Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) Report Number: ICRR0023577 1. Operation Information Operation ID Operation Name P165056 Malawi CAT-DDO Country Practice Area (Lead) Malawi Urban, Resilience and Land Non-Programmatic DPF L/C/TF Number(s) Closing Date (Original) Total Financing (USD) IDA-D4880,IDA-D4890 31-Jul-2022 69,745,488.84 Bank Approval Date Closing Date (Actual) 06-Jun-2019 21-Jun-2022 IBRD/IDA (USD) Co-financing (USD) Original Commitment 70,000,000.00 0.00 Revised Commitment 70,000,000.00 0.00 Actual 69,745,488.84 0.00 Prepared by Reviewed by ICR Review Coordinator Group Dimitri Tsarouhas Fernando Manibog Avjeet Singh IEGSD 2. Program Objectives and Pillars/Policy Areas DEVOBJ_TBL a. Objectives The program development objective of the disaster risk management DPF with a Catastrophe Deferred Drawdown Option (CAT DDO) was to “strengthen the institutional and financial capacity of the Government of Malawi (GoM) for multi-sectoral disaster and climate risk management.” (Program Document or PD, p.5). Page 1 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) The achievement of the PDO was to be supported by three pillars: Pillar A – Strengthening the institutional framework and coordination mechanisms for the implementation of the national disaster and climate resilience agenda; Pillar B – Increasing climate and disaster resilience in physical developments and infrastructure; Pillar C – Strengthening adaptive social protection mechanisms and government financial capacity to respond to disasters. For the purpose of this ICRR, the objectives of the operation (against which outcomes will be assessed) are taken to be the following: Objective 1: to strengthen the institutional capacity of the Government of Malawi (GoM) for multi-sectoral disaster and climate risk management; Objective 2: to strengthen the financial capacity of the Government of Malawi (GoM) for multi-sectoral disaster and climate risk management. Pillar A (strengthening the institutional framework and coordination mechanisms for the implementation of the national disaster and climate resilience agenda) and Pillar B (increasing climate and disaster resilience in physical developments and infrastructure) supported Objective 1, while Pillar C (strengthening adaptive social protection mechanisms and government financial capacity to respond to disasters) supported Objective 2. b. Pillars/Policy Areas The program was structured around three pillars encompassing the operation’s objectives. These were the following: Pillar 1: Strengthen the institutional framework and coordination mechanisms for the implementation of the national disaster and climate resilience agenda; Pillar 2: Increase climate and disaster resilience in physical developments and infrastructure; Pillar 3 Strengthen adaptive social protection mechanisms and government financial capacity to respond to disasters. Neither the PDO nor the pillars were changed during the program. c. Comments on Program Cost, Financing and Dates The approved program cost totaled US$70 million, which comprised the MALAWI-Disaster Risk Management DPF, an IDA grant at a cost of US$40 million (IDA-D4880), and the Catastrophe Deferred Drawdown Option Page 2 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) (CAT DDO), a second, contingent financing IDA grant worth US$30 million (IDA-D4890). The full amount disbursed was fully disbursed. The DPF was approved on 6 June 2019 and closed on 21 June 2022, 40 days ahead of the originally envisaged closing date. The US$40 million IDA grant was released on June 28, 2019 and the US$30 million Cat DDO was made available to the government of Malawi on April 10, 2020 following the outbreak of COVID-19. 3. Relevance of Design a. Relevance of Objectives The two objectives of the program were relevant to the country situation, the government’s reform program, and the Bank’s Systematic Country Diagnostic (SCD) for Malawi. Relevance to country context Malawi is a landlocked, non-resource rich country in sub-Saharan Africa (SSA), which has one of the highest poverty levels in the world. The absence of economic diversification and rapid population growth soon established a pattern of low growth and cyclical macroeconomic problems leading to short-term fiscal consolidation efforts and high levels of dependency on international donors. Several challenges hinder Malawi’s attempts to achieve long-term sustainable growth and enhance citizens’ well-being by enhancing prosperity and reducing poverty levels. First, population growth: although the total fertility rate dropped from 6.5 in 1995 to 4.25 in 2020, the population is still growing at 2.7 percent per year and is anticipated to increase from 17.2 million in 2015 to 34.4 million in 2038 (UNDESA 2015). Second, climate change and its effects: droughts and floods reduce total GDP by about 1.7 percent per year (GFDRR, 2009), and climate shocks occur more frequently and with greater intensity in recent years. Examples are flooding in the Southern Region in 2015 resulting in the destruction of 4 percent of Malawi’s arable land, and the 2016 drought, which pushed 40 percent of the population into food insecurity (MVAC, 2016). In the spring of 2019, Tropical Cyclone Idai destroyed 109,000 hectares of crops, made 731,000 people food insecure and reconstruction needs were estimated at 5.8 percent of Malawi’s GDP. Relevance to country development strategy Malawi began to develop a disaster risk management (DRM) under the outdated National Disaster Preparedness and Relief Act (NDPRA) 1991. The relevant law established the Office of the Commissioner for the Department of Disaster Management Affairs (DoDMA), and the National Disaster Preparedness and Relief Committee. It was a forward-looking strategy that had not yet been developed further. Malawi’s Vision 2020 strategy emphasized the need for effective DRM. The 2015 National DRM Policy (NDRMP) laid out the government’s vision for a comprehensive and mainstreamed approach to DRM, and included the need to improve public health risk management, but lacked the legal status and associated budgetary provisions for execution. The Third Malawi Growth and Development Strategy (MGDS III) (2017-2022) emphasized the need for different sectors to work together to achieve development goals. The core aim of Malawi’s Third Growth and Development Strategy 2017-2022 was “to move Malawi to a productive, competitive and resilient nation through