Offline FOR OFFICIAL USE ONLY Report No: PCBASIC0269148 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF US$ 150 MILLION TO THE ARGENTINE REPUBLIC FOR A SECOND HABITAT AND URBAN LAND PROJECT February 2, 2023 Urban, Resilience and Land Global Practice Latin America and Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective Jan 9, 2023) Currency Unit = Argentine Pesos (ARS) ARS 179.25 = US$1 FISCAL YEAR January 1 - December 31 Regional Vice President: Carlos Felipe Jaramillo Country Director: Jordan Z. Schwartz Regional Director: Anna Wellenstein Practice Manager: David N. Sislen Task Team Leader(s): Santiago Ezequiel Arias, Dean A. Cira ABBREVIATIONS AND ACRONYMS AMBA Metropolitan Area of Buenos Aires (Área Metropolitana de Buenos Aires) CABA Autonomous City of Buenos Aires (Ciudad Autónoma de Buenos Aires) ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan EU Executing Units FA Framework Agreement FM Financial Management GCRF Global Crises Response Framework GDP Gross Domestic Product GRS Grievance Redress Service IADB Inter-American Development Bank IMF International Monetary Fund INDEC National Statistics and Census Institute (Instituto Nacional de Estadística y Censos) LGBTIQ+ Lesbian, Gay, Bisexual, Trans and/or Intersex, Queer and others MDTyH Ministry of Territorial Development and Habitat (Ministerio de Desarrollo Territorial y Hábitat) PDO Project Development Objective PIC Community Initiative Projects (Proyectos de Iniciativa Comunitaria), PFCSyH Projects to Strengthen Social and Human Capital (Proyectos de Fortalecimiento del Capital Social y Humano) PROCREAR Argentina’s Bicentenary Credit Program (Programa Crédito Argentino del Bicentenario) PROMEBA Neighborhood Improvement Program (Programa de Mejoramiento de Barrios) RENABAP National Slums Registry (Registro Nacional de Barrios Populares) RP Resettlement Plan RPF Resettlement Policy Framework SC Secretariat of Coordination (Secretaría de Coordinación) SDT Secretariat of Territorial Development (Secretaría de Desarrollo Territorial) SH Secretariat of Habitat (Secretaría de Hábitat) VAA Slums, informal settlements and degraded areas (Villas, Asentamientos y Áreas Degradadas) TABLE OF CONTENTS DATASHEET ............................................................................................................................ 2 I. STRATEGIC CONTEXT ...................................................................................................... 7 A. Country Context................................................................................................................................ 7 B. Sectoral and Institutional Context .................................................................................................... 8 C. Relevance to Higher Level Objectives............................................................................................. 11 II. PROJECT DESCRIPTION.................................................................................................. 13 A. Project Development Objective ..................................................................................................... 13 B. Project Components ....................................................................................................................... 13 C. Project Beneficiaries ....................................................................................................................... 18 D. Results Chain .................................................................................................................................. 18 E. Rationale for Bank Involvement and Role of Partners ................................................................... 19 F. Lessons Learned and Reflected in the Project Design .................................................................... 20 III. IMPLEMENTATION ARRANGEMENTS ............................................................................ 21 A. Institutional and Implementation Arrangements .......................................................................... 21 B. Results Monitoring and Evaluation Arrangements......................................................................... 23 C. Sustainability................................................................................................................................... 23 IV. PROJECT APPRAISAL SUMMARY ................................................................................... 25 A. Technical, Economic and Financial Analysis ................................................................................... 25 B. Fiduciary.......................................................................................................................................... 30 C. Legal Operational Policies ............................................................................................................... 31 D. Environmental and Social ............................................................................................................... 31 V. GRIEVANCE REDRESS SERVICES ..................................................................................... 32 VI. KEY RISKS ..................................................................................................................... 33 VII. RESULTS FRAMEWORK AND MONITORING ................................................................... 35 ANNEX 1: Implementation Arrangements ..................................................................... 44 ANNEX 2: Implementation Support Plan ....................................................................... 60 ANNEX 3: Habitat 1 Processes Evaluation. Main Conclusions and recommendations. ..... 61 Page 1 of 61 DATASHEET BASIC INFORMATION BASIC_INFO_TABLE Country(ies) Project Name Argentina Second Habitat and Urban Land Project Project ID Financing Instrument Environmental and Social Risk Classification Investment Project P179636 Substantial Financing Financing & Implementation Modalities [ ] Multiphase Programmatic Approach (MPA) [✓] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [ ] Fragile State(s) [ ] Performance-Based Conditions (PBCs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster [ ] Alternate Procurement Arrangements (APA) [ ] Hands-on Enhanced Implementation Support (HEIS) Expected Approval Date Expected Closing Date 24-Feb-2023 31-Jul-2028 Bank/IFC Collaboration No Proposed Development Objective(s) The proposed Project’s Development Objective is to (i) promote formal and planned urban growth in selected cities; (ii) improve living conditions for households in selected precarious urban settlements; and (iii) respond effectively in case of an eligible crisis or emergency. Components Component Name Cost (US$, millions) Page 2 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Component 1: Formal and Planned Urban Growth 54.00 Component 2: Sustainable Habitat Improvement 91.50 Component 3: Institutional Strengthening and Project Management 4.50 Component 4: Contingent Emergency Response 0.00 Organizations Borrower: Argentine Republic Implementing Agency: Ministry of Territorial Development and Habitat PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 150.00 Total Financing 150.00 of which IBRD/IDA 150.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Bank for Reconstruction and Development (IBRD) 150.00 Expected Disbursements (in US$, Millions) WB Fiscal Year 2023 2024 2025 2026 2027 2028 2029 Annual 7.50 37.50 45.00 37.50 15.00 5.00 2.50 Cumulative 7.50 45.00 90.00 127.50 142.50 147.50 150.00 INSTITUTIONAL DATA Practice Area (Lead) Contributing Practice Areas Page 3 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Urban, Resilience and Land Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating 1. Political and Governance ⚫ Substantial 2. Macroeconomic ⚫ Substantial 3. Sector Strategies and Policies ⚫ Moderate 4. Technical Design of Project or Program ⚫ Moderate 5. Institutional Capacity for Implementation and Sustainability ⚫ Substantial 6. Fiduciary ⚫ Substantial 7. Environment and Social ⚫ Substantial 8. Stakeholders ⚫ Moderate 9. Other 10. Overall ⚫ Substantial COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [✓] No Does the project require any waivers of Bank policies? [ ] Yes [✓] No Page 4 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Environmental and Social Standards Relevance Given its Context at the Time of Appraisal E & S Standards Relevance Assessment and Management of Environmental and Social Risks and Impacts Relevant Stakeholder Engagement and Information Disclosure Relevant Labor and Working Conditions Relevant Resource Efficiency and Pollution Prevention and Management Relevant Community Health and Safety Relevant Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Relevant Biodiversity Conservation and Sustainable Management of Living Natural Not Currently Relevant Resources Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Not Currently Relevant Local Communities Cultural Heritage Relevant Financial Intermediaries Not Currently Relevant NOTE: For further information regarding the World Bank’s due diligence assessment of the Project’s potential environmental and social risks and impacts, please refer to the Project’s Appraisal Environmental and Social Review Summary (ESRS). Legal Covenants Sections and Description Section I.B.1 of Schedule 2 to the LA: To facilitate the carrying out of Parts 1 and 2 of the Project, and prior to the carrying out of any Subproject, the Borrower, through MDTyH, shall make part of the proceeds of the Loan available to each Subnational Entity selected to participate in the Project pursuant to criteria set forth in the POM, under an agreement or a series of agreements between the Borrower and the selected Subnational Entity, under terms and conditions approved by the Bank and substantially in line with form agreements included in the POM (each “Project Implementation Agreement”) under terms and conditions acceptable to the Bank. Sections and Description Section III.B.2 of Schedule 2 to the LA: The Borrower shall refrain from transferring any funds out of the proceeds of the Loan to any Subnational Entity, Page 5 of 61 The World Bank Second Habitat and Urban Land Project (P179636) until the Borrower, through MDTyH and the respective Subnational Entity have duly executed the respective Project Implementation Agreement in a manner and substance satisfactory to the Bank. Any transfers from the Borrower to a Subnational Entity in violation of this provision may be deemed an ineligible expenditure. Conditions Type Financing source Description Effectiveness IBRD/IDA Article 4.01 of the LA: That the Borrower, through MDTyH, has adopted the Operations Manual in form and manner satisfactory to the Bank. Type Financing source Description Disbursement IBRD/IDA Section III.B.2 of Schedule 2 to the LA: The Borrower shall refrain from transferring any funds out of the proceeds of the Loan to any Subnational Entity, until the Borrower, through MDTyH and the respective Subnational Entity have duly executed the respective Project Implementation Agreement in a manner and substance satisfactory to the Bank. Any transfers from the Borrower to a Subnational Entity in violation of this provision may be deemed an ineligible expenditure. Page 6 of 61 The World Bank Second Habitat and Urban Land Project (P179636) I. STRATEGIC CONTEXT A. Country Context 1. Argentina, with a gross domestic product (GDP) of US$491 billion, was the third-largest economy in Latin America in 2021. The country has a large territory of 2.8 million square kilometers, and its population of about 47 million inhabitants is highly urbanized with 92 percent living in cities. The Buenos Aires Metropolitan Area (AMBA)1 alone constitutes 33 percent of the national population and generates more than 40 percent of Argentina’s GDP. 2. The middle class has historically been large and strong, with social indicators generally above the regional average; however, persistent social inequalities, economic volatility, and underinvestment have limited the country’s development. The rate of urban poverty reached 36.5 percent in the first semester of 2022, and 8.8 percent of Argentines live in extreme poverty. Childhood poverty, for those under 15 years old, is at 50.9 percent. The high frequency of economic crises in recent decades —the economy has been in recessions during 21 of the past 50 years— has resulted in an average annual growth rate of 1.8 percent, well below the world average of 3.6 percent and the region´s average of 3.2 percent. Decades of chronic underinvestment have led to sizeable gaps in capital stock relative to comparable countries, with public capital expenditures as a share of GDP stagnated at historically low records. 3. Argentina has struggled with macro-fiscal imbalances since the end of the commodity super-cycle. Even as commodity prices began to fall in 2014-15, Argentina’s public recurrent spending continued to rise. Thin buffers as well as procyclical policies have further exacerbated the impact of external shocks, such as drought, the pandemic, and resurgent fuel prices. By mid-2018, amidst tighter global financial conditions and a poor harvest, growing concerns around Argentina´s debt repayment capacity triggered a run against Argentine assets. This led to a balance of payment crisis and a request for an International Monetary Fund (IMF) Stand-By Arrangement (SBA). 4. Consequently, the COVID-19 outbreak hit Argentina when its economy was still facing macroeconomic imbalances and an uncertain outlook. Following a two-year recession, high inflation, and lack of access to capital markets, the strict lockdown established to contain the spread of the pandemic triggered a GDP loss of 9.9 percent in 2020, the largest decline since 2002. In response, the country has prioritized social spending through various programs, including the Universal Child Allowance, a cash transfer that reaches approximately 4 million children and adolescents up to age 18. In a context of restricted market access, financing the response to the pandemic required monetization of the deficit. This has exacerbated macroeconomic imbalances, notably by exerting pressures on reserves, widening the persistent large gap between the official and parallel exchange rate and fueling inflation. Regarding capital market financing, during September-October 2020 the Government of Argentina concluded the process of restructuring its debt in foreign currency (both local and external) with private creditors, significantly improving the maturity profile for the next five to eight years. However, debt service obligations as of 2028 are projected to be equivalent to those that triggered the debt swap in 2020– 2021. 5. Bolstered by pent up demand and favorable external conditions, the economy recovered from the COVID-19 crisis at a fast pace, reaching pre-pandemic activity levels by mid-2021. Argentina’s economy grew by 10.4 percent in 2021. Higher commodity prices and trading partners’ growth, notably Brazil’s, combined with expansionary domestic policies led to a robust growth recovery. However, since early 2022 the pace of growth has slowed down amidst a more turbulent global context and still large domestic macro imbalances. In this context the authorities requested an IMF- supported program to help the country meet its large balance of payment needs, including those arising from the 2018 SBA. 1 AMBA is the urban area comprises of the City of Buenos Aires and 40 municipalities in the Province of Buenos Aires. Page 7 of 61 The World Bank Second Habitat and Urban Land Project (P179636) 6. In March-2022, Argentine authorities reached an agreement with the IMF, on an Extended Fund Facility program for a period of 30 months and an amount of US$45 billion, to address the economy’s macroeconomic imbalances and set the basis for sustainable growth. This amount will cover the remaining obligations under the 2018 SBA (US$40.5 billion) and already provided a small net financing support for reserves accumulation (US$4.5 billion). According to the memorandum of economic and financial policies, the program sets a gradual fiscal consolidation path toward a zero primary deficit in 2025 (from 3 percent in 2021 to 2.5 percent of GDP in 2022, 1.9 percent in 2023, and 0.9 percent in 2024), a reduction of monetary financing of the deficit (eliminated by 2024), and the framework for monetary policy involving positive real interest rates, as part of a strategy to fight inflation. 7. The third Review of the program was approved by the IMF Executive Board on December 22nd, 2022, allowing for an immediate disbursement of US$6 billion, elevating total disbursements to close to US$23.5 billion. All quantitative performance criteria through end-September 2022 were met, on the back of prudent macroeconomic management by the new economic team. According to the IMF statement, decisive policy actions by the new economic team are starting to bear fruit. The IMF Board also approved waivers of non-observance associated with the introduction of policy measures that gave rise to new exchange restrictions and multiple currency practices. However, the statement points that these policies should be avoided and unwound as early as conditions permit. 8. Despite meeting all the performance criteria under the IMF, downside risks are elevated. Capital controls and deficit monetization continue to cause a large gap between the official and parallel exchange rate and limit foreign reserve accumulation. Inflation accelerated to historically high levels (94.8 percent year-over-year, as of December), denting purchasing power. While fiscal targets have been met so far, a still sizable fiscal deficit continues to put pressure on monetary policy, given limited access to capital markets. Moreover, adverse climatic conditions or potential global effects caused by a protracted Russian invasion of Ukraine ─which increases the cost of imported energy─ could hamper the fiscal consolidation program. B. Sectoral and Institutional Context 9. Approximately 5.3 million people in Argentina (or 1 in 9) live in slums, informal settlements, and degraded areas (VAA, villas, asentamientos informales y áreas degradadas), according to the official 2018 National Slums Registry (RENABAP). Most VAAs are characterized by poor living conditions and high vulnerability to multiple types of disasters, which are increasing in frequency and severity due to climate change. The Inter-American Development Bank (IADB) analyzed the exposure of VAAs through its Risk Atlas of Informal Settlements.2 It found that 100 percent of VAAs in the city and province of Buenos Aires (i.e., nearly two-thirds of all VAAs), Cordoba and Santa Fe are exposed to a high risk of drought. Likewise, nearly 100 percent of VAAs in La Pampa and Tierra del Fuego are at a high risk of flooding. In thirteen provinces and the City of Buenos Aires (CABA), 100 percent of VAAs are located in areas characterized by deforestation, water loss and other types of natural landscape fragmentation. Other types of environmental impacts prevalent in VAAs include urban heat island effects, air pollution from open burning of garbage and nearby industrial sources, loss of vegetation and soil erosion. 10. In addition to high exposure, VAAs suffer from disproportionate impacts from disasters, compared to formal, planned urban areas. For example, insufficient storm drainage and cross-connection cause sewer overflows, causing untreated sewage to be discharged into waterways. It is estimated that 40 percent of households in these settlements live less than three blocks away from an open dumpsite3 and many other near industrial wastes, with high soil contamination that can be unleashed through flood, drought, and soil erosion (one in 10 people in Argentina is exposed 2 See Vera, Felipe, and Jeannette Sordi. 2021. Ecological Design: Strategies for the Vulnerable City. Inter-American Development Bank. 3 World Bank Group, 2016. Building Clean and Inclusive Cities in Argentina. Page 8 of 61 The World Bank Second Habitat and Urban Land Project (P179636) to arsenic, the main natural contaminant in groundwater).4 In addition, the likelihood of not having waste collection services is five times higher for residents living in informal settlements. Lack of adequate open or green space for ventilation, along with lack of access to electricity may compound the urban heat island effect in VAAs. Lack of infrastructure increases risks to health, productivity, and livelihoods—especially in the informal economy. In short, disasters in VAAs can become a poverty trap for lower-income households, preventing them from fully recovering before the next disaster. 11. Residents of VAAs also face poor living conditions and limited access to basic services on a day-to-day basis. According to the RENABAP, 90 percent of the population in VAA lack formal access to the water network (versus 12.4 percent of national urban population), 97 percent do not have formal access to a sewerage network (versus 29 percent of national urban population) and 99 percent do not have formal access to a natural gas network (versus 33.9 percent of national urban population).5 Approximately 66 percent do not have formal access to electricity, including for heat, and their low-energy efficiency homes lead to greater energy needs. 12. Insufficient public services in VAAs have profound knock-on effects on human development outcomes, social inclusion, and economic opportunities. Women, children, and youth in VAA are disproportionately impacted by the lack of adequate social and community services in their neighborhoods. For 34 percent of women in these neighborhoods, their main activities revolve around the household and caregiving, much higher than men (1 percent). Despite their high needs, households living in precarious urban settlements lack social and community services, including health care, day care for children, green areas, schools, recreational activities, and community centers: according to the Observatory of Gender and Public Policy, more than 54 percent of the neighborhoods do not have a kindergarten, 89 percent do not have a hospital and 21 percent do not have a green space within at least 1km.6 Inadequate infrastructure creates a disproportionate time burden for caregivers, who are primarily women. This lack of access to services reinforces the vicious cycle of poverty and inequality, leads to social divisions, and prevents households from full inclusion in the formal economy. 13. The growth of VAAs in high-risk areas without adequate housing or basic services is driven by multiple bottlenecks across the entire housing value chain. Argentina’s housing deficit is increasing and affects 3.5 million households, approximately one third of the population.7 Around 230,000 new households are created every year, however, the formal housing market is only able to produce an estimated 190,000 housing units annually.8 As a result, the deficit continues to increase while households must find alternative solutions through the informal market and/or overcrowding. Almost two thirds of this housing deficit is qualitative (units built with precarious materials, without access to basic services and/or without tenure security), yet the quantitative deficit (households living in overcrowding conditions, or in obsolete or unrecoverable dwellings) has been increasing at a higher rate in recent years. The value of mortgages as a proportion of GDP has steadily declined from 4 percent in the early 2000s to 0.6 percent in 20159 and only 12 percent of bank transactions are related to housing finance. The result has been a stagnant housing sector dominated by a limited provision of public housing (directly or through the provision of subsidized housing finance from public banks), which is unsustainable in the long-term. 14. Access to serviced urban land is increasingly constrained for middle- and low-income groups. As land prices grow steadily, access to well-located land, with adequate provision of urban services, infrastructure, and connectivity to major 4 World Bank. 2021. “Argentina: Valuing Water—Brief for Policy Makers.” Water Security Diagnostic. World Bank, Washington, DC. 5 RENABAP, 2022 and INDEC, 2022. Encuesta Permanente de Hogares (EPH). 6 Observatorio de Géneros y Políticas Públicas, 2020. Desigualdad Social y Desigualdad de Género. Radiografía de los barrios populares en la Argentina actual. 7 Ministerio del Interior, Obras Públicas y Vivienda, 2018. Plan Estratégico Territorial: Avance 2018. Argentina Urbana. 