will finance sub- component activities (sub-component 1A) of the MOE and sub-component 2A of the MOI for eligible expenditures, including non-consulting services, consulting services and training, but excludes expenditures for goods, works, and operating costs. 26. Disbursement for emergency expenditures under component 4. Component 4 (CERC) has zero allocation and no associated financing unless it is triggered. In situations where the CERC is triggered, the credit can be used for emergency response from each IA, based on the CERC manual Annexed in the POM and subject to the World Bank’s no objection. 27. Reimbursement of expenses before effectiveness. Each agency will need to pre-finance specific procurement activities from its own sources of funding including, but not limited to, publication and advertising expenses for expression of interest, request for proposal, request for quotations, invitation for bid, and so on. The total estimated amount for pre-finance activities is US$6,000 each for the MOE, MOI, and MPWT between the date of signing the Financing Agreement and the effectiveness of the project. These eligible expenditures can be reimbursed by the project funds. 28. Disbursement deadline date. The project will have a date for disbursement deadline four months (grace period) after the closing date of the project. 29. Frequency of Bank supervision. The Bank will carry out FM support mission twice a year based on the outcome of the FM capacity assessment and based on the current Substantial risk. There will be frequent Bank missions to the support EAs/IAs’ FM arrangements in the first year. The EAs/IAs will Page 64 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) nevertheless implement an agreed FM action plan to ensure that front-end activities are ready, to thus minimize delays in the project start-up phase. The standard two times supervision will be back to twice a year starting from the second year of the project. Procurement 30. Applicable procurement procedures. Procurement will be carried out in accordance with the World Bank Procurement Regulations for Borrowers under IPF Fourth Edition, November 2020. Procurement under National Procedures will be carried out in accordance with Government Standard Operating Procedures and Procurement Manual updated on December 2, 2019, which is issued pursuant to Article 3 of the Kingdom of Cambodia’s Law on Public Procurement dated January 14, 2012, subject to the additional provisions included in the Procurement Plan. STEP, which is a web-based tool for procurement planning, tracking procurement transactions and contract management, streamlining and automation, and monitoring and reporting, will be used for this project. 31. PPSD. The PPSD is jointly prepared by the EA and IAs with the support of the World Bank. It is based on the short form of PPSD shared by the World Bank. The PPSD is a living document and is subject to revision as needed. 32. Scope of procurement. Major procurement items to be financed by the project include (a) landfill investment cost in Siem Reap, Kampong Spue, and Kandal provinces as well as two transfer stations /MRFs in Battambang and Sihanoukville; (b) selection of a consulting firm for design and contract supervision of landfill investment in three targeted provinces and transfer stations; (c) selection of a consultancy firm for transaction advisory services to participating municipalities in waste companies monitoring; (d) consulting firm for design and construction supervision of two transfer stations in Sihanoukville and Battambang, (e) consultancy services for ESIA/ESMP; (f) development of GIS system; (g) consultancy service for development of solid waste regulatory framework; (h) consultancy service for national policy, standards, or guideline development, and (i) consultancy service for operational municipal SWM management support and municipal strengthening. The cost of these procurement items account for about 83 percent of the total project cost, therefore, they are considered critical for the project. Successful implementation of these activities will ensure the achievement of the project PDO. 33. Implementation Arrangements. Procurement activities will be undertaken by the Procurement Unit of the EA and each IA. The EA and IAs have established procurement units with clear responsibilities and separation of accountability in carrying out all procurement activities of this project. The assigned procurement officer of the MPWT has experience in handling several development partner-funded projects, including World Bank-financed projects, but the assigned procurement officers of the MOI and MOE have limited experience in handling World Bank-financed projects. As part of project preparation, the World Bank team has conducted capacity assessment of these IAs and project procurement risks. 34. Procurement risks and mitigation measures. The overall procurement risk of this project is Substantial. The risks are the following: (a) inadequate procurement capacity and experience of IAs; (b) protracted procurement process of high-value and technically complex works, goods, and consultants’ contracts; (c) possible delay of procurement activities during the project start-up phase; (d) governance risks including conflicts of interest and fraud/corruption practices in procurement; (e) possible difficulty Page 65 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) in the availability of qualified procurement and technical consultants when needed; and (f) limited capacity of the assigned procurement officers in contract management of large civil work packages. 35. Risks mitigation measures are: (a) Efforts and increased advertising to select qualified individual procurement and technical consultant/s to assist the EA/IAs; (b) assigning a focal person for effective coordination within the technical departments and across the ministries; (c) an effective procurement monitoring system to ensure an effective internal procurement review process through sufficient delegation of authority to the members of all procurement committees and in compliance with the internally-agreed service standard; (d) enhanced disclosure of procurement information, including publication of the annual procurement plan and a quarterly summary of the contract award information for all procurement in local newspapers/project’s website; (e) provision of procurement trainings and technical support to the project’s procurement team during project implementation; (f) support the EA and IAs to finalize the ToR of key consultancies including procurement consultants, FM consultants, E&S management consultants, consulting firms for the detailed design and supervision for investment preparation for three cities, ESIA/ESMP, needs assessment in three sites, and consulting firm for transaction advisory services before signing Financing Agreement; (vii) confirm the composition of the Bid Evaluation Committee/Consultant Evaluation Committee/Procurement Review Committee; (viii) the contract management plan of the large civil work contracts and detailed design and supervision firm contracts to be prepared and regularly monitored to ensure that works/services will be completed/delivered based on the agreed schedule in the contract documents. 