The World Bank Urban Water and Sanitation Project (P178954) Project Information Document (PID) Concept Stage | Date Prepared/Updated: 09-Sep-2022 | Report No: PIDC34263 Aug 13, 2022 Page 1 of 11 The World Bank Urban Water and Sanitation Project (P178954) BASIC INFORMATION A. Basic Project Data OPS TABLE Country Project ID Parent Project ID (if any) Project Name Malawi P178954 Urban Water and Sanitation Project (P178954) Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead) EASTERN AND SOUTHERN Dec 13, 2022 Apr 21, 2023 Water AFRICA Financing Instrument Borrower(s) Implementing Agency Investment Project Financing Ministry of Finance and Blantyre Water Board Economic Affairs Proposed Development Objective(s) To improve access to safely managed water supply and sanitation services in Blantyre City and to enhance the operational and financial efficiency of the Blantyre Water Board. PROJECT FINANCING DATA (US$, Millions) SUMMARY-NewFin1 Total Project Cost 130.00 Total Financing 130.00 of which IBRD/IDA 128.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Development Association (IDA) 128.00 IDA Grant 128.00 Non-World Bank Group Financing Counterpart Funding 2.00 Borrower/Recipient 2.00 Aug 13, 2022 Page 2 of 11 The World Bank Urban Water and Sanitation Project (P178954) Environmental and Social Risk Classification Concept Review Decision Substantial Track II-The review did authorize the preparation to continue Other Decision (as needed) B. Introduction and Context Country Context 1. Poverty remains stubbornly high in Malawi. With over half of its population living below poverty which has remained virtually unchanged in the last decade, Malawi remains one of the poorest countries in the World. Between 2010 and 2019, Real Gross Domestic Product (GDP) growth per capita remained largely flat and has had a very limited impact on poverty reduction.1 Malawi ranked 174 out of 189 countries on the United Nations Human Development Index2 and 142 out of 173 on the World Bank's Human Capital Index3 in 2020. Although Malawian households have diversified to other sources, such as short-term labor, over the last ten years, agriculture remains the main income source, albeit with persistently low returns. The transition from agriculture to higher-return activities has been slowed, partly due to a lack of access to financing, market constraints, skill gaps, and high vulnerability to shocks. 2. Malawi is highly vulnerable to exogenous shocks. According to the Malawi Poverty Assessment (MPA), for every three Malawians that moved out of poverty between 2010 and 2019, four fell back due to the impact of weather shocks. The high vulnerability is driven by an overreliance on natural resource-intense economic activities, limited infrastructure, high population density, and the associated catchment degradation. The 2018 Climate Vulnerability Index (CRI) by Germanwatch ranked Malawi with a CRI of 83.67, 80 globally, and 8 th in Sub-Saharan Africa.4 Climate change scenarios suggest that Malawi will see increasing climatic variability, higher temperatures, longer dry periods, and more erratic and intense rainfall events.5 While the country was still recovering from Cyclone Idai of 2019, tropical storms Ana and Gombe hit parts of the country in early 2022, directly affecting close to one million people, with USD 326.0 million in damages and economic loss.6 The combined effects of floods and droughts have caused losses estimated at 1.7 percent of Malawi's GDP annually.7 Further, the global COVID-19 pandemic dampened Malawi's medium-term growth prospects.8 Economic growth fell from 5.4 percent in 2019 to 0.8 percent in 2020 before partially rebounding to 2.2 percent in 2021.9 Amid uncertainties following a number of severe shocks, including the impacts of the Russia-Ukraine war, economic growth is projected to decline in 2022 but increase modestly in the medium term. 1 World Bank (2022) Malawi Poverty Assessment 2 UN Human Development Index tables 3 https://datacatalog.worldbank.org/int/ 4 https://www.germanwatch.org/sites/germanwatch.org/files/20-2-01e%20Global%20Climate%20Risk%20Index%202020_14.pdf 5 Government of Malawi (2017). Strategic Program for Climate Resilience: Pilot Program on Climate Resilience (PPCR). 6 From GRADE Assessment 7 https://www.gfdrr.org/en/feature-story/reducing-impact-natural-disasters-malawi 8 World Bank (2020) Malawi Economic Monitor 9 World Bank (2022, Forthcoming) Malawi Economic Monitor June 2022. Aug 13, 2022 Page 3 of 11 The World Bank Urban Water and Sanitation Project (P178954) 3. Urbanization has slowed down over the past decade, limiting the country's opportunities for economic growth. Whereas cities are known as productive engines for growth where labor is matched with employment opportunities, Malawi has experienced a deceleration of urbanization in contrast to its regional peers.10 The proportion of urban inhabitants increased only by one percent between 2010 and 2019, which correlates to the country's poverty reduction trends. A key driver for urbanization in Malawi relates to job opportunities. In the past decade, about 39 percent of the internal migration from rural to urban areas were seeking job or business opportunities.11 However, cities suffer from inadequate access and reliability of most basic infrastructure services, which add to production costs and weaken the competitiveness of Malawi's private sector. Addressing the urban infrastructure and service gaps is therefore critical to boosting productivity, unlocking private capital, creating jobs, and supporting structural transformation for Malawi. 