The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) @#&OPS~Doctype~OPS^blank@pidaprcoverpage#doctemplate Project Information Document (PID) Appraisal Stage | Date Prepared/Updated: 08-Nov-2023 | Report No: PIDA0206 Nov 08, 2023 Page 1 of 13 The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) @#&OPS~Doctype~OPS^dynamics@pidaprbasicinformation#doctemplate BASIC INFORMATION A. Basic Project Data Project Beneficiary(ies) Operation ID Operation Name Regional Climate Resilience EASTERN AND SOUTHERN P181308 Program for Eastern and AFRICA Southern Africa 2 Financing Instrument Estimated Appraisal Date Estimated Approval Date Practice Area (Lead) Investment Project 25-Oct-2023 21-Dec-2023 Water Financing (IPF) Borrower(s) Implementing Agency African Union Commission African Union, Republic of (AUC), Ministry of Finance Malawi and Economic Affairs Proposed Development Objective(s) To improve resilience to water-related climate shocks in Malawi and in the Eastern and Southern Africa region, and in case of an Eligible Crisis or Emergency, to respond promptly and effectively to it. Components Component 1. Risk Management and Climate Financing Component 2. Infrastructure Investments and Sustainable Asset Management for Climate Resilience Component 3. Adaptive Climate Services for Resilient Communities Component 4. Project Management Component 5. Contingent Emergency Response Component @#&OPS~Doctype~OPS^dynamics@pidprojectfinancing#doctemplate PROJECT FINANCING DATA (US$, Millions) Maximizing Finance for Development Is this an MFD-Enabling Project (MFD-EP)? No Is this project Private Capital Enabling (PCE)? Yes SUMMARY Total Operation Cost 250.00 Total Financing 250.00 Nov 08, 2023 Page 2 of 13 The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) of which IBRD/IDA 250.00 Financing Gap 0.00 DETAILS World Bank Group Financing International Development Association (IDA) 250.00 IDA Grant 250.00 @#&OPS~Doctype~OPS^dynamics@envsocriskdecision#doctemplate Environmental And Social Risk Classification High Decision The review did authorize the team to appraise and negotiate Other Decision (as needed) B. Introduction and Context 1. This Project is a proposed second operation in the Regional Climate Resilience Program for Eastern and Southern Africa (RCRP) Series of Projects (SOP). The proposed Regional Climate Resilience Program for Eastern and Southern Africa 2 (RCRP-2) includes Malawi and the African Union (AU) and scales up the Regional Climate Resilience Program for Eastern and Southern Africa (RCRP-1, P180171) in Comoros, Madagascar, Mozambique, South Sudan, the Southern Africa Development Community (SADC), and the Eastern Nile Technical Regional Office (ENTRO). RCRP-1 became effective in July 2023 with the completion of the condition by ENTRO and implementation is advancing well. 2. The Eastern and Southern Africa (AFE) economies have been recovering from the COVID-19 pandemic, but the Russia invasion of Ukraine has created new challenges, further exacerbated by climate change. Climate change poses a threat to the AFE region's long-term development objectives, particularly poverty reduction. In 2022, the continent was hit by 80 extreme weather and climate hazards1 resulting in extensive economic loss. Climate Change and Development Reports (CCDRs) in AFE demonstrate a common thread for the need to focus on resilience of physical assets, natural resources, and people. For example, in Malawi achieving resilience will require three-pronged approach of building resilient infrastructure, reversing land degradation, and addressing the impact of climate change on livelihoods. Regional organizations such as the AU can play a crucial role in fostering greater partnership among countries to tackle these 1 Macroeconomic and Financial Weekly Monitoring, September 8, 2023, Office of Chief Economist, Africa Region, the World Bank Nov 08, 2023 Page 3 of 13 The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) common challenges and facilitate knowledge exchange among member countries, which is critical for accelerating action against climate change. 3. Malawi’s economy has shown modest growth with persistently high poverty rates over the past decades and faces significant development challenges. Malawi’s GDP per capita growth averaged less than 1.5 percent since independence in 1965; as a result, GDP per capita in 2021 was only US$394 compared with US$197 in 1965 (constant 2015 US$). The country is facing an economic and social crisis, with unsustainable debt, serious macro-fiscal imbalances, shortages of power and key import commodities, acute lack of foreign exchange, and high inflation. The crisis has been aggravated by exogenous shocks from the COVID-19 pandemic, Russia invasion of Ukraine, and several natural disasters. 