24650 ~~j,A 2000 -~w- . _ .. r.- 4'0 THE WORLD.-BANK.. IN ; MOZAMBIlUE * i; . ...... .. *- . ~ ~~ ~~~~~~~~~~~~~~~~~~~~~~~. . ' ; . World Bank Banco Mundial 1818 H Street, NW Ave. Kenneth Kaunda #1224 Washington, DC 20433 Maputo, Mozambique Tel: (202) 477-1234 Tel: 49-2841/51/61 Fax: (202) 477-4391 Fax: 49-2893 E mail: woddbank@worldbank.org E mail: worldbank@worldbank.org V Preface P ii Xt is with great pleasure that the World Bank Country OffQce in Mozambique pub- lishes its first edition of the brochure, "The World Bankl in Mozambique." We v hope that this brochure will providc you witli an under-statiding of the Wor-ld Bank in general and what we are doing in Mozambique, in par-ticulat: As we enter the new millenniuim, the Gover-nment will contiinuc working tofQght i v poverty and improve living standards by focussing on delivery of social ser-viccs and v promoting sustainable growth and investment. The World Bank lias sought to actively support the Government of Mozambique's effor-ts through a program set out in the Country Assistance Strategy. A kzey featur-e of the Couintry Assistance Strategy is the > development of partnerships, not only with the Governlment, its nliajot- clienit, but also with donors, NGOs and civil society. The World Banh extended its first loan to Mozambique in 1986. The present M Mozambique program is broad based and has helpedfinance 28 investment cr-edits and 6 adjustment operations with a commitment of approximately US$ 1.9 billio7t. James H. Coates Residenit Repr-esentative I k V, 0 3 _ , >~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~i _I W~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~, V 3 , Table of Contents Preface ........................................................... 3 Table of Contents ............................................................5 List of Abbreviations ............................................................7 7 The World Bank Group ........................................................... 9 P The Relationship between the World Bank and Mozambique ............. ............... I I Country Assistance Strategy ........................................................... 13 > A Macroeconomic and Adjustment Operations .................... ................... 15 > A Public Sector Management ........................................................... 19 > A Private and Financial Sector Development ........................................... 23 > A Education and Capacity Building ................................ ................... 26 * Health Sector .................2................................................... 28 * Agriculture and Rural Development ................................ 30 . A Energy Sector .................................33........... 3 A Infrastructure and Transport Sector ................................ 35 . A Environment .................................39........... 3 A Urban and Water Sectors ................................ 42 Tables ................................ 44 5 List of Abbreviations A ANE Autoridade Nacional das Estradas APL Adaptable Program Lending B BCM Banco Comercial de Mo,cambique BoM Banco de Mo,cambique > c CAS Country Assistance Strategy CFM Caminhos de Ferro de Mocambique CG Consultative Group CPPR Country Portfolio Performance Review I CIDA Canadian International Development Agency D DNEP Direcgldo Nacional de Estradas e Pontes. DNFFB Direc(do Nacional de Florestas e Fauna Bravia E EMRO Economic Management Reform Operation EMTIM Energy, Mining and Telecom (World Bank Dept) ENH Empresa Nacional de Hidrocarbonetos de MoCambique ESSP Education Sector Strategy Program ESRP Economic and Social Rehabilitation Program F FSCB Financial Sector Capacity Building Project FRP Feeder Roads Program G GDP Gross Domestic Product GEF Global Environmental Facility GNP Gross National Product GoM Government of Mozambique GREI Bureau for Industrial Enterprise Restructuring GTRAP Grupo Tecnico de Reforma da Administra,cdo Pablica H HIPC Heavily Indebted Poor Countries IBRD International Bank for Reconstruction and Development ICSID International Center for Settlement of Investment Disputes IDA International Development Association 4 IDF Institutional Development Fund IERP Industrial Enterprise Restructuring Project IFC International Finance Corporation IMF International Monetary Fund M MAE Ministry of State Administration MAP Ministry of Agriculture and Fisheries MICTUR Ministry of Commerce, Trade and Tourism MIGA Multilateral Investment Guarantee Association MINED Ministry of Education MIREME Ministry of Natural Resources and Energy MoH Ministry of Health MoPF Ministry of Planning and Finance MoPH Ministry of Public Works and Housing MTC Ministry of Transport and Communications N NES National Educational Strategy NGO Non Governmental Organizations NDF Nordic Development Fund NHS National Health Services ? PEE Plano Estrategico da Educacdo PFP Policy Framework Paper PODE Private Enterprise Development Project PROAGRI Agriculture Sector Public Expenditure Program TR ROCS Roads and Coastal Shipping RBMMP Roads and Bridges Maintenance Management Project RWSS Rural Water Supply and Sanitation 3 SCR Sistema de Carreiras e de RemuneracAo SEMF Strategic Environmental Management Framework SGRH Sistema de Gestdo de Recursos Humanos SIP Sistema de Informando de Pessoal SWAP Sector Wide Approach SDC Swiss Development Cooperation SIDA Swedish International Development Authority T TFCA Transfrontier Conservation Areas IrT ) UEM Eduardo Mondlane University UTRE Technical Unit for Enterprise Restructuring The World Bank Group he World Bank was founded in 1944, at the Bretton Woods Conference, to T assist in the reconstruction of the world economy following the catastrophic > events of the Second World War. By 1991, it had grown to a point where it had committed about US$470 billion towards development, of which approximately US$40 > billion was allocated to Sub-Saharan African countries. Today it is a multilateral de- > velopment lending organization with approximately US$157.6 billion in outstanding loans. The World Bank Group includes the following institutions. A The International Bank for Reconstruction and Development (IBRD), established P in 1945, is the largest of the affiliated institutions. The IBRD is a financial coop- > erative owned by the Governments of 181 countries that have subscribed to its capital (as of August 1998). It provides loans and development assistance to middle- income member countries and creditworthy poorer member countries. IBRD ob- > tains most of its funds through the sale of bonds in the international financial > markets and lends to its member countries at market-based interest rates. A The International Development Association (IDA) is a fund, established in 1960, > which provides assistance on concessional (soft) terms to the poorest countries. IDA depends on contributions from its wealthier member countries, including some developing countries for most of its financial resources A The International Finance Corporation (IFC), established in 1965, promotes eco- nomic growth in developing countries by financing privaLe sector investments p with loans and equity finance, mobilizing capital in the international financial > markets and providing technical assistance and advice to governments and pri- vate enterprises. IFC also fosters the building of efficient capital and financial P markets. Although IFC's operations complement, and are often coordinated with other World Bank institutions, IFC is legally and financially independent, with its own Articles of Agreement, share capital and staff. Today, with more than 160 member countries, US$31.6 billion in assets and US$2.3 billion in capital stock, ; IFC is the largest multilateral source of financing for private sector projects in the P developing world. 