sustainable economic growth, energy, industrial and infrastructure development while addressing water, climate change and environmental management and population challenges." (PD, p. 35). Page 3 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) Relevance to WBG priorities The last Country Assistance Strategy (CAS) was for FY2013-2016 at the time of the operation. Among the lessons teased out by the CAS was the need to strengthen institutional development and capacity building so as to enhance the development impact of WB interventions. The SCD (2018) identified climate risks as a key challenge affecting poor households and macroeconomic stability and recommended implementing resilience strategies to allow for sustainable growth. The SCD also stressed that Malawi’s reaction-based response to shocks was traditionally characterized by short-term measures that expired soon after a disaster had struck and which relied on international donors instead of domestic fiscal adjustments. Informal rules of the game responding to political economy imperatives continue to shape behavior and function. Building resilience to climatic, health, and other disasters remains a priority for the government and the Country Partnership Framework (FY21-25). The CPF’s Objective 2.2 is, “Increasing resilience in urban and rural hotspots”, with a focus on land and flood risk management, resilient urbanization, early warnings, and disaster preparedness The Program Development Objective was aligned with the World Bank and Country strategies and appropriate in its ambition given the country context. The operation was also expected to complement other ongoing and planned World Bank projects to help the government manage immediate and long-term climate and disaster shocks. b. Relevance of Prior Actions Rationale The operation was structured around three pillars: (i) strengthening the institutional framework and coordination mechanisms for the implementation of the national disaster and climate resilience agenda, (ii) increasing climate and disaster resilience in physical developments and infrastructure, and (iii) strengthening adaptive social protection mechanisms and government financial capacity to respond to disasters. The operation had 8 Prior Actions (PAs), six related to Objective 1 and two to Objective 2. There were three PAs for the first pillar, three for the second pillar, and two for the third pillar (ICR, p. 11). Table 1: Objectives, Pillars, and Prior Actions for the Malawi Disaster Risk Management DPF with a Catastrophe Deferred Drawdown Option (CAT DDO) Objective 1: Strengthen the institutional capacity of the Government of Malawi (GoM) for multi-sectoral disaster and climate risk management Pillar 1: Strengthen the institutional framework and PA1: The Recipient’s Cabinet of Ministers has approved the coordination mechanisms for the Malawi Disaster Risk Management (DRM) Bill that will define a implementation of the national shift in the institutional framework from emergency response to disaster and climate resilience a more holistic and comprehensive DRM approach. agenda PA2: The Recipient, through its Cabinet of Ministers, has approved and adopted the Malawi National Meteorology Policy (NMP), which will guide the modernization of climate and Page 4 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) meteorological services central to providing quality and timely information for resilient development. PA3: The Recipient, through its Minister of Health and Population, has approved and adopted the Public Health Institute of Malawi’s Strategic Plan (2018-2022). PA4: The Recipient, through its Cabinet of Ministers, has Pillar 2: Increase climate and approved and adopted the Malawi National Urban Policy, which disaster resilience in physical incorporates DRM and climate change as cross-cutting topics developments and infrastructure and facilitates the development of other policy instruments needed to improve urban resilience. PA5: The Recipient, through its Cabinet of Ministers, has approved and adopted the Malawi National Transport Policy, which promotes mechanisms for resilient design, construction, and operation of transport infrastructure. PA6: The Recipient, through its Minister of Education, Science, and Technology, has approved and adopted the Safer School Construction Guidelines, which will ensure the multi-hazard resilient design and construction of public education infrastructure and outline a way forward for a safe location, selection of materials, and construction techniques for safer schools. Objective 2: Strengthen the financial capacity of the Government of Malawi (GoM) for multi- sectoral disaster and climate risk management PA7: The Recipient’s National Social Support Steering Pillar 3: Strengthen adaptive Committee has approved and adopted the Malawi National social protection mechanisms Social Support Programme II (2018-2023) and Implementation and government financial Plan which prioritizes the development of a shock-sensitive capacity to respond to disasters social protection system. PA8: The Recipient’s Minister of Finance, Economic Planning, and Development has approved and adopted a Disaster Risk Financing Strategy (DRFS) and Implementation Plan, outlining the Government’s strategic objectives to strengthen financial preparedness for effective and timely disaster response. Objective 1: Strengthen the institutional capacity of the Government of Malawi (GoM) for multi-sectoral disaster and climate risk management Page 5 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) Pillar 1: Strengthen the institutional framework and coordination mechanisms for implementing the national disaster and climate resilience agenda. PAs 1-3. PA1: The Recipient’s Cabinet of Ministers has approved the Malawi Disaster Risk Management (DRM) Bill that will define a shift in the institutional framework from emergency response to a more holistic and comprehensive DRM approach. Malawi’s disaster risk management policy was set at baseline by the National Development Preparedness and Relief Act (NDPRA) of 1991, an outdated and ex-post (post-disaster) with no provision for prevention and building resilience. The 2015 National DRM Policy underlined the need for a preventative approach mainstreamed across sectors. The DRM Bill entailed a detailed outline of the new institutional architecture that DRM entailed, mainstreamed the policy across sectors as called for by the 2015 DRM Policy, and included provisions for sustainable DRM financing. The PA entailed Cabinet approval, a precursor to the passage through Parliament. However, this was the first step and required subsequent tabling for Parliament and legislation for adoption and contribution to the institutional framework of the country’s DRM response. PA1: Moderately Satisfactory. PA2: The Recipient, through its Cabinet of Ministers, has approved and adopted the Malawi National Meteorology Policy (NMP), which will guide the modernization of climate and meteorological services central to providing quality and timely information for resilient development. Meteorological services that are up to date, well-coordinated, and facilitate prevention are key to Malawi’s development, not least in the context of frequent and increasing climate disasters. “Weather forecasts and agrometeorological advisory are key, particularly in a rain-fed agricultural environment, to support farmers as they make critical decisions in planting, sowing, fertilizing, and fumigation dates.” (PD, p.23). Adopting and approving the NMP directly contribute to a stronger and better coordinated climate resilience agenda by increasing financial resources for the Department of Climate Change and Meteorological Services (DCCMS), making meteorological services user-friendly and output oriented and coordinating risk communication. PA2: Satisfactory. PA3: The Recipient, through its Minister of Health and Population, has approved and adopted the Public Health Institute of Malawi’s Strategic Plan (2018-2022). The Public Health Institute of Malawi (PHIM) was established in 2012 to lead and coordinate the multi-sectoral surveillance, prevention, and control of health threats. Its coordinating role extended to linking DRM systems with public health systems by introducing the National Public Health Emergencies Management Committee. Its formal establishment did not translate into practical change since the PHIM lacked the resources, financial and technical, to fulfill its mandate. The adoption of the 2018-2022 Strategic Plan would institutionalize the government’s health policy framework by clarifying the roles of the PHIM, DRM institutions, and other institutions in health risk management and allow the government to develop national capacity for addressing public health emergencies. PA3: Moderately Satisfactory. Pillar 2: Increase climate and disaster resilience in physical developments and infrastructure PAs 4-6. PA4: The Recipient, through its Cabinet of Ministers, has approved and adopted the Malawi National Urban Policy, which incorporates DRM and climate change as cross-cutting topics and facilitates the development of other policy instruments needed to improve urban resilience. Page 6 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) The National Urban Policy constituted the first policy plan targeting urban spaces in Malawi. Urbanization has been relatively slow in Malawi, stagnating at around 15 percent since 1999 and remaining lower than in other SSA states. Adopting a national urban policy would establish minimum requirements for promoting urban resilient initiatives and integrate DRM into the institutional framework of urban development. This PA also formed part of a series of subsequent RIs to embed resilience in the policy framework of infrastructure policy, such as setting up multi-hazard plans and using hazard-compatible building standards. PA4: Satisfactory. PA5: The Recipient, through its Cabinet of Ministers, has approved and adopted the Malawi National Transport Policy, which promotes mechanisms for resilient design, construction, and operation of transport infrastructure. The MGDS III and the 2018 National Transport Master Plan (NTMP) Climate Change Action Plan of 2018 called for reforms to improve transport resilience by adopting new standards on roads, buildings, and infrastructure that consider the risk of climate change and natural disasters. The non-incorporation of such standards costs Malawi dearly in terms of both physical destruction and foregone gains in growth and development, with the damage caused by Tropical Cyclone Idai in the transport sector equaling 17 percent of all costs. PA5: Satisfactory. PA6: The Recipient, through its Minister of Education, Science, and Technology, has approved and adopted the Safer School Construction Guidelines, which will ensure the multi-hazard resilient design and construction of public education infrastructure and outline a way forward for a safe location, selection of materials, and construction techniques for safer schools. Schools are often funded and constructed by non-governmental organizations, with limited consultation with the Government or the affected local communities. There is little evidence that site selection and physical planning of the school site is undertaken, with many schools across the country located on exposed and vulnerable sites. Recent catastrophes demonstrated the problem: the Koronga earthquake in 2009 damaged more than 100 school buildings, and Tropical Cyclone Idai affected more than 1,500 schools. Adopting the Safer School Construction Guidelines would add to Malawi’s infrastructure resilience through detailed guidance on site selection, designs, and construction technologies that incorporate views by experts and stakeholders. PA6: Satisfactory. Objective 2: Strengthen the financial capacity of the Government of Malawi (GoM) for multi-sectoral disaster and climate risk management Pillar 3: Strengthen adaptive social protection mechanisms and government financial capacity to respond to disasters PAs 7-8. PA7: The Recipient’s National Social Support Steering Committee has approved and adopted the Malawi National Social Support Programme II (2018-2023) and Implementation Plan, which prioritizes the development of a shock-sensitive social protection system. The second National Social Support Programme included concrete actions for the development of a shock- sensitive social protection system, with stronger coordination across programs and a shift of focus from individual programs to coherence and integration across systems, including the use of a single Unified Beneficiary Registry (UBR). The relevance of the PA is straightforward, but it is unclear why it included the approval of a relevant Committee instead of the Cabinet. PA7: Satisfactory. Page 7 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) PA8: The Recipient’s Minister of Finance, Economic