4. Malawi is highly vulnerable to climate change impacts and variability, which disproportionately affect vulnerable households. The country has experienced more than 19 major flooding events and eight catastrophic droughts in the last five decades, costing an estimated 1.7 percent of its Gross Domestic Product (GDP) annually. Weather shocks have caused more Malawians to fall back into poverty than those who moved out of it between 2010 and 2019. Women and girls were particularly exposed: of the 2.5 million people affected by Tropical Cyclone Freddy in 2023, more than half were women and girls of reproductive age. Among this group, more than 100,000 were pregnant women2. 5. The recent CCDR for Malawi showed that without strategic investments and the current low-growth development trajectory, climate change could reduce GDP by 3 to 9 percent by 2030, 6 to 20 percent by 2040, and 8 to 16 percent by 2050. The largest impacts from climate change are projected to come from damage to dams, roads and bridges and reinforce what the country is currently experiencing in terms of large damage from current climate shocks to infrastructure assets. Continued land degradation is expected to increase the damage to infrastructure from inland flooding by as much as 25 percent by 2050. The CCDR notes that urgent action is needed to build resilient infrastructure; halt and reverse widespread land degradation and minimize the impact of climate change on productivity and livelihoods. Sectoral and Institutional Context 6. Across AFE, countries struggle to manage climate-related shocks and variability because of tendency to react rather than prevent, and lack of financing, amongst others. Due to the increased frequency and recurring nature of disasters in the region, the tendency is overwhelmingly to react to these disasters, with limited opportunity for tackling the root cause of the vulnerability. Climate-related impacts are further exacerbated by chronic underfunding for climate adaptation investments. It is estimated that through 2030, cumulative adaptation finance through 2030 would be US$125.4 billion—less than one quarter of the estimated needs stated in NDC3. The recuring disasters and funding gaps compound the already fragile financial situation of the region’s governments. 7. Malawi’s high population pressure, low economic diversification, underdevelopment of water resources, and unsustainable agricultural practices have contributed to depletion of natural resources, most visibly severe catchment degradation, erosion, and sedimentation. Uncontrolled development has led to a reduction of natural buffers and severe catchment degradation in rural areas. Lack of coordination between national and local level government agencies leads to uncoordinated and sub-optimal investments. Both national and local agencies often struggle to allocate operation and maintenance (O&M) funds leading to untimely infrastructure failures and continued land degradation. 2 Malawi 2023 Tropical Cyclone Freddy PostDisaster Needs Assessment, Government of Malawi. April 2023 3 World Bank, 2022. Climate and Development: An Agenda for Action - Emerging Insights from World Bank Group 2021-22 Country Climate and Development Reports. Nov 08, 2023 Page 4 of 13 The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) 8. The Shire River Basin (SRB) in Southern Malawi provides crucial water and energy resources, food security, and biodiversity, but faces severe sustainability challenges due to high demographic pressure, climatic change, and a rapidly depleting natural resource base4. Poverty is persistent and widespread in the SRB, exceeding 60 percent in several districts, and more than half a million people currently reside in areas adjacent to the river in the lower Shire, making them vulnerable to both droughts and floods.5 Unsustainable management of the SRB’s natural resources coupled with weak institutional capacity and lack of coordination at both national and local government levels are largely responsible for the degradation of the basin and the related increase in flood incidence 6. Regional solutions and coordination are needed to effectively manage the SRB. 9. Parliament approval of the Disaster Risk Management Act in Malawi (2023) presents an opportunity to support the country’s shift from a disaster response approach, to preparedness, risk reduction, and sustainable post disaster recovery. The Act establishes stronger structures at the national and local level for Disaster Risk Management (DRM), makes provisions for disaster risk financing mechanisms and funds, and provides a basis for stronger regulation of land use in high-risk and disaster-prone areas. While there is a strong national framework for landscape restoration in Malawi, there are still challenges of implementation due to uncoordinated approaches for landscape restoration. 