9 A The Multilateral Investment Guarantee Agency (MIGA), established in 1988, has a dual mandate. It encourages foreign investment in developing countries by pro- viding political risk insurance against the risks of currency transfer, expropriation, and war and civil disturbances, and by extending investment marketing services to promote private investment opportunities. MIGA membership is comprised of 128 signatories, 19 from industrialized and 109 from developing countries. A The International Center for Settlement of Investment Disputes (ICSID), was es- tablished in 1966 to help promote international investment through conciliation and arbitration of disputes between foreign investors and their host countries. 31 The Relationship hetween the World Bank and Mozambique M ozambique first entered into discussions with the World Bank and IMF in 1984. The World Bank has sought to actively support the Government's economic recovery efforts since 1986. IDA lending over the past decade included a judicious blend of adjustment support (totaling about US$ 685 million for 6 operations since FY 89) and investment support (29 investment credits totaling approximately US$1.253 billion, see Table 1). In addition, IDA has provided techni- cal expertise on a variety of development topics, from poverty reduction and safety nets, to private sector development, environmental protection and macroeconomic management. At the end of January 2000, the World Bank finances eleven actively disbursing investment projects in Mozambique and three additional projects have been approved by the Board of Directors, but are awaiting fulfillment of effectiveness conditions. Financial commitments for these fourteen projects total US$782.80 million (see Table 2). Another six projects are in various stages of preparation The IFC portfolio in Mozambique, in- cludes approximately US$ 146.2 million committed for 11 projects. The World Bank recognizes the impor- tant role that non-governmental organiza- tions (NGOs) play as advocates for policy change and institutional reforms, as well as meeting development challenges. They of- ten operate in close contact with the poor in remote areas and are in the best position - to help identify the most pressing concerns . and needs and recommend solutions. Work- ing together with the Bank, NGOs have helped introduce participatory approaches, strengthened transparency and accountabil- I Callisto Madavo, VP Africa and HE Tomaz Salomdo, - Minister of Transport & Communications I . K .@ .-- .s wev ir- -F --J , - ity at the grass roots level, improved efficiency of service delivery, ensured better targeting of projects to the poor and piloted innovations. As part of the World Bank commitment to forge a more participatory develop- ment strategy, there is an NGO officer residing in the World Bank Country Office in Maputo. He liaises with NGOs to increase the consultative process with civil society, particularly in areas of economic development, poverty alleviation, gender issues and the environment. 312 D Country Assistance Strategy T he Country Assistance Strategy (CAS) is the central vehicle for Board review of the Bank Group's assistance for IDA and IBRD borrowers. The CAS document 1 (a) describes the Bank Group's strategy based on an assessment of priorities in the country, and (b) indicates the level and composition of assistance to be provided > based on the strategy and the country's portfolio performance The CAS is prepared > with the government in a participatory way; its key elements are discussed with the government, civil society and other donors prior to Board consideration. However, it 0 is not a negotiated document. Any differences between the country's own agenda and the strategy advocated by the Bank are highlighted in the CAS document. The CAS document focuses on the four or five most critical development issues in > the country, as identified in discussions during earlier country economic and sector work and country portfolio performance reviews (CPPRs). It then delineates the Bank > Group's selected course of action. The document is concise, analytic and organized in five principal sections: (a) historical perspective on the country and its recent eco- nomic and social performance; (b) its external environment, (c) its development ob- t jectives and policies; (d) the Bank Group's country assistance strategy; and (e) an agenda for Board consideration. The document is not designed to be a comprehensive > treatment of all the development problems facing the country. The latest CAS was prepared in November 1997; the subsequent CAS (May 2000) > is in the initial stages of preparation. It supports the Government's program for pov- erty reduction through sustainable economic growth. Poverty-reducing growth in Mozambique involves a shift of resources and opportunities towards rural areas where > the poorest live. Three strategic priorities were defined during this collaboration. These include: f 13 3 I l Promoting rapid, broad-based private sector led growth: Supporting the macroeconomic reform agenda Supporting high potential growth sectors Creating a "business-friendly environment I Capacity building and developing human resources: Increasing Mozambican participation in the private sector I | Supporting public sector reform and decentralization Increasing coverage and quality in health and education Promoting HIV/AIDS education I Strengthening development partnerships: Reinforcing the Bank Group/Government partnership Mobilizing resources and coordinating aid Strengthening ties with civil society Promoting regional partnerships Ensuring adequate coordination within the Bank Group 14 Macroeconomic and Adjustment Operations tarting in 1987, until the end of civil war, the first structural reforms marked the shift from a centrally-planned economy to a market-oriented one and initi- ated the liberalization of import controls and the price regime. During the post-con- flict stage from 1992 to 1997, production, commercial and financial activities were privatized, while increased shares of government resources were allocated to the so- cial sectors and infrastructure. Reforms in indirect tax and trade regimes were initi- ated and the basic legislative framework for improved public resource management was established. The Government plans to capitalize on the macroeconomic stability gains achieved so far by strengthening fiscal management, including the coordination between fiscal and monetary policies. The macroeconomic framework for the 1998-2000 period targets: (i) real Gross Domestic Product (GDP) growth of about 7 percent (excluding large projects); (ii) end-of-period inflation of 6 to 8 percent; (iii) the maintenance of gross international reserves at approximately 5 months of projected imports in 1998, declining to 4 months in 2000; and (iv) zero net government repayments to the bank- ing system in 1998 and 1999. Several large-scale private investment projects in en- ergy (electricity and gas) and other sectors (iron, steel, aluminum), including activities Annual Inflation Rate in Maputo (March 1995-November 1999) 80 - 40 .