Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00005923 IMPLEMENTATION COMPLETION AND RESULTS REPORT D5210-AF ON A GRANT IN THE AMOUNT OF SDR 38.6 MILLION (US$ 52.5 MILLION EQUIVALENT) TO THE Islamic Republic of Afghanistan FOR THE Afghanistan Gas Project (AGASP) May 08, 2023 Energy & Extractives Global Practice South Asia Region Official Use CURRENCY EQUIVALENTS (Exchange Rate Effective {Apr 25, 2022}) Currency Afghani AFG US$ 1 = AFN 78.25 US$ = SDR 0.7335 FISCAL YEAR December 21 - December 20 Regional Vice President: Martin Raiser Country Director: Melinda Good Regional Director: Demetrios Papathanasiou Practice Manager: Naomi A. Johnson Task Team Leader(s): Carlos Alberto Lopez Quiroga, Noora Arfaa ICR Main Contributor: Noora Arfaa Official Use ABBREVIATIONS AND ACRONYMS AEITI Afghanistan Extractive Industries Transparency Initiative AGASP Afghanistan Gas Project AGE Afghan Gas Enterprise AOGRA Afghanistan Oil and Gas Regulatory Authority ARTF Afghanistan Reconstruction Trust Fund Bcf Billion Cubic Feet CPF Country Partnership Framework CSO Civil Society Organization DA Designated Account DAB Da Afghanistan Bank DABS Da Afghanistan Breshna Sherkat DM Deputy Minister E&P Exploration and Production E&S Environmental and Social EITI Extractive Industries Transparency Initiative FM Financial Management GBV Gender-based Violence GoIRA Government of Islamic Republic of Afghanistan GRM Grievance Redress Mechanism GSA Gas Supply Agreement HEC High Economic Council HEIS Hands-on Expanded Implementation Support HSE Health, Safety, and Environment IFC International Finance Corporation IPP Independent Power Producer IUFR Interim Unaudited Financial Report M&E Monitoring and Evaluation MAOP Maximum Allowable Operating Pressure MCM Million Cubic Meters MEW Ministry of Energy and Water MIGA Multilateral Investment Guarantee Agency MoF Ministry of Finance MoMP Ministry of Mines and Petroleum MoU Memorandum of Understanding MSCMD Thousand Standard Cubic Meters Per Day MSG Multistakeholder Group NEPA National Environmental Protection Agency NFPP Northern Fertilizer and Power Plant O&M Operation and Maintenance OHS Occupational Health and Safety PD Procurement Directorate PDO Project Development Objective PMSF Project Management Support Firm PMU Project Management Unit PPA Power Purchase Agreement SCADA Supervisory Control and Data Acquisition SDNRP1 First Sustainable Development of Natural Resources Project SDNRP2 Second Sustainable Development of Natural Resources Project SE Supervision Engineer SMPL Sheberghan-Mazar Pipeline SOE State-owned Enterprise STEP Systematic Tracking of Exchanges in Procurement TA Technical Assistance TFBSO Task Force for Business and Stability Operations TOR Terms of Reference TPM Third-party Monitoring TTL Task Team Leader TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 II. OUTCOME .................................................................................................................... 13 A. RELEVANCE OF PDOs ............................................................................................................13 B. ACHIEVEMENT OF PDOs (EFFICACY) ......................................................................................13 C. EFFICIENCY ...........................................................................................................................16 D. JUSTIFICATION OF OVERALL OUTCOME RATING ....................................................................17 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 17 A. KEY FACTORS DURING PREPARATION ...................................................................................17 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 20 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................20 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE .....................................................21 C. BANK PERFORMANCE ...........................................................................................................22 D. RISK TO DEVELOPMENT OUTCOME .......................................................................................25 V. LESSONS AND RECOMMENDATIONS ............................................................................. 25 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 28 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 40 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 42 ANNEX 4. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 43 ANNEX 5. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P172109 Afghanistan Gas Project (AGASP) Country Financing Instrument Afghanistan Investment Project Financing Original EA Category Revised EA Category Organizations Borrower Implementing Agency Islamic Republic of Afghanistan Ministry of Mines and Petroluem Project Development Objective (PDO) Original PDO The PDO is to facilitate a sustainable supply of gas through targeted investments in gas infrastructure and enhanced gas sector governance . Page 1 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 52,500,000 52,500,000 4,368,777 IDA-D5210 Total 52,500,000 52,500,000 4,368,777 Non-World Bank Financing 0 0 0 Total 0 0 0 Total Project Cost 52,500,000 52,500,000 4,368,777 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 26-Nov-2019 08-Jan-2020 31-Oct-2024 31-Oct-2024 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions KEY RATINGS Outcome Bank Performance M&E Quality Unsatisfactory Moderately Satisfactory Modest RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 29-Apr-2020 Satisfactory Satisfactory 1.60 02 16-Dec-2020 Satisfactory Moderately Satisfactory 3.14 03 30-Sep-2021 Moderately Satisfactory Moderately Unsatisfactory 4.37 04 14-Apr-2022 Moderately Satisfactory Moderately Unsatisfactory 4.37 Page 2 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) 05 28-Oct-2022 Moderately Satisfactory Moderately Unsatisfactory 4.37 SECTORS AND THEMES Sectors Major Sector/Sector (%) Energy and Extractives 100 Oil and Gas 67 Public Administration - Energy and Extractives 33 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Finance 75 Finance for Development 75 Infrastructure Finance 75 Human Development and Gender 33 Gender 33 Urban and Rural Development 75 Rural Development 75 Geospatial Services 75 Environment and Natural Resource Management 100 Energy 100 Energy Efficiency 69 Energy Policies & Reform 15 Access to Energy 16 ADM STAFF Role At Approval At ICR Regional Vice President: Hartwig Schafer Martin Raiser Country Director: Henry G. R. Kerali Melinda Good Page 3 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) Director: Riccardo Puliti Demetrios Papathanasiou Practice Manager: Christopher Gilbert Sheldon Zubin Esadvaster Bamji Carlos Alberto Lopez Quiroga, Task Team Leader(s): Michael C. Stanley, Noora Arfaa Noora Arfaa ICR Contributing Author: Noora Arfaa Page 4 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL 1. The August 21, 2021, takeover of the Afghanistan government by the Taliban marked the culmination of 20 years of violent conflict in Afghanistan that killed tens of thousands of civilians and combatants in a protracted civil war. Despite the optimism of the early years with economic growth averaging over 9 percent a year during 2003- 2012, the gradual withdrawal of international forces and assistance starting in 2011-2012 saw a long-term decline in growth. The last five years from 2017-2021 were marked by economic stagnation and deterioration as the country was hit by a worsening conflict and deepening internal political divisions. The contested Presidential elections in September 2019, were followed by a long hiatus until the announcement of a new government in May 2020. Average annual growth fell to 2.5 percent between 2015-2020, below the rate of population increase over most of that period. In 2020, the COVID-19 pandemic led to a temporary closing of the country’s borders, an estimated 2 percent economic contraction and a sharp increase in poverty to reach an estimated 60-70 percent of the population by the end of the year. Most aid to the country was suspended following the seizure of power in August 2021, triggering an economic crisis, widespread and deepening poverty and major disruption to basic services. 2. Displacement, drought, and corruption were additional challenges. Displacement intensified during the period, with more than 3.5 million Afghans internally displaced by conflict by the end of 2020 and more than 2 million returning to Afghanistan—mostly from Pakistan and Iran—since 2015. Deterioration of rural livelihoods added to displacement: nearly 400,000 individuals were displaced by drought alone in 2018. Private sector development was heavily constrained by insecurity, political instability, weak institutions, inadequate infrastructure, and widespread corruption. Afghanistan was ranked 174 out of 180 countries in Transparency International’s corruption perception index in 2021. According to UNDP’s Human Development Index, Afghanistan ranked 169 out of 187 countries in 2020. Many of the key educational gains of the past had been long under threat as school attendance levels had steadily fallen over several years, with more than half of children between 7-17 years missing from school in 2018, and girls making up over 60 percent of those affected (UNICEF, 2018). 3. Afghanistan’s fragility, defined both in terms of weak state institutions, poor governance and dysfunctional societal relations leading to violent conflict between groups, affected almost every aspect of development. The risks entailed for development partners were always going to be high in such an environment. At the same time, development partners had to contend with an increasingly difficult working environment, including managing long periods of remote working, third-party monitoring of projects and frequent restrictions on movement. During the COVID-19 crisis in 2020 many withdrew their international staff from Kabul and national staff worked from home. 4. The Bank’s Systematic Country Diagnostic (SCD) and Country Partnership Framework (CPF), both published in 2016, pointed out the extreme fragility and high risk of operating in Afghanistan. The SCD argued that carefully selecting and tailoring development interventions to the fragile circumstances in the country was a critical imperative. The CPF noted the need for flexibility in project design and implementation, with the ability to adjust projects quickly as circumstances changed, and selectively downscale some interventions, while putting others on hold until the situation improved. Page 5 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) 5. Following the takeover of government in mid-August 2021, the World Bank paused its disbursements and suspended its operations in Afghanistan. The sudden cut-off of aid from the international community, combined with the impact of drought in rural areas, led to a dramatic fall in living standards and a humanitarian crisis. In response, in November 2021 the World Bank Board approved the partial and limited release of uncommitted ARTF funds to the UN’s World Food Programme and UNICEF under a Transfers-Out (TO) modality to meet urgent humanitarian needs. This approach was expanded in March 2022 to include over USD $1 billion in ARTF funding, under both TO and Recipient executed (RE) modalities, to meet both humanitarian and urgent development needs to help protect the vulnerable, preserve human capital and reduce the need for future humanitarian assistance in four key areas – agriculture, livelihoods, health and education. All support was to be given off budget and outside the direct involvement of the Interim Taliban Administration (ITA) to United Nations agencies and international and non-governmental organizations working in the country. In conjunction with this new approach, existing projects that were suspended at the time of the Taliban takeover in August 2021 were to be phased out and Implementation Completion and Results Reports (ICRs) prepared for the portfolio by the end 2022 to ensure timely capture of results under each project as well as lessons-learned from the World Bank’s long engagement in the country. Sector Context 6. At the time of project appraisal, reforms and investments in the extractives sectors were viewed as a key for Afghanistan to achieve its economic development potential, given the country’s abundance of untapped mineral wealth (minerals, oil and gas). Aside from agriculture, extractives and energy were assessed by the Bank, the GoIRA, and other development partners as the only sectors that could leverage significant economic development potential for Afghanistan 1. In 2006 the U.S. Geological Survey (USGS) and the Ministry of Mines and Petroleum (MoMP) assessed the undiscovered conventional, technically recoverable natural gas resources of northern Afghanistan at a substantial 15.7 trillion cubic feet (TCF); and the potential offered by the minerals sector as far more prolific. Despite substantial donor support for nearly a decade, several binding constraints had inhibited investor interest and sector development. 