10. The Malawi Social Support for Resilient Livelihoods Project (SSRLP, P169198), launched in 2020, has been financing climate smart public works primarily in extremely poor rural areas. The SSRLP, has been supporting the restoration of 454 degraded micro-catchments involving 520,000 poor households (approx. 13 percent of the population) in rural areas using a Unified Beneficiary Registry (UBR)7 through climate smart public works program. However, as the UBR only includes a marginal number of households in urban areas and the nature of public works in urban settings are different, the program was unable to be expand into urban areas. 11. In recent years, the region and Malawi in specific have improved their capacity to manage water resources, but there remain gaps in long term planning and optimal asset operation. At the national level, with the establishment and empowerment of the National Water Resources Authority in 2013, the country is now able to implement integrated water resources management at the national and basin levels. At the regional level, Mozambique and Malawi have established a Joint Technical Committee to manage their shared waters, and Malawi is also a member of the Zambezi Watercourse Commission (ZAMCOM), which coordinates the cooperative management and development of the Zambezi Watercourse. 12. The African Union has developed continental frameworks and strategies to tackle water-related climate shocks, but there is a gap in operationalizing these frameworks and strategies. Via its 2022 Climate Change and Resilient Development Strategy and Action Plan, the AU has identified priority interventions for enhancing water systems’ resilience across Africa, including investments in water infrastructure, strengthening capacities for water investment projects, strengthening transboundary water management and cooperation, and integrating water security issues into key development agenda. The AU, in 2022, adopted a framework for advancing Multi-hazard Early Warning and Action 4 The SRB comprises Upper, Middle, and Lower Shire sections across a 520-km stretch from its Lake Malawi source before joining the Zambezi River. 5 Caruso, G. and L. Cardona Sosa. 2022. Poverty Persistence in Malawi: Climate Shocks, Low Agricultural Productivity and Slow Structural Transformation. Malawi Poverty Assessment. Washington, DC: World Bank Group. https://documents1.worldbank.org/curated/en/099920006302215250/pdf/P174948072f3880690afb70c20973fe214d.pdf. 6 Nkhoma, Lusungu, et al. 2020. 7 Malawi’s Unified Beneficiary Registry (UBR) provides a consolidated source of information on the socio-economic status of households to determine their potential eligibility for social programs. Nov 08, 2023 Page 5 of 13 The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) System and launched Situation Room to monitor disasters events, consolidate country level reports and analyze disaster trends. However, the AU’s ability to scale up and harmonize the various initiatives requires sustained support. C. Proposed Development Objective(s) Development Objective(s) (From PAD) To improve resilience to water-related climate shocks in Malawi and in the Eastern and Southern Africa region. Key Results The PDO will be measured by the following PDO-level Indicators, which are aligned with the RCRP-1 indicators8: (a) People in selected basins with reduced vulnerability to climate shocks - floods, droughts and/or cyclones (Number, Thousand) (SOP level, adapted) - % of which in transboundary basins (Percentage); % of which in the Shire Basin (Percentage); % of which women (Percentage) (b) Land area with increased flood protection and catchment conservation (Hectare) (SOP level, adapted) - % of which in transboundary basins (Percentage) (c) People having access to Early Action and social protection systems supported through the project (Number) - % of which women (Percentage) (SOP-level, adapted) (d) People benefiting from restored infrastructure damaged by Tropical Cyclone Freddy and/or other eligible emergencies9 (Number, Thousand) (e) Regional collaboration strengthened on water-related climate challenges (Number) (SOP-level, adapted) D. Project Description 13. The project's five components integrate regional and national dimensions, promoting policy harmonization, knowledge generation, capacity development, and coordination across RCRP countries. This long-term approach addresses the challenges of climate change shocks by creating an enabling environment for capacity building, infrastructure reconstruction, and landscape management – with benefits that go beyond countries’ boundaries. The project will also use funds from the Crisis Response Window to reconstruct critical infrastructure damaged by Tropical Cyclone Freddy in March 2023. Annex 2 provides a detailed project description. 