The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) j Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. Please delete this note when finalizing the document. Project Information Document (PID) Concept Stage | Date Prepared/Updated: 05-Sep-2022 | Report No: PIDC34312 Sep 05, 2022 Page 1 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) BASIC INFORMATION A. Basic Project Data OPS TABLE Country Project ID Parent Project ID (if any) Project Name Colombia P178932 Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead) LATIN AMERICA AND Dec 09, 2022 Jul 07, 2023 Water CARIBBEAN Financing Instrument Borrower(s) Implementing Agency Investment Project Financing Bogota Water Utility Bogota Water Utility (Empresa de Acueducto y (Empresa de Acueducto y Alcantarillado de Bogota - Alcantarillado de Bogota - EAAB) EAAB) Proposed Development Objective(s) Improve EAAB wastewater management capacity PROJECT FINANCING DATA (US$, Millions) SUMMARY-NewFin1 Total Project Cost 110.00 Total Financing 110.00 of which IBRD/IDA 83.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Bank for Reconstruction and Development (IBRD) 83.00 Non-World Bank Group Financing Counterpart Funding 7.00 Sep 05, 2022 Page 2 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) Borrower/Recipient 7.00 Other Sources 20.00 Development Bank of Latin America (CAF) 20.00 Environmental and Social Risk Classification Concept Review Decision Substantial Track II-The review did authorize the preparation to continue Note to Task Teams: End of system generated content, document is editable from here. Please delete this note when finalizing the document. Other Decision (as needed) B. Introduction and Context Country Context 1. The outbreak of the COVID-19 pandemic caused a large shock to Colombia’s economy and society. The drop in global and domestic demand and mobility restrictions caused the country’s Gross Domestic Product (GDP) to contract by 6.8 percent in 2020. The authorities promptly put in place a range of monetary and fiscal measures to support firms and households, which helped to contain the contraction of GDP and of private consumption, but not that of gross fixed capital formation, which declined by 23.3 percent, dragged by both private and public investment. Fiscal emergency measures and the fall in nominal GDP pushed the central government deficit to a record 7.8 percent of GDP in 2020 and the gross (that is, unconsolidated) general government debt-to-GDP ratio to 67.2 percent at end-2020. The national poverty rate increased from 35.7 in 2019 to 42.5 percent in 2020.1 2. Colombia’s economy bounced back robustly from the COVID-19 crisis. The country’s GDP grew by 10.6 percent in 2021, reaching its 2019 level by the end of the year, on the back of the removal of mobility restrictions and the consequent reactivation of the economy, which were possible thanks to progress in vaccination in the country as well as the reduction of COVID-19 cases. 3. The economic setback resulting from COVID-19 has exposed the weaknesses of Colombia’s economy. Despite the strong economic outlook and poverty reduction that Colombia experienced in the past two decades, the country continues to face high levels of poverty and income inequality. In fact, income inequality in Colombia is higher than any 1 World Bank. 2021. Data Bank: Colombia – poverty. https://data.worldbank.org/topic/poverty?locations=CO Sep 05, 2022 Page 3 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) Organization of Economic Cooperation and Development (OECD) countries.2 In February 2021, the government formulated the National Economic and Social Policy Council (Consejo Nacional de Política Económica y Social or CONPES) 4023, which presented policy guidelines to reactivate the economy taking into account longer term sustainability considerations. This document portrays the Government of Colombia (GoC)’s commitment to reduce inequality through job creation to compensate the economic contraction resulting from the pandemic and it incorporates an investment plan equivalent to 12.5 percent of GDP to allocate across critical sectors, as well as establishes a set of actions that promote a sustainable and inclusive growth throughout the nation. However, low productivity levels and limited social mobility will weigh on growth. Although growth is projected to reach 5.5 percent in 2022, this masks a flattening of activity during the year and a moderate growth over the medium term of just 3.3 percent. Also, reducing the public debt-to-GDP ratio and complying with the requirement of the fiscal rule will require strengthening tax collection and tight control of spending. 