~ __'i . 30 ; 20 160 Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Nov 95 95 95 95 96 96 96 96 97 97 97 97 98 98 98 98 99 99 99 99 15 1 associated with the Maputo Development Corridor pushed total GDP growth to over 4 10 percent in 1998 and 1999. Policy Framework Paper (PFP) Status: Completedfor 1999, but undertaken annually, on a rolling three-year basis This document was prepared by the GoM with the joint assistance of the staffs of the Bank and the Fund. The PFP outlines the Government's objec- 4 tives for the medium-term (1999-2002) and reflects the understandings reached 4 between the Government and the Bank and the International Monetary Fund 4 (IMF) on policy reforms. A policy matrix summarizing these understandings, as well as a macroeconomic indicators' table prepared by the Bank and IMF staff are included in the paper. The paper also indicates the estimated exter- 4 nal financing requirements for 1999 to 2002. A part of this requirement is expected to be met by future IDA operations. The volume and timing of such financing, both project and adjustment-related, will be determined according to the Bank's normal procedures. The future PFP will be more focused on poverty and will change its title to Poverty Reduction Strategy Paper (PRSP). Growth Prospects Report 1 F' Status: Underway The economic developments of recent years suggest that Mozambique is fi- nally headed for a promising future. The economy has been growing at double- digit rates since 1996 and Mozambique is increasingly highlighted as among the Sub-Saharan African countries with the most promising prospects for sustained growth and development. In early 1998, for instance, Mozambique ranked first of twenty countries on the "optimism index" reported in the African Competitiveness Survey of business people active in Africa. Overall, these developments are a very promising start. The average Mozambican is clearly better off today than only five years ago. Yet the coun- 4 try is still at the early stages of economic and social development and the growth of the past decade starts from a very low base. The average Mozambican lives on an average income of US$220 per year; to reach per capita income levels comparable to those of upper middle income countries such as Mexico or Brazil, Mozambique would need to sustain real per capita growth rates of 4 10 percent, every year, for over three decades. - The Growth Prospects Report will analyze the economic developments and key reforms of the past decade, with an emphasis on aggregate perfor- I mance, structural change, and sources of growth. In addition, it will examine the nature and extent of the macroeconomic and structural weaknesses that can constrain growth in the future and articulates possible strategies to ad- dress them. 16 Highly Indebted Poor Countries (HIPC) Initiative On June 30, 1999, the World Bank Board agreed that Mozambique, based on its demonstrated record of economic and social reforms would be the fourth > country to receive debt relief through the HIPC initiative. Mozambique has been pursuing a wide-ranging program of economic stabilization and struc- tural reform, which has been reaping impressive results. Market liberaliza- > tion, completion of an ambitious privatization program, fiscal reform, and progress on public sector reform have contributed to strong economic growth, > which has averaged more than 8 percent per year over the past five years. In addition, the Government has made notable progress in expanding the deliv- > ery of health, education and water services, as well as in expanding the road > network. Mozambique received close to US$3.7 billion in debt relief from its exter- P nal creditors under the HIPC Initiative. The total debt relief package is worth P US$1.7 billion in today's values This is the largest debt relief package orga- P nized by the international community under the HIPC Initiative so far V The HIPC debt relief will reduce Mozambique's external public debt by > almost two-thirds from about $2.7 billion to US$1 billion in today's values, E on top of debt relief provided under traditional mechanisms. Mozambique's t external debt-service obligations will fall to an annual average of US$73 mil- lion in 1999-2005, compared with an average of US$169 million that would > have been due in the absence of the HIPC Initiative relief, and the US$104 million actually paid in 1998. By 2001, debt service due would fall to 8 per- > cent of exports and 10 percent of government revenues, compared with 19 percent of exports and 23 percent of revenues actually paid in 1998. Debt relief is expected to help deepen the social benefits of good eco- nomic management and will enable the Government of Mozambique to sus- tain increases in spending for social development. Taking into account the > relief, the Government plans to increase annual current spending on health t and education from about US$120 million in 1998 to US$175 million by > 2001, or from just over the amounts paid in debt service in 1998 to more than double the projected debt-service payments after HIPC Initiative assis- tance. IDA will provide debt service relief to Mozambique equivalent to US$975 million, or US$381 million in today's values. This debt reduction will be delivered mainly through the purchase and cancellation by the HIPC t Trust Fund of IDA credits, resulting in debt service savings of US$327 million in today's values. In addition, an IDA grant has been approved to support > improved economic management which will provide debt service savings of > US$54 million in today's values. 17 4 ~~A.