36. The WBG's oversight of procurement will be done through increased implementation support and when requested by Borrowers. The procurement supervision will be part of the semi-annual project implementation support missions and the procurement clinics/trainings will be conducted based on need. In addition to the prior review by the World Bank based on the prior thresholds, which are subject to change according to the result of risk assessments carried out during the project implementation, the World Bank will carry out the annual procurement post review on a sample of at least 20 percent of all post review contracts financed by the project. STEP will help the World Bank monitor the procurement progress and to take appropriate supportive actions in due course. The World Bank also requires the assigned procurement officers of EA and IAs to promptly update the procurement tracking and monitoring form in the standard operating procedures to monitor procurement performance. 37. Procurement Plan. Based on the PPSD, the first 18 months procurement plan for the project is prepared by the EA/IAs with the support of the World Bank, and it is attached as Annex to the PPSD. Implementation Support Plan 38. The project will require intensive implementation support and a continuous dialogue with clients at all levels. The implementation support strategy combines periodic supervision with in-time technical support and policy advice as necessary. Implementation support will include (a) an implementation support mission (ISM) every six months, (b) interim technical discussions and field visits by the World Bank team, (c) monitoring and reporting on implementation progress and achievement of results by the PMU and PIUs, (d) annual internal and external financial audits and FM reporting, and (e) periodic procurement post review. The ISM will visit all possible project sites to physically verify and assess implementation Page 66 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) progress. The following measures will be taken in early implementation when implementation challenges are expected to be more significant: • Intensive capacity building of the IAs. Training and hands-on support will be required on a technical level and in terms of fiduciary and E&S management. This will include supporting the PMU and PIUs in (a) task planning and task supervision, (b) review of important TORs for key consultancies, and (c) coordination with development partners. • Fiduciary assurance support. The proposed funds flow brings challenges for project FM. The implementation support team will provide hands-on guidance on review and audit reporting procedures. Similarly, procurement activities will be spread widely among entities, types of procurement, and size of contracts. This will require intensive implementation support. • E&S management. M&E and mitigation of E&S risks is a core part of risk management for this project, especially on account of the framework approach adopted. Managing the risk requires expertise in the implementation support team with a good understanding of the administrative, business, and cultural environment in Cambodia. In addition, sufficient staff time and resources will be provided to review site-specific environmental management measures and DRPs/site-specific ESIA preparation during the investment planning process, design, and implementation. 39. Implementation support plan. The implementation support plan reflects the anticipated skills mix, timing, and resource requirements over the project life. To maintain flexibility, the implementation support plan will be reviewed periodically to ensure that it meets the project’s implementation support needs over time. Table 1.3 indicates the World Bank team’s implementation support plan and the required skill mix. Page 67 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Table 1.4. Implementation Support Plan Time Focus Skills Needed 0–18 • Building core team at the PMU and PIUs, and project management • Core team, particularly FM, months systems including fiduciary, ESF, M&E, and so on. procurement, M&E, and E&S • Onboarding technical staff experts • Staff capacity building • Solid waste technical experts • Baseline of SWM generation and composition for performance • Waste information and contract and investment preparation geospatial system specialists • Procurement of services and works for first year investment activities • Technical and administrative procedures for first-year works • Year 1 and year 2 policy works and research • Detailed design and work plan of technical assistance and capacity building activities 19–36 • Implementation progress review • Core team, particularly FM, months • Review of E&S and contractual performance of sub-projects services procurement, M&E, and E&S • Procurement of services and works for years 2-5 investment experts activities • Solid waste experts • Technical and administrative procedures for years 2-5 works, and • Waste information and construction geospatial system specialists • Commissioning and operation of waste information and geospatial • Citizen engagement and public systems outreach • Technical assistance and capacity building 37–54 • Further synergy of policy work and physical improvements at • Core team, particularly FM, months national and local levels procurement, M&E, and E&S • Continued improvements in project management systems including experts fiduciary, environmental and social • Solid waste experts • Special attention to be given to assess the M&E methodology • Outreach and publicity expert • Know-how generation and sharing • Project Midterm Review 54–80 • Completion of activities • Core team, particularly FM, months • Capturing impacts and lessons learned procurement, M&E, and E&S • Facilitate knowledge exchange and events to consolidate project experts learnings • Solid waste experts • Finalize detailed learning and analysis and prepare for end-of- project evaluation • Support technical and financial analysis of project investments • End-term evaluation and client Implementation Completion and Results Report Page 68 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) 40. Skills mix. The skills mix and team composition for supporting project implementation is proposed in Table 1.4. Table 1.5. Skills Mix and Team Composition No. of Staff Skills Needed Number of Missions Comments Weeks Task team leader (TTL) 11 Two per year, but three/four in the first year Washington, DC Co-TTLs 25 Continuous support Staff member in country office or region Solid waste technical expert 14 Two per year, but three in the first year Washington, DC and co-TTL Procurement specialist 3 Two per year, including field travel Staff in the country office FM specialist 3 Two per year, including field travel Staff in the country office E&S specialists (each) 4 Two per year, including field travel Staff in the regional offices Waste information and 5 Two per year in first two years Washington, DC and geospatial specialists consultant(s) Page 69 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) ANNEX 2: Project Description and Overview of Provinces and Municipalities/Districts Project Description and Design 1. The project will support policy development, regulatory improvements, and monitoring tools and systems at the national level. In participating provinces and municipalities, the project will support enhanced waste service collection, including staged introduction of source-segregation, management, and related investments in solid waste treatment and disposal infrastructure as the main responsibility for solid waste management lies with local government administrations.81 In Cambodia, the governance of provincial and municipal tasks and responsibilities is shared and both provincial and municipal authorities are involved in the organization of solid waste collection and disposal services; both will be supported under the project. The RGC has made a strong commitment to ‘deconcentration and decentralization’ reforms as a way to improve local governance and public service delivery,82 and the project supports this for the solid waste sector service delivery (see box 2.1 on key functions of municipal solid waste management). For solid waste infrastructure, the location of the new landfill and waste treatment infrastructure is typically outside the municipality and therefore often under provincial or national management. Box 2.1 Key Functions of Municipal SWM Municipal waste management units are typically tasked with key SWM functions, such as (a) Waste fee setting and organization of bill collection to pay for (private) waste management services; (b) Establishment and insertion of SWM performance indicators in contracts with (private sector) waste management companies; (c) Inclusion of contract requirements for the (private) waste companies to provide clarity on costs and revenues; (d) Monitoring and enforcement of (private sector) waste management companies based on established key performance indicators (KPIs), required operational plans, and reporting requirements regarding costs, revenues, and waste composition and quantities as well as required environmental standards for solid waste transport, treatment, and disposal; (e) Preparation of local waste management strategies and plans; (f) Local regulations, specifically municipal ordinances for SWM; (g) Solid waste information system comprising information on amounts and types of solid waste generated, collected, and disposed of and financial information on the applicable costs and revenues; and (h) Public awareness, grievance response and complaint mechanism and citizen engagement, which are typically financed from solid waste fees to enable continuous awareness raising, citizen engagement and service improvement activities. 2. The project will support participating provinces and municipalities that meet specified eligibility criteria for technical assistance and investments in landfills, material recovery and waste treatment infrastructure. Siem Reap, Kampong Speu, Kandal, Battambang and Sihanoukville are in principle eligible for support under component 2 of the project and have submitted a signed letter of intent to the MOI. Adherence to the eligibility criteria for the participating provinces, municipalities and districts for 81 World Bank, Bridging the Gap in Solid Waste Management, Governance Requirements for Results, 2021. 82 World Bank, Cambodia Intergovernmental Fiscal Architecture Study, 2021. Page 70 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) component 2 will continue to be required during project implementation. The transaction advisory services will support MOI and participating provinces, municipalities and districts to define the Key Performance Indicators (KPIs) and reporting requirements for waste collection, treatment and disposal as well as the (arrangements for) related payments required for these waste services (waste fee model) and to introduce these in the waste collection, treatment and disposal contracts. Similar key performance indicators, monitoring and reporting requirements will also be included in national policies under component 1. 3. Agreement to include performance indicators and related payments in waste service contracts as well as the preparation of financing and cost-recovery plans will need to be in place in the first sixteen months of project implementation for provinces, municipalities/districts interested in financing for landfills, material recovery and waste treatment infrastructure under the project The detailed implementation planning of the key activities in the first sixteen months is included in the POM. The specific activities and tasks under the transaction advisory services are shown in Box 2.2. Box 2.2. Transaction Advisory services for Solid Waste Collection and Treatment/Disposal Contracts Transaction advisory services for solid waste collection and treatment/disposal contracts may include the following with respect to defining, planning and financing waste management systems and KPIs: (a) Description of current system of SWM collection and transport and disposal in terms of size, type of service, equipment used, and so on. (b) Definition of basic requirements for waste collection to specify cost-effective waste collection and introduction of zones for solid waste collection (that is, waste collection zones in municipalities and districts or evaluation based on the economic condition of the population - for example, size of house, household income, and tax evaluation of the property) which is important to allow more affluent