4. In addition to these challenges, climate variability and its impact on natural resources poses increasing risks to Colombia’s economic development. Throughout history, Colombia has experienced a strong correlation between natural hazards and negative economic outcomes. Assuming that extreme weather events will be more frequent and intense over the coming years, recent World Bank studies indicate that the highest impacts would result in alterations in the water cycle. The impacts of flooding, droughts, gaps in water supply and sanitation, as well as poor water resources management could impact the country’s GDP by up to 3 percent. The largest GDP impacts result from the reduction in production due to water cuts, employment contraction during droughts, and floods affecting property and agricultural income.3 Sectoral and Institutional Context 5. Water quantity and quality issues reduce the country’s ability to face climate variability risks and a growing demand for water resources. Despite Colombia’s water resources abundance, many parts of the country already suffer from water stress. The Magdalena-Cauca, Amazon and the Pacific regions have higher risks of becoming water insecure in the 2030’s (World Bank, 2020) and 17 percent of the continental area of the national territory is at risk from flooding (IDEAM 2018). In addition to water quantity issues, pollution is affecting the country’s rivers due to rapid urbanization, putting higher pressures on surface water and groundwater resources, and threatening future water security. In 2018, the National Report on Water Quality identified 289 municipalities with high and very high risks stemming from low water quality for human consumption. Most of these pollution risks have been attributed to a low percentage of wastewater treated (42 percent), low surveillance capacity of Regional Autonomous Corporations (CARs) and low coverage and performance of wastewater treatment infrastructure. 6. To tackle these issues, the GoC has recognized the importance of modernizing wastewater management for the country’s development. The Green Growth Policy (Misión Crecimiento Verde) in the country’s 2018-2022 National Development Plan (Plan Nacional de Desarrollo or PND) highlights investments in wastewater treatment infrastructure as a key step towards the country's economic development and green growth for the next decade. Most recently, in 2020, the CONPES approved a national policy document to implement the principles of circular economy in the management of drinking water and wastewater to guarantee the availability of water in the long term (CONPES 4004 2 https://www.oecd.org/social/bycountry/colombia/ 3 World Bank. 2020. Turning the Tide: Improving Water Security for Recovery and Sustainable Growth in Colombia. Sep 05, 2022 Page 4 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) of 2020).4 Despite these efforts, fast growing cities such as Medellín, Cali and Bogotá are still struggling to manage wastewater, control water pollution and improve water body environmental quality. 7. The capital city of Bogotá, with a population of approximately eight million people, currently treats only 30 percent of its wastewater and discharges it into the Río Bogotá, leading to negative impacts on health, environmental degradation and a higher cost of hydropower generation. The Río Bogotá is located in the Cundinamarca Department of Colombia. With an average flow of 10 m3/s and a basin of 6,000 km2, the river is considered essential for the Cundinamarca Department, as it supplies drinking water in the upper basin and supports multiple uses, such as agriculture, livestock and electricity generation in its lower part. However, Bogotá’s limited wastewater treatment has led to high contamination levels in the river, resulting in Total Suspended Solids (TSS) levels of 89 mg/L and Biochemical Oxygen Demand (BOD) levels of 150 mg/L in its lower basin, causing health impacts for an estimated of 8.1 million people, deteriorating wetlands and biodiversity, posing a risk for agricultural practices downstream, and negatively impacting hydropower generation costs in the Muña hydropower reservoir, which currently generates 4000 GW/hr/year using untreated wastewater. 8. Authorities started addressing these impacts through long-term investment, policy and institutional commitments in 2004. The Cundinamarca Tribunal issued a ruling in 2004 ordering the local, regional and national government agencies to begin with an environmental decontamination project of the Río Bogotá’s middle basin. Later that year, the Departmento Nacional de Planeación (DNP) issued a strategic planning document for the Río Bogotá ( Estrategia para el Manejo Ambiental del Río Bogotá, CONPES 3320), which included the upgrading of existing wastewater treatment plant (WWTP) ‘’El Salitre,� which has a total treatment capacity of 7 m3/s and treats 30 percent of the city’s total wastewater.5 This plan also contemplated the construction of a new WWTP called “Canoas� to treat the remaining 70 percent of collected wastewater (see Figure 1). Since then, the CAR of Cundinamarca became responsible for the upgrading and expansion of the Salitre WWTP, and the Bogota Water and Sewerage Utility (Empresa de Acueducto y Alcantarillado de Bogotá, EAAB) — who will operate and maintain the new infrastructure once the Salitre WWTP is commissioned — is advancing with the construction of the Canoas pumping station as well as the structuring of the Canoas WWTP public-private partnership (PPP). In 2018, the Cundinamarca Department signed Convenio 1483 with EAAB which defined the amounts, terms and conditions under which the Department will co-finance the Canoas WWTP, and in 2019, CAR and EAAB signed Convenio 823 to join financial, administrative and technical efforts for the project. That same year, the Bogotá District and EAAB signed Convenio 830 to finance the remaining portion of the construction of the Canoas WWTP, officializing their participation, as well as the Cundinamarca Department’s and CAR’s as co-financiers in the Canoas Project. 