Planning, and Development has approved and adopted a Disaster Risk Financing Strategy (DRFS) and Implementation Plan, outlining the Government’s strategic objectives to strengthen financial preparedness for effective and timely disaster response. Natural disasters undermine fiscal planning and often overwhelm the government’s financial capacity to respond, adding to fiscal pressures and reliance on international donors. The Disaster Risk Financing Strategy (DRFS) and Implementation Plan were designed to increase Malawi’s financial resilience to shocks through mutually complementary risk financing instruments, systematic data collection on disaster response, and a more transparent decision-making process for DRF instrument selection. Its adoption by the Ministry of Finance directly strengthened Malawi’s decision-making capacity in financing post-disaster response. PA8: Satisfactory. Overall, PAs were set at the right level of ambition and addressed major shortcomings in Malawi’s institutional capacity to deal with DRM and climate resilience challenges. The PAs were based on lessons learned from experience and prior analytical work. They were context-appropriate and essentially encouraged a whole government approach aimed at introducing a culture of prevention concerning DRM. The prior actions were appropriate along the results chain for realizing the intended objectives. PAs 1 to 3, under the first pillar, directly contributed to the PDO by reinforcing the institutional framework and the coordination capacity of Malawi regarding DRM capacity and preparation. Likewise, PAs 4 to 6 under Pillar were directly relevant to the PDO by contributing to a stronger resilience infrastructure. In contrast, PAs 7 and 8 contributed to the PDO’s goal of strengthening the financial capacity of Malawi to respond to the fiscal challenges associated with pre- and post-disaster management. Six of the eight prior actions were satisfactory, and two were moderately satisfactory. Overall, the relevance of the prior actions is rated as Satisfactory. Rating Satisfactory 4. Relevance of Results Indicators Rationale The results indicators (RIs) were generally placed within well-articulated results chains premised on a theory of change that measured the likely impact of the PAs and their links to the stated objectives. Relevance of RIs for Pillar 1: Strengthen the institutional framework and coordination mechanisms for the implementation of the national disaster and climate resilience agenda. RI1 (Number of Technical Sub-committees operationalizing a more comprehensive DRM approach as established in the Malawi Disaster Risk Management Bill evidenced by an independent assessment report) measured an important determinant of progress toward the objective of strengthening the institutional framework that would make the DRM framework operational. In order to ensure the credibility of reporting, an independent assessment report was specified. RI1: Satisfactory. Page 8 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) RI2 (Annual reports on NRS and/or MGDS III monitoring progress on results, budget allocations, and expenditures on disaster risk management and social protection from Government and development partners produced) used to measure progress regarding the implementation of the resilience agenda, which included both the state and civil society. The publishing of the annual report enhanced the transparency and accountability of the Government. RI2: Satisfactory. RI3 [Number of user sectors (i.e. agricultural sector, DRM institutional system) receiving tailor-made forecasts and early warning bulletins with the appropriate content, frequency, and communication channels and in local languages (Chichewa, Tumbuka and Yao)] directly measured progress made in upgrading the early warning capacity of the country in a user-friendly, tailor-made manner towards those most in need of it. Both baselines and targets were clear and measurable. RI3: Satisfactory. RI4 [National Public Health Emergencies Committee established and operating in accordance with the MoU that clarifies all ministry roles and responsibilities relevant to International Health Regulations (IHR) capacity implementation] was an indicator directly linked to PA3 on the setup of a Strategic Plan by the Public Health Institute of Malawi, and directly measured progress towards the institutional strengthening of the country’s national disaster agenda with regard to health-related emergencies. The target of a Committee setup was clear but the inclusion of an MoU which did not exist at the baseline complicated measurement. In practice, a handbook took the place of an MoU. RI4: Moderately Satisfactory. RI5 (Number of cities with appropriate hazard maps that inform the location of public infrastructure and physical development) was relevant to measuring progress towards the first objective of enhancing climate and disaster resilience in urban planning, development and resilience. Both baselines and targets were clear and directly measurable. RI5: Satisfactory. RI6 (Number of cities and districts where stakeholders have been trained on existing standards and building policy/regulations that incorporate multi-hazard resilience) measured progress in enhancing the capacity of the stakeholders. The indicator was however relatively output-oriented without measuring the effectiveness of the training provided. Also, the ICR notes that the indicator was ambiguous as to whether only legally binding codes and regulations were sufficient, or guidelines adopted by relevant ministries could also be used RI6: Moderately Unsatisfactory. RI7 (Number of new national transport projects implemented by the Roads Authority that apply the new harmonized multi-hazard resilience standards) measured progress towards mainstreaming of resilience standards under new national transportation projects. It reflected the progress made towards the implementation of the resilience standards even though it was earlier in the results chain. Also, defining the target in terms of percentage compliance rather than just the new number of projects would have helped put the achievement in perspective. RI7: Moderately Satisfactory. RI8 (Percentage of new educational facilities constructed or rehabilitated in compliance with the technical hazard-resilient criteria adopted by MoEST) directly measured progress made with regards to enhanced resilience in education infrastructure and