-> djustment Operations The World Bank has been actively supporting GoM's macroeconomic pro- gram through a series of structural adjustment operations. Since 1985, IDA has approved six structural adjustment operations, totaling approximately US$685 million. The latest adjustment operation was the Economic Management Reform Operation (EMRO), an IDA grant aimed at providing debt relief under the HIPC initiative, disbursed US$150 million to the GoM. The EMRO built on the implementation of previous economic reforms and the progress in stabi- lizing and jump-starting Mozambique's post-war economy It supported the Government's overall reform program aimed at: (a) the consolidation of a stable macroeconomic framework; (b) the development of human resources; and (c) the development of the private sector. Specifically, the reform pro- gram supported by this operation aimed at sustaining growth with poverty reduction and diminishing dependency on external aid over the medium- term. EMRO consisted of two main components: (i) measures to improve the efficiency of revenue mobilization and the incentive regime for private sector development, through expansion of the tax base, elimination of distortions due to the current tax and trade regime, and simplification of importer regis- tration and import procedures; and (ii) measures to improve the management and efficiency of public expenditures, through an expenditure management and budget reform, the development of a medium-term expenditure frame- work. The grant was disbursed in two tranches of US$75 million each. The first tranche was disbursed in March 1999, and the second was disbursed in June 1999. The implementing agency was the Ministry of Planning and Finance(MoPF). e1 Public Sector Management T he Bank is supporting the Government's preparation of a strategy to reform the public service. The Government is in the process of establishing the Grupo Tecnico de Reforma da Administracao Puiblica (GTRAP) to draft this strategy for the Council of Ministers by the end of 2000. The Bank is supporting the GTRAP with an Institu- tional Development Fund (IDF). It is expected that the strategy will cover issues such as further pay reform to provide incentives for technical and professional staff in the public service, improved accountability and transparency, and further decentraliza- tion in the provision of services. It will introduce a result-oriented public service, linking policy formulation to the Medium Term Expenditure Framework, improving policy implementation and monitoring, and improving financial management to make budgetar,y flows more predictable and accountable. It is anticipated that the GoM will provide the basis for the preparation of a multi-donor public service reform program The following projects are currently addressing some of the public sector issues. : ~~~~~~~~~~~~t_ Operated by Municipality of Marracuene liv ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I Legal/Public Sector Capacity Building Status: Legal component is closed; Public Sector component closes June 2000 The project aims at helping Mozambique strengthen the capacity of its civil 4 service and the ability of its key legal institutions to deliver, to the public, the services for which they were created. The project has two components: one 4 addresses the civil service, particularly the Ministry of State Administration (MAE), and the other addresses five legal institutions. With respect to the first component, the project provides financing to redesign and develop per- sonnel management systems for the civil service (including the development of career structures, job analysis and grading, recruitment procedures, etc), to strengthen its Department of Administration and Finances, to introduce a human resources management function into provincial structures, and to train < ~~administrators both on and off-the-job. With respect to the second compo- nent, the project provides financing to: (a) train legal and para-legal staff, including judges and lawyers, for the Ministry of Justice, the Supreme Court, the Attorney General and the Administrative Court; (b) equip them with basic office technology; (c) strengthen the Faculty of Law at the University; (d) to help all of these institutions improve their legal library; (e) reform important legal codes; and (f) disseminate knowledge of the law. Activities under all but one of the sub-components have been completed satisfactorily. The project has been extended until June 2000 to allow for further support 4 to the MAE during the introduction phase of the new human resources man- agement system (Sistema de Gestdo de Recursos Humanos, SGRH), including a new personnel information system (Sistema de Informacdo de Pessoal, SIP) and a new career and remuneration system (Sistema de Carreiras e de Remuneracdo, 4 SCR). In addition, the project is supporting the design of a computer net- 4. work to link all central and provincial human resources departments and MAE, to facilitate the functioning of the SGRH, particularly at the provincial d level, and to allow for greater flexibility in civil servants' career management. 4 By undertaking the activities supported by this project, among others, the 4 Government is laying the foundation for a more extensive reform of the pub- 4 lic sector aimed at improving the delivery of services to Mozambican citi- 4 zens. (US$12.57 million) 4 a,> Rural Action Program - Status: Under preparation The project is in the early stages of preparation. Its overall objective is to promote economic development and reduce poverty in rural areas by im- proving the delivery of services and of social and economic infrastructure. 20 Towards this goal, the project will assist in the development of a nationally consistent, decentralized and participatory development planning system. It is expected that the project will focus on three principal objectives: (a) > strengthen the capacity of provincial and district administrations and cor-n- munities to plan, finance, implement and maintain small-scale rural infra- > structure and services; (b) provide/restore essential small-scale social and economic infrastructure and services through decentralized means; and (c) > introduce, in Sofala and/or Zambezia, decentralized planning and financial > management procedures consistent with national guidelines and regulations. > (US$20 million). Municipal Development Project Status: Under preparation The proposed project would be the first stage of an expected long-term pro- gram. The project's objectives would be to: (a) assist the GoM in further de- F veloping the policy and institutional framework for municipal government; 1 (b) lay a foundation for improving the technical and financial capacity of municipal governments to provide sustainable urban infrastructure and ser- vices; and (c) establish a replicable mechanism for financing municipal infra- structure in five cities. It would have four components: (i) policy reform; (ii) municipal capacity building; (iii) infrastructure investments; and (iv) project # management, design, and supervision. (US$30 million) Fiscal Management Review Status: Underway The GoM initiated its phased Fiscal Management Review process in late 1995, with the support of the World Bank and several other donors. The Mozambique i Fiscal Management Review laid out a reform approach with three distinct > analytical phases, with implementation of each phase to extend over a con- siderable period of time. The first would aim at creating a sound, transparent, p comprehensive and unified