14. Component 1. Risk Management and Climate Financing (US$34 million equivalent, including US$10 million National IDA, US$21 million Regional IDA, US$3 million CRW). The objective of this component is to build regional and national institutional capacity in watershed and catchment management; and to strengthen cooperation on climate and related 8 Some indicators are slightly rephrased to better suit the RCRP-2 activities. 9 People that will benefit from the emergency response activities from the Contingency Emergency Response Component Nov 08, 2023 Page 6 of 13 The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) disasters risk management10 and climate financing. Sub-component 1.1 to 1.3 will be implemented by Malawi and sub- component 1.4 will be implemented by AUC. . 15. Sub-component 1.1. Consolidating and Implementing basin plans (US$6 million). RCRP-2 focuses on sustainable development in critical basins in Malawi, particularly the transboundary Shire River Basin (SRB). This sub-component aims to consolidate basin plans and instruments for catchment management, land and forest restoration, flood-risk mapping, and nature-based solutions. It will conduct feasibility studies of proposed investments to complement investments further downstream in the SRB and broader Zambezi River basin financed in Mozambique under RCRP-1. The project also supports the engagement of Malawi in climate resilient transboundary water resources management and promotes gender balance in staffing at relevant authorities. 16. Sub-component 1.2. Emergency Preparedness and Response and Early Warning Systems (US$18 million). This sub- component supports the institutionalization of government-led emergency management and disaster response capacity at national, district, and local levels against climate risks. It finances the development and deployment of a government- led Incident Command System (ICS) at the National Emergency Operations Center (NEOC) for coordinated disaster response. It also provides robust disaster response coordination facilities at the district level and equipment and training for local response teams and community volunteers in high-risk flood areas. The project funds core-network hydromet instrumentation and communication equipment for improved climate data collection and dissemination. The enhanced network allows for sharing hydromet data with neighboring countries and regional counterparts, benefiting early warning and modeling efforts. 17. Sub-component 1.3. Strengthening Monitoring, Reporting, and Verification (MRV) capacity to facilitate access to climate finance (US$6 million). This sub-component will enhance Malawi’s national MRV unit, enabling tracking land-use change, forest degradation and deforestation, and associated carbon emissions, with the objective of creating the enabling environment to facilitate access to carbon markets. The sub-component will strengthen the Government of Malawi’s capacity to monitor carbon stocks and measure the reduction in resulting from its various mitigation activities, including natural resources management, landscape restoration, and land-use changes. This system is a key instrument to unlocking climate finance and showing progress toward the climate goals outlined in its Nationally Determined Contributions. 18. Sub-component 1.4. Capacity Building to Enhance Hydromet Systems and Climate Finance (US$4 million). This sub- component, implemented by the AU, finances the development of regional hydromet diagnostic and roadmap for data collection and transmission to support the operationalization of the Africa Multi-hazard Early Warning and Early Action System (AMHEWAS) Program. It includes a comprehensive study on raising climate finance in member countries, trainings for decision makers and technical experts on various thematic topics including hydromet, disasters risk management, and climate finance, and expanding the AU's secondment programs by bringing hydrologists, metrologists, and disaster management to improve collaboration on water resources and disaster risk management. The secondment program includes promoting women's careers in the typically male-dominated sector. 