areas, businesses and residents to pay more than economically-disadvantaged areas to ensure that waste collection for all citizens can take place without leaving poorer populations behind. This will determine the expansion of the waste collection area. (c) Type of buildings and structures for various types of waste generators and types of waste. (d) Required types and quantities of containers, collection areas, collection frequencies for different types of collection areas, collection equipment, staffing, and street cleanliness/street sweeping criteria. (e) Definition of performance indicators for waste collection and expansion of waste collection areas on the basis of various investments and staffing requirements for private waste collection companies and a focus on staged introduction of source-segregation, minimizing waste/plastic leakage into the environment and waterways with accompanying provisions and incentives, and to improve cleanliness in key areas. This will also include the determination of the waste disposal and treatment location and lay-out of annual beneficiaries’ satisfaction surveys. (f) Estimated costs and options for various types of waste collection services and their expansion to 75 percent of households. (g) Development of operating cost recovery plans for solid waste services. (h) Performance indicators for contracts related to waste treatment and landfill operation and management. (i) Fees required to cover operational and investment costs for (private) waste collection companies for improved and expanded waste collection (j) Fees required to cover operational costs of waste treatment and landfill facilities (that is, gate fees) and definition and specification of the relationship between landfill management and operation companies, the waste collection companies and municipalities. (k) Current laws, regulations, permits, waste contracts and licenses; and (l) Specifications for monitoring and enforcement (for example, penalties) as well as reporting. (m) Determination of financial liabilities of pollution of current dumpsites and support to MOI, GDR and participating provinces and municipalities in land transfer arrangements of the current dumpsites. (n) Support to the MOI and participating municipalities to amend or establish the contracts for waste collection, transport, treatment and disposal It will also include templates and support for defining municipal waste ordinances, definition of municipal waste service standards, and performance standards as well as monitoring and enforcement guidelines for (private) waste companies. Page 71 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) 4. Every province, municipality/district receiving financing under component 3 will be supported with related technical assistance and capacity building under component 2. Eligibility criteria for provinces and municipalities/districts to receive financing under component 3 are: (a) municipal waste generation equivalent to or more than 100,000 residents in the municipality to ensure cost effectiveness of investments,83 (b) cost-recovery plans developed to recover, at minimum, the operating costs of newly- constructed landfills; (c) revision of contracts to include KPIs for landfills and waste treatment management and operations; and (d) land availability for landfills, other waste treatment infrastructure and closure of related dumpsites, in line with ESF requirements. Siem Reap, Kandal and Kampong Speu are in principle eligible to receive support under component 3 for solid waste infrastructure financing. Basic data on the provinces are shown in Table 2.1. Table 2.1. Basic Profiles of Provinces with Estimated Waste Generated and Waste to be Landfilled Total Waste Waste Transported to Province Population Generation Landfill (percent of (tons/day) total) Siem Reap 1,006,512 614 46 Battambang 987,400 602 39 Kandal 1,195,547 729 39 Kampong Speu 872,219 532 39 Sihanoukville 302,887 185 73 5. The project's focus on Cambodian secondary cities was agreed with RGC. The country's secondary cities are fast growing, however particularly underserved when it comes to solid waste management. By focusing on secondary cities, the project aims to establish successful waste management systems that can provide an example to the country's multiple cities with similar characteristics facing comparable challenges. Further, the RGC is exploring potential alternative solutions for improving the capital's waste management. 6. For possible landfill site options, site suitability assessments have been undertaken on the basis of detailed site suitability criteria as part of the completed pre-feasibility study. A pre-feasibility study assessed various landfill site options based on the following key parameters: (a) environmental and natural conditions criteria, (b) social criteria and public acceptability, (c) transport and logistical aspects; (d) presence of available infrastructure, and (e) land ownership characteristics.84 Figure 2.2 outlines the landfill site suitability assessment process followed. Details on the site suitability analysis can be found in the ESMF and P-ESIA. 83 Infrastructure investments will target selected areas in municipalities, urban districts, and surrounding sub-urban communities which are in a suitable distance to transport the waste and accompanying opportunities for operational financial sustainability/cost recovery. 84 These parameters are based on criteria from the MOE and the World Bank Environment, Health and Safety Guidelines for Waste Management Facilities. Page 72 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Figure 2.2. Landfill Site Suitability Assessment Process 7. For the waste infrastructure and waste systems in the three preliminary eligible provinces, a conceptual landfill design and cost assessments were developed for the most suitable and cost-efficient waste management systems. The design and cost estimates included: (a) (regional)85 landfills, including landfill gas capture and abatement systems (b) transfer stations, (c) intermediate waste treatment facilities, such as material recovery and composting facilities, and possibly RDF (d) limited collection and transport equipment, including for priority source segregated waste streams and (e) waste information, monitoring, and fee collection systems. The infrastructure to be financed under the project will vary between the different provinces and municipalities. Investments along the entire SWM chain are foreseen for Siem Reap, Kandal and Kampong Speu.86 For Battambang and Sihanoukville, where there are existing sanitary landfills, potential accompanying material recovery, and composting facilities may be financed. 