budget system. The objective of phase two through t the development of a Medium-Term Expenditure Framework, is seen as that > of improving fiscal management capacity to attain Government's develop- > ment objectives through the improved allocation of public resources. Under phase three, an assessment of the unit costs of public expenditure outputs > (such as children educated, babies vaccinated, etc) in Mozambique should enable an identification of where key inefficiencies lie and permit Govern- > ment to address them. 21 9 Private and Financial Sector Development M ozambique has successfully undertaken a highly ambitious program.of so-called "first-generation" economic reforms. With the privatization of over 800 enter: prises (out of 1,250), public enterprises' share of industrial output fell from over 66 percent in 1990 to below 25 percent by 1997. Though growth stimuli remain strong, Mozambique's difficult historical legacy is I evident both in the unpropitious structure of its domestic private sector-fragmenta- tion, small size, and inward-orientation-and in continuing micro-level obstacles to 6 doing business. This raises the risk that, once the momentum of recovery slows, con- I tinuing economic growth will be dependent on a small number of giant mega-projects initiated by foreign investors. In order both to sustain rapid economic growth, and to broaden the base of pri- vate sector participation, the Government is committed to a so-called "second gen- eration" program of reforms to address a wide variety of continuing weaknesses in its I business environment. These include: (a) further simplification of the regulatory en- I vironment; (b) increased investment in infrastructure (achieved in part by increasing the role of the private sector in the provision of infrastructural services); (c) contin- I ued efforts to promote and facilitate foreign, as well as domestic investment into Mozambique; and 9d renewed efforts to enhance access, in market-friendly ways, to 4 finance, technical and training services by Mozambican firms. d Bicycle Repair Shop IE ; - 22 6 One of the strategic priorities defined in the CAS was the promotion of rapid, 0 broad-based private-sector led growth. This would be achieved through projects which provide support to: (i) high potential growth sectors; (ii) increasing Mozambican par- ticipation in the private sector; (iii) creating a "business-friendly environment; and (iv) institutional and capacity building efforts. The World Bank has supported Government's endeavor, through one project which recently closed, Industrial Enterprise Restructuring Project (IERP) and a new project Private Enterprise Development Project (PODE) which has been recently negotiated and is expected to be presented to the World Bank Board in January 2000. Private Enterprise Development Project (PODE) P Status: Proposed Board Date -January 2000 The project will help broaden the base of private participation in Mozambican 0 economic growth. This would be achieved by: (a) boosting the competitive- ness of Mozambican private firms by strengthening their access to, and use of, support services external to the firm; (b) providing a more efficient market for training and capacity building services and establishing forward and back- ward linkages to existing and new local and foreign buyers and investors; (c) enhancing access to term finance by both first-time and other borrowers; and (d) helping to strengthen the capabilities of key agencies. Three components aim at reducing constraints to enterprises' and institutions' development and include: (i) the Technical Learning in Firms Program to assist private Mozambican firms to build their technical capabilities through the utilization of matching grants; (ii) a Financing Facility to provide medium term financ- ing for investment assets for private sub-borrowers in the industrial, agro- processing, tourism, transportation, construction and services sectors; and (iii) an Institutional Capacity Building Program to enhance the capabilities of private and public institutions to deliver business support services. The project is expected to be effective in early 2000. (US$26.0 million) Financial Sector Capacity Building (FSCB) - Status: Actively disbursing Closing: June 2000 The FSCB seeks to develop skills within the financial sector in support of the Government's overall financial reform program. It has five main components. First, the credit supports training within the BoM in economics, banking supervision, foreign exchange management, accounting, and management strengthening. The second component supports training in the commercial banking sector through a series of specific, short-term courses, which are taught through the Banker's Institute. Third, it supports the legal financial capacities of the lawyers in BoM and the Ministry of Plan and Finance (MoPF) through training programs, provision of specialized legal services, develop- ment of the legal institutional framework, and the dissemination of financial 23 legislation. Fourth, it provides institutional development to the banking sector through the provision of consultant services particularly in the area of bank privatization. Last, it funds a series of studies related to the financial sector. (US$9.0 million) Mining Sector Policy Report 4 - Status: Completed The Government of Mozambique is actively seeking to attract private and foreign investment to promote growth in the sector and so far, investors have shown positive interest in terms of exploration. This report was a joint effort 4 of Mozambique's Ministry of Mineral Resources and Energy (MIREME) and the Industry and Mining Unit of the-World Bank (EMTIM). The report ide'n- tifies the major constraints for private sector-led growth in the sector and proposes a strategy and an action plan to improve the regulatory framework in the sector, including priority technical assistance measures and their esti- I mated costs. The report was discussed at an international conference held in 4 July 1999, and will form the basis for a proposed Mineral Resources Manage- ment Capacity Building Project. X Private Sector Conference Technical Assistance _ - Status: Completedfor 1999, but is an annual event These conferences provide a forum to, sketch out clear strategies to ensure a smooth transition to regional economic integration and at the same time, promote actions aimed at creating and exploiting a tripartite partnership be- tween the private sector, the public sector and the political leadership. The conferences function on the basis of a common agenda with convergent ob- jectives and create a space for permanent and constructive dialog to help develop an environment to support private sector-led growth. The World Bank, 4 in conjunction with other donors, Government and in particular, the private sector, has supported four such annual events, with over 50 percent of the support being derived from the private sector. The smaller, regional and domestic conferences (e.g. Tete, Pemba and Nelspruitt) provided