followed from PA6 pertaining to the adoption of the Safer School Construction Guidelines. RI8: Satisfactory. RI9 [Unified Beneficiary Registry (UBR) data sharing protocols implemented, as evidenced by the percentage of shock-affected households identified through the UBR that are targeted for post-disaster support] was directly measuring the extent to which social protection through the UBR was put to use to support those affected by natural disasters. The indicator, however, could be misconstrued as targeting Page 9 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) the percentage of shock-affected households that actually received post-disaster support, rather than the percentage of beneficiaries that were identified using the UBR as intended. RI9: Moderately Satisfactory. RI10 (Number of new ex-ante risk financing instruments established in alignment with the National Disaster Risk Financing Strategy) measured the pillar’s second aspect on the government’s financial capacity and followed PA8 on the adoption of a Risk Financing Strategy. RI10: Satisfactory. The results indicators (RIs) were generally placed within well-articulated results chains premised on a theory of change that measured the likely impact of the PAs and their links to the stated objectives. Six RIs are rated Satisfactory, Three Moderately Satisfactory and One Moderately Unsatisfactory. The overall relevance of the results indicators is rated as Moderately Satisfactory. Table 1 Baseline Target Actual as Actual at RI Results Indicator Associated RI (including (including % to target achievement (RI) PA(s) relevance units and units and targeted date rating date) date) change Objective 1: Strengthen the institutional capacity of the Government of Malawi (GoM) for multi- sectoral disaster and climate risk management RI1: Number of Technical Sub- committees operationalizing a more comprehensive 66% of DRM approach as 1 S 0 (2019) 3 (2022) 2 (2022) targeted Substantial established in the change Malawi Disaster Risk Management Bill (evidenced by an independent assessment report) RI2: Annual 1 S 0 (2019) 3 (2022) 3 (2022) 100% of High reports on targeted National change Resilience Strategy (NRS) and/or Malawi Growth and Development Strategy (MGDS) III monitoring progress on results, budget Page 10 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) allocations, and expenditures on disaster risk management and social protection from Government and development partners produced. RI3: Number of user sectors (i.e. agricultural sector, DRM institutional system) receiving tailor-made forecasts and early warning 33% of bulletins with the 2 S 0 (2019) 3 (2022) 1 (2022) targeted Modest appropriate change content, frequency, and communication channels and in local languages (Chichewa, Tumbuka and Yao). RI4: National Public Health Emergencies Committee established and operating in accordance with the MoU that 0% of clarifies all 3 MS No (2019) Yes (2022) No (2022) targeted Negligible ministry roles and change responsibilities relevant to International Health Regulations (IHR) capacity implementation RI5: Number of 4 S 0 (2019) 2 (2022) 1(2022) 50% of Modest cities with targeted appropriate change hazard maps that Page 11 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) inform the location of public infrastructure and physical development RI6: Number of cities and districts where stakeholders have More than been trained on 100% of existing standards 4 MU 0 (2019) 15 (2022) 18 (2022) Substantial targeted and new building change policy/regulations that incorporate multi-hazard resilience. RI7: Number of new national transport projects implemented by 0% of the Roads 5 MS 0 (2019) 3 (2022) 0 (2022) targeted Negligible Authority that change apply the new harmonized multi- hazard resilience standards. RI8: Percentage of new educational facilities constructed or 100% of rehabilitated in 6 S 0 (2019) 100(2022) 100 (2022) targeted Substantial compliance with change the technical hazard-resilient criteria adopted by MoEST. Objective 2: Strengthen the financial capacity of the Government of Malawi (GoM) for multi-sectoral disaster and climate risk management RI9: Unified 7 MS 0 (2019) 90 (2022) 100 (2022) More than High Beneficiary 100% of Registry (UBR) targeted data sharing change protocols implemented, as evidenced by percentage of shock-affected Page 12 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) households identified through the UBR that are targeted for post- disaster support. RI10: Number of new ex-ante risk financing instruments 100% of established in 8 S 0 (2019) 2 (2022) 2 (2022) targeted High alignment with the change National Disaster Risk Financing Strategy Rating Moderately Satisfactory 5. Achievement of Objectives (Efficacy) EFFICACY_TBL OBJECTIVE 1 Objective Strengthen the institutional capacity of the Government of Malawi (GoM) for multi-sectoral disaster and climate risk management [PAs 1-6, RIs 1-8]. Rationale Theory of Change: The ICR presented a “theory of change” (page 11, Figure 1) for each pillar, describing how PAs were expected to contribute to program objectives. Institutional capacity was to be strengthened by (i) increasing the preventative focus and coordination of DRM institutions; stakeholder access to actionable risk information; public health disaster risk management; and DRM monitoring, evaluation, and transparency; and (ii) mainstreaming DRM considerations in the policies of key exposed sectors to reduce asset losses in case of disasters (including risk-sensitive land-use planning, and more resilient design and construction principles for transport, housing, and schools Together, these were likely to boost Malawi’s institutional capacity. The theory of change was logical though no critical assumptions were identified. The targeted number of annual reports had been published by the target date and included the full spectrum of requirements determined by the relevant indicator. The reports’ efficacy was especially pronounced in that they facilitated enhanced transparency on governmental activities pertaining to DRM policy and scrutiny by civil society. The latter’s views were not incorporated in the reports, however, with the ICR citing “data gaps” (ICR, p. 21) in that respect. A workshop to raise awareness and a subsequent training-for-trainers event was held in the spring and summer of 2022 for 54 officials from 18 districts, who were trained on the new multi- hazard