19. Component 2. Infrastructure Investments and Sustainable Asset Management for Climate Resilience (US$183 million equivalent, including US$28 million National IDA, US$64 million Regional IDA, US$91 million CRW). This component 10 In the case of RCRP SOP and RCRP-2, Disaster Risk Management is associated with climate change exacerbated extreme weather events, mainly floods, tropical cyclones and droughts, as stated in the PAD. These disasters move beyond the historical recurrences that could be deemed normal as the Malawi is now witnessing an increase in the frequency, intensity and duration of these disasters. Nov 08, 2023 Page 7 of 13 The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) will address both the immediate reconstruction needs in areas affected by Tropical Cyclone Freddy and the long-term catchment management and resilient infrastructure needs in Malawi with particular focus in the Shire River Basin. The project will establish a strong district-level institutional framework to ensure incorporation of climate considerations into the planning, implementation, and O&M of infrastructure and catchments. Sub-components 2.1 and 2.2 will be implemented by Malawi while Sub-component 2.3 will be implemented by AU. 20. Sub-component 2.1. Basin-Level Infrastructure Development (US$100 million). This sub-component will finance (i) rapid reconstruction and rehabilitation of critical connectivity (roads and bridges) and hydraulic infrastructure impacted by Tropical Cyclone Freddy and (ii) construction or rehabilitation of hydraulic infrastructure in the transboundary SRB, for example river training and riverbank protection structures, drainage systems, dykes, and weirs – that are critical for avoiding future damages to key infrastructure assets due to floods and cyclones. The new infrastructure will feature improved design standards to accommodate higher flood return periods that are necessary due to climate change. The rapid reconstruction of infrastructure impacted by Tropical Cyclone Freddy will be financed using CRW funds. Priority infrastructure will be selected based on detailed criteria11 and their potential to improve the overall targeted basins’ climate resilience. Infrastructure with available designs will be prioritized for implementation in the first 12 months of the project. The remaining designs will be advanced through the World Bank financed Malawi Resilience and Disaster Risk Management Project (P161392) to ensure readiness of the sub-component. Climate resilience considerations will be integrated in the design of all these infrastructures to ensure their sustainability under changing climate and the positive impact on the resilience of the beneficiaries. 21. Sub-component 2.2. District-Led Resilience Building (US$80 million). The sub-component will finance Performance-Based Grants (PBGs) for district-level infrastructure, landscape management and nature-based solution investments12 across Malawi's twenty-eight district Local Authorities (LAs), with a particular focus on districts in the transboundary SRB. Access to the PBGs will depend on the capacity of the districts to plan, implement, and monitor infrastructure and catchment management interventions. The two main performance measures are (i) availability of adequate technical staffing, and (ii) development of implementable spatial plans. The PBGs will align with the World Bank financed Malawi Governance to Enable Service Delivery Project (GESD) (P164961). PBGs’ amounts will be determined by: LAs’ particular risk profiles, with larger PBG amounts assigned to LAs in high flood risk areas within the transboundary SRB and LAs with adequate technical capacity for implementation, determined through an Annual Performance Assessment, and investment readiness. These activities, and in particular the landscape management investments, will lead to carbon sequestration. 22. Sub-component 2.3. Capacity building to strengthen flood and drought risk vulnerability analysis and O&M of flood protective infrastructure (US$ 3 million). The AU will undertake (i) a climate vulnerability study with focus on future water security of the region (ii) a review of current operations, efficiency, and O&M practices of major water protective and storage infrastructure in the region , highlighting best practices and proposing solutions to common challenges (iii) trainings to strengthen member countries’ capacity to optimally operate water infrastructure and (iv) the development of a Monitoring and Reporting methodology for the AU Climate Change and Resilient Development Strategy and Action plan. 11 Criteria being used for prioritization are (i) extent of damage, (ii) population impacted by the damage or to be served by the reconstruction, (iii) traffic volume, (iv) availability of alternative routes, and (v) access to essential services. Finally, logistical and construction consideration such as access to construction sites and proximity of damaged assets is also considered. 