Page 1 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 11/09/2010 Report No.: AC5747 1. Basic Project Data Country: Haiti Project ID: P121391 Project Name: Haiti Post-Disaster Partial Credit Guarantee Program Support Project Task Team Leader: Juan Buchenau Hoth Estimated Appraisal Date: October 7, 2010 Estimated Board Date: December 14, 2010 Managing Unit: LCSPF Lending Instrument: Specific Investment Loan Sector: Micro- and SME finance (50%);General finance sector (40%);Housing finance and real estate markets (10%) Theme: Other financial and private sector development (60%);Small and medium enterprise support (40%) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 3.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 0.00 Haiti Reconstruction Fund 12.50 Inter-American Development Bank 20.00 32.50 Environmental Category: B - Partial Assessment Simplified Processing Simple [X] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and Emergencies) Yes [X] No [ ] 2. Project Objectives The objective of the Project is to support the development of a partial credit guarantee program by the Recipient to help (i) financial institutions restart lending; and (ii) financial sector borrowers overcome the impact of the Emergency. This objective is consistent with the Haiti Recovery Plan presented by the government in March 2010. 3. Project Description The IDA#s contribution to the Project will be implemented as a Specific Investment Grant (SIG) in the amount of US$ 3 million equivalent to the Republic of Haiti. The Project will have two components: (i) provision of partial credit guarantees (PCGs) for the financial sector with two Pillars, the second one involving support to an organic Partial Credit Guarantee Fund) and (ii) technical assistance to design and carry out measures to remove some of the most pressing obstacles to credit growth. The first component of the Project has two pillars: Page 2 a) Pillar 1 which will provide partial credit guarantees on restructured loans to borrowers who have been affected by the recent earthquake but are still considered viable b) Pillar 2 which will involve the establishment of an organic Partial Credit Guarantee Fund to provide partial credit guarantees to Micro, Small and Medium Enterprises and housing financing to new or existing borrowers. IDA resources will be leveraged by grant funding from other donors, and form part of a larger initiative to revive the Haitian credit market. Given its expertise and prior knowledge of the Haitian financial system, IDA has played a key role in designing the scheme and has contributed in other areas, such as the insurance sector. The design of the PCGP follows a specific request by Haiti#s BRH and the private sector banks, and has been closely coordinated with the Inter-American Development Bank (IADB) and the US Department of Treasury, supported by the experts from FOGAPE, the Chilean Partial Credit Guarantee Fund; valuable inputs were received from the International Finance Corporation and the International Monetary Fund. 4. Project Location and salient physical characteristics relevant to the safeguard analysis The project will support the development of a partial credit guarantee program, whereby guarantees will be extended to loans whose borrowers have been affected by the recent earthquake. These borrowers would be mostly located in the urban zones affected by the earthquake around the Port-au-Prince metropolitan area. 5. Environmental and Social Safeguards Specialists Ms Catalina Marulanda (LCSEN) 6. Safeguard Policies Triggered 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 Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: Scale and scope of impacts: Page 3 Restructuring loans is expected to have positive social impacts while reestablishing or enhancing the operation of small and medium enterprises (SMEs) and larger firms. At the same time, the enterprises benefiting from guarantees to restructure their loans may exhibit specific adverse environmental, social, health, safety and labor impacts associated with their activities. These impacts will largely be small-scale and reversible, but their significance will depend on the enterprise´s size, sector activity, and location. No major social and environmental issues are expected to arise as a result of the Project, since the vast majority of banking loans in Haiti and supported by this Project are extended to the commercial and service sectors and to individuals; however, there may be a small number of loans in the manufacturing, industrial and construction sectors that apply for guarantees, which could potentially have some negative environmental and social impacts. For that reason, a framework has been developed as part of this Project to screen all loans for potential impacts, in compliance with the World Bank#s environmental and social safeguards, in order to ensure that such potential impacts are mitigated (see 4). Based on a preliminary review of the existing portfolio and the fact that guarantees are provided to private sector enterprises that have been impacted by the earthquake, involuntary resettlement is not triggered (the private sector will engage only in market transactions and any activities that pursue or benefit from eminent domain that could result in involuntary resettlement will not be supported), nor will any loans have impacts on natural habitats or forestry. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: All loans in the manufacturing, industrial and construction sectors will be subject to environmental and social screening, and their cumulative impacts will also be assessed prior to loan guarantee approval. There are no long-term or irreversible impacts expected from any sub-projects as they are all already operational and require only a loan guarantee to continue ongoing operations rather than start or expand into new operations. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. N/A 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The screening framework uses a twofold approach depending on the size of loans: * Small loans (expected to be under a threshold of around US$62,000) in the commercial and service sectors are expected to have no environmental impacts, and thus will be reviewed and processed in a streamlined manner. These loans will be screened against a list of activities that may not be supported by the PCGP, i.e. a "negative list", which is included in the Project#s Environmental and Social Management System (ESMS). They will be processed in batches, and the implementing agency, the FDI, will Page 4 check ex-post compliance with the World Bank#s environmental and social safeguards on a sampling basis. In case a small loan is found not to comply with the safeguard policies, the guarantee will be cancelled. * A limited number of small loans to manufacturing, industrial and construction sectors, identified a-priori from the database of the BRH, may potentially have negative environmental impacts. Therefore, those loans will be screened in greater detail, following the same procedures summarized below for larger loans (above the threshold), and described in full detail in the ESMS. The list of small loans that will be fully assessed for environmental and social impacts is included in the ESMS. * Larger loans (above the expected threshold) will also be screened against the #negative list#. In addition, an individual assessment of each loan will be carried out to identify potential social and environmental risks, using the ESMS. Mitigating measures will be evaluated prior to granting the guarantee. In the event that any sub-project will store, purchase or handle pesticides, the loan guarantee will not be granted prior to the development of a pest management plan with appropriate budget and institutional arrangements for its implementation. FDI will also check ex-post compliance of the larger loans on a sampling basis, and guarantee for loans that are found in noncompliance will be cancelled. The FDI will assess the environmental and social impacts and risks associated with the issuance of guarantees. The ESMS will be included in the Project#s Operational Manual. It will provide procedures for developing a pest management plan as defined under OP 4.09, as well as procedures to be followed in the event that any sub-project comes across any physical cultural resources, as defined under OP 4.11, during the course of its implementation. Supervision missions of IDA and the IADB will check compliance with safeguard policies. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The ESMS and subsequent safeguard instruments will be consulted on and disclosed prior to the provision of any loan guarantee. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? No Date of receipt by the Bank 07/14/2010 Date of "in-country" disclosure 11/18/2010 Date of submission to InfoShop 11/03/2010 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Page 5 Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Pest Management Plan: Was the document disclosed prior to appraisal? N/A Date of receipt by the Bank N/A Date of "in-country" disclosure N/A Date of submission to InfoShop N/A * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: A PMP will only be required if a financial institution applies for a guarantee on a loan that involves pest management which is not considered a likely event. C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? Yes If yes, then did the Regional Environment Unit or Sector Manager (SM) review and approve the EA report? Yes Are the cost and the accountabilities for the EMP incorporated in the credit/loan? Yes OP 4.09 - Pest Management Does the EA adequately address the pest management issues? Yes Is a separate PMP required? No If yes, has the PMP been reviewed and approved by a safeguards specialist or SM? Are PMP requirements included in project design? If yes, does the project team include a Pest Management Specialist? N/A OP/BP 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural property? Yes Does the credit/loan incorporate mechanisms to mitigate the potential adverse impacts on cultural property? Yes The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Infoshop? No Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected No Page 6 groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Yes Have costs related to safeguard policy measures been included in the project cost? Yes Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Yes Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? Yes D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr Juan Buchenau Hoth 10/05/2010 Environmental Specialist: Ms Catalina Marulanda 10/08/2010 Social Development Specialist Additional Environmental and/or Social Development Specialist(s): Approved by: Sector Manager: Ms Lily L. Chu 10/14/2010 Comments: