FOR OFFICIAL USE ONLY Report No: RES42654 INTERNATIONAL DEVELOPMENT ASSOCIATION RESTRUCTURING PAPER ON A PROPOSED PROGRAM RESTRUCTURING OF MOZAMBIQUE DISASTER RISK MANAGEMENT AND RESILIENCE PROGRAM APPROVED ON MARCH 19, 2019 TO THE REPUBLIC OF MOZAMBIQUE Urban, Resilience And Land Global Practice Africa East Region Regional Vice President: Hafez M. H. Ghanem Country Director: Idah Z. Pswarayi-Riddihough Regional Director (acting): Catherine Signe Tovey The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) Practice Manager: Catalina Marulanda Lizardo Narvaez Marulanda, Martin Luis Alton, Nicholas Task Team Leader(s): James Callender The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) ABBREVIATIONS AND ACRONYMS DLI Disbursement-linked indictor DMF Disaster Management Fund DRM Disaster Risk Management E&S Environmental and Social GoM Government of Mozambique IP Implementation Progress ISR Implementation Status Report MINEDH Ministry of Education and Human Development M&E Monitoring and Evaluation PforR Program for Results PDO Project Development Objective RETF Recipient-executed Trust Fund TA Technical Assistance TF Trust Fund WB World Bank The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) DATA SHEET (Mozambique Disaster Risk Management and Resilience Program - P166437) BASIC DATA Project ID Financing Instrument IPF Component P166437 Program-for-Results Financing Yes Original Environmental Assessment Category (IPF Current Environmental Assessment Category (IPF Component) Component) Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 19-Mar-2019 30-Jun-2024 Organizations Borrower Responsible Agency Ministry of Economy and Finance Program Development Objective(s) The Program Development Objective is to strengthen the Government of Mozambique's program to finance and prepare for disaster response and to increase the climate resilience of vulnerable education infrastructure in risk-prone areas. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Approval Effectiveness Closing Ln/Cr/TF Signing Date Commitment Disbursed Undisbursed Date Date Date 19-Mar- IDA-D4360 21-Mar-2019 29-Mar-2019 30-Jun-2024 90.00 35.93 53.72 2019 19-Mar- TF-A9637 21-Mar-2019 29-Mar-2019 30-Jun-2022 6.00 0 6.00 2019 Policy Waiver(s) Does the Program require any waivers of Bank policies applicable to Program-for-Results operations? No Page 1 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) I. PROGRAM STATUS AND RATIONALE FOR RESTRUCTURING A. Program Status 1. The Mozambique Disaster Risk Management (DRM) and Resilience Program was approved by the Board of Executive Directors on March 19, 2019. The Program is financed with US$90 million from the International Development Association (IDA) and with US$6 million from a recipient-executed trust fund (RETF) TF0A9637 from the Global Risk Financing Facility. The Program also includes counterpart funding of US$36.27 million. The RETF was granted to co-finance sovereign catastrophe insurance in accordance with the Mozambican Government’s disaster risk finance strategy. The trust fund was provided to match Government of Mozambique’s (GOM) expenditures on sovereign catastrophe up to US$6 million in total, spread over three to four years depending on implementation progress. The Program’s closing date is June 30, 2024. 2. As of June 2022, the Project Development Objective is achievable. The PDO indicator is currently rated Moderately Satisfactory, and the project is making good progress towards meeting its development objectives. The overall performance of the recipient is satisfactory. There were some implementation delays in 2021 relative to the original schedule, particularly in terms of disbursements vis a vis the DLIs, related to COVID-19 and other implementation challenges, which warranted a downgrade of the Implementation Progress rating to Moderately Unsatisfactory. However, the Borrowers’ ratings for technical, fiduciary, environmental and social standards, and monitoring and evaluation are all Moderately Satisfactory. Moreover, an Action Plan was agreed in 2021 to address shortcomings and recover from delays, which is being implemented, and progress has been achieved since early 2022. There is an agreement between the Bank and the GoM on actions that need to be taken to achieve all the objectives of the PforR (see further details in annex 3). There are no overdue audit reports from the Recipient. The disbursement rate is 37.6 percent as of June 14, 2022. 