Safer Housing Construction Guidelines(s) (SHCGs). Further, over 400 schools benefited from new, rehabilitated, or reconstructed Safer Schools Construction Guidelines (SSCG) compliant facilities, and that Page 13 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) included including 1,584 classrooms, 884 bathrooms, 384 ICT centers, laboratories, or libraries, and 142 teacher houses (ICR, p.28) Evidence to date suggests that the full adoption and implementation of SSCGs in new educational facilities has boosted the resilience of those structures when faced with the floods arising from Cyclones Ana and Gombe in 2022. Two of the three Sub-Committees specified at baseline, the Early Warning System Technical Subcommittee (EWSC) and the Joint Technical Committee on Climate Change and DRM have been formed and operate in regular intervals since 2021 in line with their mandate. The operationalization of the new approach to DRM by the two Committees is, however, not demonstrated by an independent assessment report, as per the indicator’s target, but by the Committees’ terms of reference. Tailor-made warnings that enhanced resilience by offering citizens and especially fishermen and agricultural laborers were, at completion, sent only in one local language. The ICR mentions, however, that a few months later the broadcast and sending two more local languages (out of Malawi’s total of 12) had been added. That fact, in combination with the fact that the Department of Climate Change and Meteorological Services (DCCMS) has enabled user-friendly, actionable early warnings that proved crucial for local livelihoods during the 2023 Tropical Cyclone Freddy. A hazard map with completed flood risk analysis, which has been disseminated to stakeholders and made available on the country’s geospatial data portal has been prepared for Lilongwe. The equivalent map for Blantyre is scheduled to be finalized and delivered by 2024. The foreseen National Public Health Emergencies Committee has not been established at completion, and public health emergency responses are coordinated by the National Health Cluster. The National Public Health Emergency Operation Centre (NPHEOC) has created a Handbook, in lieu of the foreseen Memorandum of Understanding. Malawi’s Road Authority initiated no new national transport projects during the project’s duration, nor were new resilience-oriented standards introduced for the road sector. Given the shortcomings in achievement of some of the targets, the efficacy of the first objective is rated as Moderately Satisfactory. Rating Moderately Satisfactory OBJECTIVE 2 Objective Strengthen the financial capacity of the Government of Malawi (GoM) for multi-sectoral disaster and climate risk management [PAs 7-8, RIs 9-10]. Rationale Theory of Change: The government’s financial capacity for disaster and climate risk management was to be strengthened by building the financial resilience of households and the national government to disasters, through more (i) risk-sensitive, scalable, and streamlined social protection systems such as the use of Unified Page 14 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) Beneficiary Registry (UBR) sharing protocols which facilitated the streamlining of post-disaster support; and (ii) establishing ex-ante financing instruments for disaster response. The theory of change was logical. Following the 2020 approval of the UBR data-sharing protocols by the National UBR Coordination Committee, UBR has been used for all new intake and targeting for post-disaster cash transfers. This has facilitated the enrollment, payment, and case management of each beneficiary under a single Management Information System. The UBR is widely used by Malawian authorities and international donors in the country. The indicator, measures the percentage of beneficiaries that were identified using the UBR as intended, rather than the percentage of shock-affected households that actually received post-disaster support. The project met the target of establishing two risk financing instruments.. The Flexible Contingency and African Risk Capacity (ARC) Group sovereign drought insurance have already made payments in response to 2020/21 drought conditions, financing transfers to more than 70,000 households. A Parametric Insurance instrument designed to complement the Flexible Contingency is in final stages of procurement.. The government obtained Sovereign Drought Insurance from the African Risk Capacity (ARC) group. This insurance makes general budget payments to the government in case of qualifying localized drought conditions, evidenced by subnational triggers. Under this insurance policy, ARC paid US$14.2 million in the 2021/22 season, which was used to support the 2022 Lean Season cash transfers and emergency food (maize) procurement in four regional clusters (northern region, central region, Shire Valley, and Blantyre southern). In addition, a Contingent Emergency Response Component (CERC) was also established that has been funded by the IDA to increase the government’s financial readiness and resilience to shocks. The efficacy of the second objective is rated as Satisfactory given the substantial achievement. Rating Satisfactory OVERALL EFF TBL OLD Overall Achievement of Objectives (Efficacy) Rationale The rationale behind each PA was adequately discussed in both the PD and the ICR. The relationship between PAs and the intended outcomes was evident, with some exceptions. The achievement of the first objective is rated as Moderately Satisfactory, and the second objective is rated as Satisfactory. Given the overall moderate shortcomings in the achievement of the PDO, the overall outcome is rated as Moderately Satisfactory. Overall Efficacy Rating Moderately Satisfactory Page 15 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) 6. Outcome Rationale The Satisfactory rating for the relevance of PAs was based on their sound design to build on initiatives from previous analytical work and country engagement. In most cases, PAs were designed as a sequence of successive steps that could enable the achievement of appropriate PDOs and were based on an explicitly articulated theory of change. The rationale for each action was generally well articulated and was largely based on data points that justified the salience of each PA and how it helped get closer to the realization of the set objective. On the efficacy aspects, key achievements have been made in strengthening the