4. Unreliable services and lagging infrastructure development are significantly hindering the private sector's growth. According to the World Bank global study12 on the economics of water scarcity, a single water interruption in an urban firm can reduce its revenue by more than eight percent. And if that firm is in the informal sector, as many are in the developing countries, sales decline by 35 percent, ruining livelihoods and stagnating economic growth. As part of the 2014 World Bank Enterprise Survey (WBES)13 in Malawi, firms reported experiencing an average of 6.7 electricity outages lasting about 3.5 hours. Firms also reported 5.3 days of insufficient water in a typical month, which is the highest amongst comparable countries in the region and more than double the regional average for countries in Sub Saharan Africa (1.8 days in a typical month). Water outages were reported more prominently by enterprises in Blantyre compared to the other parts of the country. Except for the capital city, Lilongwe, much of the existing water supply infrastructure in the country is aged and operating significantly below the optimum efficiency levels. Furthermore, the water and electricity utilities are failing to cope with the growing population growth and increased demand. Major donor-financed programs were unable to adequately address the infrastructure deficit, given the focus on expansion and less on improving the operational efficiency of the systems. Even where investments were made, these have not translated into improved services due to the weak institutional capacity of the service providers. 5. Limited access to basic services is also undermining human development in Malawi. The 2020 voluntary national review of the Sustainable Development Goals (SDGs) indicated that the country is only making significant progress on 29 out of the 169 targets.14 For instance, access to basic water supply stands at 70 percent and access to sanitation at 27 percent, 15 putting the country significantly off-track to achieving the SDG for water. Official access figures often mask the poor quality of services. The impacts on public health are severe. The Ministry of Health estimates an average of 13 million cases of diarrhea per year in children under five,16 with about 90 percent caused by poor water, sanitation, and hygiene (WASH) services. About 37 percent of the children under age five in Malawi are short for their age due to long-term effects of poor sanitation, consequent diarrhea, and malnutrition, and 20 percent are severely stunted.17Unsafe water and sanitation have exacerbated the impacts of the Covid-19 pandemic, particularly in the largest urban centers. The country is currently racing to contain a cholera outbreak due to poor access to water and sanitation in the aftermath of Tropical Storm Ana. As of July 1, 2022, there were 758 reported cases across the country since the outbreak in the aftermath of Cyclone Ana. 6. Women face disproportionate disadvantages in accessing services, affecting their performance in different economic activities. For instance, in the presence of low access to electricity and water, women also tend to spend more 10 https://databank.worldbank.org/source/world-development-indicators 11 National Statistics Office of Malawi (2020) The Fifth Integrated Household Survey 2020 Report 12 Damania, R. et al (2017). Uncharted Waters: The New Economics of Water Scarcity and Variability. Washington DC, The World Bank 13 https://microdata.worldbank.org/index.php/catalog/2358 14 https://sustainabledevelopment.un.org/memberstates/malawi 15 https://washdata.org/data/household#!/mwi 16 https://www.health.gov.mw/index.php/diarrhoel-diseases 17 NPC (2021) Cost-benefit analysis of interventions to reduce the prevalence of stunting in Malawi - Technical Report Aug 13, 2022 Page 4 of 11 The World Bank Urban Water and Sanitation Project (P178954) time than men collecting firewood and water.18 In 85 percent of Malawian households, women are responsible for collecting water.19 Similarly, the lack of WASH facilities is particularly challenging for girls, who, in many cases, are forced to stay at home during the menstrual period due to the absence of adequate sanitation facilities in their schools. This limits school attendance and retention for girls, which in turn limits their future livelihood opportunities. Among the key policy actions proposed by the Malawi Poverty Assessment to enhance economic growth is the need to address determinants of unequal opportunity, especially low completion rates for secondary education, by keeping girls in school much longer, through improved water sources and sanitation facilities at schools. 