12 The type of investments under the sub-component 2.2 will be limited to activities that will (i)create space for sustainable flood management and improve conservation. Examples of activities to be financed are construction of small dikes, low flood bunds, clearing flood streams, riverbank protection etc. (ii) non structured measures such as developing district level flood maps, conducting training, awareness in early warning system etc. The sub-component will not finance community facilities such as hospitals, schools etc. which are being financed by GESD (P164961). Nov 08, 2023 Page 8 of 13 The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) 23. Component 3. Adaptive Climate Services for Resilient Communities (US$11.5 million equivalent, including US$4 million National IDA, US$6.5 million Regional IDA, US$1 million CRW). This component will enhance community preparedness in urban areas and engagement in planning of community level risk reduction plans to help mainstream climate dimensions in social protection policy design and operations. Sub-component 3.1 and 3.2 will be implemented by Malawi and Sub-component 3.3 by the AU. 24. Sub-component 3.1. Expanding Social Registry in Urban Areas (US$3 million). This sub-component aims to enhance resilience in climate vulnerable areas by implementing an urban social registry and strengthening institutional capacity. The sub-component will redesign and roll out an urban social registry, to enhance resilience of beneficiaries to floods, cyclones and droughts in Blantyre and Zomba cities, including the design of an urban Proxy Means Test (PMT) to be used as a prioritization criteria for different ex-post household-focused interventions. 25. Sub-component 3.2 Design and Pilot Urban Climate Smart Public Works Program (US$7 million). This activity will support central government units and urban councils to design an urban public works program (UPWP) that combines aspects of climate smart operational maintenance of public infrastructure and land restoration activities across green spaces and urban watersheds. Public works eligible under this sub-component include maintenance of urban drainage canals, peri- urban water retention and urban open space rehabilitation activities to enhance resilience to climate change risks and sequester carbon where possible. This will be done through development of UPWP design guidelines and operational manuals and subsequent training of city councils and relevant community structures. The sub-project will pilot the UPWP in selected urban centers to live test the guidelines and operational manuals. 26. Sub-component 3.3 Mainstreaming Climate Resilience in Social Protection and Empowering Communities (US$1.5 million). This sub-component will be implemented by the AU and finance (i) the preparation of a study on best practices of adaptive social protection programs in the region and (ii) the development of participatory and gender and youth inclusive guidelines for development of Community-level climate risk management plans and projects, (iii) trainings to disseminate knowledge and share lessons learned to member countries. 27. Component 4. Project Management (US$16.5 million equivalent, including US$3 million National IDA, US$8.5 million Regional IDA, US$5 million CRW,). This component will finance project management activities, equipment and materials, and TA in Malawi (US$ 15 million) and AU (US$ 1.5 million) to ensure that the project is compliant with World Bank fiduciary and environmental and social (E&S) risk management procedures and standards. It will also finance costs of implementation supervision, monitoring and evaluation (M&E) and reporting activities, an impact assessment at baseline, midterm, and completion, and knowledge management and communication activities. This component will also finance the participation of Malawi and the AU in the RCRP RSC to increase coordination and learning across the region. 28. Component 5. Contingent Emergency Response Component (US$5 million equivalent from National IDA). This component will allow DoDMA to respond to any eligible crisis or emergency in a timely manner. US$5M will serve as a seasonal contingency fund ensuring predictability of funding and allow DoDMA to develop a concrete and implementable contingent emergency plan with pre-arrangements made with contractors and/or suppliers for quick contracting and speedy implementation. Activities eligible for financing will be defined based on the immediate needs of the country and the preparedness plan development by DoDOMA. For the CERC to be activated and financing to be provided, the recipient will need to: (a) submit a request letter for CERC activation and the evidence required to determine eligibility of the emergency; (b) submit an Emergency Action Plan, including the emergency expenditures to be financed; (c) meet the E&S requirements as agreed in the Emergency Action Plan and Environmental and Social Commitment Plan (ESCP); and (d) adopt a CERC Manual. Nov 08, 2023 Page 9 of 13 The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) @#&OPS~Doctype~OPS^dynamics@pidaprlegalpolicy#doctemplate Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 Yes Projects in Disputed Area OP 7.60 No Summary of Screening of Environmental and Social Risks and Impacts 29. The risk rating for both environment and social (E&S) in Malawi is high resulting in an overall High E&S risk rating for the project. Activities under the AUC are generally low risk as they consist of technical assistance and capacity building for climate resilience. 