institutional capacity for the implementation of the national disaster and climate resilience agenda though moderate shortcomings remain. User-friendly warnings, particularly for core sectors like agriculture and fisheries, are now operational and available in at least three local languages. The institutional framework for disaster risk management (DRM) has been strengthened with the publication of annual reports and the passage of the DRM Bill. Despite not being part of the initial indicators, the passing of the DRM Bill and the restructuring of the Department of Disaster Management Affairs indicate tangible progress in establishing a new institutional framework and enhancing coordination among state departments. Improved coordination in addressing the link between public health emergencies and prevention is pending due to the delay in establishing the National Public Health Emergencies Committee. In terms of physical infrastructure, educational infrastructure vulnerability has been addressed through the implementation of Safer Schools Construction Guidelines in relevant facilities since 2019. However, progress has been slower in implementing hazard maps for vulnerable urban infrastructure, and resilience standards for the road sector are yet to be put into practice. On strengthening the financial capacity aspects, measurable progress includes the implementation of UBR data-sharing protocols and the introduction of specific risk-financing instruments. These steps demonstrate the government's commitment to enhancing resilience in the face of climate disasters, focusing on both social protection and fiscal sustainability. The overall outcome of the Project is rated Moderately Satisfactory, based on the Satisfactory Relevance of the Prior Actions and Moderately Satisfactory achievement of the Results Indicators. a. Rating Moderately Satisfactory 7. Risk to Development Outcome Political Risk: The annulment of previous elections in February 2020 and the election of a new government in the spring of 2020 ushered in a new era in the country’s political landscape. The new government has proceeded with important changes in the state administration and personnel appointments. This is a substantial risk regarding the sustainability of achieved reforms given how dependent progress on state decisions is in the country context, despite the recent approval of the DRM Bill. Equally importantly, personnel changes since 2020 have meant that reform champions during the program’s setup have exited positions of authority and decision-making, increasing the possibility of policy reversals, especially regarding institutional coordination and implementing the new DRM policy framework. The program was in sync with Page 16 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) the previous administration’s Growth and Development Strategy, but that inevitably enhanced the program’s dependence on the old leadership. The PD had pointed to that risk and had foreseen mitigation measures. Institutional Risk: the program’s comprehensive and horizontal nature affects several state departments, agencies, and authorities and requires fine-tuned coordination across the state administration to deliver sustainable results. Malawi’s limited human resources capacity and implementation gaps have historically proven crucial in reversing a reformist political agenda, especially when multiple actors with diverse interests are required to synchronize operations. Pandemic risk: concurrent with the change in the country’s political leadership. COVID-19 naturally absorbed the authorities’ attention. Risk about a shift away from core aspects of the program, such as the government’s financial risk-sharing schemes, has been heightened as a result. Malawi’s long dependence on international donors is an associated risk to the extent that a deteriorating fiscal situation will likely enhance dependence on external financial assistance and undermine progress made in long-term fiscal adjustment. Financial Risk: the program’s ambitious nature requires sustained financial commitment, especially when it comes to the implementation of the new DRM approach on physical infrastructure. In closing, Malawi’s headline inflation had reached the highest level since 2013 (Engel et al. 2023), and the country’s debt levels were considered unsustainable through a Debt Sustainability Analysis (DSA) jointly conducted by the IMF and the World Bank. The nature of the program through DDO-contingent funding is a default mitigation strategy during the program’s operation and worked well. Still, it does not remove the uncertainty of future implementation, given limited fiscal space. 8. Assessment of Bank Performance a. Bank Performance – Design Rationale The DPF was underpinned by strong analytical underpinnings. The rationale for each policy action was well documented based on prior analytical work by the World Bank, the United Nations, the World Meteorological Organization, and the Government of Malawi (PD, pages 31-33, Table 5). The project team also included TA work carried out during program implementation (PD, Table 5). The first pillar was supported by the 2015 Sendai Framework for Disaster Risk Reduction 2015-2030, the 2015 World Meteorological Organization Guidelines on Multi-Hazard, Impact-based Forecast and Warning Services, and the 2017 WB Diagnostic on Multi-Sector Investment Framework for Climate and DRM. The second pillar was supported by the 2015 WB Report on Moving Toward Climate-Resilient Transport, the 2016 WB Malawi Urbanization Review and the 2018 joint report by the World Bank, the Global Facility for Disaster Reduction and Recovery, and ARUP on a Roadmap for Safer Schools. The third pillar drew from the 2016 post-disaster needs assessment (PDNA) for Malawi, the 2017 World Bank report entitled Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters. Climate Change and Development and the 2018 Malawi Country Economic Memorandum. The program document rightly assessed the overall risk to the program as high, given that political, macroeconomic, institutional and fiduciary risks were all classified as high, and that multiple policy sectors Page 17 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) would be involved in implementation. Sectoral, technical and social and environmental risks were identified as moderate. While sectoral and technical risk were correctly identified, environmental and social risks proved higher