8 World Bank Group, 2017. Integrated Housing and Habitat Project, Project Appraisal Document. 9 World Bank Group, 2017. Developing Deep and Sustainable Housing Finance Markets. Page 9 of 61 The World Bank Second Habitat and Urban Land Project (P179636) employment areas, becomes difficult for a significant portion of the population. Low-income families are pushed outwards where land is more affordable but access to jobs and services suffer. For example, according to the RENABAP, 22.7 percent of VAAs were formed in the last 10 years. In the absence of effective land use and planning policies, subnational governments also locate large social housing projects in the urban periphery to minimize construction costs. However, this approach often exacerbates household vulnerability by limiting the community’s life chance s in schooling, employment, health, intergenerational mobility, and other vital outcomes, deepening spatial inequality and socio- economic segregation.10 In addition, patterns of lower-density urban sprawl pose greater congestion costs such as air pollution from car-dependent development patterns, water pollution and the loss and occupation of environmentally sensitive areas. 15. At the same time, cities are not utilizing existing serviced land in an efficient manner. Among the cities with more than 20,000 inhabitants, more than 23 percent of the surface area is vacant land. 11 Nationally, 2.5 million houses are empty (18 percent). 12 Meanwhile, from 2001 to 2010, cities expanded their built-up area 2.9 times faster than the urban population –incorporating 1,023 km2. 13 Only 27 percent of that new development was infill in existing urban areas, while 53 percent comprised contiguous urban expansion and 20 percent was leapfrog development fully disconnected from the existing urban fabric. As a result of urban expansion outpacing population growth, the population density of built-up areas declined by 2.2 percent annually on average in most agglomerations between 2001 and 2010.14 16. Proactive urban planning and land use management have been hindered by scarce fiscal resources of local governments, lack of public land, inefficient service provision and outdated or nonexistent planning and land management instruments. Shortcomings in urban management have contributed to sprawl and unequal provision of services between the urban core and periphery of urban areas, thus negatively affecting efficient urban development. Provincial governments have the power to sanction legislation to promote territorial development, however, they have not been able to consolidate long term territorial policies, and until December 2022 only six provinces have territorial planning regulations in force.15 Municipalities are responsible for land use planning and service provision, but they do not use all available planning tools to guide territorial development and often the extension of basic infrastructure is not aligned with urban expansion plans. On the contrary, local land use practices and lack of coordination with service providers has fostered unsustainable patterns of urban development and increasing inefficiency of the infrastructure networks imposing an additional burden on the local fiscal budget.16 17. Despite continued efforts, the government’s demand-side responses to the growing housing deficit have been insufficient and inefficient. On the demand side, the current iteration of the Bicentennial Credit Program (PROCREAR II) provides access to subsidized mortgages for households to build a new unit. It evolved with the subsequent administrations, and currently provides subsidized mortgages for the purchase of a new house in a PROCREAR II urban development, acquire serviced land (sites and services), or add household connections for gas. The Solución Casa Propia 10 Lens,M.; Monkkonen, P., 2016. Do Strict Land Use Regulations Make Metropolitan Areas More Segregated by Income? Journal of the American Planning Association 11 Goytia C., 2015. Rapid Diagnostics: Urban Expansion Patterns in Argentina. Research Center for Urban Policy and Housing (CIPUV), Torcuato Di Tella University. The study analyses urban expansion patterns for 26 of the 31 agglomerations sampled in the Permanent Household Survey of the National Institute of Statistics and Censuses (INDEC) using population census data and satellite imagery over the decade 2001–10. 12 INDEC, 2010. National Census. Latest data comes from the National Census carried out in 2010. 2022 National Census data is not available yet. Preliminary data is expected to be public at the end of 2022 and would potentially inform the Project preparation. 13 Goytia C., 2015. Rapid Diagnostics: Urban Expansion Patterns in Argentina. 14 Goytia C., 2015. Rapid Diagnostics: Urban Expansion Patterns in Argentina. 15 By December 2022 the jurisdictions that have a Territorial Development Law in force are CABA and the provinces of Mendoza, Jujuy, La Rioja, Chaco and Buenos Aires. 16 World Bank Group, 2002. Argentina: Provision of Municipal Services - Issues and Options. Page 10 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Program (SCPP)17 provides households with an upfront subsidy for a partial down payment and a mortgage loan from a financial institution (public or private). In previous versions of the PROCREAR, the absence of clear policies for the production and regulation of urban land contributed to a rapid increase in land prices, which prevented households from using the subsidies effectively. The unstable macroeconomic context and the rapid inflation increase made the mortgages formerly indexed to inflation unaffordable for most of the beneficiaries.18 Although the PROCREAR II and SCPP programs now have a more integrated approach with territorial planning, they continue to be limited in scale and mostly oriented to middle income formal workers. 18. On the supply side, the national government has been addressing the spread of informality through a variety of nationally and internationally funded urban upgrading projects. Despite sustained commitment to this agenda, the absence of an overarching policy and programmatic approach for urban upgrading, limited coordination of territorial investments and the duplication of mandates have limited the scale and pace of upgrading. At the municipal level, interventions have been restricted to piecemeal and reactive planning for urban growth. They face constraints from weak planning instruments, low technical and implementation capacity, scarce fiscal resources with increased urban development responsibilities at the local government level, and no mechanisms for institutional coordination. Furthermore, the lack of adequate land use regulations and instruments to regulate land markets contributes to constraining access to formal land and housing, thus promoting the growth of informal settlements. 19. The proposed project aims to improve the resilience and living conditions in existing precarious urban settlements, while at the same time advancing policies to stem the creation or expansion of slums, by gradually increasing formal access to well-located urban land in low-risk areas. This two-pronged approach will, in the long term, contribute to addressing the unmet demand for affordable and well-located land, while in the short term it will tackle the needs of those currently living in slums. The Project is fully consistent with the national sectoral approach: in 2020, the Ministry of Territorial Development and Habitat (MDTyH) announced the National Urban Land Plan, which encompasses strategies to amplify the offer of urbanized land through sites and services projects; offers capacity building on land policy and instruments to subnational governments and creates different land monitoring instruments, such as the Registry of Adequate Land and the National Observatory of Land Prices. In 2021, the Territorial Planning and Management Program was launched as a complementary initiative to enforce policies and legislation to conduct planned processes of urban development. Regarding habitat, the MDTyH continues implementing an evolving integrated slum upgrading program. 20. The World Bank has been supporting the urban agenda in Argentina since 2017, through the Integrated Habitat and Housing Project (“Habitat 1”) (P159929) and the Metropolitan Buenos Aires Urban Transformation Project (P159843). This Project will be a continuation of “Habitat 1”, which supported the increased access to formal housing for more than seventeen thousand households, by providing up-front subsidies (Component 1) and continues to finance integrated habitat interventions to improve living conditions for households in fifteen precarious urban settlements of the country (Component 2). The new operational design draws on this experience, particularly on lessons learned from Component 2 which include streamlining and making more systematic the implementation processes, standardizing training programs for Executing Units (EUs) and adopting a risk-based approach for the prior review of sub-projects. Through streamlined implementation arrangements and a pipeline of viable subprojects identified during preparation, the Project is assessed to be well advanced and ready for implementation. C. Relevance to Higher Level Objectives 21. The Project contributes to the World Bank Group’s Twin Goals of reducing poverty and promoting shared 17 Supported by the World Bank under Component 1 of the Integrated Habitat and Housing Project. 18 The PROCREAR mortgage adjustment method has recently changed from the Acquisition Value Unit (Unidad de Valor Adquisitivo, UVA) indexed by inflation to Hog.Ar, based on income variation. Page 11 of 61 The World Bank Second Habitat and Urban Land Project (P179636) prosperity in a sustainable manner by promoting inclusive urban growth, low-carbon and climate resilience development, economic development and improved access to services that reduce the vulnerability of the urban poor. 22. The Project is aligned with the World Bank Group’s Country Partnership Framework (CPF) for Argentina for the Period FY19-FY22 (Report No. 131971–AR) and revised by the Performance and Learning Review on May 31, 2022. Specifically, it would contribute to CPF Focus Area 2: “Strengthening service delivery to protect the poor and vulnerable”, and in particular Objective 4 “Improving access to basic services delivery in vulnerable areas”, by providing basic services infrastructure through site and services interventions and slum upgrading interventions. The Project also aligns to Focus Area 3: “Supporting climate measures and long-term sustainable growth”, in particular, Objective 9 “Supporting a resilient economy”, by promoting energy-efficient interventions, nature-based solutions, and other climate resilience measures under Components 1 and 2. 23. The Project contributes to the World Bank’s Global Crisis Response Framework (GCRF). The GCRF provides a framework for the WBG’s operational response to the multiple current crises between April 2022 to June 2023. Specifically, Components 1 and 2 will contribute to the GRCF’s Pillar 3: “Strengthening Resilience”, by supporting the construction and rehabilitation of critical public and community infrastructure designed in line with climate- and disaster- resilient standards. Community Development activities under Component 2 are aligned with GCRF’s Pillar 2: “Protecting People and Preserving Jobs”, as they would promote the creation of new jobs, facilitate gender equality, and encourage entrepreneurship and women’s economic activity. Component 3 will contribute to GCRF’s Pillar 4 “Strengthening Policies, Institutions, and Investments for Rebuilding Better”, by strengthening institutional capacity to enhance resilient and inclusive territorial planning and information systems for disaster risk assessment and response. Component 4 will contribute to the overall implementation of the GCRF, and in particularly with Pillar 3, as it addresses disaster-risk management for a long-term resilience. The Project focuses on ensuring that interventions target the most vulnerable while also advancing longer-term resilience and sustainability. 24. The Project will also contribute to the World Bank Group’s Green, Resilient, and Inclusive Development (GRID) approach. In line with GRID, this Project will systemically and simultaneously address the challenges of urban poverty and climate change through targeted investments in upgrading housing and enhancing public spaces and connectivity to increase the quality of life of the most vulnerable urban residents. In particular, the project will help drive the transition towards low-carbon, sustainable urban development, through green and resilient investments to mitigate and adapt to climate change. The project will enhance Argentina’s institutional capacities on territorial and environmental planning and management; low-carbon, energy-efficient and resilient infrastructure construction; to contribute to a more resilient and inclusive urban development trajectory. 25. The proposed Project is aligned with the World Bank’s Urban Development Strategy , which aims to build sustainable cities and communities through an urbanization process that is green, inclusive, competitive, and resilient, contributing to the Sustainable Development Goal (SDG) No.11 and to the implementation of the New Urban Agenda. 19 In particular, this Project would contribute to Priority 1: “Enhance Planning System and Local Capacity for cities”, by supporting the development of the policy and normative frameworks to steer compact low-carbon and climate-resilient urban development and to strengthen municipalities’ capacities to promote a more effective management of urban land. In addition, the Project will be supporting Priority 5: “Invest in low-income, marginalized urban communities”, with its focus on upgrading informal settlements and vulnerable neighborhoods with improved access to urban infrastructure and services. 19 TheNew Urban Agenda was adopted at the United Nations Conference on Housing and Sustainable Urban Development (Habitat III) in Quito, Ecuador, on 20 October 2016. It represents a shared vision for a better and more sustainable future. It provides guidance on how well-planned and well-managed urbanization can be a transformative force for sustainable development for both developing and developed countries, to accelerate towards the Sustainable Development Goals. Page 12 of 61 The World Bank Second Habitat and Urban Land Project (P179636) 26. The Project is also aligned with national government’s priorities, including its commitment of reducing poverty and social exclusion; it continues supporting the long-lasting habitat and slum upgrading programs20, which has been in implementation for the last 20 years; and contributes to the implementation of the National Urban Land Plan issued in 2020; and it is aligned with the strategic territorial development plan21 and the urban agenda.22 Additionally, the Project is aligned with national climate change policies reflected in the National Climate Change Adaptation and Mitigation Plan published at the end of 2022, especially in the action line of “Sustainable and Resilient Territories”.23 II. PROJECT DESCRIPTION A. Project Development Objective PDO Statement 27. The proposed Project’s Development Objective is to (i) promote formal and planned urban growth in selected cities; (ii) improve living conditions for households in selected precarious urban settlements24; and (iii) respond effectively in case of an eligible crisis or emergency. PDO Level Indicators 28. The key PDO level results indicators for the proposed project are the following: (i) Number of serviced plots financed by the project that have been legally registered. (ii) Number of households provided with improved living conditions in selected slums, informal settlements, and degraded areas. (iii) Percentage of female and LGBTIQ+ persons headed households with improved living conditions in selected slums, informal settlements, and degraded areas. (iv) Subnational governments that have elaborated, published, and submitted land planning and management instruments for future legal adoption. B. Project Components 29. The Project would support (i) access to urbanized land; (ii) improve basic standards of living, climate resilience and access to opportunities in slums, informal settlements, and degraded areas (VAA); and (iii) increase national and sub-national governments’ capacities for planning and land management and to scale up habitat interventions in an efficient manner. The Project would achieve these goals through four components: 30. Component 1: Formal and Planned Urban Growth (US$ 54 million). This component would promote formally planned, sustainable, climate resilient, and inclusive urban areas through the production of sites and services.25 It consists 20 Such as the neighborhood improvement program (PROMEBA) that has been carrying out since 1997 with IADB funds, and the Integrated Habitat and Housing Project (Habitat 1) funded by the World Bank. 21 Territorial Strategic Plan (Plan Estratégico Territorial - PET) was launched in 2008 as a continuous planning process to align the main initiatives and investments at the national level. For more information: https://www.argentina.gob.ar/obras-publicas/secretaria/plan-estrategico-territorial 22 Ministerio del Interior, Obras Públicas y Vivienda, 2018. Plan Estratégico Territorial: Avance 2018. Argentina Urbana. 23 The National Climate Change Adaptation and Mitigation Plan is the Argentine National Government's strategy to consolidate actions and strategies on Climate Change. For more information: https://www.argentina.gob.ar/ambiente/cambio-climatico/plan-nacional 24 “Precarious urban settlements” refer to slums, informal settlements and degraded areas (VAA). 25 The term “sites and services” refers to housing programs where governments assemble land in urban areas or areas likel y to be absorbed into the urban fabric, install basic infrastructure and services, and subdivide the land into serviced individual plots that are allocated to households. The Page 13 of 61 The World Bank Second Habitat and Urban Land Project (P179636) of two subcomponents. 31. Subcomponent 1.1. Preparation of Studies, Urban Planning and Land Management Instruments to Improve Urban Management Capacities (US$ 4.32 million). This subcomponent would support the development of adequate planning and regulatory frameworks to facilitate compact, low-carbon and climate-resilient urban development and strengthen eligible subnational governments’ capacities to promote more effective land management, with a view to facilitate the development of sites and services projects, which is aligned with GCRF’s Pillar 4 (Strengthening Policies, Institutions, and Investments for Rebuilding Better). This includes, inter alia, financing of: (a) Preparation of preliminary studies for sites and services projects which would be mandatory prior to the implementation of subcomponent 1.2 and would include (i) preliminary studies for the implementation of works as required by applicable regulation and service provider companies to issue the services’ prefeasibility; (ii) land measurement and subdivision plans; and (iii) preliminary and detailed designs of site and services subprojects. (b) Preparation of urban planning and land management instruments such as the elaboration or updating of policy and regulatory frameworks to enhance subnational government’s capacities to guide the urban growth process. This activity will include (i) the drafting or updating of ordinances to create land value capture instruments and land banks and (ii) the elaboration of climate risk and socio-environmental informed urban expansion plans, which would promote a compact, resilient, and mixed uses urban development and identify the land plots to be developed with sites and services investments.26 32. Subcomponent 1.2: Carrying Out Sites and Services Subprojects (US$ 49.68 million). This subcomponent would finance the design and development of sites and services, and promote access to affordable urbanized land in environmentally, socially, and economically suitable areas. The investments to be financed are aligned with GCRF’s Pillar 3 (Strengthening Resilience) as they aim to enhance access to housing and deliver quality public services, through climate-smart, climate-informed and resilient physical infrastructure. The subcomponent would comprise, inter alia: (a) Civil works to prepare and grade the site, considering climate vulnerability, which include the layout, opening and consolidation of streets and/or passages to subdivide plots and connect them to the main road network. (b) Installation of basic infrastructure networks, including drinkable water, storm drainage and sewerage investments, gas distribution networks, electricity connections and internet connectivity. Infrastructures would include the lowest carbon solutions that are available and viable in the context of each subproject, such as solar power to replace electricity needs, including the use of solar collector to heat up water mechanisms for a rational households themselves are responsible for building the housing structure after the plot has been allocated, which they often do incrementally using a combination of their own labor and outside contractors. Sites and services are presented as a potential housing solution and represent a departure from traditional models of government-led housing provision, with reduced costs and greater flexibility in housing investment (while still promoting regulations and standards for the use of urban land). This approach provides an alternative to future informal settlements in high-risk areas. In additional, it is expected that the development of serviced plots will enhance access to well-located, risk-free and affordable land, which will redound in increased incomes and abilities to recover after major climatic events. 26 The urban expansion plans will consider climate change projections and local climate risks such as flooding, landslides, and other, to define the urban growth areas and the localization of sites and services subprojects. The plans would promote compact and low-carbon development, either by consolidating existing urban areas, hence intensifying the use of existing infrastructure, or through planned growth towards adequate locations (accessible, risk-free and close to job opportunities). By promoting mixed uses, they will promote a reduction in travel needs and travel times, therefore reducing transport related GHG emissions. Lastly, the development of these plans will further encourage an adequate management of the urban fabric and public spaces. Page 14 of 61 The World Bank Second Habitat and Urban Land Project (P179636) water management27 such as rainwater harvesting to preserve and reuse water, and other improvements that enhance more sustainable and off-grid solutions. (c) Development of Public spaces and community infrastructure, including (i) installation of accessible and low-carbon connectivity infrastructure, such as roads for cars and public buses, bike lanes, and pedestrian paths, considering universal accessibility; (ii) installation of efficient lighting in the projected streets and public areas;28 (iii) linear parks, green corridors, nature-based solutions and native urban forestry to reduce carbon footprint, provide shade and reduce flooding and landslides; and (iv) urban furniture, such as waste management equipment or bus stops.29 33. The eligibility criteria for sites include the following aspects: (i) location in urbanized areas or land located in a planned growth sector, identified in municipal expansion plans, either existing or to be developed under Subcomponent 1.1, or in other instruments or studies that define expansion areas; (ii) land should be vacant, clear of disputes, court cases, encumbrances or other constraints on use, and public, proved by ownership documentation; (iii) plots should have hydraulic aptitude and prefeasibility to provide basic services, issued by the service provider companies; and (iv) environmental prefeasibility, considering location in areas with reduced climatic vulnerability and provided with waste collection services. 34. Even though the Project will not finance the allocation of the plots to final beneficiaries, the Project will guide subnational entities in the definition of selection criteria. These criteria will include, inter alia: households that are not owners and/or co-owners of other properties, households with low or zero income and/or that receive state subsidies,30 single-parent families, female-headed households, female victims of Gender-Based Violence (GBV), households with members with disabilities, households with elderly members, and households led by LGBTIQ+ 31 community members, among others. The eligibility criteria and the allocation process will be elaborated as part of the preliminary subprojects’ documentation. 35. Component 2: Sustainable Habitat Improvement (US$ 91.50 million). This component would improve the living conditions of households in VAA, through urban transformation subprojects in a scalable, low-carbon and climate resilient way. The component would be structured in three subcomponents. 36. Subcomponent 2.1: Increasing Security of Land Tenure (US$ 0.915 million). This subcomponent would finance technical assistance and other activities that facilitate: (i) the physical regularization of the area; (ii) the legal regularization of plots; and (iii) the delivery of permanent and temporary legal instruments that guarantee an increase in land tenure security for beneficiaries. The subcomponent will foster the increase in land tenure security for women and LGBTIQ+ persons and is aligned with GCRF’s Pillar 3, as tenure security is critical to increases low-income households’ resilience to external shocks 37. Subcomponent 2.2: Developing Integrated Urban Infrastructure (US$ 84.18 million). The subcomponent would finance the provision of basic infrastructure in VAA. The investments to be financed are aligned with GCRF’s Pillar 3 as they aim to deliver resilient, climate-smart and climate-informed infrastructure, including: 27 Project investments will benefit from close coordination with the proposed Climate Resilient Infrastructure for Urban Flood Risk Management (P178534). 28 Including either new installation for the created roads or replacing inefficient lighting when existing. 29 This item would include the installation of new bus stops, waste management equipment and other furniture for existing services but can also set the furniture for new ones to be established and provided by the local government or corresponding companies. 30 Such as the Universal Allowance per Child -Asignación Universal por Hijo, AUH- or a disability allowance. 31 Lesbian, gay, bisexual, transgender, intersex and queer (LGBTIQ+) people, and others who may face discrimination based on gender identity or sexual orientation. Page 15 of 61 The World Bank Second Habitat and Urban Land Project (P179636) (a) Infrastructure and basic services including, inter alia: (i) design, implementation and supervision of an integrated package of investments, including mains, laterals and household connections for drinkable water, storm drainage, sewerage, gas, electricity and internet; (ii) provision of land for project-affected people who need to be resettled32, plus investments in safe, locally appropriate housing with the lowest-carbon solutions that are available and viable in the context of each subproject33; (iii) complementary works, necessary for the installation of service networks or to make the operation of the systems more efficient, which may include, among others, the implementation of reservoirs for rainwater collection, and the development of sewage effluent treatment plants that include the evaluation of low-carbon alternatives; and (iii) environmental risk mitigation works and nature-based solutions, such as sustainable drainage systems, to reduce environmental and climatic risks. (b) Improved public spaces and community facilities to promote low-carbon development and climate resilience, including, inter alia: (i) efficient lighting in streets and public areas;34 (ii) roads for cars and buses, bike lanes and pedestrian paths, considering universal accessibility; (iii) improvement and construction of public spaces and green areas, incorporating gender and universal accessibility criteria and climate resilient measures; and (iv) safe, locally appropriate recreational and social service facilities, using the lowest-carbon solutions that are available and viable in the local context.35 38. Subcomponent 2.3: Supporting Community Development (US$ 6.41 million). This subcomponent would finance the hiring of multidisciplinary field teams36 and the implementation of Lines of Action for Community Development (LADC), which will be carried out through participatory workshops, technical assistance, trainings and dissemination campaigns, among other. Activities under this subcomponent are aligned with GCRF’s Pillar 2 (Protecting People and Preserving Jobs), as they would promote the creation of new jobs, facilitate gender equality and encourage entrepreneurship and women’s economic activity. They include the following: (a) The planning and execution of basic Lines of Action, which will be implemented in all VAA subprojects, linked to topics such as vector and water-borne disease prevention, sanitation of micro dump sites, activities to promote community-led maintenance of existing and new infrastructure, such as community solid waste management operation and the coordination with the community to implement community-level Disaster Risk Management plans. (b) The design and implementation of Projects to Strengthen Social and Human Capital (PFCSyH) of the community, fostering the participation of women and LGBTIQ+ persons. This could include: (i) sports, recreational and cultural activities to promote social inclusion; (ii) trainings to support employability of vulnerable groups, including women; and (iii) training and workshops for micro-dump sanitation, training for urban recyclers, vegetable garden workshops, among others. (c) Community Initiative Projects (PIC), which will entail the formulation and community execution of low- complexity works prioritized by residents through a participatory design process and considering particular 32 Considering possible relocation needs in connection with opening/widening of streets, identified structural deficits of houses and other social and environmental risks. 33 All new buildings financed under the Project (housing and/or facilities) would consider local climate risks and be disaster resistant; would be built using materials, skills and tools that are appropriate for the local culture and the climate; would be healthy and secure, with adequate water, sanitation, ventilation, and light and would be low-carbon, by including efficiency in the buildings’ envelope and insulation, maximization of light and ventilation, water saving technologies, and other climate smart technologies. 34 Including either new installations or replacement of inefficient and informal lighting, when existing. 35 See Footnote 33. 36 Field teams will be formed by social, environmental, urban, legal and supervision experts, and will support the execution of works and community development activities. Page 16 of 61 The World Bank Second Habitat and Urban Land Project (P179636) needs and interests of women and LGBTIQ+ persons. They could include (i) urban furniture, such as solid waste management equipment, bus stops or publics stairs; (ii) the adequation and retrofitting of squares, public spaces or small community facilities such as community centers or nurseries, considering climate resilience and energy efficiency aspects37; and (iii) other small projects that increase the climate resilience of the vulnerable population. 39. Eligibility criteria for the subprojects in VAA include the following aspects: (i) environmental viability, considering subprojects not assessed as considerable or high risk; (ii) social aspects, including that 40% of the population of the subprojects has Unmet Basic Needs and/or insufficient sanitation conditions, and an average time of residency of 4 years; (iii) urban and technical prefeasibility: the settlement area is included in the local strategic territorial plan and the subproject has prefeasibility to provide basic services granted by the agencies responsible for planning public infrastructure networks; and (iv) legal viability: the land is public, has been acquired by their occupants or has begun a process that grants legal possession of the land to beneficiaries, and can be legally transferred to households. The full criteria for eligibility of the subprojects are described in Annex 1, Table A2.7. 40. Component 3: Institutional Strengthening and Project Management (US$ 4.50 million). This component would finance studies and analytical activities to strengthen the national and subnational governments’ capacities for the efficient and scalable implementation of habitat, land and housing policies and projects and support Project management. It would be comprised of two subcomponents. 41. Subcomponent 3.1: Supporting Habitat, Housing and Land Policies and Capacity Strengthening (US$ 0.99 million). The subcomponent will support (a) the MDTyH and selected subnational governments to strengthen their capacity to define and implement policies related to urban land management and territorial plans; (b) the MDTyH and selected subnational governments to strengthen their capacity to design and implement policies and programs to enhance scale, efficiency and climate resilience for habitat and slum upgrading projects. The activities under this subcomponent are aligned with GCRF’s Pillar 4 by strengthening institutional capacity to design and implement long-term, resilient and inclusive urban and territorial planning and information systems for disaster risk assessment and response, and could include, inter alia: (a) Strengthen national and subnational government’s capacity for the definition and implementation of land policies including, inter alia: (i) urban land analyses, such as land value mapping, risk atlas and opportunity land plots mapping; (ii) supporting the development of climate and socio-environmental risk informed subnational territorial regulations and plans; and (iii) assisting in the design and implementation of land management instruments, including land value capture instruments, land banks and multipurpose cadaster; and (iv) performing studies of the demand- and supply-side constraints to adequate housing in order to set a baseline to define future programs such as mortgage access and demand-side subsidies. (b) Strengthen national and subnational government’s capacity for the design and implementation of habitat and slum upgrading policies and projects by, inter alia: (i) analyzing the existing housing and habitat deficit, using updated data;38 (ii) designing strategies to enhance scale, efficiency and climate resilience in slum upgrading investments and habitat programs; (iii) providing technical assistance and reinforcing human resources recruitment for the Executive Units to improve their capacities to implement habitat projects. 42. Subcomponent 3.2: Project Management (US$ 3.51 million). This subcomponent would include comprehensive support for the management, implementation, monitoring and evaluation of the Project, including, inter alia: (i) carrying out of the Project audits; (ii) technological and/or computer support; (iii) carrying out project-related trainings, seminars 37 See Footnote 33. 38 Census 2022 data is expected to be published in 2023. Page 17 of 61 The World Bank Second Habitat and Urban Land Project (P179636) and workshops; (iv) conducting outreach campaigns to disseminate the Project; (v) carrying out of mid-term and final impact evaluation surveys to evaluate the Project’s impact; (vi) provision of technical support on procurement, environmental and social management and financial management requirements, including the hiring of staff; and (vii) financing of Operating Costs. The activities to be financed are aligned with GCRF’s Pillar 4 as they aim to support the national government in the overall implementation of the Project. 43. Component 4: Contingent Emergency Response (US$ 0 million). This component is a contingent financing mechanism available to Argentina to have immediate access to Bank financing to respond to an eligible crisis or emergency, defined as “an event that has caused, or is likely to imminently cause, a major adverse economic and/or social impact associated with natural or man-made crises or disasters.” As such, this subcomponent is fully aligned with the GCRF, and in particular, with Pillar 3. The mechanism for the triggering of the CERC would be established in the CERC Manual, detailing the applicable fiduciary, environmental and social, monitoring, reporting, and any other implementation arrangements necessary for the implementation of the proposed activities to be financed. In case of an event triggering the component, a reallocation of funds would be introduced to loan disbursement categories, to be able to fund the proposed activities under this component in order to be able to respond to the emergency. The implementation agency for this CERC would be determined in accordance with a CERC Manual. C. Project Beneficiaries 44. Project Beneficiaries will include an estimated 40 subnational governments and 16,521 households . Under Component 1, the Project will develop an estimated of 4,000 serviced plots, which are expected to benefit approximately the same number of households which will be able to access a housing solution within the formal city. Component 2 is expected to intervene in around 23 VAA, benefiting an estimated 12,521 households with improved living conditions. Additionally, the Project will benefit women and LGBTIQ+ persons by increasing their participation in investment planning processes and community development activities, bringing their voices into critical decision making and ensuring their input. Lastly, the Project aims to strengthen capacities in urban planning and land management of 40 out of the 2,200 subnational governments of the country. The Project’s investments will also have a spillover effect in the local economies, indirectly benefiting the local workforce, construction, and related services sectors which will be contracted by the project to plan, design, and executive these resilient urban infrastructure investments. D. Results Chain 45. The Theory of Change (see Figure 1 below) shows how the Project’s proposed activities respond to the sector challenges highlighted above. First, the Project would improve access to affordable and well-located urban land in planned, sustainable and inclusive communities by strengthening the urban planning and land management capacities of national and subnational governments, and by directly implementing sites-and-services subprojects. Second, the Project would improve the living conditions of households living in existing precarious settlements through infrastructure upgrading, community development and regularization subprojects. Third, the Project would improve the efficiency and effectiveness of national and subnational governments’ housing and habitat programs (beyond access to land and urban upgrading) through policies, guidelines, regulations, and capacity building plans. Page 18 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Figure 1. Theory of Change E. Rationale for Bank Involvement and Role of Partners 46. The World Bank’s involvement in the Project is supported by its long-standing global experience in sites and services and urban upgrading projects, and by current habitat and housing engagements in Argentina. Between 1972 and 1986, seventy percent of the World Bank’s total urban shelter lending consisted of sites and services and slum upgrading projects. Following a period focused on municipal development and housing finance from the 1980s to 2000s, the Bank has led a renewed approach of sites and services interventions, reconsidering the production of urban land plots with adequate infrastructure as a potential housing solution. Regarding slum upgrading, this Project will build on the lessons learned during several decades of different engagements in projects globally (considering most recently experiences in Indonesia, Vietnam, Brazil, Kenya, China, and India). In Argentina, the Bank has supported the National Government, the Government of the Province of Buenos Aires, and the Government of the City of Buenos Aires in this agenda through the ongoing Integrated Habitat and Housing Project (P159929), Metropolitan Buenos Aires Urban Transformation Project (P159843); and Salado Integrated River Basin Management Support Project (P161798). 47. The Government’s slums upgrading programs are also funded by the IADB (through PROMEBA), the Development Bank of Latin America (CAF) and the Development Fund for the Plata Basin (FONPLATA). The Bank is working with the IADB to incorporate lessons learned from the extensive experience in financing neighborhood upgrading programs and develop a coordinated approach to support the habitat program in Argentina. Page 19 of 61 The World Bank Second Habitat and Urban Land Project (P179636) F. Lessons Learned and Reflected in the Project Design 48. Component 1 of the Project builds on the Bank’s long-standing global experience in sites and services projects. A recent review of World Bank sites and services projects39 shows they remain a policy option for governments tackling the housing challenges in typical rapidly urbanizing contexts. The need of clear strategies for land acquisition and innovations in land instruments, the importance of strengthening local capacities, the proper selection of location sites in relation to employment opportunities, introducing low-carbon technologies to lower costs and the carbon footprint, linking sites and services with diverse and sufficient financing for land and housing to allow faster consolidation and build- out, and other lessons learned that are included in the study, will guide the present Project. 49. The Project design also draws on several lessons learned from previous projects in Argentina focused on urban upgrading, basic services, and infrastructure40, as well as the World Bank’s global experience in the sector.41 First, based on the experience of Habitat 1 and the results of a Processes Evaluation performed by the World Bank (detailed in Annex 3),42 the Project includes several measures to streamline and systemize the approval process for investment packages under Subcomponent 2.2, in the context of decentralized implementation. The Operations Manual will include clear investment prioritization criteria, lists of eligible and ineligible expenditures, standardized document templates for EUs (e.g., bidding documents and safeguards instruments), and differentiated subproject revision paths adapted to the capacity level of EUs. These will all help the Project establish a robust pipeline of viable subprojects early in implementation, while avoiding multiple rounds of revisions on the proposals. 50. In addition, under Habitat 1, MDTyH will develop a standardized training program for EUs and field teams to build their capacity on subproject development, tender, and supervision. The MDTyH plans to engage knowledge management specialists to prepare detailed curricula on key topics (e.g., urban design standards, stakeholder engagement, procurement, environmental and social safeguards, etc.), prepare presentations and other training materials, record training videos that EU or field team staff can access on an ad hoc basis, and design a centralized training platform to host the knowledge assets. This upfront investment in knowledge management will allow the MDTyH to operate capacity building activities on a rolling basis throughout Project implementation based on the changing needs of different EUs and field teams. It also ensures any new team members in EUs and field teams can be quickly trained as soon as they are hired. 51. The systems and standards described above will help MDTyH transition its urban upgrading activities from a fragmented project-based approach toward a more open-ended programmatic approach, which can be readily scaled up or extended with other funding sources after Project closing. Likewise, they bring the Project in closer alignment with MDTyH’s PROMEBA projects (financed by the IADB) compared to Habitat 1. 52. The second set of lessons learned from Habitat 1, PROMEBA, and similar slum upgrading projects relates to the specific investment types. It is critical for investment packages to: (i) promote in situ upgrading of neighborhoods wherever possible; (ii) integrate those neighborhoods into the wider urban fabric to deepen social and economic integration; (iii) establish a regular urban layout that is conducive to the community’s identity and day -to-day needs; (iv) 39 World Bank Group, 2022. Reconsidering Sites and Services. A Global Review. 40 Integrated Habitat and Housing Project (P159929); Metropolitan Buenos Aires Urban Transformation Project (P159843); Neighborhood Upgrading Program (Programa de Mejoramiento de Barrios, PROMEBA). 41 Bahia Slum Upgrading Project in Brazil (P081436), Kenya Informal Settlements Improvement Project (P113542), Vietnam Urban Upgrading Program (P070197), and an urban regeneration initiative in the Taipingquiao neighborhood of Shanghai. 42 The World Bank has conducted a Processes Evaluation on the implementation of Habitat 1, based on interviews with the MDTyH, selected EUs and World Bank staff involved in the implementation of Habitat 1. The exercise identified a series of bottlenecks in terms of processes and coordination that limited its efficiency and provided concrete recommendations to overcome these challenges moving forward to the new operation. Main conclusions are described in Annex 3. Page 20 of 61 The World Bank Second Habitat and Urban Land Project (P179636) ensure strong political commitment and sufficient government capacity to implement the investments: (v) undertake strong social engagement, particularly on arrangements for long-term operations and maintenance of public investments; and (vi) identify tools to mitigate possible gentrification after the investments are completed. These lessons will be incorporated into the physical plans for sites-and-services subprojects under Subcomponent 1.2, the subproject standards and criteria for Subcomponent 2.2, and the analytical work under Subcomponent 3.1. 53. Slum upgrading and sites and services’ projects offer several opportunities to strengthen climate resilience and reduce the cities’ carbon footprint, as evidenced by Habitat 1 and AMBA Urban Transformation Project (P159843).43 The proposed Project would incorporate practical, affordable and adaptable low-carbon and climate resilient solutions implemented in Barrio Mugica, such the use of solar energy and the improvement of energy efficiency in housing and community facilities, which reduced the dependence on grid energy; and the design of quality public spaces combining adequate green coverage and efficient water management measures, which helped mitigating heat island effect. This operation will also build on global experiences, including the Sustainable Cities Project in Turkey (P128605),44 which mainstreamed sustainability and climate and disaster resilience in both city planning and a range of sustainable city infrastructure needed to mitigate and adapt to climate change. In particular, the adoption of climate informed planning instruments under Subcomponent 1.1 of the proposed Project and the strengthening of national and sub-national capacities for their implementation (Component 3) will enable more compact and dense urban development in eligible municipalities. 54. The mobilization of adequate funding is critical to promote the development of the housing market. Analytical work performed by the Finance, Competitiveness & Innovation Global Practice indicates that the development and improvement of financial products and services provided by commercial banks and capital market solutions for housing finance needs to be explored in an integrated approach to serve low- and middle-income households within the current challenging context. Mechanisms to reconcile the interest of borrowers and investors when shielding both categories against inflation would be highly relevant for private capital mobilization. For instance, hedging mechanisms, management of systemic credit risk by establishing guarantee or insurance schemes, second-tier lending programs supporting the provision of mortgages by primary level lenders (especially in underserved segments) and the emission of Environmental, Social and Governance bonds for housing are alternatives that could be further assessed for developing the housing market. Component 3 of the Project will continue exploring demand-side and housing financing possibilities in Argentina. III. IMPLEMENTATION ARRANGEMENTS A. Institutional and Implementation Arrangements 55. The MDTyH will be the Implementing Agency for this Project and will be the entity responsible for the overall implementation of the Project’s components through its different technical and administrative departments. The implementation of the subprojects would be carried out in a centralized and decentralized manner, through participating subnational executing units. Eligible expenditures might include financing subprojects as well as financing related 43 The Project would be further enriched with lessons learned from the Metropolitan Buenos Aires Efficient and Sustainable Urban Settlements technical assistance financed by the Energy Sector Management Assistance Program (ESMAP), implemented in two slums in AMBA, between 2017 and 2020. 