Document of The World Bank FOR OFFICIAL USE ONLY Report No: 69029-MZ PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT FROM THE PILOT PROGRAM FOR CLIMATE RESILIENCE OF THE STRATEGIC CLIMATE FUND IN THE AMOUNT OF US$2 MILLION TO THE REPUBLIC OF MOZAMBIQUE FOR A CLIMATE CHANGE TECHNICAL ASSISTANCE PROJECT May 31, 2012 Environmental and Natural Resources Management Unit Sustainable Development Department Country Department AFCS2 Africa Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank's policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective April 14, 2012) Currency Unit = Meticais (MZN) 27.3 MZN = US$1 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AAP Africa Adaptation Program AFDB African Development Bank CCGC Conselho Coordenador de Gestdo de Calamidades (Coordinating Council for Disaster Management) CCCU Climate Change Coordination Unit CCTAP Climate Change Technical Assistance Project CIF Climate Investment Funds CONDES Conselho Nacional de Desenvolvimento Sustentavel (National Sustainable Development Council) CPS Country Partnership Strategy CTGC Conselho T6cnico de Gestdo de Calamidades (Technical Council for Disaster Management) DA Designated Account DAF Direcqio de Administraqio e Finangas (Department of Administration and Finance) DFID Department for International Development DNA Direcqio Nacional de Aguas (National Directorate of Water) DNTF Direcqio Nacional de Terras e Florestas (National Forestry Driectorate) DNP Direcqio Nacional de Planificaqio (National Planning Directorate) DRM Disaster Risk Management FCPF Forest Carbon Partnership Facility FM Financial Management FUNAE Fundo Nacional para o Acqesso da Energia (National Energy Fund) GCM General Circulation Model GDP Gross Domestic Product GIS Geographic Information System GFDRR Global Facility for Disaster Reduction and Recovery GoM Government of Mozambique HDI Human Development Index IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Financial Corporation IFR Interim Financial Report 11AM Insituto de Investigagio Agraria de Mogambique (Agronomic Research Institute of Mozambique) INAM Instituto Nacional de Meterologia (National Meteorological Institute) INGC Instituto Nacional de Gestdo de Calamidades (National Institute for Disaster Management) IPCC International Panel for Climate Change JICA Japanese International Cooperation Agency M&E Monitoring and Evaluation MAE Minist6rio da Administraqio Estatal (Ministry of State Administration) ME Minist6rio da Energia (Ministry of Energy) MDG Millennium Development Goal MICOA Minist6rio para a Coordenaqio da Acqio Ambiental (Ministry for the Coordination of Environmental Affairs) MINAG Minst6rio da Agricultura (Ministry of Agriculture) MPD Minist6rio de Planificaqio e Desenvolvimento (Ministry of Planning and Development) MRV Monitoring, Reporting and Verification NAPA National Adaptation Programme of Action NREG Natural Resources and Environmental Governance ODI Overseas Development Institute PAF Performance Assessment Framework PDO Project Development Objective PIU Project Implementation Unit PPCR Pilot Program for Climate Resilience REDD Reduction of Emissions from Deforestation and Forest Degradation R-PP Readiness Preparation Plan SEA Strategic Environmental Assessment SESA Strategic Environmental and Social Assessment SLR Sea Level Rise SMEs Small and Medium Enterprises SPCR Strategic Program for Climate Resilience TA Technical Assistance TrdAdm Tribunalo Administrativo (Administrative Tribunal) UNDP United Nations Development Programme UNFCCC United Nations Framework Convention on Climate Change UNICEF United Nations Children Fund WB World Bank WWF World Wide Fund for Nature Regional Vice President: Makhtar Diop Country Director: Laurence C. Clarke Sector Director: Jamal Saghir Sector Manager: Idah Pswarayi-Riddihough Task Team Leader: Giovanni Ruta/Frauke Jungbluth  MOZAMBIQUE CLIMATE CHANGE TECHNICAL ASSISTANCE PROJECT TABLE OF CONTENTS Page I. Strategic C ontext .............................................................................................................. 1 A. Country Context ......................1.......................... B. Sectoral and Institutional Context............................................ 1 C. Higher Level Objectives to which the Project contributes ................... 3 II. Project Development Objectives .................................................................................. 5 A. PDO........ ................................................ 5 B. Project Beneficiaries ................................................. 5 C. PDO Level Results Indicators......................6.... ............6 III. Project D escription ......................................................................................................... 6 A. Project Components ..................................... ........ 6 Structure and leveraging ................................................. 6 Description of project components ...................7..... .............7 B. Project Financing ......................................... ..... 10 Lending Instrument ...................... .................. 10 Project Cost and Financing .......................................... 10 C. Lessons Learned and Reflected in the Project Design..................... 10 IV . Im plem entation ................................................................................................................11 A. Institutional and Implementation Arrangements ................ ............. 11 B. Results Monitoring and Evaluation ........................................ 11 C. Sustainability......... ........ ............................... 12 V. Key Risks and M itigation M easures ...........................................................................13 A. Risk Ratings Summary Table .................................. 13 B. Overall Risk Rating Explanation .................................... 13 VI. Appraisal Sum m ary ................................................................................................... 14 A. Economic and Financial Analyses .......................... ......... 14 B. Technical .................................................... 14 C. Financial Management....................... ................ 14 D. Procurement ......................................... ......... 14 E. Social ...................................................... 15 F. Environment (including Safeguards) .................................. 15 G. Other Safeguards Policies Triggered .................................. 16 Annex 1: Results Framework and Monitoring ......................................................................17 Annex 2: Detailed Project Description.................................................................................. 19 Annex 3: Implementation Arrangements ............................................................................. 23 Annex 4: Operational Risk Assessment Framework (ORAF).............................................34 Annex 5: Implementation Support Plan ................................................................................ 37 Annex 6: Additional Activities identified in Support of Knowledge and Evidence Gaps.....40 PAD DATA SHEET Mozambique Climate Change Technical Assistance Project PROJECT APPRAISAL DOCUMENT Africa AFTEN Basic Information Date: May 31, 2012 Sectors: Transport (17%); General water, sanitation and flood protection (17%), Renewable Energy (17%); Health (17%); Agriculture, fishing and forestry sector (32%) Country Director: Laurence C. Clarke Themes: Climate Change (100%) Sector Manager/Director: Idah Pswarayi-Riddihough/ EA Category: B - Partial Assessment Jamal Saghir Project ID: P131195 Lending Instrument: Grant under the Pilot Program for Climate Resilience of the Strategic Climate Fund Team Leader(s): Giovanni Ruta/ Frauke Jungbluth Does the project include any CDD component? No Joint IFC: No Recipient: Republic of Mozambique Responsible Agency: Ministry of Planning and Development (MPD) Contact: Mr. Adriano Ubisse Title: National Director (MPD) Telephone No.: Email: aubisse(&,mpd.gov.mz Project Implementation Start Date: June 26, 2012 End Date: October 31, 2016 Period: Expected Effectiveness Date: August 15, 2012 Expected Closing Date: October 31, 2016 Project Financing Data(US$M) Loan X ] Grant [ ] Other Credit [ ] Guarantee For Loans/Credits/Others Total Project Cost: 2.52 Total Bank Financing: 2.00 Other Financing: 0.52 Financing Gap: Financing Source Amount(US$M) Climate Investment Funds, Pilot Program for Climate Resilience 2.00 UK Department for International Development (DFID) TF (Bank executed) 0.52 Total 2.52 Expected Disbursements (in USD Million) Fiscal Year 13 14 15 16 17 Annual 0.75 0.70 0.35 0.15 0.05 Cumulative 0.75 1.45 1.8 1.95 2.00 Project Development Objective(s) The Project Development Objectives (PDOs) are to strengthen the institutional and technical capacity of the Government of the Republic of Mozambique to mainstream climate change resilience into key economic sectors and to improve the evidentiary basis for future development policy and planning. Components Component Name Cost (USD Millions) Component 1: Policy and Institutional Reform 0.99 Component 2: Knowledge Management and Evidence Building 0.49 Component 3 SPCR Management and Coordination 1.04 Compliance Policy Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [ X] Does the project require any exceptions from Bank policies? Yes [ ] No [X] Have these been approved by Bank management? Yes [ ] No[ Is approval for any policy exception sought from the Board? Yes [ ] No [X] Does the project meet the Regional criteria for readiness for implementation? Yes [ X] No [ Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waters OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X Legal Covenants Name Recurrent Due Date Frequency Description of Covenant Team Composition Bank Staff Name Title Specialization Unit UPI Giovanni Ruta Senior Environmental Economist Team Leader AFTEN 232745 Frauke Jungbluth Senior Rural Development Economist Co-Team Leader AFTEN 176408 Jean-Christophe Carret Sector Leader Former TTL AFTEN 092763 Ross Hughes Senior Climate Change Specialist AFTEN 239598 Vanessa Lopes Janik Operations Analyst SEGES 316710 Mohamed Khatouri Lead Monitoring and Evaluation Specialist AFTDE 274463 Maika Watanuki Jr. Professional Officer AFCS2 380339 Stephen Ling NRM and Environment Specialist AFTEN 274247 Cheikh Sagna Senior Social Development Specialist AFTCS 216532 Celia Dos Santos Faias Team Assistant AFCS2 368252 Antonio L. Chamuco Senior Procurement Specialist AFTPC 222820 Joao Tinga Financial Management AFTFM 206490 Diala Makdssi Afram Counsel LEGAF 174951 Jose C. Janeiro Senior Finance Officer CTRLA 194575 Amos Malate Procurement Analyst AFTPC 321409  1. Strategic Context A. Country Context 1. Mozambique is one of the poorest countries in the world and is also one of the most vulnerable to climate change in Africa. The country faces three major climate risks: (i) droughts, which impact upon agriculture and livelihoods, especially in the south of the country, including the major agricultural production area of the Limpopo watershed; (ii) floods, which are a major hazard to agriculture, infrastructure and livelihoods; and (iii) coastal erosion, storm surges and rising sea levels which threaten Mozambique's coastal zone and cities. Existing climate events and variability frequently overwhelm the resilience capacity of the country's infrastructure and economic systems. These events disproportionately affect the poor, as they have less capacity to manage risk, and have consequences for food security, health and other long term human development outcomes'. Future climate change scenarios suggest that these climatic challenges will be exacerbated in the years ahead. For example, future climate scenarios in Mozambique's coastal cities suggest that 100 year flood events will be occurring every 60 years under the low sea level rise scenario, every 40 years under the medium sea level rise scenario and every 33 years under the high sea level rise scenario2 . Economic analysis undertaken by World Bank on the Economics of Adaptation to Climate iaw, has shown that the effects on growth could accumulate into significant declines in national welfare by 2050 with GDP falls of between 4 percent and 14 percent relative to baseline growth in the 2040-50 decade if adaptation strategies are not implemented in transport, agriculture, water management and coastal zone management3 . This analysis also shows that the cost of inaction to climate change could be in the region of US$ 450 million per year - mostly through slower economic growth. Rain-fed agriculture, coastal towns and transport infrastructure are sectors that are particularly vulnerable to droughts, floods and cyclones - although other sectors that were not assessed by this analysis, for example fisheries, natural resources and health, may also be vulnerable. B. Sectoral and Institutional Context 2. The Government of Mozambique (GoM) recognizes that increasing climate variability and climate change impacts will impede economic growth and efforts to reduce poverty in a sustainable way and has therefore begun to develop its own policy and institutional responses. GoM also recognizes that climate change will have impacts across all sectors in Mozambique. It is understood that climate resilient development planning needs to be encouraged and supported across the economy as a responsibility that must be shared by all line ministries and agencies. 3. Climate change adaptation and forest carbon: The Ministry for the Coordination of Environmental Affairs (MICOA - Minist6rio para a Coordenagdo da Ac io Ambiental)4 is the UNFCCC focal point ministry and has responsibility for coordinating work on climate change and policy development on climate change - including on Reduced Emissions from Deforestation and Forest Degradation (REDD+). MICOA does not have a mandate for implementation -responsibility for which lies with the line ministries. The inter-ministerial National Sustainable Development Council (CONDES - Conselho According to a Poverty and Vulnerability Survey (PVS) conducted by the World Bank in 2006, the most common covariate risks facing Mozambique's households were shocks caused by climatic changes or natural disasters. 2 Based on the 'high scenario' derived from Rahmstorf (2007) which would imply mean sea level around 24cm higher in 2040 compared to the 1990 mean sea level. The 'low scenario' in this study is derived from the midpoint of IPCC AR4 A2 range and estimates mean sea levels around 12cm above 1990 mean sea level. 3 World Bank (2010). Economics ofAdaptation to Climate ( loan Mozambique. World Bank, Washington D.C. 4 The Ministry for the Coordination of Environmental Affairs (MICOA) coordinates sustainable development, guides the management of natural resources and develops appropriate policies, laws and public environmental awareness. MICOA is a coordination body and does not have implementing functions. -1- Nacional de Desenvolvimento Sustentavel), chaired by the Prime Minister, coordinates policy and planning on sustainable development and climate change. CONDES is guided by a technical coordination committee that is chaired by the Deputy Minister of MICOA. 4. Strategic Program for Climate Resilience (SPCR): In June 2011, the government presented to the Climate Investment Funds (CIFs) sub-committee its SPCR - the most comprehensive national approach to addressing climate change so far. This program was endorsed by the sub-committee and aims to 'mainstream climate resilience into key and vulnerable economic sectors and regions of Mozambique'. The SPCR sets-out an ambitious program of (i) policy and institutional reforms; (ii) pilot investments; and (iii) knowledge and program management investments. Policy and institutional reforms would be supported through a series of Development Policy Operations (DPOs). Seven pilot investments have been included in the SPCR covering infrastructure (urban and transport), water resources management, agriculture and natural resources, including forestry. Five of these will be blended with investment projects implemented by the World Bank and the African Development Bank to leverage additional resources and impacts. The remaining two investment projects will leverage private sector investment and will be co-financed by the International Finance Corporation (IFC). MICOA and the Ministry of Planning and Development (MPD - Minist6rio do Planificaqio e Desenvolvimento) have joint responsibility for the coordination, management and monitoring of the SPCR and will be supported by the project. 5. Disaster Risk Management (DRM): The National Institute for Disaster Management (INGC - Instituto Nacional de Gestdo de Calamidades) under the Ministry of State Administration (MAE - Minist6rio da Administraqio Estatal) leads on disaster response and preparedness and has conducted a major analysis of climate change implications for Mozambique. INGC receives support from the Global Facility for Disaster Reduction and Recovery (GFDRR) for a five year DRM program. Support for strengthening responses to disasters is supplemented by a range of donors that include the European Commission, Denmark, Sweden and UNICEF. The Coordinating Council for Disaster Management (CCGC - Conselho Coordenador de Gestdo de Calamidades), chaired by the Prime Minister, ensures multi-sectoral coordination in disaster prevention, assistance to victims and disaster rehabilitation. It receives advice from the Technical Council for Disaster Management (CTGC - Conselho T6cnico de Gestdo de Calamidades). 6. Low Carbon Development: In terms of mitigation priorities, per capita energy consumption and emissions are amongst the lowest in the world (<50kWh/capita/annum) and much of Mozambique's electricity and household energy is already generated from renewable sources. Nearly all of Mozambique's electricity generation comes from hydropower - most of which is exported. However, the energy intensity of the economy remains high - a consequence of high dependence on biomass fuels and a small economy. The key issue for many years to come will be access to modem forms of energy - only around 12 percent of households had access to such energy in 2009 and around 85 percent of energy needs are supplied by biomass fuels - mainly wood and charcoal. This constrains economic opportunities for the poor, reduces the quality of services available to them (since modem health and education services rely on access to electricity) and leaves rural populations over-dependent on declining forest resources for fuel. The burning of these fuels also has negative impacts on health. Renewable forms of energy generation - from solar, wind, biomass and small and medium hydro - now offer possibilities for improving energy access; but unlocking this potential, while ensuring low income households are not financially affected, will require the right mix of policies, incentives and safeguard measures. 7. Power Generation: The Ministry of Energy (ME - Minist6rio da Energia) is responsible for national energy planning and policy formulation and for overseeing the operation and development of the energy sector. ME is composed of three main thematic areas (Power Sector, Renewables and Liquid Fuels) and a central services management group. GoM's 'Energy Management Strategy for the Energy Sector (2008- 12)' promotes new and renewable sources of energy and the diversification of the country's energy mix. -2- In support of this, the ME has launched a National Renewables Strategy to encourage take-up of technologies that will improve access to modem forms of energy and to encourage investment in renewable energy generation for grid supply. 8. Forestry: Mozambique is losing its forests at a rate of about 0.58 percent per annum - more than double the deforestation reported in 1994 (0.21 percent)6. This is one of the largest sources of GHG emissions in Mozambique. Forest loss also erodes the resilience and productivity of the economy as a whole, by eliminating their contribution of undervalued environmental services (e.g. watershed protection, carbon sequestration, fuel supply, biodiversity, coastal protection and fisheries support). There is currently a high level of private sector interest in making investments in forest carbon management in Mozambique, but, like in most countries, there is currently no governance framework for Reduced Emissions from Deforestation and Forest Degradation (REDD+). MICOA and the National Forestry Directorate (DNTF - Direcyio Nacional de Terras e Florestas) in the Ministry of Agriculture (MINAG - Minist6rio da Agricultura) have responsibility for forest policy and the state management of forests. These institutions lead on REDD+ policy development and they anticipate that REDD+ could strengthen incentives for sustaining forest cover and for delivering development benefits to forest-dependent communities. MICOA and DNTF are leading the preparation of a national strategy for REDD+ readiness - supported by Norway, JICA and the Forest Carbon Partnership Facility (FCPF) and are seeking to put in place the necessary legal and regulatory framework for forest carbon management. 9. International donor support: There is substantial, but fragmented, international donor support for improved environmental and social management and action on climate change 7. At budget support level, the Performance Assessment Framework (PAF) of the G19 policy matrix includes a very general indicator on climate change ('number of climate change adaptation projects and initiatives in risk areas'). At the programmatic level, Denmark is providing support to a second phase of an environment program with MICOA that includes a climate change support component (approx. US$ 25 million) that focuses on climate change planning at sub-national level. The GFDRR provides support through the INGC to the government's Disaster Risk Management program (US$ 5 million). The UNDP Africa Adaptation Program is providing technical assistance support to MICOA (US$ 2 million). The remainder of international support is delivered through small projects (although this will change with the substantial pilot investments of the SPCR). For example, DFID provides support to a Save the Children Fund- implemented community-based adaptation and disaster risk response project in the Zambezi valley; CARE implements a regional climate change 'leaming' project that includes Mozambique. On low carbon development, Norway, Belgium and the Netherlands are providing support to government for renewable energy development through FUNAE - the national rural energy fund. Germany is providing technical assistance and the European Commission and Portugal have been funding mini-hydropower and 'solar villages.' JICA has been supporting solar PV installations for schools and clinics and is also helping GoM to prepare a Monitoring, Reporting and Verification (MRV) baseline for REDD+ through GIS mapping of forests in areas prioritized for forest carbon management. India is making a major new investment to build solar panels in Mozambique. C. Higher Level Objectives to which the Project contributes 10. Strategic Program from Climate Resilience. In FY11, the GoM prepared a US$ 100 million Strategic Program for Climate Resilience (SPCR), with the assistance of the World Bank, AFDB and IFC, MoE (2011). Strategy for New and Renewable Energy Development (EDENR) 2011-2025. Ministry of Energy, Republic of Mozambique. 6 See Mozambique: Readiness Preparation Proposal (R-PP). Government of Mozambique (supported by the Forest Carbon Partnership Facility). March 2012. 7 A detailed inventory of climate change related projects is currently under preparation by MICOA. -3- that was endorsed by the Climate Investment Funds in June 2011. The SPCR comprises three pillars: Pillar 1: Institutional and policy reforms; Pillar 2: 'Transformational' investment pilots; and Pillar 3: Management, monitoring and knowledge management. 11. Through the SPCR, the GoM proposed to introduce climate resilience into development planning through a combination of policy and institutional reforms, pilot investment projects in different sectors (agriculture, natural resources management, hydromet, rural roads and cities) and knowledge management activities. The preparation of the SPCR marked a significant shift towards strong ownership from the GoM on the climate change agenda. The Climate Change Technical Assistance Project (CCTAP) will build capacity in implementation of all three pillars of the SPCR and will also support the preparation of the climate change DPO that, in turn, would support the policy and institutional reforms included in Pillar I of the SPCR (Figure 1). Figure 1. The relationship between the CCTAP, the SPCR and the DPO SPCR Pillar 1: Pillar 2: Pillar 3: Institutional and policy Transformational Management, monitoring and reform investment pilots knowledge management Climate Change Development Policy Operation (DPO) series Climate Change Technical Assistance Project (CCTAP) 12. Country Partnership Strategy. Climate change and disaster risk reduction is a central theme of Pillar 2 on 'Vulnerability and Resilience' of the Country Partnership Strategy (CPS) 2012-2015 for Mozambique, which was approved by the World Bank Board on April 3, 2012. The SPCR, including its investment pillar and its policy and institutional reform pillar features prominently in the CPS. Investments supported by the SPCR include the following: Cities and Climate Change Project, Roads and Bridges Maintenance and Management Project ,and the National Water Resources Development Project. The policy and institutional reforms included in the Development Policy Operation include reforms in infrastructure, agriculture, water resources management, energy, forestry and health. Technical assistance requirements required to 'mainstream' climate resilience across the World Bank country portfolio have been discussed with each of the sectors. 13. Africa Strategy. The project is closely aligned to the World Bank's Africa Strategy' by building- capacity for strengthening the overall government response to the climate challenge facing Mozambique. The project would contribute specifically to Pillar II on Vulnerability and Resilience by strengthening World Bank 2011. Africa's Future and the World Bank's Support to It. Washington DC World Bank. -4- sector resilience to climate change by helping Mozambique respond better to climate shocks. The project would also contribute to Pillar I on Competitiveness and Employment - by supporting GoM efforts to boost private sector investment in renewable energy development and forestry. 11. Project Development Objectives A. PDO 14. The Project Development Objectives (PDO) are to strengthen the institutional and technical capacity of the Government of the Republic of Mozambique to mainstream climate change resilience into key economic sectors and to improve the evidentiary basis for future development policy and planning. B. Project Beneficiaries 15. The project will put a strong emphasis on enabling the GoM in handling the increasingly complex climate change investment portfolio under SPCR and in delivering necessary policy and institutional reform in a timely manner. The technical assistance activities will specifically target the government agencies involved in climate change policy and institutional reform. However, ultimate beneficiaries of the CCTAP will be the communities whose livelihoods will become more resilient to weather related shocks and to climate change as a result of a well implemented climate program under the umbrella of SPCR. 16. MPD and MICOA. MPD is tasked with inter alia coordinating planning and development across sectors, coordinating the preparation of the national budget and managing GoM's relationship with international development partners. The Ministry is playing an active role in climate change planning and works closely with MICOA on overall policy and planning development. Technical capacity on climate change specific issues is however limited. MICOA leads on sustainable development and climate change issues. However, it has limited capacity and would require considerable institutional and capacity strengthening if it is to deliver on its mandate for environmental management, REDD+, climate change and sustainable development. 17. Sector Ministries. The climate change agenda is inherently a multi-sectoral one. Key government ministries likely to benefit from technical assistance activities during implementation are the Ministry of Energy, Ministry of Public Works and Housing, Ministry of Agriculture, Ministry of Health, and Ministry of Women and Social Action. 18. Communities. Beneficiaries at local level would be reached through various aspects of the SPCR and this project will provide capacity-building and technical support to enable the impacts of SPCR investments to be optimized and monitored. For example, PPCR Phase 1 funds are supporting vulnerability assessments in SPCR focal areas as a basis for targeting pilot investments under Phase 2. This project would also support vulnerability assessment scoping studies for the coastal zone, for health and for natural resources and would work to ensure that the National Climate Change Strategy is focused on responding to the needs of vulnerable men, women and children. The project would also provide the support needed to build capacity of MICOA, MPD and line ministries to monitor the impacts of SPCR investments on vulnerable target groups, especially women and the poor. 19. Civil Society. Civil society is developing a stronger voice in Mozambique and is gradually becoming more informed and engaged in discussions on climate change. Various international and local NGOs have programs working on climate change in Mozambique including Save the Children Fund (UK), CARE and World Wide Fund for Nature (WWF). The media, especially print media, now regularly carry stories and features on climate change issues. The knowledge management component of the SPCR, which will be -5- supported by the CCTAP, would seek to strengthen civil society engagement, including academia and research institutions, through training, engagement in workshops and seminars and by improving information flows via briefings, audio-visual outputs and media work. 20. Private Sector. International indicators of economic competitiveness and business environment are poor for Mozambique - the country ranked 139 out of 183 countries in the 2012 Doing Business Index, 136 out of 155 countries in the 2010 Global Logistics Performance Index, and 131 out of 139 countries by the World Economic Forum's Global Competitiveness Report 2010-2011. The World Bank Investment Climate Assessment report released in 2009 found that the top private sector constraints in Mozambique were access to finance, practices of the informal sector, inadequate electricity supply, high tax rates, crime and disorder9. The SPCR and DPO, which would be both supported by the CCTAP, are seeking to encourage private sector investment into climate resilient development through developing improved incentives for private sector investment in forest carbon management in peri-urban water supply, index- based weather insurance and renewable energy supply. C. PDO Level Results Indicators 21. Key Results. The achievement of the PDO (see section II.A above) will be measured through the following results indicators: (a) Number of sectors that have integrated climate change actions in sectoral plans or strategies (b) Key reforms for selected sectors identified and integrated in DPO discussions (c) Direct project beneficiaries (number), of which female (percentage) 22. The PDO level results indicators will be complemented by intermediate results indicators as indicated in Annex 1. III. Project Description A. Project Components Structure and leveraging 23. The CCTAP will consist of three components to be implemented over four years: (i) Policy and institutional reform; (ii) Knowledge management and evidence building; and (iii) SPCR management and coordination. PPCR resources are being used to leverage additional bilateral support, including financing from the United Kingdom Department for International Development (DFID). DFID would support technical studies and assessment in support of the DPO operation and will support the preparation of the Mozambique National Climate Change Strategy. This support is already being delivered through a Bank- executed Trust Fund. 24. The CCTAP will provide a platform for follow-up interventions, particularly on climate change knowledge development and dissemination. The development of the National Climate Change Strategy and the knowledge management work to be supported by the CCTAP would identify opportunities for further knowledge creation and capacity- building needs making the operation amenable to additional financing opportunities. Annex 6 provides a summary of knowledge creation opportunities for potential future co-financing support which are based on the evidence gaps identified in the SPCR program 9 Mozambique Investment Climate Assessment (World Bank, 2009). http://siteresources.worldbank.org/INTMOZAMBIQUE/Resources/ICAMoz.pdf. -6- document. They include vulnerability assessment scoping studies for the health, natural resources (such as forests, wetlands, fisheries resources and protected areas) and coastal cities. When possible, assessments will be sex-disaggregated where relevant to help analyze the differentiated benefits, opportunities and roles for women and men. Description of project components Component 1: Policy and Institutional Reform (Component Costs: US$ 0.99 million, of which US$ 0.50 million DFID TF and US$ 0.49 million PPCR grant) 25. This component will provide advice on strategy preparation, institutional and policy reform. The component would build around three sub-components: (i) Preparation of the Mozambique Climate Change Strategy, (ii) Preparation of a Climate Change Development Policy Operation, and (iii) Support of policy and institutional reforms at the sector level. As described in Schedule 1 of the Grant Agreement, this component will invest in the following activities: (i) Preparing an appropriate national climate change strategy. (ii) Preparing a climate change public expenditure review; and iJudwi iw' eventual poverty, social and environmental impacts of the climate change policy and institutional reforms under the SPCR and assessing the Recipient's systems for reducing any such adverse impacts and enhancing any such positive impacts. (iii) Carrying out a program of capacity building activities designed to, inter alia, (a) enhance the capacity of the Recipient's ministry responsible for agriculture to address climate change implications in key sector policies and plans; (b) enhance the capacity of the Recipient's ministry responsible for public works to assess the vulnerability of rural roads infrastructure to climate change, and to identify and pilot the development of updated and revised climate resilient standards; and (c) enhance the capacity of the Recipient's ministry responsible for human health to address health risks related to climate change. (iv) Provision of Training required for the purposes of (i), (ii), (iii) above. 26. Preparation of Climate Ciaw,, Strategy. The project will support GoM to develop its first National Climate Change Strategy. Preparation support will require deployment of national and international consultants to build national capacity and to support the strategy development process. The project will also contribute to the costs of national and regional consultation processes to ensure that strategy development is evidence-based and responsive to ideas and views from a wide range of stakeholders. The strategy will be reviewed by the National Sustainable Development Council (chaired by the Prime Minister) by September 2012 and it will be finalized and adopted under the future Climate Change DPO. 27. Preparation of the Climate Cinwg Development Policy Operation. Over the next three years the government would engage in an ambitious program of policy and institutional reform which would receive World Bank support through a series of three climate change DPOs. Under this sub-component, specialist technical assistance support will help GoM prepare a climate change public expenditure review and undertake analysis of the environmental, social and poverty impacts of the proposed policy reforms. The climate change public expenditure review will provide the GoM with an analytical basis and specific recommendations to increase the institutional capacity and efficiency of public resource allocation, utilization and implementation to support the Climate Change Strategy. 28. Operational Policy 8.60 requires that the Bank determines whether specific policies supported by the operation are likely to cause significant effects on the country's environment, forests, and other natural -7- resources. The CCTAP will help identify eventual impacts from the proposed policy reforms and assess the Recipient's systems for reducing such adverse effects and enhancing positive effects, drawing on relevant country-level or sectoral environmental analysis. If significant gaps in the analysis or shortcomings in the Recipient's systems are identified, the analysis under this component would identify how such gaps or shortcomings could be addressed during the DPO implementation. 29. This component will also support three national consultations on the DPO - one for each cycle of the DPO. 30. Support for policy and institutional reforms at sector level: The DPO would support a number of sector ministries to introduce policy and institutional reforms for agriculture, hydro-meteorological services, energy, roads, social protection and health. At national level, the CCTAP will support the deployment of a capacity-building specialist in support of policy and institutional reform work and to coordinate delivery of sector-level capacity-building support. At sector level, the project will support the delivery of specialist technical assistance in cases where this is not already available from other sources. This will comprise both national and international consultancy support to help in the analysis design and introduction of specific policy actions identified in the DPO results framework. This will include consultancy support to1o (i) Assist the Ministry of Agriculture to address climate change implications in key sector policies and plans (ii) Assist the Ministry of Public Works to assess the vulnerability of its rural roads infrastructure to climate change and to identify and pilot the development of updated and revised climate resilient standards (iii) Assist the Ministry of Health to identify policy actions that address health risks exacerbated by climate change Component 2: Knowledge Management and Evidence Building (Component Costs: US$ 0.49 million, of which US$ 0.02 million DFID and US$ 0.47 million PPCR grant) 31. This component will allow the Government to collect and disseminate lessons learnt from PPCR investments and from DPO implementation, and fill knowledge gaps in a number of important sectors. This will be achieved through two sub-components: (i) Design and implementation support for the SPCR knowledge management system; and (ii) Addressing evidence gaps. As described in Schedule 1 of the Grant Agreement, this component will invest in the following activities: (i) Developing and implementing an appropriate and coherent knowledge management system for the SPCR, including: developing a knowledge management strategy, preparing a comprehensive training needs assessment for key line ministries and agencies of the Recipient,- and developing and managing a web portal to facilitate improved sharing of information on climate change and climate-related initiatives. (ii) Carrying out studies to address gaps in the knowledge of climate change vulnerabilities in a number ofsectors, including for natural resources, health, and coastal cities. (iii) Provision of Training required for the purposes of (i) and (ii) above. 10 In addition to the support identified here, financing from the Forest Carbon Partnership Facility (FCPF) will assist the Government to put in place a robust legal framework for forest carbon management. -8- 32. Design and implementation support for the SPCR knowledge management system. The project will support a 'knowledge management and learning specialist' tasked with developing a coherent knowledge management strategy for the SPCR and preparing a comprehensive training needs assessment on climate change adaptation and mitigation for key line ministries and agencies. These will identify priorities for future investments in training, communications and the sharing of experience, information and knowledge across government and with civil society and other stakeholders. These will also provide tools for better coordination of donor support for knowledge management and studies on climate change. The project will also support the costs of a part-time communications specialist to develop and manage a web portal to facilitate improved sharing of information and coordination on climate change and climate-related initiatives. 33. Addressing evidence gaps. Scoping studies will be undertaken to address the evidence gaps identified in the SPCR and where feasible and appropriate, would support the detailed design of vulnerability assessments and tools. When possible, the scoping studies will have sex-disaggregated data to better understand evidence gaps for women and men. Each study would review the existing evidence base (including various studies undertaken by the Institute of Disaster Management - INGC) and would seek to identify key gaps needed for effective policy development and planning. For example, there is currently a dearth of information on the implications of climate change for (i) the health sector - for example, on changes in distribution and prevalence of vector- and water-borne diseases, on implications for the transport and storage of medicines and on health sector infrastructure; (ii) natural resources sectors, for example, on wetlands, marine resources, protected areas and forest resources. These sectors offer opportunities for building climate resilience (through improved management) but could also be impacted significantly by climate change; and (iii) coastal cities, for example on risks from storm surges, cyclone damage, saline inundation and sea level change. These scoping studies will build on the work being undertaken by the National Institute for Disaster Management (INGC) and will seek to add value for example by developing guidelines and awareness products to support climate-resilient sector planning, by identifying key evidence gaps for policy makers, and where appropriate, by detailed design of follow- up interventions for vulnerability assessments and the development of planning tools. These follow-up actions could then be supported with additional financing under the framework of the SPCR. Annex 6 provides an outline of priorities for potential additional financing, based mostly on evidence gaps identified in the SPCR. Component 3: SPCR Management and Coordination (Component Costs: US$ 1.04 million, of which US$ 1.04 million PPCR grant) 34. This component will strengthen the capacity of GoM to manage the SPCR effectively. It would strengthen the capacity of CONDES by supporting the establishment and operations of a climate change secretariat - the Climate Change Coordination Unit (CCCU) ". The component would also support the costs of workshops at national and sub-national levels. As described in Schedule 1 of the Grant Agreement, this component will invest in the following activities: Establishing CCCU and on gdli itig its institutional capacity, in the areas ofprocurement, financial management, and monitoring and evaluation, to implement the SPCR, including provision of goods and Training required for the purpose. 35. The component will support technical expertise on financial management, procurement and M&E including the incremental operating costs of a monitoring and evaluation specialist, a financial management specialist and a procurement specialist. The team will be based in the CCCU once it is formed and in the interim will be hosted by MPD. " The proposal for a CCCU is included in the Government's SPCR. -9- 36. The component will also finance the training of such technical experts including capacity building on financial management, procurement and monitoring and evaluation in MPD and/or MICOA (and eventually - of the CCCU) through training and workshops. Strengthening the capacity of MPD and MICOA in these areas will help ensure timely delivery of analyses and capacity building activities necessary to support SPCR implementation and DPO preparation. 37. Capacity-building and incremental operating cost support for monitoring and evaluation will help GoM to put in place a comprehensive M&E framework for the SPCR - for which an outline results framework is already in place. Support would ensure that outcome level indicators are identified and included to ensure monitoring of policy and institutional reforms, including their implementation at provincial, district and municipal level. 38. The component will partially support the costs of operations of the climate change coordination unit. The unit will provide the work space for the staff in charge of managing and coordinating SPCR activities. Activities to be supported include the purchase of office equipment and supplies, and a vehicle, and will allow the staff to travel in order to supervise PPCR projects and attend relevant international events. B. Project Financing Lending Instrument 39. Financing for the proposed CCTAP will be provided through a grant from the PPCR in the amount of US$ 2.0 million. The PPCR grant is accompanied by a Bank executed Trust Fund from DFID. Project Cost and Financing 40. The total project financing requirements are estimated at US$ 2.52 million, inclusive of price contingencies. Component and Sub-Component PPCR DFID Total (US$ m) (US$ m) (US$ m) 1. Policy and Institutional Reform Preparation of the Mozambique Climate ( / , Strategy 0.06 0.23 0.29 Preparation of a Climate ( lon& Development Policy Operation 0.03 0.22 0.26 Policy and institutional reform support at sector level 0.40 0.04 0.44 Subtotal 0.49 0.50 0.99 2. Knowledge Management and Evidence Building Design and Implementation Support for the SPCR Knowledge 0.41 - 0.41 Management System Addressing Evidence Gaps 0.06 0.02 0.08 Subtotal 0.47 0.02 0.49 3. SPCR Management and Coordination Subtotal 1.04 1.04 Total PROJECT COSTS 2.00 0.52 2.52 C. Lessons Learned and Reflected in the Project Design 41. The design of the CCTAP will explicitly support GoM's national climate change program - the SPCR by covering each of its three pillars: (i) policy and institutional reforms; (ii) pilot investments; and (iii) - 10 - program and knowledge management. Design has been guided by the need to effectively address the scale and complexity of SPCR investments (US$ 86 million plus and estimated US$ 330 million of co- financing) and the need to support DPO reform (US$ 150 million plus co-financing). This provides the rationale for the use of a technical assistance project. 42. While preparation of the CCTAP started together with the preparation of the Climate Change DPO, the decision to take the CCTAP to board prior to the DPO recognizes a need to sequence TA in support of 'ongoing' policy and strategic development of SPCR investments and to help GoM prepare the ground for the forthcoming program of policy and institutional reforms to be supported with the DPO series. 43. Experience from other World Bank operations has shown that technical assistance can play a crucial role in enhancing the impact of policy and institutional reforms12. In Ghana, the Implementation Completion and Results Report (ICR) for the DPO series on Natural Resources and Environmental Governance (NREG) showed that, although the triggers of the DPO series were met, more needed to be done to ensure that the policy changes adopted were adequately institutionalized and operationalized to deliver sustainable impacts. A key ICR recommendation was to ensure that follow-up operations (subsequent DPOs or other related instruments) should be supported by adequate levels of TA that would help government formulate policies and support their inclusion in the respective sectoral policies. TA support has been shown to be a critical input to provide the Government with timely support and guidance on policy options. IV. Implementation A. Institutional and Implementation Arrangements 44. The Ministry of Planning and Development (MPD) will be the implementing agency for the project. MPD will coordinate with the Ministry for the Coordination of Environmental Affairs (MICOA) which would be advising on the contents of project activities under its technical areas of competence. 45. After the creation of the Climate Change Coordination Unit (CCCU), the responsibility for the CCTAP will be transferred to the new Unit. It is envisaged that both MPD and MICOA will assign national staff and logistical support to the CCCU. Before taking over implementation responsibility, a technical and fiduciary (procurement and financial management) assessment of the CCCU (as an implementing agency for the Project) will be carried out, in a manner acceptable to the World Bank, to confirm that CCCU has appropriate technical and fiduciary capacity to take over said responsibilities. 46. Climate change will have impacts across all sectors in Mozambique and so ensuring that appropriate adaptation plans are integrated across the economy will be a responsibility that must be shared by all line ministries and agencies. For this reason, CCTAP will finance technical assistance work to support sector ministries in the formulation of policy and institutional reform. This technical assistance work will be under the responsibility of the implementing agency (i.e. MPD first and CCCU after its creation) but its scope and deliverables will be agreed with the relevant sector ministries. B. Results Monitoring and Evaluation 47. Project monitoring and evaluation (M&E) will serve to: (i) monitor and report on implementation progress as agreed in work plans and related budget plans; (ii) proactively identify potential bottlenecks in 12 The 2009 Development Policy Lending Retrospective (OPCS 2009, Development Policy Lending Retrospective: Flexibility, Customization and Results, Operational Policy and Country Services, October 2009), showed that "intertwining DPOs and technical assistance usually strengthens the enabling environment for policy reform". - 11 - implementation of the activities and decide on appropriate corrective actions; and (iii) assess and report on the achievement of planned outputs, outcomes and impacts as per Results Framework established for the Project (see Annex 1). 48. The M&E system would be based on the Results Framework (Annex 1). MPD and MICOA would be in charge of coordinating the data collection effort with the other government agencies. Once the CCCU is established, the M&E system would be established in the CCCU to track the results of the various frameworks, but also to build capacity for the CCCU to maintain a monitoring framework for climate related activities and investments. In the short run, MPD and MICOA will compile the data collected and prepare a progress report describing overall progress towards achieving results to be presented to the World Bank. Cost for collection of monitoring information is embedded in the Project activities. 49. The results framework for the CCTAP builds on the results framework developed for the SPCR. A separate results framework is under development for the DPO and identifies policy actions and results for each of the three main policy and institutional reform areas. 50. Given the emphasis of the CCTAP on processes such as strategy preparation, coordination and capacity building, rather than physical investments, results monitoring will rely on indicators that capture the achievement of qualitative milestones (e.g. approval of the strategy, completion of climate change vulnerability scoping studies). C. Sustainability 51. The project has been designed so that its results will help overall efforts to achieve institutional, financial, environmental and social sustainability, as described below. 52. Institutional sustainability: The project will place strong emphasis on capacity building of Governmental entities. It will help to strengthen the institutional architecture for mainstreaming climate change considerations in sector strategies and plans. No PIU is to be set up for the purposes of this operation: rather, the operation will invest in the capacity of existing institutions and will strengthen skills and technical capacities of the CCCU to be created by the Government during project implementation. 53. Financial sustainability: In the short term, the project will not create any unsustainable investments, as there are not any new recurrent costs or any new permanent staff positions or add-on processes that are created. But to the extent that the government reaps the fruits of the technical assistance work under the CCTAP, it will likely reduce the financial costs linked to climate change damages. 54. Environmental sustainability: The CCTAP will help the government address the risks arising from climate change. Sectors targeted include those in which environment and natural resources are crucial, like agriculture. At a more specific level, the project will foster resilience building for example in coastal areas and fisheries through vulnerability assessments. The results achieved under the CCTAP will help the government learn important lessons to support environmental sustainability in such sectors in the future. 55. Social sustainability: The project has been designed to ensure an adequate consultation and participation of the different stakeholders in the reform process on-going in the context of SPCR. As such, the project will aim to ensure that social considerations are appropriately taken into account and reflected in the policy and institutional reform to be undertaken by the Government during the preparation of the DPO. - 12 - V. Key Risks and Mitigation Measures A. Risk Ratings Summary Table Stakeholder Risk Rating Implementing Agency Risk - Capacity Moderate - Governance Moderate Project Risk - Design Moderate - Social and Environmental Low - Program and Donor Low - Delivery Monitoring and Sustainability Moderate Overall Implementation Risk Moderate B. Overall Risk Rating Explanation 56. Key risks and associated mitigation measures for the project are detailed in the Operational Risk and Assessment Framework (ORAF, Annex4). The overall risk rating for the project implementation is moderate. There is strong support at senior level within government and from the other implementing partners of the SPCR - the African Development Bank and the International Finance Corporation. Appropriate risk mitigation measures have been identified, notably to (i) ensure prior agreement at detailed design on technical assistance hosting and working relationships and (ii) emphasize capacity- building for SPCR management and coordination of detailed project component design. Nonetheless, risks remain, particularly in relation to implementation capacity and to the commitment of some sector line ministries to commit to addressing climate change. 57. Institutional alignment: Given the SPCR focus on mainstreaming climate change into sector planning and support for institutional and policy reforms and given the limited experience on climate change coordination within the government, it will be important to ensure a strong role for MPD in project management (including fiduciary management) and coordination. There will be a particularly pressing case for a strong role for MPD until the Climate Change Coordination Unit is fully established. On a technical level, this will need to be coordinated carefully with existing TA provided by UNDP/Africa Adaptation Program and the Danish Environment Program (Phase 2). In terms of management, the CCCU will need to develop appropriate technical and fiduciary management capacity for effective management of a growing portfolio of climate change funding. This introduces technical challenges as well as fiduciary risk. 58. Limited coordination and management capacity: GoM recognizes the need to strengthen management and coordination capacity and this project seeks to address this issue by prioritizing capacity building for management and coordination aspects of the SPCR and to develop the institutional architecture necessary to deliver effective leadership and coordination of the climate change agenda. 59. Different sector priorities within line ministries: There is a risk that some sector line ministries will not regard a response to climate change as a priority - given other pressing priorities. The project preparation will address this issue through policy dialogue with each of the sector line ministries with an - 13 - emphasis on identifying opportunities that could help sectors assess vulnerability and identify practical options that would respond to the high levels of existing climate variability (i.e. 'no regret' options). 60. Social and environmental issues and safeguards: The project is designed to improve social and environmental outcomes through strengthening MICOA and broader capacity to identify and manage climate adaptation and mitigation investments. The project does not include physical investment and therefore will not have any direct social and/or environmental safeguard impacts. VI. Appraisal Summary A. Economic and Financial Analyses 61. As a technical assistance project with no tangible investment activities, neither economic nor financial analyses were undertaken for the project. B. Technical 62. The activities to be supported under the project have extensively been discussed and agreed with the Government and other stakeholders and partners. The CCTAP will address technical assistance needs of MPD, MICOA and line ministries related to the management of SPCR and the delivery of DPO prior action. The CCTAP is structured as a focused and simple project and lays the foundation for the achievement of an ambitious climate change agenda in Mozambique. C. Financial Management 63. The financial management of the project will be the responsibility of MPD, through the Direcqdo Nacional de Planificago (DNP) in close coordination with the respective Department of Administration and Finance (DAF). The Bank has assessed DNP's financial management arrangements, including the proposed systems of accounting, reporting, auditing, and internal controls to ensure that it would be capable of recording correctly all transactions and balances, supporting the preparation of regular and reliable financial statements, and producing Interim Financial Reports (IFRs) in accordance with the Bank's requirements. The assessment was positively impacted by the fact that the DNP team has been responsible for implementing several Bank-financed operations, including the active National Decentralized Planning and Finance Project. The overall risk rating for the project in the area of financial management is Moderate. This reflects the simplified activities to be handled and experience of the FM personnel at DNP. 64. The review concluded that the timely implementation of the following actions should be taken by MPD to ensure that financial management arrangements meet the Bank's financial management requirements: (i) opening of the DA at the Banco de Mogambique and the respective Forex Account; (ii) request the Minister of Finance for the use of the Regime Especial; and (iii) agreement of format of IFRs prior to the negotiations. 65. The assessment concludes that with the implementation of the above actions, the project will meet the minimum requirements under the Bank's OP/BP 10.02. D. Procurement 66. The overall project risk for procurement is rated as Moderate. The procurement for PPCR will be undertaken by the implementing agency of the ongoing National Decentralized Planning and Finance Program at MPD. Virtual assessment of the implementing agency's capacity in procurement was - 14 - conducted by the Bank in April 25, 2012 and the outcomes of the recent FY12 post procurement review were considered. Its objective was to determine whether the above proposed procurement arrangement for the PPCR implementation is aligned with to Bank requirements. The results of the assessment indicated that the GoM would need to put in place some risk mitigating measures to minimize identified procurement risks related to implementation capacity. 67. For the ongoing PPCR phase 1 activities, the Decentralization Project PIU within the National Directorate of Planning, MPD has been managing procurement. This arrangement has worked reasonably well so far. However, with the CCTAP the work load will become larger. MPD has therefore initiated the procurement of an experienced procurement specialist to be based within the National Planning Directorate who will increase the capacity of the PIU to handle all procurement related to the project and PPCR phase 1 funds. It is expected that the specialist will start his work in MPD in June 2012. 68. Once the Climate Change Coordination Unit has been established by MICOA in support of CONDES, the project will provide funding to strengthen the capacity of this unit to handle procurement related matters and eventually, after a Bank procurement capacity assessment has considered it acceptable, procurement responsibility will be transferred to the CCCU under MICOA. Governance and Anti-corruption 69. Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and revised in January 2011, shall apply to the project. E. Social 70. The project is a technical assistance operation designed to improve social outcomes through strengthening MICOA and broader capacity to identify and manage climate adaptation and mitigation investments, and will not finance physical investment activities on the ground. It will therefore not have any direct social impacts, and its indirect impacts, through informing policy development, are expected to be largely positive. The project will support preparation of a Climate Change Development Policy Operation. To allow compliance of the DPO with OP8.60, the technical assistance project will provide support to analyze the distributional impact of the proposed policy reforms on the welfare of different stakeholder groups, with a particular focus on the poor and vulnerable. This will be done by supporting the preparation of a Poverty and Social Impact Analysis (PSIA). F. Environment (including Safeguards) 71. The project is designed to improve environmental outcomes through strengthening MICOA and broader capacity to identify and manage climate adaptation and mitigation investments, and will not finance physical investment activities on the ground. It will therefore not have any direct environmental impacts, and its indirect impacts, through informing policy development, are expected to be largely positive. The project will provide support across all three pillars of the SPCR, including the 'Mozambique: First Climate Change Development Policy Operation'. In order to allow compliance of the DPO with OP8.60, the technical assistance project will support an analysis of the likelihood of significant effects of proposed policy reforms on the country's environment, forests, and other natural resources and an assessment of the Recipient's systems for reducing such adverse effects and enhancing positive effects, drawing on relevant country-level or sectoral environmental analysis. A Strategic Environmental and Social Assessment (SESA) of the SPCR is already being undertaken by GoM with support from the African Development Bank, which aims to generate sector-specific guidance for climate-smart, environmentally and socially responsible development (with a focus on the pilot investments). The work - 15 - under CCTAP will address knowledge gaps in the event that some specific social or environmental issues are considered not adequately covered by the SESA. 72. Given that the project will finance additional analytical work to complement existing analysis (including the SESA of PPCR activities) of poverty, social and environmental effects of the climate change policy reforms considered by the government, the Policy on Environmental Assessment BP/OP 4.01 has been triggered, and the project classified as Category B. The ToRs for the analytical work on poverty, social and environmental effects of climate change ("Terms of Reference for Poverty and Social Impact Analysis" and "Terms of Reference for Strategic Environmental Assessment") have been prepared, consulted upon, and disclosed in country on May 11, 2012 and at the World Bank's InfoShop on May 14, 2012. G. Other Safeguards Policies Triggered 73. The project does not trigger any other safeguard policies. - 16 - Annex 1: Results Framework and Monitoring MOZAMBIQUE: Climate Change Technical Assistance Project Project Development Objectives (PDOs): To strengthen the institutional and technical capacity of the Government of the Republic of Mozambique to mainstream climate change resilience into key economic sectors and to improve the evidentiary basis for future development policy and planning. PDO Level Results 2 Unit of Cumulative Target Values** Fre- Data Source Responsibility Description (indicator Indicators* M u Baseline for Data definition etc.) Measure YR1 YR2 YR3 YR4 quency Methodology Collection Result 1: Sector investment plans or sector Climate change strategies include climate change considerations included as criteria for at least one in sector strategies SPCR intervention. Indicator: monitoring Sectors considered include Number of sectors with and reporting agriculture, energy, roads, comprehensive climate E Sector 0 1 3 5 7 Annual framework; MPD health, social protection, change actions integrated environment, in sectoral plans or progress water/hydromet(total: 7) strategies reports Note: This indicator is included in the SPCR Results Framework _______(RF).- Indicator: Goal achieved if for each sector Key reforms for selected SPCR at least one policy reform per sectors identified and monitoring sector is included in DPO. integrated in DPO and reporting discussions EH Sector 0 1 3 5 7 Annual framework; MPD Sectors considered include CCTAP agriculture, energy, roads, progress health, social protection, reports environment, water/hydromet(total: 7) Indicator: Direct project Beneficiaries are defined as the beneficiaries (number), total number of government staff of which female 300 CCTAP in MPD, MICOA and selected (percentage) Individual 0 30 Annual progress MPD/MICOA line ministries reached by reports workshops and other training events supported directly by the CCTAP agri__ _ _ __ _ _ _ _CCTAP. -17 - INTERMEDIATE RESULTS Intermediate Result (Component One): Policy and Institutional Reform Intermediate Result Cabinet Approval by cabinet is obtained indicator].1: Ismeeting S Qualitative 0 YsAna IO National Strategy for CC E Q 0 minutes/offici MICOA approved by Cabinet al gazette Intermediate Result (Component Two): Knowledge Management and Evidence Intermediate Result The Knowledge Management Indicator 2.1 KMate System (KMS) consists of (1) SPCR knowledge workshops SPCR the establishment of a team in management system and (or monitoring charge of knowledge tools are ready to be used KM team . and reporting management and learning; (2) a E Qualitative 0 0 0 estab- Annual framework; MICOA activities (e.g. website, seminars, lished KM team CCTAP workshops) are organized by the establishes progress team. ownreport Note: A related indicator is included in the SPCR RF. Intermediate results Three (3) scoping studies are to Indicator 2.2. CCTAP be completed: coastal zones, Number ofsector scoping E Scoping 0 0 1 2 3 Annual progress MPD/MICOA natural resources management studies on CC report and health. vulnerability completed I Intermediate Result (Component Three): SPCR Management and coordination Intermediate Result Annual Work plans and progress reports Indicator 3.1 Project work 65% of 80% of SPCR are those produced under SPCR Frameworks and Systems manage plan Progress Progress 95% of programs. for monitoring and ment Pors frmntrnanmet agreed reports reports of Progress mnitreoring reporting on progress of E Qualitative team is with ofrthe the reports of Quarter- repor ; MICOA Timely delivery is defined as SPCR funded projects are equip- the projects ly frA less than one week delay in the in place ped with each projects projects delivered CCTAP delivery. alky SPCR delivered delivered otieprogress alIk funded on time on time otiereports staff prnded Note: This indicator is included project _in the SPCR RF. - 18 - Annex 2: Detailed Project Description MOZAMBIQUE: Climate Change Technical Assistance Project 1. The Project Development Objectives are to strengthen the institutional and technical capacity of the Government of the Republic of Mozambique to mainstream climate change resilience into key economic sectors and to improve the evidentiary basis for future development policy and planning. The CCTAP will enable the Government of Mozambique to implement the Strategic Program for Climate Resilience and deliver in a timely manner Climate Change policy and institutional reforms to mainstream climate change resilience into key economic sectors. 2. The project will consist of three components to be implemented over four years: (i) Policy and institutional reform; (ii) Knowledge management and evidence building; and (iii) SPCR management and coordination. Component 1: Policy and Institutional Reform (Component Costs: US$ 0.99 million, of which US$ 0.50 million DFID TF and US$ 0.49 million PPCR grant) 3. This component will provide advice on strategy preparation, institutional and policy reform. The component has three sub-components: (i) Preparation of the Climate Change Strategy; (ii) Preparation of a Climate Change Development Policy Operation; and (iii) Support of Policy and Institutional Reforms at the Sector Level. As described in Schedule 1 of the Grant Agreement, this component will invest in the following activities: (i) Preparing an appropriate national climate change strategy. (ii) Preparing a climate change public expenditure review,- and itili eventual poverty, social and environmental impacts of the climate change policy and institutional reforms under the SPCR and assessing the Recipient's systems for reducing any such adverse impacts and enhancing any such positive impacts. (iii) Carrying out a program of capacity building activities designed to, inter alia, (a) enhance the capacity of the Recipient's ministry responsible for agriculture to address climate change implications in key sector policies and plans,- (b) enhance the capacity of the Recipient's ministry responsible for public works to assess the vulnerability of rural roads infrastructure to climate change, and to identify and pilot the development of updated and revised climate resilient standards,- and (c) enhance the capacity of the Recipient's ministry responsible for human health to address health risks related to climate change. (iv) Provision of Training required for the purposes of (i), (ii), (iii) above. 4. Preparation of the Climate Ciaw,, Strategy. The project will support GoM to develop its first National Climate Change Strategy. Preparation support would require deployment of national and international consultants to build national capacity and to support the strategy development process. The project would also contribute to the costs of national and regional consultation processes to ensure that strategy development is evidence-based and responsive to ideas and views from a wide range of stakeholders. The strategy is scheduled to be reviewed by the National Sustainable Development Council (chaired by the Prime Minister) by September 2012 and it will be finalized and adopted under the future Climate Change DPO. 5. Preparation of the Climate Clia ,g Development Policy Operation. Over the next three years the government would engage in an ambitious program of policy and institutional reform which would receive World Bank support through a series of three climate change DPOs. Under this sub-component, - 19 - specialist technical assistance support will help GoM prepare a climate change public expenditure review and undertake analysis of the environmental, social and poverty impacts of the proposed policy reforms. The climate change public expenditure review will provide the GoM with an analytical basis and specific recommendations to increase the institutional capacity and efficiency of public resource allocation, utilization and implementation to support the Climate Change Strategy. 6. Operational Policy 8.60 requires that the Bank determines whether specific policies supported by the operation are likely to cause significant effects on the country's environment, forests, and other natural resources. The CCTAP would help identify eventual impacts from the proposed policy reforms and assess the Recipient's systems for reducing such adverse effects and enhancing positive effects, drawing on relevant country-level or sectoral environmental analysis. If significant gaps in the analysis or shortcomings in the Recipient's systems are identified, the analysis under this component would identify how such gaps or shortcomings could be addressed during the DPO implementation. 7. This component will also support three national consultations on the DPO - one for each cycle of the DPO. 8. Support for Policy and Institutional Reforms at Sector Level. The DPO will support a number of sector ministries to introduce policy and institutional reforms for agriculture, hydro-meteorological services, energy, roads, social protection and health. At national level, the CCTAP will support the deployment of a capacity-building specialist in support of policy and institutional reform work and to coordinate delivery of sector-level capacity-building support. At sector level, the project will support the delivery of specialist technical assistance in cases where this is not already available from other sources. This will comprise both national and international consultancy support to help in the analysis design and introduction of specific policy actions identified in the DPO results framework. This will include consultancy support to1: (i) Assist the Ministry of Agriculture to address climate change implications in key sector policies and plans (ii) Assist the Ministry of Public Works to assess the vulnerability of its rural roads infrastructure to climate change and to identify and pilot the development of updated and revised climate resilient standards (iii) Assist the Ministry of Health to identify policy actions that address health risks exacerbated by climate change Component 2: Knowledge Management and Evidence Building (Component Costs: US$ 0.49 million, of which US$ 0.02 million DFID and US$ 0.47 million PPCR grant) 9. This component will allow the Government to collect and disseminate lessons learnt from PPCR investments and from DPO implementation, and fill knowledge gaps in a number of important sectors. This will be achieved through two sub-components: (i) Design and implementation support for the SPCR knowledge management system; and (ii) Addressing evidence gaps. As described in Schedule 1 of the Grant Agreement, this component will invest in the following activities: (i) Developing and implementing an appropriate and coherent knowledge management system for the SPCR, including: developing a knowledge management strategy, preparing a comprehensive training needs assessment for key line ministries and agencies of the Recipient,- and developing and managing a web portal to facilitate improved sharing of information on climate change and climate-related initiatives. 1 In addition to the support identified here, financing from the Forest Carbon Partnership Facility (FCPF) will assist the Government to put in place a robust legal framework for forest carbon management. - 20 - (ii) Carrying out studies to address gaps in the knowledge of climate change vulnerabilities in a number ofsectors, including for natural resources, health, and coastal cities. (iii) Provision of Training required for the purposes of (i) and (ii) above. 10. Design and implementation support for the SPCR knowledge management system. The project will support a 'knowledge management and learning specialist' tasked with developing a coherent knowledge management strategy for the SPCR and preparing a comprehensive training needs assessment on climate change adaptation and mitigation for key line ministries and agencies. These will identify priorities for future investments in training, communications and the sharing of experience, information and knowledge across government and with civil society and other stakeholders. These will also provide tools for better coordination of donor support for knowledge management and studies on climate change. The project would also support the costs of a part-time communications specialist to develop and manage a web portal to facilitate improved sharing of information and coordination on climate change and climate-related initiatives. 11. Addressing evidence gaps. Scoping studies will be undertaken to address the evidence gaps identified in the SPCR and where feasible and appropriate, would support the detailed design of vulnerability assessments and tools. When possible, the scoping studies will have sex-disaggregated data to better understand evidence gaps for women and men. Each study would review the existing evidence base (including various studies undertaken by the National Institute of Disaster Management - INGC) and would seek to identify key gaps needed for effective policy development and planning. For example, there is currently a dearth of information on the implications of climate change for (i) the health sector - for example, on changes in distribution and prevalence of vector- and water-borne diseases, on implications for the transport and storage of medicines and on health sector infrastructure; (ii) the natural resources sectors, for example, on wetlands, marine resources, protected areas and forest resources. These sectors offer opportunities for building climate resilience (through improved management) but could also be impacted significantly by climate change; and (iii) coastal cities, for example on risks from storm surges, cyclone damage, saline inundation and sea level change. These scoping studies will build on the work being undertaken by the INGC and will seek to add value for example by developing guidelines and awareness products to support climate-resilient sector planning, by identifying key evidence gaps for policy makers, and where appropriate, by detailed design of follow-up interventions for vulnerability assessments and the development of planning tools. These follow-up actions could then be supported with additional financing under the framework of the SPCR. Annex 6 provides an outline of priorities for potential additional financing, based mostly on evidence gaps identified in the SPCR. Component 3: SPCR Management and Coordination (Component Costs: US$ 1.04 million, of which US$ 1.04 million PPCR grant) 12. This component will strengthen the capacity of GoM to manage the SPCR effectively. It would strengthen the capacity of CONDES by supporting the establishment and operations of a climate change secretariat - the Climate Change Coordination Unit (CCCU)14. The component would also support the costs of workshops at national and sub-national levels. As described in Schedule 1 of the Grant Agreement, this component will invest in the following activities: Establishing CCCU and we ii g its institutional capacity, in the areas of procurement, financial management, and monitoring and evaluation, to implement the SPCR, including provision of goods and Training required for the purpose. 14 The proposal for a CCCU is included in the Government's SPCR. -21 - 13. The component would support technical expertise on financial management, procurement and M&E including the incremental operating costs of a monitoring and evaluation specialist, a financial management specialist and a procurement specialist. The team will be based in the CCCU once it is formed and in the interim will be hosted by MPD. 14. The component would also finance the training of such technical experts including capacity building on financial management, procurement and monitoring and evaluation in MPD and/or MICOA (and eventually - of the CCCU) through training and workshops. Strengthening the capacity of MPD and MICOA in these areas will help ensure timely delivery of analyses and capacity building activities necessary to support SPCR implementation and DPO preparation. 15. Capacity-building and incremental operating cost support for monitoring and evaluation would help GoM to put in place a comprehensive M&E framework for the SPCR - for which an outline results framework is already in place. Support would ensure that outcome level indicators are identified and included to ensure monitoring of policy and institutional reforms, including their implementation at provincial, district and municipal level. 16. The component will partially support the costs of operations of the climate change coordination unit. The unit will provide the work space for the staff in charge of managing and coordinating SPCR activities. Activities to be supported include the purchase of office equipment and supplies, and a vehicle, and will allow the staff to travel in order to supervise PPCR projects and attend relevant international events. - 22 - Annex 3: Implementation Arrangements MOZAMBIQUE: Climate Change Technical Assistance Project 1. Project Institutional and Implementation Arrangements Project administration mechanisms 1. The project will be implemented by the Ministry of Planning and Development (MPD) and guided by the technical level Council for Sustainable Development (CONDES) - chaired by the Deputy Minister of MICOA and comprising director-level representation from line ministries. MPD will coordinate with the Ministry for the Coordination of Environmental Affairs (MICOA) which would be advising on the contents of project activities under its technical areas of competence. At the level of national administration, MPD leads on overall budget coordination and expenditure prioritization, whereas the MICOA is the UNFCCC focal point ministry and therefore leads on overall climate change policy development, coordinating work on climate change and territorial planning - but not for implementation. 2. GoM proposed to establish the Climate Change Coordination Unit (CCCU) as part of the Strategic Program on Climate Resilience (SPCR) and is now being established by MPD and MICOA. Day-to-day project implementation would eventually be undertaken by the CCCU. Both ministries will assign national staff and logistical support to the unit for a period of four years. The CCCU is being established to coordinate climate change work across the government agenda and will eventually assume full responsibility for management, coordination and monitoring of this project. 3. Until the CCCU is fully established, and as an interim measure, MPD will host the technical assistance and services for financial management, procurement, management and coordination under the ongoing arrangements for the SPCR. During this interim period, MPD will coordinate with relevant and participating agencies as necessary under the direction of CONDES. 4. Component 1 on policy and institutional reform would be led by MPD directly. Component 2 on knowledge management would be guided by the findings of the institutional analysis and the knowledge management strategy. Component 3 on project management and monitoring would be led by MPD. 5. Once established, the work of the CCCU will be guided and overseen by the Sustainable Development Technical Council which reports to the Sustainable Development National Council (CONDES) that is chaired by the Prime Minister. The technical council provides the mechanism for detailed discussion and review of policy and institutional reforms across government ministries - including Ministries of Public Works and Housing, Agriculture, Health, State Administration, Fisheries and Transport. The technical council also reports to and receives guidance from the Minister and Prime Minister level Sustainable Development Council and so provides a conduit for high level political engagement on the climate change agenda. - 23 - Institutional arrangements for climate change policy coordination and project management (beyond transitional phase) Sustainable Development National Council (Conselho Nacional e Desenvolvimento Sustentavel - CONDES) Sustainable Development Technical Council (Conselho T6cnico do CONDES) Climate Change Coordination Unit (including seconded staff from MPD and MICOA) II I Component 1: Component 2: Component 3: Knowledge SPCR Policy.a Management Management Rns tonl and Evidence and Building Coordination II. Financial Management, Disbursements and Procurement A. Financial Management and Disbursement 6. Overall, the residual financial management risk for the project is assessed as Moderate and the FM arrangements will meet the Bank's OP/BP 10.02 minimum requirements under financial management. 7. DNP will take overall responsibility for overseeing and coordinating the FM arrangements of project. The experience gathered through implementation of other Bank-financed operations will play a key role in ensuring that project activities begin soon after effectiveness. This includes experience gathered in the active National Decentralized Planning and Finance project. DNP's FM performance on past projects is considered adequate and the DNP has the minimal requirements to ensure that funds will be used only for the intended purposes, in an efficient and economical manner, but which will also be strengthened through the described mitigating measures. 8. Budgeting and Flow of Funds. Upon signing of the Financing Agreement, the project will need to be registered through the National Directorate of Budget (DNO) to ensure that funds can be channeled through the government IFMIS. Upon completion of preparation of the project budget and on a yearly - 24 - basis DNP will need to ensure that yearly budgets are inserted into MEO following the government of Mozambique procedures, including the calendar for such, by including the project budget in the budget of MPD, which is sent to parliament for approval. This will be key to ensuring celerity in the implementation of project activities at the beginning of every fiscal year. The project already has a draft procurement plan for the first 18 months of the project, which will be used for preparation of the budget as well as the basis for the initial advance request from the Bank. In addition, the DNP will need to ensure that it appropriately plans out its contracting activities taking into account all the necessary time required in terms of receiving a Visto on the contracts and other national requirements. 9. All project funds will flow through the government's single treasury account (CUT). MPD will open a Designated Account in the Banco de Mogambique and through which the funds will flow to a FOREX account and transferred to the CUT on demand. The funds will then be transferred from the CUT directly to the consultants and other suppliers of services. The funds will flow as follows: World Bank Designated Account in Banco de Mozambique DA (US$) CUT (US$ and MZN on demand) (MPD) Consultants/Suppliers/Service Providers 10. Accounting and Reporting. All project transactions will be recorded directly on e-SISTAFE and reports extracted from the IFMIS and complemented through excel spreadsheets. The civil servants at MPD already have access to e-SISTAFE as Agentes de Execuqdo Orqamental, Agentes de Controle Interno, Agentes de Execuqdo Financeira and other key access codes required to ensure that they can execute funds through the IFMIS and CUT. 11. Cash-basis of accounting will be used to record transactions. DNP will report on project transactions to the Bank on a quarterly basis through Interim Financial Reports (IFRs), which will be submitted to the Bank no later than 45 days after the end of each calendar quarter. The reports will include a (i) Designated Account (DA) Activity Statements; (ii) Summary Statements of DA expenditures subject to Prior Review; as well as (iii) DA expenditure not subject to prior Review; (iv) Sources and Uses of Funds by disbursement categories; (v) Detailed Use of Funds by Project Component/Activity with comparison of budgets and actual and explanation of variances; and short-term forecasts of expenditure. A narrative summary of implementation highlights for the quarter will also be key to help the readers better understand the financial statements. - 25 - 12. Internal Control. MPD has adequate internal controls in place for preparation and approval of transactions and segregation of duties, which is enhanced by the use of the government IFMIS. The project will use internal control policies and procedures laid out on the Manual de Administration Financeira (MAF), which are based on the Law 9/2002. Such internal controls have also proved to be adequate on the National Decentralized Planning and Finance project and other operations implemented by DNP. 13. The Inspe(do Geral das Finan(as (IGF) and other Orgdos de Controlo Interno (OCIs) also play a key role in following up on the implementation of recommendations on audits carried out by the Tribunalo Administrativo (TrdAdm) and other OCIs as well as in the evaluation and value-adding to the systems of internal controls and accountability. 14. Staffing. As the operation will make use of the country FM systems, it will also rely on the civil servants from the Dire(do de Administraqdo e Finanqas (DAF) of MPD. As some of these staff in the DAY may not be fully conversant with Bank financed operations, the guidance from the contracted personnel from DNP as well as close coordination between the contracted personnel and civil servants will be key to the successful implementation of the operation. However, should project activities increase significantly, there may be a need to contract an additional accountant, only to oversee the activities of the CCTAP as the DNP has other operations to handle. Should an additional accountant eventually be recruited, the Bank FM team will be also provide the necessary training in Financial Management and Disbursement for World Bank financed projects to ensure the person immediately becomes familiar with the respective Bank procedures. 15. Audit. The project accounts will be audited by the Mozambique Supreme Audit Institution, the TrdAdm or it may be subcontract to a private sector audit firm. The audits will be conducted in accordance to International Standards on Auditing (ISA). Continuous coordination between the Bank and TrdAdm takes place to improve the quality of the audits and ensure compliance with ISA and the TrdAdm is benefitting from a Bank-financed Institutional Development Grant to help with certification of its auditors. The TrdAdm auditors have also recently benefitted from training provided by the Bank FM team on Bank procedures as well as audit report preparation in accordance with ISA. The TrdAdm will be informed when the project becomes effective, to ensure they include the project in their audit plan. A copy of the audited project financial statements, along with the auditor's opinion will be submitted to the Bank not later than six months after the end of each financial year. The audit report will also contain a management letter, indicating any weaknesses, deficiencies or reportable conditions on the project's systems of internal controls and accountability, as well as project management's response. 16. Financial Management Action Plan. The following action plan has been agreed with MPD/DNP. Action 1. Open a project Designated Account at Banco de Mogambique, as well as a Forex Account, after signing of Financing Agreement 2. Submit a request to the Minister of Finance for permission for the use of Regime Especial, after the signing of the Financing Agreement 3. Agree on Formats of quarterly IFR by negotiations 17. Disbursement Arrangements. The project will disburse at least quarterly, based on Interim Financial Reports, Upon effectiveness of the Financing Agreement, an initial advance, based on an estimate of six months forecast financing requirements will be disbursed into the DAs to cover eligible expenditures. The project may also use the (i) Reimbursement disbursement method whereby eligible - 26 - expenditures paid for by GoM will be reimbursed by the Bank from the Credit account; (ii) Direct Payment method by making direct payments to suppliers and contractors from the Credit account at the request of the project; and (iii) the Special Commitment method, whereby the Bank will issue special commitment to commercial banks for payment of eligible expenditures. Additional instruction will be laid out on the 'Disbursement Letter'. B. Procurement 18. The Bank conducted an analysis of the implementing agency's procurement capacity in April 25, 2012 and considered the result of the FY12 post procurement review. The outcomes of this assessment led the Bank to conclude that the National Decentralized Planning and Finance Program at MPD has relevant experience and qualifications in procurement including the Bank fiduciary requirements to carry out the existing activities. Nevertheless and taking into account the complexity of the coming PPCR, extra qualified staff needs to be hired for the next phase. Based on the above assessment, the overall project risk for Procurement is rated as Moderate. Risk mitigation measures and the action plan below were discussed and agreed with National Decentralized Planning and Finance Program at MPD during the assessment. Risk Mitigation Measures By When Low procurement Conclude the selection of an experienced procurement capacity specialist to be based in the National Planning Directorate 19. All procurement to be financed under the proposed project will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated January 2011, and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated January 2011. Procurement of Goods 20. Goods to be procured under this project are estimated in aggregate at US$ 120,000. No ICB is expected under this project. The procurement of goods will be done using NCB or shopping as appropriate. 21. All procurement under National Competitive Bidding is carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated January 2011. All bidding documents for use of National Competitive Bidding will be satisfactory to the Bank, based on the national bidding documents and which take into account the following additional procedures: (a) General. The procedures to be followed for National Competitive Bidding (NCB) shall be those set forth in the Recipient's procurement regulation entitled "Regulamento de Contrataqdo de Empreitada de Obras Ptublicas, Fornecimento de Bens e Prestaqao de Serviqos ao Estado", decree number 15/2010, and dated May 24, 2010, as such Regulation read on May 14, 2012, with the modifications described in the following paragraphs. (b) Eligibility. (i) No restriction based on nationality of bidders and/or origin of goods shall apply. Foreign bidders shall be allowed to participate in NCB without restriction and shall not be subject to any unjustified requirement which will affect their ability to participate in the bidding process such as, but not limited to, the proof that they are not under bankruptcy proceedings in the territory of the Recipient; have a local representative; have an attorney resident and domiciled in in the territory of the Recipient; form a joint venture with a local firm In cases ofjoint ventures, they shall confirm joint and several liability. - 27 - (ii) Prior registration, obtaining a license or agreement shall not be a requirement for any bidder to participate in the bidding process. (iii) Government-owned enterprises or institutions of the Recipient shall be eligible to participate in the bidding process only if they can establish that they are legally and financially autonomous, operate under commercial law, and are not dependent agencies of the Recipient. (c) Bidding Documents. Standard bidding documents acceptable to the World Bank shall be used. (d) Preferences. No domestic preference shall be given for domestic bidders and/or for domestically manufactured goods. (e) Applicable Procurement Method. Subject to these provisions, procurement shall be carried out in accordance with the "public competition" method (Concurso Publico) set forth in the Regulation. (f) Bid Preparation Time. Bidders shall be given at least twenty eight (28) days from the date of the invitation to bid or the date of availability of bidding documents, whichever is later, to prepare and submit bids (g) Bid Opening. Bids shall be opened in public, immediately after the deadline for their submission in accordance with the procedures stated in the bidding documents. (h) Bid Evaluation. (i) Qualification criteria shall be clearly specified in the bidding documents, and all criteria so specified, and only such criteria so specified shall be used to determine whether a bidder is qualified; the evaluation of the bidder's qualifications should be conducted separately from the technical and commercial evaluation of the bid. Qualification criteria shall be applied on a pass or fail basis. (ii) Evaluation of bids shall be made in strict adherence to the criteria declared in the bidding documents; criteria other than price shall be quantified in monetary terms. (iii) A contract shall be awarded to the qualified bidder offering the lowest-evaluated and substantially responsive bid. (iv) Bidders shall not be eliminated on the basis of minor, non-substantial deviations. (i) Rejection of All Bids and Re-bidding. All bids shall not be