30. There is low capacity to identify E&S risks and implement required management and monitoring measures in Malawi. There are limited E&S staff as well as poor supervision and technical oversight at central and district levels, resulting in poor design, materials and workmanship with associated risks. Key environmental risk and impacts include (i) loss of riverine, woodland and remnant rainforest resulting in loss of habitat and contribution to climate change; (ii) spillage and increased sediment load into water courses and loss of riparian buffers; (iii) wash bays discharging into watercourses; (iv) inadvertently promoting illegal river sand mining; (v) occupational and community health and safety risks; (vi) impact of informal vendors around construction sites; (vii) poor waste management, (viii) increased deforestation for fuelwood/charcoal; (ix) exacerbate existing erosion problems; (x) cumulative impacts of floods and construction debris downstream into Elephant Marsh and other key biodiversity areas; (xi) impacts/damage to other infrastructure; and (xii) lack of runoff management within catchments. From a social perspective, the project activities will result in i) resettlement, land take or restrictions on land use in areas where vulnerable populations due to the high rates of poverty live; (ii) insufficient community and other stakeholder engagement; (iii) social tensions/conflicts induced by competition over project benefits; (iv) risks associated with labor influx including sexual exploitation and abuse and sexual harassment (SEA/SH); and (v) failure to comply with labor standards. 31. To address the E&S risks, Malawi will implement measures in the Environmental and Social Commitment Plan (ESCP), Environmental and Social Management Framework (ESMF) including Labor Management Procedures (LMP), Resettlement Policy Framework (RPF) and Stakeholder Engagement Plan (SEP) and associated requirements for site specific instruments. Given the high-risk rating for environment in order to meet the Pelosi requirement a draft of the ESMF was disclosed on August 18, 2023. A revised version of the ESMF and all other instruments were disclosed prior to the end of appraisal. Strategic instruments to inform longer term basin planning will also be developed including a Conflict Assessment looking at community tensions and a Strategic Environment and Social Assessment (SESA). 32. Environmental and Social Institutional Arrangements and Capacity. A PCU will be established in EP&D within the MoFEA supported by two PIUs in NLGFC and the Roads Authority. All three entities will be supported by a Third-Party Project Management Consultancy firm. This will be the first World Bank funded project to be implemented by EP&D who have no experience in implementing projects in line with the requirements of the ESF and currently employ no safeguards specialists. As such, environmental and social specialists will need to be recruited to support EP&D to coordinate the safeguards activities. For the district level activities under Component 2.2 and 4 the Project will be implemented by the NLGFC who has experience through the implementation of the Governance Enabled Service Delivery (GESD) Project Nov 08, 2023 Page 10 of 13 The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) which is under the Operational Policies and are therefore new to working with the ESF. The RA also has experience working on World Bank financed projects notably the Southern Africa Trade and Connectivity Project but again not with the ESF. As such, both the NLGFC and the RA will need to have environmental and social safeguards staff in place as outlined in the ESCP and support will need to be provided to the districts to address the capacity gaps. E&S capacity concerns will also be addressed through the use supervising engineers for construction works as well as the capacity building measures outlined in the ESCP. 33. E&S Management. All the project activities shall be undertaken in line with the requirements of ESF and in a manner acceptable to the Bank. Therefore, the project will comply with requirements of all the relevant ESSs (ESS 1 - ESS10) with exception of ESS 9 which is not considered relevant. The Borrower will also adhere to the key national regulatory requirements for E&S that shall be applicable to the project activities. Compliance with the ESF as it relates to the project activities will be mandatory for all project implementing agencies including the districts. E. Implementation Institutional