7. Investing in water supply and sanitation (WSS) has the potential to harness human capital and enhance productivity in Malawi. It is estimated that Malawi loses about US$3.8 per capita or 1.1 percent of the country's annual GDP due to poor health outcomes attributed to, among others, low access to safely managed sanitation services. 20 A recent study by the National Planning Commission (NPC) of Malawi shows a benefit-cost ratio of 22 ( meaning that every kwacha invested yields 22 kwacha in benefits) in Lilongwe City, with the increase in the availability of water for the residents of informal settlements which benefited from the network improvements and smart water kiosks under the Lilongwe Water and Sanitation Project (P163794).21 Benefits were assessed as a reduction in coping costs associated with water storage (by bucket), travel time, purchasing water from nearby sources which were still functioning, using streams for washing and laundry, and using a private borehole. For industrial and commercial customers, coping strategies included the construction of boreholes and storage facilities to minimize productivity losses due to unreliable water supply. Where such hurdles have been removed, there is wide evidence of benefits in health and burden of disease (seeking less health care, reduced losses of productive time due to disease, and a reduction in premature mortality), improved education outcomes, with higher school enrollment and attendance rate, income from more tourism and business investments, reduced pollution, among others.22 23 Sectoral and Institutional Context 8. The recently established Ministry of Water and Sanitation (MoWS) oversees the water sector, including water resources management and water supply and sanitation. The National Water Resources Authority (NWRA) oversees water resources planning and management, including infrastructure development, operation, and water allocation. Urban and small-town water supply is under the responsibility of the two urban Water Boards (Lilongwe and Blantyre) and the three regional Water Boards (Northern, Central, and Southern). The Water Boards report to MoWS on technical matters and to the Department of Statutory Corporations (DSC)—under the Office of President and Cabinet—on policy issues (such as financial, administrative, and managerial oversight). Discussions are ongoing to explore NWRA mandate extension to cover the regulation of WSS in rider to improve the sector financing strategy and incentivize efficiency improvements in water service provision. This forms part of the ongoing Government of Malawi (GoM) initiatives to strengthen the corporate governance and institutional framework of water utilities. Further, the National Water Policy has been recently reviewed, and a sanitation act is being proposed to enhance investments in the sanitation sub-sector. 9. The GoM is committed to providing adequate, reliable, and sustainable water and sanitation services to the urban, peri-urban, and rural populations of Malawi. The Water Sector Public Sector Expenditure Review (PER) of 2020 indicates that despite limited fiscal space, GoM has increased budget allocations to water, sanitation, and hygiene (WASH) from 0.39 percent of total government expenditure in 2014/15 to 0.49 percent in 2018/19. However, high population 18 World Bank (2022) Malawi Poverty Assessment 19 National Statistics Office of Malawi (2021) Malawi Multiple Indicator Cluster Survey 2019-20, Survey Findings Report 20 Water and Sanitation Program (2012). Economic impacts of poor sanitation in Africa. Water and Sanitation Program, The World Bank. 21 NPC(2021) A Cost-Benefit Analysis of Interventions to Improve Water Service Reliability in Blantyre Malawi - Technical Report 22 World Health Organization (2012) Global costs and benefits of drinking-water supply and sanitation interventions to reach the MDG target and universal coverage 23 The World Bank Group (2017) Injury Prevention Environmental Health Aug 13, 2022 Page 5 of 11 The World Bank Urban Water and Sanitation Project (P178954) growth, dwindling water resources and climate change, lagging infrastructure development, and aging water systems with high levels of non-revenue water create large gaps between supply and demand, leading to unreliable services. Globally, Malawi is ranked number five out of the top countries (with a population greater than one million), with the highest proportion of the population at risk of frequent water shortages.24 10. Addressing the WASH challenges in Malawi would require a medium-term program, with a set of investments in infrastructure, policy, and institutional reforms to enhance the efficiency and resilience of water supply and sanitation services. The sector is faced with two major interrelated challenges – lack of investment financing to match needs and the inefficiency of the water utilities and service providers, which is exacerbated by their weak corporate governance. Firstly, there is a need to shift from the traditional water source/production expansion into prioritizing and fast-tracking investments that address the critical operational bottlenecks and water availability gaps, with interventions that result in rapid improvements in the reliability and resilience of water production and distribution services as a whole. Second, enhance the support to water service providers with incentives to reduce operational inefficiencies by linking public financing for capital expenditure and tariff reviews to verifiable improvements in efficiency, governance, and innovation. Third, the Government should play its part in strengthening the financial position of water utilities by minimizing the accumulation of unpaid utility bills through the adoption of prepaid services for all Government agencies and departments. Finally, the water service providers can adopt greener and more efficient processes to build resilience to external shocks and contribute to the country's environmental sustainability agenda. 