The World Bank Development Response to Displacement Impacts Project (DRDIP) in the Horn of Africa (P161067) REPORT NO.: RES47916 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF DEVELOPMENT RESPONSE TO DISPLACEMENT IMPACTS PROJECT (DRDIP) IN THE HORN OF AFRICA APPROVED ON APRIL 26, 2017 TO THE REPUBLIC OF KENYA SOCIAL SUSTAINABILITY AND INCLUSION AFRICA EAST Regional Vice President: Hafez M. H. Ghanem Country Director: Boutheina Guermazi Regional Director: Catherine Signe Tovey Practice Manager/Manager: Helene Monika Carlsson Rex Task Team Leader(s): Matthew Stephens, Anna Lisa Schmidt, Samuel Lule Demsash The World Bank Development Response to Displacement Impacts Project (DRDIP) in the Horn of Africa (P161067) I. BASIC DATA Product Information Project ID Financing Instrument P161067 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 26-Apr-2017 30-Apr-2022 Organizations Borrower Responsible Agency State Department for the Development of ASALs, The Republic of Kenya Ministry of Public Service, Gender, Senior Citizens A Project Development Objective (PDO) Original PDO Project Development Objective (from Project Appraisal Document) The Project Development Objective is to improve access to basic social services, expand economic opportunities, and enhance environmental management for communities hosting refugees in the target areas in the Recipient's territory. Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-60210 26-Apr-2017 29-May-2017 28-Jun-2017 30-Apr-2022 100.00 52.06 52.26 IDA-D1840 26-Apr-2017 23-May-2017 20-Jun-2017 30-Apr-2022 3.00 1.80 1.43 TF-A7762 06-Nov-2018 30-Jan-2019 30-Jan-2019 30-Apr-2022 8.18 7.99 .19 The World Bank Development Response to Displacement Impacts Project (DRDIP) in the Horn of Africa (P161067) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES A. Project Status 1. The Kenya Development Response to Displacement Impacts Project (DRDIP) (P161067) was approved on April 26, 2017 and became effective on June 20, 2017. The project is part of the broader DRDIP regional operation (P152822) that also covers Djibouti, Ethiopia and Uganda. 2. At approval, the project comprised a credit of US$100 million to the Government of Kenya (IDA60210-KE) and a grant of US$3 million to the Inter-governmental Authority on Development (IGAD), the peak inter-governmental body in the Horn of Africa (IDA-D1840). An Additional Financing of US$8.18 million through a Trust Fund (TF0A7762) from the Danish International Development Agency (DANIDA) was added to the project and became effective on January 30, 2019. 3. The project supports refugee hosting communities in five sub-counties in Kenya (Turkana West, Wajir South and Lagdera, Dadaab and Fafi in Garissa) through activities under five components, as follows: (i) Social and Economic Infrastructure and Services; (ii) Environmental and Natural Resource Management; (iii) Livelihoods Program; (iv) Project Management, Monitoring and Evaluation (M&E), and Knowledge Sharing; and (v) Support to IGAD for Expansion of the Regional Secretariat on Forced Displacement and Mixed Migration. B. Implementation progress Kenya Credit (IDA60210-KE) & TF0A7762 4. After a slow start in the initial period, project progress has picked up over the last 12 months. Progress towards achievement of the Project Development Objective and Implementation Progress was rated as Moderately Satisfactory in both the most recent Implementation Support Missions (held in June 2021 and November 2020). 5. As of February 1, 2022 disbursement of the credit stands at US$53.86 m (54 percent) and of the DANIDA Additional Financing grant at US$7.99 m (98 percent). 6. Major achievements include the following: - 74 Water, Sanitation & Hygiene (WASH) subprojects completed in FY2019/20 as part of the response to the Coronavirus Disease 19 (COVID-19) - 749 infrastructure subprojects completed under component one (education, water supply, health, markets, sanitation and roads) - 519 integrated natural resource management projects completed under component 2 (e.g., irrigation, reforestation, seeding, water and soil conservation) - 7,470 clean cooking stoves distributed under component 2 The World Bank Development Response to Displacement Impacts Project (DRDIP) in the Horn of Africa (P161067) - 2017 community groups funded for livelihood activities under component 3. IGAD Grant 7. The purpose of the IGAD grant under component five of the project is to support regional coordination and knowledge exchange between the four DRDIP countries, being Djibouti, Ethiopia, Kenya and Uganda. The grant complements a US$5 million grant to IGAD under P152822. Under this project, P161067, IGAD also provides technical assistance to the government of Somalia on development responses to forced displacement. 8. The DRDIP support has helped to establish within IGAD the Regional Secretariat (RS) for Mixed Migration and Forced Displacement. The RS is leading activities in the Horn of Africa to promote development responses to forced displacement and to share knowledge between the DRDIP countries and at regional and global forums. 9. Progress toward achievement of the project development objective (PDO) and Implementation Progress was rated Moderately Satisfactory in the last two implementation support missions for the IGAD grants (February and November 2021). As of February 2, 2022, disbursement for IDA D-1840 stood at US$1.8 m (60 percent). 