and Implementation Arrangements 34. The implementation arrangements are as follows: • The Economic Planning, and Development (EP&D) with in the Ministry of Finance and Economic Affairs (MoFEA) will be the coordinating agency for the project, responsible for overall project management, implementation, and coordination. A PCU will be set up at EP&D, led by a Project Coordinator, that will be directly responsible for the implementation of Component 1, part of sub-component 2.1 (the rehabilitation of hydraulic infrastructure), part of component 3, and Component 4. In addition, it will coordinate the implementation of Component 2. The Road Authority (RA), within the Ministry of Transport and Public works, will be responsible for the implementation of part of sub-component 2.1 (rehabilitation of roads and bridges). At the RA level, a PIU, led by a Deputy Project Coordinator, will be set up. The District-Level Resilience Building sub-component 2.2 will be coordinated by the National Local Government Finance Committee (NLGFC), which is a constitutional body mandated to facilitate fiscal decentralization and local development in local councils, while the actual implementation of the activities will be carried out by the districts. The NLGFC will also implement part of Component 3. It will host a PIU led by Deputy Coordinator and that will report to the PCU at EP&D. • A Project Steering Committee (PSC) and Project Technical Committee (PTC) will be established for the overall management of the project. The PSC will be chaired by the Principal Secretary (PS) for MoFEA and comprise representatives of all MDAs and one representative from the districts. The PSC will meet biannually to monitor implementation progress; provide guidance, evaluate recommendations and requests that have policy and institutional implications. The PTC will be chaired by Director-level staff from the MoFEA and will comprise representatives of all MDAs. The PTC will meet monthly to oversee project implementation; discuss and agree on corrective measures; and ensure coordination among relevant MDAs. • For activities to be implemented by the AU, the Sustainable Development and Blue Economy Department will implement the project with support from relevant centralized units such as the Supply Chain Management Division (SCMD) and External Resources Management Division (ERMD), which will be responsible for procurement and financial management, respectively. The Department of Health, Humanitarian Affairs & Social Development (HHS) will support the technical implementation of the activities under Component 3. The Sustainable Development and Nov 08, 2023 Page 11 of 13 The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) Blue Economy Department will establish a Project implementation Unit (PIU) with two full time staff: a Project coordinator and the Training Coordinator to effectively manage the project. The project coordinator will be responsible for the overall management of the project the training coordinator will be responsible for developing Annual Training plans and organizing training for member countries, facilitating the secondment program, and contributing to the knowledge agenda of the RCRP. Additional fiduciary support will be hired to manage the AU-World Bank portfolio. • To ensure regional coordination, a Regional Steering Committee (RSC) of participating RCRP SOP countries and regional organizations’ policy makers and technical-level representatives is being established under RCRP-1, which Malawi and the AU will also join after the project is approved. @#&OPS~Doctype~OPS^dynamics@contactpoint#doctemplate CONTACT POINT World Bank Yohannes Yemane Kesete Senior Disaster Risk Management Specialist Nicholas Stephen Zmijewski Senior Environmental Engineer Laura Bonzanigo Senior Water Specialist Francis Samson Nkoka Senior Disaster Risk Management Specialist Edmundo Murrugarra Senior Social Protection Economist Borrower/Client/Recipient African Union Republic of Malawi Implementing Agencies African Union Commission (AUC) Harsen Nyambe, Director, Sustainable Environment and Blue Economy, nyambeh@africa-union.org Ministry of Finance and Economic Affairs Patrick Zimpita, Principal Secretary, Economic Planning and Development, pfzimpita65@gmail.com Dr. Mac Donald Mwale, Secretary to the Treasury, mmafutamwale@gmail.com Nov 08, 2023 Page 12 of 13 The World Bank Regional Climate Resilience Program for Eastern and Southern Africa 2 (P181308) FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects @#&OPS~Doctype~OPS^dynamics@approval#doctemplate APPROVAL Yohannes Yemane Kesete, Nicholas Stephen Zmijewski, Laura Bonzanigo, Task Team Leader(s): Francis Samson Nkoka, Edmundo Murrugarra Approved By Practice Manager/Manager: Country Director: Boutheina Guermazi 08-Nov-2023 Nov 08, 2023 Page 13 of 13