11. Blantyre City, the second-largest urban center in Malawi, needs urgent water supply interventions. Poor access to water has reached a crisis level in Blantyre and is causing substandard living conditions for many of its inhabitants. With close to 900,000 inhabitants, and an average growth rate of 2.8 percent per annum, the city has failed to accommodate its growing population in a planned manner, despite its vibrant urban economy and historical and cultural heritage. Close to 70 percent of the city's population live in unplanned, informal settlements characterized by high poverty rates, overcrowding, poor road access, and limited access to basic services, such as energy, water supply, and sanitation. Low and unreliable energy and water supply access have also been among the key constraints to private sector development, in addition to unstable macro-economic conditions and limited access to financing; thus, limiting the city's capacity to further contribute to the country's economic growth.25 12. Blantyre City's water supply system is under strain and is expected to worsen with increasing climate change impacts. Walkers Ferry (WF) on the Shire River is the city's main source of water, which account for 80 percent of the water supplied to Blantyre. The other 20 percent come from Mudi and Likhubula dams. Current water production is estimated at 122,000m3/d against a demand of 140,000m3/d. The city is already facing water shortages, and these are expected to become severe over time with the increased intensity of climate-related events such as floods and droughts. Blantyre water supply is highly vulnerable to water shocks, with frequent water supply interruptions due to high sediment load, deteriorating water quality, and aging infrastructure. In February 2022, in the aftermath of Cyclone Ana, Blantyre residents were left without water for more than three days, as both sources at Shire and Mudi were loaded with sediments from the flooded waters. 13. Blantyre Water Board (BWB),26 the city's water supply utility, is facing major operational and financial challenges. With an existing reticulation system of about 1,407 km, the water supply system currently meets a total average water consumption of 95,395 m3/day. This services around 87 percent of the population through 64,809 individual connections, 827 water kiosks (for communal supply), and 1,940 commercial and industrial connections. The utility is experiencing financial and operational stress resulting from the technical complexities and high energy costs relating to 24Sadoff C.W., et al (2015). Securing Water, Sustaining Growth: Report of the GWP/OECD Task Force on Water Security and Sustainable Growth, University of Oxford, UK, 180pp. 25 UN-Habitat(2011) Blantyre City Profile 26 BWB is a statutory corporation established in 1995 with responsibility for water and sewerage services in Blantyre City Aug 13, 2022 Page 6 of 11 The World Bank Urban Water and Sanitation Project (P178954) high head pumping, with long rising mains and pipe aging that is leading to elevated operational costs and Non-revenue Water (NRW). Energy costs currently account for 46 percent of the total operating costs, and NRW is estimated at 43 percent. BWB's financial performance remains highly unstable, with operating ratios varying between 1.05–1.35 over the past five years, representing a continuous erosion of equity and reserves. Collection rates have been stagnant at around 95 percent. 14. Poor sanitation is among the key public health issues and significantly affects the quality of life of Blantyre residents. The provision of sanitation services is currently under the responsibility of the Blantyre City Council (BCC), which lacks the financial and technical muscle to adequately maintain the services. The sewerage infrastructure covers about 16 percent of the population, while the majority rely on onsite sanitation systems. Most of the sewage generated in the city ends up in the environment without any treatment, either through leaks in the sewer lines or discharges from the five wastewater treatment sites to several streams across the city. Recorded BOD effluent values for Soche, Blantyre, and Limbe indicate discharge values of 130mg/l, 382mg/l, and 86mg/l, respectively, against Malawi's Standard discharge value of 20mg/l. This situation is exacerbated by poor solid waste management. Less than 50 percent of the city's 472 tons of solid waste generated daily27 is collected and partially