rejected and new bids solicited without the World Bank's prior concurrence. (j) Complaints by Bidders and Handling of Complaints. The Recipient shall establish an effective and independent protest mechanism allowing bidders to protest and to have their protest handled in a timely manner. (k) Right to Inspect/Audit. In accordance with paragraph 1.16(e) of the Procurement Guidelines, each bidding document and contract financed from the proceeds of the Grant shall provide that: (i) the bidders, suppliers, and contractors and their subcontractors, agents, personnel, consultants, service providers or suppliers, shall permit the World Bank, at its request, to inspect their accounts, records and other documents relating to the submission of bids and contract performance, and to have them audited by auditors appointed by the World Bank; and (ii) the - 28 - deliberate and material violation by the bidder, supplier, contractor or subcontractor of such provision may amount to obstructive practice as defined in paragraph 1.16(a)(v) of the Procurement Guidelines. (1) Fraud and Corruption. Each bidding document and contract financed from the proceeds of the Grant shall include provisions on matters pertaining to fraud and corruption as defined in paragraph 1.16(a) of the Procurement Guidelines. The World Bank will sanction a firm or individual, at any time, in accordance with prevailing World Bank sanctions procedures, including by publicly declaring such firm or individual ineligible, either indefinitely or for a stated period of time: (i) to be awarded a World Bank-financed contract; and (ii) to be a nominated sub-contractor, consultant, supplier or service provider of an otherwise eligible firm being awarded a World Bank-financed contract. (in) Debarment Under National System. The World Bank may recognize, if requested by the Recipient, exclusion from participation as a result of debarment under the national system, provided that the debarment is for offenses involving fraud, corruption or similar misconduct, and further provided that the World Bank confirms that the particular debarment procedure afforded due process and the debarment decision is final. Selection of Consultants 22. Consultants' services required for firms and individuals are estimated in aggregate at US$ 0.7 million to cover consultancies for: (a) Specialist Technical Assistance support to the project; (b) technical reviews and evaluations; (c) subsector studies; (d) training module development; (e) surveys; (f) impact evaluations; and (g) project management services among others. 23. Training. This category would cover all costs related to the carrying out of study tours, training courses and workshops, i.e., hiring of venues and related expenses, stationery, and resources required to deliver the workshops as well as costs associated with financing the participation of community organization in short-courses, seminars and conferences including associated per diem and travel costs. Training projects would be part of the Annual Work Plan and Budget and will be included in the procurement plan. Prior review of training plans, including proposed budget, agenda, participants, location of training and other relevant details, will be required only on annual basis and include transportation costs and per diem of trainers and trainees, workshops, rental of training facilities and acquisition of training equipment and material needed for the implementation and supervision of the Project. 24. Operating Costs. Incremental operating costs include expenditures for maintaining equipment and vehicles, fuel, office supplies, utilities, consumables, allowable travel per diems and, allowable travel and accommodation expenses (excluding salaries of Recipient's civil servants). These will be procured using the Recipient's administrative procedures, acceptable to the World Bank. Review by the Association of Procurement Decisions 25. The review thresholds are based on Tables below. The Procurement Plan shall set forth those contracts which shall be subject to the Association's Prior Review. All other contracts shall be subject to Post Review by the Association. - 29 - Procurement of Goods Table A3.1: Prior-review and procurement method thresholds for goods Procurement Method Procurement Prior Review Threshold Method Threshold 1. National Competitive Bidding > 75,000 - <500,000 None 2. Shopping <75,000 None Goods with Selection Methods and Time Schedule 1 2 3 4 5 6 7 Ref. Contract Estimated Procurement Review Expected Comments No. (Description) Cost Method by World Bid-Opening US$ Bank Date (Prior/Post) GOODS Vehicle 60,000 Shopping Post 28/09/12 Office equipment - 1 10,000 Shopping Post 15/10/2012 Office equipment - 2 10,000 Shopping Post 15/04/2013 Sub -total Goods 80,000 Selection of Consultants Table A3.2: Prior Review Threshold: Consultants Selection Method Selection Method Prior Review Threshold s Threshold 1. QCBS >$200,000 All 2. LCS and CQS <$200,000 None 3. Individual Consultants >$100,000 All 4. Individual Consultants <$100,000 None 5. Single Source N/A All 26. Short list comprising entirely of national consultants. Short list of consultants for services, estimated to cost less than US$ 200,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. All Terms of Reference irrespective of the value of the consultancy assignment are subject to prior review. - 30 - Consultancy Assignments with Selection Methods and Time Schedule 1 2 3 4 5 6 7 Ref. Description of Assignment Estimated Selection Review Expected Comments No. Cost (US$) Method by Bank Proposals Prior/ Submis- Post sion Date National Strategy Support 45,000 IC Prior 31/7/2012 National consultants in support of above advisors Climate change coordinator 180,000 IC Prior 31/7/2012 Inputs over four years TA for DPO preparation (road 60,000 IC Post 15/2/2013 Inputs over standards) two years TA for DPO preparation (health) 60,000 IC Post 15/2/2013 Inputs over two years National Technical Assistance to 40,000 IC Post 15/2/2013 Inputs over support DPO preparation two years Knowledge Management 180,000 IC Prior 30/11/2012 Inputs over Learning Specialist four years Communications Specialist: 120,000 IC Prior 30/11/2012 Inputs over Web-design and Management four years Support to Knowledge and 40,000 IC Post 30/11/2012 Inputs over Learning two years TA sector scoping study - 20,000 IC Post 15/2/2013 National TA in coastal vulnerability assessment support of sector TA sector scoping study - 20,000 IC Post 15/2/2013 National TA in natural resources management support of vulnerability assessment sector International TA Support for 80,000 IC Post 15/2/2013 Inputs over climate change coordination three years SPCR Monitoring and 168,000 IC Prior 15/2/2013 Inputs over Evaluation Specialist four years SPCR Financial Management 144,000 IC Prior 15/2/2013 Inputs over Specialist three years SPCR Procurement Specialist 144,000 IC Prior 15/2/2013 Inputs over I I I I three years Total 1,540,000 Procurement Plan 27. The Recipient, at pre-appraisal, developed a Procurement Plan for the first 18 months of project implementation. This Plan was agreed between the Recipient and the Bank on May 12, 2012 and is available at MPD, in the project's database and in the Bank's external website. The Procurement Plan will be updated annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 28. The frequency of procurement supervision missions will be once every six months and special procurement supervision for post procurement reviews will be carried out at least once every twelve months. -31 - C. Environmental and Social (including safeguards) 29. The project is a technical assistance operation designed to improve social outcomes through strengthening MICOA and broader capacity to identify and manage climate adaptation and mitigation investments, and will not finance physical investment activities on the ground. It will therefore not have any direct social impacts, and its indirect impacts, through informing policy development, are expected to be largely positive. The project will support preparation of a Climate Change Development Policy Operation. To allow compliance of the DPO with OP8.60, the technical assistance project will provide support to analyze the distributional impact of the proposed policy reforms on the welfare of different stakeholder groups, with a particular focus on the poor and vulnerable. This will be done by supporting the preparation of a Poverty and Social Impact Analysis (PSIA). 30. The project is a TA operation designed to improve environmental outcomes through strengthening MICOA and broader capacity to identify and manage climate adaptation and mitigation investments, and will not finance physical investment activities on the ground. It will therefore not have any direct environmental impacts, and its indirect impacts, through informing policy development, are expected to be largely positive. The project will provide support across all three pillars of the SPCR, including the 'Mozambique: First Climate Change Development Policy Operation'. In order to allow compliance of the DPO with OP8.60, the technical assistance project will support an analysis of the likelihood of significant effects of proposed policy reforms on the country's environment, forests, and other natural resources and, if deemed necessary, an assessment of the Recipient's systems for reducing such adverse effects and enhancing positive effects, drawing on relevant country-level or sectoral environmental analysis. A Strategic Environmental and Social Assessment (SESA) of the SPCR is already being undertaken by GoM with support from the African Development Bank, which aims to generate sector-specific guidance for climate-smart, environmentally and socially responsible development (with a focus on the pilot investments). The work under CCTAP will allow to fill eventual knowledge gaps in the event that some specific social or environmental issues are considered not adequately covered by the SESA. 31. Given that the project will finance additional analytical work to complement existing analysis (including the SESA of PPCR activities) of poverty, social and environmental effects of the climate change policy reforms considered by the government, the Policy on Environmental Assessment BP/OP 4.01 has been triggered, and the project classified as Category B. The ToRs for the analytical work on poverty, social and environmental effects of climate change ("Terms of Reference for Poverty and Social Impact Analysis" and "Terms of Reference for Strategic Environmental Assessment") have been prepared, consulted upon, and disclosed in country on May 11, 2012 and at the World Bank's InfoShop on May 14, 2012. III. Monitoring & Evaluation 32. Project monitoring and evaluation (M&E) will serve to: (a) monitor and report on implementation progress as agreed in work plans and related budget plans; (b) proactively identify potential bottlenecks in implementation of the activities and decide an appropriate corrective actions; and (c) assess and report on the achievement of planned outputs, outcomes and impacts as per Results Framework established for the Project (see Annex 1). 33. The M&E system will would be based on the Results Matrix (Annex 1). MPD and MICOA would be in charge of coordinating the data collection effort with the other government agencies. Once the CCCU is established, the M&E system would be established in the CCCU to track the results of the various frameworks, but also to build capacity for the CCCU to maintain a monitoring framework for climate related activities and investments. In the short run, MPD and MICOA would compile the data collected - 32 - and prepare a progress report describing overall progress towards achieving results to be presented to the World Bank. Cost for collection of monitoring information is embedded in the Project activities. 34. The results framework for the CCTAP partly builds on the results framework developed for the SPCR program. A separate results framework is under development for the DPO and identifies policy actions and results for each of the three main policy and institutional reform areas. 35. Given the emphasis of the CCTAP on processes such as strategy preparation, coordination and capacity building, rather than physical investments, results monitoring will rely on indicators that capture the achievement of qualitative milestones (e.g. approval of the strategy, creation of specific institutions such as the Climate Change Coordination Unit). IV. Role of Partners 36. DFID, through a Bank executed Trust Fund, will support activities under Component 1, focusing on assisting the government during preparation of the Climate Change Strategy and in the preparation of the DPO. DFID will also support work at sector level on health and agriculture as well as providing substantial co-financing to the DPO. - 33 - Annex 4: Operational Risk Assessment Framework (ORAF) Mozambique: Climate Change Technical Assistance Project Stage: Appraisal 1. Project Stakeholder Risks Rating Moderate Description : Risk Management: Inter-ministry coordination for climate change action is relatively new. * World Bank support delivered through the SPCR is funding two national climate change coordinators (one There is a risk that sectors ministries will not provide timely input to the TA positioned within MPD, the other within MICOA) who are active on inter-ministerial coordination issues. The specifications and work targeting their respective sectors. CCCU, supported by the CCTAP, will provide the venue for sector issues to be tackled. * The knowledge management component of the SPCR, which is supported by the CCTAP, seeks to strengthen Civil society is developing a stronger voice in Mozambique and is gradually civil society engagement, including academia and research institutions, through training, engagement in becoming more informed and engaged in discussions on climate change. There workshops and seminars and by improving information flows via briefings, audio-visual outputs and media work. is a low risk that civil society will not understand the importance of the project Status: In for DPO and SPCR and that will then not provide timely feedback on its various Resp: Bank/ Partners Stage: Implementation Due Date: activities. Progress Description: Risk Management: Institutional roles on climate change between government agencies need * MICOA and MPD see their strengths as 'coordinating' and 'cross-cutting' ministries and they have been very better definition. This could potentially lead to institutional tensions over successful in promoting inter-ministerial cooperation on the climate change agenda. The Ministries have strong hosting arrangements and operational issues, and constructive working relationships with each other. MPD in particular has the leverage to shape and define institutional roles through the state planning and budgeting process - on which it leads in government. * The project design includes cross-cutting activities that will specifically promote engagement with other line ministries. The project will also provide TA within other sector line ministries and agencies. Resp: Client/Bank Stage: Implementation Due Date: :tts:I Progress 3. Implementing Agency Risks (including fiduciary) 3.1. Capacity Rating: Moderate Description : Risk Management: Capacity to coordinate, monitor and manage the complex SPCR portfolio of TA support would be based on a capacity needs assessment to take place during project implementation and this knowledge management and investment pilots is limited and requires substantial would be followed by capacity-building work to strengthen program management, monitoring and evaluation strengthening. capacity and to develop capabilities in specific technical areas. TA to address specific capacity needs will be deployed at cross-sectoral level within MPD and MICOA to build management, coordination and monitoring Within sectors, there are also specific technical capacity constraints that hold capacity; and at sector level to build capacity needed to deliver institutional and policy reforms. back progress on climate resilient and low carbon development - including for the policy reforms being considered for inclusion in the DPO. DNP will hire an additional accountant to oversee all financial management related issues. Financial Management: Additional workload of the Project Coordinating Unit Stage: Prep / Status: In and DAF as a result of other commitments related to their institutions and Resp: Client Stage ep Due Date: Progress maybe other projects. Implementation - 34 - 3.2. Governance Rating: Moderate Description : Risk Management: Environmental and climate change governance is currently limited - particularly Specific vulnerability assessments will be conducted as part of TA support. These will help improve the at provincial and district level. However, GoM has been making progress on understanding of governance improvement needs. Assessments will include the following sectors: health and improving the evidence base needed to strengthen governance on climate climate impacts, social protection and. Technical assistance will also deliver support to institutional governance change. This includes the preparation of a comprehensive Second National mechanisms already established at high level, technical and sector level. Communication on climate change for UNFCCC, a stronger environmental impact assessment process and ongoing preparation to prepare a legal Resp: Client Stage: Implementation Due Date : Status: framework for forest carbon management. not yet due 4. Project Risks 4.1. Design Rating: Moderate Description : The CCTAP will provide technical assistance to help sector ministries prepare Risk Management: policy actions for inclusion in the CC DPO. There is an element of risk The project design has been discussed and agreed with MPD and MICOA. The project is designed to lower these introduced by the possibility that some sectors may not wish to prioritize risks by relying on the technical work of the CCCU in addressing coordination issues with line ministries. The technical assistance support on climate change. project will build the necessary capacity for effective management, monitoring and reporting. Status* Resp: Client Stage: Implementation Due Date: tytue not yet due 4.2. Social & Environmental Rating: Low Description: Risk Management: " The CCTAP will help the government prepare the CC DPO. There is a low The project includes support for a Strategic Environmental Assessment and a Poverty and Social Impact risk that DPO intervention will have distributional, environmental and natural Assessment of the DPO to complement the SESA of the SPCR. resources impacts. * There are no additional safeguard risks associated with technical assistance Reape:Clientratimplementatio deployment. 