forums for discussions to trade facilitation within the region. The Maputo, Beira and Nacala Development Corridors and the Lubombo Spatial Development Initiative involving Mozambique, Swaziland and South I Africa are examples of partnerships that will make a contribution to the socio- economic growth of the country. Also, regional cooperation established within the spirit of the SADC is an effective instrument for achieving Mozambique's interest in the sphere of attracting investment and commercial exchanges. These conferences result in a matrix of concrete measures which are subse- quently followed-up by the private sector and Government as a partnership. I 24 v Education and Capacity Building V W ith an adult literacy rate of 40 percent, Mozambique faces a shortage of well- educated and experienced nationals who can assist in the planning and manage- ment of both public and private sector activities vital to the country's progress in the > economic and social spheres as well as increasing productivity in the agricultural v sector, where about 80 percent of the working force is employed. The Mozambicans p who are capable of providing leadership are often siphoned off to the private sector because the civil service is increasingly unable to compete with private institutions in q terms of pay, conditions of employment and work environment. In the agricultural v sector, most farmers are illiterate and productivity is low. Government has relied more on costly expatriate education under which strategies will be developed by first ex- panding access and improving the quality of basic education, followed by the devel- v opment of strategies for secondary education (including technical and vocational) v and tertiary education. This is being complemented by a broad based Public Sector v Capacity Building Project. The World Bank has been an active partner in supporting v this process and current support will ensure a long-term increase in the number of v children who successfully complete primary education and increase the supply of v well-trained senior managers, professionals and technicians, conditions of services > and governance, making a significant contribution to alleviating poverty, improving i literacy rates thereby enhancing the capacity to sustain the economic and social de- velopment of the country L~~~~~~~~~~~~~~~ A~~~~~~~~~~~~ K i. 3 ' i- l , -, - -sai---5 t tZ~~~~~~~~~- -< -_ a K~~~~~-~ ~~~. ,. [-3,~~~~~~~~~~~~~~~~~~~~-~ - Education Sector Strategic Program (ESSP) _ - Status: Became effective August 1999 Closing: June 2004 This program, approved by the World Bank Board in February 1999, will support the implementation of the Government's National Education Strat- egy (NES) and the "Plano Estrategico da Educacao 1998" (PEE). The ultimate objective of the NES, and PEE, is the promotion of sustained improvement in the quality of the Mozambique labor force, with greater regional and gender equity in economic opportunities. This is to be achieved, in part, through an increase in the' number and quality of students graduating from the primary and secondary sub-education systems, with a focus on the under-served cen- tral and northern regions of the country and a targeted program of girls edu- cation. The program will improve the learning achievements and levels of attain- ment of Mozambican children, including those from the most vulnerable groups and under-served regions. It will also promote greater participation of girls and populations living in rural areas. In addition, various measures are de- signed to improve the quality of education offered and to enhance the capac- ity of the Ministry of Education (MINED) to carry out its policy development, managerial, and administrative functions. The proposed IDA credit would finance about 10 percent of the global program. (US$71 million) 4 Human Resources Capacity Building Project _ - Status: Actively disbursing Closing: June 2000 Thls project aims to help Mozambique increase and improve the supply of 4 skilled personnel entering the labor market by increasing capacity in key public 4 institutions where such people are trained. The project has two components: 4 one addressing upper secondary schools, whose graduates are going into higher education, and anrother addressing the Eduardo Mondlane University, which is the primary institution preparirig academics and professionals in the coun- try. With respect'to. the first component, project funds will help rehabilitate six secondary schools, build dormitories for pupils and houses for staff, re- vise the curriculum and the examination system, provide textbooks and other teaching and learning materials, increase female enrollments, and train MINED officials in management. With respect to the second component, project funds will support the development of administrative and information systems at the University and train administrative staff locally, rehabilitate, upgrade and construct staff houses as well as student dormitories, expand libraries and improve the provision of text books, enter into twinning arrangements for the faculties of economics and engineering with other universities, and de- velop staff through a araduate studies fellowship program. (US$48.6 million) 26 D i Health Sector v ttost of Mozambique's health indicators compare poorly with the Sub-Saharan MVaverages. For the Government, health is one of its four priority areas. Modern D health care is mainly provided through the public National Health Services (NHS) which aims to extend the health network and the benefits of the NHS throughout the country; and develop a national promotive, preventive and curative care program v both in rural and urban areas. Through a series of policy adjustments which began in 1991, the following principles have been affirmed as the basis for the National Health Policy: (a) maximizing the benefits from the use of available resources; (b) fairness in distributing resources and equity in the access to health care across regions and social groups; (c) freedom of users to chose their health care providers; and (d) co-existence v of public and private sector. The Bank, through the following operation continues to stress the need for investment in human resources and supports GoM's program for p poverty reduction through improved health care. 27 vp 4 >, Health Sector Recovery. Program Status: Actively disbursing Closing: June 2001 The objective of this program is to improve the health status of the popula- tion in general, and decrease infant and child mortality in particular. This would be achieved through an increase in health coverage of the population from the present 40 percent level to 60 percent by the turn of the century, with better quality of services provided. The program has three main compo- nents: (a) improvement of service delivery; (b) institutional development; and (c) development of human -resources. The program provides a frame- work for the Ministry of Health (MoH) and support by external partners. The credit supports