4 CONPES 4004. https://colaboracion.dnp.gov.co/CDT/Conpes/Econ%C3%B3micos/4004.pdf 5 CONPES 3320. https://colaboracion.dnp.gov.co/CDT/Conpes/Econ%C3%B3micos/3320.pdf Sep 05, 2022 Page 5 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) Figure 1. Río Bogotá Sanitation Program Scheme Source: Empresa de Acueducto y Alcantarillado de Bogotá 9. The Canoas WWTP is the cornerstone of these investments and will be one of the largest infrastructure projects in the country. The Canoas WWTP will be the largest WWTP in Colombia, and the third largest in Latin America. The Canoas WWTP will be built in Vereda el Charquito, an area of approximately 292 hectares located on the right bank of the Río Bogotá. This area in the west of Bogotá City is owned by EAAB and it was designated for the Canoas WWTP by the municipality of Soacha, Cundinamarca. The plant will have a total treatment capacity of 16 m3/s using primary and secondary treatment stages, with disinfection. This will allow the plant to reach a final effluent quality of 30 mg/L of BOD and 30 mg/L of TSS. 10. With an estimated total cost of US$ 2.47 billion, the Canoas WWTP will be built using a PPP scheme to catalyze private sector finance. The PPP contract will include designs, financing (18 months from the start of the PPP contract), construction (52 months), commissioning and process stabilization (12 months), operation and maintenance (5-10 years) and handover of the Canoas WWTP back to EAAB (12 months). EAAB has quickly advanced in the preparation of a draft contract and a draft prequalification document. EAAB is also developing a financing model to define the length of the operation phase of the PPP, and EAAB expects to launch the prequalification for the Canoas WWTP contract in 2022. This PPP contract scheme will catalyze the financing and technical experience from the private sector, Sep 05, 2022 Page 6 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) reducing the risk of interface between the construction, commissioning and the operation of the plant. Public finance will reduce the pressure on private finance and balance emerging risks during the construction and operation phases. 11. In addition to wastewater treatment infrastructure, EAAB is responsible for Bogotá’s sewerage and urban drainage infrastructure. EAAB’s sewerage system includes separate sanitary, stormwater and combined sewerage networks, and, while the central sector of the city is served by a combined system, the western low-lying areas are using a separate system. EAAB has 5 operational zones across the city and each zone is responsible for the operation and maintenance of minor sewerage networks. However, the Bogotá River basin receives sewage and stormwater through different sewer systems from 15 sub-basins, and areas such as Southwest Bogotá are at risk of urban flooding events. In early 2022, EAAB constructed new stormwater and sewerage networks, and embarked on a rehabilitation program for its water supply and sanitary sewerage networks, with the aim of mitigating the risk of flooding and guaranteeing continuous services for 3000 people. 12. To successfully comply with its mandate, EAAB is seeking to improve its institutional capacity and modernize its wastewater management practices. EAAB is currently a financially solvent utility with a minimum level of debt, representing only 0.06 percent of assets, and with sound financial indicators (e.g. EBITDA and operating margins of 53 percent and 41 percent, respectively). Today, EAAB has the financial resources to carry out a large operation such as the Canoas WWTP without the need for a long-term PPP contract. Moreover, EAAB has competent technical staff to manage their existing water and wastewater infrastructure serving Bogotá, as well as eleven neighboring municipalities. EAAB has also formulated action plans for the management of discharges to mitigate contamination within the city and established their obligations as a public company to evaluate and monitor the current activities. The tendering and management of the Canoas WWTP will require the strengthening of its current technical, contractual and financial capacities, and in order to improve the performance of its wastewater infrastructure and achieve the desired social and environmental impacts, EAAB wishes to embark on a broader program, including: i) the development of information systems for and monitoring of its sewerage networks in order to prevent urban flooding, optimize the dosage of chemicals at treatment plants and determine which interceptors need to be rehabilitated or renewed; ii) the monitoring of industrial wastewater discharges along its sewerage network to anticipate potential issues at treatment plants and enhance environmental stewardship; and iii) the reuse of biosolids in EAAB’s area of influence. EAAB is committed to strengthening its interaction with its governing bodies and stakeholders based on accountability and good practices for better decision-making processes within the program. To support these innovative and transformational efforts and the Canoas WWTP financing, EAAB has sought out technical and financial support from the World Bank and the Development Bank of Latin America (CAF). 13. Since 2010, the World Bank has provided comprehensive support and advice to country authorities to transform the Río Bogotá into an environmental asset for the capital city metropolitan region. Through the Río Bogotá Environmental Recuperation and Flood Control Project (P111479), the Bank financed the expansion of the Salitre WWTP and provided technical support in environmental restauration works to reduce flood risks in the basin and establish multifunctional zones along the river. This engagement and wealth of knowledge acquired over the years will serve to continue providing authorities comprehensive support and advice, contributing to the efforts of the Río Bogotá sanitation program mainly through the treatment of the remaining volumes of wastewater generated within the city of Bogotá. The proposed program will aim to improve overall water security and enhancing the quality of life for the population living along the river. Sep 05, 2022 Page 7 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) Relationship to CPF 14. The Project is aligned with pillars II and III of the Country Partnership Framework (CPF) 2016-2021 for Colombia. The World Bank has been deeply involved in urban development and water supply and sanitation operations in Bogotá over the past decades. The Canoas WWTP project continues this engagement and aligns with Pillar II: Enhancing Social Inclusion and Mobility through Improved Service Delivery. This project will improve wastewater treatment in fourteen municipalities along the Río Bogotá and enhance social inclusion. Furthermore, the strengthening data monitoring infrastructure and the institutional capacity to expand these services at scale will also contribute to improving EAAB’s service provision area in Bogotá and its neighboring municipalities. 15. Moreover, the Project aligns with Pillar III: Supporting Fiscal Sustainability and Productivity, and its objective to deliver improved infrastructure. The GoC has adopted a strategy to improve sanitation services through a two wastewater treatment plant approach (Salitre and Canoas WWTPs) and aims to achieve water quality standards suitable for agricultural use6 in the Río Bogotá. It is important to point out that wastewater treatment offers a double value proposition, meaning that it will not only generate environmental and health benefits, but will also yield economic benefits across sectors through the potential of circular economy. The reuse of water and byproducts deriving from resource recovery processes in WWTPs could generate additional revenues to help cover the plant’s operational and maintenance costs in a sustainable manner. 16. The Canoas WWTP will also contribute to Colombia’s Nationally Determined Contributions (NDC). In 2020, Colombia established objectives to achieve 68 percent of domestic urban wastewater treatment and enable service providers to reuse 10 percent of this treated wastewater by 2030 in order to protect river basins and reduce pressure on water resources, generating both economic and environmental benefits.7 In the case of the Canoas WWTP, besides generating environmental and health benefits downstream, improving water quality will directly contribute to reducing the costs of generating 4000 GW/hr/year, thus contributing to sustaining a clean energy matrix in Colombia. C. Proposed Development Objective(s) Note to Task Teams: The PDO has been pre-populated from the datasheet for the first time for your convenience. Please keep it up to date whenever it is changed in the datasheet. Please delete this note when finalizing the document. 17. The Project Development Objective (PDO) of Phase I is to “Improve EAAB wastewater management capacity.� A preliminary list of PDO-level results indicators has been identified to measure the achievement of the PDO (see Table 1). The first indicator “EAAB’s wastewater management capacity is improved, as evidenced by innovations in place� will consist in the main indicator for Phase I and will measure progress in improving EAAB’s capacity to manage its sewerage networks and pilots. Both treatment performance indicators, namely “Tons of BOD removed per year� (core indicator) and “Tons of TSS removed per year� are associated with Phase II as they will only be able to generate 6 Class IV in water quality standards are suitable for agricultural use with requirements of both biochemical oxygen demand (BOD) and total suspended solids (TSS) of 30 mg/L. 7 Ministerio de Ambiente, 2020. Actualización de la Contribución Determinada a Nivel Nacional de Colombia (NDC). https://www.minambiente.gov.co/wp-content/uploads/2021/10/informe-actualizacion-contribucion-determinada-Colombia-ndc-2020.pdf Sep 05, 2022 Page 8 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) information on PDO progress once the WWTP is operational. To compensate this time gap in obtaining valuable progress information throughout the Program, the last indicator “Building blocks of increased wastewater treatment capacity in place� could be assigned to both phases I and II to allow for the Team to monitor a number of critical milestones and adjust as needed across the procurement-design-construction-operation spectrum. These indicators contribute directly to the PrDO-level indicators. Table 1. Preliminary list of PDO-level results indicators PDO Indicators End Target Number of people with To be defined during project preparation improved urban flood protection from sewer overflow Phase I – EAAB’s wastewater (i) wastewater