disposed of in an open dumping space, while the remaining waste ends up in the open spaces in peri-urban areas, streams, roadsides, and drains. The heavy pollution of rivers and streams has led to breeding disease vectors, loss of aquatic life and recreation activities, and a poor general outlook of the city. 15. BWB and BCC28 are embarking on an investment program to enhance the city's water supply and sanitation services. Both institutions have traditionally been implementing small interventions to minimize the critical operational and service delivery challenges. However, these have resulted in limited progress so far, primarily due to limited financial resources. A new package of investments includes a series of interventions designed to address the immediate and medium-term water security and sanitation needs and support a long-term solution with the following sub-projects: the construction and upgrade of the water sources, construction of independent power sources, network upgrade and efficiency improvement, sewerage system upgrade and solid waste management improvements. The Blantyre Water and Sanitation Program is estimated at US$ 613 million and is expected to benefit one million people. So far, US$ 150 million have been secured from India Exim Bank for the upgrade of the water source and associated infrastructure on the Shire River and the construction of a new solar power plant, which will cover the energy requirements at the water production level. Additional US$ 45 million are under preparation, of which US$ 30 million from the African Development Bank (to finance partial network upgrade and expansion) and US$ 15 million from the Japan International Cooperation Agency (JICA ) to finance the upgrade of the Mudi water treatment plant. With these commitments, the program is short of US$ 416 million, required to enhance service quality, expand the WSS services to ensure universal access to the Blantyre residents and further diversify the source of energy and implement solid waste management upgrades. Relationship to CPF 16. The project aligns well with the Country Partnership Framework (CPF 2021-2025) for Malawi. The CPF focuses on three strategic objectives, (i) foundations for growth and accountability, (ii) promoting private sector-led jobs and livelihoods, and (iii) strengthening human capital development. The project is expected to contribute to Focus area 2, objectives 2.1 through supporting access to water supply services for micro, small, and medium enterprises, and 2.2 in increasing resilience in urban hotspots, and enhancing urban-rural linkages, with better access to water supply and sanitation services, thus making Blantyre city more attractive to rural migrants seeking entrepreneurship and job opportunities. The project is also expected to contribute to Focus area 3, objective 3.1 in enhancing the demographic dividend with improved access to WASH for women and children in early years, and objective 3.2 on improving learning 27 https://africancleancities.org/assets/data/Organization/Blantyre_EN.pdf 28 . The local Government Act of 1998, as amended in 2010, and the National Decentralization Policy of 1998, mandates Blantyre City Council to govern and manage the City of Blantyre. Aug 13, 2022 Page 7 of 11 The World Bank Urban Water and Sanitation Project (P178954) outcomes for young girls with targeted school WASH interventions and menstrual hygiene management. Moreover, the project investments will contribute to the proposed CPF interventions to mitigate COVID-19-related impacts on livelihoods and build back better during the post-pandemic economic recovery phase. 17. The project is also consistent with the Government's priorities, as it directly aligns with Malawi's commitment to improving urbanization. The Malawi 2063 (MW2063) aims to transform Malawi into a wealthy and self-reliant industrialized 'upper-middle-income country' by the year 2063.29 MW2063 commits to developing world-class urban centers and tourism hubs across the country with requisite socio-economic amenities for a high-quality life. Further, MW2063 positions human capital development as pivotal in its aspirations to achieve a transformative economy, including access to water supply and sanitation. C. Proposed Development Objective(s) 18. The Project Development Objective is to improve access to safely managed water supply and sanitation services in Blantyre City and to enhance the operational and financial efficiency of the Blantyre Water Board. Key Results (From PCN) 19. The achievement of the project development objectives will be monitored and measured by the following key results indicators: a. People provided with improved access to water supply. b. Commercial and industrial facilities provided with improved access to water supply c. People provided with access to safely managed sanitation. d. Reduced physical losses. e. Operating cost coverage ratio for BWB. D. Concept Description 20. Building upon the experience and lessons from the ongoing water supply service delivery efficiency improvements in Lilongwe, a Series of Projects (SOP) is proposed to improve urban water supply and sanitation access and to support a