44 The Turkey Sustainable Cities Project’s objective is to improve the planning capacity of and access to basic services in participating municipalities and utilities, by providing technical assistance to ensure comprehensive and integrated planning, including support for spatial, social, environmental, and capital investment planning and management More information: https://documents.worldbank.org/en/publication/documents- reports/documentdetail/801621482462173038/turkey-sustainable-cities-project Page 21 of 61 The World Bank Second Habitat and Urban Land Project (P179636) expenses such as goods, works, consulting as well as non-consulting, operational expenses, and training. There is no counterpart allocated funds for this operation. General implementation arrangement are as follows (a detailed description is presented in Annex 1): (a) The Coordination Secretariat (SC) would be responsible for the management of the Project, the implementation of the fiduciary and administrative aspects. The SC will be in charge of coordinating activities between different areas of the Ministry and fostering the completion of activities timely and effectively. SC will carry out the administration of the Project, including preparing and updating the annual work plan and procurement plan, financial management including managing the special account and arranging for audits, and monitoring and report on progress and outcomes, on compliance with the operations manual and World Bank policies. The SC will also administer the fund transfer, assess the capacity of new EUs, and approve different stages of the bidding processes along with the technical areas. This Secretariat will assist in the administrative aspects for the implementation of Component 3, in close collaboration with the Territorial Development Secretariat (SDT) and the Secretariat of Habitat (SH). (b) The SDT would be responsible of the technical aspects for Component 1, including (i) advising the subnational EUs in the identification and elaboration of sites and services subproject proposals based on eligibility criteria; (ii) providing technical supervision and advice to the EUs in the development of sites and services project designs; (iii) undertaking technical review of subproject documents related to viability, project design, bidding and contracting; (iv) implementing the monitoring and evaluation system of subprojects and (v) planning, projecting and implementing studies and other technical activities related to land and territorial development under Component 3. (c) The SH would be responsible of technical aspects for Component 2, and in particular for (i) advising the subnational EUs in the identification and elaboration of subproject proposals based on eligibility criteria, confirming the eligibility and viability of subprojects, undertaking annual programming of subprojects, signing agreements with EUs; (ii) providing technical supervision and advice to the EUs in the development of Integrated Project Designs and emitting the approval; (iii) undertaking technical review of subproject documents related to viability, Integrated Project Design, bidding and contracting; (iv) supervising the EUs’ management of contracts and progress of works; (v) implementing the monitoring and evaluation system of subprojects 2; and (vi) planning, projecting and implementing studies and other technical activities related to habitat and slum upgrading under Component 3. The Environmental and Social Technical Team of the SH, which manages, monitors, and evaluates the various international financing programs, will carry out the technical and socio-environmental supervision of the EUs activities throughout the cycle of the subprojects of Components 1 and 2. (d) The subnational Executing Units (EUs) would execute the prioritized subprojects, following implementation arrangements similar to the Habitat 1 Project. They include entities in provincial and local governments with adequate capacity to assume this responsibility. The specific responsibilities of the EUs are to: (i) identify and develop subproject proposals; (ii) supervise and coordinate viability process; (iii) establish the management work team; (iv) development of the Preliminary Project documentation for Component 1 and Integrated Project Design (PEI) for Component 2; (v) contract the field team and procuring the works, goods and consultants for execution of subprojects; (vi) supervise social, environmental and technical quality; (vii) management and payment of contracts for execution; (viii) ensure coordination and transfer to service providers; (ix) supervise the maintenance of works and equipment, and the sustainability of the services during the post- works stage; (x) report on financial, procurement, technical, social and environmental aspects of the subprojects to the MDTyH; and (xi) take part in institutional strengthening activities and the contribute with the information systems of the Project. (e) Management Working Groups are established as a mechanism for participation and construction of Page 22 of 61 The World Bank Second Habitat and Urban Land Project (P179636) consensus for the formulation and execution of activities under Component 2, and consists of representatives of the executing agencies and other institutional actors linked to the subproject such as the municipality that has jurisdiction over the community, government institutions responsible for land regularization, service providers, professional associations, community representatives, non-governmental organizations, federal housing programs and other relevant programs. (f) Service provider companies. When applicable, water and sanitation, electricity and natural gas service provider companies will be engaged in the implementation of infrastructure works of Components 1 and 2 from early design stages. They will participate as key institutional actors of the Management Working Groups established under Component 2, with the role of reviewing executive designs and supervising the progress of works, when required. After construction, service providers or other relevant authority will receive the works and start their operation. An agreement between the EU and service providers concerning the transfer and operation and maintenance of the works will be signed before finishing the investments. 56. The Implementation agency for the CERC Component will be determined in accordance with a CERC Manual to be developed. The execution of CERC financed activities shall leverage the implementation arrangements defined for Components 1 and 2 of this operation where Provincial and Local Executing Units can act as sub-executors to carry out subprojects in agreement with the MDTyH. If an entity other than MDTyH leads the emergency response, the Bank will need to conduct an assessment of said entity, prior to funds under this component being disbursed. B. Results Monitoring and Evaluation Arrangements 57. Monitoring and evaluation of the Project will be the responsibility of the MDTyH, which will provide progress reports to the Bank on a bi-annual basis. Semestral reports will include the Project progress and feature outstanding events occurred during execution of works, including environmental and social aspects. The MDTyH will submit the subprojects documentation, technical designs, environmental and social instruments, bidding documents and supervision reports, among others, which will be updated and available for the Bank’s access when applicable. 58. For Components 1 and 2, the MDTyH will rely on the supervision and monitoring systems already under implementation. Component 1 will use the system developed under the National Land Production Program and Component 2 will continue to rely on the monitoring mechanisms set up for all MDTyH VAA upgrading programs. As described in the Implementation Arrangements, the EUs will perform the supervision of works, along with the SDT and SH, accordingly, ensuring the compliance of technical, environmental, and social standards. The MDTyH will regularly consolidate reports and submit them to the Bank. Once the works have been completed, they will be inspected by the SDT and SH. C. Sustainability 59. The Government has made slum upgrading, land and housing a priority in its 2020-2023 political plan. To begin with, the creation of the Ministry of Territorial Development and Habitat, and its ministerial structure showcase the commitment of the government with the territorial and habitat portfolios, previously relegated to the status of secretariats or sub-secretariats within the former Ministry of Interior, Public Works and Housing. The creation of the Social and Urban Integration Fund (Fondo de Integración Socio Urbana, FISU), that finances slum upgrading projects for the RENABAP neighborhoods, the implementation of the Tax for an Inclusive and Solidary Argentina (PAIS), which funds the FISU; and the promulgation of the National Urban Land Plan are other signals that the Government intends to support these programs over time, and that they indeed represent a priority for the current administration. 60. The Project’s overall long-term sustainability is largely contingent upon adequate financial resources to cover the costs of service provision and maintenance of new and improved infrastructure. Today, most VAA have irregular Page 23 of 61 The World Bank Second Habitat and Urban Land Project (P179636) connections to water, sanitation, and electricity, and pay no fees for these services. The Project recognizes the need to gradually introduce cost recovery through tariffs, taxes, and other fees, in order to ensure the sustainability of these investments. After construction, the infrastructure will be transferred to the corresponding organism. A transfer agreement will be signed that outlines these responsibilities and norms. After the conclusion of works, the investments will be subject to inspections by the subnational UEs who will suggest improvements, as necessary. 61. Fiscal sustainability and own-source revenue generation. The sites-and-services approach under Component 1 represents a proven alternative to traditional models of government-led housing provision.45 First, sites-and-services projects are more cost effective for governments compared to publicly led new housing construction. Based on recent analysis in Argentina and Latin America more broadly, providing a serviced plot costs approximately one-quarter of a new government-built housing unit.46 The lower cost of sites-and-services compared to full housing construction enables MDTyH and the subnational governments to increase the overall scale of the Project and reach more beneficiaries. Second, the use of urban expansion plans to guide future urban growth in and around Sites and Services areas will help subnational governments limit the creation of new informal settlements in the future – which is would also be more costly to upgrade retroactively compared to proactive planning and infrastructure provision. Third, the Project’s investments and technical assistance are expected to lead to an increase in those governments’ revenue in the long term. This would be through several channels: payments from beneficiaries for the purchase of housing or land, municipal service fees from registering new property titles, and property tax revenues related to the more intensive land use and higher land values. Increased own-source revenues will also strengthen these subnational governments’ capacity to maintain the investments and potentially invest in new housing and urban development projects—notably with the land banks established under Subcomponent 1.1. In addition, under Component 3, the Project will work with the eligible subnational governments to strengthen their capacities for other cost recovery and land value capture mechanisms, to promote fiscal and financial relief and ensure availability of funds to continue investing in the implementation of the housing and land policy. 62. Creating opportunities for private capital mobilization and local economic development. The sites-and-services approach improves housing affordability by distributing the cost of housing provision between the government and the beneficiary households. Public-led investments under Component 1 will focus on land and infrastructure, while the beneficiary households themselves mobilize their own resources (such as savings or construction loans) for the structure. Likewise, for Component 2, improved land tenure security and regularization is associated with increased housing investment. For both Components 1 and 2, the Project will leverage national mortgage credit programs for new housing construction (e.g., PROCREAR or Casa Propia) and other existing provincial and municipal housing programs, to encourage rapid construction of the new neighborhoods after plots are allocated to beneficiaries. Component 3 will also support housing demand studies that improve the provision model and identify innovations in housing financing and opportunities for private sector housing development. Lastly, a portion of the serviced plots could be allocated for commercial uses, facilitating the growth of small and medium enterprises and a more economically vibrant neighborhood. The land uses of all plots would be defined in the urban expansion plans to be developed under Subcomponent 1.1. 63. The Project includes actions to strengthen planning and management capacities at the subnational level to conduct urban growth in a sustainable way. In-place adequate policy and normative frameworks and strong local capacities are central to achieving sustainability outcomes, promote an effective management of urban land and steer compact low-carbon and climate-resilient urban development. 45 Owens, K.E., Gulyani, S. and Rizvi, A., 2018. Success when we deemed it failure? Revisiting sites and services projects in Mumbai and Chennai 20 years later. World Development. 46 Banco Mundial, 2022. El costo y la asequibilidad de las soluciones de vivienda en América Latina y el Caribe ¿Es posible hacer más con menos? Page 24 of 61 The World Bank Second Habitat and Urban Land Project (P179636) IV. PROJECT APPRAISAL SUMMARY A. Technical, Economic and Financial Analysis Technical design 64. The technical definitions based on well-performing previous experiences will be used for ensuring adequate technical solutions for the interventions under Component 1 and Component 2. Both the interventions on sites and services and on slum upgrading will be prepared by EUs previously evaluated, and will undergo technical evaluation and supervision as part of a comprehensive planning, review, and clearance process by SDT and SH. In particular: (i) the plots to develop under sites and services will be identified in expansion urban plans; (ii) the basic viability of subprojects under both components will be confirmed at an early stage providing verification from sector authorities, certificates of prefeasibility for the provision of basic services, and availability of land; (iii) subproject designs and technical specifications will be required to meet design standards and be approved by the competent authorities; (iv) bid evaluations will be reviewed and construction supervision will be carried out by qualified professionals to ensure conformity to the technical specifications; and (v) after construction, arrangements will be made to transfer the works and their operation to the relevant authority or service provider. 65. Readiness: The MDTyH has identified a number of potential areas for intervention to accelerate implementation, based on the eligibility criteria. These include a preliminary list of twenty-six potential sites and services’ subprojects for Component 1, and twenty-three potential VAA upgrading subprojects for Component 2.47 The interventions would be distributed across the country’s five regions: eight subprojects have been identified in the Northwest region, four in the Northeast region, nine in the Center and Cuyo region, twelve in Patagonia and sixteen in the Province of Buenos Aires. The distribution represents a wide range of subnational governments with differing levels of institutional and technical capacities. In order to accelerate readiness and start disbursing the loan early on, the MDTyH will use Habitat 1 funds to further screen the potential subprojects and develop prefeasibility documentation of subprojects for investments to be financed by the Project. Economic and Financial Analysis 66. The Project will generate positive development impacts by addressing the unmet demand for affordable and well-located land through sites and services projects and improving the quality of life of households in VAA through habitat improvements. Components 1 and 2 were evaluated utilizing the cost-benefit method, defined based on a scenario with and a scenario without the project, as well as using the Hedonic Price method. The Hedonic Price method considers an increase in the market value of plots and housing as a benefit brought upon by the Projects investments. In Component 1, the provision of basic infrastructure and facilities integrates a new area to the urban fabric and generates new serviced plots to the local land market which is captured through the land valuation. The quality of life of the beneficiary households is improved in Component 2 and reflected in the increase in the value of the properties brought by Project interventions including improvements in the quality of materials; connection of houses to existing water, sewerage and drainage, gas and electricity networks; street lighting; and improvements and construction of public spaces and green areas. Additionally, in Component 2 the benefits of the interventions were measured through the ‘Cost Saving’ method which is based on the savings generated by the new water connections which results on savings of households that are currently purchasing water from delivery trucks and consumer surplus associated with better access to water at lower price. The economic analysis includes the determination of the Internal Rate of Return and the Net Present Value, considering a discount rate of 12 percent. 67. The Project is economically viable. The benefits for Component 1 were estimated for 10 subprojects including 47 Representing 75% of the investments of Component 1 and 89% of the investments of Component 2. Page 25 of 61 The World Bank Second Habitat and Urban Land Project (P179636) 2,753 plots, located in cities across different regions. The cash-flow for the appreciation in value of the plots was done over a period of 5 years. Under these assumptions and estimates, the Net Present Value of the Project reached US$39.28 million and the Internal Rate of Return was 35.2 percent. A sensitivity analysis was carried out to see how these indicators were impacted by possible variation in the values assumed. The sensitivity analysis considered i) a 30 percent increase in costs and ii) a 30 percent decrease in benefits. The sensitivity analysis shows that the project can withstand a cost increase of 30 percent and still show high profitability rates, 27 percent. Regarding a decrease in benefits, although it appears to be more sensitive, it withstands a decrease of 30 percent with a profitability of over 24 percent. Based on the costs and benefits defined for Component 2, a cash-flow for 20 years was created for the 23 neighborhoods preliminary considered in the Project. Under these assumptions and estimates, the Net Present Value of the Project reached US$81.23 million, and the Internal Rate of Return was 35.7 percent. Using the considerations for the sensitivity analysis, the Project can withstand a cost increase of 30 percent and still show high profitability rates, 27,6 percent. Regarding a decrease in benefits, although it appears to be more sensitive, it withstands a decrease of 30 percent with a profitability of over 24,7 percent (See table 1). Table 1: Economic analysis of the Project, including sensitivity analysis NPV (US$ million) IRR (percent) Scenarios Component 1 Component 2 Component 1 Component 2 Without sensitivity 39.28 81.23 35.2 35.7 analysis 30 percent increase in 27.2 27.6 project benefits 30 percent reduction 24.4 24.7 in project benefits 68. Rationale for Public Sector Financing. The National Law 27.453 and its regulations decree (819/2019) state that it is in the public interest to improve socio-urban integration for slums and informal settlements identified in the National Registry of Popular Neighborhoods (RENABAP). The public provision of urban infrastructure is a core responsibility of local governments and the public financial support from the national government is in keeping with established intergovernmental fiscal norms and processes. The public sector, including national and sub-national governments, also have the legal and policy mandates to guarantee the efficient, equitable and sustainable urban growth. This includes, inter alia, facilitating the provision of urbanized land; utilizing legal, fiscal, and planning instruments necessary to produce urban land; and the creation of land banks, which serve to regularize and establish public land reserves. 69. Value Added of World Bank support. The World Bank has a long-standing global experience in sites and services and urban upgrading projects and has been supporting the urban agenda in Argentina since 2017. This Project will be a continuation of “Habitat 1”, which supported the increased access to formal housing for more than seventeen thousand households. Moreover, the World Bank’s experience in sites and services projects (see paragraph 46) constitutes a key support to the new aspects of the Project under Component 1. With three quarters of the population in low-income countries unable to afford market rate housing without huge subsidies and emerging economies facing a major challenge to secure land for development and with about 70 percent of land unregistered or tenure insecure, the production of urban land plots with adequate infrastructure is reconsidered as a potential housing solution. Gender 70. Men, women, gender minorities and people of different abilities tend to use the public space in different ways; however, the city is built for the “neutral” male user, neglecting the needs, interests, and routines of other groups. Women, girls, and sexual and gender minorities of all ages and abilities are routinely excluded from participating in Page 26 of 61 The World Bank Second Habitat and Urban Land Project (P179636) community planning and design processes, in particular in slums and vulnerable contexts. This happens due to an array of reasons, many of them relating to deficiencies in the urban environment -limited access to basic services and public space, inadequate mobility, unsafety, lack of health and hygiene, vulnerability to climate change effects, and insecurity of tenure- as well as to economic pressures and their main role as caregivers. The lower representation of these groups makes them struggle to make their voices heard and their priorities count in planning and design decisions, what ultimately affect nearly every aspect of their day-today life. 71. Argentina has an important legal and institutional framework that seeks to create conditions of substantive equity so that women and LGBTIQ+ persons can access their rights and exercise them in a free, fair, and equal manner. The Ministry of Women, Gender and Diversities created in December 2019, focuses on national public policies aimed at promoting the autonomy of women and LGTBIQ+ persons, and on the prevention and eradication of gender violence. The MDTyH executes gender policies linked to Habitat and Territorial Development, in the framework of human rights and with an intersectional perspective. In particular, it formulates and implements policies and projects to strengthen the access of these groups to decent and sustainable habitat and housing and territorial development with a gender and diversity perspective. 