FOR OFFICIAL USE ONLY Report No: PAD4817 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF EUR 282.8 MILLION (US$300.0 MILLION EQUIVALENT) FROM THE IDA SCALE UP WINDOW TO THE REPUBLIC OF CÔTE D’IVOIRE FOR A SUSTAINABLE AND INCLUSIVE SECONDARY CITIES PROJECT March 9, 2023 Urban, Resilience And Land Global Practice Western and Central 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 February 28, 2023) Currency Unit = Euro (EUR) US$1 = EUR 0.942595910 FISCAL YEAR January 1 - December 31 Regional Vice President: Ousmane Diagana Country Director: Coralie Gevers Regional Director: Simeon Kacou Ehui Practice Manager: Sylvie Debomy Task Team Leaders: Camille Bourguignon-Roger, Vivien Deparday ABBREVIATIONS AND ACRONYMS ACD Urban Land Title (Arrêté de concession definitive) AFD French Development Agency (Agence française de développement) AGEROUTE Roads Management Agency (Agence de Gestion des Routes) ANAGED National Waste Management Agency (Agence Nationale de Gestion des Déchets) ANDE National Environment Agency (Agence Nationale de l’Environnement) ASA Advisory Services and Analytics AWPB Annual Work Plan and Budget BCEAO Central Bank of West African States (Banque Centrale des Etats de l’Afrique de l’Ouest) BOAD West African Development Bank (Banque Ouest-Africaine de Développement) CERC Contingent Emergency Response Component CIGN Geographic and Digital Information Center (Centre d’information géographique et numérique) COVID-19 Coronavirus Disease 2019 CPF Country Partnership Framework CSO Civil Society Organization DGDDL General Directorate for Decentralization and Local Development (Direction Générale de la Décentralisation et du Développement Local) DPIO Decentralized Project Implementation Office DA Designated Account EIRR Expected Internal Rate of Return ESCP Environmental and Social Commitment Plan ESF Environmental and Social Framework ESMF Environmental and Social Management Framework FA Financing Agreement FM Financial Management GDP Gross Domestic Product GHG Greenhouse Gas GPN General Procurement Notice GRID Green Resilient and Inclusive Development GRM Grievance Redress Mechanism GRS Grievance Redress Service IBRD International Bank for Reconstruction and Development IDA International Development Association IFR Interim Financial Report IGF General Inspectorate of Finance (Inspection Générale des Finances) IPCC Intergovernmental Panel on Climate Change IPF Investment Project Financing ISC Inter-Ministerial Steering Committee LAC Local Advisory Committee LMP Labor Management Procedures M&E Monitoring and Evaluation MCLU Ministry of Construction, Housing, and Urban Development (Ministère de la Construction, du Logement et de l’Urbanisme) MINHAS Ministry of Water and Sanitation (Ministère de l’Hydraulique, de l’Assainissement et de la Salubrité) MIS Ministry of Interior and Security NDC Nationally Determined Contributions NDP National Development Plan NPV Net Present Value NGO Non-governmental organization ONAD National Office for Sanitation and Drainage (Office National de l’Assainissement et du Drainage) PA Project Account PARU Urban Resilience and Solid Waste Management Project (Projet d’assainissement et de résilience urbaine) PCU Project Coordinating Unit PDO Project Development Objective PIM Project Implementation Manual PIP Priority Investment Plan PPSD Project Procurement Strategy for Development QII Quality Infrastructure Investments RPF Resettlement Policy Framework SCD Systematic Country Diagnostic SEA/SH Sexual Exploitation and Abuse/Sexual Harassment SEP Stakeholder Engagement Plan SPN Specific Procurement Notices TORs Terms of Reference UN United Nations UVICOCI Union of Cities and Municipalities of Côte d'Ivoire (Union des Villes et Communes de Côte d’Ivoire) WAEMU West African Economic and Monetary Union The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) TABLE OF CONTENTS DATASHEET ........................................................................................................................... 1 I. STRATEGIC CONTEXT ...................................................................................................... 8 A. Country Context................................................................................................................................ 8 B. Sectoral and Institutional Context .................................................................................................. 10 C. Relevance to Higher Level Objectives............................................................................................. 14 II. PROJECT DESCRIPTION.................................................................................................. 16 A. Project Development Objective ..................................................................................................... 16 B. Project Components ....................................................................................................................... 16 C. Project Beneficiaries ....................................................................................................................... 28 D. Results Chain .................................................................................................................................. 29 E. Rationale for World Bank Involvement and the Role of Partners .................................................. 29 F. Lessons Learned and Reflected in the Project Design .................................................................... 30 III. IMPLEMENTATION ARRANGEMENTS ............................................................................ 31 A. Institutional and Implementation Arrangements .......................................................................... 31 B. Results Monitoring and Evaluation Arrangements......................................................................... 32 C. Sustainability................................................................................................................................... 33 IV. PROJECT APPRAISAL SUMMARY ................................................................................... 33 A. Economic Analysis .......................................................................................................................... 33 B. Fiduciary.......................................................................................................................................... 34 C. Legal Operational Policies ............................................................................................................... 37 D. Environmental and Social .............................................................................................................. 37 V. GRIEVANCE REDRESS SERVICES ..................................................................................... 38 VI. KEY RISKS ..................................................................................................................... 38 VII. RESULTS FRAMEWORK AND MONITORING ................................................................... 41 ANNEX 1: Implementation Arrangements and Support Plan .......................................... 54 ANNEX 2: Economic Analysis ......................................................................................... 66 ANNEX 3: Climate Co-Benefits ....................................................................................... 72 ANNEX 4: Priority Investment Plan: Framework ............................................................ 80 ANNEX 5: Map .............................................................................................................. 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) DATASHEET BASIC INFORMATION BASIC_INFO_TABLE Country(ies) Project Name Cote d'Ivoire Sustainable and Inclusive Secondary Cities Project Project ID Financing Instrument Environmental and Social Risk Classification Investment Project P177062 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 30-Mar-2023 31-May-2029 Bank/IFC Collaboration No Proposed Development Objective(s) The Development Objective is to (i) improve access to green and climate resilient urban infrastructure and basic services, and (ii) strengthen local government capacity for participatory and climate risk-informed urban and economic planning in selected secondary cities Page 1 of 82 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Components Component Name Cost (US$, millions) Component 1: Developing Green and Climate Resilient Urban infrastructure in 250.00 Selected Secondary Cities Component 2: Providing Support to Local Governments in Selected Secondary Cities 30.00 Component 3: Project Management and Coordination 20.00 Component 4: Contingent Emergency Response 0.00 Organizations Borrower: Republic of Côte d'Ivoire Implementing Agency: Ministry of Water and Sanitation PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 300.00 Total Financing 300.00 of which IBRD/IDA 300.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Development Association (IDA) 300.00 IDA Credit 300.00 IDA Resources (in US$, Millions) Guarantee Credit Amount Grant Amount SML Amount Total Amount Amount Cote d'Ivoire 300.00 0.00 0.00 0.00 300.00 Page 2 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Scale-Up Window 300.00 0.00 0.00 0.00 300.00 (SUW) Total 300.00 0.00 0.00 0.00 300.00 Expected Disbursements (in US$, Millions) WB Fiscal Year 2023 2024 2025 2026 2027 2028 2029 Annual 0.00 26.98 31.33 39.89 57.46 67.75 76.59 Cumulative 0.00 26.98 58.31 98.20 155.66 223.41 300.00 INSTITUTIONAL DATA Practice Area (Lead) Contributing Practice Areas Agriculture and Food, Education, Health, Nutrition & Urban, Resilience and Land Population, Social Sustainability and Inclusion 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 Moderate 3. Sector Strategies and Policies Moderate 4. Technical Design of Project or Program Substantial 5. Institutional Capacity for Implementation and Sustainability Substantial 6. Fiduciary Substantial 7. Environment and Social Substantial 8. Stakeholders Moderate 9. Other Substantial Page 3 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) 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 Environmental and Social Standards Relevance Given its Context at the Time of Appraisal E & S Standards Relevance Assessment and Management of Environmental and Social Risks and Impacts Relevant Stakeholder Engagement and Information Disclosure Relevant Labor and Working Conditions Relevant Resource Efficiency and Pollution Prevention and Management Relevant Community Health and Safety Relevant Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Relevant Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional 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). Page 4 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Legal Covenants Sections and Description FA, Schedule 2, Section I, A, 2: The Recipient shall: (a) no later than one (1) month after the Effective Date, establish a new committee (“Inter-Ministerial Steering Committee” or “ISC”) under the authority of its Prime Minister, and thereafter maintain it throughout the period of implementation of the Project with terms of reference, composition and resources acceptable to the Association. Without limitation to the foregoing provision, the ISC shall (i) be responsible for the provision of overall strategic guidance to the Project, the approval of Annual Work Plans and Budgets, and coordination among stakeholders; and (ii) include representatives of the Recipient’s line ministries and specialized agencies involved in the implementation of the Project. Sections and Description FA, Schedule 2, Section I, A.3 (a): The Recipient shall designate and charge the PARU PCU (“PCU”), under MINHAS, with overall responsibility for coordination and implementation of the Project: with this respect, the Recipient shall ensure that no later than one (1) month after the Effective Date, the mandate of the PCU is expanded to also include the Project and that the contracts of the PCU staff working on the Project is amended as needed to cover their services in connection with the Project for a term commensurate with the period of implementation of the Project. Sections and Description FA, Schedule 2, Section I, B.1 (d): If during Project implementation, the Recipient decides to use its military or security forces, the Recipient shall prior to any involvement of its military and/or security forces in the carrying out of Project activities, send a written notice to the Association (in accordance with Section 11.01(b) of the General Conditions) communicating such decision, including the name of the military or security unit. Sections and Description ESCP: A draft SEA / SH Prevention and Management Action is included in the disclosed ESMF. The Plan shall be refined, disclosed, consulted upon, and adopted no later than 120 days after the Effective Date. Sections and Description FA, Schedule 2, Section I, A.3 (c) (B): The Recipient shall recruit, from a date not later than three (3) months after the Effective Date, and thereafter maintain the following additional staff to strengthen the PCU (in addition to the key staff currently based in Abidjan): a procurement specialist, a financial management specialist, a monitoring and evaluation specialist, an environmental specialist, a social development specialist and others as may be mentioned in the ESCP, a civil engineer and an urban development specialist. Sections and Description ESCP: Three (3) months after the effective date, additional staff (including an environmental specialist, a social development specialist, and a gender specialist) will be recruited to strengthen the PCU and maintained throughout the implementation of the project, as outlined in the Financial Agreement. Sections and Description ESCP: Establish and operationalize the Project GM prior to carrying out project activities and maintain and operate the mechanism throughout Project implementation. Page 5 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Sections and Description ESCP: The SMP shall be developed, consulted upon, and adopted before the carrying out of the Project activities, and thereafter implement the SMP throughout Project implementation. Sections and Description ESCP: Submit the respective RAP for the Association’s prior review and no objection, adopt, and disclose the RAP, and once adopted, implement the respective RAP, including ensuring that before taking possession of the land and related assets, full compensation has been provided and displaced people have been resettled and moving allowances have been provided. Conditions Type Financing source Description Effectiveness IBRD/IDA FA, Article IV, 4.01 a): the Recipient has recruited a Manager for the Decentralized Project Implementation Office (“DPIO”) in Korhogo, in accordance with Section I.A.3(c)(i) of Schedule 2 to this Agreement. Type Financing source Description Effectiveness IBRD/IDA FA, Article IV, 4.01 b): the Recipient, through its PCU, has signed Project Implementation Support Framework Agreements with the Recipient’s following ministries and specialized agencies: Ministry of Construction, Housing and Urban Development, Ministry of National Education and Literacy, Ministry of Health, Public Hygiene and Universal Health Coverage, AGEROUTE ONAD, and ANAGED, all in accordance with Section I.A.3(d) of Schedule 2 to this Agreement Type Financing source Description Effectiveness IBRD/IDA FA, Article IV, 4.01 c): the Recipient has prepared and adopted the Project Implementation Manual (“PIM”), in accordance with Section I.B.1 of Schedule 2 to this Agreement. Type Financing source Description Disbursement IBRD/IDA FA, Schedule 2, Section III, B.1 (b): No withdrawal shall be made for expenditures under Category (2), unless and until: (i) the Recipient has provided at least one (1) resettlement action plan in connection with affected people as a result of activities to be implemented under Part 1 of the Project, in accordance with the provisions of the ESCP, in form and substance acceptable to the Association; and (ii) the Association has confirmed its agreement to allocate funds of the Credit to Category (2) for the financing of the expenditures to be incurred by the Recipient for the implementation of such Page 6 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) resettlement action plan. Page 7 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) I. STRATEGIC CONTEXT A. Country Context 1. Côte d’Ivoire’s economy has been relatively resilient throughout the COVID-19 pandemic. While economic growth fell from an average of 6.9 percent during 2017-2019, to 2 percent in 2020 (a real per capita decline of 0.6 percent), Côte d’Ivoire was among the best performing economies in sub-Saharan Africa.1 COVID-19 response measures resulted in the fiscal deficit rising from 2.3 percent to 5.6 percent of gross domestic product (GDP) between 2019 and 2020. Government expenditure increased from 17.3 percent to 20.7 percent of GDP between 2019 and 2020 and included the expansion of social services. The increase was also attributable to ongoing initiatives to expand universal health care, education, and access to water and electricity. Slow progress in efforts to mobilize domestic revenues continues to constrain the government’s ability to respond to shocks, with tax revenues remaining around 12 percent of GDP in recent years. Public debt rose steeply, from 41 percent of GDP in 2019 to 49.8 percent in 2020. 2. Although Côte d’Ivoire’s economy rebounded strongly from the COVID-19 pandemic in 2021, it faces headwinds from increased inflationary pressures and tightening international financial markets. Real GDP growth declined but remained positive at 2 percent in 2020 and recovered to 7 percent in 2021. Yet, the fiscal deficit and public debt increased over this period, by 2.8 and 4.5 percentage points of GDP. Inflation hit a 10-year high in 2021 because of supply chain disruptions and weather conditions. The impact of Russia’s invasion of Ukraine is putting additional strain on public finances. Côte d’Ivoire has tried to contain rising food and fuel prices through subsidies and price caps, the cost of which is estimated at nearly 1 percent of GDP in 2022. For 2022, real economic growth is set to slow to 5.7 percent (2.8 percent per capita) but is expected to reach 6.7 percent in 2023-2025. Notwithstanding these heightened global uncertainties, the government is rolling out its long-term development plan. 3. Côte d’Ivoire aspires to reach upper-middle income status by 2030, which would require sustaining rapid economic growth. The government has set ambitious goals for the decade, including achieving emerging market status by 2030, which would entail doubling the country’s GDP per capita compared to its 2020 level of US$1,736. To achieve this and ensure a more inclusive economic growth, the National Development Plan (NDP) for 2021-2025 lays out the main guiding principles and strategic pillars of development, namely attracting more private investment and transforming the economy towards greater productivity and value-added, while ensuring regional equity and inclusion. It also sets the government’s development objectives including accelerating the economic transformation, reducing poverty and inequality, and improving governance. Côte d’Ivoire will have to improve domestic resource mobilization and enhance the business environment, as well as the efficiency and allocation of public spending in education, healthcare, and rural development. 4. Although poverty declined in Côte d’Ivoire between 2011 and 2019, the incidence remains high, and the 2022 Poverty Assessment reveals significant spatial disparities. Between 2011 and 2019, Côte d’Ivoire’s poverty rate declined from 55.3 to 39.4 percent; much higher than other lower middle-income countries where the average poverty rate was only 12.8 percent. Poverty reduction has been uneven across the country. Poverty declined rapidly in the regions along the eastern border with Ghana and in the south 1According to the Macro Poverty Outlook consulted on October 2022, Côte d’Ivoire has been one of the fastest growing economies in Sub-Saharan Africa for almost a decade, with real GDP growth averaging 8.2 percent over 2012–2019 (5.7 percent in per capita terms). Page 8 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) while living conditions have significantly worsened along the western border with Liberia and Guinea. 2 In the north, 52.8 percent of the population is poor compared to 39.5 percent nationally. 5. Côte d’Ivoire also faces rising regional insecurity risks stemming from the ongoing crisis in the Sahel that could dampen the economic outlook. The number of violent attacks in Central Sahel has increased eight times since 2015. Porous borders and intense migratory flows render containing this threat to any country or area unlikely. In the last decade, terrorist groups have repeatedly assailed neighboring Mali and Burkina Faso, and Côte d’Ivoire has suffered several terrorist attacks targeting security forces and villages along these borders. Many living in proximity to these borders share history and participate in shared local economies, and may have the same political grievances – social contexts which are highly conducive to the spread of extremism and violence. The expansion of terrorism can be fostered by any number of factors, including rising poverty, growing unemployment, marginalization, infrastructure and basic services gaps, as well as a widespread perception that government disregards the needs and concerns of communities. Regional disparities and the sense among poor communities that their interests are unrepresented within government institutions can quickly become accelerants of escalating conflict, as can land disputes. Insecurity in neighboring countries can destabilize the northern part of Côte d’Ivoire and create additional fiscal pressures, as increased spending on security becomes even more necessary. Programs to address these sources of vulnerability and fragility, and spillover risks from elsewhere in the Sahel, warrant significant priority on the part of the government. 6. Strengthening the government’s capacity to deliver effective and inclusive public services, and supporting citizen engagement are paramount to enhance the social contract, as well as reinforce trust between citizens and the state. Côte d’Ivoire has made important efforts to bolster its governance framework through the establishment of accountability institutions and fighting against corruption.3 Nevertheless, further efforts are required to strengthen accountability in public financial management, as well as to enhance access to and the quality of public services throughout the country, and foster citizen engagement. Improving access to key public services such as education, health, transport, and electricity is critical to improve the quality of life and create economic opportunities for citizens who otherwise rely on more expensive and less climate-friendly alternatives. In this context, it is essential to consolidate efforts to accelerate access to public services to all citizens, in particular to those located in lagging regions such as northern and western Côte d’Ivoire. Strengthening the bargaining interface between the state and citizens, and among citizens, could also create space to peacefully address the social breakdown. This could be achieved by establishing and deepening citizen engagement in the definition, planning and implementation of public policies and programs. 7. In Côte d’Ivoire, climate change is expected to exacerbate the impacts of extreme weather events and natural disasters, especially floods. In terms of vulnerability to climate change, Côte d’Ivoire ranks in the bottom quintile compared to other lower middle-income countries, and it also scores relatively low in terms of climate change readiness.4 Considering demographic growth and climate change projections, the country’s high climate risk level is quickly escalating, mainly driven by vulnerability and the lack of coping 2 40 percent of the population in extreme poverty lives in the western regions. World Bank Group Côte d’Ivoire Country Partnership Framework (CPF) for the period FY 23-27 (Report No. 179288) 3 Recent initiatives include the creation of a Ministry in charge of good governance and anti-corruption in 2021, the creation of the digital platform System for the Prevention and Detection of Acts of Corruption and Assimilated Offenses in 2022, and the creation of three supreme judicial institutions (i.e., Court of Auditors, Court of Cassation, and Council of State). 4 Chen, C., Noble, I., Hellmann, J., Coffee, J., Murillo, M., & Chawla, N. (2015). University of Notre Dame global adaptation index country index technical report. ND-GAIN: South Bend, IN, USA Page 9 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) capacity.5 The semi-arid northern regions, including Savanes and Zanzan, are highly exposed to extreme heat events, which are likely to intensify given an anticipated rise in mean temperatures of up to 3°C by the end of the century under a Shared Socioeconomic Pathways 5-8.5 climate change scenario. At the same time, precipitation is projected to increase and become temporally more concentrated, making wet seasons wetter and dry seasons drier.6 Internal climate migration modelling indicates high levels of climate in- migration toward large secondary cities such as Korhogo and Man, which further increases their exposure and vulnerability to climate change.7 B. Sectoral and Institutional Context 8. Côte d’Ivoire is one of the most urbanized countries in sub-Saharan Africa, with 52 percent of its population residing in urban areas, compared to an average of 41 percent for the region .8 The country continues to urbanize rapidly, at a rate of approximately 3.4 percent a year. The share of the Ivoirian population living in cities is expected to reach 60 percent by 2025, and to exceed 70 percent by 2050. Côte d’Ivoire is also characterized by the economic dominance of Abidjan, which has an estimated population of 5.6 million inhabitants, or 20 percent of the country’s total population and over 40 percent of its urban dwellers. 90 percent of the country’s formal enterprises are in Abidjan. With 550,000 inhabitants, Bouaké is the second largest city, followed by Daloa (270,000), Korhogo (375,000), Yamoussoukro (210,000), San Pédro (180,000), Gagnoa (170,000), Man (197,000), and many smaller cities. Abidjan, San Pédro, and Yamoussoukro are Côte d’Ivoire’s global connectors: Urban economies that are hubs of innovation, increasing returns to scale, and global competitiveness. The country also has six regional connectors, more localized urban economies that are essential centers of transport and regional trade, namely Bouaké and Korhogo (north corridor), Daloa and Man (west corridor), and Adzopé and Abengourou (east corridor). Around 20 other cities serve as domestic connectors, generating internal economies of scale that play a central role in realizing the agricultural potential of their respective regions.9 9. Boosting the development of Côte d’Ivoire’s secondary cities is critical to reduce poverty, promote shared prosperity, and help the country attain middle-income status. Sixty percent of Côte d’Ivoire’s urban population and 30 percent of its total population reside in secondary cities. Yet, while Abidjan is experiencing rapid urbanization accompanied by strong economic development, the same trend is not evident among secondary cities. The Autonomous District of Abidjan alone accounts for 80 percent of formal jobs and over 60 percent of the country's economic activity. By contrast, secondary cities have not been well-integrated into the national economy and fall significantly behind. This is of particular concern for secondary cities in the northern and western regions, where years of civil war, political unrest, and lack of investment in key infrastructure have kept cities and urban areas less efficient and prosperous. These regions are experiencing a higher incidence of poverty, a lower Human Development Index, limited economic opportunities, and increased fragility. 10 Access to education, life expectancy, food security, and gross domestic product per capita are all lower than the national average.11 Major constraints include years 5 Côte d’Ivoire is among the 15 countries classified as “high risk” and where the risk level is quickly growing. Source: European Union (2022) INFORM Risk Index: Climate Change Tool. https://drmkc.jrc.ec.europa.eu/inform-index/INFORM-Climate- Change/INFORM-Climate-Change-Tool 6 World Bank Climate Change Knowledge Portal: Côte d’Ivoire. 7 World Bank (2021) Groundswell Africa: Internal Climate Migration in West African Countries 8 United Nations Population Division. World Urbanization Prospects: 2018 Revision. 