The World Bank Beirut Housing Rehabilitation and Cultural and Creative Industries Recovery (P176577) Project Information Document (PID) Appraisal Stage | Date Prepared/Updated: 16-Dec-2021 | Report No: PIDC31939 Nov 18, 2021 Page 1 of 10 The World Bank Beirut Housing Rehabilitation and Cultural and Creative Industries Recovery (P176577) BASIC INFORMATION OPS_TABLE_BASIC_DATA A. Basic Project Data Country Project ID Project Name Parent Project ID (if any) Lebanon P176577 Beirut Housing Rehabilitation and Cultural and Creative Industries Recovery Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead) MIDDLE EAST AND NORTH 17-Dec-2021 24-Jan-2022 Urban, Resilience and AFRICA Land Financing Instrument Borrower(s) Implementing Agency Investment Project Financing United Nations Human United Nations Human Settlements Programme Settlement Programme (UN-HABITAT) Proposed Development Objective(s) The project aims to support the rehabilitation of prioritized historical housing for the most vulnerable people and to provide emergency support to creative practitioners and entities in areas affected by the Port of Beirut explosion. Components Resilient Housing Reconstruction Emergency Support for Cultural and Creative Industries Recovery Project Management OPS_TABLE_FCC The processing of this project is applying the policy requirements exceptions for situations of urgent need of assistance or capacity constraints that are outlined in OP 10.00, paragraph 12. Yes PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 12.75 Total Financing 12.75 of which IBRD/IDA 0.00 Financing Gap 0.00 Page 2 of 10 The World Bank Beirut Housing Rehabilitation and Cultural and Creative Industries Recovery (P176577) DETAILS -NewFinEnh1 Non-World Bank Group Financing Trust Funds 12.75 Lebanon Financing Facility 12.75 Environmental and Social Risk Classification Substantial Decision The review did authorize the team to appraise and negotiate A. Country Context 1. On August 4, 2020, a massive explosion at the Port of Beirut (PoB) devastated the city, killing at least 217 people, wounding more than 6,000 and displacing around 300,000 individuals. The explosion caused widespread destruction to homes, businesses, infrastructure, and disrupted economic activity. In the immediate aftermath of the blast, a Rapid Damage and Needs Assessment (RDNA) was undertaken to estimate the impact of the disaster on the population, changes in economic flows, physical assets, infrastructure, and service delivery in Beirut. Total damages were estimated between US$ 3.8-4.6 billion, and losses were estimated at US$ 2.9-3.5 billion, with the housing sector being the hardest hit, followed by the transport and port sector, and the culture sector.1 2. The compounded shocks of Covid-19, socioeconomic crises, and the PoB explosion reinforce the ongoing financial crisis the country is facing2. Even before the explosion, the fallout of the economic crisis and the pandemic had led to a significant increase in poverty and shrinking of the middle class. Recent projections estimate that poverty rates have surged from 28 percent in 2019 to over half of the population in Lebanon currently living under the poverty line. The unemployment rate also rose, from 28 percent in February (pre- COVID) to nearly 40 percent in the Nov-Dec 2020.3 B. Sectoral and Institutional Context 3. Housing was the most impacted sector by the PoB explosion, with vulnerable populations4 being the most severely affected. The explosion is estimated to have caused between US$ 1.9 – 2.3 billion in damage to 1 World Bank Group; European Union; United Nations. 2020. Beirut Rapid Damage and Needs Assessment. World Bank, Washington, DC. © World Bank. - https://openknowledge.worldbank.org/handle/10986/34401 2 Lebanon has one of the most unequal wealth distributions in the region and the world, ranking twentieth globally where 10 percent of adults owned 70.6 percent of all estimated personal wealth in the country in 2019. 3 Lebanon Economic Monitor, Lebanon Sinking (to the Top 3), Spring 2021 4 Socio-economic vulnerability: The project will prioritize the poorest and the most vulnerable households affected by the blast (e.g. low-income, FHH, refugees), based on a socioeconomic field survey. The vulnerability criteria consider social (i.e. presence of elderly, female headed households, people with disabilities, refugees, building located in an area of higher social vulnerability) and economic vulnerability (i.e. household receiving rental support, presence of CCI, level of income). Page 3 of 10 The World Bank Beirut Housing Rehabilitation and Cultural and Creative Industries Recovery (P176577) the housing sector, adversely affecting an estimated 351,000 residents of Beirut.5 About 87,552 housing units were damaged6, 16 percent of them completely destroyed, 29 percent partially damaged, and 55 percent minimally damaged. Of all asset classes, low-income housing units7 sustained the most damage, with 64 percent of these units (est. 22,000 low-income residential units) having sustained some form of damage. Units and buildings remaining in need of repair are mainly those severely damaged, requiring more costly structural works, particularly historic buildings dating back to the Ottoman era. 4. The Cultural and Creative Industries including cultural practitioners and entities in Beirut are mostly located in the neighborhoods affected by the explosion, which are home to 850 CCI businesses and 88 galleries and cultural spaces.8 Overall, the estimate of damage9 to the cultural sector ranges from US$1 to US$1.2 billion, with losses for the first 36 months after explosion ranging from US$400 to US$490 million. The explosion caused losses to intangible assets where the sector has experienced severe loss of cultural production and intangible heritage, with impacts on associated livelihoods, and risk of permanent exodus from the sector of those affected. As a result, the livelihoods of these cultural actors are affected and have led to a decline in cultural production. It is urgent to lend emergency support to CCI to sustain the livelihoods of cultural actors and help reverse their exodus to recover and retain the vibrancy and creative identity of the affected neighborhoods. 5. The Government of Lebanon (GoL) requested the support of the Lebanon Financing Facility (LFF) to support the emergency reconstruction of Beirut and to address the most pressing gaps left through humanitarian assistance. The project will focus on the gaps left after the humanitarian phase and identified through consultations with organizations on the ground, namely the rehabilitation of select, severely damaged residential units of heritage value that host vulnerable populations, and the revitalization of the culture and creative industries sector. The project will also embed bases for longer term area-based urban recovery and regeneration for the city. Given the institutional challenges and dynamic political situation, the project will be implemented through UN-Habitat, but will rely on strong coordination with the GoL, particularly at the Governorate level, and relevant stakeholders, and will support the initiation of longer-term urban reconstruction dialogue with the relevant institutions. C. Relevance to Higher Level Objectives 6. The proposed operation is aligned with the strategic objectives of the World Bank Country Partnership Framework (CPF) for Lebanon (CPF FY17-22) and the Lebanon Reform, Recovery, and Reconstruction Framework (3RF). The project will address Focus Area 1: Expand access to and quality of service delivery through resilient housing rehabilitation. The project will focus on increasing access to affordable housing by rehabilitating severely damaged residential buildings of heritage value for some of the most vulnerable. Moreover, the project will intervene in the cultural and creative sector and will help foster the socio-economic inclusion of women, youth, and other marginalized groups, leveraging their talent and creativity for cultural production. Specifically, the project will build on culture to facilitate tolerance, social cohesion, and inclusion. Through this approach, the WBG will help Lebanon mitigate the economic and social impact of Beirut’s 5 World Bank Group; European Union; United Nations. (2020). Beirut Rapid Damage and Needs Assessment. Washington, DC.: World Bank Group. 6 The 87,552 damaged residential building represented about 51 percent of the 171,887 housing units assessed 7 Combined low-income apartment buildings and low-income, single-family housing asset typologies. 8 World Bank Group; European Union; United Nations. 2020. Beirut Rapid Damage and Needs Assessment. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/34401 License: CC BY 3.0 IGO 9 World Bank Group; European Union; United Nations. (2020). Beirut Rapid Damage and Needs Assessment. Washington, DC.: World Bank Group. Page 4 of 10 The World Bank Beirut Housing Rehabilitation and Cultural and Creative Industries Recovery (P176577) compounded crises, rebuild identity and a sense of hope in the affected communities, and enhance the prospects for stability and development in the coming years. Moreover, the operation aligns with the 3RF pillar and priority areas of social protection, inclusion, and culture as well as improving services and infrastructure. Additionally, the operation embeds the 3RF cross-cutting priorities of gender, inclusion and transparency, as well as governance and renewing the social contract by improving data availability, promoting citizen engagement, and contributing to the debate on policy reforms. The project is also aligned with the Lebanon Financing Facility (LFF)’s commitment to proactively identify, address and monitor gender gaps, as well with the 3RF (Gender equality and women’s empowerment as a guiding principle). 7. The project contributes to and is aligned with the World Bank Group’s twin goals to eradicate extreme poverty and promote shared prosperity in a sustainable manner. The objectives of the operation are strongly linked to the Reconstruction and Recovery Pillar and Resilience and the Renewing the Social Contract Pillar of the WBG MENA strategy. The project will contribute to the implementation of the World Bank Group MENA enlarged strategy, particularly to building resilience to shocks, renewing the social contract, and building human capital. D. Proposed Development Objective(s) PDO Statement 8. The project aims to support rehabilitation of prioritized historic housing for the most vulnerable people and to provide emergency support to creative practitioners and entities in areas affected by the Port of Beirut explosion. PDO Level Indicators 9. The PDO will be monitored through the following PDO level outcome indicators (see Results Framework for further details): A. People benefiting from resilient, rehabilitated residential units (Number) (i) Homeowners benefiting from resilient, rehabilitated residential units (Number) (ii) Tenants benefiting from resilient, rehabilitated residential units (Number) B. Direct beneficiaries of grants for cultural production (i) Cultural entities supported in cultural production work (Number) (ii) Cultural practitioners supported in cultural production work (Number) E. Project Components 10. The proposed project responds to critical needs on the ground in terms of emergency reconstruction of severely damaged residential buildings and CCI support, while establishing the basis for medium-term reconstruction and resilient recovery for the city. The project is structured as follows: 1A) the rehabilitation of severely damaged residential heritage buildings; 1B) the provision of technical assistance for rental support; 2) support to cultural entities and practitioners through the provision of grants for cultural production; and 3) project management. Page 5 of 10 The World Bank Beirut Housing Rehabilitation and Cultural and Creative Industries Recovery (P176577) Component 1. Resilient Housing Reconstruction Subcomponent 1.1 Residential Heritage Buildings Rehabilitation 11. This subcomponent will finance the rehabilitation of a select number of severely damaged buildings that have been directly impacted by the blast and have not been addressed yet. The project will prioritize complex repairs of severely damaged residential units that have not been completely rehabilitated and are located in a neighborhood within 5 km of the epicenter of the blast. A focus will be on a subset of vacant residential buildings that were inhabited by lower-income and vulnerable10 households with low tenure security that may have been temporarily displaced. 12. The building rehabilitation process will follow a Build Back Better (BBB) approach. This entails rehabilitation occurs in ways that are stronger (more productive and resilient), faster (limiting the impact of shocks), and more inclusive (ensuring nobody is left behind). The project will adopt the national construction code and best international construction practices. In addition to structural strengthening of buildings, it is envisaged that the rehabilitation of residential buildings will also be aimed at increasing climate change mitigation and building accessibility. Subcomponent 1.2 Technical Assistance for Rental Support 13. The Rental Support subcomponent will provide: (i) support to beneficiaries (tenants and owners) of subcomponent 1.1 to achieve sustainable rental agreements; and (ii) capacity development to renters in the districts of Rmeil and Medawar for them to advocate for renters’ rights and minimize eviction risk. The intended outcome of this component is to promote the return of the vulnerable households who were living in the affected area prior to the explosion and to facilitate stability on their rental agreements for a reasonable period after the rehabilitation, to be finalized in the early phases of implementation. To do so, the subcomponent will tackle housing and property (renter–owner) legal disputes within selected buildings to facilitate the return of affected households, promoting affordable rental housing and minimizing eviction risk. As such, the first activity will leverage the improvements works conducted under subcomponent 1.1. to ensure displaced tenants can return to their homes with preferential rental agreements (i.e. long-term contract, rental cap). 14. Capacity development and outreach and awareness campaigns will be conducted as a part of the second activity to make vulnerable households aware of the rental laws and risk of eviction. This second activity will include: (i) Conduct awareness-raising and capacity-building sessions on housing and property rights targeting tenants and owners and relevant local and international NGOs; (ii) Conduct capacity-building and outreach campaigns to enhance relevant governmental entities’ engagement in addressing identified housing and property issues.; and (iii) Document the learning process to inform the progressive development of the Urban Recovery Strategy11 and other ongoing affordable housing initiatives. 10 This includes low-income population, refugees, migrant workers, Female Head-of-Household (FHH), and the LGBTQI+ community. 11 The Urban Recovery Strategy will be developed by the World Bank in parallel as part of an ASA linked to this operation. Page 6 of 10 The World Bank Beirut Housing Rehabilitation and Cultural and Creative Industries Recovery (P176577) Component 2: Emergency Support for Cultural and Creative Industries (CCI) Recovery Subcomponent 2.1 Technical Support for Cultural Actors 15. An extensive outreach and communication campaign will be conducted to reach out to cultural entities and practitioners operating in Beirut to raise awareness about the project. The campaign will be rolled out by a local organization hired by UNESCO with the following proposed tasks: (i) development of needed communication materials; (ii) raising awareness about the project; and (iii) preliminary identification of interested eligible beneficiaries. Technical support will be provided to cultural entities and practitioners for the design and implementation of cultural productions; cultural entities and practitioners with low capacity will be prioritized. To ensure adequate technical support, the same local organization engaged on the communication and outreach campaign will also perform this technical role. Subcomponent 2.2. Provision of Grants for Cultural Production 16. To access support, cultural entities and practitioners will apply for grants under component 2. A Grant Approval Committee (GAC) will be set up, chaired by UNESCO, and comprised of external members (on a pro- bono basis), with representatives of both ministerial institutions and cultural entities active within the cultural sector. UNESCO will set clear controls and guidelines to ensure clear, equitable and accountable management of funds. It is expected that the grants will be disbursed in at least two installments. The Project Operations Manual (POM) will spell out the details related to the calls for proposals, mechanics of disbursement of grants and the required documentation to be submitted by grantees, such as narrative and financial reports. 17. The criteria that guided the prioritization process of cultural and creative industries are the geographic scope, the socio-economic inclusion and the local ecosystem: (i) geographic scope: selected CCI are present or relevant in the neighborhoods affected by the PoB explosion; (ii) socio-economic inclusion: selected CCI are run, implemented by or benefit vulnerable groups and individuals (identified as low-income youth and women, persons with disabilities, the elderly, LGBTIQ+, refugees, displaced people and migrants); and (iii) prevalence/ecosystem of cultural entities/practitioners: selected CCI are primarily composed of local cultural institutions/centers/associations of a non-profit nature and by self-employed cultural workers. Component 3. Project Management 18. This component will ensure coordinated, effective, and efficient management of the project. It will support the overall coordination and management of the proposed activities, including, inter alia: (i) track project costs to meet the budget; (ii) develop and manage a detailed project schedule and work plan; (iii) provide project updates on a consistent basis to the World Bank task team about strategy, adjustments, and progress; (iv) manage contracts with vendors and suppliers by assigning tasks and communicating expected deliverables; (v) utilize industry best practices, techniques, and standards throughout the entire project execution; (vi) monitor progress and adjust as needed; and (vii) measure project performance using agreed upon results framework and indicators to identify areas for improvement. 