data is used for decision-making/to inform network maintenance management capacity is and rehabilitation improved, as evidenced by (ii) early warning signal for industrial effluent discharges is operational innovations in place (iii) sludge drying pilot is completed at Salitre WWTP (iv) sludge drying pilot is replicated for the Canoas WWTP Phases I Building (i) the signing of the PPP contract is completed blocks of increased (ii) the PPP’s financial close process is completed wastewater (iii) detailed engineering designs are finalized treatment capacity in place Key Results (From PCN) 18. One of the GoC’s and EAAB’s foremost development challenges today for Bogotá is to close the wastewater treatment gap in the capital city, in order to reap the health and environmental benefits envisioned under the CONPES 3320 and to enhance water security in the river basin. EAAB needs to improve and modernize its wastewater management approach to ensure that it has the necessary tools and know-how to contribute to this development challenge. The Program’s Results Chain is designed to address these challenges over a 10 -year period through supporting EAAB’s implementation of the Río Bogotá Restauration investment program. 19. The proposed MPA Program Development Objective (PrDO) is to improve water security from urban flooding events and pollution through wastewater management for the population of Río Bogotá basin. A preliminary list of PrDO-level results indicators has been identified to measure the achievement of the PrDO (Table 2). Table 2. Preliminary list of PrDO-level results indicators PrDO Indicators End Target Sep 05, 2022 Page 9 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) Number of people with To be defined during project preparation improved urban flood protection from sewer overflow Number of people with safely 5.6 million managed sanitation services EAAB’s wastewater (i) wastewater data is used for decision-making/to inform network maintenance management capacity is and rehabilitation improved, as evidenced by (ii) early warning signal for industrial effluent discharges is operational innovations in place (iii) sludge drying pilot is completed at Salitre WWTP (iv) sludge drying pilot is replicated for the Canoas WWTP Tons of BOD removed BOD tons removed/year per year (core indicator) Tons of TSS removed per TSS tons removed/year year 20. The MPA will support this PrDO by contributing to three overarching outcomes: (i) Improved management of sewerage networks, discharges and flooding events. By bringing in innovation, smart technology and operational analytics, EAAB will be able to (a) get a clearer picture of how its system is performing in near-real-time and develop predictive tools for proactive event management, (b) improve service reliability from sanitary (or combined) sewer networks and understanding of WWTP influent quality and quantity, in turn informing the final designs of the Canoas WWTP, (c) generate real-time data to predict and prevent sewer overflows and urban flooding events, and (d) detect pollution events when they enter collection networks to trace them back to their source and engage, with those responsible for their discharge, ultimately changing habits and reducing pollution before it happens. The pilots to be financed under Phase I, and their potential scale-up in Phase II, could thus contribute to improved environmental restauration and enhanced water security, through improvements in water quality and operational efficiency. (ii) Strengthened institutional capacity to manage wastewater projects. EAAB’s Strategic Plan recognizes that there are a number of weaknesses that need to be addressed in order to unlock the utility’s modernization process, including WWTP influent and effluent management (see point (i) above), as well as contract and project management. The Program will not only allow for the immediate use of private capital brought in to respond to the high initial investment needs for this infrastructure – through the PPP model proposed for the Canoas WWTP – but will also bring technical capacity for project management by private partners, consultants, as well as additional staff, while strengthening EAAB’s capacity in contract management. This will in turn boost the GoC’s ability to reach its restauration objectives in a more efficient and timely manner. (iii) Expanded wastewater treatment capacity. The MPA will finance the final design, construction, and initial operation of the Canoas WWTP, contributing to the objective of achieving 100 percent treatment of wastewater discharges into the Río Bogotá, and completing the safely-managed sanitation service chain for the remaining 70 percent of Bogota’s population whose services currently do not include treatment. Sep 05, 2022 Page 10 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) D. Concept Description 21. The IPF under Phase I will focus on three strategic areas, namely (i) EAAB’s modernization plan, through innovation in asset monitoring, data management and biosolids management, (ii) EAAB’s wastewater management capacity and (iii) wastewater treatment infrastructure development. The Project will also ensure that a citizen engagement strategy, gender approaches and climate change aspects are included as part of preparation and implementation. 