9 World Bank (2015) Côte d’Ivoire Urbanization Review: Diversified Urbanization 10 Almost 53 percent of the northern population is considered poor, compared with 39.4percent nationally 11 Northern Côte d’Ivoire has on average up to 4.6 years of schooling, compared to 6.4 for the rest of the country Page 10 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) of underinvestment in public infrastructure and basic services, limited access to finance, costly and unsafe transportation, and insufficient local government capacity to plan and control urban and economic growth. 10. Investing in green infrastructure and the sustainable development of Côte d’Ivoire’s secondary cities is critical to reducing their carbon footprint. Most urban areas are heat islands: they have less vegetation than natural landscapes, and have urban structures that absorb and re-emit solar heat. Urban areas are also major greenhouse gas (GHG) emitters, and are responsible for around 70 percent of global anthropogenic GHG emissions. Because they are still in an early stage of urbanization with low population density, secondary cities in Côte d’Ivoire are in a unique position to minimize their carbon footprint as urban development advances. 12 This will require sound urban planning to minimize urban sprawl, prevent the removal of trees and vegetation, plant trees and greenery, create public parks, and encourage the adoption of green building and infrastructure standards. Unique opportunities are available to secondary cities to grow in ways that are climate-friendly and respectful of the environment. Existing public squares, recreational areas, schools, and other facilities have often been constructed without adequate consideration to green building design. They can be retrofitted or renovated to reduce their carbon footprint. This is the case with many public schools that lack any form of vegetation. 11. As Côte d’Ivoire’s secondary cities continue to grow, it is critical to increase their climate change resilience. Small and medium cities are particularly vulnerable to extreme weather and climate change- related natural hazards. This is, in part, due to the lack of sound planning, limited control exerted over urban growth, and lack of investments in basic urban infrastructure. These often result in the informal occupation of risk prone areas and other areas unsuitable for urbanization. The effects of climate change are expected to differ throughout the country. In northern Côte d’Ivoire, climate change is anticipated to make rainfall patterns more erratic and unpredictable, with longer dry periods, and more intense and extreme rainfall, exacerbating flood risks.13 Secondary cities are particularly ill-prepared to cope with floods. While the southern part of the country is more prone to floods and costal erosion, these events can also take place in the north, such as in Korhogo in 2007. Vegetation, which plays a role in regulating the local hydrological cycle, has been receding over decades, creating conditions for soil erosion and landslides. Temperatures in Côte d’Ivoire are projected to increase by 3 °C by the end of the century, with more frequent heatwaves. 14 This poses serious risks for urban areas, where alternations between extended droughts and flood events will lead to the faster deterioration of infrastructure and buildings. These alternating periods of drought and extreme rainfall also threaten food security, rendering local agricultural economies more vulnerable to shocks and undermining cities’ potential to serve as engines of growth. 15 12. Secondary cities’ limited capacity to plan and regulate urban development and address uncertainties regarding questions over land tenure has meant that urban spatial growth has substantially exceeded investment in basic public services. Local governments often lack updated planning instruments, and urban sprawl continues, with cities expanding into new “village subdivisions” – areas subdivided by customary authorities, families, or individuals without necessarily following existing plans and regulations. These subdivisions are generally delineated by land surveyors who should normally submit the plans for a 12 World Bank (2022) From Surviving to Thriving: Making Cities Green, Resilient, and Inclusive 13 Côte d’Ivoire is in a transition zone between humid equatorial climate to the southeast and drier tropical conditions to the north, heavily influenced by the West African Monsoon, which brings moisture during the wet season, with recurring extreme rainfall episodes. 14 Côte d’Ivoire (2017) Troisième communication nationale à la Convention Cadre des Nations Unies sur les changements climatiques 15 Dodman, D. et al. (2022) Cities, Settlements and Key Infrastructure. In: Climate Change (2022) Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, the United Kingdom. Page 11 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) subdivision to local governments for approval before they are forwarded for final approval by the Ministry of Construction, Housing, and Urban Development (Ministère de la Construction, du Logement et de l’Urbanisme, MCLU). However, the commercialization and occupation of urban lots in village subdivisions often precede any such formal approval, resulting in the creation of fragmented and poorly connected urban areas that do not comply with regulations, and suffer from poor access to basic services and infrastructure. So long as these land subdivisions are not regularized, their residents cannot obtain an Urban Land Title (Arrêté de Concession Définitive, ACD), the legal proof of land ownership in urban areas. Residents may rely on alternative mechanisms such as certificates issued by traditional and local authorities, but these documents provide limited protection in case of disputed claims. 13. Although there are differences in service provision between secondary cities, all require significant investments in roads, drainage, and solid waste management. Secondary cities generally have only a small part of their streets paved as investments have not kept up with the urban expansion. This subsequently increases the cost of transportation and leaves cities more vulnerable to higher levels of precipitation associated with climate change. In Korhogo, Côte d’Ivoire’s fourth largest city and the largest city in the north, only 8 percent of the roads are paved, one-quarter of the city has public lighting, while 3 percent of the houses – i.e., in the city center – are legally provisioned with water, electricity, and roads. In Odienné, 80 percent of the population has access to safe water, but this figure drops to 62 percent in Korhogo and below 50 percent in Ouangolodougou. The absence of functioning drainage systems is another source of concern, as these are critical infrastructure to control runoff water, prevent flooding, and protect assets. Because most secondary cities lack sanitation and sewage infrastructure, untreated gray waters are often discharged informally without being treated. Solid waste management is another matter requiring urgent attention. Many secondary cities have neither efficient solid waste management collection systems nor sanitary landfills. Garbage ends up in a multitude of unauthorized dumpsites without being treated and with no opportunities for recycling, which stands in the way of achieving the 13-percent reduction in GHG emissions from the solid waste management sector envisioned in Côte d’Ivoire’s 2022 Nationally Determined Contributions (NDC).16 This applies to large secondary cities such as Korhogo, Ferkessédougou, and Man as well. 14. Secondary cities also require important investments in other key public infrastructure and services, notably those related to education, health, and economic activities. Public school infrastructure is a major determinant of the learning environment.17 Many public schools in urban areas are too dilapidated, overcrowded, and poorly equipped to offer a safe or inclusive learning environment. In secondary cities in the north public schools are often built on large parcels, and investments are urgently required to build additional classrooms, canteens, latrines, leisure areas, and fences. Public schools lack greenery and trees and do not meet environmental standards. Health infrastructure is likewise inadequately equipped and severely overcrowded, while local urban health facilities are the primary sources of public health services for local population. Maternity facilities, for instance, are sometimes used for both giving birth and providing general health services, owing to a lack of physical space. Lastly, economic infrastructure such as wholesale, retail and cattle markets play a key economic role and are a revenue source for local governments. However, they are often overcrowded, and do not meet safety and health standards. 15. Most secondary cities are heavily reliant on agriculture, and it is essential to support sustainable practices, improve market infrastructure, and undertake activities aimed at transforming the sector. The 16 Côte d’Ivoire (2022). Contributions Déterminées au niveau National Côte d’Ivoire. 17 Barrett et al. (2019). The Impact of School Infrastructure on Learning: A Synthesis of the Evidence. Washington, DC. The World Bank. Page 12 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) economies of secondary cities are dominated by the tertiary sector, with a focus on basic economic services such as markets and banks. Economic activities in the industrial sector are very limited and formal employment opportunities are scarce. Youths are caught between limited opportunities in rural areas and informal urban activities.18 Women often work in food systems such as peri-urban vegetable production, small-scale processing of agricultural products, and local trading and services. The potential for economic transformation is limited or absent altogether, with activities limited to the production and commercialization of raw products such as mangoes, cashews, and shea nuts. Market infrastructure is limited and, where existent, is often inadequate, poorly maintained, overcrowded, and does not comply with basic hygiene and security requirements.19 As a result, agricultural supply chains face serious challenges. Most of Côte d’Ivoire’s secondary cities are unable to support the realization of the full agricultural potential of their regions, and their role as regional and domestic connectors remains limited. Unleashing secondary cities’ economic potential requires significant investments in market infrastructure and local food systems.20 16. While local governments have a significant part in supporting urban development and responding effectively to citizens’ basic needs, their ability to do so is constrained by an incomplete decentralization process, which left them with limited autonomy, financial resources, and human capacity. Since the 1980s, Côte d’Ivoire has adopted a large body of laws and regulations on decentralization. For instance, Law no.2003-208 of July 7, 2003, defines 16 areas of responsibility to be delegated to local governments, including nursery and primary schools, health centers, roads and networks of communal interest, water supply and sewage, waste pre-collection, as well as urban master plan and land use planning. However, the adoption of this law was followed by years of civil and political conflict, and the responsibility for urban development remained centralized within ministries and specialized agencies. In 2014, Côte d’Ivoire adopted law 2014-451 on the general organization of the territorial administration, which specifies that regions and local governments are the main agents of decentralization. This law details local governments’ missions, including ensuring the participation of populations in the management of local affairs; promoting and implementing local development; improving living conditions; as well as land and environmental management. These broad missions allow local governments to intervene in a large range of services, all within the administrative purview of the Ministry of Interior and Security’s General Directorate for Decentralization and Local Development (Direction Générale de la Décentralisation et du Développement Local, DGDDL). Yet, the effective decentralization of public service delivery functions and authority to local governments did not occur in practice. Ambiguities remain regarding the mandates of the subnational governments; local governments’ capacity to generate their own revenues is limited; the transfers of financial resources from the central to local governments are inadequate and sporadic; and local governments are unable to recruit and retain staff with the required experience and skills. 21 17. In view of Côte d’Ivoire’s limited decentralization, ministries and specialized agencies have retained a central role in supporting urban development. The MCLU is responsible for preparing urban master plans and detailed urban plans, formalizing urban subdivisions, and issuing ACDs. While local 18 Korhogo and Ferkessédougou, respectively 74 percent and 64 percent of 15- to 24-year-olds are unemployed. 19 Market infrastructure has only slowly changed in response to urban growth because they are hampered by major constraints such as the lack of density, a large part of the population living in informal settlements, the lack of scale effects (i.e., cities are a collection of neighborhoods having little connection to a coherent whole), and expensive living costs. It is estimated that the cost of living and doing business in African cities is 30 percent higher than in other regions. 20 World Bank (2021) Côte d’Ivoire Northern Cities: Investing in Cities to Fight Fragility and Support Territorial Development. 21 Even large secondary cities have limited financial resources, 80 to 85 percent of which are used for payroll expenditures. This leaves few resources available to invest in infrastructure and maintenance Secondary city budgets are typically between $1 and $7 per capita Page 13 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) governments are responsible for local roads construction and maintenance, they usually can only afford to build unpaved roads without sidewalks and drainage systems. Local governments rely on external support, mainly from the Roads Management Agency (Agence de Gestion des Routes, AGEROUTE), which prioritizes the national road network and main urban roads.22 Regarding drainage and sanitation infrastructure, these are generally built by AGEROUTE or the National Office for Sanitation and Drainage ( Office National de l’Assainissement et du Drainage, ONAD), while local governments focus primarily on cleaning road drainage gutters. The National Waste Management Agency (Agence Nationale de Gestion des Déchets, ANAGED) is responsible for solid waste management, which is normally contracted out to private firms. However, ANAGED operates in a limited number of cities, and many secondary cities simply lack any structured solid waste management systems. Regarding education infrastructure, the construction of schools is the responsibility of the Ministry of National Education and Literacy which delegates maintenance to School Management Committees comprising teachers and parents’ representatives. Local governments play an advisory role in these committees. As for health infrastructure, local governments are responsible for constructing local health centers, and they generally receive dedicated subsidies for this purpose. However, the staffing and daily operation of these health centers fall under the Ministry of Health and Public Hygiene’s (Ministère de la Santé et de l’Hygiène Publique) responsibility. Lastly, local governments are responsible for building and maintaining markets, though large market infrastructure may involve the Ministry of Trade, Industry and Promotion of Small and Medium Enterprises (Ministre du Commerce, de l'Industrie. et de la Promotion des Petites et Moyennes Entreprises). Other key institutions involved in urban development include the DGDDL; the National Environment Agency (Agence Nationale de l’Environnement, ANDE); the National Office of Civil Status and Identification; and the Union of Cities and Communes of Côte d'Ivoire (Union des Villes et Communes de Côte d’Ivoire, UVICOCI). 18. In the north in particular, secondary cities have a vital role to play in addressing security concerns. Much of this will consist of providing access to basic services and encouraging community participation through more inclusive institutions. They also have an important role in facilitating and promoting job creation. Cities in neighboring countries – including Sikasso in Mali; and Boucle du Mouhoun, Hauts-Bassins, and Cascades in Burkina Faso – are experiencing structural fragilities which are likely to spread to Côte d’Ivoire. Instability in Burkina Faso has led to a regrouping of the jihadist movements in northern Côte d’Ivoire, particularly in the Comoé forest between Bouna and Ferkessédougou. Other vulnerable areas include Tengréla near the border with Mali, and Ouangolodougou along the border with Burkina Faso. Boundiali and Korhogo are vulnerable as well. The number of conflicts along the northern border with Mali and Burkina Faso have increased significantly. Clashes between farmers and herders are also a source of concern, particularly in the areas around Bouna. Northern Côte d’Ivoire is part of the Sahel’s Central Transhumance Corridor, and has become a destination for stranded herders that is an important part of their adaptation strategy. Over recent years, a variety of stressors, including some attributable to climate change, have intensified competition over land and water resources in northern Côte d’Ivoire. C. Relevance to Higher Level Objectives 19. The Project will contribute to Côte d’Ivoire’s NDP 2021-2025, which aims to support the development of productive, competitive, green, inclusive, and resilient cities. The NDP identifies the development of secondary cities as a priority to improve economic opportunities for people living outside of Abidjan. The plan seeks to balance regional development, support environmental preservation, and fight 22Observations made during project preparation show that between 5 and 15 percent of the urban roads are paved in the main secondary cities of northern Côte d’Ivoire. Page 14 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) against climate change. The Project will support the goals set in Côte d’Ivoire’s 2022 NDC to invest US$12 billion in adaptation measures, and to GHG emissions by 30.4 percent by 2030. 20. The Project fits within the Main Pathways of the 2022 update of the Côte d’Ivoire Systematic Country Diagnostic (SCD), which identifies untapped opportunities to use secondary cities to stimulate the economies of rural areas through regional integration and territorial development. The Project’s focus on urban agriculture is consistent with the priorities set under Main Pathway I: Improving agricultural productivity and boosting rural development. The proposed investment in public educational and health facilities will support Main Pathway III: Human capital development through better social spending. 21. The Project is aligned with the World Bank Group Côte d’Ivoire Country Partnership Framework (CPF) for the period FY23-27 (discussed by the Board of Executive Directors on February 2, 2023, Report No. 179288). One of the objectives of the CPFs second High-Level Outcome is to support the development of sustainable cities for inclusive growth. The CPF stresses the importance of supporting the sustainable development of Côte d’Ivoire’s secondary cities to enable all regions to contribute to, and benefit from, national economic progress. The CPF proposes a phased approach, starting with a limited number of cities in the northern and western regions to counter the Sahel security crisis’ spillover effects. 22. The Project will support the World Bank Group’s 2021-2025 Climate Change Action Plan in contributing to Côte d’Ivoire’s efforts to develop, finance, and implement solutions for cities that reduce emissions, build resilience, and promote shared prosperity. The Project is aligned with the Adapt-Connect- Transform goals of the World Bank Group’s 2021-2025 Western and Central Africa Region Priority: Supporting a Resilient Recovery, including Goal #4 Ramp Up Climate Resilience, which state that efforts should focus on resilient green cities by enabling urban transition and transformation toward resilient low- carbon growth and green technology. Project activities are intended to promote transformational and sustainable impacts on communities, by prioritizing people-centered interventions that contribute to making secondary cities, Green, Resilient, Inclusive, and more Competitive in accordance with the World Bank’s Green, Resilient, and Inclusive Development (GRID) framework and goals. 23. The Project will support the Sustainable Development Goal 11’s objective to make cities inclusive, safe, resilient, and sustainable. Lastly, the Project builds upon the findings and recommendations of several Advisory Services and Analytics (ASA), including the Côte d'Ivoire Urbanization Review: Diversified Urbanization (World Bank, 2015, P147762), the ASA Côte d’Ivoire Northern Cities: Investing in Cities to Fight Fragility and Support Territorial Development (World Bank, 2021, P175630), and the flagship report From Surviving to Thriving: Making Cities Green, Resilient, and Inclusive (World Bank, 2022). 24. The Project is aligned with the World Bank Group’s Global Crisis Response Framework (World Bank, 2022). Under Component 1, most of the Project funds will finance investments in green and climate- resilient urban infrastructure, which is consistent with Pillar 3’s objective to help strengthen resilience, while support provided to urban agriculture planned under Subcomponent 2.3 will contribute to Pillar 1’s objective to respond to food insecurity and protect the vulnerable. Subcomponents 2.1 and 2.2 are also aligned with the objectives of Pillar 3. Page 15 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) II. PROJECT DESCRIPTION A. Project Development Objective 25. The Project Development Objectives (PDO) are to (i) improve access to green and climate resilient urban infrastructure and basic services; and (ii) strengthen local government capacity for participatory and climate risk-informed urban and economic planning in selected secondary cities. 26. The achievement of the PDO will be measured by four key results: - People provided with improved urban living conditions23 (Number) - People provided with improved urban living conditions - female (Number) - Beneficiaries reporting that Project investments reflected their needs (Percentage) - Female beneficiaries reporting that Project investments reflected their needs (Percentage) - Local governments with new/updated climate risk-informed urban master plans prepared through a participatory process (Number) - Local governments with new/updated local development plans prepared through a participatory process (Number) B. Project Components 27. It was agreed with the Government that the Project will initially target eight secondary cities. Depending on future government priorities and the availability of funds, the Project may be extended to additional cities. The cities initially targeted are Bouna, Boundiali, Ferkessédougou, Korhogo, Man, Odienné, Ouangolodougou, and Tengréla. The selection of these cities follows the recommendations of the World Bank Group Côte d’Ivoire’s CPF (FY23-27) to adopt a phased approach, starting with a limited number of cities in the northern and western regions to counter the Sahel security crisis’ spillover effects. These regions were selected because they fall behind the rest of the country, including in terms of poverty, Human Development Index, and economic opportunities. The rationale for the Project’s strong focus on northern Côte d’Ivoire is that this region is directly affected by security and stability concerns along the borders with Burkina Faso and Mali. Korhogo, Ferkessédougou, Boundiali, Odienné, Tengréla, and Ouangolodougou are the largest cities in northern Côte d’Ivoire, with a combined population of 900,000. Their populations range from around 30,000 inhabitants in Bouna, to close to 375,000 inhabitants in Korhogo. While Bouna is the eleventh largest city in the north, it was selected because it is the largest urban center in the northeastern region of Bounkani, which borders Burkina Faso and Ghana, and is particularly affected by ongoing conflicts in the Sahel. Man is the largest city in western Côte d’Ivoire, with around 200,000 inhabitants. 24 It is a regional connector and an important center of transport and regional trade with Guinea and Liberia. 28. The Project aims to have a transformational impact on secondary cities, making them more inclusive, greener, and more resilient to climate change. Infrastructure and services need to be significantly upgraded to improve the living conditions of their populations, provide job opportunities, and leverage the cities’ role as drivers of economic growth. The proposed spatial approach consists in targeting specific areas such as city centers and selected poor neighborhoods to avoid lock-in effects of less dense, and fragmented 23 This is a Corporate Result Indicator with a standardized name. However, this indicator measures the number of people benefiting from new or rehabilitated green and climate-resilient urban infrastructure financed under the Project. 24 2021 census of Côte d’Ivoire’s National Institute of Statistics Page 16 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) urban forms, which are raising the cost-of-service delivery, and are preventing cities from achieving agglomeration economies. Scattered and fragmented cities also generate higher risks, energy consumption, and transport induced GHG emissions. Therefore, the Project will help developing and densifying city centers, upgrading access to the denser neighborhoods, improving soft mobility, developing access to public facilities, and establishing well-functioning drainage and solid waste management systems. Incorporating greening strategies and climate resilience into urban planning and infrastructure design is also paramount in view of these cities’ vulnerability to climate change and its consequent impact on poverty. 29. Proposed infrastructure investments can be grouped into three broad areas of intervention: (i) Urban roads and public spaces: Well-connected street grids bring connectivity as well as access to jobs and markets. However, only 5 to 15 percent of the cities’ roads are paved. The Project will finance the construction or renovation of approximately 70 km of urban roads, representing about 3 percent of these cities’ total road networks. The focus will be on improving all-weather access to city centers, dense areas, key public facilities, and poor neighborhoods. Attention will be given to improving safety at accident-prone intersections, soft transportation (sidewalks, bike lanes, etc.), and tree planting along roadsides to limit rain flows and improve walkability; (ii) Drainage and solid waste management: The Project will finance urban drainage and nature-based solution infrastructure. The focus will be on restoring, improving, and protecting the drainage system’s capacity to increase resilience to floods. Priority will be given to lowlands to safeguard and support urban agriculture, parks, and green belts to limit urban sprawl. In four cities, solid waste management will complement these investments. (iii) Public facilities: The focus will be on the rehabilitation and construction of public health, education, recreational, and economic facilities, such as primary, secondary, and high schools; nurseries; local health centers; parks; squares; public markets; and cattle markets. 