7. The MoMP had been strengthening the enabling environment for private/commercial sector investments, targeting further development of the producing and discovered gas fields in northern Afghanistan and testing untapped potential in other prospective basins. While internationally competitive natural gas tender rounds confirmed investor interest, unaddressed impediments to investment across the gas value chain remained an obstacle to continued sector development. Deficiencies that compromised the investment potential of the sector included a weak legal, regulatory and contractual framework, and weak institutional and human resource capacity among relevant government agencies - such as the MoMP, the National Environmental Protection Agency (NEPA), Afghan Gas Enterprise (AGE), and later Afghanistan Oil and Gas Regulatory Authority (AOGRA) - to adequately manage the sector and minimize investor risks. 8. In late 2018, the Government of Afghanistan requested the World Bank Group’s (IFC, WB, and MIGA) support on a dedicated gas-to-power development program, which included three interrelated initiatives aimed at jump- starting the extractives sector through a combined push-pull strategy. The development of Afghanistan’s gas resources was identified as a critical link for long-term access, security and diversification of energy supply, and for the growth and stability for the country. Over the short-term, indigenous gas resources offered opportunities for increased energy access and energy security, improved self-reliance and lower dependence on imported electricity, and created the space for the deployment of variable, intermittent renewable energy. However, gas sector reforms 1 World Bank Group. Afghanistan Development Update. Building Confidence Amid Uncertainty, July 2019. Page 6 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) were required to both improve general investment confidence and mobilize existing economic potential. In addition, several critical pieces of gas infrastructure were needed to ensure the delivery of gas and the viability of the independent power plants (IPPs) set to be commissioned by 2020/2021. 9. The accelerated development of the gas and downstream power sectors was justified for the following reasons: (a) to diversify the sources of electricity supply and provide more Afghans with access to the electric grid, to enable them to lift themselves out of poverty and engage in more productive economic activities; (b) to diversify electricity sources to provide more stable supply for those who already have access to the electric grid; and (c) to increase the supply of gas-fired power to help technically stabilize the electricity grid as the Government was advancing a 2,000 MW solar energy program (compared to 522 MW of installed domestic power) as part of a wider green growth agenda. However, by 2019 when the project was being prepared, Afghanistan had yet to demonstrate a fully integrated ‘proof of concept’ investment to develop and deliver natural gas for power generation; hence the need to support the development of the sector, while concurrently de-risk the existing investment framework. 10. As part of the comprehensive WBG strategy, the ‘push’ for the development of the gas sector was provided through the Afghanistan Gas Project (AGASP, P172109, approved 26 November 2019), which included support to the GoIRA in the amount of a US$52.5 million grant to develop specific gas supply infrastructure and improve sector governance. Simply put, the project was intended to ensure that enough gas could be supplied to the IPPs discussed below. The ‘pull’ was provided by two small-size gas-fired power plants which would create the cornerstone and anchor the development of an internal market for natural gas: (a) a 40 MW gas-fired IPP at Sheberghan to operate in the short term, sited near the existing gas fields (Sheberghan Gas-to-Power Project, P166405, approved 10 October, 2019) which was supported through an IDA guarantee and (b) a 58.6 MW gas-fired IPP to operate over a 20-year time frame located at Mazar-e-Sharif (Mazar e-Sharif Gas-to-Power Project, P157827, approved 10 October, 2019), which was supported by multiple WBG instruments, including IDA and MIGA guarantees, an IFC loan, and the IDA Private Sector Window (PSW). It was expected that the development of Afghanistan's natural gas potential would initially be anchored in the expansion of domestic uses of natural gas and, fundamentally, in the expansion of gas-based electric generation capacity as part of current efforts to increase availability of power and energy from domestic sources. 11. Project agreements for the Mazar and Sheberghan IPPs, including the corresponding power purchase agreements (PPAs) and gas sales agreements (GSAs) (gas supply commitments) had been signed in January 2018 and March 2018, respectively. The implementation of both projects, however, would be dependent on confirmed access to sufficient and sustainable gas supply from the existing productive fields and on sustained investment in the development of upstream gas production and processing capacity to ensure long-term gas supply to support the two IPPs for the duration of their contracts 2. 12. Afghanistan Gas Project. At the time of project appraisal, the Government of the Islamic Republic of Afghanistan (GoIRA) faced an urgent challenge: to increase gas production and transport capacity from the existing 350 thousand standard cubic meters per day (Mscmd) to 920 Mscmd to supply needed fuel gas for the Sheberghan and Mazar IPPs and for existing off-takers, including the Northern Fertilizer and Power Plant (NFPP) near Mazar. To meet this demand and fulfil its contractual obligations, the GoIRA would need to accelerate construction of the new 2 In April 2022, the World Bank withdrew its guarantee for the Mazar and Sheberghan projects, and as of August 2022, the IFC Loan was on hold. Page 7 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) Sheberghan-Mazar Pipeline (SMPL) 3 and optimize production, treatment (e.g. dehydration) and processing (e.g. desulfurization) of natural gas flows to meet contracted quality specifications. 13. AGASP sought to de-risk the Mazar and Sheberghan IPPs through interrelated sets of activities that would address key bottlenecks under Government control through: 1) support to the MoMP and AGE to ensure sustainable natural gas deliverability for off-takers through the enhancement of gas infrastructure, including completion construction of the SMPL to international standards, optimization and operations and maintenance (O&M) of field facilities to international standards, and installation of a new desulfurization amine plant, and 2) support to the MoMP, AOGRA, and AGE strengthening their institutional capacity for the management of Afghanistan’s hydrocarbon resources—ensuring predictability, transparency, and effectiveness. Figure 1. Gas-to-Power Value Chain 14. The project was aligned with the Country Partnership Framework (CPF) (2017–2020) for Afghanistan, which had been extended by two years to FY22 during the 2019 Performance Learning Review (PLR). The CPF focused on (a) building strong and accountable institutions, (b) supporting inclusive growth, and (c) deepening social inclusion, which was critical to maintaining the balance between protecting the poor and laying the foundations for longer- term growth. The pillar on inclusive growth indicated that “support for extractive industries aims to improve governance and increase revenues, and to provide a base for more diversified growth in the longer term along key resource corridors.” The Afghanistan Development Update (2019) noted that over the medium-term, economic 3 Starting in 2016, AGE had begun to undertake the construction of the new pipeline, and approximately 44 km (about 50% of its total length) had been laid and partially trenched along the route of the old structure using pipe and materials delivered by US Taskforce for Business Stability and Operations (TFBSO). Under Component A1 of AGASP the remaining 44.8km would be constructed and the entire pipeline would be brought up to international standards. Page 8 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) development progress would depend on mobilizing the sectors with greatest capacity to support increased growth, job creation, exports, and government revenues. Gas production and use was considered conducive to support a balanced growth strategy through improved energy access and energy security, including the realization of Afghanistan’s substantial extractives potential. Theory of Change (Results Chain) 15. The PDO of AGASP was to facilitate a sustainable supply of natural gas through targeted investments in gas infrastructure and enhanced gas sector governance. The theory of change for the project was relatively straightforward: Two sets of activities were necessary to achieve a sustainable supply of commercial-quality natural gas: (a) the enhanced gas infrastructure for sustainable gas supply for the IPPs and other existing and potential off- takers; and (b) enhanced gas sector governance, by strengthening the institutional, regulatory and contractual environment to enable private investment. The first set of project activities aimed to enhance the viability of the gas-to-power projects and build Government capacity to successfully meet its gas supply commitments (Component A). The second set of activities adopted a much more integrated view of the gas sector, and aimed to improve and modernize sector management and governance capacities by updating the policy and regulatory framework, strengthening institutional capacity, strengthening environmental and social (E&S) management (Component B). Figure 1, taken from the Project Appraisal Document (PAD) for AGASP, shows graphical representation of the envisaged theory of change moving from main activity areas to project inputs to key project outcomes to long-term (sustainable) outcomes. Figure 2: AGASP Theory of Change Project Development Objectives (PDOs) 16. The Project Development Objective remained unchanged throughout the life of the project as to facilitate a sustainable supply of gas through targeted investments in gas infrastructure and enhanced gas sector governance. Page 9 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) Key Expected Outcomes and Outcome Indicators 17. PDO-Level indicators and expected outcomes were as follows: a) Increased capacity to deliver commercial-quality natural gas to off-takers in Sheberghan and Mazar b) Improved institutional, regulatory, and contractual framework for gas sector management and oversight 18. While the entire project was aimed at facilitating a sustainable supply of gas, PDO indicator ‘a’ is linked primarily to the first element of the PDO on targeted investments in gas infrastructure and to the activities financed under Component A, whereas PDO indicator ‘b’ is linked to enhanced gas sector governance and the activities financed under Component B of the project. Components 19. The project contemplated three components: Component A: Sustaining Gas Supply; Component B: Strengthening Gas Sector Governance; and Component C: Project Management. Activities under Component A were prioritized for implementation during the early stages of the project to ensure the deliverability of natural gas was aligned with the timelines for the commissioning of the IPPs; whereas many of the activities under Component B were longer-term in nature, reinforced the sustainability of project interventions, and as such were prioritized for implementation during the later stages of the project. 