comprehensive national water program. The SoP will anchor the longer-term Bank support in this subsector. In the medium and long term, the SoP is expected to contribute to improving the quality of life and competitiveness of urban and rural growth centers in Malawi. GoM's vision is to leverage World Bank support in a manner that aligns with the MW2063, building upon the experience and lessons from the ongoing water supply service delivery efficiency improvements in Lilongwe, and be aligned with the 2021 Water Sector Investment Plan and the national climate resilience financing strategy (under development). The program is estimated at US$ 700 million over the next ten years (US$ 200 million for phases I and II each, and US$300 for phase III) with a proposed envelope of US$ 400 million IDA. The program targets 2.1 million people with improved water and sanitation services. The program will also support the sector regulation to strengthen governance, increase service delivery and financial efficiency, and enhance resilience against external shocks such as climate, financial and health-related shocks. 21. The program will consist of a combination of financing instruments to maximize investment efficiency and incentives for strengthening institutional capacity, operational and financial efficiency, and service quality. SoP-1 will 29 https://npc.mw/wp-content/uploads/2021/02/ENGLISH-VERSION.pdf Aug 13, 2022 Page 8 of 11 The World Bank Urban Water and Sanitation Project (P178954) use an Investment Project Financing (IPF) to launch off with the urgent and critical water supply efficiency improvements, upgrading of water production and priority sanitation interventions in Blantyre (similar to ongoing infrastructure investments in Lilongwe) and a set of technical assistance (TA) activities to prepare for the subsequent phases. The infrastructure investments will couple with an operational and financial turnaround program for the BWB, focusing on climate-resilient planning and operational systems. SoP-2 will sequentially expand support to other regional water boards on priority service gaps investments in selected small towns and performance improvements using a Program for Results (PforR) approach. SoP-3 will focus on supporting a comprehensive service delivery framework to expand access (possibly using a wholesale PforR instrument), extending the mandate of the regional water boards to support rural growth centers using a Green, Resilient and Inclusive Development (GRID) approach. 22. The project scope consists of five components that contribute to the PDO. Below is a brief description of the activities. The preliminary set of interventions is presented in Annex 1. Component 1 - Water supply improvements (US$ 67.85 million equivalent) 23. This component will finance investments to improve network operational efficiency, reduce water losses, improve water supply service quality, and expand service access to unserved areas. Key interventions include priority water supply network upgrade, including 24km of transmission pipeline from Chileka to Blantyre and five associated storage reservoirs with a combined capacity of 55,000m3; around 300km distribution network upgrade, pressure management systems, and expansion in selected zones, including eight solar-powered pumping stations. Component 2 - Priority Sanitation Investments (US$23.5 million equivalent) 24. This component involves several interventions to increase access to safely managed sanitation and reduce environmental pollution. Key investments include (i) the rehabilitation and upgrade of 50km of sewers in the Blantyre sewerage catchment to reduce environmental pollution, minor upgrades to the treatment plants at Zingwangwa and Soche, (ii) improvements in solid waste collection, and the construction of a new solid waste landfill, and (iii) upgrade of sanitation facilities for 20 priority schools, health centers, and markets, enhanced with MHM facilities and training to enhance the retention of girls in schools and support female entrepreneurs in markets. Component 3 - Institutional Capacity Strengthening (US$ 20.8 million equivalent) 25. This component will finance a set of institutional development activities aimed at (i) enhancing BWB's financial efficiency and governance systems, (ii) improving BCC's capacity to manage sanitation services, and (iii) supporting the water sector investment planning and policy development to enhance the sustainability of urban water services. BWB activities, estimated at US$ 15 million, will be financed through a performance-based mechanism to incentivize improvements in (i) staff efficiency through performance management systems and cost reduction, (ii) investment in innovative solutions for asset management and operations, (iii) customer services, and (iv) tariff framework with sector ministry. Component 4 - Technical Assistance and Project Management Support (US$ 15.85 million equivalent) 26. This component will finance TA activities designed to support the preparation and supervision of all infrastructure investments planned under the project and the incremental operating costs for project management. The TA activities include consultancy