30. Project investments will encourage green, resilient, and compact urban growth. Investments in nature-based solutions will be prioritized to support carbon sequestration, reduce the impact of natural hazards (e.g., floods, droughts, landslides, and extreme heat), while improving the quality of life through preserving and creating green spaces that provide shade and cool cities. Project investments in drainage and integrated storm water management will be adopted where possible. The creation of green spaces along canals, as well as the protection and restoration of existing green spaces that are deteriorated and are threatened by encroachment, are key to help to retain water during storm events. Reforestation and greening efforts will prioritize the use of indigenous species appropriate to the target regions. There will be three levels of intervention. At the city level, the Project will help protect and restore green belts (e.g., Ferkessédougou and Odienné) and riverbanks. It will also support the creation of green corridors and the protection of holly forests. At the neighborhood level, the Project will concentrate on the creation and preservation of parks and squares, as well as improving and protecting urban agriculture areas. At the infrastructure level, green designs will be of particular importance. For instance, the Project will finance roadside greening, and tree planting in school yards and public squares. These measures are expected to contribute to reducing the impact of heat waves, improving the quality of life, and positively affect public health. The Project will also focus on energy efficiency, notably through investments in energy-efficient street lighting, solar panels for public facilities, and energy efficient retrofits. Regarding investments in school renovation and construction, architectural designs will reflect the bioclimatic plans that are being developed by the Ministry of Education and Literacy, with the support of the French Development Agency (Agence française de développement, AFD). 31. Local governments identified a first series of priority investments, in close collaboration with local communities and stakeholders, ministries, and specialized agencies . Consultations were initiated in 2021 Page 17 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) with the support of the Project Coordination Unit of the Urban Resilience and Solid Waste Management Project (PARU, P168308) and resulted in a long list of over 800 investment proposals totaling over US$1.5 billion. This long list was established in a participatory manner, with local authorities and communities partaking in the process. Proposals were screened and prioritized considering their relevance regarding the PDO; number of beneficiaries; complexity; social and environmental impact; complementarity with investments under other projects financed by the government and development partners; and, importantly, overall transformational impact through spatial coherence and synergy. Available studies, plans, and strategies were reviewed to ensure that the proposed investments are aligned with local, regional, and national priorities. Public consultations were held to ensure that the investment proposals reflected the priority needs of local communities and other stakeholders. As a result, a short list of proposed integrated investments amounting to US$250 million was compiled, including urban roads; drainage, flood reduction, and water infrastructure; education and health infrastructure; green spaces; solid waste management; and economic infrastructure. This short list will be used to prepare a Priority Investment Plan (PIP) for each target city, which may be adjusted from time to time in agreement with the implementing agency and the World Bank. 32. With most of the target cities located in the north, the Project is being designed to complement a series of World Bank operations concentrating on northern Côte d’Ivoire. Investments in these operations total over US$1 billion. They include the Gulf of Guinea Social Cohesion Project (P175043) and the Northern Côte d’Ivoire Inclusive Connectivity and Rural Infrastructure Project (P178362); two operations that target rural areas. The Northern Côte d’Ivoire Electricity and Digital Access Project (P176776) and the Côte d'Ivoire Water Security and Sanitation Support Project (P177118, under preparation) focus on improving the availability of water resources, and increasing access to electricity and drinking water. The Secondary Cities Project will not finance any major investments in the electricity and water sectors, though funds will be earmarked for possible social connections to increase access to water in the target cities. The primary focus of the Secondary Cities Project will be inclusive and resilient development in urban areas through investments in green and climate-resilient urban infrastructure (e.g., schools, health centers, recreational facilities, and markets, as well as roads, water, sanitation, drainage, and solid waste management) and support to local governments in matters related to urban planning, land administration, municipal services, infrastructure management, and local economic development. These investments will complement those planned under other projects, notably the PARU (P168308), the Côte d'Ivoire Urban Water Supply and Sanitation Project (P156739), and the Strengthening Primary Education System Operation (P177800).25The Project will be structured around the following components: 25There is presently a shortfall of 16,000 classrooms to accommodate the students who are subject to compulsory education but cannot attend school because of lack of space, while demographic trends suggest the need to build 3,000 new classrooms per year. The Strengthening Primary Education System Operation plans to finance the construction of 3,000 new classrooms throughout the country, and the Sustainable and Inclusive Secondary Cities Project will support the construction of around 500 additional classrooms. Page 18 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Component 1: Developing Green and Climate Resilient Urban infrastructure in Selected Secondary Cities (US$250 million equivalent) 33. This component focuses on priority green and climate-resilient infrastructure to improve urban living conditions, promote local economic development, and foster social inclusion. These investments will be coupled with implementation support and technical assistance for Operation and Maintenance under Subcomponent 2.2. Greening strategies and climate resilience considerations will be embedded into all infrastructure design to reduce the carbon footprint of cities and ensure resilience to climate-related impacts. Sub-component 1.1: Quick Impact Investments (US$40 million equivalent) 34. This subcomponent will finance quick impact investments identified and selected in close consultation with local governments and communities. The objective is to encourage citizen engagement from project design to completion, while responding to the most pressing investment needs that do not trigger negative social and environmental impacts, including physical or economic displacement. A first batch of quick impact investments amounting to an estimated US$25 million were identified with the municipalities and communities during Project preparation. They were screened for environmental and social impacts and will be implemented as soon as the Project becomes effective. This first series of quick impact investments includes improvements to existing facilities such as public schools, health centers, maternities, dispensaries, stadiums, sports facilities, cultural centers, and youth centers. The Project will finance the: (i) renovation and construction works such as fences, classrooms, canteens, gender-segregated latrines, painting, maintenance of public buildings, and additions of energy efficient and climate-resilient design features; (ii) purchase of goods for the renovated facilities and to support local associations particularly women and youth associations; and (iii) tree planting, urban cleaning and anti-erosion measures. 35. Project funds will be earmarked for additional quick impact investments to be identified in collaboration with local governments and local communities throughout implementation. This subcomponent will encourage Project beneficiaries’ active participation. It will help develop ownership of the Project investments, and encourage stakeholders to maintain them after completion – a vital determinant of how sustainable these investments will ultimately be. This early engagement will also strengthen the government’s presence in areas that have suffered from a lack of public investment. Throughout Project implementation, the Project Coordination Unit (PCU) will carry out consultations with local communities and local governments at least once a year. This will help enhance citizens feedback and thereby interaction between the state and citizens, as well as deepening citizen engagement in the definition, planning, and implementation of public policies and programs. Wherever possible, Non- Government Organizations (NGOs) and Civil Society Organizations (CSOs) will be called upon to support local communities in carrying out Project activities. Subcomponent 1.2: Social and Economic Infrastructure (US$60 million equivalent) 36. This subcomponent will focus on the renovation and construction of social and economic infrastructure that is instrumental in fostering social cohesion, improving living standards, building climate resilience, protecting existing vegetation, and promoting local economic development. A list of proposed subprojects was identified during Project preparation with the support of local governments and communities, as well as ministries and public agencies in charge of the planning and construction of public social and economic infrastructure. Over 100 subprojects were proposed, amounting to around US$300 Page 19 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) million. They include among others: (i) construction and rehabilitation of health, education, and recreational facilities, notably primary and secondary schools, vocational education centers, public libraries, cultural centers, childcare centers, local health centers, maternities, and dispensaries; (ii) greening of public spaces; (iii) creation and protection of green spaces and protected areas such as parks, forests, and riverbanks; and (iv) investments in the rehabilitation and construction of economic infrastructure such as public markets, cattle markets, and bus stations. The project will also support the implementing agencies and local governments on how to design and build green and climate change-resilient social and economic infrastructure. Subcomponent 1.3. Roads, Sanitation, Solid Waste Management and Water Infrastructure (US$150 million equivalent) 37. This subcomponent will finance pressing investments needs in urban roads, sanitation, solid waste management and water infrastructure. It will focus on medium and large-scale infrastructure that aims to make cities greener, more livable and resilient, as well as support local food systems, while contributing to their emergence as regional and domestic connectors. It will finance among others: (i) the rehabilitation or construction of at about 70 km of urban roads to improve climate-resilient accessibility to social and economic public facilities, economic zones, as well as to enhance living conditions in poor neighborhoods. Urban road rehabilitation and construction will include sidewalks and pedestrian safety features, energy efficient public lighting, and tree planting. This aims at making safer and more walkable cities, while minimizing their carbon emissions and making them more resilient to climate-related shocks such as heavy rainfall.26 (ii) Preparation of sanitation and drainage master plans and the construction of about 30 km of stormwater channels and complementary Nature Based Solutions to reduce and manage floods. Boundiali , Ferkessédougou, Korhogo and Odienné already have or are in the process of adopting Sanitation and Drainage Master Plans, which will also be prepared for Bouna, Ouangolodougou, and Tengréla. (iii) Preparation of Communal Solid Waste Management Plans, implementation of cleanup campaigns, promotion of recycling and circular economy opportunities, establishment of solid waste management services, and the first phase of construction of sanitary landfills in Bouna, Boundiali, Odienné and Tengréla. No investments in solid waste management are planned in Ferkessédougou, Korhogo, or Ouangolodougou because these cities are already covered by the PARU. The Project may also finance (iv) water network extensions and social water connections contingent on the completion of new and rehabilitated water supply infrastructure planned in these cities under the Water Security Program for Results (P177118). Component 2: Providing Support to Local Governments in Selected Secondary Cities (US$30 million equivalent) 38. This component focuses on urban and economic planning, land administration, and strengthening the capacity of local governments to plan and manage local development. Funds are earmarked for urban agriculture to support local economic development. Sub-component 2.1: Urban Planning, Land Administration, and Municipal Services Activities (US$10 million equivalent) 39. The subcomponent will finance (i) the update and preparation of green and climate-resilient urban master plans and detailed urban plans. All target cities have Urban Master Plans that are outdated and do 26Côte d’Ivoire’s Road Management Agency, in consultation with local and regional authorities, identified 264 km of roads that need to be rehabilitated or constructed in the target cities for a total of US$ 314 million. Page 20 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) not adequately address green and climate-resilient concerns. The Project will finance the update of urban master plans for Bouna, Boundiali, Ferkessédougou, Korhogo, and Odienné. For Man, Ouangolodougou and Tengréla, new Urban Master Plans will be prepared as existing plans date from the 1980s. Master plans will be prepared with the active participation of local governments and citizens, including women, youth and vulnerable groups. Better planning capacity will help control urban growth with the aim to reduce the carbon footprint of the target cities and help keep development out from areas prone to climate hazards. This subcomponent will also support (ii) the regularization of urban subdivisions and land tenure, and housing policies. The approach adopted to regularize urban subdivisions will foster citizen’s engagement, favor flexible zoning approaches, acknowledge realities on the ground, and minimize involuntary resettlement. Activities will include a review of Côte d’Ivoire’s experience in issuing urban land titles ( Arrêtés de concession definitive), and feasibility studies on sites and services. The possibility of piloting systematic urban land tenure regularization will be explored. If piloting of urban land tenure regularization proceeds, then measures will be included in the process to ensure that women benefit. Such measures will include sensitization and awareness raising on women’s land rights. The participation of women in the process and the number of women with land tenure regularized will also be measured. Lastly, this subcomponent will finance (iii) the establishment of Geomatics Units in selected target cities through office renovation, acquisition of furniture, equipment and software, and data production. This activity will help local governments access the knowledge and tools to carry out an inventory of their assets. Sub-component 2.2: Capacity Development for Urban Management and Social Participation (US$8 million equivalent) 40. This subcomponent will strengthen local governments’ capacity to program, design, and manage urban infrastructure investments planned under Component 1 through: (i) Hiring of municipal engineers and urban development specialists to help plan and oversee Project activities and to strengthen local governments’ capacity to plan in a participatory manner, oversee, operate and maintain urban infrastructure; and (ii) Formulating and implementing annual training and technical assistance plans. These plans will be prepared annually and may be updated as mutually agreed between the PCU and the World Bank. They will address matters such as green and climate-resilient urban infrastructure, urban infrastructure operations and maintenance programming, solid waste management and circular economy, local economic development, urban planning, local tax administration, financial management, procurement, as well as social and environmental safeguards.27 This subcomponent will also support citizens engagement through (iii) Hiring community organizers and organization of citizens engagement activities. Community organizers will be responsible for carrying out consultations and other activities to help local communities engage in all aspects of project investments (e.g., needs assessment, investment planning, participatory planning, social accountability, and operation and maintenance). This will include activities to support youth mobilization, social inclusion, and social cohesion. Community organizers may be individual consultants, NGOs, or CSOs. They will be contracted by the Project to cover specific geographic areas and tasks (e.g., consultations, cultural and sports events to promote collaboration, team spirit, workshops; focus group discussions; communication and awareness campaigns; and community clean up days). Subcomponent 2.3: Local Economic Development (US$12 million equivalent) 41. Activities under this subcomponent will include: (i) Sustainable development of local food systems through a) infrastructure investments in market gardening areas, including the installation and/or 27 Matters related to social and environmental safeguards will include conflict resolution and Community-Based Early Warning Systems. Page 21 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) rehabilitation of water mobilization infrastructure, storage units and marketing structures; and b) studies, technical assistance, and training to help local producers integrate local and regional food systems (e.g. support to producer organizations, food standards and certifications, development of strategic partnerships); and (ii) Preparation of Local Development Plans and studies to support local economic development and private sector participation. All of the target cities already support community groups, job creation, small-scale business activities involved in urban service provision, and small-income generating businesses. These studies will help them to optimize and enhance coordination between these initiatives, as well as to better articulate joint initiatives between the local and the regional levels. They will provide inputs for the preparation of Local Development Plans prepared under Subcomponent 2.1. A series of studies will focus on the creation of Economic Activity Zones within the target cities. Component 3: Project Management and Coordination (US$20 million equivalent) 42. This component finances project management and coordination costs including: (i) staffing, training, equipment, and operating costs for expanding the PARU PCU which will implement the Project. The PCU is based in Abidjan and a Decentralized Project Implementation Office (DPIO) will be opened in Korhogo to host the project team responsible for implementing the Sustainable and Inclusive Secondary Cities Project; (ii) establishment of the Project monitoring and evaluation (M&E) system; (iii) development and implementation of all Environmental and Social Framework (ESF) activities, including a Grievance Redress Mechanism; and (iv) the implementation of campaigns for the sensitization of the public, citizen engagement, communications, and knowledge exchange. The PCU responsibilities will include overall project coordination, fiduciary, safeguards, M&E,28 preparation of audits (e.g., technical, financial, and ESF), and reporting. The Korhogo office will be staffed with a DPIO Manager, a Civil Engineer, an Urban Development Specialist, a Procurement Specialist, a Financial Management (FM) Specialist, a Social Specialist, an Environmental Specialist, a M&E Specialist, and a gender and social inclusion specialist. Safeguard Assistants and Municipal Engineers will support the implementation of and oversee compliance with Project activities. They will also help strengthen local governments’ capacity for infrastructure planning and management. Additional staff will be hired as needed. This component will finance the development of an economic analysis using real-time, field-based data. This component may also support the preparation of new operations. 43. This component may also finance compensation for land acquisition, loss of assets and revenues, and livelihood restoration. Per the Resettlement Policy Framework (RPF), resettlement costs are estimated at US$6.4 million. However, the estimate will need to be refined and reconfirmed during implementation once more details are available on all investments and locations. Provided that the World Bank is satisfied by the methodology applied by the Borrower to estimate the reasonable cost of implementing the RAP and the resulting estimated cost, the World Bank will process a formal request for authorization to use the funds of the Credit to the financing of such costs. If the authorization is provided by the World Bank, a corresponding reallocation of funds of the Credit among disbursement Categories will be processed as well. Component 4: Contingent Emergency Response (US$0 million) 44. A Contingent Emergency Response Component (CERC) is included in the Project structure pursuant to World Bank Policy Investment Project Financing. The Borrower may request the reallocation of Project funds to this component under the circumstances set forth under the World Bank Policy Investment Project 28 Including the tools and methods of the Geo-Enabling Initiative for Monitoring and Supervision (GEMS) Page 22 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Financing such as in case of (i) urgent need for assistance because of a natural or man-made disaster or conflict; or (ii) capacity constraints related to fragility or specific vulnerabilities. Corporate Commitments Gender 45. Urban infrastructure financed under the Project will be designed to reduce gender inequalities in access to education, health, and economic opportunities. The 2022 SCD update underlines that women in Côte d’Ivoire face constraints regarding access to education and high-quality maternal and reproductive health care, good jobs, assets, voice, and political decision making. Project investments in the renovation and construction of educational and health facilities will help close gender gaps in access to education and health care. The installation of gender-segregated latrines, fences, and public lights in schools, health centers and other locations is intended to increase public safety and to create a safer environment for women. Women are expected to be the primary beneficiaries of the support provided to urban agriculture under Subcomponent 2.3. Several project performance indicators will be disaggregated by sex and citizen satisfaction surveys will provide additional data specifying whether the respondent is male or female. The project’s results framework includes PDO-level indicators tracking the number of women provided with improved urban living conditions, and the number of women beneficiaries reporting that project financed investments reflected their needs. 46. Gender gap in women’s economic empowerment. In 2019 the female labor force participation rate was 44.6 percent compared to 62.6 percent for males. 80.4 percent of women were employed in jobs classified as vulnerable compared to 61.5 percent for men. Just 22 percent of women owned a business compared to 78 percent of men).29 Women’s activities are mostly based on agriculture, including local food- crop farming and women-friendly value chains such as shea butter. Agriculture employs 42.9 percent of the female workforce, followed by 31.6 percent in retail and 9.6 percent in domestic work.30 However, these activities are constrained by persistent issues such as tediousness of artisanal transformation processes (e.g., shea nuts into butter and other products), bad hygiene conditions, non-existent or poor work platform, inadequate equipment, and lack of certifications and norms to integrate regional and international markets. Thus women-owned microenterprises/associations are less productive than those owned by men, and this decreases their income-earning opportunities.31 In Project areas, the shea butter value chain is a women- led activity. Cooperative members are all women. To help address the gender gap in economic empowerment, the project will undertake specific actions to improve women-led activities by purchasing equipment, rehabilitating shea butter processing sites, improving access roads, and providing technical assistance to help them have required certifications. The project will invest in market gardening area improvement with specific facilities and infrastructure to improve accessibility, hygiene, sanitation, and water supply. The project’s impact on women’s economic empowerment will be monitored using an intermediate results indicator measuring the number of women certified to sell their shea butter products. 47. Gender gap in women’s access to maternal health facilities and services. Although some progress has been made in the past years to close the "first generation" gaps in health, issues remain. Many urban health facilities are overcrowded. Some maternity facilities are used for both childbirth and general health 29 World Bank gender data portal: https://genderdata.worldbank.org/countries/cote-d-ivoire 30 Kavita Kalsi and Dr Fofana Memon (2020) Women’s Economic Empowerment in Côte d'Ivoire. WOW Helpdesk Query 55. 31 World Bank (2021) Côte d’Ivoire Systematic Country Diagnostic Update: Countdown to 2030 Page 23 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) services, owing to a lack of space. Pregnant women do not always receive adequate attention because of congestion in the maternity and lengthy waiting time. These factors contribute to Côte d’Ivoire’s high maternal mortality rate. 617 women die per 100,000 live births due to pregnancy-related causes. A 2014 research article from the National Library of Medicine shows that the occurrence of any delay in obtaining access to appropriate health care is associated with increasing severity of maternal outcomes: 52 percent in potentially life-threatening conditions, 68.4 percent in maternal near-miss, and 84.1 percent in maternal death.32 To address this gap in access to maternal health services , the project will rehabilitate and expand existing health facilities – by adding dispensary to maternity and vice versa according to the situation- and will provide adequate equipment to allow women to have dedicated buildings for maternity care. The project’s impact on women’s access to health services will be monitored with an intermediate results indicator measuring a reduction in the waiting time for women seeking maternal health services in new or improved facilities. Climate Change 48. Improving climate resilience and adaptation. Climate and other environmental considerations are incorporated into the design of all infrastructure investments planned in the Project. These include investments in the renovation and construction of educational, health, recreational and commercial facilities, most of which were constructed with limited attention environmental impact and climate change- resilience. Public squares and other urban amenities are devoid of trees, while most roads are unpaved with no sidewalks or trees. Similarly, most public schools lack vegetation, though trees help moderate temperature and provide protection from the sun. This represents a missed opportunity to combat heat islands while making these areas safer and more attractive to the public. Project investments in the renovation and construction of urban infrastructure will focus on environmental sustainability and climate- change resilience. Project investments in urban roads and drainage will also make the target cities more resilient to climate change. These cities are all located in regions experiencing medium to high risk of river floods. Urban flood hazard is high medium in Man and medium to low in other project locations.33 The project will help target cities prepare for expected climate change impacts. Further, project’s investments in land administration are expected to have a range of positive effects for climate adaptation, such as enabling people to safely evacuate their land in case of disaster. 49. Mitigating climate change. The project will finance investments in solid waste management in Bouna, Boundiali, Tengréla and Odienné. An assessment of the GHG emissions resulting from these investments has been carried out and shows a gross emission over a 10-year economic lifetime of 638,119 t Co2 and a net emission of -199,997 t Co2. Project’s investments in solid waste management are aligned with the priorities of Côte d'Ivoire’s National Hygiene Policy (2022-2026) and National Solid Waste Management Program (2022-2026), which underline the importance of reducing the number of open dumping and burning sites – the method commonly used in target cities to dispose of solid waste – and investing in methane gas management systems to reduce GHG emissions. Access and collection roads will be rehabilitated. This will help to improve trucks' fuel efficiency and optimize travel distances for solid waste transport. Finally, all investments in infrastructure undertaken in the Project will address matters relating to environment and climate-resilience. The Project will also help establish and preserve green areas within and around the target cities. The World Bank has secured a Trust Fund under the Quality Infrastructure 32 Pacagnella et al. (2014) Delays in receiving obstetric care and poor maternal outcomes: results from a national multicenter cross- sectional study. BMC Pregnancy Childbirth. May 5, 2014. 