19. Under Component 3, Project Management will ensure adequate resources for implementation and monitoring of gender related activities (for instance, gender expert/focal point for UN-Habitat to support implementation and monitoring). . Page 7 of 10 The World Bank Beirut Housing Rehabilitation and Cultural and Creative Industries Recovery (P176577) . Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No Summary of Assessment of Environmental and Social Risks and Impacts . E. Implementation 20. The proposed project is an emergency operation processed under OP 2.30 and OP 10.00 paragraph 12. It uses UN-Habitat as the recipient of the Lebanon Financing Facility (LFF) funds and as alternative implementation agency on an exceptional basis under the Financial Management Framework Agreement (FMFA) between the World Bank and UN agencies. Detailed implementation arrangements can be found in annex 2. 21. The project will be implemented by UN-Habitat through direct implementation as well as project cooperation agreements between UN-Habitat and UN/local partners. UN-Habitat will: (i) take responsibility for project implementation; (ii) monitor the project targets and results in coordination with the local partners; (iii) handle relevant procurement, financial management, and disbursement management, including the preparation of withdrawal applications under the project; and (iv) ensure that all reporting requirements for the LFF are met per the Grant Agreement. Figure 4 below describes the project governance and management structure to be put in place under the project. The project will also benefit from UNESCO’s global and local experience on culture and creative industries as the implementer of Component 2. 22. A Technical Advisory Committee (TAC) will provide strategic level advice on project implementation to support integration and synergies among the activities of the components. The TAC will be chaired and managed by UN-Habitat, and comprise of key government and CSOs actors. The TAC will ensure a cross- sectoral, integrated, and area-based approach towards the overall long-term vision of the urban recovery efforts. 23. Under an UN-to-UN agreement, the United Nations Educational, Scientific and Cultural Organization (“UNESCO�) will carry out Component 2 activities as a contributing UN entity. UNESCO will be responsible for administering the contributing amount following UN-Habitat financial regulations, rules, policies and procedures, and administrative instructions with the appropriate cascading responsibilities on safeguards, Anti-Corruption Guidelines, and procurement and financial management, as well as carrying out the activities efficiently and effectively. UNESCO will report to UN-Habitat with trimestral narrative reports on the progress of activities and annual financial reports. 24. Annual Subproject Plans. A citizen-informed annual subproject plan recommended by the TAC and finalized by UN-Habitat will be submitted to the World Bank for no-objection prior to commencement of implementation. The annual subproject plans will be reviewed during implementation to ensure the continued Page 8 of 10 The World Bank Beirut Housing Rehabilitation and Cultural and Creative Industries Recovery (P176577) appropriateness of the selected buildings to rehabilitate, the calls for proposals and the technical assistance provided to the beneficiaries. 25. Closing date and implementation schedule. The planned activities under the proposed emergency operation will be implemented over a period of two years and a half (January 30, 2022 to September 30, 2024). 26. A detailed Project Operations Manual (POM) will be prepared to guide overall project implementation arrangements. The POM will describe the project and the PDO objectives, results indicators, implementation roles and responsibilities (implementation arrangements matrix), financial management, procurement, safeguards and other project implementation details. . CONTACT POINT World Bank Karima Ben Bih Disaster Risk Management Specialist Dario Zanardi Social Development Specialist Borrower/Client/Recipient United Nations Human Settlements Programme Implementing Agencies United Nations Human Settlement Programme (UN-HABITAT) Taina Christiansen Representative info.lebanon@unhabitat.org Page 9 of 10 The World Bank Beirut Housing Rehabilitation and Cultural and Creative Industries Recovery (P176577) FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects APPROVAL Karima Ben Bih Task Team Leader(s): Dario Zanardi Approved By Practice Manager/Manager: Country Director: Saroj Kumar Jha 16-Dec-2021 Nov 18, 2021 Page 10 of 10