3. Recent achievements of the GoM under the Program are: (a) the Disaster Risk Financing Strategy (DLI 2) has been prepared, validated and is expected to be approved by Cabinet in June 2022; (b) the preparation of assessment and strategy for the DRM Committees (DLI 3), which is expected to be approved by the National Council of Disaster Risk Management in June 2022; (c) the design of the tropical cyclone catastrophe model (basis for a sovereign insurance transaction), accompanied with the hiring of a broker to structure a product and place it with markets, and the design of the early warning information flow system (DLI 4); (d) the approval of technical norms for climate-resilient education infrastructure (DLI 5), and (v) the assessment of the vulnerability of education infrastructure (a result of year 1 for DLI 6) which is partly completed and achievement expected by end June 2022, while the contract of construction works for the first 600 classrooms (beyond the targeted 500 classrooms) has been signed and works will start in July 2022. B. Rationale for Restructuring 4. This Level 2 restructuring seeks to extend the closing date of RETF (TF0A9637), which partly finances the Mozambique DRM and Resilience Program, from June 30, 2022, to May 30, 2024. The proposed restructuring does not seek an extension of or any change to the overall Program. This restructuring is needed, because at the time of negotiations, the closing date of the Parent TF (Trustee) of TF0A9637 was August 2020. The Parent TF has since been extended, so the restructuring proposes to align the RETF’s closing date with the Program’s closing date. The fact the RETF would eventually need to be extended was agreed and recorded in the minutes of negotiations. The GoM has formally requested the extension of the closing date of the TF0A9637 on a letter dated May 31, 2022. The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) II. DESCRIPTION OF PROPOSED CHANGES 5. This proposed restructuring would extend the recipient-executed trust fund (RETF – TF0A9637) associated with the Mozambique Disaster Risk Management and Resilience Program (P166437) from June 30, 2022, to May 30, 2024. III. SUMMARY OF CHANGES Changed Not Changed Change in Loan Closing Date(s) ✔ Change in Implementing Agency ✔ Change in Program's Development Objectives ✔ Change in Program Scope ✔ Change in Results Framework ✔ Change in Cancellations Proposed ✔ Reallocation between and/or Change in DLI ✔ Change in IPF Component ✔ Change in Disbursements Arrangements ✔ Change in Disbursement Estimates ✔ Change in Systematic Operations Risk-Rating Tool ✔ (SORT) Change in Safeguard Policies Triggered ✔ Change in EA category (IPF Component) ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Technical Method ✔ Change in Fiduciary ✔ Change in Environmental and Social Aspects ✔ Change in Implementation Schedule ✔ The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) Other Change(s) ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/TF Status Closing Date Closing(s) Date Closing Date for Withdrawal Applications IDA-D4360 Effective 30-Jun-2024 30-Jun-2024 30-Oct-2024 TF-A9637 Effective 30-Jun-2022 30-May-2024 30-Sep-2024 . The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) ANNEX 1: RESULTS FRAMEWORK . . Results framework Program Development Objectives(s) The Program Development Objective is to strengthen the Government of Mozambique's program to finance and prepare for disaster response and to increase the climate resilience of vulnerable education infrastructure in risk-prone areas. Program Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Improved financial protection against disasters Ex-ante resources immediately available annually for disaster DLI 1 2,300,000.00 14,000,000.00 14,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 preparedness and response (Amount(USD)) Sovereign catastrophe insurance coverage for at least one peril (cyclone and/or drought) with capital or DLI 2 No No Yes Yes Yes Yes insurance market in place, in accordance with national Disaster Risk Finance Strategy (Yes/No) Page 6 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Strengthened capacity for disaster preparedness and response Number of people in risk-prone areas covered by functioning 0.00 0.00 750,000.00 1,500,000.00 2,250,000.00 3,000,000.00 local DRM committees under the Program (Number) Number of people in risk-prone areas reached by flood and DLI 4 0.00 0.00 0.00 6,200.00 716,200.00 1,900,000.00 cyclone early warning systems under the Program (Number) Improved climate resilience of vulnerable education infrastructure in risk-prone areas Number of children provided with access to climate-resilient 0.00 0.00 60,000.00 156,000.00 252,000.00 360,000.00 education infrastructure under the Program (Number) PDO Table SPACE