8. Cost-effectiveness is a key priority in the project and lower-cost solutions are highly prioritized. For planned investments, a comparison has been made with other typical solid waste treatment and disposal costs. The average costs per ton of waste are projected to amount to 8 US$/ton of waste for Siem Reap and 9 US$/ton for Kandal and Kampong Speu.87 This is in line with the typical waste management costs for sanitary landfills in lower-income countries. Overview of Provinces, Municipalities/Districts: current open dumpsites and further site suitability analysis 9. The provinces of Siem Reap, Kandal, Kampong Speu, Battambang and Sihanoukville have a combined population of around 4 million. The proportion of population in selected areas with regular household waste collection is estimated at 45 percent. In Siem Reap, Kandal, and Kampong Speu, waste is deposited at unsanitary open dumpsites. Waste collection is largely unregulated and organized by the private sector, focusing on profitable areas and selected customers. 85 Investments in transfer stations will increase collection efficiencies and increase landfill coverage areas to enable regional landfills serving municipalities and neighboring districts. This regional landfill concept will ensure collaboration with more (rural) districts, thereby expanding waste coverage areas and cost-effectiveness of landfills. Other districts disposing waste in regional landfills will be able to continue doing so by paying gate fees. 86 While Kandal and Kampong Speu are within potentially suitable distance to a planned large-scale new regional landfill for Phnom Penh, investments in smaller-scale local landfills, treatment and material recovery and composting facilities for waste reduction will be required. 87 Based on typical weighted average waste density of 1 ton per m3 of waste after compaction and decomposition. Page 73 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) 10. The waste investments will target municipalities, urban districts, and surrounding more rural communities in suitable distance for waste transports and feasibility for operational cost recovery. Suitable municipalities/districts may for example include, for (i) Siem Reap: Sasar Sdam, Puok, Chan Sar, Dam Daek; (ii) Kampong Speu Chbar Mon and Samraong Tong; Kandal: Ta Khmau; Battambang: (iii) Tham Koul, Bavel; and (iv) Sihanoukville: coastal tourism hotspots and islands. The situation of the current open dumpsites and site suitability analysis in Siem Reap, Kampong Speu and Kandal is presented below.88 89 Siem Reap Table 2.2. Summary of current dumpsite and landfill suitability analysis in Siem Reap 1. Size 3.1. The total current open dumpsite area ≈ 50,000 m2 . Total waste volume (disposed above ground) ≈ 86,466 m3 and maximum height (above ground) ≈ 19 m 2. Groundwater The site is low-lying and poorly drained, with surrounding open water ponds. No main rivers or water courses or surface water exist near the site. The ecologically sensitive Tonle Sap lake is located 13.5 km to the south. 3. Waste amount Between 220 and 300 tons/day according to GAEA and municipality sources. to dumpsite 4. Distance to city The dumpsite is located about 25 km east of Siem Reap City. Local community settlements are also and communities located along the main road in the northern perimeter of the site. 5. Surrounding Leachate is not collected and is an environmental hazard due to surface and groundwater pollution. water quality 6 Site suitability A site suitability map has been produced to highlight potential new landfill areas in green, provided below. analysis Two main new landfill site options were considered by the MOI and provincial and municipal government and assessed in the preliminary ESIA and pre-feasibility study: (a) option 1: Closing and rehabilitation of the existing dumpsite and extending with new sanitary landfill at Anlung Pir Village; and (b) option 2: a Greenfield site at Trapang Tim Village about 11 km south-southeast of Siem Reap City (with rehabilitation of existing dumpsite). The extension of the current dumpsite under option 1 is assessed positively in the pre-feasibility study for rehabilitation of the existing dumpsite and landfill expansion. Land around the current site is available, including a possible extension into the new site owned by company CINTRI. The site has good access to the nearby main road, NR6, and is located approximately 20 km from the city center. However, it is about 1 km from residential settlements and has shallow groundwater. Regardless of the final selection of site for new landfill, the existing dumpsite will need to be rehabilitated to prevent environmental impact. Landfill site option 2 is located in Trapang Tim Village. The site option is a greenfield site, adjacent to a proposed wastewater treatment plant and surrounded by agricultural land. There is a large area (+50 ha) of public land available, making landfill siting, buffer zone, and future potential expansion possible. However, this site option has the risk of becoming a Siem Reap City expansion area in the near future. Furthermore, the Tonle Sap United Nations Educational, Scientific and Cultural Organization (UNESCO) biodiversity reserve is located nearby and provides a major environmental risk. The groundwater is shallow and water pollution risk during flooding events is high. 88 In Battambang, the project will not finance a new landfill. A new landfill has already been developed with financing from the Asian Development Bank. The site is located approximately 25 km west of Battambang City center in Tanop Village. The new landfill has already been constructed and the project will, thus, not finance a new landfill for Battambang. However, other potential waste treatment infrastructure, such as material recovery and composting facilities, can be considered. 89 In Sihanoukville, a new landfill has already been developed financed by the national budget. The new site is located approximately 1 km further east from the city centre compared to the existing dumpsite, approximately 30 km from the city centre in total. The project will not finance a new landfill for Sihanoukville. However other potential waste treatment infrastructure, such as material recovery and composting facilities, can be considered. Page 74 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) The P-ESIA and pre-feasibility study analyzes and assesses the potential landfill sites options. These were presented by the MOI as the EA of the project and discussed during the Stakeholder Consultations and Engagement in Siem Reap and nationally. The potential new landfill site in Trapang Tim Village (Option 2) provides higher risks with regard to livelihoods of waste pickers and pollution of the Tonle Sap biodiversity area. From an E&S impact and risks perspective, there are clear advantages in the rehabilitation and extension of the existing dumpsite site and the site is suitable for landfill and waste infrastructure development. The finalization of site selection and formalization is planned during the first 16 months of project implementation with support of the transaction advisory services and in parallel starting with the respective detailed designs, needs assessment and support for disadvantaged and vulnerable groups, and the site-specific ESIA/ESMP and DRPs. This will include the closing and rehabilitation of the current open dumpsite and all related E&S aspects, and the transaction advisory services related to closure. The development of national landfill design, management and operation guidelines will inform, and be informed by, the detailed design and site specific ESIAs. Kampong Speu Table 2.3. Summary of Current Dumpsite and Landfill Suitability Analysis in Kampong Speu 1. Size The main open dumpsite is located at Chbar Mon municipality and approximately 10.5 ha 2. Groundwater The existing site is not located near any surface water streams, rivers, or lakes. or surface water 3. Waste Waste amount generated in Chbar Mon municipality and the markets in Samraong Tong: 75 tons/day; amount Factories: 130 tons/day (rough estimate). 4. Impact on Waste is permanently left in open piles, and some burning occurs. There is no leachate collection or neighboring treatment, site fencing or access control, so informal waste collectors live on and around the site. communities 5. Evaluation on The site is operated as an open dump. Waste leachate is not collected and forms an environmental hazard surrounding due to surface and groundwater pollution. Produced methane is not collected. The surrounding water quality environment is littered due to windblown waste, in particular, plastic. 6 Site suitability A site suitability map has been produced to highlight potential areas to located landfill in green, provided analysis below. The current dumpsite is immediately adjacent to a new residential development within a high-value commercial and residential development zone. There is no further land available for expansion around the existing site and therefore the existing site cannot be extended. Two landfill site options were originally provided by the municipal administration for the development of a new landfill: one site west of Chbar Mon municipality in Samraong Tong and one site in Kong Pisey district. The first of these options is in a remote location over 30 km from the city center and with a very poor access dirt road. Therefore, the site is not suitable for landfill development. The site at Kong Pisey is approximately 15 km (direct) from the Chbar Mon City center. However, the site can only be reached by National Highway 4 and National Highway 41, with a combined travel distance of 36 km. It is, thus, not suitable due to the distance from city center and is also located in an environmentally and culturally sensitive area. Further details on E&S impacts assessed for the potential sites can be found in the ESMF. A concentrated search zone within a corridor 3km either side of the main road leading North-west from the current dump site was proposed to the MOI and Kampong Speu local government on the basis of the site. The Kampong Speu local government returned with two options along this search corridor. located 6 km north-west of the existing dumpsite. One of these new options, located 6 km north-west of the existing dumpsite was found to be suitable for landfill development. Some key advantages (a) the site is being located in flat, low quality agricultural land, away from residential settlements and other sensitive receptors, (b) not in a flood prone area, and (c) having 15.2 ha for landfill development within the immediate site, with options to expand for future extension needs. The current open dump has no environmental controls and will require closure. Since the waste volume is low the current waste can be fully removed, and the site made available for redevelopment. The finalization of site selection and Page 75 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) formalization is planned during the first 16 months of project implementation with support of the transaction advisory services and in parallel starting with the respective detailed designs, needs assessment and support for disadvantaged and vulnerable groups, and site-specific ESIA/ESMP and DRP. This will include the closing and cleaning of the current open dumpsite and all related E&S aspects, and the transaction advisory services related to closure. The development of national landfill design, management and operation guidelines will inform, and be informed by, the detailed design and site specific ESIAs. Kandal Table 2.4. Summary of Current Dumpsite and Landfill Suitability Analysis in Kandal 1. Size Kandal’s main dumpsite is 8 km from the urban area. The size of the dumpsite is 8.0 ha x 6 m (depth) and is already saturated with solid waste. The current maximum estimated storage volume of the dumpsite cells is approximately 630,000 m3, with an average height of waste pile estimated at 4 m.90 2. Groundwater The existing site is surrounded by surface water ponds and is less than 0.5 km from a river to the east of or surface water the site. The existing dumpsite cannot be extended as it is in a high value development zone and there is no land available. It can be closed and rehabilitated. 3. Waste The approximate waste disposed at the dumpsite is ~270 tons/day amount 4. Distance to The site is surrounded by sparce community settlements and is less than 2 km from Sangkat Ta Khmau neighboring town. communities 5. Evaluation on The open dump has no management plan. Waste arrives at the site and no official sorting is conducted, surrounding with waste dumped in one pile and the dumpsite is constantly on fire. This causes tension with local water quality villages around the dumpsite, who have complained of respiratory illnesses. There is no leachate collection or treatment. 