72. To combat gendered imbalances in the built environment the Project will support the meaningful participation of women and LGTBIQ+ persons in community decision-making, to advance gender equity and unlock more inclusive economic and social development. The Project will promote the active role of women and LGTBI people during the preparation of the infrastructure, community facilities and public spaces’ improvement studies, plans, and designs, and encourage their engagement in the design and construction of community projects. In addition, it will facilitate their participation by providing access to child-care services. 73. Specific gender gaps to be addressed under Project: despite the fact that women are the protagonists in the struggle for development and access to opportunities in vulnerable neighborhoods, there is still a gap between their participation and their effective involvement in decision-making and in the execution of projects, largely due to their role as the main responsible for household and caregiving activities. The MDTyH reports that, out of thirty Community Initiative Projects implemented in 2022 within the framework of other projects, only four were designed and executed by women and/or LGTBIQ+ persons. The effective participation of women in the matters of their communities competes with or is added to other tasks they already carry out, such as their work occupation and a high burden of caregiving activities. Indeed, in VAA, household responsibilities fall disproportionately on women: for 34 percent of women in these neighborhoods, their main activities revolve around the household and caregiving, much higher than men (1 percent). 48 Despite their high needs, households living in precarious urban settlements lack social and community services, including health care, day care for children, schools, recreational activities, and community centers: according to the Observatory of Gender and Public Policy, more than 54 percent of the neighborhoods do not have a kindergarten, 18 percent do not have a school and 89 percent do not have a hospital within at least 1km. Inadequate infrastructure and caregiving responsibilities create a disproportionate time burden for caregivers, preventing them from attending participatory design sessions. Even when there is great interest and participation of women in the VAA urbanization processes, it is necessary to promote a qualitative leap so that they can sustain their assistance, can clearly express their interests and needs, have an active role in decision-making and intervene effectively in the execution of prioritized subprojects. 74. Specific actions: (a) Through the Community Development Subcomponent (2.3), the Project will finance PFCSyH and PIC designed and executed by women and/or LGBTIQ+ persons. The Project will support PFCSyH and PIC, which will include activities for the identification, participatory design and community execution of low complexity habitat 48Observatorio de Géneros y Políticas Públicas, 2020. Desigualdad Social y Desigualdad de Género. Radiografía de los barrios populares en la Argentina actual. Page 27 of 61 The World Bank Second Habitat and Urban Land Project (P179636) improvement works, and initiatives to promote employability, circular economy and social inclusion, among others, that are prioritized based on the work of field teams with the community. These proposals are based on objective and symbolic needs, they can include the execution of physical works and/or the strengthening of social and human capital in the neighborhoods and in the surrounding area. The Project will seek to encourage groups of women and/or LGBTIQ+ persons to formulate and execute interventions that respond to their strategic interests, what will guarantee the effective inclusion of these groups’ needs and interests in their community development, and at the same time, create job opportunities. In addition, the Project will carry out trainings for the executing units, technical teams, and neighbors on gender and LGBTIQ+ concerns (including issues related to legal, social, economic, employment and cultural equality), and propose mentoring and skills development training programs for women, to promote their economic autonomy and drive progress on gender equality and inclusive economic growth. (b) The Project would aim to enable and maximize the assistance of caregivers ─in particular, women─ in participatory processes and community development activities, bringing their voices into critical decision- making and ensuring their input and agency, by providing childcare services and other solutions during participatory sessions. These could include the organization of temporary playgrounds with childcare attention, the definition of convenient meeting times when women and other caregivers can participate and the opening safe spaces where they feel comfortable enough to talk. 75. Indicators: The Project includes the following indicators to monitor the successful implementation of the actions proposed above: (i) Percentage of PIC and PFCSyH that were formulated and/or executed by women (with a target of 25 percent); and (ii) Women reporting use of childcare services and other solutions increased their opportunity to participate in consultations/planning processes (with a target of 51 percent). Climate Change 76. Households living in slums are more vulnerable to climate change due to sub-standard housing, inadequate service provision and location in high-risk areas. VAA are exposed to regular floods and other extreme events such as landslides or fires, and vulnerable to the anticipated increased impacts of climate change. It is estimated that 45 percent of VAA are located in areas subject to some type of environmental risk49 and, in particular, almost 50 percent of these neighborhoods are located in flood prone areas.50 Lack of adequate open or green space for ventilation, along with lack of access to electricity may compound the urban heat island effect. After major climactic events, lack of infrastructure increases risk to health, and livelihoods especially in the informal economy, and slum households’ limited incomes reduce their ability to recover. The presence of sewage and untreated solid waste affects both the environment and people's health, increasing vulnerability to events such as floods. The lack of connection to energy networks leads to the domestic use of firewood for cooking and heating, a fuel with high greenhouse gas (GHG) emissions. Business as usual slum upgrading can lead to a reduction in greenhouse gas (GHG) emissions if energy saving criteria, the use of clean energy, the creation of public spaces and sustainable construction are taken into account. At the same time, adopting a low- carbon pathway in slum upgrading upfront can achieve even higher results, by avoiding the carbon lock-in effects associated with conventional interventions ─thus helping neighborhoods leapfrog towards carbon neutrality.51 77. The Project would be enriched with lessons learned from the Metropolitan Buenos Aires Efficient and Sustainable Urban Settlements technical assistance financed by the Energy Sector Management Assistance Program 49 Programa de Investigación sobre la Sociedad Argentina Contemporánea (PISAC), 2015. Encuesta Nacional de Estructura Social (ENES). 50 IADB, 2022. Cuarta Operación Individual Bajo la Línea de Crédito Condicional para Proyecto de Inversión (CCLIP) – Programa de Mejoramiento de Barrios (PROMEBA). 51 City Climate Finance Gap Fund, World Bank, 2022. Low-carbon Slum Upgrading. A Guidance Note. Page 28 of 61 The World Bank Second Habitat and Urban Land Project (P179636) (ESMAP52), implemented in two slums in AMBA, between 2017 and 2020. 78. Specific actions to support climate adaptation and mitigation goals: (a) Under Component 1.1, the adoption of climate informed planning instruments, and the strengthening of national and sub-national capacities to effectively implement those plans, would enable more compact and dense urban development and reduced car reliance in those areas. Improvements in territorial and urban planning policies will enable subnational governments and communities to incorporate climate change projections into decision-making frameworks and strategies for future urban growth. (b) Under Component 1.2, the provision of serviced residential plots in low-risk areas is expected to reduce the formation of new VAAs in high-risk areas, by providing a more sustainable and resilient alternative. The plots are expected to be allocated to households who would otherwise seek housing solutions through informal means in marginal areas with high exposure to climate-related disasters. It is estimated that at least half of the improved land area in a given sites-and-services subproject would help directly divert households from future VAAs.53 (c) Under Component 2.2, all of the infrastructure investments in VAA will directly address the climate- related disaster risks and impacts outlined in the context section. Moreover, these investments will help prevent future environmental degradation and climate disaster risk from unmanaged stormwater runoff or untreated sewage discharge. For example, piped water supply, diversion of household sewage from open waterways, increased capacity of stormwater management, and solid waste collection will reduce neighborhoods’ risk of urban flooding and subsequent exposure to contaminants in the soil and groundwater. The use of safe and locally adapted designs and construction techniques for community facilities and house construction (in the case of resettlement) would also ensure a higher resilience in the face of climate-related hazards. Formal electricity connections, community buildings, green spaces and tree cover will all help residents cope better with heat waves. Green infrastructure, nature-based solutions the use of native vegetation, and enhanced drainage will also contribute to reducing flooding and landslides. (d) Investments under Component 2.2 also provide climate change mitigation co-benefits. The proposed investments will generate efficiencies in the urban form, by promoting re-blocking, mixed uses and enhanced green and open spaces. New road, bike and pedestrian infrastructure will promote the use of public transport and non-motorized transportation; energy efficient lightning and low-carbon, energy efficient community facilities and housing will entail significant reduction in carbon emissions (which may vary depending on technologies’ local viability and availability) and the new sanitation and storm drainage infrastructure will improve air and water quality, reduce carbon emissions and result in better health and productivity for slum residents. (e) Community Development Lines of Action to be implemented under subcomponent 2.3 would support both adaptation and mitigation objectives. For example, the sanitation of micro dump sites, the construction of solid waste management equipment and the installation of a community collection system will reduce carbon emissions while improving air and water quality. The development of community-level Disaster Risk Management plans will build the capacity of communities to assess their vulnerability to natural hazards, prioritize investments, 52 The ESMAP fund is a non-reimbursable direct execution fund that was carried out between 2017 and 2020 in two slums and settlements located in the AMBA. Its objective was to promote and analyze the efficient use of energy and the implementation of renewable energy in buildings in different neighborhoods (VAA) of the AMBA. The lessons learned from this analysis are reflected in the following publication: World Bank. 2021. Green Neighborhoods for All: A Framework for Promoting Low-Carbon Slum Upgrading Initiatives. Building on Experiences from Buenos Aires, Argentina. 53 This is based on the assumption that 30 percent of a sites-and-services subproject would be dedicated to streets and public spaces. Page 29 of 61 The World Bank Second Habitat and Urban Land Project (P179636) and create strategies to prepare for and recover from climate-related disasters. (f) Subcomponent 3.1 will support activities to strengthen national and subnational government’s capacity for the definition and implementation of climate-informed and low-carbon land and habitat policies. 79. Indicator: the Project includes one indicator to monitor the successful implementation of the actions proposed above: “Developed or updated urban expansion plans that are climate risk informed,” with a target of 100 percent. Citizen Engagement 80. The Project considers Citizen Engagement (CE) as a cross-cutting issue for all subcomponents and activities, particularly in activities related to sustainable habitat improvement. These would follow a community-based approach and engage neighbors early in project planning and implementation. Such processes are expected to involve, among others, local authorities and community organizations and would be tailored for cultural, social, and geographic specificities in the subproject areas. The concept for each subproject will be submitted to a broad consultation process, whose results would be translated into improved architecture project design. Specifically, Subcomponent 2.3 would finance the implementation of Community Development Lines of Action, aiming at strengthening capacities and participation of community organizations and social actors involved in the subprojects. Social and Human Capital Strengthening Projects and Community Initiative Projects will be implemented, which include activities that foster the participation and social and economic inclusion of women and diverse groups and entail the participatory design and community execution of low complexity works prioritized by residents. 81. The Stakeholders Engagement Plan (SEP) will ensure the participation of all stakeholders , to understand the needs of the affected populations, ensure transparency and coordination between government entities, the EUs and communities, and receive feedback and grievances. The SEP will set out the nature and periodicity of stakeholder consultations and require regular beneficiary feedback surveys. 82. The Project has a beneficiary feedback indicator that would help the MDTyH to monitor the level of citizen engagement and beneficiary feedback. The indicator is Subprojects that have incorporated feedback received on the beneficiaries' participation process. B. Fiduciary 83. Financial Management. A Financial Management (FM) Assessment was conducted on November 29, 2022 to assess the adequacy of FM arrangements in place at SC of the MDTyH. The scope of the FM Assessment included: (i) an evaluation of existing FM systems in place to be used for Project budgeting, monitoring, accounting and reporting; (ii) a review of staffing arrangements; (iii) a review of the flow of funds arrangements and disbursement methods to be used; (iv) a review of internal control mechanisms in place; (v) a discussion with regards to reporting requirements, including the format and content of Interim Financial Reports; and (vi) a review of the external audit arrangements. 84. The overall FM residual risk after mitigating measures is assessed as Moderate. The Project risk rating will be reviewed regularly during Project implementation support. 85. Procurement will be conducted using the WB’s ‘Procurement Regulations for Investment Project Financing (IPF) Borrowers’, dated November 2020, for the supply of goods, works, non-consulting and consulting services. The fiduciary implementation will be decentralized for the civil works and associated services and MDTyH will supervise these local entities and also implement procurement activities. Therefore, a procurement capacity assessment of MDTyH was carried out considering the existing systems, structure, and staff that is currently implementing a WB project concluding that the MDTyH has extensive experience and capacity to perform the responsibilities that this operation will entail. The MDTyH will assess the capacity of subnational EUs and will share the results of the evaluation with the Bank for its information. In the event that a Capacity Building Plan is needed, the Bank will review it and provide a Technical Conformity to the Page 30 of 61 The World Bank Second Habitat and Urban Land Project (P179636) MDTyH. A Project Procurement Strategy for Development (PPSD) has been prepared with support from the WB team to identify fit-for-purpose approaches to the procurement processes expected to be conducted within the project. The result of this analysis, capacity assessment and actions to address the identified risks are detailed in Annex 1. C. Legal Operational Policies . . Triggered? Projects on International Waterways OP 7.50 Yes Projects in Disputed Areas OP 7.60 No . 86. The Project triggers OP/BP 7.50 on International Waterways as some of the investments in water supply and sewerage networks are expected to be located in the La Plata river basin, which is shared between Argentina, Bolivia, Brazil, Paraguay and Uruguay and Hua-Hum, Manso and Puelo, Futaleufú, Carrenleufu and Pico, Mayer and Lake San Martin, Vizcachas and Simpson rivers basins and Fagnano, and Buenos Aires-Pueyrredón lakes basins, which are shared between Argentina and Chile. The Project falls under the exception to the notification requirement according to paragraph 7(a) of the Policy because the Project activities involve minor alternations to ongoing water schemes that: (i) will not adversely change the quality or quantity of water flows to the other riparians; and (ii) will not be adversely affected by the other riparians' possible water use. The exception to the notification requirement was approved by the RVP on December 21, 2022. D. Environmental and Social 87. The combined Social and Environmental risk has been defined as Substantial, with moderate environmental risks. Overall, the project is expected to have social benefits since it promotes access to habitat and housing improvement opportunities for low-income households living in vulnerable settings. Social development activities will be defined through participatory processes. These activities will help to address different social and/or economic development challenges identified by the community members (e.g., childcare services, primary health facilities, gender-based violence prevention programs, etc.). Potential social risk and impacts are expected to: (i) be predictable and temporary and/or reversible; (ii) be low in magnitude as the impact area of influence is small-scale; (iii) occur in site specific locations. These risks are linked to social dimensions of habitat construction actions, including, inter alia, community and worker’s health and safety, accessibility or equitable access to housing, vehicular traffic and pedestrian activity, and stakeholder engagement process and information management. Indirect social risks and impacts linked to habitat and housing improvement could potentially include the increase in monthly expenses of the beneficiaries due to the formalization of access to services and gentrification effect, as well as the increase of land value derived from improvements with the frequent expulsion of those families with fewer resources. 88. The Project will be implemented in urban vulnerable settings (VAAs), implying that intervention areas are already transformed land, publicly owned, which comply also with local regulations. Considering that there is no current definition on subprojects and specific site locations, some of these interventions could require small scale taking of land resulting in relocation or loss of shelter for some Project beneficiaries. This includes the potential negative impact of physical and economic displacement (usually temporary) for the construction of public services. Overall, the project will have environmental benefits in households’ improvement, and from increased access to land with services. The environmental risk classification responds to risks and potential environmental impacts associated with the type of foreseen interventions under Components 1 and 2. The scale of these interventions is medium to small, with moderate environmental sensitivity of implementation sites as they would be located in already transformed land. In that sense, no valuable ecosystems or habitats (legally protected and internationally recognized areas of high biodiversity value) are also Page 31 of 61 The World Bank Second Habitat and Urban Land Project (P179636) expected to be affected. The magnitude of the potential adverse environmental impacts preliminarily identified is low or moderate and their spatial extent is localized. No long term, permanent, irreversible, unprecedented or complex adverse impacts are expected; expected risks and potential adverse impacts preliminarily identified so far will be site-specific, temporary, predictable and/or reversible, and can be mitigated through readily available measures, considering the mitigation hierarchy. These include e.g., alteration of everyday urban traffic, pollution by particulate matter, gaseous emissions, noise and vibration related to the movement and operation of vehicles and machinery, soil excavation, waste generation of different types, issues with project workers and/or public health and safety, accidental damage to objects and interference to other public services. In principle, there is low probability of serious adverse effects to human health, being the current COVID-19 pandemic (and uncertainties on its evolution) and the recurrent Dengue epidemic the main related risks to be managed, in addition to standard working health and safety risks, usually present in this kind of urban infrastructure projects. 89. For the management of these risks and potential impacts, the MTDYH has developed a set of Environmental and Social instruments. An Environmental and Social Management Framework (ESMF), which, among other aspects, includes the guidelines for the development of site-specific Environmental and Social Management Plans (ESMPs) to be applied to the subprojects design and implementation once they are selected during Project implementation. The MDTyH also developed a Stakeholder Engagement Plan (SEP), to ensure active participation of key stakeholders during Project preparation and implementation, and a Resettlement Policy Framework (RPF) to cover any potential impact under ESS5 that could be associated with future selected subproject. The MTDYH will also identify project workers and develop the corresponding Labor-Management Procedures (LMP), which will be finalized in a satisfactory manner to the Bank before hiring any project worker. A draft version of the SEP was disclosed in-country on January 9th, 2023 and on the WB’s external website on January 12th, 2023. The draft ESMF, including the RPF were disclosed in-country on January 9th, 2023 and on the World Bank’s external website on January 10th, 2023, prior to appraisal. The draft ESMF, the draft SEP and the draft RPF will be updated based on the feedback from consultations and re-disclosed accordingly. Environmental and social commitments have been reflected in a draft Environmental and Social Commitment Plan (ESCP), agreed between the Borrower and the Bank, disclosed in-country on January 9th, 2023, and on the WB’s external website on January 12th, 2023 prior to appraisal; the ESCP was finalized in negotiations. The Appraisal Environmental and Social Review Summary (A- ESRS) was disclosed on the World Bank´s external website on January 12th, 2023. 90. Additionally, regarding the indirect social risks and impacts identified, specific measures will be taken to mitigate them, which will be developed in the corresponding environmental and social instruments. Among others, the social tariff and in many cases the subsidy for services will be applied in order to minimize the increase in the monthly expenses of the beneficiaries from the formalization of access to the service networks; ad hoc mechanisms will be implemented to avoid the effects on household expenses due to the payment of housing, for example, through the exemption of the payment.’ V. GRIEVANCE REDRESS SERVICES 91. Grievance Redress. Communities and individuals who believe that they are adversely affected by a project supported by the World Bank may submit complaints to existing project-level grievance mechanisms or the Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the Bank’s independent Accountability Mechanism (AM). The AM houses the Inspection Panel, which determines whether harm occurred, or could occur, as a result of Bank non-compliance with its policies and procedures, and the Dispute Resolution Service, which provides communities and borrowers with the opportunity to address complaints through Page 32 of 61 The World Bank Second Habitat and Urban Land Project (P179636) dispute resolution. Complaints may be submitted to the AM at any time after concerns have been brought directly to the attention of Bank Management and after Management has been given an opportunity to respond. For information on how to submit complaints to the Bank’s Grievance Redress Service (GRS), please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the Bank’s Accountability Mechanism, please visit https://accountability.worldbank.org. VI. KEY RISKS . 1. The overall risk of the proposed Project is rated Substantial, due to risks associated with the political and governance context, macroeconomic environment, institutional capacity for implementation, fiduciary risks and social management. 2. Political and governance risk is assessed as Substantial. The inherent risk is related to 2023 presidential elections, that could undermine the commitment to decisions related to the Project, such as selected municipalities and neighborhoods. The risk is mitigated by defining clear and transparent subprojects’ selection and prioritization criteria and by the work of the World Bank to strengthen and improve the operating environment and strengthen the overall governance and transparency. It is likely this risk could delay the Project during the initial phases of implementation. 3. Macroeconomic risk is Substantial. The current macroeconomic conditions in Argentina include high foreign exchange volatility, very low Central Bank reserves, and high inflation. The inherent risk is that these conditions might reduce the funding available for the Project and delay Project implementation directly and indirectly. To mitigate the counterpart’s budgetary risk, the Project is designed with zero counterpart financing. 4. Institutional Capacity for Implementation risk has been rated Substantial given the high number of provincial and municipal executing units and the coordination effort to be performed by the MDTyH. The World Bank has conducted a Process Evaluation to identify main barriers in habitat improvement projects and opportunities to make the process and institutional coordination more efficient. Lessons learned in the Habitat 1 Project underlined the importance of doing sound evaluations of the subnational executing units, including technical, financial management, procurement, social and environmental assessments to define institutional capacity strengthening needs. The technical assistance provided under Components 1.1 and 3 would serve to mitigate these risks, providing capacity building to the EUs involved, and bringing in technical expertise. The establishment of Management Working Groups for subprojects under Component 2 investments will also support consensus-building and coordination processes. 5. Fiduciary Risk is rated Substantial. The Project entails complex fiduciary implementation arrangements with multiple EUs in coordination with the MDTyH. These arrangements will be defined once subprojects are selected, and technical and management capacity will vary. FM and generation of necessary reports and audits will be complex and will be supported by a clear control system. Additionally, the Project’s framework approach, whereby new EUs will be included during implementation, may produce delays in the Procurement Plan and subsequently affect the achievement of the PDO. The main measures to mitigate these fiduciary risks include: (i) keep a procurement and financial management team within MDTyH with experience in Bank financed operations to guide and supervise EUs; (ii) assess the fiduciary capacity of EUs and deliver tailored training where needed; (iii) implement the Procurement Plan to efficiently manage the procurement processes (avoiding the fragmentation of contracts); (iv) perform annual audits following standards and terms of reference acceptable to the Bank; (v) clearly state the fiduciary functions and responsibilities of the MDTyH and the EUs in the Operations Manual; and (vi) use a standard procurement document for all EUs. 6. The Social risk rating has been assessed as Substantial, given the varying implementation capacity, complex institutional arrangements, scope, and scale of the project related to social risk management. Other risks being assessed Page 33 of 61 The World Bank Second Habitat and Urban Land Project (P179636) include: (i) political and elite capture risk, related to the titling process and the community development activities; and (ii) risk of exclusion of vulnerable groups such as the elderly and women. To mitigate these risks, the MDTyH is working in the identification of subprojects according to the eligibility and prioritization criteria, which consider: (i) diverse geographic distribution, to provide a representative sample of cities in the country and ensure that benefits reach a diversity of regions; and (ii) a wide range of subnational governments with different level of institutional and technical capacities. Additionally, under Component 1, urban expansion plans and other preliminary subprojects’ documentation will identify the land plots to be developed with sites and services investments; define future land uses of those plots to foster mix- used neighborhoods; and specify the eligibility criteria and parcels allocation process to be implemented in order to ensure transparency and effective targeting of beneficiaries. A specific indicator has been included to monitor the final allocation of plots to households for the first package of sites and services subprojects. Regarding Component 2, the risk of exclusion of vulnerable groups will be mitigated through the establishment of Management Working Groups, as a mechanism for participation and consensus building and through thorough participation processes. . Page 34 of 61 The World Bank Second Habitat and Urban Land Project (P179636) VII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Argentina Second Habitat and Urban Land Project Project Development Objectives(s) The proposed Project’s Development Objective is to (i) promote formal and planned urban growth in selected cities; (ii) improve living conditions for households in selected precarious urban settlements; and (iii) respond effectively in case of an eligible crisis or emergency. Project Development Objective Indicators RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline End Target Promote formal and planned urban growth in selected cities Serviced plots financed by the project that have been legally 0.00 4,000.00 registered (Number) Subnational governments that have elaborated, published, and submitted land planning and management instruments for 0.00 40.00 future legal adoption (Number) Improve living conditions for households in selected precarious urban settlements Households provided with improved living conditions in selected 0.00 12,521.00 slums, informal settlements, and degraded areas (Number) Female and LGBTIQ+ persons headed households with improved living conditions in selected slums, informal settlements, and 0.00 51.00 degraded areas (Percentage) Page 35 of 61 The World Bank Second Habitat and Urban Land Project (P179636) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline End Target Component 1: Formal and Planned Urban Growth Developed or updated urban expansion plans that are climate risk informed (Percentage) 0.00 100.00 Plots in urban areas provided with access to improved water sources under the Project (Number) 0.00 4,000.00 Plots in urban areas provided with access to improved sanitation 0.00 4,000.00 under the Project (Number) Number of plots in urban areas with access to electricity under 0.00 4,000.00 the Project (Number) Serviced plots financed by the Project that have been legally allocated to households (Percentage) 0.00 15.00 Kilometers of roads constructed or rehabilitated (Number) 0.00 40.00 Component 2: Sustainable Habitat Improvement Households in urban areas benefitted under the Project with 0.00 728.00 increased tenure security (Number) Households headed by women, LGBTIQ+ persons, or LGBTIQ+ couples, who have benefited from increased tenure security 0.00 51.00 (Percentage) Households in urban areas provided with access to improved 0.00 6,010.00 water sources under the Project (Number) Households in urban areas provided with access to improved 0.00 6,887.00 sanitation under the Project (Number) Households in urban areas provided with access to electricity under the Project by household connections (Number) 0.00 6,386.00 Kilometers of roads constructed or rehabilitated (Number) 0.00 8.15 Page 36 of 61 The World Bank Second Habitat and Urban Land Project (P179636) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline End Target Subprojects that have incorporated feedback received on the 0.00 100.00 beneficiaries' participation process (Percentage) Completed Community Development Lines of Action (Number) 0.00 96.00 Community Initiative Projects (PIC) and Projects to Strengthen Social and Human Capital (PFCSyH) that were formulated and/or 0.00 25.00 executed by women (Number) Women reporting that the use of childcare services and/or other solutions increased their opportunity to participate in 0.00 51.00 consultations/planning processes (Percentage) Component 3: Institutional Strengthening and Project Management Technical studies for the design of land, housing, habitat, and 0.00 5.00 land policies prepared under the Project (Number) Capacity building activities, trainings, and courses implemented 0.00 10.00 (Number) IO Table SPACE UL Table SPACE Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Plots developed under the Project that have been Report on subprojects Final works endowed with basic Every six with final work report Serviced plots financed by the project that report Sub-executors MDTyH infrastructure and have months submitted / progress have been legally registered submitted. started the registration certificates. process in the provincial and/or municipal cadasters. Page 37 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Records of Subnational governments that have Land and planning Every six the Records of the elaborated, published, and submitted instruments created by MDTyH months competent competent authorities. land planning and management provincial and/or local authorities instruments for future legal adoption governments. Households are Households provided with improved living Beneficiary households of Every six Ele System counted after project MDTyH conditions in selected slums, informal the Project with improved months completion. settlements, and degraded areas living conditions. Female and LGBTIQ+ persons headed Survey of all Female and LGBTIQ+ Every six New Survey households with improved living households using the Sub-executors MDTyH persons headed households months APP conditions in selected slums, informal APP. benefitted by the Project. settlements, and degraded areas ME PDO Table SPACE Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection This indicator measures the percentage of urban expansion plans developed or updated in the Report on framework of the Project Report on urban urban that consider climate Every six expansion plans that Developed or updated urban expansion expansion MDTyH change projections and local months include climate risks are plans that are climate risk informed plans carried climate risks such as counted. out. flooding, landslides, and others, to define the urban growth areas and the localization of sites and services projects. Page 38 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Using survey of Survey of borrower's reception borrower's certificates, final work reception completion certificate, certificates / Plots in urban areas provided with access Number of plots with Every six and progress final work Sub-executors MDTyH to improved water sources under the improved water sources months certificates plots with completion Project under the Project. improved water certificates / sources will be counted progress when the Project is certificates. finalized. Survey of Using survey of borrower's borrower's reception reception certificates, final work certificates, completion certificate, Number of plots with Every six Plots in urban areas provided with access final work and progress Sub-executors MDTyH improved sanitation under months to improved sanitation under the Project completion certificates plots with the Project. certificates, improved sanitation and progress will be counted when certificates. the Project is finalized. Survey of Using survey of borrower's borrower's reception reception certificates, final work certificates, completion certificate, Every six Number of plots in urban areas with Plots with access to final work and progress Sub-executors MDTyH months access to electricity under the Project electricity under the Project. completion certificates plots with certificates, access to electricity will and progress be counted when the certificates. Project is finalized. Page 39 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Records of Plots developed under the Every six the Records of the Serviced plots financed by the Project that Project that have been Sub-executors MDTyH months competent competent authorities have been legally allocated to households legally transferred to authorities beneficiary households. Kilometers of roads ELE System An average road with a Every six Kilometers of roads constructed or constructed or rehabilitated Work Plan width of 6 m is used for MDTyH months rehabilitated in sites and services under Items the calculation. the Project. All plots that change legal status as a result At 50% of the project led by completion Households in urban areas benefitted Competent female headed All land parcels with tenure and at the MDTyH under the Project with increased tenure authorities households, LGBTIQ+ security. end of the security people, and/or couples- Project. headed households are counted. Proportion of all plots that change legal status At 50% as a result of the All land parcels with Records from completion project led by female Households headed by women, LGBTIQ+ increased tenure security the and at the headed households, MDTyH persons, or LGBTIQ+ couples, who have for households headed by competent end of the LGBTIQ+ benefited from increased tenure security women, LGBTIQ+ persons, authorities. Project. persons, and/or couple- or LGBTIQ+ couples. households are counted. Number of households in Households with a Households in urban areas provided with Every six urban areas provided with ELE System completed drinking MDTyH access to improved water sources under months access to improved water water supply system the Project sources under the Project. are counted. Page 40 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Households with a Households in urban areas provided with Number of households with Every six ELE System completed sewerage MDTyH access to improved sanitation under the improved sanitation after months system are counted. Project works are completed. ELE System Households with Households in urban areas provided with Number of households with Every six Work Plan completed electricity MDTyH access to electricity under the Project by access to electricity after months Items works are counted. household connections works are completed. ELE System An average road with a Kilometers of roads Every six Kilometers of roads constructed or Work Plan width of 6 m is used for MDTyH constructed or rehabilitated months rehabilitated Items the calculation. under the Project. Public consultation report, Number of habitat minutes of subprojects that have been the Subprojects updated Subprojects that have incorporated updated considering Every six management based on the Sub-executors and feedback received on the beneficiaries' feedback received from months working table participation process MDTyH participation process beneficiaries in the public and feedback are counted. consultation process, Subproject including the public audit. participatory design workshops. Six lines of action for MDTyH Number of community Every six each project under Completed Community Development Social Area Sub-executors MDTyH development action lines in months implementation are Lines of Action Report execution. counted. Page 41 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Number of Community Initiative Projects (PIC) and Community Initiative Projects (PIC) and Projects to Strengthen Every six Completed PIC and Projects to Strengthen Social and Human ELE system MDTyH Social and Human Capital months PFCSyH are counted. Capital (PFCSyH) that were formulated (PFCSyH) that have been and/or executed by women designed and/or executed by women. Women that report that their participation in consultations and planning At 50% An ad-hoc survey will Women reporting that the use of processes increased due to completion Ad-hoc be conducted at 50% childcare services and/or other solutions the childcare service and/or and at the MDTyH Survey completion and at the increased their opportunity to participate other solutions (such as end of the end of the Project. in consultations/planning processes definition of convenient Project. meeting times when caregiver can participate) provided under the Project. Records of Technical studies for the design of land, Every six technical Report of technical Number of technical studies MDTyH housing, habitat, and land policies months studies studies carried out. completed. prepared under the Project completed Capacity building activities, Capacity Report on trainings, Every six Capacity building activities, trainings, and trainings, and courses building courses, and workshops MDTyH months courses implemented implemented during the records held. Project. ME IO Table SPACE Page 42 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Page 43 of 61 The World Bank Second Habitat and Urban Land Project (P179636) ANNEX 1: Implementation Arrangements 1. The Ministry of Territorial Development and Habitat (MDTyH) will have overall responsibility for the implementation of the Project through the Secretariat of Coordination (SC). The SC will be in charge of coordinating activities between different areas of the Ministry and assuring the completion of activities timely and effectively. It will be responsible of the fiduciary processes and financial management of the Project, conveying a support team covering legal, procurement, financial and administrative areas. Two secretariats that will be responsible for the technical, social, and environmental implementation of Component 1 (Secretariat of Territorial Development, SDT) and Component 2 (Secretariat of Habitat, SH); Component 3 will be led by the SC, with technical support from the other two secretariats. In addition to the role of the MDTyH, Components 1 and 2 will involve coordination with a number of entities that will be further explained in the next paragraphs. Figure A1-1: Organizational Chart Component 1: Formal and Planned Urban Growth 2. The MDTyH, through the SDT and with support from the SC, will have institutional responsibility for implementing Component 1 and will make agreements with executing units (EUs) at the provincial and/or the municipal level to execute subprojects. A detailed description of the roles is presented below: Page 44 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Table A1-1: Implementation Roles for Component 1 Entity Role Secretariat of The SC will carry out the administration of the component activities including preparing and updating the Coordination (SC) annual work plan and procurement plan, financial management including managing the special account and arranging for audits, and monitoring and report on progress and outcomes, on compliance with the operations manual and World Bank policies. The SC will also administer the fund transfer, assess the capacity of new EUs, and approve different stages of the bidding processes along with the technical areas. This Secretariat will assist in the administrative aspects for the implementation of Component 3, in close collaboration with the Territorial Development Secretariat (SDT) and the Secretariat of Habitat (SH) . Secretariat of Territorial The SDT will be responsible for the technical supervision and quality review of the entire subproject cycle. Development (SDT) It will sign the framework and specific agreements with Provinces and Municipalities. Specifically, it will advise the executing units in the identification and elaboration of subproject proposals based on the eligibility criteria; provide technical supervision and advice to the executing units in the development of sites and services subprojects’ designs; and undertake technical review of subproject documents related to viability, project design, bidding and contracting. It will also be responsible for the technical supervision of the activities of the EUs during execution and post-work phases and the implementation of the monitoring and evaluation systems for the component. The SDT will also ensure the coordination of the subprojects with component 3 activities and the Project in general with other housing programs in the Secretariat and in the Ministry and with federal programs in the social sector. It will evaluate the financial performance of the program and its components in conjunction with the Secretariat of Coordination and inform the Minister of any non-compliance of the agreements with the executing units and propose amending measures. National Court of It will be responsible for issuing the evaluation of the properties to develop sites and services. Appraisals Executing Units (EUs) The EUs will execute the eligible and prioritized subprojects. They are responsible of informing the SDT of the existence of urban planning regulations, land management instruments and land plots available for purchase in the municipality and to collaborate in the conformation of land registries and price maps. They will be responsible for the measurement, preparation and processing of the measurement plan and subdivision of the land plots, their registration and demarcation. They will also deliver the cadastral information required by the SDT. Main responsibilities include the presentation of the subprojects and, eventually, their adjustment according to the requirements of the SDT. EUs will be responsible for monitoring the sites and services works, as well as for their inspection, the control of their compliance when executed by companies, cooperatives or other legal persons and the timely notification to the Management Unit of any type of non-compliances. They will develop and submit progress certifications of the sites and services works and prepare reports, including the provisional and definitive reception of the works. Service provider They will be responsible for issuing technical pre feasibilities to develop infrastructure networks during companies the subproject design phase, guaranteeing operational conditions according to the serviced plots demand. They will support the EUs supervising works and after construction will receive them to continue with operation (when applicable). A transfer agreement will be signed between the EU and service providers that outlines the responsibilities for operation and maintenance of the investments. 3. Subproject development and execution. The subprojects are identified by EUs and after eligibility and prioritization is confirmed, they follow a structured process from design to implementation, involving the MDTyH and the WB at different stages. The Subproject Cycle for Component 1 is as follows: Page 45 of 61 The World Bank Second Habitat and Urban Land Project (P179636) 4. Phase 0. Project Launching. The Project will start with a launch event and the publication of the guidelines and requirements for EUs to participate and present subprojects. 