20. A detailed summary of each of the components is provided in the following paragraphs: 21. COMPONENT A: Sustaining Gas Supply (US$35.20 million). The objective of Component A: Sustaining Gas Supply was to support the sustained supply of commercial-quality natural gas for the Sheberghan and Mazar IPPs and other existing and potential off-takers, and links directly to the first PDO-level indicator above. Subcomponent A1 provided support to the MoMP and AGE to ensure sustainable natural gas deliverability for off-takers by supporting the refurbishment and supplementation of existing gas infrastructure, including completing construction of the Sheberghan-Mazar Gas Pipeline (SMPL), optimization and O&M of gas infrastructure and field facilities, and installation of a new amine plant. More specifically, this component financed: i) Procurement of equipment and provision of specialized technical assistance for the construction, operations, and maintenance of the new SMPL to international standards, with hands-on support provided to AGE by a supervision engineer and a consultancy specialized in sector operations and E&S management; ii) Procurement of a new amine plant and provision of technical assistance to optimize field facilities and adopt recommended O&M practices in gas field facilities; iii) Technical assistance and on-the-job capacity building for AGE to ensure that as older gas wells naturally depleted, a plan was in place to develop newer resources to ensure the sustainability of natural gas supplies to existing and prospective offtakes. Subcomponent A2 was intended to provide technical assistance support to the MoMP to prepare and launch an international competitive tender for the development of the discovered but undeveloped Totimaidan gas block to ensure the medium- to long term sustainability of natural gas supply for the Sheberghan and Mazar IPPs and other off-takers. This subcomponent financed technical, legal, financial, E&S expertise, and training for the preparation and implementation of the international tender and monitoring of contractual and regulatory compliance (including E&S aspects) of the Totimaidan gas block. Page 10 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) 22. COMPONENT B: Strengthening Gas Sector Governance (US$13.3 million). The objective of this component was to address institutional capacity gaps for the management of Afghanistan’s hydrocarbon resources—ensuring predictability, transparency, and effectiveness. The activities under this component linked directly to the achievement of the second PDO-level indicator. Emphasis was given to the MoMP’s central functions as established in the Hydrocarbons Law (2018) and the Government’s Mining Sector Road Map (2018), as well as to the operationalization of AOGRA. Geographic focus included the MoMP’s and AOGRA’s central offices in Kabul and, where relevant to the task at hand, field offices responsible for regulatory oversight and inspection, including compliance with occupational health, safety and environmental requirements. Component B was organized around two separate subcomponents. Subcomponent B1 supported activities to strengthen the institutional capacity of the Ministry to discharge its functions and responsibilities as related to the development of sector policy, sector strategies to achieve short- to medium-term objectives, sector oversight, development of model contracts and regulations, assessment of contractual terms and conditions, financial modeling, and inter-institutional coordination. Activities financed through Subcomponent B1 comprised primarily technical assistance and capacity building focusing on the following: i) developing a robust institutional, legal and regulatory, and contractual framework to support sustainable gas sector development over the medium to long term and building the institutional capacity to implement the framework; ii) developing and implementing a program to strengthen the capacity of the MoMP’s human resources to facilitate the development and sustainability of gender-balanced staff and skills, with a specific focus on on-the-job training, enhancement of technical skills and capacity for environmental and social oversight and management of the sector and for the implementation of the Afghanistan Extractive Industries Transparency Initiative (AEITI). Subcomponent B2 was aimed at consolidating AOGRA’s operationalization and its capacity to discharge the functions and responsibilities assigned to the regulator in the new Hydrocarbons Law. This subcomponent financed TA in support of AOGRA to successfully discharge its legal mandate. 23. COMPONENT C: Project Management (US$4 million). This component provided support for project management, in accordance with the World Bank’s fiduciary and other guidelines, including financing incremental operating costs (IOCs), equipment, training on fiduciary and project management issues and project audits, and engagement of technical advisers to support project performance monitoring and planning. This component also financed the cost of recruiting a project management support firm (PMSF) to support the MoMP in the effective management and implementation of the project, as well as costs associated with ‘project implementation staff’. The firm was intended to provide on-the-job training and capacity building to project and ministry staff. Page 11 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) Table 1: AGASP Project Costing Table Budgeted at Project Activities Appraisal US$, millions COMPONENT A: Sustaining Gas Supply 35.20 Subcomponent A1. Gas Infrastructure 31.95 A1.1. Procurement of equipment and technical assistance for the construction, 13.25 operations, and maintenance of the new SMPL A1.2. Procurement of amine plant and technical assistance for the O&M of gas field 16.45 facilities A1.3. Technical assistance and on-the-job capacity building to AGE on Yatimtaq gas 2.25 field Subcomponent A2. Tendering Totimidan Gas Block 3.25 COMPONENT B: Strengthening Gas Sector Governance 13.30 Subcomponent B1. Strengthening the MoMP’s Capacity to Manage the Gas Sector 10.80 B1.1. Gas sector development framework 3.50 B1.2. Sustainable administration and management of the MoMP 1.50 B1.3. Building institutional capacity at MoMP for the E&S management of the sector 3.30 B1.4. Strengthening transparency and accountability of the EI Sector - EITI 2.50 B2. Strengthening Regulatory Compliance and Monitoring of Gas Sector Activities 2.50 COMPONENT C: Project Management 4.00 Project Total 52.50 For further details on specific activities financed under the project please see Annex 1, Table B. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) 24. There was no project restructuring, and no changes were made to the PDO or outcome targets, project components, indicators, etc. Page 12 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) II. OUTCOME A. RELEVANCE OF PDOs Assessment of Relevance of PDOs and Rating 25. The relevance of the PDO remained ‘substantial’ at the time that project activities ceased (August 15, 2021). As mentioned above, the project was aligned with the Country Partnership Framework (CPF) (2017–2020) for Afghanistan, which had been extended by two years to FY22 during the 2019 Performance Learning Review (PLR). There were no significant shortcomings in the relevance to the current Bank CPF/CPS. The operation provided clear evidence of the alignment of the PDOs to the current CPF/CPS objectives. 26. The AGASP was anchored on the Mazar and Sheberghan IPPs that were also benefitting from World Bank Group support as proof-of-concept investments, which gives further justification to relevance of its primary objectives and its design. Ensuring that gas was supplied to these IPPs and that governance conditions were in place to support the investments, so that the people of Afghanistan could have increased access to electricity and energy security, was core to the achievement of the PDO. One IPP became operational during the life of the project (Sheberghan), with discussions of expansion, while the project continued to work towards ensuring that gas could be supplied to the Mazar IPP, until the cessation of activities. 27. In February 2022, the World Bank Board of Directors approved the Approach Paper 2.0 for Afghanistan which sets out the strategy for WBG support to the people of Afghanistan, post the collapse of government. The Approach Paper focuses primarily on those sectors that support basic needs of the population, namely food, health, education, and livelihoods. Sectors such as energy security and energy access, which serve as broader economic development enablers, are not contemplated in the Approach Paper. This does not, however, negate the longer- term needs of Afghanistan for access to energy and energy security using indigenous natural gas resources. B. ACHIEVEMENT OF PDOs (EFFICACY) 28. The development objective of the project was to facilitate a sustainable supply of natural gas¸ which was to be achieved through two key activities i) targeted investments in gas infrastructure and ii) enhanced gas sector governance. This section of the ICR evaluates the project’s ability “to facilitate a sustainable supply of gas”. (Please note that given the short implementation period of 19-months and low disbursement rate of 8.11% , the team chose not to assess the efficacy of the project using the split rating approach.) Assessment of Achievement of Each Objective/Outcome 29. By the time the government collapsed on August 15, 2021 and all project activities were effectively suspended, few sustainable results had been achieved. While project implementation had picked up momentum during the first 9 months, it faced significant delays in its last 10 months as internal security deteriorated, the government became increasingly fractured, and the COVID-19 pandemic forced lockdowns. 30. Component A PDO-Level Indicator: Increased capacity to deliver commercial quality natural gas through to off-takers in Sheberghan and Mazar. Under Subcomponent A1. Gas Infrastructure, the MoMP procured several Page 13 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) individual consultants and a supervision engineer (SE), which were tasked with providing supervisory and technical support, and capacity building to AGE on activities related to the optimization of field operations in Sheberghan, construction of the remaining portion of the SMPL, and an assessment and management of environmental and social impacts. As a result of this specialized technical support, AGE increased its capacity to deliver commercial quality natural gas from a baseline of 330,000 cubic meters per day (cmd) to 560,000 cmd at the end of 2020, surpassing the first-year target for the outcome indicator, in anticipation of the commissioning of the Sheberghan IPP. According to the operators of the IPP plant in Sheberghan, as of June 2022, the plant is still receiving gas from AGE and operating at baseload capacity. 31. However, based on an assessment undertaken during project preparation, this volume of gas would have been insufficient to supply the Mazar IPP. A series of critical activities to ensure the sustainability of gas supply to the two IPPs and other off takers (i.e., the Northern Fertilizer Power Plant) beyond the medium-term were yet to be implemented. The sustainable supply of natural gas would be dependent on the continued development of already discovered gas resources in the Sheberghan area. Estimates based on projected demand and on the existing field development plan indicated that beginning in 2023, it would be necessary for the government to bring new wells into production to meet the needs of the two IPPs as well as other existing off-takers. A set of activities was included in the project to address the sustainable supply of gas over the short-to-medium-term through Activity A1.3. Technical Assistance and On-the-Job Capacity Building to AGE on Yatimtaq Gas Field, and over the long-term with the inclusion of Subcomponent A2. Tendering of the Totimaidan Gas Block. 32. By end of 2020, the supervision engineer had largely completed its phase 1 contract activities, except for the completion and approval of ESF-related documentation, which faced delays. This included pre-construction surveying and development of Detailed Design and Engineering (DD&E) for the SMPL; plan for the reconfiguration, optimization, testing and commissioning of field facilities; some support and training for the operation and maintenance (O&M) of field and transport facilities; and support for environmental and social management. However, the MoMP had been unable to address several bottlenecks related to the procurement of equipment and matériel 4 necessary for the construction of the SMPL, mobilization of the required workforce, and supplementation of AGE managerial and technical capacity 5. As stipulated in the project’s results framework, the pipeline’s commissioning was expected within the second year of project implementation (Q3 or Q4 2021). However, the SE’s last available projection called for its commissioning by late Q2 or early Q3 of 2022, assuming the bottlenecks mentioned above had been addressed by June 2021. At the same time, however, by August 15, 2021, the construction of the Mazar power plant had also suffered delays; its estimated commissioning date at the time coincided with the expected commissioning date for the SMPL. In August, support from the WBG to the projects (including the WB, MIGA and IFC) was suspended. To the team’s knowledge, the project sponsor’s plans for the Mazar IPP remain on hold to-date. 33. Component B PDO-Level Indicator: Improved institutional, regulatory and contractual framework for gas sector management and oversight. By August 15, 2021, administrative regulations addressing institutional and coordination aspects for sector management had been approved by the Cabinet (although they were not implemented, see below re AOGRA), EITI had reached meaningful progress, and the MoMP had recruited a strong 4 While construction equipment for the SMPL was included for support under the project, after extensive consultations and at the insistence of the GoIRA, it was agreed that 1st batch of construction equipment would be procured using government resources and Government-to-Government (G2G) arrangement with Tajikistan. After significant delays, some equipment was successfully procured but remained seized at the border. 