services for engineering designs, procurement and supervision of water network and sanitation infrastructure planned under the project, and preparation and implementation support for safeguards instruments. Component 5 – Contingency Emergency Response (CERC- US$ 0) 27. This component will provide immediate response to an Eligible Crisis or Emergency, as needed. This would finance emergency works in the case of another disaster event by including a "zero-dollar" CERC. This would help recover damage to infrastructure, ensure business continuity, and enable early rehabilitation. Aug 13, 2022 Page 9 of 11 The World Bank Urban Water and Sanitation Project (P178954) Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 Yes Projects in Disputed Areas OP 7.60 No Summary of Screening of Environmental and Social Risks and Impacts . The project overall risk is rated substantial. The activities have positive environmental and social impacts such as improved access to potable water, improved sanitation and hygiene, improved waste management, clean energy access, improved household economy, improved city aesthetic and reduced gender vulnerabilities for women and girls due to long distances taken to fetch water. Negative environmental and social impacts and risks are anticipated and these are occupational health and safety risks, community health and safety risks, soil erosion, waste management risks, the pollution of air, water, and soil, biodiversity, water-borne diseases; COVID 19 and other communicable and noncommunicable diseases, waste and solid waste handling, water related vector borne diseases, possible hazardous gasses, risks related to losing land and other assets, and loss of income and reduction of economic activity, risk of restricting access to land and other assets during construction, pollution of water stream and natural habitats, sedimentation, and increased run-off and Gender Based Violence/Sexual Exploitation and Abuse-Sexual Harassment (GBV/SEA-SH, release of odors due to inappropriate handling of fecal sludge, solid waste and sewerage; eruption of infectious diseases (e.g. infectious diseases including cholera, typhoid, hepatitis, ascariasis, and schistosomiasis), within the communities and among the project workers emanating from fecal sludge collection conducted not in accordance with safe standards or in case of an accident or a weather event; contamination of water during maintenance of water pipes; traffic safety management during transportation of waste; degradation of the local environment due to accidental leakage from landfill; composting/fecal sludge management plant releasing fecal material into water courses and open ground; accidents or breaking of the infrastructure, heavy winds and flooding hence taking away all sludge to the rest of flooded area and stream, risk of waste contact by any unauthorized entry in case of compromised site management, management of a scenario when there is shortage in recommended PPE, safety of compost, financial preparedness for any emergency such as breakage etc. Both Blantyre Water Board and Blantyre City Council have institutional capacity on environmental management but not social and gender. BWB has three environmental management personnel while BCC has four in different departments. Both institutions have experience with World Bank safeguards policy. PIU will be established and will have environmental and Health and Safety specialist and Social and Gender Specialist who will be supported by institution personnel. The project will take the framework approach since some of the sites are not yet known and other activity details are not yet available. Environmental and Social management Framework with therefore be prepared to manage the above risks associated with ESS1, ESS2, ESS3, ESS4, ESS6, ESS8 and ESS10 while Resettlement Policy Framework (RPF) will be prepared to manage all risks associated with ESS5. Other instruments that will be prepared include Labor Management Procedures (LMP), including a worker Grievance Redress Mechanism (GRM); the Stakeholder Engagement Plan (SEP) will include project Grievance Redress Mechanism (GRM); and an Environmental and Social Commitment Plan (ESCP) that will be agreed on with the borrower and will set out the substantive measures and actions required for the project to meet environmental and social requirements over a specified period of time prior to project appraisal. The project’s GBV and SEA/SH risks have been rated moderate and SEA/SH Prevention and Response Action Plan, and an Accountability and Response Framework will be included in the ESMF. Aug 13, 2022 Page 10 of 11 The World Bank Urban Water and Sanitation Project (P178954) . CONTACT POINT World Bank Odete Duarte Muximpua Water Supply and Sanitation Specialist Borrower/Client/Recipient Ministry of Finance and Economic Affairs Nations Msowoya Director Debt and Aid nmsowoya@naosupportmw.org Implementing Agencies Blantyre Water Board Robert Hanjahanja Chief Executive Officer rhanjahanja@bwb.mw 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): Odete Duarte Muximpua Approved By APPROVALTBL Country Director: Hugh Riddell 12-Sep-2022 Aug 13, 2022 Page 11 of 11