10. Major achievements under the grant include: - commissioned a Capacity and Institutional Assessment in Areas of Return and Integration for Somalia, which informed a detailed implementation plan, learning plan and procurement plan to help achieve five interrelated outcomes: (i) strengthen existing coordination mechanisms at both federal and regional level; (ii) policy development and legal frameworks to promote durable solutions; (iii) strengthening the information system for durable solutions to forced displacement; (iv) specific technical assistance; and (v) enhanced and effective monitoring, evaluation and learning system. - implementation highlights include: (i) developed a social cohesion policy; (ii) developed National Commission for Refugees and IDPs (NCRI) Strategic Plan (2021-2024); (iii) developed a durable solutions database (digital platform/dashboard for information management) including data on IDPs; (iv) upgraded and expanded the refugee- returnees registration system to include IDPs; and (v) mapped existing socio-economic services in areas of return and reintegration (Baidoa, Kismayo, and Mogadishu). Proposed changes 11. The following changes are proposed: - extend the closing date for IDA Credit 60210-KE for the Government of Kenya to April 30, 2023. - extend the closing date for IDA Grant D1840 for IGAD to December 31, 2022. - extend the closing date for TF0A7762 for the Government of Kenya to May 31, 2022. Rationale for Restructuring Kenya Credit & TF0A7762 12. DRDIP has faced multiple challenges during the last two years. Firstly in in the 2020/21 financial year, the project changed implementing agencies from the Office of the Presidency to the Ministry of Devolution and Arid and Semi- The World Bank Development Response to Displacement Impacts Project (DRDIP) in the Horn of Africa (P161067) Arid Lands (in late 2021 it moved again to the Ministry of Public Service, Gender, Senior Citizens Affairs and Special Programmes). The transition led to delays in budget management. The impact of COVID-19 has also been significant for the project, based as it is on community-driven development principles that require community planning, decision- making and implementation. Restrictions on large gatherings have affected progress. Movement restrictions due to COVID and security concerns in some of the project sites have also affected the ability of the Project Implementation Units at the national and county levels to provide effective oversight and management support. 13. Consequently, while the pace of implementation has picked up significantly through 2021, a number of activities will not be completed by the closing date. Thus, the Government of Kenya on June 23, 2021 formally requested the Bank to extend the project closing date by one year. The same letter requested an extension of the Additional Financing grant TF0A7762 until June 30, 2022 to ensure all activities will be completed. However, the latest possible closing date is May 31, 2022 due to the fact that the trustee account closes on November 30, 2022 and the TF must close at least six months prior. 14. The client has agreed on the set of activities to be performed during the planned extension period. There are no outstanding audit reports for this credit. IGAD Grant 15. The IGAD grant supports a combination of coordination events (such as the Regional Project Steering Committee meetings that bring together the four DRDIP countries and Somalia), targeted technical assistance (including helping roll out the World Bank's Geo-Enabling Initiative for Monitoring and Supervision or GEMS), analytical work on key areas of common interest to the four countries (e.g., approaches to supporting renewable energy) and learning events. Many events that were planned to be held in-person were postponed during 2020 and 2021 due to the impacts of COVID-19. While IGAD is now adapting its work plan to the new realities of life during a pandemic, the delays mean that some activities will not be completed by the original closing date. 16. Furthermore, with the DRDIP operation to be extended in Kenya and already running through to the end of 2022 or 2023 in the other DRDIP countries (Djibouti, Ethiopia and Uganda), an extension of the IGAD grant will allow it to continue its support for regional coordination and learning across all DRDIP countries. 17. Accordingly, on April 1, 2021, IGAD submitted a request for a no-cost extension to the closing date of the grant to December 31, 2022. The same letter requested two separate amounts of Additional Financing for IGAD: (a) for the existing four countries; and (b) to extend technical support to Sudan and South Sudan. The Additional Financing requests are being considered separately by the task team, which is in the process of ascertaining client demand and trying to identify sources of financing. The AF request will be processed separately at a later date should demand and financing be confirmed. 18. There are no outstanding audit reports for this grant. III. DETAILED CHANGES LOAN CLOSING DATE(S) The World Bank Development Response to Displacement Impacts Project (DRDIP) in the Horn of Africa (P161067) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-60210 Effective 29-Apr-2022 30-Apr-2022 30-Apr-2023 30-Aug-2023 IDA-D1840 Effective 29-Apr-2022 30-Apr-2022 31-Dec-2022 30-Apr-2023 30-Jun-2021, 30-Apr- TF-A7762 Effective 30-Jun-2020 31-May-2022 30-Sep-2022 2022