5 The assessment conducted by the SE during its phase 1 activities with regards to the technical and managerial capacity of AGE, the requirements of construction equipment and matériel, and the quality of the already constructed portion of the SMPL differed from the assessments provided to the Bank and the GoIRA during project preparation. Page 14 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) team of E&S staff – all of which are critical targets in the project’s results framework. Each of these individual achievements was significant, particularly given the low-capacity fragile context in which the project was operating. The overall institutional, regulatory, and contractual framework for gas sector management and oversight was not substantively improved, nor it was intended to be improved within this timeframe being among those activities in component B envisaged for later implementation in the Project results framework 34. At the early stages of the project, priority was placed by MoMP and the Task Team on implementing activities under Component A designed to meet the heavy demands and tight timelines required to supply gas to the IPPs. Nonetheless, procurement for many of the remaining activities was underway by the time activities were effectively suspended. The paragraphs below include the status of implementation and achievements under Component B. 35. Under Activity B1.4. Strengthening transparency and accountability of the EI Sector, the National Secretariat for the Afghanistan Extractive Industries Transparency Initiative (AEITI), housed within the MoMP, maintained its activities with support from AGASP and crucial milestones were met during that period. Following its second Validation, on October 28, 2020, Afghanistan was assessed by the EITI Board to have made meaningful progress in implementing the EITI Standard. The country was deemed to have improved the transparency of licenses and contracts, state-owned enterprises, and quasi-fiscal expenditures and, as a result, Afghanistan’s temporary suspension had been lifted 6. The 7th AEITI Report, covering the Afghanistan years 1397 and 1398 (21 December 2017 - 20 December 2019), was published on June 27, 2021, which was again a major milestone given that the work was conducted during the height of the COVID-19 pandemic. The report was developed in-house by the AEITI multi-stakeholder group (MSG) with intensive technical assistance from the World Bank and the International EITI Secretariat. The Dari and Pashto versions of the report were published in July 2021. Afghanistan’s 8th AEITI Report, covering year 1399 (21 December 2019 - 20 December 2020) was due for publication by December 2022 and the third validation under the EITI Standard was scheduled for January 1, 2023; however, all EITI activities have been suspended since the collapse of the government. 36. Other partial achievements under the project included the recruitment of a national gender specialist to support the MoMP in the i) Preparation of a code of conduct for resource developers to implement Gender Based Violence (GBV) prevention in the extractives sector; and ii) Implementation of GoIRA gender policy within the MoMP. Concurrently the Bank team procured an international gender specialist (consultant) to work directly with the national gender specialist. However, given the limited capacity and time for implementation, expected outcomes from this work did not materialize prior to the cessation of project activities. In addition, a team of national E&S specialists was recruited through the project to support the MoMP E&S team, which was significant given the dissolution of the Social Development Unit of the MoMP several years prior; however, the MoMP had not yet formally established an E&S unit within its organizational structure, nor had capacity building activities for the unit commenced. The Bank, however, had procured two senior-level environmental and social specialists to work directly with the MoMP team. 37. As mentioned above, the project was meant to support institutional capacity building and human resource/skills development activities, resulting in strengthening the sustainability and long-term viability of gas sector management and development in Afghanistan. By August 15, 2021, the majority of institutional 6Afghanistan was suspended from EITI in January 2019 due to ‘inadequate progress’ in the implementation of its standards. Nineteen corrective actions were recommended by the EITI Secretariat for completion in eighteen months. With technical assistance from the World Bank under the AGASP project, AEITI successfully fulfilled fourteen and partially fulfilled five corrective actions. Page 15 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) development and capacity activities in Component B (i.e. B2. Strengthening Regulatory Compliance and Monitoring of Gas Sector; B1.3. Building institutional capacity at MoMP for the E&S management of the sector; B1.2. Sustainable administration and management of the MoMP) had not begun implementation or remained incomplete; procurement of specialized support was nearly finalized for several large consultancy assignments. On the operationalization of the Afghanistan Oil and Gas Regulatory Authority (AOGRA), (B2. Strengthening Regulatory Compliance and Monitoring of Gas Sector Activities), the project suffered significant setbacks due to lack of logistical, staffing, and budgetary support from the GoIRA (see below in Lessons Learned). To further incentivize the government of Afghanistan to operationalize AOGRA, prior actions related to the operationalization of AOGRA (including the appointment of the CEO) were included in two successive Development Policy Operations in 2020 and 2021. While the 2017 Hydrocarbons Law called for the establishment of AOGRA, by August 2021 its CEO 7 and High Board of Directors had not been appointed, rendering AOGRA non- operational as an institution. As a result, these project activities effectively lacked an essential counterpart and beneficiary. See Annex 1, Table B for a full list of activities under the project and their status as of August 2021. Justification of Overall Efficacy Rating 38. The Efficacy Rating (extent of achievement of the PDO) for the AGASP prior to the collapse of government and since the collapse of government are both rated as ‘Negligible’, as the operation barely achieved its objective to facilitate a sustainable supply of gas. The low rating is largely due to the collapse of government and the resulting suspension of the project early on its life –only 19 months after the date of effectiveness. While some important achievements were attained in the delivery of gas and governance of the sector because of the support provided, there are concerns over their medium- to long-term sustainability in the absence of a longer-term engagement by the Bank and implementation of the remainder of project activities. The overall efficacy rating for the project is therefore also ‘Negligible’. As mentioned above, given the short implementation period and low disbursement rate, the team chose not to assess the efficacy of the project using the split rating approach. C. EFFICIENCY Assessment of Efficiency and Rating 39. The overall efficiency rating for the project is ‘Modest’ as efficiency is assessed as below expectations. Below is a more detailed assessment of efficiency. Economic analysis 40. Given the stage at which the project was suspended, resulting in many incomplete activities and unrealized results, detailed economic analysis for this ICR is not feasible. Aspects of design and implementation 41. In the first 9-months of the project, implementation was efficient and largely on-schedule. The team at the 7 In 2020 a CEO for AOGRA was appointed by the then President of Afghanistan, however, he resigned from his post shortly thereafter. Page 16 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) Ministry had worked with the Bank during project preparation and was familiar with the project design and Bank procedures. With strong support from the Bank team, the MoMP was able to procure the new supervision engineer in record time (5 months), which was an indication of the Ministry’s capacity to implement and ownership in the project. In addition, the Bank together with the GoIRA counterparts held regular oversight and coordination meetings through the Mazar IPP High-Level Stakeholder Committee to discuss the status of progress of AGASP and the Mazar IPP Guarantee and IFC operations. Meetings were chaired by the Minister of Finance, with strong participation by Bank management (including the Bank CD and IFC Director), which allowed stakeholders to identify and flag implementation challenges early on and agree on a joint strategy for addressing bottlenecks. The convening of the High-Level Stakeholder Committee proved to be a very effective tool early on in implementation. While only a limited number of procurement activities were fully completed, where the procurement process was finalized or nearly finalized overall costs were aligned with budgeted allocations as per the costing table in the PAD. 42. Within less than a year of implementation there were several significant changes in personnel and key individuals that impacted the efficiency of implementation and decision making, resulting in significant delays. The Minister of Finance was replaced, which limited the MoF’s engagement in the High-Level Stakeholder Committee. The frequency of Committee meetings diminished, resulting in the absence of consistent and effective government oversight, weak inter-ministerial coordination, and reduced efficiency. In addition, at around the same time, a new Minister of Mines and Petroleum was appointed. Shortly thereafter the Project Director (PD) 8 and Project Coordinator (PC) 9 left the project, and the new minister began to question the implementation strategy and design of the project. More importantly, as the conflict and impacts of the COVID-19 pandemic intensified, the attention of senior government leadership shifted elsewhere. In the absence of strong and consistent leadership, there was a cascading effect of decision paralysis and accumulating bottlenecks in project implementation, resulting in significant delays. 43. By August 2021, implementation had fallen behind schedule for several key planned activities resulting in potential delays in the construction of the SMPL (including mobilization of personnel, procurement of equipment, and finalization of E&S instruments). This raised the risks that the effectiveness conditions for the Mazar IPP Guarantee and IFC operation would not be met on-time, threatening the timeline for the commissioning of the new power plant (assuming that the planned date of commissioning were to be maintained). D. JUSTIFICATION OF OVERALL OUTCOME RATING 44. Given the time available for implementation and the early suspension of the project resulting from the collapse of Government, the overall outcome rating is Unsatisfactory. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 8The PD resigned shortly after the appointment of the new Minister. 