33 Thinkhazard (2022): https://thinkhazard.org/en/report/66-cote-d-ivoire/FL Page 24 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Investments partnership to implement the program Green and Resilient Cities for Northern Côte d’Ivoire. The program is executed by the World Bank and supports the creation and dissemination of knowledge on the design of green and climate-resilient urban infrastructure. 50. Annex 3 provides further details on the project’s contribution to climate change adaptation and mitigation. Citizen Engagement 51. The project will support citizen engagement at the local level to promote greater transparency and accountability, as well as address perceptions of exclusion and strengthen social cohesion. Public consultations were held early during Project preparation to allow the active participation of the civil society in the selection of the proposed investments.34 During implementation, the PCU will carry out consultations with local governments and communities at least once a year to ensure that the project meet their needs. The PCU will give particular attention to the needs of women, the youth, and vulnerable groups. These consultations will help ensure that citizens are engage and actively participate in the design and maintenance of the infrastructure investments planned under Component 1. The civil society will also be actively consulted and engaged in the preparation of the urban master plans Subcomponent 2.1 and local economic development plans under Subcomponent 2,3. In each city, and for each plan, the PCU will ensure that at least two public consultations are carried out. Further, under Subcomponent 2.2, the project will recruit community organizers to carrying out consultations and other activities to help local communities engage in project investments. Through these community organizers and the project’s grievance redress mechanisms (GRM), the PCU will establish a real-time feedback mechanism that will help ensure that project investments address their needs. 52. The project’s institutional arrangements were designed with a focus on the active participation of local governments and local communities. The project’s institutional arrangement will include the creation of Local Advisory Committees (LAC) chaired by the mayors, and comprising representatives from the civil society. The PCU, through the DPIO in Korhogo, will establish and maintain the project-level GRM. The DPIO in Korhogo will also be responsible for carrying out information and public awareness campaign, encouraging citizen engagement, and creating opportunities for knowledge exchange. The DPIO will be responsible for collecting, recording, and reporting on inputs received from citizens, as well as ensuring citizens’ participation in decision-making, and citizen-led monitoring and oversight. 53. Under Sub-component 2.3, project funds will be allocated to support the preparation of urban and local development plans, housing policies, and land tenure regularization. These activities will be carried out through participatory and inclusive processes that foster citizen’s engagement, ensure equitable and non- discriminatory access to land and housing (including women and people of foreign origin), favor flexible zoning approaches based on existing realities on the ground and avoid as much as possible involuntary resettlement. Participatory approaches, such as Urban Labs, are already showing encouraging results and may be adapted and replicated with the support of the Project.35 34 For each sector involved, consultations have been done with the main beneficiaries – Teachers, directors and pupils parents’ representatives for education, merchants, drivers, small shop owners and head of commercial associations for economic facilities – and municipal actors to ensure investments propositions are tailored to their needs and appropriate. 35 Urban Labs were tested in the Sahel (Ouagadougou) by the French Development Agency. This Urban Labs supports communities in designing and testing urban micro-projects with social, cultural, and environmental impact. An urban operator, in partnership Page 25 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) 54. The project’s Results Framework includes a PDO-level indicator to measure the percentage of beneficiaries satisfied with the project financed investments , including the percentage of female beneficiaries reporting that project financed investments reflected their needs. It also includes a Intermediate Results Indicators measuring the number of consultations held to prepare or revise urban master plans and local development plans, as well as the percentage of grievances recorded and addressed within the GRM timeframes. Data for the PDO-level indicator on beneficiaries’ satisfaction will be collected through beneficiary satisfaction surveys to be carried out at least every two years. Readiness and sequencing 55. Under Subcomponent 1.1, a first series of quick impact investments, amounting to US$25 million, has been identified and screened during preparation. It is expected that related technical studies and bidding documents will be finalized during Project preparation so that works can be contracted as soon as the Project becomes effective. These initial quick impact investments include the renovation and equipment of 83 primary schools, five secondary and high schools, as well as 18 local health centers. They also include the renovation of public squares, recreational facilities, and minor roadworks. 56. For investments planned under Subcomponent 1.2 and 1.3, the bidding documents for feasibility and technical and safeguards studies are being prepared so a first series of contracts can be tendered as soon as the project becomes effective. The plan is to launch works-related procurement processes at the end of the first year and start works for an estimated US$165 million in the second year of project implementation. (i) Urban roads. A mobility and technical feasibility study will be finalized during the first year of Project implementation. Over 250 km of priority roads have been identified, of which 70 km are expected to be covered by the Project for an estimated US$80 million. The study will determine which roads will be selected under the Project, provide recommendations on how to ensure that the proposed road designs are green and climate change-resilient, and provide the required technical inputs for the preparation of the bidding documents for road renovation works. (ii) Drainage. Investments in drainage amount to an estimated US$60 million. The contracts for the preparation of Sanitation and Drainage Master Plans for Bouna, Ouangolodougou and Tengréla will be launched shortly after project effectiveness. Since Korhogo, Ferkessédougou, Odienné, and Boundiali already have Sanitation and Drainage Master Plans, the contracts for the detailed technical studies will be launched during the first year of implementation. This activity will benefit from the nature-based solutions technical assistance contract that is being tendered under PARU. (iii) Solid waste management. The preparation of Communal Solid Waste Management Plans in Korhogo, Ferkessédougou and Ouangolodougou will be launched during the first year of Project implementation. PARU already supports the preparation of Communal Solid Waste Management Plans for other cities and will support the preparation of the bidding documents for the preparation of such plans in Korhogo, Ferkessédougou and Ouangolodougou. 57. To avoid delays with project implementation, the hiring of the Deputy Project Coordinator, FM Specialist, Procurement Specialist, Social Safeguards Specialist, Environment Safeguards Specialist, Civil Engineer, and Urban Development Specialist have been initiated during Project preparation. with local authorities, facilitates the identification and implementation of micro-projects, which may be temporary or eventually upscaled. Projects can promote better use of unoccupied space during land-use studies or construction such as urban improvements, development of new uses for renovated spaces such as sports trail or playgrounds in restored riverbanks. Page 26 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) 58. Project funds under Component 1 amount to US$250 million to be allocated between cities as shown in Table 2. Considering that the estimated population of these cities ranges from 30,000 for Bouna and 350,000 for Korhogo, they will all receive a minimum of US$25 million, or a total of US$200 million representing 80 percent of the US$250 million earmarked for Component 1. The rationale for these minimum allocations is to have a transformational impact in all targeted cities, and in particular the smaller ones as larger secondary cities tend to attract more investments. The remaining US$50 million will be distributed based on the population of these cities. Per this methodology, cities will receive between US$26.7 million for Bouna, and US$45.8 million for Korhogo. These funds will be split into a firm envelope, allocated immediately, and an optional envelope, which will be confirmed at Project Mid-Term depending on the progress and results achieved. To ensure that Project funds are used within the project timeframe, the PCU will continuously monitor disbursement per city, and allocations may be adjusted as mutually agreed between the implementing agency and the World Bank. Table 1 – Summary of project costs by subcomponent Project Components US$ million Component 1: Developing Green and Climate Resilient Urban Infrastructure in Selected 250.0 Secondary Cities Sub-component 1.1: Quick Impact Investments 40.0 Subcomponent 1.2: Social and Economic Infrastructure 60.0 Subcomponent 1.3. Roads, Sanitation, Solid Waste Management and Water Infrastructure 150.0 Component 2: Providing Support to Local Governments in Selected Secondary Cities 30.0 Sub-component 2.1: Urban planning, land administration, and municipal services 10.0 activities Sub-component 2.2: Capacity Development for urban management and social 8.0 participation Subcomponent 2.3: Local Economic Development 12.0 Component 3: Project Management and Coordination 20.0 Component 4: Contingent Emergency Response 0.0 Total 300.0 Page 27 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Table 2 – Proposed initial fund allocations per city for Component 1 Ouangolo Boundiali Tengréla Odienné Korhogo Bouna Ferké Total Man City Population (INS 2021) 30,359 62,232 74,578 374,614 72,619 42,213 46,089 197,079 899,783 Lum sump allocation 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 200 (80%) Pop based allocation 1.7 3.5 4.1 20.8 4.0 2.3 2.6 11.0 50 (20%) Total allocation 26.7 28.5 29.1 45.8 29.0 27.3 27.6 36.0 250 Firm envelope (80%) 21.3 22.8 23.3 36.7 23.2 21.9 22.0 28.8 200 Performance 50 envelope (20%) 5.3 5.7 5.8 9.2 5.8 5.5 5.5 7.2 C. Project Beneficiaries 59. The project’s direct beneficiaries are the inhabitants of Bouna, Boundiali, Ferkessédougou, Korhogo, Man, Odienné, Ouangolodougou and Tengréla. The cumulated population of these cities amounts to close to 900,000 inhabitants, most of whom are expected to benefit directly or indirectly from the Project investments. Some of the larger-scale economic infrastructure such as markets, cattle markets and bus stations that will be renovated or constructed under the project are commonly used by most residents, as well as by people from surrounding areas. The same applies to some of the public spaces, green spaces, and other recreational facilities that will be renovated or constructed. Smaller infrastructure such as schools and local health centers are expected to benefit surrounding residents. Support to local entrepreneurship that will be provided under Subcomponent 2.3 is also expected to favor specific groups, notably women who are traditionally involved in urban agriculture. While it is difficult to accurately quantify the number of beneficiaries who will benefit from the Project’s infrastructure investments, a methodology will be developed to calculate the number of beneficiaries associated with each. The PCU will regularly report on the actual number of project beneficiaries through the Project’s M&E system. Lastly, the Project’s investments in civil works are expected to directly benefit the local construction industry and to create a significant number of temporary job opportunities in the construction sector. Page 28 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) D. Results Chain Figure 1 Theory of Change/Results Chain E. Rationale for World Bank Involvement and the Role of Partners 60. The World Bank is uniquely positioned to support the Government of Côte d’Ivoire’s efforts to promote the inclusive and sustainable development in secondary cities. The World Bank Group has been financing urban development projects since the 1970s and developed a diversified and extensive experience in supporting governments in sub-Saharan Africa and elsewhere in their efforts to address urban development challenges. The World Bank has been engaged in the urban sector in Côte d’Ivoire for decades, and is currently supporting five urban development projects amounting to over US$1.2 billion, including a growing portfolio of sector operations with investments in urban areas.36 This operational and analytical engagement allowed the World Bank to develop a thorough practical understanding of the challenges facing urban development in Côte d’Ivoire, and effective working partnerships with government institutions and development agencies. 61. The proposed Project activities are beyond the financing capacity of local governments and are directly related to the provision of public goods and services that tend not to be attractive to and could not be viably provided by the private sector. Many of the challenges facing secondary cities in Côte d’Ivoire 36Urban Water Supply and Sanitation Project (P156739-), the Urban Resilience and Solid Waste Management Project (P168308), Infrastructure for Urban Development and competitiveness of second cities (P151324), Greater Abidjan port and city integration project (P159697), and the Abidjan Urban Mobility Project (P167401). Page 29 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) stem from a lack of public sector finance available to invest in basic services. The COVID-19 outbreak further complicates an already fragile economic outlook, stresses the Government’s revenues, and constrains its ability to invest in basic infrastructure and services—and the poor stand to be hit particularly hard. In the prevailing fiscal context, any resources the World Bank can offer are needed to improve key public sector services and priority investments targeted to the poorest and most affected populations. This will ultimately support preparatory work to help mobilize private capital and assist to improve capacity within agencies involved in these areas 62. The government of Côte d’Ivoire and the World Bank have reached out to development partners involved in urban development during project preparation, establishing a technical platform that includes representatives from the United States Agency for International Development (USAID), European Union, Suisse Cooperation, Japan International Cooperation Agency, and will expand to include representatives from the AFD, the West African Development Bank (Banque Ouest-Africaine de Développement, BOAD), the African Development Bank, and others. F. Lessons Learned and Reflected in the Project Design 63. Project design reflects lessons learned from recent urban development projects in Côte d’Ivoire and in fragile and low-capacity environments. (i) While a multisectoral approach to urban development is key to achieving transformative results, project design should remain simple, focused, and include well- linked components. (ii) In multisectoral projects, it is important to ensure that implementation is not hampered by complex decision-making processes, conflicting interests, or diverging views from the various stakeholders. It is also key to rely on trusted implementing entities and to ensure that the responsibilities of the institutions involved in project implementation are clearly defined. (iii) Phasing investments and ensuring that the initial set of activities can be implemented as soon as the project becomes effective is essential to foster citizen engagement and allow for early disbursements. (iv) Project investments should foster genuine involvement of local governments and communities in the selection and implementation oversight of project activities to ensure social cohesion and greater ownership and sustainability of investments. (v) Projects should support activities to encourage the participation of vulnerable groups such as women, youth, and minorities. (vi) Large-scale investments in urban infrastructure should be associated with adequate technical assistance, and with supporting measures in terms of management and maintenance of facilities. (vii) When planning project investments, try to utilize labor intensive approaches to basic infrastructure and services to help create jobs for youth and develop their skills. (viii) In conflict- prone and polarized communities, it is paramount to create opportunities for dialogue among community leaders to help minimize and address disputes. (ix) In a rapidly changing and unpredictable environment, project design and implementation arrangements need to be flexible enough to adapt to the evolving context and allow for rapid response to emerging needs.37 37These operations include the Côte d’Ivoire Municipal Support Project (P037575), Côte d’Ivoire Emergency Urban infrastructure (P110020), Côte d’Ivoire Emergency Infrastructure Renewal Project (P124715), Côte d’Ivoire Infrastructure for Urban Development and Competitiveness of second cities (P151324), Mali Reconstruction and Economic Recovery Project (P144442), Cameroon Inclusive and Resilient Cities Development Project (P156210), and Togo Infrastructure and Urban Development Project (P161772). Page 30 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) III. IMPLEMENTATION ARRANGEMENTS A. Institutional and Implementation Arrangements 64. The Ministry of Water and Sanitation (Ministère de l’Hydraulique, de l’Assainissement et de la Salubrité, MINHAS) will implement the project through the PCU. The core project team will be based in the DPIO in Korhogo, with a liaison office in Abidjan. The PCU will be responsible for all aspects of project management, including fiduciary functions, audits, M&E, and compliance with the ESF. The DPIO will be staffed with a Manager, a Procurement Specialist, an FM Specialist, an Accountant, an M&E Specialist, an Environmental Safeguard Specialist, a Social Safeguard Specialist, a Sexual Exploitation and Abuse/Sexual Harassment (SEA/SH) Specialist, a Civil Engineer, and an Urban Development Specialist. The DPIO manager will report to the PCU Project Coordinator. The Project will also hire Safeguard Assistants and Municipal Engineers to support Project implementation and oversee compliance of Project activities. Technical experts will be hired as needed, and are expected to include specialists in matters related to urban development, urban planning, urban infrastructure, solid waste management, land administration, geospatial information, and agriculture. 65. Ministries and specialized agencies will provide design and implementation support to the PCU within the framework of their technical mandates. The role and responsibilities of each party will be defined in project implementation support framework agreements to be signed with the PCU prior to project effectiveness. It is expected that framework agreements will be signed between the PCU and the (i) MCLU for the activities related to urban planning, the regularization of urban subdivisions and urban land tenure regularization under Subcomponent 2.1; (ii) AGEROUTE for the rehabilitation and construction of urban roads under Subcomponent 1.3; (iii) ONAD for activities related to sanitation and drainage under Subcomponent 1.3; (iv) ANAGED for activities related to Solid waste management under Subcomponent 1.3; (v) Ministry of National Education and Literacy for investments related to educational facilities under Subcomponents 1.1 and 1.2; and (vi) Ministry of Health and Public Hygiene for investments related to health under Subcomponents 1.1 and 1.2. 66. Local governments in secondary cities will sign project implementation support framework agreements with the PCU. Local governments are responsible for developing investment proposals (including Priority Investment Plans) in close collaboration with local communities, LACs, ministries, specialized agencies, and the PCU. They are also responsible for supporting the implementation of the project activities, as well as operating and maintaining the urban infrastructure that fall under their responsibility. The project will hire Municipal Engineers and Safeguards Assistants to help plan and oversee Project activities, and will be responsible for strengthening local governments' capacity through training and technical assistance. Depending on the capacity and needs of local governments, the project may hire additional experts on relevant technical matters. 67. The Prime Minister’s Office will establish and chair an Inter-Ministerial Steering Committee (ISC) comprising representatives from the ministries and specialized agencies involved in the implementation of the Project activities. The ISC will provide overall project supervision and strategic guidance. 68. In each city, local governments will establish a LAC chaired by the mayor, and comprising representatives from relevant municipal departments, decentralized government services, and civil Page 31 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) society.38 LACs have a key role in preparing and approving Priority Investment Plans, overseeing project implementation, and encouraging the participation of civil society, in particular women and the youth. 69. Activities to be financed under the Project will be defined in Priority Investment Plans developed by local governments in close collaboration with the PCU, ministries and specialized agencies. In each city, prior to initiating project activities planned under Subcomponents 1.2 and 1.3, the LAC shall advise on the Priority Investment Plan in form, substance and manner acceptable to the Association. These plans will cover the project duration, and may be updated from time to time in agreement with the LAC, PCU and the World Bank. 70. Annex 1 provides further details on the project’s implementations arrangements. B. Results Monitoring and Evaluation Arrangements 71. The PCU will be responsible for the project’s Results M&E. The DPIO will be staffed with a full time M&E specialist who will: (i) collect, consolidate, and report on Project performance, including physical and financial progress; and (ii) provide periodic information on the Project indicators included in the Project Results Framework and progress toward outcomes. The PCU will submit quarterly reports to the World Bank within 45 days of the end of each reporting period. Capacity building will be provided as needed to strengthen the PCU’s ability to carry out M&E. A methodology is being developed to calculate the number of beneficiaries associated with the project investments in green and climate-change resilient urban infrastructure, including education, health, recreational, economic facilities, urban roads, drainage, and sanitary landfills. All indicators will be sex-disaggregated to the extent possible. The project’s M&E specialist will work in close collaboration with PCU staff, local governments in the target cities, as well as partner ministries and agencies to monitor the number of individuals benefiting from the project investments. The 38 E.g., women’s and youth organizations, community-based organizations, and nongovernmental organizations Page 32 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Project will use the World Bank’s Geo-Enabling initiative for Monitoring and Supervision (GEMS), which provides platforms for remote supervision, real-time risk monitoring, and portfolio mapping for coordination across projects and partners. In-depth evaluations will be conducted for the Project Mid-Term review and for the close of Project. C. Sustainability 72. World Bank experience with urban development projects points to the need for post-project operation and maintenance of the constructed or rehabilitated infrastructure. Over 80 percent of the project funds are expected to be invested in green and climate-change resilient urban infrastructure, notably in the construction of about 70 km urban roads, 30 km of stormwater channels, and initial investments in four sanitary landfills. Investments also include the construction and rehabilitation of over 200 public facilities such as schools, vocational education centers, libraries, squares, recreational centers, local health centers, dispensaries, markets, and cattle markets. To ensure the sustainability of these investments, the project includes Subcomponent 2.2 Capacity Development for Urban Management and Social Participation with a focus on strengthening local governments’ capacity to program, operate, and maintain urban infrastructure. Support will be provided through technical assistance, training, and the development of strategies and plans for operations and maintenance. The project will finance the hiring of Municipal Engineers whose responsibilities will include strengthening local governments’ capacity to manage urban infrastructure falling under their responsibility. The maintenance of large infrastructure such as urban roads, stormwater channels, and sanitary landfills, will be carried out with the support of the relevant ministries and national agencies (e.g., AGEROUTE, ONAD, and ANAGED). IV. PROJECT APPRAISAL SUMMARY A. Economic Analysis 73. An economic analysis was conducted to confirm the economic feasibility and rationale of the proposed infrastructure investments in roads, solid waste management, drainage, sanitation, health, education, and urban agriculture. These investments are expected to bring significant socioeconomic benefits by, among others, (i) improving mobility through a reduction of travel time and upgrading road conditions, all-weather proofing for climate resilience, and flood control; (ii) strengthening human capital; (iii) reducing vector-diseases incidence; and (iv) improving sanitary conditions. In the medium term, the project will improve living conditions and social cohesion in the targeted cities. 74. Given the lack of granular data, a cost-benefit analysis was conducted for investments planned in urban roads and solid waste management, and is presented in the following two paragraphs. The analysis is conservative and only considers the estimated direct beneficiaries of these investments. For roads, the analysis considers data for vehicle operating expenses and time saves due to road improvement, and determines a value for accidents (deaths, injuries, and associated costs) avoided. For solid waste management, benefits from prevented damage and destruction of buildings due to improved flood protection, and reduced disease rates (prevented sickness, death, and associated costs) are the primary data factors used for analysis. For the other investments such those related drainage, education, sanitation, health, urban agriculture, and economic facilities, the methodology adopted is based on benefit-to-cost ratios, net present values and Economic Internal Rate of Returns (EIRR) from similar investments in cities in other countries from Sub-Saharan Africa, as well as from projects in northern Côte d’Ivoire and the Gulf of Page 33 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Guinea Northern Regions Social Cohesion Project. Annex 2 provides additional details on the results of the economic analysis across all sectors. 