the program in a flexible way, as a precondition to the start of a Sector-Wide Approach (SWAP) to the whole program of the MoH, espe- cially in the areas of service delivery, training and institutional development. (US$98.7 million) _ / W \ s | s *4; _ y _ 4 i - I 'X , I_=- '-'';-i . '"'- 4 -' v> 0 t ':_y >+ _ . . . - . -. \ '' 4_~~1 I_ _ Agricultural and Rural Development Although Mozambique is considered a land "abundant" country, in high potential areas where population density and productivity are higher, pressure on land arises Mozambique has considerable irrigation potential, however less than 10 percent of this potential is being exploited Major effort is needed to consolidate the recovery gains obtained in the past and pursue a faster rate of agriculture growth The Government's "Agricultural Policy and Strategy for Implementation" comprises "transforming subsistence agnculture and link- ing it more closely into production, marketing and processing activities, and Increasing mar- keted surpluses, while also developing an efficient commercial sector" Thus, an in-depth integration of Mozambican rural farmers into the national economy is a vital compo- nent of the agricultural strategy f~~~~~~~~~~~~~~~~~~ L :F 29 Exports must take a leading role in providing the engine of growth for the rural I sector and for the economy as a whole. Strengthening regional integration of food and non-food markets needs to be a high priority. Furthermore, an export-oriented policy 4 would facilitate intensification which is not likely to occur, if smallholder production 4 is focused only on the domestic market. To address the above constraints, policies and strategies, the Government with IDAs support, has been implementing several agricultural and rural development programs, including a recently approved Agriculture Sector Public Expenditure Pro- 3 gram (PROAGRI). Agricultural Sector Public Expenditure Program (PROAGRI) 4 - Status: Became effective August 1999 The objective of PROAGRI, another SWAP, is to improve the impact of public expenditures in developing an enabling environment for sustainable and eq- uitable growth in the rural sector, such that poverty is reduced and food security improved, while the physical and social environment is protected. PROAGRI would encompass all public expenditure programs managed by the Ministry of Agriculture and Fisheries (MAP), excluding the fisheries sub- sector. PROAGRI would be effectuated through a graduated fifteen-year three- I phased (five years each) Adaptable Program Lending instrument (APL). At one level, the objective of the first five-year phase of PROAGRI would be to I establish an institutional structure designed to provide cost-effective delivery of a core set of agriculture and natural resources related services. At a more basic level, the objective would be to enable sustainable and equitable growth in the agricultural sector. In addition, the achievements of the project will also be assessed by reviewing: (a) the number of wildlife present in national parks and reserves; (b) the area of forest under sustainable commercial and community management; (c) the number of properties demarcated, 4 land claims adjudicated, and titles registered; and (d) .the extent to which 4 water-users have become responsible for the O&M of irrigation schemes. 4 (US$30 million) 4 ~ i Agricultural Services Rehabilitation and Development i _ Status: Actively disbursing 4 Closing: December 2000 I This project, implemented by MAP, is supporting the rehabilitation and long- term development of food crops and cotton and cashew production, which form the basis for the farming system for the smallholder sector of Mozambique. This is being done by: (a) re-establishing and strengthening agricultural ex- tension and applied research in four provinces (Nampula, Cabo Delgado, 30 Gaza and Inhambane); (b) strengthening the capacity of the MAP in policy ; formulation and service delivery; and (c) improving land tenure security for all farmers. The credit was amended on June 18, 1997 with a resulting can- cellation of US$12.5 million. [Amended Credit Amount: (US$15.4 million)] t Rural Rehabilitation Pr' Status: Actively disbursing Closing: June 2000 This project is designed to address some of the principal post-war resettle- > ment and reconstruction needs of the rural sector by supporting participa- > tory, decentralized economic recovery in the provinces of Sofala and Zambezia t The project has three specific objectives: (a) to build capacity in the central > and provincial institutions responsible for coordination of post-war recon- struction; (b) to provide information about land use to assist with planning f future infrastructure investments, to guide the resettlement of returnees, and t to develop policies to ensure increased land security for smallholders; and (c) P to improve the health and quality of life of rural households by increasing coverage of the rural water supply The project has created provincial and district development funds for the financing of village-level projects prima- 1 rily in the areas of health, education, roads and bridges, and water supply and sanitation. (US$20.0 million) r Gender/Cashew Pilot Study Status: Completed The Mozambican Gender Cashew Study is aimed at assessing and monitoring the gender-differentiated effect of cashew sector reforms, so as to better in- form and guide future policy in a sector dominated by smallholders and women. This report presents results of the preliminary analysis of data from two house- hold surveys conducted in Mozambique in 1996 and 1997. The smallholders > survey fielded in 1996 was undertaken as part of the regular work program of 1 the Directorate of Economics in MAP and collected information on house- hold composition, land, labor use, other farm inputs, and crop production > from a national sample of 3,891 households. 31 Energy Sector 3T he development of energy sources is a high priority to Government. With the discovery of major gas fields, IDA has financed development efforts through a gas i engineering project which provides capacity building support to Empresa Nacional de Hidrocarbonetos de Mocambique (ENH), to prepare it for overseeing the development of the Pande Gas Field. With only a small percentage of its citizens linked to energy soutces GoM puts a high-importance on the development of alternative energy sources. Gas Engineering Status: Actively disbursing Closing: June 2000 (extension requested) The Pande Gas field was discovered in 1961. Original concessions on this field (held by the Gulf/Amoco group) were relinquished because of a lack of a market. The Pande Gas development is expected to lead to annual exports earnings of between $100 to $200 million. The primary objective of this project is to provide support to undertake the necessary pre-investment work to en- sure that ENH is in a position to make a firm decision to develop the Pande Gas for export and for use in Mozambique. Secondary objectives include minor environmental clean up