9The PC was jailed for allegedly falsifying his education documents during recruitment for the position, but was exonerated several months later and released from prison. Page 17 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) 45. Overall project preparation was strong, particularly given the challenges of preparing a project within a low- capacity FCV environment and under significant time constraints dictated by the timelines for the commissioning of the Sheberghan and Mazar IPPs. Notable strengths in project preparation are as following: i) the project design, while challenging, was relatively simple, and had in fact been streamlined when initially planned activities related to the mining sector were dropped; ii) the results framework and support to M&E through the proposed PMSF were appropriate given the design of the project, intended results, and capacity of the client; iii) the risks described in the PAD were accurate, frank and, to the extent possible, the proposed mitigation measures were appropriate; and iv) the selection of project beneficiaries and stakeholders was appropriate and congruent with the project design. 46. While the project was well designed, there were some challenges associated with the client’s readiness for project implementation, that could have been strengthened along the following lines: i) The requisite timeline for the recruitment of the PMSF as set out in the FA should have been set much sooner after the effectiveness date. Had the PMSF been on-boarded earlier, bottlenecks related to effective project management could have been better managed or avoided altogether. ii) As a result of security challenges and travel restrictions to Mazar and Sheberghan, the Bank team was unable to undertake a second verification and due diligence of the assessment of gas deliverability to the two IPPs (including a review of AGE’s management and technical capacity and the quality of the already constructed portion of the SMPL) prepared in 2018/19, which was used to inform the design of the project. Over the course of implementation, discrepancies emerged between the findings of this first assessment and that of the SE on AGE’s capacity to complete construction of the SMPL -even under the SE’s supervision- and the equipment and materiel needs for construction of the SMPL. iii) The complexity of the ESF, coupled with the limited capacity of the MoMP and AGE to meet its demands represented a substantial challenge for the Government and Task Team, during project preparation and early implementation. The provisions of the ESCP provided insufficient clarity on what specific instruments needed to be prepared, what activities needed to be implemented, by whom, and by when. B. KEY FACTORS DURING IMPLEMENTATION Factors subject to the control of government 47. There were several critical factors under the government’s control that impacted the pace of implementation. 48. During the earlier stages of project (first 9 months), there was strong traction and momentum on implementation as result of several actions taken by the counterparts including: i) Strong ownership of the project by the relevant stakeholders, including senior leadership at the MoMP, AGE, and MoF; ii) Relatively strong technical capacity among small cadre of young talented technical staff at the MoMP who served as the core project implementation team; and iii) Strong partnership with the World Bank, resulting in a sense of trust and positive working relationship between the Bank team and the project implementation team. 49. During the latter stages of project implementation (last 10 months), the internal political context deteriorated as the security situation worsened, affecting progress on implementation. During this period, factors that were under the government’s control that resulted in implementation delays include the following: i) Weak commitment and leadership upon the departure of the acting Minister of the MoMP and the departure of the acting Minister of Finance. The frequency, engagement in and effectiveness of the High-Level Stakeholder meetings was reduced, and key Page 18 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) elements of the project design, activities, procurement, and implementation strategy were questioned, without the leadership necessary to address critical bottlenecks. ii) Changes/Instability in key project staff. Following the appointment of a new minister in June of 2020, there were several changes in key project staff including the departure of the Senior Project Director (PD), the Project Coordinator (PC), and several members of the technical team. Despite persistent follow-up by the Task Team, the PC and PD positions were not refilled, in violation of the project’s financing agreement. By the time the project was suspended, resolution had not been reached on a number of issues delaying the construction of the SMPL and optimization of field facilities, including a contractual dispute with the supervision engineer which was not satisfactorily addressed, delays in procurement of a second batch of equipment and materiel for construction of the SMPL, delays in procurement of the new amine plant, capacity gaps at AGE to fulfill its role under the project which were not quickly addressed, etc.; iii) Weak Institutional and Implementation Capacity. Based on experience of the first and second Sustainable Development of Natural Resources Projects (P098118 and P118925), the Bank team recognized from the outset that the MoMP did not have the project management (procurement, FM, contract management, M&E, etc.) and E&S safeguards capacity to implement a project of this complexity, particularly given the interdependence between activities and the tight implementation timelines. However, the Government’s decision was to rely on its own agencies and institutions for the implementation of on-budget programs, which was an approach that the World Bank supported. In anticipation of these challenges and as reflected in the project’s FA, the Environmental and Social Commitment Plan (ESCP) and PAD, two large consultancies were critical to the project. The first, a Project Management and Support Firm (PMSF), aimed at building capacity and supporting the project team at the MoMP to manage the day-to-day, non-technical aspects of project activities, including developing a detailed project implementation plan to help manage and monitor project complexities and support timely decision making. While mobilization of this consultancy was to be completed within 8 months of project effectiveness (as per the FA), by the time the project was suspended the procurement process had just been finalized (with an 11-month delay). The second consultancy, an Environmental and Social Support Firm (ESSF), was aimed at building long-term institutional capacity at the MoMP to manage E&S risks associated with the project and the sector as a whole. With significant delays, ToRs for this consultancy were only sent to the Bank for No Objection just prior to the collapse of government. Factors subject to World Bank control 50. Over the course of project implementation, the Bank team proactively sought to manage risks as they arose and provided intensive hands-on supervision and implementation support through the following: i) frequent missions in Kabul (when allowed) and virtual meetings/missions under COVID-19 restrictions with project staff, government counterparts and consultants; ii) presence of a country-based operations officer to provide the project team with day- to-day operational support, as well as strong support from country-based procurement, environmental and social specialists; iii) procurement of international consultants by the Bank team to provide the client with specialized, just- in-time support, advice and capacity-building on critical gas field optimization and operations, on environmental and social management and gender, and procurement (through Hands-on Expanded Implementation Support, HEIS). In addition, given the complexity and high-profile nature of the operation, World Bank management was actively engaged through the High-Level Stakeholder Committee. This level of support allowed for the project’s satisfactory progress during the early stages of project implementation, despite the challenging FCV environment in which it was operating. Factors outside the control of government and/or implementing entities 51. While factors discussed above had an impact on project implementation, those factors that were largely outside of the government’s control ultimately played the most significant role in the project’s inability to meet its Page 19 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) development objectives: namely the i) deteriorating security situation and eventual collapse of government and ii) the COVID-19 pandemic. 52. The project was designed during a period of instability and fragility in Afghanistan, and these risks were accounted for to the extent possible in project design. During preparation, it was recognized that there were security risks along the route of the unconstructed portion of the SMPL that could impact its construction, and several mitigation measures were put in place, including the mobilization of security forces. However, by the 3rd quarter of 2020, instability, fragility, and conflict intensified to unprecedented levels, with the announcement of an imminent withdrawal of US and NATO forces, coupled with the challenges of rapidly deteriorating security in and around Sheberghan and Mazar, managing the COVID-19 pandemic and resulting lockdowns. While implementation delays are not uncommon in Afghanistan, given the rapidly deteriorating security situation, leading to the eventual collapse of government, there were no viable mitigation measures available to Bank team or the government. Moreover, because of the limited technical capacity in the gas sector in Afghanistan, the project design relied on the use of international experts to build long-term capacity and to support the government’s immediate implementation needs. The COVID-19 lockdowns coupled with security concerns made mobilization of international expertise into Afghanistan extremely challenging. For a while the project relied on virtual remote working options that were available; however, these options could not replace the needed hands-on field presence by international experts to fully implement the project. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) M&E Design 53. The design of the M&E framework was strong, with a clear theory of change and a streamlined set of PDO and intermediate-level indicators that were linked to project activities and the intended outcome/results. Moreover, the indicators and targets were relatively easy to monitor, which was critical given the limited capacity of the client. M&E Implementation 54. While there are limited data points (with three ISRs filed during the active life of the project), the indicators in the results framework were adequately monitored by the MoMP project team on a periodic basis (at least twice a year) and upon the request of the Bank team. M&E Utilization 55. While the indicators in the results framework were regularly monitored by the project team, the finding were not fully used by MoMP management to take decisions relevant to project implementation. The project team at the MoMP developed an excel-based implementation tracking system so that they could regularly review and monitor timelines for procurement and implementation. Page 20 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) Justification of Overall Rating of Quality of M&E 56. The M&E framework for the project was logical and well designed and M&E implementation was adequate, however its utilization for decision making by the client was weak. The overall rating of quality of M&E for AGASP is, therefore, rated as ‘substantial’. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE Environmental & Social 57. By August 15, 2021, the performance rating for five of six Environment and Social Standards (ESSs) that applied to the project was Moderately Satisfactory, and the overall rating was Moderately Satisfactory in the last ISR. The project hired a team of specialists to support E&S implementation at the MoMP which was one of the conditions of project financing. However, the establishment of a formal E&S Unit as part of the Ministry’s organizational structure and the recruitment of an additional social specialist were still pending. The supervision engineer consultancy, procured by the project, was tasked with providing E&S support and advisory services associated with the construction and eventual operation of the SMPL and field facilities, including the preparation of safeguard instruments set out in the ESCP. The E&S instruments were still being prepared at the time of the government collapse, some of which had nearly been finalized, albeit with delays. As of the cessation of project activities, civil works under the project had not yet commenced. A broader capacity building program for the MoMP to monitor and manage E&S risks from the sector had not yet been implemented under the project, but ToRs for this activity been prepared and sent to the task team for its No Objection. 