22. To achieve the PDO, the Project will finance the three components described below. The expected total number of beneficiaries is the population who will benefit from innovations, data improvements, improved sewerage network operation, as well as from EAAB’s strengthened wastewater management capacity. This will be detailed during project preparation. 23. Component 1 - Innovation in Wastewater Management (US$7 million, of which US$7 million will be financed by EAAB). The activities in this Component will build on EAAB’s recent work to promote innovation and expand existing tools for wastewater management. Since 2009, EAAB has embarked on an effort to improve its capacity to monitor its sanitation assets and better estimate wastewater flows entering its sewage networks, as well as to better predict wastewater management infrastructure needs. At the same time, EAAB has been exploring innovative techniques to monitor and react to industrial discharges into its network, as well as to improve the treatment and disposal of WWTP biosolids with new dewatering technology currently at the pilot development stage. Activities financed under this component will include, inter alia: (i) Data acquisition equipment as well as data management and analytics tools, to support the wastewater management improvements envisaged as part of EAAB’s modernization plan and “Measurement Masterplan� under development. This masterplan will provide a detailed diagnostic of the current monitoring system and its 58 monitoring points across the Bogotá city sewershed and identify rehabilitation and modernization opportunities, including digital solutions. This activity will help gather information of the current state of sanitary sewerage networks and inform the design of sanitation infrastructure, as well as rehabilitation and maintenance planning; (ii) Industrial discharge monitoring pilot. This pilot will seek to evaluate the feasibility and viability of an artificial intelligence predictive system to help with the continuous monitoring of wastewater quality and data analytics at strategic points of the public sewerage networks (as the first instance, where industries are known to be established and/or concentrated) in order to pinpoint industrial discharges that are not in compliance with the Colombian law; (iii) Sludge dewatering pilot. This pilot will test new alternatives for sludge dewatering at the Salitre WWTP to help reduce the water content and volume of sludge which needs to be handled by EAAB’s facilities, as well as the associated transport and disposal costs. The pilot is exploring the adaptation of rotary mining drying ovens to sludge dewatering resulting in sewage sludge ash with near 0 percent water content that could be used for soil conditioning (installation of sewerage pipes) and composting, or reused in the concrete industry. 24. Component 2 – Wastewater Treatment Infrastructure Management Capacity (US$ 33 million, of which US$27 million will be financed by IBRD, and US$6 million by CAF). In Phase I, this component will focus on strengthening EAAB’s capacity to manage the construction of new large wastewater infrastructure, in particular the construction of the Canoas WWTP planned to start the operational phase in 2029. The activities financed under this component include, inter alia: (i) The creation of a Project Management Office (PMO) dedicated to future wastewater infrastructure development (including Canoas) to strengthen EAAB’s project management capacity with complementar y technical, environmental, social and administrative experience/staff; (ii) Contract management technical assistance through the hiring of an external engineering firm which will provide technical oversight, advice, quality control and auditing during the design, construction and operation Sep 05, 2022 Page 11 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) phases of the Canoas WWTP project. This firm will also provide technical training to EAAB’s staff on the needs identified during project preparation. 25. Component 3 – Wastewater Treatment Infrastructure Development (US$70 million, of which US$56 million will be financed by IBRD, and US$14 million by CAF). In Phase I, this component will focus on the financing of the pre- construction activities for the Canoas WWTP as part of the PPP contract. These include technical support throughout the WWTP bidding process, as well as WWTP design. 26. Project Cost, Duration, and Financing. The estimated total project cost is US$2.47 billion, proposed to be partly financed with two IBRD loans of US$83 million and US$477 million. The estimated private financing is US$740 and approximately US$1.2 billion will include a CAF loan of US$ 140 million and EAAB’s co-financing agreements with CAR, Cundinamarca Department and Bogotá District. The Project will be implemented over a period of five years, starting in 2023 to allow sufficient time for successful achievement of the PDO and so as to be aligned with the PPP contract procurement timeline and financial structure. The lending instrument for the proposed project is an IPF, which was selected for its flexibility and suitability to incorporate financing for a broad range of activities, including specific investments, technical assistance, as well as capacity enhancement measures. The Borrower will be EAAB for the full IBRD amount, with a sovereign guarantee. 