6 Site suitability A site suitability map has been produced to highlight potential landfill areas in green. The initially proposed analysis sites options by the provincial and municipal government are not suitable as these are depleted quarries below groundwater level. Therefore, these depleted quarries are not suitable for development as a landfill due to groundwater intrusion and need for complex engineering at high costs that would be required to prevent intrusion of water and leakage. The detailed analysis is provided in the ESMF. Another proposed site option was not suitable due to high flood risk and community opposition. A new site option proposed by the local government located in Prey Torteng and Tropaing Veng villages, Kandal Stung district. Based on the updated site suitability assessment and site visits in November 2022, the site is assessed as a suitable landfill site option for the landfill and waste infrastructure. Some key advantages of the location are (a) this site has sufficient area (more than 20 ha), is located in abandoned low value agricultural land, away from any residential settlements or sensitive receptors (communities, schools, protected areas), (b) the land is flat, not prone to flood risk, (c) the site is near a main road connecting to the service area. The 2.5 km access road is unpaved but it is used by quarry trucks on a regular basis (50-60 trucks per hour) so it is well maintained. A rail line runs parallel to the entrance road. (iii) nearby to the site option is a worked out quarry which is currently being used as a temporary, emergency dump site. The development of a new sanitary landfill in this area will help address the emergency dumping problem in the quarry. The finalization of site selection and formalization is planned during the first 16 months of project implementation with support of the transaction advisory services and in parallel starting with the respective detailed designs, needs assessment and support for disadvantaged and vulnerable groups, and site-specific ESIA/ESMP and DRP. This will include the closing and cleaning of the current open dumpsite and all related E&S aspects and transaction advisory services related to closure. The development of national landfill design, management and operation guidelines will inform, and be informed by, the detailed design and site specific ESIAs. 90 Preaek Hour Lech village, Sangkat Preaek Hour. Page 76 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) Economic Analysis 11. A cost-benefit analysis was conducted to assess the economic viability of the project. Direct quantifiable benefits from the project include (a) monetary value generated from waste segregation, recycled materials, and composting; (b) monetary value of carbon offsets from reduced GHG emissions; (c) efficiency gains on waste management logistics; (d) environment and related health benefits; and (e) potential increases in economic value of the remediated dumpsites and land/properties surrounding current uncontrolled dumpsites due to rehabilitation/closure of these sites. Increase in land and property values after remediation and possibly redevelopment is a key quantifiable benefit of remediation of polluted territories, such as industrial site remediation or waste dumpsite remediation and rehabilitation, as evidenced by research and completed World Bank-financed projects on contaminated sites remediation.91 92 12. Additional non-quantifiable economic benefits include (a) creation of jobs, including for informal waste pickers, in the local waste economy; (b) reduction of plastic pollution, thus avoiding natural capital loss due to plastic littering in the environment and waterways as well as benefiting key sectors such as tourism and fishery; (c) reduction in blockages of sanitation pipes, drainage systems, and pumping stations; (d) health benefits due to reduced air pollution from dumpsite fires and open burning of waste; (e) avoided leachate pollution that contaminates groundwater and surface waters as well as agricultural and drinking water supplies; (e) (GIS) information system enabled urban and environmental planning as well as collection of (waste) fees and other local revenues. 13. Economic costs include capital investments for equipment and facilities for solid waste collection, transport, sorting, recovery/recycling, and disposal including rehabilitation of closed dumpsites; as well as associated operation and maintenance costs, including replacement costs of fixed assets. Moreover, component 2 of the project includes technical assistance and capacity building activities, some of which will have a direct impact on the operations of physical investments under component 3. 14. The project infrastructure included for solid waste disposal and intermediate treatment is based on the following least-cost considerations: (a) targeted landfill lifespan of about 10 years, with potential expansion of the facility area to 20 years (however, expansion of landfill cell infrastructure to be built and financed in the future); (b) minimum 100,000 people with current access to waste collection services (~20,000 households) or, if less, sufficient waste generation from tourism, commercial, institutional, or industrial (non-hazardous) sectors to enable, at minimum, operating cost recovery; (c) compaction of waste at landfill to be carried out by self-compaction under the weight of the waste placed by bulldozers and not by specific-purpose mobile compaction units; (d) new landfill sites within reasonable distance of 91 Research into cleanup benefits finds that property values in vicinity of remediated sites increases by an average of 5.0 percent to 11.5 percent and 15 percent when based on a larger welfare interpretation. (The Value of Brownfield Remediation, Journal of the Association of Environmental and Resource Economists, 2017). 92 In the Zhuzhou Brownfield Remediation Project (P147381), the most important quantifiable benefit is the increase of land (and property) values after remediation and redevelopment. In comparison with before-project, the price of commercial land in Zhuzhou’s land market in 2021 has increased by 6 percent than the 2016 level, industrial land by 43 percent, and residential land by 48 percent. (draft Implementation Completion and Results Report, 2022). In the Kosovo Energy Sector Clean-up and Land Reclamation Project (P096181), the surrounding villages experienced revitalization after the ash dump was remediated and environmental conditions improved. Page 77 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) paved access roads (~3 km) or with approved and funded road expansion plans in place; (e) gravity leachate drainage from landfill cells; and (f) a simple, robust, partly non-mechanized (manual) community MRF system and a partly mechanized MRF system 93 and simple composting facilities with manual turning of Table 2.5. Typical Waste Management Costs by Disposal Type (US$/ton) compost or use of excavator and mechanical screen to sieve the compost94. 