58. A Grievance Redress Mechanism (GRM) was established under the project, including the establishment of three Grievance Redress Committees (GRCs) and the appointment of three Stakeholder Engagement Plan (SEP)/GRM focal points in Jawzjan province. According to the Ministry, all members of the GRCs were trained and had the capacity to discharge their functions. However, there were some concerns that the GRM was not yet fully operationalized in the field, albeit complaints had been logged, primarily by AGE staff. Procurement 59. Procurement under the project was rated was Moderately Unsatisfactory in the last ISR, and the last two quarters of project implementation suffered from a number of procurement-related challenges that compromised the timely delivery of results, including weak procurement planning, delays in processing (including the finalization of bidding documents and ToRs, even after extensive inputs from the Bank task team), irregularities in procurement of (primarily) individual consultants, and contracts management. 60. Over the life of the project, there had been one major procurement for the supervision engineer (SE) which was finalized with record speed and within the first few months of project implementation, as an indication of what could be accomplished with high-level ownership. However, the SE contract expired on January 30, 2021 and its extension, allowing for the completion of several key deliverables under the contract, was still pending decision by the client. The SE continued to provide support even after the contract period had lapsed. While other major procurement activities were close to being awarded (i.e. PMSF and the TLCSF), which was very encouraging, procurement processes were Page 21 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) extremely slow. 61. Several individual national consultants were recruited to support project activities. However, there were also significant delays in the procurement of some project staff, such as the Internal Auditor and the Social Specialists. In addition, irregularities in some recruitment processes, seen in the last 9 months of the project, raised significant concerns. An internal control assessment on AGASP was conducted through a Third-Party Monitoring Agent (TPMA), which found ‘significant deficiencies’ in the procurement/recruitment of project staff and undeclared conflicts of interest in the procurement of two firms. Financial Management 62. In the final ISR recorded for the project, FM performance of the project was rated as Satisfactory based on the FM supervision review of the project in May 2021. The project submitted timely financial reports (Statement of Expenditures and Interim Unaudited Financial Reports, IUFR), which were found to be satisfactory as per the given format and in compliance with the grant agreement. 63. The statement of Expenditures ( SoE ) until the 15th of August 2021 has been reviewed and certified by the Third- Party monitoring agent and non-compliance or questionable expenditures have been reported. As per the latest IUFR for the final IUFR covering the period June 21, 2021 to August 15, 2021, the project had a cumulative expenditure of USD 1,595,235. At the time of the collapse of government, several consultancies, vendors, and consultants, including project staff at the MoMP were owed outstanding payments. However, because accounts were immediately frozen, those payments remain outstanding. See in Annex 3 for more details on project expenditures by activity. 64. There had been significant progress in completing the pending legal covenants for the project related to Financial Management. The project shared a detailed register of AGE assets for the SMPL that were purchased by TFBSO in 2013- 2014, which was a disbursement condition on Expenditure Category 2 of the project. As noted above, however, there were significant concerns associated with the delays and irregularities in the procurement of the internal auditor. C. BANK PERFORMANCE Quality at Entry 65. Quality at Entry for AGASP is rated as ‘Moderately Satisfactory’ based on the following factors: • Strategic relevance and approach. At the time AGASP was prepared its strategic relevance to the development outcomes for the people of Afghanistan was high in that it allowed the World Bank Group to provide support to the development of two IPPs that would provide much needed energy and energy security to the country. The project was designed to serve as a de-risking instrument by supporting the government in ensuring that they could meet their gas supply/delivery obligations of the IPPs over the short and long-term. • Technical, financial, and economic aspects. The Bank team provided strong technical inputs over the course of project preparation, included providing intensive hands-on support to help guide the client and working closely with consultants. Field security in northern Afghanistan prevented the team from undertaking field visits to Mazar and Sheberghan. Page 22 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) • Environmental and social aspects. Given the demands of the ESF and limited capacity of the MoMP, the client required intensive handholding and support on the environmental and social dimension of the project to ensure that it could be delivered on time. There were nearly 16 E&S documents required prior to appraisal, and the locally based Bank E&S specialists and consultants were instrumental in supporting and guiding the client and the core task team on the preparation of those documents. However, the overall process and approach to managing E&S risks could have been streamlined so that documentation that was technically relevant, fit for purpose, and focused on quality (rather than quantity) and capacity building. • Fiduciary aspects. Support on the fiduciary aspects of the project during preparation was strong. Recommendations on strengthening fiduciary oversight and systems were fit for purpose, clear, and relatively easy to implement. The procurement team worked closely with the MoMP to ensure that the procurement of the supervision engineer could be finalized quickly. Moreover, at the request of the government, the Bank procured a consultant to provide Hands-on Expanded Implementation Support (HEIS), during project preparation and implementation, which proved to be an effective mechanism to expedite procurement processes, identify bottlenecks, and provide capacity building to the procurement team at the MoMP. However, there were weaknesses in procurement capacity at the MoMP and procurement planning that could have been strengthened during project preparation through the recruitment of dedicated procurement staff (consultants) and the early preparation of ToRs for priority activities. • Institutional and Implementation arrangements. Implementation arrangements were strong and relevant to the project design. As mentioned earlier, based on the government’s mandate all on-budget programs were to be implemented through relevant line ministries and government agencies, rather than through the establishment of standalone PIUs. While the Bank team supported this approach, its success depended on 1) retaining the limited capacity that already existed at the MoMP and AGE by focusing on the organizational structure of the MoMP (Tashkeel) and including the provision in the FA related to the stability of the project team; and 2) building additional capacity for project management through the PMSF and technical capacity through the young professional’s program and other consultancies. However, there were weaknesses identifying some of the risks and in developing and/or deploying appropriate mitigation measures associated with this approach, including those related to the capacity of AOGRA to be an effective counterpart, institutional stability of the MoMP, and the stability of its limited project and technical staff. • M&E arrangements. As mentioned above, the results framework and theory of change for the project were sound, with measurable indicators and targets that clearly related to the achievement of the PDO. The indicators and targets were easy to monitor. • Risk assessment. Risks were accurately assessed in the PAD to the extent possible, with corresponding mitigation measures. The Bank recognized that AGASP was a high risk/high reward operation, and the risks associated with security, governance, technical design, and capacity constraints were amongst the highest. Based on this assessment, a robust set of mitigation measures related to each of these areas was embedded into the project design; however some of these mitigation measures were either deployed too slowly (i.e. procurement of PMSF) or did not fully address the risks (i.e. provisions in FA on project staff stability). • Implementation Readiness. As mentioned above, there were some weaknesses in the implementation readiness of the project, including the following: Page 23 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) i. The requisite timeline for the recruitment of the PMSF as set out in the FA should have been maintained at three months after effectiveness and preferably should have been complete during project preparation. The inclusion of this activity and the need to commence the procurement process had been discussed with the MoMP extensively during the preparation stage; however, the 3-month timeframe was originally established in the FA but was later extended to 8-months during negotiations at their request. Had the PMSF been on-boarded earlier, bottlenecks related to effective project management could have been better managed or avoided altogether. ii. During project preparation, an assessment was undertaken of the deliverability of gas to the IPPs, which included a review of technical and managerial capacity of AGE, review of the status and quality of the already constructed portion of the SMPL, an inventory of available pipeline and construction equipment, and an assessment of equipment needs to complete the construction of the gas line. The assessment concluded that AGE had the necessary managerial capacity to complete construction the SMPL and optimize the field facilities but required technical capacity support and supervision. Given the security situation in the field and travel restrictions, a secondary verification and due diligence of the assessment’s findings was not possible. However, on the basis of those findings, the supervision engineer was tasked with building technical capacity in AGE and ensuring that the pipeline was designed and built to international standards. During implementation, it became clear that AGE lacked the managerial capacity to fulfil its role in the construction of the SMPL and technical capacity to effectively optimize gas field facilities. In addition, based on the SE’s assessment, an additional batch of construction equipment was required to complete the SMPL. The capacity gaps at AGE and equipment needs for the SMPL resulted in implementation delays as the GoIRA sought to find a solution that was acceptable to the Bank. Quality of Supervision 66. Quality of Supervision for AGASP is rated as ‘Moderately Satisfactory’ based on the following factors (please note given the sudden and reduced implementation period, this ICR only considers a select number of factors relevant to AGASP). Over the course of project implementation, the Bank team proactively sought to manage risks as they arose and provided intensive hands-on supervision and implementation support through the following: i) The project became effective in January 2020, just before the onset of the COVID-19 pandemic, as a result there was only one in-person mission to Kabul in January 2020. In the 19 months that the project was active, the team held three implementation support missions and had regular meetings (via VC) with the project team to help resolve on- going challenges to project implementation. After each mission an Aide Memoire was prepared highlighting progress, implementation challenges and bottlenecks, and next steps. ii) While the absence of face-to-face interactions during the COVID-19 lockdowns is likely to have had an impact on the pace of implementation, the project had a strong team of national experts to support the client. The task team included a country-based operations officer who had worked on extractives projects and EITI for over a decade and provided the project team at AGE, MoMP, and AEITI Secretariat with day-to-day operational support, coordination, and client interface. In addition, the country-based fiduciary, environmental and social specialists worked closely with government counterparts providing consistent support in the face of