5. Phase 1. Subproject Identification. EUs present to MDTyH proposals for interventions in sites and services in eligible areas (see criteria in Table A1-2), along with a letter of interest to participate in the Project. 6. Phase 2. Prioritization and Eligibility/Viability. A Framework Agreement (FA) is signed between the MDTyH and the provincial or municipal EU. When there are multiple proposals from EUs, SDT prioritizes them based on the prioritization criteria. Once prioritized, SDT undertakes field visits to evaluate and advise on the proposal, develops a Subproject Description with the EU and confirms that the area meets the eligibility criteria and that the proposed activities are eligible. The SC reviews the proposed interventions and issues a statement of viability based on official documentation from the relevant provincial and municipal authorities and service providers confirming the environmental, social, technical-urban and land-regularization viability of the subproject. The SC formally approves the subprojects and sends a letter to the Bank certifying the compliance of the eligibility criteria, along with the subproject’s viability statement. The EU starts the process to sign the agreements with the service providers that outline the responsibilities for operation and maintenance of the investments. 7. A Capacity Assessment of the EU is undertaken at this stage, and the Capacity Building Plan is defined accordingly. The Bank gives No Objection to the subproject eligibility and provides a l Technical Conformity to the Capacity Assessment and the Capacity Building Plan. The SC includes the subproject in the annual investment program and updates the Project procurement plan. The EU fills in the Risks Evaluation form, which is shared with the Bank to define the subproject revision path. If it is listed as of medium-high risk due to the subproject social or environmental risks, it will require additional supervision measures from the Bank. In this case, the MDTyH starts implementing the Capacity Building plan, which will identify specific capacity building actions and training for the UE. Table A1-2: Eligibility Criteria for Sites and Services Interventions Criteria Definition / Source Environmental viability The subproject is not assessed as considerable or high risk, Environmental and Social Review Summary - World Bank's since it is not expected to have significant negative Environmental and Social Framework environmental or social impacts or risks of a delicate or Exclusion List detailed in the ESMF irreversible nature, nor are repercussions expected that could affect a wider area than that of the sites or facilities where physical works are carried out. Settlement is located in a hazard-free area or where risk can be Based on the available official hazard maps provided by the mitigated. competent national or local agency The subproject does not compromise sites of ecological, Exclusion List detailed in the ESMF historical, archaeological, religious or cultural interest, or seat of indigenous people Urban and Technical The neighborhoods should have hydraulic aptitude and Local authority and service provider companies prefeasibility to provide basic services The intervention area is located in a planned growth sector, As confirmed by the municipality; to be included in the identified in a local urban expansion plan Subproject Description Legal Viability Page 46 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Land is vacant and belongs to the national, provincial, As confirmed by the local land authority; to be included in the municipal state subproject description Land where the settlement is located can be legally subdivided As confirmed by the local land authority; to be included in the and transferred to households. subproject description Land clear of disputes, court cases, encumbrances or other As confirmed by the local land authority; to be included in the constraints on use of the land. subproject description Table A1-3: Key Agreement for component 1 subproject execution Framework Agreement (FA) Agreement between SDT and the subnational entity involved in the subproject and outlining all (“Convenio Marco de the obligations of SDT and the executing unit related to the implementation of the subprojects. Adhesion”) Specific Agreement (“Convenio The FA will be supplemented by a Specific Subproject Agreement (“Convenio Específico”) that Específico”) outlines the interventions to be financed. 8. Phase 3. Technical feasibility. At this stage and prior to the development of the works of sites and services, the eligible EUs develop or update an Urban Expansion Plan, develop the sites and services Preliminary Project, and submit the feasibility studies according to the applicable law and the ESMF. The EU, along with MDTyH perform the Stakeholders Engagement Process and the MDTyH gives the technical feasibility to the subproject. 9. Phase 4. Final subproject design. Once the subproject is designed and finalized, the SDT provides final advice and reviews to confirm compliance and readiness regarding the requirements of design including technical quality, economic efficiency, and all legal arrangements. The UE adjusts the preliminary project in collaboration with the Ministry to comply with (i) all relevant local regulations; (ii) urban expansion plan; and (iii) World Bank requirements. The MDTyH submits the subproject design documentation, including any back up information and the Stakeholders Engagement Process report to the Bank. When interventions are confirmed and the estimated cost defined, the Procurement Plan is updated. The EU prepares the bidding document according to the approved model and submit them for SC approval. For moderate-high risks subprojects, the Bank reviews the bidding documents and provides a conformity to start the bidding process 10. Phase 5. Bidding. Bidding and contracting are done by the EU; SDT and the SC provide approvals to the various stages of the bidding processes as required (see procurement arrangements for details). 11. Phase 6. Contract. The EU signs the contract with the awarded construction company. The company prepares the Construction Plan, including the Environmental and Social Management Plan in accordance with the ESMF, which is approved by the SDT. 12. Phase 7. Execution. During execution of works the EU manages the contracts including undertaking the technical supervision and the SDT performs monitoring and field visits (including environmental, social, health and safety risk management aspects). The SC undertakes financial management responsibilities related to payments, the special account and auditing. The Bank performs field visits and remote supervision and MDTyH sends works progress reports to the Bank, following an agreed Supervision Strategy. 13. Phase 8. Post implementation. The EU supervises and provides assistance with the operation and maintenance of works and produces annual maintenance reports. Land plots allocation, land title regularization and other activities after executing the works of sites and services that are beyond the scope of the Project will be carried out by subnational entities. The Bank undertakes the revision process of selected subprojects. Page 47 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Figure A1-2: Subproject Cycle for Component 1 Page 48 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Component 2: Integrated Habitat Improvement 14. The MDTyH, through the SH and with support from the SC, will have institutional responsibility for implementing Component 2 and will make agreements with EUs at the provincial and/or the municipal level to execute subprojects. Field teams and Management Working Groups will be established for each subproject to facilitate execution. A detailed description of the roles is presented below: Table A1-4: Implementation Roles for Component 2 Entity Role Secretariat of The SC will carry out the administration of the component activities including preparing and updating the Coordination (SC) annual work plan and procurement plan, financial management including managing the special account and arranging for audits, and monitoring and report on progress and outcomes, on compliance with the operations manual and World Bank policies. The SC will also administer the fund transfer, assess the capacity of new EUs, and approve different stages of the bidding processes along with the technical areas. This Secretariat will assist in the administrative aspects for the implementation of Component 3, in close collaboration with the Territorial Development Secretariat (SDT) and the Secretariat of Habitat (SH). Secretariat of Habitat The SH will be responsible for the technical supervision and quality review of the entire subproject cycle. (SH) Specifically, it will advise the EUs in the identification and elaboration of subproject proposals based on eligibility criteria; provide technical advice to the EUs in the development of Integrated Project Designs and documents related to viability, bidding and contracting. They will also be responsible for the technical, social and environmental management, follow-up, evaluation and monitoring of the activities of the EUs during execution and post-work phases and the implementation of the monitoring and evaluation systems for the component. The SH will also ensure the coordination of the subprojects with component 3 activities and the Project in general with other housing, water and sanitation and institutional strengthening programs in the Secretariat and in the Ministry and with federal programs in the social sector. Executing Units (EUs) The EUs will execute the eligible and prioritized subprojects. They include entities in local, municipal and provincial governments with adequate capacity to assume this responsibility (when the capacity is low, the EUs will be subject of a Capacity Building Plan). The specific responsibilities of the EUs are to: (i) identify and develop subproject proposals; (ii) coordinate viability process (including completing studies, obtaining certifications); (iii) establish the Management Working Group; (iv) develop the Project Design; (v) contract the field team and procuring the works, goods and consultants for execution of subprojects; (vi) supervise social, environmental and technical quality; (vii) manage and pay contracts for execution; (viii) ensure coordination and transfer to service providers; (ix) supervise the maintenance of works and equipment, and the sustainability of the services during the post-works stage; (x) report on financial, procurement, technical, social and environmental aspects of the subprojects; and (xi) take part in institutional strengthening activities and the development of information systems of the Project. Field teams The multidisciplinary field teams are comprised of individuals contracted by the EUs and are responsible of implementing community development activities and supervision of works. They will work in the implementation of outreach activities in the settlement, keeping the population informed and fostering participation and to support implementation through on the ground supervision. Their work includes the diagnosis of the settlement, development of a stakeholder map, socialization of subprojects and monitoring of the implementation including technical, social and environmental elements. The field team will be in charge of proposing and developing the Community Development Lines of Action (CDLA) under Subcomponent 2.3. The field team is mobilized two months before the beginning of works execution and continues its work until six months to one year after completion of the works. Page 49 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Management Working The Management Working Group is a coordination mechanism that consists of representatives of the Group (Mesa de executing units and other institutional actors linked to the subproject such as the municipality that has Gestión) jurisdiction over the community, government institutions responsible for land regularization, service providers, professional associations, community representatives, representatives of indigenous communities, non-governmental organizations, federal housing programs and other relevant programs and acts as a participatory, consensus -building body works. Service provider When applicable, water and sanitation, electricity and natural gas service provider companies will be companies engaged in the implementation of the infrastructure works from early design stages. They will participate as key institutional actors of the Management Working Groups, with the role of reviewing executive designs and supervising progress of works. An agreement between the EU and service providers concerning the transfer and operation and maintenance of the works will be signed before finishing the investments. 15. Participating Executing Units: Individual subproject execution will take place in a decentralized manner through the provinces and/or municipalities, as sub-executing agencies of the program. The EUs are commonly located in the provincial government but may also include government units in the municipality with adequate capacity. The Project will undertake EU capacity assessments to define if these are eligible to execute subprojects (EU eligibility criteria will be defined in the Operations Manual and will include the criteria set un the Table A2-5). The assessment would identify main risks and aspects to be strengthened and establish a capacity building action plan to make the EU eligible. The MDTyH will transfer resources in the form of grants based on signed implementation agreements and the management of these resources to execute the individual subprojects will be the responsibility of the EU in the provinces or municipalities. Table A1-5: Capacity Assessment Criteria for Incorporation of Executing Units into Component 2 Capacity Assessment Criteria Have an active working group that has experience implementing urban infrastructure projects. Have an adequate financial management system satisfactory to the Bank for accounting for funds used under the project and monitoring the activities executed. Have an adequate procurement management system satisfactory for reporting procurement processes within the Project to ensure compliance with the World Bank Rules for Borrowers of IPF and the Operations Manual. Have the capacity to manage the Environmental and Social Standards of the World Bank for compliance with the Resettlement Policy Framework, the Environmental and Social Management Framework and Labor Management Procedures. 16. Subproject development and execution: The subprojects are identified by EUs and after eligibility and prioritization are confirmed, they follow a structured process from design to implementation, involving the MDTyH and the WB at different stages. The Subproject Cycle for Component 2 is as follows: 17. Phase 0. Project Launching. The Project will start with a launch event (virtual and/or face to face), and the publication of the guidelines and requirements for EU to participate and present subprojects. 18. Phase 1. Subproject Identification. EUs present to MDTyH proposals for interventions in an eligible VAA (see criteria in Table A2-7). 19. Phase 2. Prioritization and Eligibility/Viability. A Framework Agreement (FA) is signed between the MDTyH and the provincial or municipal EU. When there are multiple proposals from EUs, SH prioritizes them based on the prioritization criteria (Table A2-6). Once prioritized, SH undertakes field visits to evaluate and advise on the proposal and confirms that the settlement meets the eligibility criteria (Table A2-7) and that the proposed activities are eligible. The SH reviews the proposed interventions and issues a statement of viability based on official documentation from the relevant provincial and municipal authorities and service providers confirming the environmental, social, technical-urban and land- Page 50 of 61 The World Bank Second Habitat and Urban Land Project (P179636) regularization viability of the subproject. The SH formally approves the subprojects and sends a letter to the Bank certifying the compliance of the eligibility criteria, along with the subproject’s Viability statement. The EU also starts the process to sign the agreements with the service providers that outline the responsibilities for operation and maintenance of the investments. A Capacity Assessment of the EU is undertaken at this stage, and the Capacity Building Plan is defined accordingly. The Bank gives No Objection to the subproject eligibility and provides a Technical Conformity to the Capacity Assessment and the Capacity Building Plan. The SH includes the subproject in the annual investment program and updates the Project procurement plan. Once confirmed, a Framework Agreement (FA) is signed between the MDTyH and the provincial or municipal EU. Table A1-6: Prioritization Criteria for VAA Interventions Prioritization criteria Ponderation according to: Urban complexity Lack of defined urban fabric structure Degree of urban consolidation Population density Environmental and climatic risks Social and Urban Impact Subproject included in a local strategic plan Have greater positive impacts in the urban and social environment Localization Federal distribution of investments across provinces Table A1-7: Eligibility Criteria for VAA Interventions Criteria Definition / Source Environmental viability The subproject is not assessed as considerable or high risk, since it is not Environmental and Social Review Summary - expected to have significant negative environmental or social impacts or risks World Bank's Environmental and Social of a delicate or irreversible nature, nor are repercussions expected that could Framework affect a wider area than that of the sites or facilities where physical works are Exclusion List detailed in the ESMF carried out. Settlement is located in a hazard-free area or where risk can be mitigated. Based on the available official hazard maps provided by the competent national or local agency The subproject does not compromise sites of ecological, historical, Exclusion List detailed in the ESMF archaeological, religious or cultural interest, or seat of indigenous people Social Viability 40 percent of the population has Unmet Basic Needs and/or insufficient National Statistics and Census Institute (Instituto sanitation conditions Nacional de Estadística y Censos, INDEC) and self-developed indexes. The beneficiary population at the time of identification has an average time of As confirmed by the local authority; to be residency of 4 years. included in the subproject description Urban and Technical The neighborhoods should have hydraulic aptitude and prefeasibility to Local authority and service provider companies provide basic services Settlement area is included in the local territorial plan and land use is As confirmed by the municipality; to be included consistent urban development plan in the Subproject Description Page 51 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Legal Viability Land where the settlement is located (i) belongs to the national, provincial, As confirmed by the local land authority; to be municipal state; (ii) has been acquired by their occupants or by any entity that included in the subproject description represents them; or (iii) has begun the expropriation process, inter alia, as per Law 24,374. Land where the settlement is located can be legally subdivided and transferred As confirmed by the local land authority; to be to households. included in the subproject description The availability and domain conditions of land for relocations have been As confirmed by the local land authority; to be verified. included in the subproject description 20. Phase 3- Subproject Formulation. The Management Working Group (Mesa de Gestión), composed of representatives of the EU, SH and civil society, community and institutional actors linked to the subproject is formed at this stage and confirms the necessary interventions in the VAA through an agreement establishing the interventions to be financed and the commitments of different actors. In coordination with the Management Working Group, the EU prepares the preliminary Integrated Subproject Design (PEI), at a concept stage. The PEI document will include a brief diagnostic of the VAA context and community needs, the infrastructure interventions (basic services, improved public spaces and community infrastructure); community development activities and the land regularization plan. The EU fills in the Risks Evaluation form (to be developed in the Operations Manual), which is shared with the Bank to define the subproject revision path. The Environmental and Social Management Plan (ESMP) of the subproject is also developed at this stage and included in the PEI. If applicable, the EU develops the Resettlement Plan (RP). Preliminary subprojects concepts are presented to the Bank for technical input. 21. If the subproject is classified as of low or medium-low risk, it will continue with the subsequent phase when approved by the SH. If it is listed as of medium-high risk due to the subproject social or environmental risks, it will require additional supervision measures from the Bank. In this case, the Bank reviews the preliminary PEI and gives conformity to the continue with the project cycle. 22. Phase 4- Public consultation. The preliminary PEI, along with the ESMP and the Resettlement Plan (if applicable) are submitted to a public consultation organized by the EU. Once finished, the EU produces a consultation report and includes the results of the participatory process in the final PEI and the environmental and social instruments. 23. Phase 5- Integrated Subproject Design (PEI). Once the PEI is finalized, the SH provides final advice and reviews to confirm compliance and readiness regarding the requirements of design, including technical quality, economic efficiency, adequate community support and all applicable legal arrangements (see Table A2-8) and regulations. SH sends to a Letter of Compliance of the PEI to the Bank, and the EU starts the preparation of bidding documents. Medium-high risk subprojects bidding documents will be reviewed by the Bank, which will emit a Technical Conformity to continue with the bidding process. When interventions are confirmed and the estimated cost defined, the Procurement Plan is updated. Table A1-8: Key Agreements for component 2 subproject execution Capacity Assessment Criteria Framework Agreement (“Convenio Agreement between SH and the EU formalizing involvement in the subproject and outlining Marco de Adhesion”) all the obligations of SH and the EU related to the implementation of the subprojects. Subproject Specific Agreement Upon formalization of the selection of a subproject for financing, the FA will be (“Acta Acuerdo”) supplemented by a Specific Subproject Agreement (“Acta Acuerdo”) that outlines the interventions to be financed. Transfer Agreement (“Convenio Agreement between the EU and service providers concerning the transfer and operation para la transferencia de obras”) and maintenance of the works will be signed before finishing the investments. Page 52 of 61 The World Bank Second Habitat and Urban Land Project (P179636) 24. Phase 6- Bidding. Bidding and contracting are done by the EU; SH and the SC provide approvals to the various stages of the bidding processes as required (see procurement arrangements for details). 25. An interdisciplinary field team including urban, social, environmental and legal specialists is contracted by the EU and formed within the community to undertake the communication, planning and preparation activities related to the execution of the subproject; initiate human development program and support participation and community strengthening. 26. Phase 7- Contract. The EU signs the contract with the awarded construction company. The company prepares the construction (ESMP), which is approved by the SH. 27. Phase 8- Execution: During execution of works, the EU manages the contracts including undertaking the technical and environmental supervision and the SH performs monitoring and field visits. The SC undertakes financial management responsibilities related to payments, the special account and auditing (see financial management arrangements) and after review of SH, approves any contractual changes, and changes in the project design and costs as required by the operations manual. The Bank performs field visits and remote supervision and MDTyH sends works progress reports to the Bank, following an agreed Supervision Strategy. The human development program, civil society participation, support to land tenure regularization and community development support are executed by the EUs in a parallel and coordinated manner and with continued involvement of the interdisciplinary field teams and Management Working Group. 28. Phase 9- Post implementation. The EU supervises and provides assistance with the operation and maintenance of works and produces annual maintenance reports. The field team stays a maximum of one year after the works are finished supporting the continued execution and sustainability of the human development program, civil society participation, support to land tenure regularization and community development support. The Bank undertakes the revision process of selected subprojects. Page 53 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Figure A1-3: Subproject Cycle for Component 2 Page 54 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Component 3: Institutional Strengthening & Project Management 29. This component will be implemented by the SC, in close coordination with the SDT and SH. Activities under this component are described in the Project Description. Component 4: CERC 30. Component 4 is to provide immediate response to an Eligible Crisis or Emergency, as may be presented in the future. The CERC is one of the Bank’s contingent financing mechanisms available to Borrowers to gain rapid access to Bank financing to respond to a crisis or emergency. As a Project component, it is designed to provide swift response in the event of an eligible crisis or emergency, defined as “an event that has caused, or is likely to imminently cause, a major adverse economic and/or social impact associated with natural or man-made crises or disasters.” The mechanism for the triggering of the CERC will be included in the Loan Agreement, which requires, inter alia, the preparation of a CERC Manual detailing the applicable fiduciary, environmental and social, monitoring, reporting, and any other implementation arrangements necessary for the implementation of the proposed activities to be financed. In case of an event triggering the component, a reallocation of funds will be introduced to loan disbursement categories, to be able to fund the proposed activities under this component to respond to the emergency. The implementation agency for this CERC will be determined in accordance with a CERC Manual to be developed. The execution of CERC financed activities shall leverage the implementation arrangements defined for component 1 and 2 of this operation where Provincial and Municipal Executing Units can act as sub-executors to carry out subprojects in agreement with the MDTyH. If an entity other than MDTyH leads the emergency response, the Bank will need to conduct an assessment of said entity, prior to funds under this component being disbursed. Financial Management 31. A FM Assessment was carried out to assess the adequacy of FM arrangements in place at the SC of the MDTyH. 32. The scope of the FM Assessment included: (i) an evaluation of existing FM systems in place to be used for Project budgeting, monitoring, accounting and reporting; (ii) a review of staffing arrangements; (iii) a review of the flow of funds arrangements and disbursement methods to be used; (iv) a review of internal control mechanisms in place, including internal audit; (v) a discussion with regards to reporting requirements, including the format and content of Interim Financial Reports; and (vi) a review of the external audit arrangements. 33. The overall conclusion of the FM Assessment is that: (i) the FM arrangements for the proposed Project are considered adequate; (ii) the funds flow, disbursements, monitoring, auditing, and supervision arrangements have been designed in a way to respond to the Project’s implementation arrangements; and (iii) the residual FM risk associated with the Project is rated as Moderate. 34. The following disbursement methods may be used under the loan: (i) Advance; (ii) Reimbursement; and (iii) Direct Payment. 35. Provincial and municipal Executing Units will execute prioritized subprojects,54 following implementation arrangements similar to the Integrated Habitat and Housing Project. The need to carry out capacity assessments of the executing units is highlighted, and, if necessary, to carry out strengthening activities agree with the Bank. SC is responsible for carrying out the assessment by themselves following the methodology to be discussed and agreed, and then the Bank reviewed the assessment. 54 Theexecution scheme provides for a high degree of participation to Provinces and Municipalities, including accounting, recording and budgeting aspects with specific bank accounts to manage the flow of funds received by the National level. Page 55 of 61 The World Bank Second Habitat and Urban Land Project (P179636) 36. Organization and Staffing. SC has qualified FM staff to support the ongoing project according to the last implementation support mission carried out in October 20, 2022. 37. Budgeting. National budget formulation and implementation are guided by rules established by the National Constitution and the Financial Administration Law. The preparation of the annual budget, which integrates current and capital expenditures, is coordinated by the Ministry of the Treasury, and follows a clearly defined calendar that is generally adhered to. 38. Accounting and Financial Reporting. The UEPEX55 system which is the Federal Government system for accounting and financial reporting of bank-financed operations will be used to generate the annual financial statements and Interim Financial Reports. 39. Internal Control and Internal Auditing. The internal control environment to be used for the Project is anchored in Argentina’s legal and institutional framework and operational processes and procedures. These allow for the establishment of roles and responsibilities for FM, and the proper segregation of duties. 40. External Auditing Arrangements. The Project’s annual financial statements will be audited under Terms of Reference (TORs), prepared according to Bank guidelines and performed by an independent auditor following standards acceptable to the Bank. The external audit of projects financial statement will be performed preferably by Argentina’s Supreme Audit Institution’s (Auditoría General de la Nación, AGN) or an external firm acceptable to the Bank. 41. Retroactive Financing. The Bank would reimburse the expenditures for payments made up to one year prior before the signature date. The retroactive date will be defined in the Loan Agreement. Expenditures will not exceed USD 30 million (20 percent of the loan signed amount). Such funds will be reimbursed to the Government in the account indicated by them (not the DA). Disbursements Table A1.8 Disbursement Table Percentage of Amount of the Loan Expenditures to be Category Allocated financed (Expressed in USD) (Inclusive of Taxes) (1) Goods, works, non-consulting services, consulting services, 144,625,00 100% Subprojects, Training, Operating Costs under Parts 1, 2 and 3 of the Project. (2) Resettlement Expenditures 5,000,000 (3) Emergency Expenditure under Part 4 of the Project 0 100% (4) Front-end Fee 375,000 100% TOTAL AMOUNT 150,000,000 100% Procurement 42. Procurement processes will be conducted according to the Bank’s ‘Procurement Regulations for IPF Borrowers’, dated November 2020, for the supply of goods, works, non-consulting services and consulting services. For World Bank- 55 UEPEX: Argentina budget execution and recording software for multi-lateral financed operations. Page 56 of 61 The World Bank Second Habitat and Urban Land Project (P179636) financed International Open Competitive Procurement, the Borrower will use World Bank’s Standard Procurement Documents. For procurement involving National Open Competitive Procurement, the Borrower will use standard procurement documents acceptable to the Bank. 43. Procurement will be implemented in a decentralized manner by provincial and municipal EUs for the civil works and some associated services. MDTyH will also carry out procurement, but its main responsibility is overseeing and providing guidance to subnational entities following the arrangements already in place for the ongoing operation. In this context, a procurement capacity assessment of MDTyH was carried out by the Bank’s procurement team in November 2022. The assessment focused mainly on updating information regarding the organizational structure for implementing the Project and the experience of the existing procurement personnel. As a conclusion, an experienced procurement team already exists, and it is currently working on the Integrated Habitat and Housing Project (P159929) and other multilateral organization´s financing. This team has legal, accountant and technical support provided by different areas of the agency. Based on the assessment, it is concluded that MDTyH currently counts on the appropriate staff and experience to implement the activities at the central level and supervise the decentralized processes. However, keeping this level of experience during this operation is crucial to ensure that the procurement overseeing function from MDTyH keeps being suitable for the project. 44. Provincial and Municipal EUs capacity will be assessed by MDTyH under supervision of the Bank’s procurement team when subprojects are defined under the scope of the operation. It will be done following a methodology previously agreed with the Bank, being the definition of the final and Action Plan subject to Bank’s approval. At this stage, the uncertainty regarding the number and procurement technical capacity of the sub-executing agencies that might be included in the program, represents an implementation risk to be mitigated with the actions described below. 45. As a conclusion of the capacity assessment and implementation arrangements, the analysis leads to an Action Plan to ensure that the appropriate mechanisms for procurement implementation keep being in place to replicate the ongoing operation. This plan includes the following actions to address the above mentioned implementation risks: i) keep a procurement team within MDTyH with experience in Bank financed operations to provide guidance and supervision to subnational entities, ii) the functions and responsibilities of the MDTyH and the EUs will be stated in the Operations Manual, iii) MDTyH commitment to use the Procurement Plan to efficiently manage the procurement function (avoiding the fragmentation of contracts) and monitoring the implementation of the Project, iv) agree on standard procurement documents for national open competitive processes, and v) deliver regular procurement training to new subnational entities. 46. Based on the above, the overall procurement risk is defined as Substantial. 47. The Borrower's Project Procurement Strategy for Development (PPSD) includes a framework approach considering the definition of specific subprojects is yet to be defined. Following this analysis, activities expected under the Project include mainly the procurement of civil works, minor goods and consultancy services. In order to support the achievement of the PDOs and based on the nature of the civil works and local market, the PPSD indicates that once approved as part of a subproject, each procurement activity for the selected urban precarious settlements is expected to be carried out through a request for bids with an open and national market approach. To promote efficiency in its implementation a standard bidding document acceptable to the Bank will be applied by all EUs, and close supervision and support to EUs will be provided by MDTyH and Bank staff as needed. For the CERC component, the procurement procedures will be defined in the appropriate Manual to be implemented if such component was triggered, following emergency arrangements as of stated in Bank´s Procurement Regulations. 48. Likewise, the Borrower has prepared a Procurement Plan for the first 18 months with the activities that are already defined. The rest of the activities will be added once each subproject is approved. Page 57 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Environmental and Social 49. The Implementing Agency will be the national Ministry of Territorial Development and Habitat (MDTyH). The execution of the physical interventions will be decentralized through the provinces and/or municipalities. The SDT will coordinate the implementation of Component 1, and the SH will be responsible for Component 2, articulating activities, as needed, with the SC. Both SDT and SH will be responsible for technical aspects (including social, environmental and health & safety management aspects). The SDT and SH are also responsible for signing the legal agreements with provinces and municipalities regarding Component 1 and Component 2 respectively, as well as ensuring coordination of the Project´s activities with other existing housing programs and the corresponding agencies. 50. The MDTyH Project Implementation Team will comprise at least the following areas: environmental (including health and safety), social, urban, land-title regularization and works inspection. They will follow each subproject in an interdisciplinary manner. Regarding environmental and social management aspects, the MDTyH is organized in five geographical working regions: (i) Northwest region; (ii) Centro-Cuyo; (iii) Buenos Aires; (iv) Northeast Region; and (v) Patagonia. Each region has its own environmental, health and safety and social arrangements, for which some professionals may support more than one region. As the implementation of the Project will be carried out in a decentralized manner, the territorial organization guarantees good articulation with the local EUs. 51. The MDTyH has experience in implementing projects financed by the WB. A particular unit within the MDTyH - a team of five environmental (including health and safety) and eight social professionals, under a general environmental and social coordinator-- responsible for the Environmental and Social matters has been coordinating subprojects nationwide for “Habitat 1” for the past five years. Despite the MDTyH not having previous experience with the Bank’s Environmental and Social Framework (ESF), the MDTyH has recently prepared and IADB project (PROMEBA V) under its new Environmental and Social Policy Framework, which has great similarity with the Bank’s ESF. Capacity of EU for environmental and social management will be assessed and strengthened, as needed, as part of the sub-project cycle design and implementation, as described in other sections above. Specific capacity building activities will be included in the ESCP at the appraisal stage and will be further evaluated throughout the implementation of the Project. Monitoring and Evaluation 52. The Results Framework (RF) in Section VII describes the PDO-level outcome indicators and the component- specific intermediate indicators, and respective baselines and targets. Monitoring and evaluation of the Project will be the responsibility of the MDTyH, which will provide progress reports to the Bank on a bi-annual basis. Semestral reports will include the Project progress and feature outstanding events occurred during execution of works, including environmental and social aspects. The MDTyH will submit the subprojects documentation, technical designs, environmental and social instruments, bidding documents and supervision reports, among other, in a shared folder as part as the control board, which will be always updated and available for the Bank’s access. Monitoring and Evaluation arrangements and responsibilities are described in detail in the Project Implementation Arrangements. 53. For Components 1 and 2, the MDTyH will rely on the supervision and monitoring systems already under implementation and will strengthen them through remote monitoring systems. Component 1 will use the system developed under the National Land Production Program and Component 2 will continue to rely on the monitoring mechanisms set up for all MDTyH slum upgrading programs. As described in the Implementation Arrangements, the EUs will perform the supervision of works, along with the SDT and SH, accordingly, ensuring the compliance of technical, environmental, and social standards. The MDTyH will regularly consolidate reports and submit them to the Bank. Once the works have been completed, they will be inspected by the SDT and SH. The monitoring and supervision scheme will be complemented through remote supervision of works, implemented through data collection geospatial tools such as Kobo Toolbox or similar. Page 58 of 61 The World Bank Second Habitat and Urban Land Project (P179636) Role of Partners (if applicable) 54. Universities, non-governmental organizations, professional associations and other institutions with the required experience and background will provide work as technical, legal, environmental, socio-economic services, including studies, project formulation and monitoring through field equipment. Neighborhood organizations, community-based, grassroots or other representative entities will convene beneficiaries involved in the various stages of the subproject cycle. Page 59 of 61 The World Bank Second Habitat and Urban Land Project (P179636) ANNEX 2: Implementation Support Plan 1. The strategy for implementation support has been determined based on the risks to achieving the PDO. The project will require dedicated implementation support as well continuous evaluation to adjust the project implementation arrangements to reflect the changing national and subnational contexts. The Bank will conduct regular missions, videoconferences, and periodic fiduciary compliance reviews. An MTR will be conducted after approximately 30 months of implementation to review performance in depth and make any adjustments necessary. The World Bank team will conduct at least two implementation support missions per year, desk reviews and field visits as required for proper subprojects supervision and assess whether any adjustments are needed to the Project design or implementation. 2. Technical. The Bank team will (a) engage and guide the technical and institutional dialogue, based on known national and international best practices; (b) advise on the design of activities envisaged within Project components, including processes for the preparation of ToR, budget, and bidding documents; (c) participate in field visits to advance the dialogue with the Government and review progress; and (d) engage with the Government to enable knowledge transfer and guidance. 3. Fiduciary. Training will be provided to the implementation unit’s staff to strengthen their FM and Procurement capacity during the Project’s inception phase. Country office-based procurement and FM specialists will provide timely and continuous support to the implementing agencies. In addition, FM and procurement aspects will be reviewed bi- annually during the supervision missions. 4. Safeguards. The Bank team will closely supervise the implementation of the social and environmental management instruments. Country office-based environmental and social specialists will conduct supervision and will participate in project implementation support missions and site visits and respond to enquiries from the implementing agency. 5. Implementation support plan. The following implementation support plan reflects the preliminary estimates of skill requirements, timing, and resource requirements over the life of the Project. Keeping in mind the need to maintain flexibility over project activities from year to year, the implementation support plan will be reviewed periodically to ensure that it continues to meet the implementation support needs of the Project. The following table indicates the World Bank team’s implementation support plan and the required skill mix and team composition. Table A2-1. Implementation support plan Skills needed No. of staff Number of missions Comments weeks (annual) Task team leaders 16 Semiannual mission, field visits as Staff, Washington-based required Staff, country office based Support technical team (Urban Specialist, 6 Semiannual mission, field visits as Staff, country office and Land Specialist, Urban Infrastructure required Washington-based, and Services Engineer Consultant, Hydraulic consultants, country office based Engineer Consultant, Architect Consultant) Procurement specialist 4 Semiannual mission Staff, country office based FM specialist 3 Semiannual mission Staff, country office-based Social specialist 4 Semiannual mission, field visits as Staff, country office-based required Environmental specialist 4 Semiannual mission, field visits as Staff, country office-based required Page 60 of 61 The World Bank Second Habitat and Urban Land Project (P179636) ANNEX 3: Habitat 1 Processes Evaluation. Main Conclusions and recommendations. 1. Learning from Habitat 1 to improve efficiency. The World Bank conducted a Processes Evaluation on the implementation of Habitat 1, based on interviews with the MDTyH, selected EUs and World Bank staff. The exercise identified a series of bottlenecks in terms of processes and coordination that limited its efficiency and provided concrete recommendations to overcome these challenges moving forward to the implementation of the new operation. 2. Main recommendations include: (a) Need to reinforce the decentralized execution, by strengthening the capacities of the EU and the field teams. This would be executed through a robust EU evaluation assessment, which will identify main risks and technical, fiduciary, environmental, social, and financial management aspects to be strengthened, and the implementation of an ad hoc capacity building action plan for each EU. In addition, the MDTyH is planning to implement a series of knowledge sharing events to be financed under Habitat 1. Lastly, the Project aims to implement technical sessions to discuss subprojects with EUs at a concept stage. (b) Definition of clear rules to participate in the program and transparent eligibility and prioritization criteria of subprojects and executive units, to avoid political and elite capture and ensure open participation. Eligibility and prioritization criteria, following the principles described above will be defined in detail in the Operations Manual. Additionally, the MDTyH and the World Bank will organize an event to launch the program, present the general participation guidelines and encourage the presentation of subprojects by the UEs. (c) Considering that provinces and municipalities in Argentina have very diverse capacity and that subprojects might present different levels of risks, the Project would follow the Proportionality Principle, defining different revision paths according to the capacity and risks of the EU and the subprojects. (d) A strong supervision strategy and accessible Project monitoring mechanisms would allow the World Bank to closely follow the Project and establish mitigation measures when needed. Some instruments to be implemented could include the establishment of Control Board, the setting up of a remote supervision application, and the creation of an accessible documentation repository. (e) The execution and supervision roles of all involved actors, and in particular of the EU, the field team, the construction companies and the MDTyH would need to be clearly defined and included in the Project documentation. (f) Systematization of subproject documents: the establishment of pre-approved models for Executive Projects, bidding documents, Environmental and Social Technical Specifications, ESMP, Resettlement Plan, etc., would ensure a minimum standard and simplify the revision process. Models of Habitat 1 will be used as a baseline. (g) Scaling up: to scale up the slum upgrading interventions, the Project would (a) systematize the offer of eligible investments; and (b) prioritize medium-size and medium-low risk subprojects, allowing to invest in a larger number of neighborhoods. Furthermore, the World Bank sees an opportunity to go beyond implementation by project to move towards a programmatic approach, with a greater impact on public policies that allow closing the existing habitat gap. The teams would work to harmonize standards and documentations with other slum upgrading projects, aiming to set adequate conditions for the MDTyH to create a unique slum upgrading program financed by multilateral and national funds. Page 61 of 61