15. Cost-effectiveness is a key priority in the project and low-cost solutions are highly prioritized. Under the planned investments, a comparison has been carried out with other typical solid waste Source: World Bank, 2020 treatment and disposal costs. The average costs per ton of waste are projected to be US$8 for Siem Reap and US$9 for Kandal and Kampong Speu.95 This is in line with, and on the lower side of, typical waste management costs for sanitary landfills in low-income countries, which typically range from US$10 to US$20 per ton of waste (Table 2.5). 16. The manual materials recovery and composting facilities under the project are projected to be US$800,000 in capital costs per facility. Fully automated mechanical and biological treatment units are more expensive than expected manual facilities. The costs of the anaerobic digestion treatment plant in Ningbo China, financed under World Bank Ningbo Municipal Solid Waste Minimization and Recycling Project (P123323), to process approximately 193,000 tons/year of kitchen waste from markets and households was US$60 million.96 This is slightly higher than the average capital investment (CAPEX) costs for such mechanical biological treatment systems, which have CAPEX costs in the order of US$45 million for 200,000 tons/year.97 17. The project is estimated to generate an economic net present value of US$35 million. The economic internal rate of return of the investment is estimated at 12.6 percent. The results indicate that the project is economically viable. 18. The provision of MSW services is a basic public sector function and significant investments and institutional development support are needed to improve waste collection, disposal and treatment capacity and enable dealing with increasing waste generation. Without improvements in waste collection coverage and waste/plastics recovery and disposal practices, the scale of current environmental impacts will increase markedly. The primary responsibility for setting the overall institutional, policy and 93 Integrated waste pickers that are registered can identify and recover recyclables contained in the waste in the community MRF. Recyclables are manually sorted by the workers and stored in the respective boxes/containers, with potential gradual mechanization of sorting and more formalization of workers. 94 For crude composting, poorly sorted organics with mixed waste content is acceptable as the purpose of crude composting is to prevent GHG production and produce a cover material that goes back into the landfill as daily/intermediate cover. 95 Based on typical weighted average waste density of 1 ton per m3 of waste after compaction and decomposition. 96 World Bank, Implementation Completion Report for the China Ningbo Municipal Solid Waste Minimization and Recycling Project. 97 World Bank, Solid and Industrial Hazardous Waste Management Assessment, options and action area to implement the national strategy in Vietnam, 2019. Page 78 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) legislative framework for municipal waste management lies with the central governments. The primary responsibility for providing on-the-ground waste services and for ensuring the controlled management of solid waste, lies with local authorities (whether through local governments providing such services or through organizing such service through private waste companies). There is a funding gap for services and infrastructure and there is a technical and operational gap at all government levels. Financing is the single most critical requirement for sustained operations and national and local governments play an important role to secure investments and sustained operational funding.98 The private sector is keen to partner with public institutions to address operational waste challenges, but a lack of confidence in the areas of regulations and public governance, operational finance, and management capacity is a significant barrier for a broader and deeper involvement by the private sector. As a result, much needed private capital inflows for investments in the sector are also not currently available and provide the rationale for public sector financing and value added of World Bank support for SWM reform to improve the waste sector performance. Figure 2.3 Economic Benefits Summary Line Chart 19. Climate impacts. Carbon benefits can be expected due to reduced GHG emission particularly from measures in landfill improvements such as collection of an estimated 50 percent of landfill gas generated at landfills and separation and treatment of 15 percent of total organic waste. 99 The estimated GHG emissions impact over the six-year project implementation period is a net reduction of 315,000 of CO2- equivalent. The potential for voluntary Emissions Reduction Purchase Agreements (ERPA) or monitoring, validation and reporting to meet Cambodia’s NDC is existing. Estimated ERPA prices are in the order of US$10/ton of CO2-equivalent—equaling a potential grant revenue steam of US$525,000 per year. The value of carbon offsets has been assessed in three scenarios, applying a zero, low, and high shadow carbon price according to the World Bank 2017 Shadow Price of Carbon Guidance Note. Table 2.6 summarizes 98World Bank, Bridging the Gap in Solid Waste Management, Governance Requirements for Results, 2021 99Estimations based on international and regional experience and based on the Pre-Feasibility Assessment undertaken for Project preparation. Page 79 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) the climate analysis results. Figure 2.4 shows the carbon benefits under two scenarios: low and high shadow prices of carbon.100 Table 2.6: Total Methane Generated from Solid Waste Disposal (ton CO2eq) Summary Total Project implementation time (years) 6 Gross emissions under baseline scenario/ no intervention (ton CO2eq) 582,742 Gross emission under project interventions (ton CO2eq) 267,361 Net emissions reduction (ton CO2eq) 315,000 Average annual emissions reductions (ton CO2eq) 52,500 Figure 2.4. Carbon Benefits Under Low and High Shadow Prices of Carbon Carbon benefits: 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 - 2023 2022 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 Low value of SPC (USD) High value of SPC (USD), cum 100 World Bank. 2017. ‘Shadow price of carbon in economic analysis’ , guidance note. Page 80 of 81 The World Bank Cambodia: Solid Waste and Plastic Management Improvement Project (P170976) ANNEX 3: Project Map Page 81 of 81