Intermediate Results Indicators by Result Areas RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Improved financial protection against disasters National Disaster Risk Finance Strategy developed and No Yes Yes adopted (Yes/No) Page 7 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Stand-by contracts for disaster response signed with at least No Yes Yes Yes Yes Yes two firms annually (Yes/No) Annual independent audits on use of funds under DMF completed and No Yes Yes Yes recommendations implemented (Yes/No) Risk transfer products for cyclone and/or drought risk 0.00 0.00 1.00 2.00 3.00 3.00 have undergone an external technical review (Number) Strengthened capacity for disaster preparedness and response Number of functional local DRM committees in risk-prone DLI 3 0.00 0.00 375.00 750.00 1,125.00 1,500.00 areas established or strengthened (Number) New or strengthened local DRM committees with at least 50% of female committee 0.00 1,500.00 members created or trained (Number) MOUs between INAM, DNGRH, and INGD are established or No Yes revised (Yes/No) Grievances registered related 0.00 25.00 50.00 75.00 100.00 to delivery of Program benefits Page 8 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 that are actually addressed (INGC) (Percentage) Improved climate resilience of vulnerable education infrastructure in risk-prone areas Number of classrooms in risk- prone areas retrofitted or reconstructed in accordance DLI 6 0.00 0.00 500.00 1,300.00 2,100.00 3,000.00 with climate-resilient technical norms under the Program (Number) Ministerial diploma adopting technical norms for climate- DLI 5 No Yes Yes resilient education infrastructure in place (Yes/No) National School Database upgraded and updated with No Yes data from building assessment (Yes/No) Maintenance arrangements for the rehabilitated school No No Yes Yes Yes Yes infrastructure developed and implemented (Yes/No) Grievances registered related to delivery of Program benefits 0.00 25.00 50.00 75.00 100.00 that are actually addressed (MINEDH) (Percentage) IO Table SPACE Page 9 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) Disbursement Linked Indicators Matrix DLI IN01132606 ACTION DLI 1 Operationalization and recurrent capitalization of the Disaster Management Fund Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Text 36,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline Not operational Ministerial diploma regulating and defining the operating procedures of the Disaster Management Prior Results Fund are issued, and Fund Management Unit for 3,000,000.00 Fund created within INGC with adequate fiduciary capacity. The Disaster Management Fund is capitalized by Government of Mozambique with the minimum Year 1 9,000,000.00 amount required as per Decree No. 53/2017 (0.1% of Annual State Budget or equivalent). The Disaster Management Fund is capitalized by Government of Mozambique with the minimum Year 2 9,000,000.00 amount required as per Decree No. 53/2017 (0.1% of Annual State Budget or equivalent). The Disaster Management Fund is capitalized by Government of Mozambique with the minimum amount required as per Decree No. 53/2017 (0.1% Year 3 5,000,000.00 of Annual State Budget or equivalent), and GoM has implemented recommendations made in the audit of the DMF's operations in year 1. The Disaster Management Fund is capitalized by Year 4 5,000,000.00 Government of Mozambique with the minimum Page 10 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) amount required as per Decree No. 53/2017 (0.1% of Annual State Budget or equivalent), and GoM has implemented recommendations made in the audit of the DMF's operations in year 2. The Disaster Management Fund is capitalized by Government of Mozambique with the minimum amount required as per Decree No. 53/2017 (0.1% Year 5 5,000,000.00 of Annual State Budget or equivalent), and GoM has implemented recommendations made in the audit of the DMF's operations in year 3. DLI IN01132611 ACTION Placement of sovereign catastrophe insurance coverage for cyclone and/or drought with capital or insurance market, in DLI 2 accordance with national Disaster Risk Finance Strategy Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Text 13,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline No sovereign catastrophe insurance in place Prior Results 0.00 National Disaster Risk Financing Strategy (NDRFS) Year 1 1,000,000.00 n/a adopted Sovereign catastrophe insurance contracted in D=Min(premium paid by GoM, US$ 3 Year 2 3,000,000.00 accordance with DRF strategy for at least one peril. million) Sovereign catastrophe insurance contracted in D=Min(premium