significant capacity gaps. Page 24 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) iii) A team of international consultants recruited by the Bank team to provide the client with specialized, just-in-time support, advice and capacity-building on critical gas field optimization and operations, on environmental and social management, gender, and procurement (through HEIS). This supplemental support was critical given the challenges of government procurement - where there were strict stipulations that consultants had to spend a specific amount of time in country despite security challenges. As mentioned earlier, the team had recruited senior-level international environmental and social specialists to help support AGE and the MoMP, review the E&S documents prepared by the SE, identify gaps, provide recommendations on areas for additional support, and develop and deliver a capacity building program on the ESF. iv) Given the complexity and high-profile nature of the operation, the WBG management was actively engaged through the Mazar IPP High-Level Stakeholder Committee. This level of high-level institutional support was critical to the project’s satisfactory progress during the early stages of project implementation, despite the challenging FCV environment in which it was operating. Justification of Overall Rating of Bank Performance 67. The overall rating for Bank Performance is ‘Moderately Satisfactory’ under AGASP. During project preparation, there were some challenges associated with the project’s readiness that resulted in implementation delays, however based on this review’s findings, the project design was strong, with activities linked to the achievement of the PDO, a there was reasonable budget, most risks were appropriately identified (albeit in some cases the mitigation measures could have been strengthened), and the Bank had development strong relationship with the counterpart. During supervision, the Bank provided extensive supplemental implementation and strong supervision support to government counterparts; however as the security situation deteriorated and the COVID-19 pandemic persisted, implementation delays compounded. D. RISK TO DEVELOPMENT OUTCOME 68. The Risk to Development Outcome for AGASP is ‘high’. The progress towards the PDO that was achieved was limited, and with even that progress is at risk. The Sheberghan IPP remains operational and is receiving gas from AGE, but the duration of the gas supply available in the future is unknown. It is also unknown whether the limited improvements in institutional capacity observed during the initial phase of implementation have endured. Had there been sufficient time to implement the full suite of capacity building activities included in the project, there would have been increased potential for sustaining development impacts and results over the longer term. V. LESSONS AND RECOMMENDATIONS 69. In low capacity FCV settings, extra support and efforts to simplify the ESF need to be planned and provided during preparation and early implementation. Given the risk profile of the gas sector and the country, the Bank’s safeguard requirements involve the preparation of a series of Environmental and Social (E&S) studies and instruments by the client prior to appraisal, when there were significant and unavoidable capacity gaps to be Page 25 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) navigated. This process, part of the Bank’s new ESF rolled out just months prior to appraisal, is designed to provide a comprehensive approach to risk mitigation during project delivery. At the time, it was challenging to determine how the ESF would work in practice, in a quintessential FCV setting. The client’s limited capacity and difficulties to recruit quickly and retain consultants to provide support made it extremely difficult for the counterparts to take on this workload. The Bank did provide support where it could. However, the completion and submission of 16 different documents according to ESF requirements was a significant burden. Moreover, counterparts were unable to internalize and apply fully the policies, procedures and recommendations in the many hundreds of pages of documentation required during preparation and implementation. Looking forward, it would be worthwhile for the Bank to consider how best to adapt ESF requirements to FCV countries, including by considering how the ESF’s flexibility can be brought into play in practice, how to build E&S capacity on a systematic basis rather than project by project, and how to ensure that the documentation prepared by the project is absorbed and understood by the client. Finally, to support implementation of the ESF in low capacity FCV countries, the Bank could consider establishing an approach similar to Hands-on Expanded Implementation Support (HEIS) currently used for procurement. 70. In limited capacity environments, project teams can consider taking a phased approach to implementing complex projects. The case of AGASP, the decision was taken that during the early stages of the project, focus would be placed on implementation of those activities related to the constructions of the SMPL and optimization of field facilities (Component A), where the need to achieve results related to the delivery of gas were more immediate, while implementation of the human resource and institutional capacity building activities (Component B), which were longer-term in nature, were planned for stage two of the project. This phased approach allowed the team to utilize limited human resources and capacity based on a prioritized set of activities. 71. In FCV countries, in particular, project preparation and implementation timelines should include a realistic assessment of the counterpart’s readiness and capacity to implement, and consideration should be given at the outset on how these gaps will be managed. As mentioned earlier in this ICR, the time provided for project preparation was largely set by external factors, namely the timeline for commissioning of the IPPs. In early 2019, the GoIRA requested support for the delivery of gas to the IPPs and the project was approved by the WB Board 10 months later, in November of that year. The Bank worked closely with government to design the project and prepare the necessary documentation (including the ESF instruments, PAD, procurement documents, etc). Nonetheless, there were gaps in the readiness of counterparts, with insufficient consideration to the challenges project implementation would impose on the MoMP, which resulted in delays during implementation. Attempts were made to address the capacity gaps by providing supplemental implementation support through the World Bank funded consultants and intensive handholding by the task team. However, this approach could not fully compensate for the critical role of the government in implementation. 72. Project implementation arrangements in unstable FCV settings should avoid excessive reliance on the stability of line ministry personnel and/or adopt and enforce explicit provisions in the project’s implementation arrangements and its covenants to ensure the permanence of staff critical to the project. While significant attention was placed during the project preparation and implementation on the need to ensure that the MoMP, AOGRA, and AGE had resources made available to them to facilitate implementation of the project, there was an absence of a critical mass of personnel to act as project counterparts and beneficiaries of capacity building activities. As mentioned above, any agreed commitments to maintain the integrity of the Director General of Hydrocarbons (DGHC) and the project’s implementation unit were undermined soon after the appointment of a new Minister in June 2020. The absence of a Senior Project Director and a Project Coordinator -who were not replaced- and the uncertainty it generated within the DGHC and the PIU, impacted traction, responsiveness, and effectiveness with project Page 26 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) implementation. . Page 27 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Facilitate a sustainable supply of gas through targeted investments in gas infrastructure Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Increased capacity to deliver Cubic 330,000.00 900,000.00 560,000.00 commercial quality natural Meter(m3) gas through to off-takers in Sheberghan and Mazar 06-Sep-2019 31-Oct-2024 14-Jul-2021 Comments (achievements against targets): 1st year target exceeded/2nd year target not met - 560,000.00 m3 Objective/Outcome: Facilitate a sustainable supply of gas through enhanced gas sector governance Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Page 28 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) Improved institutional, Text Hydrocarbons Law Primary regulatory Hydrocarbons Law regulatory and contractual (2018) and Exploration and contractual (2018) and Exploration framework for gas sector & Production Sharing framework for & Production Sharing management and oversight Contract Template. upstream and mid- Contract Template. stream gas sector Administrative development regulations have been submitted to Cabinet. approved. 06-Sep-2019 31-Oct-2024 14-Jul-2021 Comments (achievements against targets): 2nd year target partially met – cabinate approved some regulations. A.2 Intermediate Results Indicators Component: COMPONENT A: SUSTAINING GAS SUPPLY Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Launch of an international Yes/No No Yes No tender Totimaidan gas blocks 06-Sep-2019 31-Oct-2024 14-Jul-2021 Comments (achievements against targets): Page 29 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) This target was only expected to be achieved within the 3rd year of implementation. As of August 15, 2021 the status of achievement of this target was on- going w/o delays – procurement for Technical, Legal, Commercial Support Firm (TLCSF) was nearly finalized. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Commissioning of the new Yes/No No Yes No amine plant 06-Sep-2019 31-Oct-2024 16-Aug-2021 Comments (achievements against targets): Status as of August 15, 2021: 2nd year target not met – procurement delays Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Commissioning for new Yes/No No Yes No Sheberghan-Mazar Gas Pipeline 02-Dec-2019 31-Oct-2024 16-Aug-2021 Comments (achievements against targets): Status as of August 15, 2021: 2nd year target not met - On going w/ some delays Page 30 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Adoption of an updated field Yes/No No No No development plan for Yatimtaq gas field 06-Sep-2019 31-Oct-2024 16-Aug-2021 Comments (achievements against targets): Status as of August 15, 2021: While this target was not expected to be achieved until the 3rd year of implementation, it was delayed – procurement for support had not commenced Component: COMPONENT B: STRENGTHENING SECTOR GOVERNANCE Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Production of a jointly- Text Hydrocarbons Law Final Draft of Hydrocarbons Law developed (MoMP and (2018) and Exploration Prioritized Contractual (2018) and Exploration AOGRA) contractual and & Production Sharing and Regulatory & Production Sharing regulatory package for gas Contract Template. Framework ready for Contract Template sector development. submission to Cabinet. were approved prior to broad, representing the baseline. Administrative regulations were more Page 31 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) recently approved. 06-Sep-2019 31-Oct-2024 16-Aug-2021 Comments (achievements against targets): Status as of August 15, 2021: Target partially met with the approval of several regulations - procurement for TLSF nearly finalized Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Share of women Percentage 5.00 10.00 5.00 professionals in technical and managerial fields at MoMP 06-Sep-2019 31-Oct-2024 16-Aug-2021 and OAGRA Comments (achievements against targets): Status as of August 15, 2021: Target was not met and implementation of corresponding activity was delayed Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Development and Yes/No No Yes No dissemination of code of conduct to prevent Gender 06-Sep-2019 31-Oct-2024 16-Aug-2021 Based Violence in the Page 32 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) extractive sector for investors Comments (achievements against targets): Status as of August 15, 2021: 2nd Target not met – Gender expert had been recruited and was working Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Afghanistan’s EITI validation Yes/No No Yes Yes report shows improved results on greater number of 06-Sep-2019 31-Oct-2024 16-Aug-2021 parameters than the previous validation report Comments (achievements against targets): Status as of August 15, 2021: This target was exceeded Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percent of project related Percentage 0.00 70.00 0.00 grievances addressed within one month 06-Sep-2019 31-Oct-2024 16-Aug-2021 Page 33 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) Comments (achievements against targets): Status as of August 15, 2021: The achievement of this target was unknown at the time of the collapse of government. The GRM had been established and grievances were received, but its not clear if they were being addressed. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Environmental and Social Text Unit is currently Unit is staffed with Unit is currently Unit of the MoMP fully staffed with fully civil servants and staffed with staffed, operational and consultants only operational - Staffing consultants only, and maintained. of Unit is maintained, includes a team lead, an E&S management 2 env specialists, one system has been social development developed and is specialist, and a GRM systematically used by specialists. staff to monitor E&S Procurement risks/impacts in the international sector specialists (firm) to support the E&S unit has been delayed. 06-Sep-2019 31-Oct-2024 16-Aug-2021 Comments (achievements against targets): Status as of August 15, 2021: Target partially met – the unit was almost completely staffed but the tashkeel had not been approved. Page 34 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Implementation of key Text No Functional review All recommendations No Functional review recommendations from from functional review functional management implemented review for AOGRA 16-Sep-2019 31-Oct-2024 16-Aug-2021 Comments (achievements against targets): Status as of August 15, 2021: Delayed Component: COMPONENT C: PROJECT MANAGEMENT Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Project management firm Yes/No No Yes No recruited and maintained by MoMP 06-Sep-2019 31-Oct-2024 16-Aug-2021 Comments (achievements against targets): Status as of August 15, 2021: Delayed, although the procurement of the PMSF as nearly finalized. Page 35 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) B. KEY OUTPUTS BY COMPONENT Objective/Outcome 1: 1. Increased capacity to deliver commercial quality natural gas through to off-takers in Sheberghan and Outcome Indicators Mazar 1. Launch of an international tender Totimaidan gas blocks 2. Commissioning of the new amine plant Intermediate Results Indicators 3. Commissioning for new Sheberghan-Mazar Gas Pipeline 4. Adoption of an updated field development plan for Yatimtaq gas field 1. Equipment for construction of SMPL Partially Complete - The MoMP together with the MoF took the decision to procure the 1st batch of construction equipment using their own resources through a G-to-G contract with the Government of Tajikistan. As of August 15, 2021, equipment was procured but could not enter the country due to border closures caused by the conflict 2. Pre-construction surveying and Completed through the SE development of a detailed design and engineering Key Outputs by Component 3. QA/QC and supervision engineering for the Partially Completed - through the SE, specifically (linked to the achievement of the Objective/Outcome 1) construction, O&M of the SMPL, including ESIA/ESPM/RAP preparation. ESIA/ESPM/RAP preparation 4. Capacity building and implementation Not yet commenced w/delay support to monitor and report on the implementation of ESMPs associated with the SMPL 5. Procurement, installation, commissioning, Not yet commenced w/delays and O&M of a new natural gas desulfurization amine plant in the Yatimtaq gas field Page 36 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) 6. Procurement and installation of metering Not yet commenced w/delays equipment and SCADA systems 7. TA and on-the-job training for AGE Partially completed through the SE and individual personnel to optimize, operate, maintain, and consultants procured through the Bank and project. control the gas pipeline and field facilities, including gathering, dehydration, compression, and processing 8. Capacity building and technical assistance Not yet commenced w/delays to prepare and assess field development plans, focusing on the Yatimtaq gas field 9. Capacity building and implementation Not yet commenced w/delays support to prepare, monitor, and report on the implementation of ESMPs at Yatimtaq gas field (as required) 10. Expert advisers—technical, legal, Not yet commenced w/o delay - Procurement of financial, and E&S—for the preparation and Technical Legal Commercial Support Firm (TLCSF) to carry implementation of the international tender out this activity nearly finalized for the Totimaidan gas block 11. Capacity building and implementation Not yet commenced w/o delay - Procurement of TLCSF to support to monitor the contractual and carry out this activity nearly finalized regulatory compliance associated with the Totimaidan gas block 12. Capacity building and implementation Not yet commenced w/o delay - ToRs for E&S Support support to monitor and report on the Firm submitted to Bank for approval implementation of ESMPs associated with gas field development activities at Totimaidan Objective/Outcome 2 1. Improved institutional, regulatory and contractual framework for gas sector management and oversight Outcome Indicators Page 37 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) 1. Production of a jointly-developed (MoMP and AOGRA) contractual and regulatory package for gas sector development. 2. Share of women professionals in technical and managerial fields at MoMP and OAGRA 3. Development and dissemination of code of conduct to prevent 4. Gender Based Violence in the extractive sector for investors Intermediate Results Indicators 5. Afghanistan’s EITI validation report shows improved results on greater number of parameters than the previous validation report 6. Percent of project related grievances addressed within one month Environmental and Social Unit of the MoMP fully staffed, operational and maintained. 7. Implementation of key recommendations from functional management review for AOGRA 1. Provide expert support to the MoMP to Not yet commenced w/o delays Procurement of enhance its capacity to discharge its TLCSF to carry out this activity nearly finalized designated functions 2. Provide expert support for the incremental Not yet commenced w/o delays Procurement of construction of a private sector-enabling TLCSF to carry out this activity nearly finalized regulatory, contractual, and fiscal framework 3. Human resource capacity-building program for Not yet commenced w/delays the MoMP (young professionals’ program) 4. Support to implementation of GoIRA gender On-going - Gender specialist was recruited to Key Outputs by Component policy within the MoMP support this activity (linked to the achievement of the Objective/Outcome 2) 5. Establishment, functioning, and staffing of an On-going/Partially complete – E&S Unit was staff E&S Unit within the MoMP and ToRs for capacity building program was submitted to the Bank, some capacity building through Bank consultants was on-going. 6. Design and implementation of an E&S Not yet commenced w/delays - ToRs for E&S Management system Support Firm submitted to Bank for approval 7. Preparation of a code of conduct for resource On-going - Gender specialist was recruited to developers to implement GBV prevention in support this activity the extractives sector Page 38 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) 8. Development and implementation of citizen On-going – support to the establishment and engagement and social accountability operationalization of the GRM was being provided initiatives (SEP) through the MoMP’s E&S team 9. Support to implementation of AEITI On-going – after a long period of suspension, EITI had reached meaningful process 10. Support the operationalization of AOGRA to Not yet commenced, w/ delays – AOGRA was not discharge its designated functions and an effective counterpart or a functioning institution responsibilities related to regulatory and contractual oversight of hydrocarbons sector value chain investments and activities 11. Advisory services to implement the Not yet commenced, w/ delays Administrative Institutional Regulation that AOGRA was not an effective counterpart or a operationalizes the roles, responsibilities, functioning institution functions, and processes of the MoMP and AOGRA 12. PMSF Not yet commenced, w/ delays – Procurement of PMSF nearly finalized (at contact signing stage) dsf Page 39 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Michael C. Stanley, Noora Arfaa Task Team Leader(s) Muhammad Abbass Rahimi, Rahimullah Wardak Procurement Specialist(s) Zakir Hussain Gulzari Financial Management Specialist Helene Bertaud Counsel Mohammad Arif Rasuli Environmental Specialist Ria Nuri Dharmawan Counsel Mohammad Yasin Noori Social Specialist Ehsanullah Shamsi Team Member Carlos Alberto Lopez Quiroga Team Member Ahmad Shakeeb Safai Counsel Damian Mckinnon Brett Team Member Supervision/ICR Carlos Alberto Lopez Quiroga, Noora Arfaa Task Team Leader(s) Muhammad Abbass Rahimi, Kalesh Kumar Procurement Specialist(s) Anandavalliamma Karunakarakurup Zakir Hussain Gulzari Financial Management Specialist Humaira Nazari Team Member Zakia Bakhtari Team Member Matiullah Kazmi Social Specialists Damian Mckinnon Brett Team Member Ahmad Shakeeb Safai Counsel Page 40 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) Anita Bimunka Takura Tingbani Environmental Specialist Ehsanullah Shamsi Operations Officer/EITI Specialist Mohammad Yasin Noori Social Specialist Ria Nuri Dharmawan Counsel Payal Malik Madan Procurement Team Helene Bertaud Counsel B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY20 1.120 9,856.01 Total 1.12 9,856.01 Supervision/ICR FY20 1.800 5,783.76 FY21 32.168 108,996.61 FY22 56.186 282,479.14 FY23 .200 675.60 Total 90.35 397,935.11 Please note that AGASP was initially prepared under the Afghanistan Extractives Sector Development Project (AESD, P170179), which was later dropped and where a large portion of staff costs were allocated. The table above is system generated (and is not fully reflective of total expenditures) and for AGASP only. Lifetime expenditures under AESD for project preparation were US $455,655.64, and lifetime expenditures for project preparation and supervision under AGASP where US $420,021.72. Page 41 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) ANNEX 3. PROJECT COST BY COMPONENT Amount at Actual as of Percentage Aug 2021 of Approval Project Activities Approval USD USD COMPONENT A: Sustaining Gas Supply 35,200,000 1,031,421.10 2.9 Subcomponent A1. Gas Infrastructure 31,950,000 1,031,421.10 3.2 A1.1. Procurement of equipment and technical assistance for the 13,250,000 1,031,421.10 construction, operations, and maintenance of the new SMPL 7.8 A1.2. Procurement of amine plant and technical assistance for the 0.0 16,450,000 0 O&M of gas field facilities A1.3. Technical assistance and on-the-job capacity building to AGE 0.0 2,250,000 0 on Yatimtaq gas field Subcomponent A2. Tendering Totimidan Gas Block 3,250,000 0 0.0 COMPONENT B: Strengthening Gas Sector Governance 13,300,000 455,250.75 3.4 Subcomponent B1. Strengthening the MoMP’s Capacity to 4.2 10,800,000 455,250.75 Manage the Gas Sector B1.1. Gas sector development framework 3,500,000 195,417.03 5.6 B1.2. Sustainable administration and management of the MoMP 1,500,000 9,204.11 <1 B1.3. Building institutional capacity at MoMP for the E&S <1 3,300,000 84,930.72 management of the sector B1.4. Strengthening transparency and accountability of the EI <1 2,500,000 165,698.89 Sector - EITI B2. Strengthening Regulatory Compliance and Monitoring of Gas 0.0 2,500,000 0 Sector Activities COMPONENT C: Project Management 4,000,000 108,563.81 2.7 3.0 Project Total 52,500,000 1,595,235.66 10 Amount Remaining in the Designated Account 2,638,828.47 10 Please note that actual expenditures should be much higher. At the time of the collapse of government, several consultancies, vendors, and consultants, including project staff at the MoMP had outstanding payments. However, because accounts were immediately frozen, those payments remain outstanding. Page 42 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) ANNEX 4. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS None. Page 43 of 44 The World Bank Afghanistan Gas Project (AGASP) (P172109) ANNEX 5. SUPPORTING DOCUMENTS (IF ANY) • Project Appraisal Document (PAD) • Financing Agreement (FA) • Environmental and Social Commitment Plan (ESCP) • Aide Memoirs • Implementation Status Reports (ISRs) Page 44 of 44