4.3. Program & Donor Rating: Low Description : Donor coordination of support for climate change action in Mozambique is in need of strengthening. Various donors are supporting technical assistance for The World Bank is aware for the need for close donor coordination. The Bank already works closely, including in environment and climate change and this introduces some risks associated with the context of this project, with UK DFID on the climate change agenda and is also an active participant the potential overlaps, duplication of efforts and poorly-harmonized approaches. Environmental Working Group. Continuing dialog and coordination with other donors including through the There is therefore a risk that broad-based technical assistance deployment could Environment Working Group. Discussions with Denmark to ensure integration with Danish Environment Program cause tensions with other development partners. component relating to climate change have also started and these will continue during the remainder of preparation and early implementation. TeWol Bank Stage: Preparation he Ba e Statns:in Resp: a nlImplementation - 35 - 4.4. Delivery Monitoring & Sustainability Rating: Moderate Description: RiskManagement: GoM has limited capacity to monitor progress and impacts of a complex SPCR Technical assistance support will help GoM to develop a national SPCR monitoring and evaluation program and the program, especially on impacts of pilot investments on climate resilience, capability to manage and use the system for reporting on climate risks, progress and impacts of SPCR investment pilots - and of institutional and policy reforms. Sustainability issues of pilot investments are also a key issue. Whilst each pilot project will include sustainability strategies, a key challenge will be to identify Technical assistance support will also help develop capabilities to design and operate a sustainable and effective potentially transformative opportunities that enable scaling-up of successful climate change knowledge management framework to promote transformative impacts of pilot investments and approaches and experience. This will require an effective knowledge policy and institutional reforms. management system. This is currently at a very early stage of development and Status: will require considerable support and resourcing. Resp: Client Stage: Implementation Due Date : not yet due Overall Risk Following Review Technical 36tn satinal SPCrmto capability tomaae mndu etse:o eotn nciaerss rgesadipcsoPRivsmn pio -3ado6nttuinladpoiyrfrs Annex 5: Implementation Support Plan MOZAMBIQUE: Climate Change Technical Assistance Project Strategy and Approach for Implementation Support 1. The Implementation Support Plan (ISP) describes how the Bank and other development partners will support the implementation of the risk mitigation measures (identified in the ORAF) and provide the technical advice necessary to facilitate achieving the PDO (linked to results/outcomes identified in the result framework). The ISP also identifies the minimum requirements to meet the Bank's fiduciary obligations. Strategy and Approach for Implementation Support 2. The CCTAP is designed to provide strategic implementation support for the Strategic Program for Climate Resilience (SPCR) - comprising three pillars - (i) policy and institutional reforms; (ii) climate change 'transformational' investments; and (iii) program and knowledge management. During the transitional phase of TA support, implementation will build on existing institutional arrangements that are already in place to support the delivery of PPCR Phase 1 funding. This comprises a unit within the Ministry of Planning and Development (MPD) that provides procurement and financial management services, complemented by nationally-recruited technical coordinators for climate change based within MPD and MICOA. This transitional approach will be revised once MICOA has put in place the Climate Change Coordination Unit (CCCU) - as proposed in the government's SPCR document. This is expected to comprise a semi-autonomous unit with staff contracted by both MPD and MICOA and charged with responsibility for overall coordination and management of SPCR activities - including: (i) technical support and mobilization of specialist technical assistance to relevant line ministries and agencies; (ii) fiduciary management of PPCR grant funds; (iii) monitoring and evaluation of SPCR impacts and outcomes - including those from the pilot projects and from the policy and institutional reforms; (iv) mobilizing studies and technical inputs to address evidence gaps; and (v) knowledge management and capacity building activities. 3. Each of the three pillars of the government's SPCR seeks to 'mainstream' climate change into sector planning and implementation. Technical assistance for the SPCR is designed to support this government- led approach with a strong focus on (i) supporting the coordination and 'cross-cutting' functions of MPD and MICOA, and (ii) supporting specific technical assistance to line ministries and agencies to address key evidence gaps and to implement agreed institutional and policy reforms. The DPO in particular cuts across a wide range of sectors (water resources, agriculture, transport, health, social protection, forestry and energy) and will sometimes require very specific technical assistance needs - for example legal support for establishing a framework for forest carbon management, and specialist economic expertise on rural infrastructure. Specialist technical assistance will also be required to address some of the key areas where evidence gaps inhibit the design and introduction of appropriate policies and plans - for example on disease surveillance of water and vector-borne diseases; or on the possible impacts of changes on coastal cities and natural resources. Fiduciary Aspects 4. The CCTAP will rely initially on financial and procurement staff of an existing unit within MPD that currently provides support for PPCR Phase 1-supported activities. This unit will be strengthened by the CCTAP to cope with a rapidly-expanding climate change agenda. In the longer-term, fiduciary responsibilities will be transferred to the CCCU. Prior to transfer, the World Bank will undertake a fiduciary review to ensure that capacity and institutional risks are addressed appropriately. - 37 - Environmental and Social Safeguards 5. A Strategic Environmental and Social Assessment (SESA) of the SPCR is currently ongoing through support from the African Development Bank to the Ministry of Planning and Development. This SESA will be enhanced with specific and detailed environmental and social assessment of the policy and institutional reforms included in the DPO policy framework and it is anticipated that this will deliver specific guidance to optimize the social and environmental benefits of DPO and the CCTAP support and to minimize potential negative impacts and risks. Following completion of the SESA, appropriate changes will be made to the SPCR results framework to ensure impacts and risks are appropriately monitored and reported. Specific recommendations for transformational pilots will be addressed during the detailed design of these interventions and - for the policy and institutional reforms - will be addressed through dialogue with GoM and into subsequent design of policy actions and benchmarks. Coordination with other Development Partners 6. Given that the DPO and the CCTAP will be working across a range of different sectors, coordination and engagement with international development partners will be a particular challenge. The project will support GoM's engagement with Development Partner Groups (the means by which international development partners coordinate their engagement with GoM sector ministries) in all sectors where these are in place. Supervisory Arrangements 7. Formal supervision will be carried out semi-annually and will cover WB support to each of three pillars of the SPCR in an integrated way. Detailed supervision of transformational investment projects will remain the responsibility of relevant task teams. Whilst arrangements for SPCR joint donor supervision missions are still under discussion with IFC and AFDB, it is likely that an additional joint donor supervision mission will take place each year. Supervisory support from the World Bank will also be provided on an as 'as needed' basis from the WB country office where the co-TTL and a Senior Climate Change Specialist are located. Financial Management Support 8. Fiduciary support from World Bank will be provided on an "as needed" basis to support the client in a timely and efficient manner. Implementation support plan will be risk based, and will include: review of quarterly IFRs; review of annual audited financial statements and management letter as well as timely follow up of issues arising; and participation in project supervision missions as appropriate. - 38 - Summary of Staff and TA inputs Time Focus Skills Needed Resource Estimate First twelve months Verification of pre-project Financial management 1 staff week effectiveness, risk mitigation measures. Identification and resolution of early implementation problems and issues. Capacity building support for Adaptation/resilience and 18 months consultancy national strategy development. low carbon specialists input (50% international, 50% national) Budget and expenditure Public finance 11 months consultancy analysis for DPO sector specialist/economist input (70% national) baselines (3 sectors). Strategic Environmental Environmental and social 4 months consultancy Assessment (SEA). assessment expertise input (80% national, 20% international) Climate change capacity- Sector specialists (health, 32 months consultancy building and technical inputs roads, agriculture) input (40 % international to 5 sectors. and 60% national) Knowledge management and Information and 19 months consultancy learning support communications specialist inputs (5% international, 90% national) Incremental operating costs Climate change specialists, 44 months (5% for management, coordination M&E specialist, financial international, 95% and monitoring. management specialist, national) procurement specialist 12-42 months Financial management Financial management 5 staff weeks supervision. Climate change capacity- Sector specialists (health, 24 months consultancy building and technical inputs roads, agriculture) input (100% national) to 5 sectors. Knowledge management, Knowledge management, 30 months consultancy learning and communications learning and inputs (100% national) communications specialists Incremental operating costs Climate change specialists, 74 months (98% national, for management, coordination M&E specialist, financial 2% international) and monitoring. management specialist, procurement specialist - 39 - Annex 6: Additional Activities identified in Support of Knowledge and Evidence Gaps MOZAMBIQUE: Climate Change Technical Assistance Project 1. The climate change agenda in Mozambique is generating a number of policy questions and would likely continue to do so during the preparation and implementation of the DPO and PPCR investments. The CCTAP recognizes this knowledge creation agenda in its design by having a component specifically targeted to knowledge management and evidence building (Component 2). The activities to be financed by CCTAP, and specifically in its knowledge component, would set the basis for filling important knowledge gaps identified in the SPCR but would not be able to address all knowledge gaps identified or capacity building needs required. 2. Given the potential opportunity for other financing to become available to finance additional activities related to knowledge gaps, this annex identifies areas for which additional finance, if forthcoming, could be used to deepen the engagement in some of the areas the project supports. The following table provides a list of possible studies that could be undertaken if further funding becomes available. Opportunity for knowledge Brief description Indicative costs creation (million US$) Coastal zone vulnerability Comprehensive coastal zone vulnerability assessment 1.0 - 1.5 assessment covering risks from storm surges, cyclone damage, saline inundation and sea level change - using digital elevation and scenario analysis. This would develop a practical spatial planning tool for use by MPD, MICOA, provincial, district and municipal authorities. Natural resources Analysis of climate change risk to address evidence gaps for 1.5 -2.0 vulnerability assessment sectors not included in previous analytical work (e.g. by (including forests and Word Bank, INGC and others). This might include potential fisheries) impacts on coastal and inshore fisheries production, forests, woodlands and land degradation and management. Health sector vulnerability Comprehensive health sector vulnerability assessment 1.0 assessment covering potential implications of climate change for prevalence of vector- and water-borne diseases, implications for disease surveillance and climate-proofing. Identification and cost estimation of priority adaptation options. Education sector Scoping study to explore implications of disasters and 0.5 vulnerability assessment and climate change implications for the education sector, climate proofing study including assessment of impacts on sector budgets, identification of cost-effective adaptation options. In depth analysis of A PSIA analysis is being supported by the CCTAP. The 0.2 distributional, poverty and proposed activity in this annex would allow a more in-depth social impacts of climate analysis of the distributional, poverty and social impacts of change and policy reforms climate change and policy reforms in specific sectors supported by the CC DPO supported by the DPO (e.g. energy, water, agriculture). The analysis would develop, among others, in-depth stakeholder analyses and political economy analyses. Indicative total amount 4.2 - 5.2 - 40 -