paid by GoM, US$ 4 Year 3 3,000,000.00 accordance with DRF strategy for at least one peril. million) Sovereign catastrophe insurance contracted in D=Min(premium paid by GoM, US$ 4 Year 4 3,000,000.00 accordance with DRF strategy for at least one peril. million) Page 11 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) Sovereign catastrophe insurance contracted in D=Min(premium paid by GoM, US$ 4 Year 5 3,000,000.00 accordance with DRF strategy for at least one peril. million) DLI IN01132614 ACTION DLI 3 Number of functional local DRM Committees in risk-prone areas established or strengthened Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Text 9,000,000.00 0.00 Period Value Allocated Amount (USD) Formula No local DRM committees strengthened or Baseline established Prior Results No 0.00 Assessment and implementation strategy for the Year 1 establishment of functional local DRM committees 1,000,000.00 finalized. 375 local DRM committees established or D=actual Year 2 Year 2 2,000,000.00 strengthened result*(8,000,000/1,500) 375 local DRM committees established or D=actual Year 3 Year 3 2,000,000.00 strengthened (750 accumulative) result*(8,000,000/1,500) 375 local DRM committees established or D=actual Year 4 Year 4 2,000,000.00 strengthened (1125 accumulative) result*(8,000,000/1,500) 375 local DRM committees established or D=actual Year 5 Year 5 2,000,000.00 strengthened (1500 cumulative) result*(8,000,000/1,500) Page 12 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) DLI IN01132621 ACTION DLI 4 Number of people in risk-prone areas reached by functional flood and cyclone early warning system Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Text 5,000,000.00 0.00 Period Value Allocated Amount (USD) Formula No functional integrated flood and cyclone early Baseline warning system Prior Results None 0.00 Strategy for establishment of an integrated information and early warning systems developed Year 1 500,000.00 and inter-organizational MOUs established between INGC, INAM, and DNGRH Functional integrated information flow and early Year 2 700,000.00 warning dissemination system established 300,000 people reached by integrated flood and D=Actual Y3 Year 3 600,000.00 cyclone early warning system in the Gaza Province Result*(3,800,000/1,900,000) 400,000 additional people reached by integrated D=Actual Y4 Year 4 flood and cyclone early warning system in 800,000.00 Result*(3,800,000/1,900,000) Inhambane Province (700,000 people cumulative) 1,200,000 additional people reached by integrated D=Actual Y5 Year 5 flood and cyclone early warning system in Zambezi 2,400,000.00 Result*(3,800,000/1,900,000) Province (1,900,000 people cumulative) Page 13 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) DLI IN01132623 ACTION DLI 5 Ministerial diploma adopting technical norms for climate-resilient education infrastructure in place Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Yes/No 1,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline No Prior Results No 0.00 Year 1 Yes 1,000,000.00 Year 2 0.00 Year 3 0.00 Year 4 0.00 Year 5 Yes 0.00 DLI IN01132624 ACTION DLI 6 Number of classrooms retrofitted or reconstructed in accordance with climate-resilient technical norms under the Program Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Text 25,000,000.00 0.00 Period Value Allocated Amount (USD) Formula No classrooms retrofitted or reconstructed in Baseline accordance with climate-resilient technical norms Prior Results None 0.00 Page 14 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) Building assessment conducted for classrooms located in cyclone prone areas, with detailed Year 1 1,000,000.00 designs prepared for all classrooms to be retrofitted under the Program 500 classrooms retrofitted or reconstructed in D=actual # of classrooms in Year Year 2 4,000,000.00 accordance with climate-resilient technical norms 2*(24,000,000/3000) 800 classrooms retrofitted or reconstructed in D=actual # of classrooms in Year Year 3 accordance with climate-resilient technical norms 6,400,000.00 3*(24,000,000/3000) (1300 accumulative) 800 classrooms retrofitted or reconstructed in D=actual # of classrooms in Year Year 4 accordance with climate-resilient technical norms 6,400,000.00 4*(24,000,000/3000) (2100 accumulative) 900 classrooms retrofitted or reconstructed in D=actual # of classrooms in Year Year 5 accordance with climate-resilient technical norms 7,200,000.00 5*(24,000,000/3000) (3000 accumulative) Page 15 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) ANNEX 2: PROGRAM ACTION PLAN . . PAP_NOT_CHANGE_TBL Action Description Source DLI# Responsibility Timing Completion Measurement Program Steering Committee shall be established with a Terms of Reference and Letter from MEF confirming composition Within 3 month establishment of Program satisfactory to the of Program Steering Committee, including Association. Technical MEF Other effectiveness TOR and composition. Program Management Secretariat (PMS) shall be assembled with a Terms of Reference and composition satisfactory to the Association (including Within 3 experienced months of fiduciary Program personnel). Technical INGC Other effectiveness PMS TOR Program Operation Manual (POM) shall be adopted by the Recipient in a Within 6 manner months of satisfactory to the Program Association. Technical INGC Other effectiveness POM Improvement of monitoring and Within 12 evaluation system months of for local DRM Program committees Technical INGD Other effectiveness Database is improved Socio- Environmental Management Unit at INGD with proper mandate established and adequately (i) ToRs of unit and key staff staffed, including specialists on (ii) Order of INGC Director health and safety General establishing the unit as well as social Environmental and Social (iii) Health and safety specialist as development Systems INGD Due Date 30-Nov-2021 well as social specialist mobilized Page 16 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) Socio- Environmental Management Unit at DIEE/MINEDH with proper mandate established and adequately (i) ToRs of unit and key staff staffed, including specialists on (ii) Ministerial order establishing health and safety the unit and social Environmental and Social (iii) Health and safety specialist as development Systems MINEDH Due Date 31-Dec-2021 well as social specialist mobilized Preparation and adoption of socio- environmental management guidelines for coordinating and implementing (i) Socio-environmental disaster risk management guidelines management Environmental and Social (ii) Order of INGC Director activities Systems INGD Due Date 15-Dec-2021 General adopting the guidelines Preparation and adoption of improved environmental An annex with screening and social procedures will be is included in screening Environmental and Social the socio-environmental procedures Systems INGD; MINEDH Due Date 15-Dec-2021 management guidelines Grievance Within 12 Redress months of Mechanism (GRM) Environmental and Social Program GRMs are in place at both INGD established Systems INGD; MINEDH Other effectiveness and MINEDH Development of guidelines and manuals for conducting temporary resettlement in disaster response contexts (evacuation), including Within 24 definition of INGD in months of institutional Environmental and Social coordination with Program Guidelines and manuals responsibilities Systems MITADER Other effectiveness elaborated Development and adoption of Within 18 months of (i) Manuals finalized specific procedures and Environmental and Social Program (ii) Order of INGD General manuals for the Systems INGD Other effectiveness Director adopting manuals Page 17 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) management of socio- environmental aspects (incl. temporary shelter locations, prevention of gender-based violence, health and safety, vulnerable groups, persons with special needs) Design and implementation of Action Plan Gender Based prepared within Violence Action 18 months of Plan, including Program GBV Action Plan training of INGC effectiveness; staff and other Environmental and Social training Curriculum for training stakeholders Systems INGD Other recurrent Number of people trained Development and Monitoring program defined, implementation of including environmental and a monitoring Within 18 social factors to be monitored, system for socio- months after monitoring schedule and environmental Environmental and Social Program frequency, and monitoring aspects Systems INGD, MINEDH Other effectiveness procedures. Carry out capacity building activities for INGC and MINEDH on social and environmental management (including health Environmental and Social Curriculum of trainings and safety) Systems INGD, MINEDH Recurrent Yearly Number of people trained Completion of at least one contract management training for INGD and DIEE/MINEDH to support Within 12 effective months of execution of the Program TOR for training and participation Program Fiduciary Systems INGD; MINEDH Other effectiveness list Preparation of procurement plan for purchase of sovereign risk transfer product Technical DLI 2 INGD; MEF Due Date 15-Feb-2021 Procurement plan finalized Program Manager Within 3 for School Technical MINEDH Other months of TOR and CV Page 18 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) Retrofitting Program Program shall be effectiveness mobilized with a Terms of Reference and qualifications satisfactory to the Association Financial Audit. Annual financial statements of INGD and DIEE/MINEDH audited within 12 months after the end of the fiscal year by the Administrative Tribunal; resulting action plan produced, Within 12 implemented, and months after (i) Audit report reported on INGD, MINEDH the end of each (ii) Report on action plan annually. Fiduciary Systems (DIEE) Other fiscal year implementation Procurement audit. Annual procurement under the Program audited within 12 months after the end of the fiscal year by independent auditing firm; resulting action Within 12 plan produced, months after (i) Audit report implemented, and INGD, MINEDH the end of each (ii) Report on action plan reported on Fiduciary Systems (DIEE) Other fiscal year implementation Establishment of an electronic filing system for Within 24 procurement months after E-filing procurement system in processes Fiduciary Systems INGD, MINEDH Other effectiveness place and functional Development of Investment Strategy for the resources of the Disaster Management Fund Technical INGD, MEF Due Date 31-Jan-2022 Investment Strategy Finalized . Page 19 of 20 The World Bank Mozambique Disaster Risk Management and Resilience Program (P166437) ANNEX 3: Implementation progress by results area as of June 14, 2022 Results Area 1: The cumulative result of year 3 for DLI 1 (disbursement of government contribution of minimum of 0.1 percent of State budget of 2021, and implementation by National Institute for Disaster Risk Management (INGD) of recommendations of audit of the Disaster Management Fund (DMF) for year 2019) has been achieved. The independent verification by the Administrative Court is at its final stage. The Bank is expected to disburse US$5 million by end of June 2022 which will increase the total disbursements under this DLI to US$25.8 million. For DLI 2, the preparation of a National Disaster Risk Financing Strategy (a result of year1 for DLI2) has been finalized and cabinet adoption is expected by June 2022. The design of the Program anticipated that the first purchase of sovereign catastrophe insurance would take place in Program year 2 or 3. Thus, the Program design was flexible in terms of timing of the initial transaction given the technical and legal complexity of modelling catastrophe risk; structuring sovereign catastrophe insurance products; and placing them with (re-)insurance markets. This complexity, in addition to the Covid-19 pandemic and the burden it placed on the counterpart, has resulted in delays with the design and placement of catastrophe insurance by the Government. However, a catastrophe model which will serve as a basis for the transaction has now been built with WB TA; and the GoM has hired a broker which advises and assists it with placing the risk transfer product with markets. The first transaction is now expected to take place in Program year 4, ahead of the 2022/23 tropical cyclone season. Results Area 2: The preparation of assessment and strategy for the establishment of functional local DRM committees (a result of year 1 for DLI 3) is at final stage and approval is expected by early June 2022, and the creation and strengthening of committees are expected to start in September 2022. For DLI 4, the strategy for the establishment of an integrated information and early warning system, and the decree with the standard operational procedures (a result of year 1) were approved on May 18, 2022. The information flow system is expected to be ready by November 2022. Results Area 3: The Ministerial Diploma adopting technical norms for climate-resilient education infrastructure (a result of year 1 for DLI 5) was adopted by the ministers of the Ministry of Education and Human Development and the Ministry of Public Works, Housing, and Water Resources and published in October 2021. The assessment of the vulnerability of education infrastructure in cyclone-prone areas (a result of year 1 for DLI 6) has been completed for 5,000 classrooms and the selection of a total of 3,000 classrooms including the preparation of detailed designs and tender documents will be finalized by end June 2022. The contracting of retrofitting works for the first 600 classrooms (result for year 2 of DLI 6) is being negotiated. Works will start in June 2022 and will be completed by November 2022. Tenders for retrofitting of 900 classrooms (result for year 3 of DLI 6) were launched in early May 2022 and works will start in November 2022. Page 20 of 20