75. Urban roads. Alongside the benefits derived from improved road safety, and reduced travel time and vehicle operating expenses, the improved connectivity from new and upgraded roads cities bring wider benefits associated with improved spatial integration. These include raised economic activity due to increased connectivity and trade, which in turn have impacts on economic growth and spending power of individuals. The Project is expected to finance a total of 70 km of urban roads for an estimated cost of US$83.8 million, including studies, supervision, and works. Maintenance costs are assumed to be 1 percent of the investments based on the reality and context in the field. In terms of benefits, vehicle operations, travel time and accident reduction costs have been quantified. For a discount rate of 6 percent, the economic analysis shows a Net Present Value (NPV) of US$208.04 million and an EIRR of 17 percent. Sensitivity tests have confirmed the robustness of the analysis: (i) an increase of 10 percent of the investment costs shows a NPV of US$200.1 million and an EIRR of 15 percent; and (ii) a decrease of 20 percent of benefits shows a NPV of US$166.4 million and an EIRR of 17 percent. 76. Solid waste management. More effective solid waste management, especially the construction of sanitary landfills, has the benefits of reduced emissions due to better disposal of waste, reduction in flooding due to less waste blocking both natural and manmade storm water channels, and reductions in disease such as malaria, diarrhea, and typhoid. The project is expected to finance sanitary landfills in four cities. Investments costs have been associated with maintenance costs amounting to 1 percent of the investments costs over a 20-year economic period). Flood control, given the close link between a controlled chain management of waste with a good performing stormwater system, malaria incidence reduction, and CO2 emissions costs have been estimated for the analysis. High and Low Shadow Carbon Price have been used. Table 3 – Solid waste management: Results of the Economic analysis Description EIRR (%) NPV (US$ million) at 6% Shadow Price of Carbon- Low Base 18 26.3 Sensitivity test: +10% on investments costs 17 25.6 Sensitivity test: -20% on benefits 18 21.1 Shadow Price of Carbon-High Base 24 41.2 Sensitivity test: +10% on investments costs 23 40.4 Sensitivity test: -20% on benefits 24 32.9 B. Fiduciary (i) Financial Management 77. The PCU within MINHAS will be responsible for maintaining FM arrangements that are acceptable to the World Bank and for providing reasonable assurance that the proceeds of the World Bank loan are used for the intended purpose. 78. MINHAS is currently implementing PARU, which is funded by a EUR 287.7 million credit from the World Bank. An FM assessment of the PCU was completed in September 2022 in accordance with the FM Manual for World Bank-Financed Investment Operations effective on March 1, 2010, and reissued on February 10, 2017, and the supporting guidelines. The assessment focused on the following aspects of the Page 34 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) PCU: planning and budgeting, financial accounting, financial reporting, and internal controls and external auditing that are needed to satisfy the World Bank’s Policy and Directive – Investment Project Financing (IPF), which describes the overall FM policies and procedures. The implementing entities’ arrangements are found to be acceptable if they are capable of: (i) recording all budgets and transactions and balances correctly; (ii) supporting the preparation of regular and reliable financial statements; (iii) safeguarding the entities’ assets; and (iv) are subject to auditing arrangements acceptable to the World Bank. The FM assessment covered the PCU in accordance with the FM Manual for World Bank IPF Operations that became effective on March 1, 2010, and was re-issued on February 10, 2017 79. The FM assessment determined that the PCU is familiar with the World Bank FM requirements and is satisfactorily managing PARU. The current FM staffing, which includes the assignment to the Project of one financial controller and one public accountant (Agent comptable du projet) from the Ministry of Finance, is adequate. The PCU staff consists of one FM specialist and two Accountants who are experienced in the implementation of World Bank-financed projects. There were no major FM issues raised during the PARU supervision missions or by the auditors. There are no overdue audit reports or unaudited Interim Financial Reports (IFRs). The FM performance of the PCU was recently rated Satisfactory. The PARU’s compliance was deemed satisfactory for financial requirements including timely submission of unaudited IFRs, proper bookkeeping, and appropriate banking arrangement. In sum, the FM arrangements meet the minimum fiduciary requirements under the FM Manual for World Bank for IPF. 80. The financial management capacity of the PCU will be strengthened by: (i) updating the PARU FM procedures manual; and (ii) updating the configuration of the existing accounting software, train the users, and ensure that the Integrated Financial Management Information System and Integrated Accounting Computerized Network are well implemented. (iii) In line with the Use of Country Systems stipulated in Côte d’Ivoire decree n° 475 governing donor-financed projects, a financial controller, and a public accountant (both from the Ministry of Finance and Budget), already assigned to the PCU, will manage the transactions of the Sustainable and Inclusive Secondary Cities Project. (iv)The project internal audit function will be managed by the General Inspectorate of Finance (Inspection Générale des Finances) in collaboration with the Internal auditor of PCU. (v) the PCU will be required to submit to the World Bank (a) a consolidated annual work plan and budget (AWPB) not later than November 30 of the year preceding the year the AWPB will be executed; (b) consolidated quarterly unaudited IFRs; and (c) consolidated audited annual financial statements (e.g., audit reports prepared by independent external auditors) not later than June 30 of each year. 81. The Project’s annual accounts will be audited by an independent external auditor to be recruited in compliance with Terms of Reference (ToRs) acceptable to the World Bank. 82. The overall FM residual risk rating for the Project is assessed as Moderate . Based on the mitigation measures outlined above, the proposed financial management arrangements for this project are considered adequate to meet the World Bank’s minimum financial management requirements under the FM Manual for World Bank IPF. Detailed FM arrangements are provided in Annex 1. (ii) Procurement 83. Project procurement activities will be carried out in accordance with the World Bank Procurement Regulations for IPF Borrowers (dated November 2020); the Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by International Bank for Reconstruction and Development (IBRD) Loans and International Development Association (IDA) Credits and Grants (dated October 15, 2006, and Page 35 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) revised in January 2011 and as of July 1, 2016); and the provisions stipulated in the Financing Agreement. 84. Côte d’Ivoire adopted Procurement Code (Order N°2019-679 dated July 24, 2019) and Decree n°475 dated July 1, 2015, in line with the West African Economic and Monetary Union (WAEMU)’s procurement Directives and international good practices, along with key implementing regulations and documentation. An electronic system for collecting and disseminating procurement information and for monitoring procurement statistics has been set up and needs to be mainstreamed in the work of all contracting authorities. 85. The publication of procurement notices including the General Procurement Notices (GPN) and Specific Procurement Notices (SPN) will be in line with paragraphs 5.22, 5.23, and 5.24 of the World Bank Procurement Regulations. A GPN should be published on the United Nations Development Business and World Bank’s external website as soon as the project is approved. SPN Requests for Expression of Interest and results of the evaluation and contracts award should be published in accordance with advertising provisions in the World Bank Procurement Regulations. 86. Approaching the international market (international competitive procurement) is appropriate when the participation of foreign firms will increase competition and may assure the achievement of best Value for Money and fit-for-purpose results. Open international competitive procurement, for which international advertisement is required in accordance with Procurement Regulations, is the preferred approach for complex, high-risk, and/or high-value contracts. The World Bank has set specific thresholds for this purpose. 87. A PPSD and a Procurement Plan for the project’s first 18 months were prepared by the Borrower and approved by the World Bank on March 3, 2023. A qualified consultant was recruited to help the PCU to perform this operation. The PPSD identified optimum procurement strategies for meeting the PDO, and the Procurement Plan sets the selection methods. Per the PPSD, the total amount of contracts to be awarded under the Project is estimated at approximately US$254.3 million for more than200 procurement processes to be conducted. Contracts related to the works represent 79 percent of the credit amount to be allocated to all the contracts; consultancy contracts represent about 16 percent, and those relating to supplies 5 percent. All contracts to be awarded will represent at least 84 percent of the amount of project financing. Further, the PPSD recommends strengthening the procurement capacity of the PCU with at least one Senior Procurement Specialist, two Procurement Specialists, and additional specialists and assistants as needed. 88. There may be situations where direct procurement from United Nations (UN) agencies may be the most appropriate method. In such circumstances, the project would make specific arrangements with the respective UN agencies through a single-source selection; in turn, the UN agencies would then follow their own procurement procedures to purchase and deliver the goods and services needed. 89. Project implementation will be entrusted to the PCU along with the associated fiduciary responsibilities (procurement and FM). A capacity assessment of the PCU was carried out with a focus on (i) the person in charge of the procurement process; (ii) the procedure manual; and (iii) the expertise of PCU in terms of the procurement process. The assessment has shown that while the PCU has the required experience, skills, and knowledge, the procurement personnel is limited. The procedure manual fits with World Bank standards for timely project implementation. 90. Person in charge of procurement. The assessment revealed that the PCU has a procurement specialist who is familiar with and was recently trained on World Bank procurement procedures. The procurement specialist received training on the new procurement framework, specifically on the PPSD, and has been trained on contract management. Per the new procurement framework, the procurement specialist is Page 36 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) responsible for the Project’s contract management. The procedures need to be adapted to reflect these changes. 91. Procedures manual. Given the PCU’s current involvement in the implementation of a World Bank financed- project, there is an established procedures manual in place that is aligned with World Bank requirements. However, that manual should be updated to meet the requirements of the new project. 92. Expertise of the PCU in terms of procurement procedures. Despite the PCU’s experience in World Bank FM and procurement procedures, the assessment shows that the quality of the procurement documents and contract management could be improved. 93. To minimize the risks identified and ensure that the Sustainable and Inclusive Secondary Cities Project is implemented as per the World Bank standards, at least one Procurement Specialist and one Procurement Assistant should be dedicated to the new operation. The Terms of Reference, qualifications, and experience of the appointed specialists will be reviewed by the World Bank. If the specialists are recruited, the selection should be done through a competitive process according to national procedures. As the DPIO is expected to be in Korhogo, an organization chart will confirm which of the procurement specialist or the assistant will be in Abidjan or in Korhogo. .C. Legal Operational Policies . Triggered? Projects on International Waterways OP 7.50 Yes Projects in Disputed Areas OP 7.60 No . 94. OP 7.50 is applicable to this Project because the Project will finance activities that may use or risk polluting waters of the Sassandra, Comoé, Niger, and Volta rivers and/or their tributaries, which are considered international waterways. The exception to the riparian notification requirement according to paragraph 7(a) of the Policy applies because activities are limited to upgrading and modernization of existing, small-scale schemes which will not appreciably impact quality or quantity of water flows to other riparians. The exception according to paragraph 7(b) of the Policy also applies and accordingly, the terms of reference for the sanitation and drainage master plans will consider an examination of any potential riparian issues as required by the Policy. The exception to the notification requirement was approved by the Regional Vice President on December 23, 2022. D. Environmental and Social 95. The project’s environmental and social risk classification is considered Substantial owing to the risks associated with the proposed investments in urban infrastructure, namely the renovation and construction of health, education and recreational facilities, markets, cattle markets, urban roads, stormwater channels, and sanitary landfills. There are also risks associated with the project’s investments in planning, notably the preparation of Urban Master Plans, Sanitation and Drainage Master Plans, and Communal Solid Waste Management Plans. Possible environmental and social impacts include labor influx, employment expectations, and working conditions; stakeholder engagement and communication (e.g., exclusion of certain groups); displacement (economic and physical); waste management and pollution; nuisance and road traffic safety; community health and safety, including SEA/ SH, and road safety); and potential impacts Page 37 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) on natural habitats. To manage these risks, the Government of Côte d’Ivoire adopted the following safeguards instruments: an Environmental and Social Management Framework (ESMF) disclosed on January 12, 2023 in-country and January 24, 2023 on the World Bank website, a RPF disclosed on January 12, 2023 in-country and January 16, 2023 on the World Bank website, a Stakeholder Engagement Plan (SEP) disclosed on December 14, 2022 in-country and December 24, 2022 on the World Bank website, and a Labor Management Procedures (LMP) disclosed on December 14, 2022 in-country and January 16, 2023 on the World Bank website. The instruments were redisclosed to reflect changes in project implementation arrangements. However, the original disclosure dates are the ones mentioned in the Environmental and Social Commitment Plan (ESCP). An ESCP was disclosed on March 9, 2023, both in-country and on the World Bank website. A SEA/SH assessment and action plan will be prepared and disclosed no later than 120 days after project effectiveness. Further, the PCU will be staffed with an Environment Specialist, a Social Specialist, a SEA/SH specialist, while safeguards assistants will be placed in target cities. All project activities will be subject to the relevant ESF requirements. Resettlement impacts cannot be precisely determined at this stage, though per the RFP resettlement costs are not expected to exceed US$6.4 million. V. GRIEVANCE REDRESS SERVICES 96. Communities and individuals that believe they are adversely affected by a World Bank supported project may submit complaints to existing project-level grievance redress mechanisms or the World Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the World Bank’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of World Bank non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and World Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate GRS, please visit http://www.worldbank.org/en/projects- operations/products-and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. VI. KEY RISKS 97. The overall risk rating of the project is Substantial because of the risks associated with the political and governance context, technical design, institutional capacity, fiduciary, environmental and social impacts, and security concerns in some of the areas targeted by the project. 98. Political and governance risk is rated Substantial. Grievances between communities from the South and the North of Côte d’Ivoire have fueled violent conflicts as recently as ten years ago. Some of those tensions remain and could be revived during upcoming elections. In the past year, the Government has been taking concrete steps to foster a process of national. Transparency and decentralization in the governance system are not fully achieved, which may negatively impact project investments and cause delays with procurement. The political and governance risk will be mitigated with increased population involvement and greater devolution. The project will monitor stakeholder engagement to ensure that Project implementation is inclusive and responsive to community feedback. 99. Technical design of project risk is rated Substantial. The Project technical design is relatively complex given its ambitious objectives and the range of activities and investments across several secondary Page 38 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) cities. The World Bank has a wealth of expertise on the approaches and technologies proposed in the different sectors. The World Bank has mobilized Trust Fund resources to support the creation and dissemination of knowledge on the design of green and climate resilient urban infrastructure. Technical design of project risk will be mitigated by (i) ensuing that the PCU is adequality staffed; (ii) consolidating investments to reduce transaction costs; (iii) engaging relevant ministries and specialized agencies; (iii) consulting with relevant sectors (e.g., health, education, and agriculture) to ensure coordination of investments and the saucerful operation and maintenance of infrastructure beyond construction or renovation; and (iv) providing strong and continuous capacity development and technical assistance to project stakeholders. The detailed sequencing of activities was reviewed during project Appraisal and found to be realistic. 100. Institutional capacity for implementation and sustainability risk is rated Substantial . While government institutions have a good record in implementing multisectoral projects, the following risks are associated with this operation: (i) lack of coordination between institutions at the central and local levels could delay project implementation; (ii) government’s limited capacity to prepare quality studies, particularly for more complex activities, could lead to long reviews and implementation delays; and (iii) the location of the PCU in Korhogo could create coordination challenges with the central level. As mitigation measures, the Project will be implemented under the guidance of the Prime Minister’s Office, which is in a unique position to ensure coordination between relevant line ministries and specialized agencies. The PCU will be vested with strong decision-making authority and technical capacity, with a focus on limiting dependency on other government entities. Dialogue with local governments, line ministries and specialized agencies began early during project preparation. The Project will be implemented by the PCU, which will be strengthened and received additional training in procurement, FM, ESF, project management, and M&E. Strong technical assistance will be provided throughout the project duration. 101. Fiduciary risk is rated substantial. This is due to the procurement risk that is substantial because of (i) the potential influence of local authorities and/or politicians in local procurement and (ii) the number and geographic dispersion of the project's target cities. These risks are being mitigated by anchoring the Project within an existing PCU that that is familiar with the World Bank FM and procurement requirements, and is satisfactorily managing PARU. A Decentralized project Implementation Office will be created and located in the North to allow better coordination. A new procedure manual will be elaborated and adopted for the Project. This procedure manual will include processes for pre-selection and procurement at the local level that specify the roles and responsibilities of the actors, including the Local Authorities. Fiduciary capacity of the PCU will be strengthened through the hiring of additional FM and Procurement staff, some of which will based locally. 102. Environmental and social risks are substantial. These include soil and water pollution, vegetation clearing, biodiversity loss, workers’ health and safety, community safety, SEA/SH, and economic displacement. Because the Project targets some areas facing increasing insecurity, the ability to implement and supervise project activities may be restricted. In addition, the capacity of local governments is limited, especially with respect to implementing safeguard instruments as per the World Bank’s ESF. The environmental and social risk rating also considers the varying capacities of the implementing partners and direct third-party implementation institutions to manage potential risks, particularly under the new ESF requirements. The environmental and social risk management instruments entail robust mitigation measures that have been developed and disclosed. The ESCP outlines a series of capacity building and institutional strengthening activities for PCU staff to undertake during project implementation. Page 39 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) 103. Security risks are Substantial. Though stable at the time of Project preparation, the security situation could become a challenge, making it difficult to carry out Project activities in certain areas. Seven of the target cities are in Northern Côte d’Ivoire where violent extremism, community and socio-political conflicts, and conventional and cross-border crime could threaten project implementation. These cities are in five regions that are part of the 11 regions covered by the Côte d’Ivoire Inclusive Connectivity and Rural Infrastructure Project (P178362), namely Kabadougou (Odienné), Bagoué (Boundiali and Tengréla), Poro (Korhogo), Tchologo (Ferkessédougou and Ouangolodougou), and Bounkani (Bouna). A security risk assessment was conducted in June 2022 under the Côte d’Ivoire Inclusive Connectivity and Rural Infrastructure Project (P178362).39 The assessment concludes that the risk of violent extremism40 is very high in the Bounkani region and high in the Poro, Tchologo, and Bagoué regions. Even though no new attack has been reported since 2021, the security situation in some areas of northern Côte d’Ivoire remains fragile. The Government has deployed additional security forces in these areas and strengthened his intelligence cooperation with neighboring Mali and Burkina Faso. Nevertheless, the situation in some areas remains unstable and volatile, and security risks remains Substantial. While the project will rely on the 2022 security risk assessment of the Inclusive Connectivity and Rural Infrastructure Project, a project specific Security Management Plan will be adopted prior to implementing activities. Preventive measures will be included in the works contracts to protect physical infrastructure and mitigate risks exposure for workers. The PCU and the World Bank will continuously monitor security risks during project implementation and additional measures could be adopted to ensure the security of the works.41 . . 39 Evaluation des Risques Sécuritaires (ERS) - Rapport Provisoire, July 2022. 40 These risks include armed attack by jihadist groups on sites or project members or partners, kidnapping of project members or partners, assassination of project members, and destruction and/or looting of a project sites, structure, and equipment. 41 Relevant experiences include the road projects in Far-North Cameroon (CEMAC, P079736). These additional measures may include the use third-party verification in case security conditions do not allow direct supervision. Page 40 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) VII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Cote d'Ivoire Sustainable and Inclusive Secondary Cities Project Project Development Objectives(s) The Development Objective is to (i) improve access to green and climate resilient urban infrastructure and basic services, and (ii) strengthen local government capacity for participatory and climate risk-informed urban and economic planning in selected secondary cities Project Development Objective Indicators RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 Improve access to green and climate resilient infrastructure and basic services People provided with improved urban living 0.00 100,000.00 390,000.00 conditions (CRI, Number) People provided with improved urban living 0.00 50,000.00 195,000.00 conditions - Female (Number) Beneficiaries reporting that Project investments 0.00 75.00 75.00 reflected their needs (Percentage) Female beneficiaries reporting that Project 0.00 75.00 75.00 investments reflected their needs (Percentage) Strengthen local gov. capacity for participatory and climate risk-informed urban & economic planning Local governments with new/updated climate risk-informed urban master plans prepared 0.00 3.00 8.00 through a participatory process (Number) Page 41 of 82 The World Bank Sustainable and Inclusive Northern Cities Project (P177062) RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 Local governments with new/updated local development plans prepared through a 0.00 3.00 8.00 participatory process (Number) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 Component 1:Developing Green and Climate Resilient Urban infrastructure in Selected Secondary Cities Quick Impact Investments completed (Number) 0.00 60.00 94.00 Social infrastructure rehabilitated or constructed 0.00 20.00 46.00 (Number) Economic infrastructure rehabilitated or 0.00 8.00 15.00 constructed (Number) Green areas developed or rehabilitated (Text) 0.00 4 hectares 8 hectares Urban roads rehabilitated or constructed 0.00 30.00 70.00 (Kilometers) Communal sanitation and drainage master plans 4.00 6.00 8.00 adopted (Number) Stormwater channels rehabilitated or constructed (Kilometers) 0.00 10.00 30.00 Sanitary landfills with methane emission capture/combustion technology constructed 0.00 0.00 3.00 (Number) Waiting time for women seeking maternal health services (Text) To be established Baseline - 10% (in minutes) Baseline - 20% (in minutes) Page 42 of 82 The World Bank Sustainable and Inclusive Northern Cities Project (P177062) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 Communal solid waste management plans adopted (Number) 0.00 3.00 3.00 Component 2: Providing Support to Local Governments in Selected Secondary Cities Public consultations organized for the preparation of local economic development plans and urban 0.00 16.00 32.00 masterplans (Number) Local governments with an infrastructure operation and maintenance strategy (Number) 0.00 2.00 8.00 Project financed infrastructure are functioning, used, and maintenaned (Yes/No) No Yes Yes People trained (Number) 0.00 200.00 400.00 People trained (of which women) (Number) 0.00 100.00 200.00 Cities with operational Geographic Information 0.00 1.00 4.00 System (GIS) capacity (Number) Improved market gardening areas with increased 0.00 20.00 150.00 operations (Hectare(Ha)) Women with improved capacity to produce and To be established Baseline + 10% Baseline + 20% sell their shea butter products (Text) Component 3: Project Management and Coordination Project related grievances received and addressed 0.00 80.00 80.00 within the project GRM timeframe (Percentage) IO Table SPACE UL Table SPACE Page 43 of 82 The World Bank Sustainable and Inclusive Northern Cities Project (P177062) Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection This is a Corporate Result Indicator with a standardized name. However, this indicator measures the number of people benefiting from new or rehabilitated green and climate-resilient urban Detailed infrastructure financed design under the project studies, This indicator measures infrastructur the number of direct e works People provided with improved urban Semi-annual beneficiaries from the PCU completion, living conditions following new or reports, rehabilitated green and surveys climate- and evaluatio resilient urban infrastru n studies. ctures: 1) Urban Roads; 2) Health facilities; 3) Educational facilities; 4) Public spaces; 5) Markets; 6) Solid waste management; 7) Storm water channels and complementary Nature Based Solutions. Beneficiaries will be Page 44 of 82 The World Bank Sustainable and Inclusive Northern Cities Project (P177062) estimated for each type of intervention type, either through access metrics (number of people within the distance within which residents benefits from the infrastructure (for instance 500m for secondary roads) or registration/usage metrics (for instance for health center and school) The detailed methodology for data collection will be defined in the Project Implementation Manual. Detailed This indicator measures design the number of direct studies, beneficiaries from the Number of women infrastructur following new or beneficiaries of improved e works rehabilitated green and People provided with improved urban Semi-annual PCU climate-resilient urban completion, resilient living conditions - Female infrastructure reports, urban infrastructures: surveys 1) Urban Roads; 2) and evaluatio Health facilities; 3) n studies. Educational facilities; 4) Public spaces; 5) Page 45 of 82 The World Bank Sustainable and Inclusive Northern Cities Project (P177062) Markets; 6) Solid waste management; 7) Storm water channels and complementary Nature Based Solutions. Beneficiaries, adjusted with census data on gender, will be estimated for each intervention type. Access metrics (number of people within the distance within which residents benefits from the infrastructure, (for instance 500m for secondary roads) will be calculated by type of investment using spatial analysis. The detailed methodology for data collection will be defined in the Project Implementation Manual. Percentage of direct Aggregation of survey beneficiaries reporting that Satisfaction response from service Beneficiaries reporting that Project Annual PCU they are satisfied with the surveys. providers (and investments reflected their needs project financed preventing double investments. counting of Page 46 of 82 The World Bank Sustainable and Inclusive Northern Cities Project (P177062) beneficiaries) Female beneficiaries reporting that Project investments reflected their needs Confirm the extent of the participatory process used to Number of local elaborate the plans in governments with a new or Urban Local governments with new/updated the final reports, and an updated climate risk- Semi-annual master plan PCU climate risk-informed urban master plans the integration of data informed urban master final reports prepared through a participatory process on climate-risk in the plans prepared through plan, and obtain official participatory processes. signed adoption documents Number of local Confirm the extent of governments that prepared Local the stakeholder Local governments with new/updated or updated their local economic consultation done in Semi-annual PCU local development plans prepared development plans with development the final reports and through a participatory process extensive stakeholder final reports obtain official signed consultation and community adoption documents. participation. ME PDO Table SPACE Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Number of quick impact Semi- Contractor Target is based on the PCU, Municipalities Quick Impact Investments completed investment projects annual reports list of Quick Impact identified and validated in (Works Investments screened Page 47 of 82 The World Bank Sustainable and Inclusive Northern Cities Project (P177062) collaboration with the completion in collaboration with participating cities/ reports) the participating cities/ municipalities with active municipalities with community participation active community and completed. participation Data from progress reports Number of social infrastructure rehabilitated or constructed across all cities including health and Contractor education facilities, notably reports Semi- Social infrastructure rehabilitated or primary and secondary (Works Progress reports PCU, Municipalities annual constructed schools, vocational completion education centers, public reports) libraries, cultural centers, childcare centers, local health centers, maternity wards, and dispensaries Contractor Number of economic reports infrastructure rehabilitated Semi- Economic infrastructure rehabilitated or (Works Progress reports PCU, Municipalities or constructed for example annual constructed completion public markets, cattle reports) markets, and bus stations Total area (in hectares) Contractor across all municipalities for reports Semi- the creation and protection (Works Progress reports PCU, Municipalities Green areas developed or rehabilitated annual of green spaces such as completion parks, forests, and reports) riverbanks, greening of Page 48 of 82 The World Bank Sustainable and Inclusive Northern Cities Project (P177062) public building courtyard, and other nature-based solutions for flood, and heat island management. Length of urban roads (in km) rehabilitated or Contractor constructed to improve reports Semi- accessibility to social and (Works Progress reports PCU, Municipalities Urban roads rehabilitated or constructed annual economic public facilities, completion economic zones, as well as reports) to improve living conditions in poor neighborhoods Number of communal sanitation and drainage master plans adopted. Korhogo, Ferkessédougou, Odienné, and Boundiali Consultant PCU, Municipalities Communal sanitation and drainage already have or are in the Anual Progress reports reports master plans adopted process of adopting Sanitation and Drainage Master Plans, which will also be prepared for Bouna, Ouangolodougou, Tengréla, and Man. Length of stormwater Contractor channels (in km) reports Semi- Stormwater channels rehabilitated or rehabilitated or constructed (Works Progress reports PCU, Municipalities annual constructed as well as complementary completion nature based solutions to reports) reduce and manage floods. Sanitary landfills with methane emission Number of sanitary landfills Annual Contractor PCU capture/combustion technology with methane emission reports Page 49 of 82 The World Bank Sustainable and Inclusive Northern Cities Project (P177062) constructed capture/combustion (Works technology constructed, and completion related solid waste reports) management services operational in Odienné, Boundiali, Tengréla and Bouna Waiting time for women Beneficiary Semi- Waiting time for women seeking maternal seeking maternal health Satisfaction Progress reports PCU annual health services services Survey Number of communal solid waste management plans adopted, along with implementation of cleanup Consultant campaigns, promotion of reports, and recycling and circular documents Communal solid waste management plans Annual Progress reports PCU, Municipalities economy opportunities. No for the adopted investments in solid waste adoption of management are planned in the plans Korhogo, Ferkessédougou and Ouangolodougou because these cities are already covered by PARU Number of public Reports from consultations held for the consultants, Public consultations organized for the preparation of the including Semi- preparation of local economic new/updated local specific Progress reports PCU, Municipalities annual development plans and urban development plans and sections on masterplans urban master plans. In each public target city, at least 4 public participation consultations have been and Page 50 of 82 The World Bank Sustainable and Inclusive Northern Cities Project (P177062) organized, or a total of 32 stakeholder consultations. consultation processes. Consultant Number of cities which reports, adopt and implement urban Semi- consultation Local governments with an infrastructure Progress reports PCU, Municipalities infrastructure operations annual of operation and maintenance strategy and maintenance strategy participating and plans cities Project financed infrastructure are functioning, used, and maintenaned Number of people trained in local economic development, urban planning, operations and Training maintenance of municipal Semi- reports, and assets, procurement, Progress reports PCU, Municipalities People trained annual attendance financial and human lists resources management, or other topics as needed and defined in the respective capacity building chapters of the city investment plans. Number of people trained in local economic Training development, urban Semi- reports, and Progress reports Municipalities, and PCU People trained (of which women) planning, operations and annual attendance maintenance of municipal lists. assets, procurement, financial and human Page 51 of 82 The World Bank Sustainable and Inclusive Northern Cities Project (P177062) resources management, or other topics as needed and defined in the respective capacity building chapters of the city investment plans. Training Number of established GIS reports, capacity at selected consultant municipalities with effective reports, Semi- Cities with operational Geographic operationalization, including consultation Progress reports PCU, Municipalities annual Information System (GIS) capacity trained staff, software, and of equipment, and its effective participating use for planning and municipalitie maintaining investments. s Mapping of Area (in hectares) that urban improved market gardening agriculture activities and sustainable area, survey development of local food Semi- of Improved market gardening areas with systems through Progress reports PCU annual participating increased operations infrastructure investments cities and including the installation beneficiaries, and/or rehabilitation of contractor water storage units and reports marketing structures Number of local women Beneficiary producers with improved satisfaction Women with improved capacity to Semi- capacity to commercialize survey, Progress reports PCU produce and sell their shea butter annual shea butter and related trainer products products via with targeted reports and relevant training Page 52 of 82 The World Bank Sustainable and Inclusive Northern Cities Project (P177062) received in business and finance, including organic certification and standards as needed Project related grievances received and addressed within the project GRM timeframe ME IO Table SPACE Page 53 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) ANNEX 1: Implementation Arrangements and Support Plan COUNTRY: Côte d'Ivoire Sustainable and Inclusive Secondary Cities Project Institutional arrangements 1. The Project will be implemented by the PCU of the PARU established under MINHAS. MINHAS will be responsible for strengthening the PCU and coordinating with the Prime Minister’s Office regarding the establishment of the project’s ISC. Local governments in the project target cities will be responsible for establishing LACs. 2. Inter-Ministerial Steering Committee. The ISC will be headed by the Prime Minister’s Office and will include representatives from MINHAS, Ministry of Economy and Finance, Ministry of the Budget and the State Portfolio, Ministry of Equipment and Road Maintenance, DGDDL, AGEROUTE, ONAD, ANAGED, ANDE, Geographic and Digital Information Center (Centre d ’Information Géographique et du Numérique, CIGN), Association of Regions and District of Côte d’Ivoire, and UVICOCI. The ISC will meet at least twice a year and hold extraordinary meetings as necessary. The ISC will, inter alia, provide overall project supervision and strategic guidance. 3. Project Coordination Unit. The PCU will be strengthened and expanded. While the PARU-PCU is based in Abidjan, for the Sustainable and Inclusive Secondary Cities Project, a DPIO will be established in Korhogo. This will allow DPIO staff to be closer to the target population and local stakeholders, and allow them to actively participate in day-to-day project implementation. The PCU will be responsible for all aspects of Project management. This will include fiduciary functions, M&E, and compliance with the ESF. The PCU will approve project investments proposed by local governments in concertation with relevant Ministries and Specialized Agencies. The PCU will be strengthened with at least a DPIO Manager, a Civil Engineer, an Urban Development Specialist, a Procurement Specialist, a Financial Management Specialist, an Accountant, an M&E Specialist, an Environmental Safeguard Specialist, a Social Development Specialist, and a SEA/SH specialist. Safeguard Assistants and Municipal Engineers will be hired to support project implementation of and oversee compliance with Project activities. They will also help strengthen local governments’ capacity for infrastructure planning and management. The composition of the PCU will be adjusted as needed in agreement with the Implementing Agency and the World Bank. Technical experts will be hired as appropriate, and are expected to include at least one urban development specialist, one urban planner, two urban infrastructure specialists, one solid waste management specialist, one land administration and geospatial information specialist, as well as one agriculture specialist. 4. Local Advisory Committees. Local governments will establish LACs in each city. They will be chaired by the mayor and include representatives from relevant municipal departments, decentralized government services, and civil society, community representatives, women’s and youth organizations, community-based organizations, NGOs and CSOs. LASs will help plan, coordinate, and monitor Project activities. LASs will have a key role in encouraging the participation of the civil society in the planning and implementation of the Project activities. Priority will be assigned to ensuring women representatives in the LACs. 5. Local governments. Local governments in the target cities will sign Project Implementation Support Framework Agreements with the PCU. Local governments will be responsible for preparing Priority Investment Plans in close collaboration with the LACs, line ministries, specialized agencies, and the PCU. The Project will hire Municipal Engineers and Safeguards Assistants to help local governments plan and oversee Page 54 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) project activities and will be responsible for strengthening the capacity of local governments through training and technical assistance. Depending on the capacity and needs of each local government, the project may hire additional experts to second them on relevant technical matters. 6. Line Ministries and Specialized Agencies. While PCU will be responsible for the Project’s fiduciary functions and will be staffed with technical experts in the fields relevant to the Project investments, ministries and specialized agencies will provide design and implementation support to the PCU within the framework of their technical mandate. The role and responsibilities of each party will be defined in Project Implementation Support Framework agreements to be signed prior to Project effectiveness. Framework agreements will be signed with the following: (i) MCLU for the activities related to urban planning, the regularization of urban subdivisions and urban land tenure regularization under Subcomponent 2.1; (ii) AGEROUTE for the rehabilitation and construction of urban roads under Subcomponent 1.3; (iii) ONAD for activities related to sanitation and drainage under Subcomponent 1.3; (iv) ANAGED for activities related to Solid waste management under Subcomponent 1.3; (v) Ministry of National Education and Literacy for investments related to educational facilities under Subcomponents 1.1 and 1.2; and (vi) Ministry of Health and Public Hygiene for investments related to health under Subcomponents 1.1 and 1.2. Table 1.1. Key institutions and their role No Agencies Areas of Expected role Instruments intervention 1 Project Responsible for all Fiduciary; Planning; Inter-ministerial Coordination Unit aspects of project Implementation; M&E; decree expending the (PCU) management Compliance with safeguards mandate of the PCU instruments. to cover the services in connection with the project 2 Local Governments Responsible for Chair local development Project developing committees; Propose Implementation investment activities to be financed; Support Framework proposals Prepare Priority Investment Agreements signed (including Priority Plans; Review of technical with the PCU Investment Plans) studies; in close Local oversight of project collaboration with implementation. the LACs, ministries, specialized agencies, and the PCU 3 Ministry of Urban master plans, Definition and approval of Project Construction, detailed master investments in collaboration Implementation Housing and Urban plans, regularisation with local governments and Support Framework Development of urban the PCU; Agreement signed (MCLU) subdivisions, and Support the preparation of with the PCU systematic issuance bidding documents; of Arretes de Participation in Concessions procurement processes; Page 55 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) No Agencies Areas of Expected role Instruments intervention Definitives Monitoring and approval of (Subcomponent 2.1) deliverables. 4 Roads Management Rehabilitation or Definition and approval of Project Agency (AGEROUTE) construction of investments in collaboration Implementation urban roads with local governments and Support Framework (Subcomponent 1.3) the PCU; Agreement signed Definition of technical with the PCU norms; Support the preparation of bidding documents; Participation in the procurement processes; approval of works. 4 National Office for Drainage Definition and approval of Project Sanitation and (Subcomponent investments needs in Implementation Drainage (ONAD) 1.3) collaboration with local Support Framework governments and the PCU; Agreement signed Definition of technical with the PCU norms; Support the preparation of bidding documents; Participation in procurement processes; approval of works, 5 National Waste Solid waste Definition and approval of Project Management managent (Sub- investments in collaboration Implementation Agency (ANAGED) component 1.3 and with local government and Support Framework 1.2) the PCU; Agreements signed Support the preparation of with the PCU bidding documents; Participation in procurement processes; Approval of solid Waste Management Plan; Management of infrastructure built. 6 Ministry of National Rehabilitation Definition and approval of Project Education and /construction and investments needs in Implementation Literacy equipment of collaboration with local Support Framework infrastructure and government and the PCU; Agreement signed soci-education Definition of technical with the PCU (Subcomponents norms; 1.1 and 1.2) Support the preparation of bidding documents; Page 56 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) No Agencies Areas of Expected role Instruments intervention Participation in procurement processes; Provision of staff (teachers) in the rehabilitated/ constructed facilities 7 Ministry of Health Construction/rehab Definition and approval of Project and Public Hygiene ilitation and investments needs in Implementation and Universal equipment of collaboration with local Support Framework Health coverage health centers government and the PCU; Agreement signed (Subcomponents Definition of technical with the PCU 1.1 and 1.2) norms; Support the preparation of bidding documents; Participation in procurement processes; Provision of staff in the rehabilitated/ constructed facilities 8 National Safeguards Oversight of compliance Not applicable Environment with national environmental Agency (ANDE) regulations Financial Management and Disbursements arrangements 7. The PCU will be the World Bank’s main counterpart and focal point for FM aspects of the project. This includes budgeting, financial reporting, supervision, management of the Designated Account (DA), and auditing. Budgeting 8. The PCU will prepare a budgeted annual action plan, to be discussed and validated during the Project SSC annual review, scheduled by the end of September of each year. The process will be detailed, and sample reports will be included in the PIM. 9. Not later than November 30 of the year preceding the year to which the work plan applies, it will first be submitted to the project Steering Committee for approval and then to the World Bank to ensure there is no objection. The budget will also reflect the activity to be implemented by the implementing entities; hence the creation of a budget lines for the activities to be implemented by each implementing entities The budgetary discussions will begin at least six months before the fiscal year of implementation and will consider the procurement plan as the starting point. Once the budget is approved, the budget execution will be monitored through the automated accounting software to serve as a basis for a budget execution monthly follow-up, based on variance analysis report comparing planned with actual expenditures that will be part of the quarterly unaudited IFR. Page 57 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Accounting and Reporting 10. Accounting standards, policies, and procedures. The prevailing accounting policies and procedures will apply. These are aligned with the accounting standards for West African Francophone countries (SYSCOHADA) which are in use in Côte d’Ivoire for current World Bank-financed operations. The new project’s accounting systems, policies, and financial procedures will be documented in the Project Implementation Manual (PIM). 11. Accounting staff. PCU has a qualified and experienced FM specialist, who will be supported by one Chief Accountant and one accountant. This team will be reinforced by another FM specialist dedicated to this project, one chief accountant and one accountant. They will have the overall FM responsibility over budgeting, accounting, financial reporting, flow of funds, internal control, and auditing. The FM staff will have their capacity reinforced over the project implementation through the rolling out of the training plan that includes training on World Bank disbursement procedures and financial reporting arrangements, among others. 12. Accounting information systems software. The PCU will ensure within three months after the project’s effectiveness the well-functioning of the accounting software of PARU and its customization to handle the activities financed under this project. Internal Control 13. Internal controls. The internal control policies and procedures will be documented in the PIM which will be updated and adopted before project effectiveness. The PIM will document the FM and disbursement arrangements including internal controls, budget process, assets safeguards, and clarify roles and responsibilities of all the stakeholders. Internal Audit 14. The internal control system is necessary to ensure that (i) operations are effective and efficient; (ii) financial reporting is reliable; and (iii) the Project complies with all applicable laws and regulations. The PCU currently has a PIM. Therefore, for this Project the existing PIM will be updated, and it will describe work processes, information flow, authorization and delegation of authority, timing, job segregation, automatic and sequential controls, compliance with project objectives, and micro and macro rules. The FM section of the PIM will also clarify the procedures to comply with in executing the budgets allocated to the implementing agencies. 15. In line with the new Decree No. 475 governing how donor-financed projects will operate in Côte d’Ivoire, the General Inspectorate of Finance (Inspection Générale des Finances, IGF) will oversee the project internal audit function, managed by the PCU. Once the IGF is appointed, the PCU and the IGF will agree on the modalities of IGF interventions and the resources it will need to fulfill its mandate. The existing government internal controls systems in place including the use of budget controllers and separation of duties between the administrative phase of budget execution and the accounting phase of public expenditure channel will be used for the purposes of this project. 16. Transparency, accountability, and anti-corruption efforts will be encouraged including via a complaint handling mechanism; a communication strategy to inform the public through the media on all aspects of the project; and the publication on the implementing entity or government websites of budgets, financial reports and audited financial statements. The PCU will also have to deal with fraud and anti- corruption in accordance with the World Bank Anti-Corruption Guidelines referred to in the Financing Agreement. Page 58 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Flow of Funds 17. A DA managed by the Directorate of Debt (Direction Générale du Trésor et de la Comptabilité Publique) will be opened for disbursement purposes at the Central Bank of West African States ( Banque Centrale des Etats de l’Afrique de l’Ouest, BCEAO). A project account (PA), managed by the public accountant assigned to the PCU, opened in a reputable commercial bank under conditions acceptable to the World Bank, will be used to pay expenditures. The Operational Account (project account) will be managed by PCU. Cash withdrawal transactions from the Operational Account will be authorized respectively by the Project Coordinator and the project’s FM Specialist. 18. Disbursements will be made in accordance with the Disbursement Guidelines for IPF dated February 2017. Withdrawal application requests will be prepared by the Project’s FM specialist signed by a designated signatory or signatories (the signature authorization letter is signed by the Minister of Finance) and sent to the World Bank for processing. The Project will submit applications using the electronic delivery tool, “e- Disbursements”, available at the World Bank’s Client Connection website/web-based portal. The Authorized Signatory Letter will include authorization for the designated signatories to receive Secure Identification Credentials from the World Bank for delivering such applications by electronic means. 