27. Gender. EAAB is currently developing a gender policy for its staff, and to support these efforts, a gender analysis (GA) will be carried out during project preparation to examine gender-related issues, promote gender equality among the wastewater management team and enhance the Project’s development effectiveness. Findings from this GA will feed into EAAB’s gender policy and will be complemented with support from the Water Global Practice Equal Aqua collaborative platform. 28. Citizen Engagement. EAAB has developed a citizen engagement plan (Plan de Acción de Participación Ciudadana) which seeks to strengthen the relationship with its users, communities and other institutions, through the production and dissemination of educational information, awareness raising and training. Its most recent plan – from 2021 – incorporated the following main activities: (i) monthly citizen participation events; (ii) action plan dissemination; (iii) identification of priority issues through a team formed by community members; and (iv) the design of a project strengthening the participation processes with interest groups. Additionally, EAAB has developed a website that provides information of the various communication channels through which citizens can contact the entity to resolve concerns or submit requests, complaints and grievances.8 The World Bank team will review EAAB’s efforts in this regard during project preparation and recommend, if necessary, adjustments and improvements, building upon EAAB’s recent efforts to improve citizen engagement. 29. Disaster Risk Screening and Climate Change. A preliminary screening for climate change and disaster risks was conducted for the Project’s two main components. The overall climate and disaster risk rating is Moderate. While no major risks were identified for projects activities, moderate risks of flooding have been identified. Data monitoring financed under Component 1 will support the Project in mitigating these risks. In addition, EAAB has a strong record in urban flood management and direct communication with stakeholders when responding to alerts issued by the national weather service. The Team will continue to assess this capacity during project preparation. In terms of mitigation, EAAB has performed an assessment of its current emissions through their Program for the Implementation 8 EAAB.Atención al Ciudadano. https://www.acueducto.com.co/wps/portal/EAB2/Home/atencion-al- usuario/atencion_al_ciudadno/!ut/p/z1/lZDBCoJAEIafxqszbmZrN1eiMDAtRNtLWNgqqCur5esn1aEgrOY2w_f9wwxwSIDX6bUQaVfIOi2Hfs- tw5paZLWkxMeZb2O4mNq2w3aIHoH4DuBbOci2hE0QlxsC_H__Nek3fwTg4_Ex8DtihS4aFIcEk7gY7gK23USuERjmExg78dsSD7go5fHxT6c- TqgArrJzpjKlX9Qwzruuaecaatj3vS6kFGWmn2Sl4Scll20HyTsJTRVFCRZBFdP2BvofaqE!/dz/d5/L2dBISEvZ0FBIS9nQSEh/ Sep 05, 2022 Page 12 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) of Sustainable Practices (PIPS). The PIPS encompasses a set of activities to quantify, reduce and offset GHG emissions. The proposed MPA Program will aim at maximizing the inclusion of potential actions, such as adequate wastewater collection and monitoring, increased energy efficiency and the maximization of circular economy opportunities, and the quantification of these mitigation actions will be assessed during project preparation with the ex-ante tool developed by the Water Global Practice. 30. Private Capital Mobilization (PCM). As mentioned above, the financial structure for the Canoas WWTP PPP contract includes private participation for approximately US$740 million of capital expenditures (CAPEX). Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. Please delete this note when finalizing the document. Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No Summary of Screening of Environmental and Social Risks and Impacts . Note to Task Teams: This summary section is downloaded from the PCN data sheet and is editable. It should match the text provided by E&S specialist. If it is revised after the initial download the task team must manually update the summary in this section. Please delete this note when finalizing the document. 31. Phase I of the MPA program, will take place within the boundaries of Bogotá and Soacha, Colombia, in facilities and sewage infrastructure already existing, owned and managed by EAAB for the activities of Component 1 and in EAAB headquarters for the in-office work related to Components 2 and 3. Bogotá is in central Colombia in the Andean region, surrounded by the Department of Cundinamarca, and lies at 2600 meters above sea level. Colombia’s capital is bordered on the east by its well-known hills, on the west by the Bogota River, on the north by the Bogota savanna, and on the south by the Sumapaz paramo ecosystem. Soacha is a neighboring municipality located to the southwest of Bogota. 32. The exact locations of Component 1 (wastewater asset monitoring and data management) project’s activities are yet to be determined during project preparation considering that the water monitoring will be developed in facilities and sewage infrastructure already existing, owned, and managed by EAAB; also under Phase I Component 1 a first sludge drying pilot will be implemented in the already existing Salitre WWTP which has and EIAS and an environmental License 817 dating from 1996. Salitre WWTP, currently being transferred to EAAB for its operation, is in northwest Bogota, on land owned by the Capital District. It treats about 4m3/s (7 m3/s with a recent expansion) of wastewater, using a chemically enhanced primary treatment and it discharges the effluent into the Bogota River. 