during implementation, and contributed to the non-implementation of the targets on road transport as per RI7 and according to the ICR’s own assessment (p. 35). Mitigation strategies on political risks included TA and policy dialogue to achieve buy-in by the new authorities as well as M&E incentives, whereby CAT-DDO disbursement became subject to achieving a Moderately Satisfactory progress on RIs. Swift disbursement of funds prior to the inauguration of the new government assisted mitigation of macroeconomic risk, especially as the onset of the pandemic made liquidity more important. Fiduciary mitigation entailed the hiring of external independent auditors to monitor financing flows and ensure compliance with IDA rules on disbursement. Institutional risks were correctly identified ex ante and the core mitigation strategy was to focus on priority areas agreed with the government and international donors. Following the CAT-DDO request by the government in 2018, the Bank engaged in extensive consultation with the Ministry of Finance (coordinating the program), sectoral ministries and agencies as well as development partners. A total of six preparation and one virtual appraisal missions were conducted in that context (ICR, p. 33). There was also extensive coordination with development partners, ranging from the IMF on the agreed EFF with the government of Malawi on the fiscal front to the UN on designing an urban policy framework for Malawi and leveraging the Red Cross and FAO to disseminate early warning systems to targeted segments of the population. Rating Satisfactory b. Bank Performance – Implementation Rationale The Bank engaged in extensive monitoring of operations by use of extensive technical support during the program, and strong local presence made up of staff and consultants. In-house presence and close coordination with the government became especially significant for implementation after the 2020 election and the onset of the pandemic. The program was coordinated with various development partners that had been present in Malawi before the start of operations, and the results chain reflected that coordination in terms of targets set on early warning systems disseminated with the help of the Food and Agriculture Organization (FAO) as well as the Red Cross, support extended by the African Development Bank for the purchase of drought insurance and cooperation with the UN Habitat program on urban policy. The Bank was proactive in adapting to the changing circumstances. The delays in the passage of the DRM Bill led the Bank to intensify its engagement with government authorities and strengthen collaboration in a cross- sectoral manner as it engaged with Bank teams operating on social support and emergency relief support during that time. The inclusion of a potential health disaster as an eligible trigger allowed for an adequate response to COVID-19 without the need to restructure operations, which was particularly significant in the country context. Page 18 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) Rating Satisfactory c. Overall Bank Performance Rationale Given that the Bank performance at design and supervision are rated as Satisfactory, the overall Bank Performance is rated as Satisfactory.. Overall Bank Performance Rating Satisfactory 9. Other Impacts a. Social and Poverty The ICR referred to the positive impact expected from the operation in a general way. Malawi’s poor are disproportionately exposed and vulnerable to natural hazards. The operation was therefore focused on a key driver of poverty (disaster vulnerability). The operation also strengthened social protection systems targeting the most vulnerable (Pillar C); improved early warning systems (Pillar A) for low-income farmers, fishers, and households to protect their lives, assets, and livelihoods during disasters; made rural schools more resilient (Pillar B); and strengthened the foundations for more resilient low-income housing in urban and rural areas (Pillar B), b. Environmental There is no concrete evidence on the environmental impact of the program, but it is expected that better urban flood risk information, hazard-informed planning, and early warnings may have positive environmental spillovers, such as reducing pollution from urban solid and liquid waste during floods. The revised National Building Policy and Regulations also aim to reduce the environmental footprint of buildings throughout their lifecycle c. Gender The operation was not designed to have any specific gender effects. Page 19 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) d. Other --- 10. Quality of ICR Rationale The ICR is overall well-written and comprehensive. The ICR is candid, and internally consistent. The ICR evidence is generally of high quality. It provides a clear rationale for the selected prior actions and clearly illustrates the causal links between the prior actions, the results indicators, and the intended outcomes. The theory of change in the ICR could have been elaborated further, and also include any critical assumptions. The ICR draws relevant lessons from the experience of implementing this operation. a. Rating Substantial 11. Ratings Reason for Ratings ICR IEG Disagreement/Comments Moderately Outcome Moderately Satisfactory Satisfactory Bank Performance Satisfactory Satisfactory Relevance of Results --- Moderately Satisfactory Indicators Quality of ICR --- Substantial 12. Lessons The ICR draws the following main lessons from the design and implementation of the program. IEG agrees with the ICR on the need to ensure that the ambition of DPF and Cat DDO reform agendas should be matched with adequate resources for Technical Assistance in the execution of the program. This proved important in the project context, as fiscal constraints intensified during implementation, making reliance on external financial assistance necessary to sustain reform momentum. Also, exploiting synergies with ongoing IPFs in design and implementation could be considered. Page 20 of 21 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Malawi CAT-DDO (P165056) A second lesson is regarding the usefulness of designing flexible triggers to enable efficient responses to different types of disaster: The operation was able to support the COVID-19 response without restructuring due to the inclusion of health disasters among eligible triggers. 13. Project Performance Assessment Report (PPAR) Recommended? No Page 21 of 21