19. Once the credit becomes effective, Disbursements of IDA funds will be transaction-based disbursements. The Project will finance 100 percent of eligible expenditures inclusive of taxes. A DA will be opened at the central bank (BCEAO) and a Project Account (PA) in a commercial bank under terms acceptable to IDA. The PA will be managed by the public accountant assigned to the PCU by the Minister of Finance. The ceiling of the DA will be stated in the Disbursement and Financial Information Letter. An initial advance up to the DA ceiling will be made and subsequent disbursements will be made against submission of a Statement of Expenditures reporting on the use of the previous advance. The option to disburse against submission of quarterly unaudited IFRs (also known as report-based disbursements) could be considered once the project meets the criteria. Other methods of disbursing funds (reimbursement, direct payment, and special commitment) will also be available. The minimum value of applications for these methods is 20 percent of the DA ceiling. The project will sign and submit Withdrawal Applications electronically using the eSignatures module accessible from the World Bank’s Client Connection website. Figure 1.1: Funds flow diagram IDA Account (Washington) at the World Bank Direct payment upon request from project Designated Account (BCEAO) managed by MoF Transactions Account managed by Project in commercial bank Transactions Account by implementing agencies Beneficiaries / Suppliers / Consultants Page 59 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) 20. The table below specifies the categories of eligible expenditures to be financed out of the proceeds of the financing, the amounts under each category, and the percentage of expenditures to be financed for eligible expenditures in each category. Table 1.2: Categories of Eligible Expenditures Category Amount of the Financing Percentage of Expenditures Allocated (expressed in EUR) to be Financed (exclusive of Taxes) (1) Goods, works, non-consulting services, 282,093,000 100% consulting services, Training and Incremental Operating Costs of the Project excluding Parts 3.2(ii) and 4 of the Project (2) Land expenditures (including compensation for 0 land acquisition related to the implementation of a resettlement instrument), cash compensation and other assistance paid in cash for involuntary resettlement under Part 3.2(ii) of the Project (3) Front-end Fee 707,000 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 3.08 (b) of the General Conditions (4) Emergency Expenditures under Part 4 of the 0 100% Project TOTAL AMOUNT 282,800,000 Financial Reporting 21. PCU will prepare quarterly un-audited IFRs in form and content satisfactory to the World Bank, which will be submitted to the World Bank within 45 days after the end of the quarter to which they relate. External Audit 22. An external independent and qualified private sector auditor will be recruited to carry out the audit of the Project’s financial statements. The annual audits will be conducted based on ToRs that are satisfactory to the World Bank. The Auditor will express an opinion on the Annual Financial Statements and perform his audit in compliance with International Standards on Auditing. The auditor will be required to prepare a Management Letter detailing observations and comments and providing recommendations for improvements in the accounting system and the internal control environment. The audit report on the annual Project financial statements and activities of the DA shall be submitted to the World Bank within six months of the end of each fiscal year. 23. In accordance with World Bank Policy on Access to Information, the Borrower is required to make its audited financial statements publicly available in a manner acceptable to the World Bank; following the World Bank’s formal receipt of these statements from the borrower, the World Bank also makes them available to the public. Page 60 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Table 1.3: FM action plan Issue Remedial action recommended Responsible Completion Effectiveness entity conditions Staffing Recruit a qualified and experienced PCU Three months N FM specialist, one chief accountant, after and one accountant under ToRs effectiveness acceptable to IDA. Information Ensure the well-functioning of the PCU Three months N system PARUs accounting software after accounting effectiveness software Interim Financial Format, content, and frequency of PCU Prior to N reporting (IFR) the IFR will be agreed during project effectiveness negotiation Administrative, Update PARU Administrative, PCU Prior to Y Accounting, and Accounting and Financial Manual of effectiveness Financial Manual procedures (as part of the PIM) of procedures Internal audit Update of Internal auditor’s work- PCU/ Three months N program to include the new project’s IGF after internal auditing on a risk-based effectiveness approach External financial Appoint an external auditor PCU Six months after N auditing acceptable to the World Bank effectiveness Implementation Support Plan 24. FM implementation support missions will be carried out twice a year based on the substantial FM residual risk rating. Implementation Support will also include desk reviews such as the review of the IFRs and audit reports. In-depth reviews may be done where deemed necessary. The FM implementation support will include FM training missions for all implementing entities and will be an integrated part of the project’s implementation support plan. Table 1.4: FM support plan FM Activity Frequency Desk reviews IFRs review Quarterly Audit report review of the project Annually Review of other relevant information such as interim internal control systems Continuous as they become reports. available On site visits Review of overall operation of the FM system Once per year (Implementation Support Mission) Monitoring of actions taken on issues highlighted in audit reports, auditors’ As needed management letters, internal audit, and other reports Transaction reviews (if needed) As needed Capacity building support FM training sessions During implementation and as needed Page 61 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) 25. The conclusion of the assessment is that the FM arrangements in place meet the World Bank’s minimum FM requirements under World Bank IPF Policy and Directive, and subject to the implementation of the FM action plan above, are therefore adequate to provide, with reasonable assurance, accurate and timely information on the status of the project required by World Bank. The project’s FM residual risk of the project is assessed as Moderate. 26. Financial Management Risks and Mitigation Measures. The FM risk assessment and mitigations measures are summarized in the table below: Table 1.5: FM Risks and Mitigation Measures Risk Risk Risk-Mitigation Measures Incorporated Effectiveness Residual Rating into Project Design Conditions (Y/N) Risk Inherent Risks: M M Country: Beyond the control of the project: The The PEFA undertaken in 2017 government is committed to a reform and the PIMA in 2016 identified S program that includes preparation of a N S critical PFM weakness. Strategic Framework for PFM reforms in Côte d’Ivoire. However, there are still weaknesses. This project requires use of the World Bank FM procedures supported by Decree 475. Entity Level The PCU is familiar with the World Bank PCU has a good knowledge of M FM procedures and is well staffed. N M World bank policies. Project level The updated version of project current Misunderstanding of FM procedures, internal controls and a responsibility as the project M clear description of the roles and N M involves several stakeholders. responsibilities of the various stakeholders will be taken into consideration with appropriate trainings. Control Risks: M M Delays in budget preparation Budget procedures clearly defined in the process of the project Project FM manual of procedures. M M And PCU has a good knowledge in N budget preparation Accounting Risk of increasing of the FM This team will be reinforced by another team workload leading to some FM specialist dedicated to this Project, delays in the submission of the M one chief accountant and one N M required reporting. accountant. Lack of adequate accounting software The existing accounting software will be customized to consider the new project’s specificities. Page 62 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Risk Risk Risk-Mitigation Measures Incorporated Effectiveness Residual Rating into Project Design Conditions (Y/N) Risk Internal Audit Weak compliance with FM The FM manual will outline approval procedures manual and of and authorization procedures with clear circumventing internal control S segregation of duties. The project’s N M systems internal audit annual work-program will be updated to include this Project’s internal auditing. Funds Flow M - Risk of misuse of funds and - Payment requests will be approved by use funds to pay non eligible M the Coordinator and the Project FMS N M purposes or combined with prior to disbursement of funds. other projects funds managed - Require of the FM team to ensure by the PCU monthly submission of the withdrawal - Weak capacity in the application. disbursement procedures of the - Perform external audit. World Bank which could affect the disbursement rate. Reporting Delay and difficulties in The IFR reports will be generated by the preparation of acceptable IFRs M accounting software and support from N M and financial statements the FMS. External Audit Project audit reports might be An independent qualified financial submitted with delay and external auditor will be recruited. inacceptable quality. M N M Risk of fraud and corruption Overall Risk M M H: High; S: Substantial; M: Moderate; L: Low Procurement 27. Procurement for the Project will be carried out in accordance with the World Bank’s Procurement Regulations for IPF Borrowers (“Procurement Regulations”) dated November 2020; the Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants dated October 15, 2006, and revised in January 2011 and as of July 1, 2016; and the provisions stipulated in the Financing Agreement. 28. Côte d’Ivoire adopted a Procurement Code (Order N°2019-679 dated July 24, 2019) and Decree n°475 dated July 1, 2015 in line with the WAEMU’s procurement Directives and international good practices, along with key implementing regulations and documentation. An electronic system for collecting and disseminating procurement information and for monitoring procurement statistics has been set up and needs to be mainstreamed in the work of all contracting authorities. 29. The publication of procurement notices including the GPN and Specific Procurement Notices (SPN) will be in line with paragraphs 5.22, 5.23, and 5.24 of the World Bank’s Procurement Regulations. A GPN should be published on the United Nations Development Business and World Bank’s external website as soon as the project is approved. SPN Requests for Expression of Interest and results of the evaluation and contracts award should be published in accordance with advertising provisions in the World Bank’s Page 63 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Procurement Regulations. 30. Approaching the international market (international competitive procurement) is appropriate when the participation of foreign firms will increase competition and may assure the achievement of best Value for Money and fit-for-purpose results. Open international competitive procurement, for which international advertisement is required in accordance with Procurement Regulations, is the preferred approach for complex, high-risk, and/or high-value contracts. The World Bank has set specific thresholds for this purpose. 104. The PPSD and a Procurement Plan for the project’s first 18 months were prepared by the Borrower and approved by the World Bank. A qualified consultant was recruited to help the PCU perform this operation. The PPSD identified optimum procurement strategies for meeting the PDO, and the Procurement Plan sets the selection methods. Per the PPSD, the total amount of contracts to be awarded under the Project is estimated at approximately US$254.3 million for more than two hundred (200) procurement processes to be conducted. Contracts related to the works represent 79 percent of the credit amount to be allocated to all the contracts; consultancy contracts represent about 16 percent, and those relating to supplies 5 percent. All contracts to be awarded will represent at least 84 percent of the amount of project financing. Further, the PPSD recommends strengthening the procurement capacity of the PCU with at least one Senior Procurement Specialist, two Procurement Specialists, and additional specialists and assistants as needed. 31. There may be situations where direct procurement from United Nations (UN) agencies may be the most appropriate method. In such circumstances, the project would make specific arrangements with the respective UN agencies through a single-source selection; in turn, the UN agencies would then follow their own procurement procedures to purchase and deliver the goods and services needed. 32. Project implementation will be entrusted to the PCU along with the associated fiduciary responsibilities (procurement and FM). A capacity assessment of the PCU was carried out with a focus on (i) the person in charge of the procurement process; (ii) the procedure manual; and (iii) the expertise of the PCU in terms of the procurement process. The assessment has shown that while the PCU has the required experience, skills, and knowledge, the procurement personnel is limited. The procedure manual fits with World Bank standards for timely project implementation. The main findings of the capacity assessment of the PCU are outlined in the following paragraphs. 33. Person in charge of the procurement process. The assessment revealed that the PCU has a procurement specialist who is familiar with and has recently been trained on World Bank procurement procedures. The procurement specialist received training on the new procurement framework and specifically on the PPSD. The procurement specialist has also been trained on contract management. Per the new procurement framework, the procurement specialist is responsible for contract management of the project. Thus, the procedures need to be adapted to reflect these changes. 34. Procedure manual. Given the PCU’s current involvement in the implementation of a World Bank financed project, there is an established procedures manual in place that is aligned with World Bank requirements. However, that manual should be updated to meet the requirements of the new project. 35. Expertise of the PCU in terms of procurement process. Despite the PCU’s experience in World Bank FM and procurement procedures, the assessment shows that the quality of the procurement documents and contract management could be improved. 36. To minimize the risks identified and ensure that the Sustainable and Inclusive Secondary Cities Project is implemented as per the World Bank standards, at least one Procurement Specialist and one Procurement Assistant should be dedicated to the new operation. The Terms of Reference, qualifications, and experience Page 64 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) of the appointed specialists will be reviewed by the World Bank. If the specialists are recruited, the selection should be done through a competitive process according to national procedures. As the DPIO is expected to be in Korhogo, an organization chart will confirm which of the procurement specialist or the assistant will be in Abidjan or in Korhogo. Page 65 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) ANNEX 2: Economic Analysis COUNTRY: Côte d'Ivoire Sustainable and Inclusive Secondary Cities Project Economic Analysis 1. A Project economic analysis was conducted to confirm the economic feasibility and rationale of the proposed infrastructure investments in roads, solid waste management, drainage, sanitation, health, education, and urban agriculture. These investments are expected to bring significant socioeconomic benefits by, among others, (i) improving mobility through a reduction of travel time, upgrade of road condition, all weather proofing for climate resilience, and flood control; (ii) strengthening human capital; (iii) reducing vector-diseases incidence; and (iv) improving sanitary conditions. In the medium term, the project will improve people living conditions and social cohesion in the targeted cities. 2. Given the lack of granular data, a cost-benefit analysis was conducted for investments planned in urban roads and solid waste management. The analysis is conservative and only considers the estimated direct beneficiaries of these investments. For roads, the analysis considers data for vehicle operating expenses and time saves due to road improvement, and determines a value for accidents avoided (deaths, injuries and associated costs). For solid waste management, benefits from prevented damage and destruction of buildings due to improved flood protection, and reduced disease rates (prevented sickness, death, and associated costs) are the primary data factors used for analysis. For the other investments such those related drainage, education, sanitation, health, urban agriculture, and economic facilities, the methodology adopted is based on benefit-to-cost ratios, NPV and EIRR from similar investments in cities in other countries in Sub-Saharan Africa as well as from projects in northern Côte d’Ivoire and neighboring countries. Urban roads 3. Alongside the benefits derived from improved road safety, and reduced travel time and vehicle operating expenses, the improved connectivity from new and upgraded roads between cities bring wider benefits associated with improved spatial integration in country. These include raised economic activity due to increased connectivity and trade between cities, which in turn have impacts on economic growth and spending power of individuals. It is expected that the project will finance the construction of 70 km of urban roads for an estimated cost of US$70 million, including studies, supervision, and works costs. Maintenance costs are assumed to be 1 percent of the investments based on the reality and context in the field. In terms of benefits, vehicle operations, travel time and accidents reduction costs have been quantified. For a discount rate of 6 percent, the economic analysis shows an NPV of US$208.04 million and an EIRR of 17 percent. Sensitivity tests have also been done to confirm the robustness of the analysis: (i) an increase of 10 percent of the investments costs shows an NPV of US$200.1 million and an EIRR of 15 percent; and (ii) a decrease of 20 percent of benefits shows an NPV of US$166.4 million and an EIRR of 17 percent. To ensure socioeconomic benefits, roads construction should be planned in a spatially integrated manner so that it connects key sites in the cities (e.g., urban poor to jobs and markets, and informal settlements to schools and/or healthcare facilities). To ensure resilience, roads should have associated drainage. Solid waste management 4. More effective solid waste management, especially the construction of sanitary landfills, have the benefits of reduced emissions due to better disposal of waste, reduction in flooding due to less waste Page 66 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) blocking both natural and manmade storm water channels, and reductions in disease such as malaria, diarrhea, and typhoid. The project is expected to finance sanitary landfills in four cities. Investments costs have been associated with maintenance costs amounting to 1 percent of the investments costs over a 20- year economic period). Flood control, given the close link between a controlled chain management of waste with a good performing stormwater system, malaria incidence reduction, and CO2 emissions costs have been estimated for the analysis. High and Low Shadow Carbon Prices have been used to make the estimates. 5. The cost of carbon is shown to be a significant factor in economic outcomes. This is corroborated in the Côte d’Ivoire National Electricity Digitization and Access Operation (P176776), where the high and low price of carbon led to a variation on NPV of 53 percent and of variation of EIRR of 34 percent for grid connection investments. Table 2.1: EIRR and NPV for Solid waste management Description EIRR (%) NPV (US$ million) at 6% Shadow Price of Carbon- Low Base 18 26.3 Sensitivity test: +10% on investments costs 17 25.6 Sensitivity test: -20% on benefits 18 21.1 Shadow Price of Carbon-High Base 24 41.2 Sensitivity test: +10% on investments costs 23 40.4 Sensitivity test: -20% on benefits 24 32.9 Drainage 6. Globally, urban flood impacts are more devastating than rural ones because they affect a greater number of people and a higher asset concentration. Disrupted or inadequate drainage can cause or exacerbate flooding, which can cost lives, damage, or destroy property and spread effluent and solid waste. Unsanitary conditions can also spread disease due to stagnant pools of water caused by hampered free drainage. Sediments in ponds and rivers can also increase due to run off from roads without adequate drainage. Therefore, drainage benefits range from saved lives to avoided costs related to infrastructure and property damage (including impacts on housing, businesses, roads etc.). Improved drainage systems also help water discharge, help preserve the water table, and reduce the occurrence of water borne diseases due to stagnant water. 7. Côte d’Ivoire’s economic development, combined with a lack of land planning and infrastructure maintenance, have deepened its urban problems, and led to environmental degradation and greater vulnerability to natural hazards. Major factors exacerbating this vulnerability include: (i) occupation of areas not suitable for construction, building dwellings in high-risk areas such as storm basins. (ii) a deficit in alternative housing exacerbated by rural-to-urban migration. (iii) a lack of investment for implementation of master plans for sanitation and drainage. (iv) an inadequate solid waste management system, causing unsanitary conditions and spreading diseases. (v) insufficient involvement of local authorities in development management. Page 67 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) 8. While climate modelling scenarios present a large variability over the very long term, by 2050, the country could face an estimated 9 percent decrease of precipitation in May coupled with an increase of 9 percent in October and 30 cm of sea level rise. Rising temperatures and increased variability will also increase the frequency and magnitude of extreme events. These will further exacerbate the risk of flooding due to more frequent extreme precipitations and lack of capacity to discharge stormwater by the existing drainage systems. While precise flood models for northern cities are not available, these challenges are expected to affect them. 9. The Project plans US$61.6 million in drainage investment across all eight investment areas. This includes construction of 33 km of stormwater drainage channels, preparation of sanitation and drainage master plans, and acquisition of equipment for local governments. Specific city-level investments will be decided based on community engagement and participatory planning and will be coordinated to ensure spatial integration of the selected investments. 10. The proposed Project’s drainage investments can be considered positive in economic terms. As reference points, the analysis in the PARU, which finances drainage in Abidjan, points to a 28 percent EIRR. Similar projects in other countries show a EIRR range of between 10 percent (Cameroon) to 32 percent (Mali and Mozambique). 11. For economic analysis, given the lack of other data, a range of benefit-to-cost ratios are used based on investments from comparable projects in other comparable jurisdictions. The low end of the range is 1.43x (Tanzania) and the high end is 2.8x (Mozambique). Analysis of the planned drainage investment for this project assumes a five-year funds dispersal period. A 10-year benefits realization period is assumed, where no benefits are realized in years 1 and 2, 72 percent of benefits are realized in years 3, 4, 5 and 6, with 28 percent of benefits are realized in years 7, 8, 9 and 10. A discount rate of 6 percent is assumed. Operations and Management costs are assumed at 5 percent of total investment amount per annum, starting in year 3. A reduction in deaths due to flooding per km and an increase in employment due to prevented flooding disruption are also assumed. 12. The baseline scenario assumes a benefit to cost ratio of 2x. In this scenario the EIRR of drainage investments is 16 percent and NPV is US$17.8 million. (This analysis is subject to change as more information on investments and beneficiaries is finalized). 13. The table below tests sensitivity of drainage investments by varying the benefit-to-cost ratio, and the discount rate to show the effect on NPV. Baseline scenario as set out above is in grey. Table 2.2: EIRR and NPV for Drainage investments Discount rate Benefit ratio 4% 6% 8% 1.43 (US$5.1M) (US$7.8M) (US$10.0M) 1.8 US$13.3M US$8.8M US$5.0M 2 US$23.2M US$17.8M US$13.2M 2.5 US$48.1M US$40.3M US$33.6M 2.8 US$63.1M US$53.8M US$45.8M Latrines 14. Benefits of investment in latrines consist of (i) value of reduced mortality due to improved sanitation- and hygiene-related outcomes; (ii) value of reduced childhood malnutrition related to reduced Page 68 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) bouts of diarrhea and nematode infections; (iii) value of reduced healthcare costs; (vi) value of reduced foregone income; (v) value of reduced school absence; and (vi) value of time saving due to increased privacy and proximity of sanitation points to frequented areas, as laid out in the Cameroon Sanitation Project Phase 1 (P117102). 15. This project plans US$1 million in latrine investment across the investment areas. 16. Economic analysis from the World Bank-financed Gulf of Guinea Northern Regions Social Cohesion Project (P175043) assesses investment in construction of latrines and indicates positive investment outcomes. 17. Estimated yearly benefits are US$6,735 per five toilet latrines. The cost of a five-toilet latrine is estimated at US$29,544. Over a twenty-year period, EIRR per five-person latrine is 24.5 percent, with NPV of US$41,062. Sensitivity is shown with cost overruns, benefits reductions, and benefits lagging by two years. 18. The EIRR is similar in economic analysis for this project at 26 percent, with an NPV of US$678,000. Table 2.3: EIRR and NPV for Latrines Latrine NPV (US$) EIRR (%) Cost Increase 10% 37,844 24.5 Benefits reduce 10% 33,738 21.5 Benefits lag two years 26,617 15.6 Water 19. Investing in water supply infrastructure will provide positive economic benefits of higher and more reliable access to safe potable water, which include direct savings in healthcare costs and lost work-time due to averted cases of diarrhea and malnutrition related disease, as well as potential savings, productivity, and education gains due to time savings realized by households gaining access closer to their home. In addition to investments in water connections and networks, benefits are also derived from the construction of water boreholes, which also help realize health benefits related to reduced risk of diarrhea morbidity, value of time saved to access drinking water; and cost savings from decreased need to purchase water. The project plans US$11.9 million in drinking water investment across all seven investment areas. Per city this is allocated as follows, which includes investment in water connections, network extensions and boreholes. 20. Economic analysis from the World Bank-financed Gulf of Guinea Northern Regions Social Cohesion Project (P175043), which assesses investment in boreholes indicates positive investment outcomes for each type of investment. 21. For water connections, the EIRR is 10 percent (lowering to 8 percent with a 10 percent capital cost overrun and 6 percent with a 20 percent overrun), with an NPV of US$3.4 million, based off a US$6.7 million investment. 22. For boreholes, over a twenty-year period and based on a cost of US6,266 per borehole, EIRR per borehole is 54 percent, with NPV of US$25,192 at a 6 percent discount rate. Sensitivity is shown with cost overruns, benefits reductions, and benefits lagging by two years. Page 69 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Table 2.4: EIRR and NPV for Water Borehole sensitivity NPV (US$) EIRR (%) Cost Increase 10% 24,333 48.7 Benefits reduce 10% 21,814 48.2 Benefits lag 2 years 18,528 30.0 Health 23. The project plans about US$18.2 million in health investment across all eight investment areas. This includes construction of small, central urban and larger scale healthcare facilities, including maternity clinics, as well as improvements and repairs to existing facilities. 24. Benefits of improved access to primary healthcare units consist of value of reduced maternal mortality, value of reduced morbidity-related deaths, value of reduced infant and general mortality, value of quicker and more effective medical treatment. 25. Economic analysis from the World Bank-financed Gulf of Guinea Northern Regions Social Cohesion Project (P175043), assesses investments in construction of primary healthcare facilities indicates positive investment outcomes for primary health care facilities. Over a twenty-year period, based on a cost of US$71,070 per health care unit, EIRR per unit is 67 percent, with NPV of US$390,764. Sensitivity is shown with cost overruns, benefits reductions, and benefits lagging by two years. Table 2.5: EIRR and NPV for Health Health sensitivity NPV (US$) EIRR (US$) Cost Increase 10% 363,780 58.3% Benefits reduce 10% 324,704 57.5% Benefits lag two years 260,464 27.9% Education 26. Benefits of improved access to educational facilities consist of value of reduction in child mortality and maternal deaths related to mother literacy and value of increased productivity income per year of additional schooling. The project plans about US$18.4 million in education investment across all eight investment areas. This includes school upgrades and improvements, and new school/classroom construction. 27. Economic analysis from the World Bank-financed Gulf of Guinea Northern Regions Social Cohesion Project (P175043), which assesses investment in construction of classrooms, indicates positive investment outcomes. Estimated yearly benefits are US$18,476 per classroom. The cost of a classroom is estimated at U$14,446. Over a twenty-year period, EIRR per classroom is 55.1 percent, with NPV of US$59,691. Sensitivity is shown with cost overruns, benefits reductions, and benefits lagging by two years. Table 2.6: EIRR and NPV for Education Education sensitivity NPV (US$) EIRR Cost Increase 10% 48,486 43.3% Benefits reduce 10% 42,517 42.1% Benefits lag two years 817 15.7% Page 70 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Urban agriculture and economic equipment 28. Investment in urban agriculture and restoration/provision of economic equipment supports increasing productivity for small scale farmers, pastoralists, aquaculture producers and small businesses through provision of improved inputs, restoring productive assets for displaced populations, diversifying livelihoods, and increasing resilience to shocks, which has an added benefit of promoting stability. 