33. The EAAB should include the following environmental criteria in the selection of the sites for the activities of wastewater asset monitoring under Component 1: (i) properties are not located in areas of high non-mitigable risk; (ii) properties are not located in areas of protected natural resources; (iii) properties are not located in hazardous areas. Sep 05, 2022 Page 13 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) 34. Contract management technical assistance, financed as part of Component 2, will support the development of EAAB headquarters. The activities will include hiring an external engineering firm to provide technical oversight, advice, quality control, and auditing during the design, construction, and operation phases of the Canoas WWTP project. This firm will also provide technical training to EAAB’s staff on the needs identified during project preparation. 35. The activities of Component 3 will support the design of the planned Canoas WWTP to be constructed in the village of “El Charquito�, in the rural area of Soacha. The property, where this new infrastructure will be constructed, is owned by EAAB and borders the eastern side with the Bogotá River and the western side with Avenida Longitudinal de Occidente (Avenida ALO). The construction of Canoas WWTP is part of Phase 2 which will be financed under another IPF. 36. EAAB is a public company that provides aqueduct and sewerage services to more than 2 million citizens in Bogotá and provides these services to eleven neighboring municipalities. EAAB has been part of the Río Bogotá’s sanitation program since 2004 which seeks to contribute to the environmental recovery of the river and has formulated action plans for the management of discharges to mitigate contamination along the river. EAAB is committed to protecting, conserving, and recovering the region’s water resources. EAAB has an Environmental Policy, which covers all its management, construction, and operational activities for water supply and sanitary and storm sewer services in Bogotá; however, some of its infrastructures works such as dams, treatment plants, and water supply networks are in some neighboring municipalities of Bogotá. As part of its organization, EAAB has an environmental department that reports to the General Management of the company, responsible for carrying out the environmental management of the projects, which has a team with extensive experience in environmental management, applying the local regulatory framework for aqueduct works, sewerage, drinking water, and wastewater treatment plants, water conservation, among others. Also, EAAB has a direction management community with experience in social management. 37. EAAB does not have direct experience in the implementation of WB-financed projects. Likewise, EAAB does not have experience in applying the Environmental and Social Standards (ESS) of the Environmental and Social Framework (ESF) to its projects, therefore it is necessary to develop a training program on the new ESF of the World Bank to be provided to the environmental management, the management team of the Project Implementation Unit (PIU), supervision team and other stakeholders. EAAB has high experience implementing environmental and social management according to national and local legislation. 38. For the implementation of the project, EAAB must form a PIU with suitable professionals (based on an environmental specialist, a Health and Safety specialist, and a social specialist) who can work specifically on the project. Also, an ESS training plan must be carried out for the environmental, HS, and social professional participants in all components, to strengthen their professional knowledge of ESF and specific topics related to standards. The Environmental and Social Commitment Plan (ESCP) will identify details on capacity building, staffing, and training needs and the budget required for the implementation activities that will strengthen the capacity of EAAB. Note: To view the Environmental and Social Risks and Impacts, please refer to the Concept Stage ESRS Document. Please delete this note when finalizing the document. Sep 05, 2022 Page 14 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) . CONTACT POINT World Bank Hector Alexander Serrano, Jean-Martin Brault Senior Water Resources Management Specialist Borrower/Client/Recipient Bogota Water Utility (Empresa de Acueducto y Alcantarillado de Bogota - EAAB) Cristina Arango General Manager carangoo@acueducto.com.co Implementing Agencies Bogota Water Utility (Empresa de Acueducto y Alcantarillado de Bogota - EAAB) Cristina Arango General Manager carangoo@acueducto.com.co 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 Task Team Leader(s): Hector Alexander Serrano, Jean-Martin Brault Approved By APPROVALTBL Country Director: Mark Roland Thomas 21-Oct-2022 Note to Task Teams: End of system generated content, document is editable from here. Please delete this note when finalizing the document. Sep 05, 2022 Page 15 of 16 The World Bank Wastewater management for environmental restauration and water security in the Bogota River Basin (P178932) Sep 05, 2022 Page 16 of 16