29. Similar investments in the Gulf of Guinea Northern Regions Social Cohesion Project (P175043) focussed on rehabilitation of primary markets, increasing resilience and productivity of local farmers, aquaculture and livestock producers, including allowing for climate-smart adaptation. In this case the total strategic investment for climate adaptation at the local level to ensure robust economic activity was US$67.5 million, with an NPV at 6 percent of US$284.4 million and an IRR of 63.5 percent. Sensitivity is shown in cost overruns, benefits reductions and benefits lagging by two years. Page 71 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) ANNEX 3: Climate Co-Benefits COUNTRY: Côte d'Ivoire Sustainable and Inclusive Secondary Cities Project 1. The Project will achieve climate Co-Benefits through a series of comprehensive cross-cutting approaches and activities on both mitigation and adaptation side. 2. Mitigation: Optimizing urban forms, methods of construction, and design represents powerful levers for energy efficiency. This objective will be pursued through actions on: (i) build-up density, by concentrating investments in denser areas to reduce the energy and infrastructure costs per inhabitant and shorten the distances between housing and public and commercial facilities, as well as preserving and developing green belt to limit urban sprawl; (ii) accessibility, by developing access to dense neighborhoods through resilient road rehabilitation, using basic road profile, with sidewalks, pavements, surface gutter, double lane, roadsides tree planting, greening ; (iii) “soft” mobility, by encouraging the use of non-motorized modes of transport - developing sidewalks, bike lanes, two-wheelers parking (to avoid parking on sidewalks), greening the roadsides to improve walkability; (iv) energy efficiency, with energy-efficient street lighting, installation of solar panels on public facilities, and energy efficient school / public facilities retrofits; and (v) waste management and storage (methane capture) 3. Climate change adaptation: A major objective of the Project is to manage urban floods combining grey infrastructure measures (drainage systems and flood defenses), nature-based solutions, and softer approaches (land use planning and early warning systems) with relevant support provided to authorities. Examples of green infrastructures include: (i) to absorb rainwater - bioswales, permeable paving, trees & plants, green shores & riverbanks, park as water retention; (ii) to store / capture rainwater –retention pond wet/dry, constructed, and natural wetland, rainwater tanks, and roof water storage; and (iii) to drain rainwater – green ditches/ open water channels, cascading drain, road drainage, reinstatement of vegetation and re-vegetation. Heatwaves and other climate risks will also be managed through green infrastructures such as green corridors (Korhogo), forest preservation and improvement, contour planting (along roads), green urban park, public green space, multifunctional sports field, planting trees and plants in schoolyards, preserving urban agriculture in lowlands. 4. The Project will finance investments in solid waste management in Bouna, Boundiali, Tengréla and Odienné. The Project will support the establishment of more efficient and resilient management and treatment systems (e.g., organization of collection and pre-collection and treatment, and construction of recovery and technical landfill centers with methane capture) that will improve the daily lives of the inhabitants of these cities, most of whom are vulnerable to the effects of the anarchic treatment of municipal solid waste (e.g., proliferation of diseases and decrease in the city's competitiveness due to insalubrity). An assessment of the greenhouse gas emissions resulting from these investments has been carried out. It is based on the methodologies and formulas defined by the Intergovernmental Panel on Climate Change (IPCC) and the World Bank's Curb tool. Data used comes from the General Directorate of Sanitation and Hygiene for those that are available, and from the report "What a Waste 2.0". The analysis shows a gross emission over a 10-year economic lifetime of 619,091 t Co2 and a net emissions of -376,246 t Co2. and the results has been used in the project economic analysis using shadow price of carbon. 5. See Tables 3.1 and 3.2 for details on the integration of these measures per subcomponents and activities: Page 72 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Table 3.1 – Estimated cost breakdown by subcomponent and activities Project Components US$ million Component 1: Developing Green and Climate Resilient Urban infrastructure in Selected 250.0 Secondary Cities Sub-component 1.1: Quick Impact Investments 40.0 Renovation of and improvement to health, education, and recreational facilities 25 Purchase of goods for the renovated facilities and to support local associations 5 Tree planting and anti-erosion measures 10 Subcomponent 1.2: Social and Economic Infrastructure 60.0 Construction and rehabilitation of health, education, and recreational facilities 28.0 Greening of public spaces 10.0 Creation and protection of green spaces (e.g., parks, forests, and riverbanks) 10.0 Rehabilitation and construction of economic infrastructure (e.g., markets and bus stations) 12.0 Subcomponent 1.3. Roads, Sanitation, Solid Waste Management and Water 150.0 Infrastructure Rehabilitation or construction of urban roads 70.0 Preparation of sanitation and drainage master plans 2.0 Construction of stormwater channels and complementary Nature-Based Solutions 66.0 Preparation of Communal Solid Waste Management Plans 2.0 Cleanup campaigns and promotion of recycling and circular economy opportunities 2.0 Construction of sanitary landfills 8.0 Component 2: Providing Support to Local Governments in Selected Secondary Cities 30.0 Sub-component 2.1: Urban planning, land administration, and municipal services 10.0 activities Green and climate-resilient Urban Master Plans, Detailed Urban Plans, and Local Dev. Plans 5.0 Regularization of urban subdivisions, land tenure, and housing policies 2.0 Establishment of Geomatics Units 3.0 Sub-component 2.2: Capacity Development for urban management and social 8.0 participation Hiring of municipal engineers 1.5 Formulating and implementing technical assistance and training plans 3.0 Hiring community organizers 1.5 Implementing activities aimed at encouraging and strengthening citizen engagement 2.0 Subcomponent 2.3: Local Economic Development 12.0 Studies and strategies to support local economic development 2.0 Establishment or reinforcement of a local economic development services 2.0 Sustainable development of local food systems 8.0 Component 3: Project Management and Coordination 20.0 Staffing and training 8.0 Rental of premises, equipment, and operating costs 4.0 Development and implementation Environmental and Social Framework (ESF) activities 3.0 Public information, citizen engagement, communications, and knowledge exchange 5.0 Total 300.0 Page 73 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Table 3.2: Specific Project Activities to Address Climate Change Vulnerability and Mitigation Component Climate-Relevant Activity Component 1: Sub-component 1.1: Quick Impact Investments Developing Renovation of and improvement of health, education, and recreational Green and facilities: Climate Renovations of public buildings and recreational facilities will follow Resilient climate-resilient and energy efficient technical designs, informed by Urban the Green and Resilient Cities for Northern Côte d’Ivoire’s Technical infrastructure Assistance. in Selected Secondary Surroundings spaces and courtyard of public buildings, recreational Cities facilities will be greened to provide shade and cooler areas and contribute to climate change mitigation. Tree planting and anti-erosion measures: Tree planting and anti-erosion measures in river basins, along exist drainage canals, and roads, will help capture carbon dioxide, reduce heat island effects, reduce erosion caused by falling rain, help absorb water in the soil, and help control stormwater runoff. Subcomponent 1.2: Social and Economic Infrastructure Construction and rehabilitation of health, education, and recreational facilities Construction of these public facilities buildings, will follow climate- resilient technical and energy efficient designs, informed by the Green and Resilient Cities for Northern Côte d’Ivoire Technical Assistance. This will increase the resilience of critical social infrastructure in all cities. It will provide shelter points in cases of climate-related disasters and allow for quicker recovery. Improved access to education will provide a vehicle for communication of drills, increased awareness of climate change matters, and implementation of behavioral change campaign (for instance on solid waste). Surroundings spaces and courtyard of public buildings, recreational facilities will be greened to provide shade and cooler areas and contribute to mitigation. Construction of these social and economic will accommodate for migrants (climate and conflict induced) and enhance social cohesion of these cities that present a severe lack of infrastructure and services facilities and are exposed to fragility due to their location close to the borders with Mali and Burkina Faso with high levels of climate in- Page 74 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Component Climate-Relevant Activity migration toward secondary cities which further increases their exposure and vulnerability to climate change. Greening of public spaces and Creation and protection of green spaces (e.g., parks, forests, and riverbanks) Mitigation activities: Greening of public spaces will produce shade and increase walkability, reducing the likelihood of a car-oriented, higher carbon development path. Construction or renovation of public buildings will include climate-smart technical designs (e.g., energy efficient design and solar energy). Adaptation and mitigation activities: Creation and protection of green spaces and protected areas such as parks, forests, and riverbanks will help absorb heat during extreme heat events, reduce the urban heat island effect and therefore energy demand for cooling. Green belts will facilitate a better control of urban sprawl. Additionally, it will Increase green space and tree canopy that absorb air pollution, including GHGs. Rehabilitation and construction of economic infrastructure (e.g., markets and bus stations) Construction of these commerce and transport facilities, will follow climate-resilient technical designs, informed by the Green and Resilient Cities for Northern Côte d’Ivoire Technical Assistance. This will increase the resilience of critical social infrastructure in all cities. Surroundings spaces and courtyard of public buildings, recreational facilities will be greened to provide shade and cooler areas and contribute to mitigation. The rehabilitation of markets will strengthen the resilience of the local farmers, facilitating the trading of their products, strengthening the agricultural logistic and overall increasing the local farmers ability to adapt to climate change. Market facilities will integrate preventive and protective measures to address the climate change impacts on agricultural logistics Rehabilitation of bus stations will reinforce the mass public transport system and increase its usage, reducing the usage of personal mode of transportation Subcomponent 1.3. Roads, Sanitation, Solid Waste Management and Water Infrastructure Rehabilitation or construction of urban roads Mitigation activities: Page 75 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Component Climate-Relevant Activity Roads to be financed by the project were selected through an urban analysis and spatial approach. The road constructed and rehabilitated will foster a higher density of urban development, and accessibility by developing access to dense neighborhoods and key socio-economic infrastructures. Constructed roads will include sidewalks, public lighting, and tree planting which will increase walkability, reduce the likelihood of a car- oriented, higher carbon development path. Urban greening and Nature Based Solutions will also aid carbon sequestration and lower urban GHG-levels. “Soft” mobility, by encouraging the use of non-motorized modes of transport - developing sidewalks, bike lanes, two-wheelers parking (to avoid parking on sidewalks). In addition, roads in good condition slow down the wear and tear of vehicles and the increased average speeds result in lower fuel consumption and consequently in lead to a reduction in CO2 emissions, thus supporting climate change mitigation. Adaptation activities: Road selected to be financed in the city priority investment plans are key to access critical infrastructures (schools, health centers, markets, bus stations). Currently, many roads are difficult to use due to damage from climate hazards and the lack of climate-resilient measures in construction and maintenance, and they may be impassable during extreme weather events. They can be they impassable during extreme weather events. All-weather proofing of roads that used to be dirt roads or severely deteriorated will be accessible under worsening climate change conditions. Accessibility facilitated by the roads to key infrastructure (schools, health centers, markets, bus stations) will increase overall climate resilience of these cities making them able to function normally under worsening climate change conditions. It will also provide better disaster response access and food security in the cities. Drainage along the roads, and further the application of the “Green Roads for Water”42 approach will allow to protect roads while managing rainwater and improve overall stormwater management of the city. Soil permeability will be increased by using appropriate materials for streets, public facilities, markets and parking, and a combination of 42 World Bank (2021) Green Roads for Water: Guidelines for road infrastructure in support of water management and climate resilience. Page 76 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Component Climate-Relevant Activity small-scale nature-based solutions like bioswales will be integrated in the design. Preparation of sanitation and drainage master plans The sanitation and drainage master plans contain a specific volume on stormwater water that will enable the cities to identify the key flood risk mitigation investment required to limit flood impact in their cities. Drainage masterplan will have a specific focus on the utilization of nature-based solutions for stormwater management. Construction of stormwater channels and complementary Nature Based Solutions The construction of at least 30 km of stormwater channels and complementary Nature Based Solutions (e.g., green space conservation or renaturation of watercourse, water buffer using public green space or urban agriculture) will increase the targeted cities resilience to urban flooding, which is projected to increase with higher precipitation during the rainy season. Urban greening and Nature Based Solutions in the drainage systems will include the addition of bioswale, conservation of urban agriculture, and existing wetland present in floodable areas of the river basin. It will reduce the urban heat island effect in the local context that is highly vulnerable to increasing mean and max temperatures due to climate change and provide mitigation impact. Preparation of Communal Solid Waste Management Plans, cleanup campaigns, and promotion of recycling and circular economy opportunities The communal solid waste management plans will aim achieving no illegal dumping and burn, installation of sorting facilities, and methane capture technology at the sanitary landfill. Cleanup campaign will direct the waste to the sanitary landfills and be organized before rainy seasons in order to ensure the proper function of the drainage network for extreme rainy events. Construction of sanitary landfills This activity will finance the establishment of integrated solid waste management services, and the construction of controlled landfills (with methane capture and sorting facilities) in Odienné, Boundiali, Tengréla and Bouna. Unmanaged solid waste is a major cause of flooding due to waste clogging the various stormwater management system during extreme weather event worsened by climate change. Implementation of a well performing solid waste management system will ensure functioning Page 77 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Component Climate-Relevant Activity drainage systems for flood prevention, and mitigate urban GHG- emissions from unmanaged solid waste. Component 2: Sub-component 2.1: Urban Planning, land administration, and municipal services activities Providing Support to Risk of river flooding is medium to high in all districts and pluvial flood Local is medium to high in most districts that the targeted cities are part of Governments Urban planning capacity, enforcement and improved land in Selected administration are decreasing the risk of urban expansion in hazard Secondary prone areas, such as riverbanks and land-slide-prone soils. Cities Green and climate-resilient Urban Master Plans, Detailed Urban Plans, and Local Dev. Plans The development of the Green and climate-resilient Urban Master Plans, Detailed Urban Plans, and Local Dev. Plans will enable climate- smart land-use planning and urban growth management in peri-urban settings. Particularly the plans will take into account flood, and water scarcity risks. Urban plans will also foster densification, better accessibility, non- motorized modes of transport, and overall and higher efficiency of the city to reduce the energy and infrastructure costs per inhabitant and shorten the distances between housing and public and commercial facilities, and avoid carbon intensive development. Urban plan will specifically consider the conservation of forested areas, greenbelts, urban agricultures, and green spaces more broadly to ensure both mitigation and adaption benefits. Regularization of urban subdivisions, land tenure, and housing policies Improved land registration systems have a range of positive effects for climate adaptation, inter alia:43 o Formalized and registered land rights allow people to evacuate their land during climate disasters without fear of losing it or leaving anybody behind to protect the land and risk their lives. o Formalized and registered land rights allow people to safely reclaim their land after climate disasters. o Formalized and registered land rights reduce loss of land, land grabs, and elite capture during and after climate disasters. o Formalized and registered land rights enable land holders to apply for insurance and compensation after climate disasters. 43IPCC, 2019: Summary for Policymakers. In: Climate Change and Land: an IPCC special report on climate change, desertification, land degradation, sustainable land management, food security, and greenhouse gas fluxes in terrestrial ecosystems. IPCC. Page 78 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) Component Climate-Relevant Activity o Formalized and registered land rights give land holders the legal right to sell their land, which is a key coping mechanism after climate disasters. Sub-component 2.2: Capacity Development for Urban Management and Social Participation Through building technical and institutional capacity, this sub- component enables sound management of green and resilient investments planned. It will enable the mainstreaming of climate change consideration in the design and supervision of all infrastructures and technical assistance activities. Local engineers hired by the projects, the PIU, local government staff, and national technical agencies staff will be trained on topic such climate-resilient and energy efficient design, flood risk management, utilization of nature base-solutions, and green spaces, and improving mobility and accessibility. Subcomponent 2.3: Local Economic Development Strengthening of sustainable local food value chains and storage is expected to increase resilience climate-related stresses to urban food- systems, such as heatwaves and drought.44 The local economic development plans will support the local food value chains to adopt climate adaptation practices and increase the resilience of the local farmers. Local economic development plans will account for the climate adaptation of the food value chains. Component 4: This component would support emergency recovery and Contingent reconstruction efforts for future disasters. Emergency Response 44Blay-Palmer, A., Santini, G., Dubbeling, M., Renting, H., Taguchi, M., & Giordano, T. (2018). Validating the city region food system approach: Enacting inclusive, transformational city region food systems. Sustainability, 10(5), 1680. Page 79 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) ANNEX 4: Priority Investment Plan: Framework Methodology for developing the cities’ Priority Investment Plans 1. The Project aims to have a significant impact in eight secondary cities that presents a severe lack of public infrastructure and services, and potential fragility due to their location close the northern border with Mali and Burkina Faso. The objective of the investments planned under the project is to make the cities more spatially and socially inclusive, economically attractive, greener, and environmentally sustainable. Urna Infrastructure and services need to be upgraded to improve the populations’ living conditions, provide jobs and economic opportunities, leverage the cities’ role as drivers of economic growth, as well as making then greener and more resilient to climate change. 2. To meet those objectives, a PIP will be prepared for each target city through an approach combining: (i) the definition of a series of basic principles and overarching objectives (green and climate resilient urban infrastructure); (ii) consultations with local governments, ministries, specialist agencies, development partners local communities to elaborate a long list of sub-projects, and perform an initial screening based on the alignment with project objectives and existing urban master plans and sector programs; (iii) a spatial urban and socioeconomic diagnosis to rationalize and prioritize investments; (iv) the validation and formal adoption of the plans by the target municipalities; and (v) an understanding that PIPs may have to be regularly updated throughout project implementation. Those elements have been used based on an iterative approach. Framing through a menu of investments 3. Based on the PDO, available urban studies, and preliminary discussions with local governments, local communities, and other Project stakeholders, the following categories of investments were defined: (i) quick impact investments; (ii) socio-economic urban infrastructure; and (iii) basic urban infrastructure such as those related to transportation, drainage, solid waste management and water supply. These investments can fall either under the mandate of ministries, specialized agencies, or local governments. It was also agreed that investments proposals should be aligned with municipal three-year rolling plans (“ plans triennaux”) and other planning documents prepared at the local, regional, and national levels. A tentative fund allocation was also established for each municipality based on population and an equalization formula to support the programming approach and guide discussions with stakeholders. Both were used as initial framing for the participatory approach described below. Participatory approach and initial screening 4. A first series of priority investments were identified by municipalities, in close collaboration with local communities, ministries, specialized agencies, and other stakeholders. Consultations were initiated in 2021 with the support of the Coordination Unit of the Urban Resilience and Solid Waste Management Project (PCU) and resulted in a long list of over 800 investment proposals amounting to over US$1.5 billion. These include investments proposals made from existing municipal three-year rolling plans and other planning documents. 5. Investment proposals were discussed, screened, and prioritized considering their relevance regarding the PDO, the basic principle of green and climate resilient urban infrastructure, and the tentative fund allocation. Other criteria have been considered such as number of beneficiaries, implementation complexity, social, economic, and environmental impact, complementarity with investments under other projects financed by the government and development partners, and finally, overall impact on living Page 80 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) conditions and attractiveness of the city. Available studies, plans, and strategies were reviewed to ensure that the proposed investments are aligned with local, regional, and national priorities. Public consultations were held to ensure that the investment proposals reflected the priority needs of local civil society and local stakeholders. As a result, a shortlist of proposed integrated investments amounting to US$250 million was compiled. This shortlist represents an initial list of possible investments to be further prioritized through spatial and economic approach specific to each city, and further public dissemination and consultation for final validation and adoption. It may also be adjusted from time to time in a common agreement between the World Bank, the implementing agencies, and local governments. Prioritization through a spatial urban and economic approach 6. Site visits and further participatory process are organized in each city to continue ensuring joint programming with municipalities, local communities, and other involved stakeholders. The objective is to prepare a first version of the PIPs to be financed by the Project. Attention was given to the identification of the urban and economic challenges specific to each. To limit urban sprawls and foster agglomeration economies, an integrated multi-sectoral spatial approach was used, considering the overall characteristics of the territory, and spatial location and concentrations of both people and economic activities. Having scattered small size investments has been avoided to favor integrated urban and economic impact. Developing access to public facilities in densely populated neighborhoods and central areas, and preservation of urban green spaces have been favored. Risk-sensitive climate-resilient urban planning and infrastructure design are also paramount in view of these cities’ vulnerability to climate change and its resulting impact on poverty. Within this frame, the infrastructure investments proposed are grouped into three broad areas of interventions: (i) Public facilities to support social and economic development. The focus is on the rehabilitation and construction of public schools and other educational facilities, nurseries, local health centers, parks, squares, markets, cattle markets, and bus stations. These public facilities are prioritized in the same selected dense and/or poor neighborhoods whose access are strengthened by the Project. Green and climate resilient design is favored for all investments. (ii) Urban roads. Well-connected street grids bring connectivity and access to facilities, jobs, and markets. The project finances the construction or renovation of urban roads with associated drainage. The focus is on (a) unlocking residential vulnerable neighborhood and their facilities, and (b) improving access to city centers and economic activities areas. Attention is paid to improving safety at accident-prone intersections, non-motorized transportation (footpath, sidewalks, footbridges) and tree planting along roadsides to limit rain flows and improve walkability. (iii) Drainage, nature-based infrastructure, and solid waste management. The focus is on restoring, improving, and protecting the capacity of the drainage system to increase resilience to floods. Priority is given to lowlands and existing natural areas to safeguards and support urban agriculture, parks, and green belts to limit urban sprawl and protect existing jobs. Solid waste management infrastructure complements planned investments from the PARU. Participatory validation and formal adoption of the PIPs 7. Draft PIPs and associated maps are disseminated, discussed, and validated through a consultative and participatory process managed jointly by the PCU and local governments. Once validated by local governments, the PCU and the World Bank, PIPs serve as a roadmap for project investments . 8. PIPs may be adjusted from time to time in a common agreement between the local governments, the PCU and the World Bank. Page 81 of 82 The World Bank Sustainable and Inclusive Secondary Cities Project (P177062) ANNEX 5: Map Page 82 of 82