relating to previous operations and some training and institutional strengthening. (US$30 million) 4 _R Rural Energy and Electrification Program r - Status: Under preparation 4 The World Bank and GoM are working together in an effort to identify and il prepare a project on rural energy which would be supported by the Bank and ; bilateral donors. The likely components of this operation would be: (a) a policy component to help put in place the essential elements of the enabling framework for a competitive and sustained expansion of electricity access; (b) pilot investments to test financing mechanisms and technical and institu- il tional delivery options for (i) deepening, as well as extension, of electricity access along the main grid, (ii) decentralized mini-grids, and (iii) utilizing solar-based individual home systems; and (c) a program to develop sustain- able supply of traditional fuels by promoting local capacity for natural re- source management and enhanced sustainable supply of traditional fuels for urban consumption. (amount not yet determined) 332 4 Infrastructure and Transport Sectors the transport programs support the CAS objective to alleviate poverty through sustainable growth. The programs will achieve this by improving linkages and > reducing transportation costs between all parts of the country, fostering private sector participation in road rehabilitation and maintenance, as well as operation and man- agement of railways, sea ports and airports, supporting public sector reform and de- k centralization, mobilizing resources and coordinating aid, and strengthening ties with civil society. Additionally, to alleviate poverty in rural areas, the programs also focus on im- v proving the condition of rural roads, thus easing a major constraint to the transport of farm produce to the point of consumption and export. > Roads and Coastal Shipping (ROCS II) p Following on the First Roads and Coastal Shipping Project (ROCS 1), the primary objectives of the project are to: (a) support Mozambique's economic t 33 recovery program through rehabilitation and maintenance of priority roads; and (b) further strengthen the manragement capacity of road sector institu- tions. The project comprises the Government's agreed "flexible" rolling roads investment and maintenance program for five years (1994-1998), coordinat- ing all donors through discrete parallel sub-projects. The first two years of the program have been defined and appraised in detail, as has the scope of the five-year program. A major review after two years and annual reviews 4 thereafter will define, in more detail, the specifics of the program in the outer years. The civil works program comprises: (a) emergency works to open ac- cess in all 10 provinces; (b) rehabilitation of priority trunk roads; (c) labor based reconstruction of about priority feeder roads; and (d) current routine and periodic maintenance of that portion of the network that is in good or fair condition. The project will also finance engineering services in support of the program and the continuation of the Government's Road Sector Institu- tion Building Program commenced under ROCS 1. (US$188.0 million) Railways and Ports Restructuring Project _ Status: Board approved October 1999 Closing: September 2005 The proposed project has two main objectives. The first is to substantially increase the operating efficiency of the three major port-rail systems in Mozambique and enable them to increase their share of the international I freight traffic from the neighboring countries. The increase in freight traffic should enable: (a) the neighboring countries to reduce the surface transport costs of their exports and imports resulting from use of shorter routes, in- creased efficiency of operations; and use of railways in preference to roads; (b) the ports and railways to become financially self-sustaining; (c) CFM to 4 increase its net income and, consequently, be in a position to pay dividends to GoM; and (d) Mozambique to generate more foreign exchange from the 4 neighboring countries' use.of railways and port facilities in Mozambique. 4 The second is to strengthen the transport sector policy, the regulatory frame- work, and the institutional capacity of the MTC. The Government strategy to achieve the project objectives comprises: (i) comprehensive restructuring of CFM; (ii), large scale involvement of the private sector in the operations and management of all the ports and railways; (iii) retrenchment of surplus staff; (iv) strengthening of the MTC and refining the Transport Sector, Policy;' (v) establishing an appropriate regiulatory -framework for the whole transport sector; and (vi) concessioning and rehabilitation of a some tertiary ports. The project would support the strategy through financing of severance payments, civil works, goods, consultancy services, and staff training and retraining. I (US$100,0 million) 34 Roads and Bridges Maintenance Management Project (RBMMP) Status: under preparation In the roads sector, the Bank will continue to support Mozambique with its > long-term transport program. However, prior to undertaking a major new investment program, Government needs to complete the institutional and policy reforms initiated under the early projects. Essential reforms were ne- glected during the immediate post-war period, when emergency rehabilita- tion and roads opening were the priority. There is now a need to take a more systematic approach, and to fully respect procurement and other procedures > Of utmost importance is to correct the institutional deficiencies created with t the April 1999 decrees, and to once again separate oversight and monitoring functions of the Board from the day-today management responsibilities of the * executing agency It is also essential to divide the financing and allocation 0 functions (under the Road Fund) from the management of contracts and su- 0 pervision of construction and maintenance. Government must also make t progress on decentralizing road management responsibilities and attending to rural roads needs. Further, it needs to finish its priority rehabilitation pro- p gram. Finally it is essential that road maintenance receives priority in the # Government's public expenditure program, so that sufficient funds are avail- able for periodic and routine maintenance. A 2-3 year operation, supported by a credit of no more than US$50 mil- > lion, is appropriate at this time. Such a project would comprise three major components: (a) civil works; (b) assistance to establish institutional prerequi- # sites for sustainable and effective road sector management; and (c) prepara- tory activities for a follow-up investment program. Specifically, the project > would provide assistance to: 35 Civil works A continue rehabilitation of major roads not completed under ROCS-II; A connect Zambezia to the rest of the country (north 4 4 , - and south) with paved roads; and A pilot a rural roads rehabilitation and maintenance sup- port programn, including institutional and technical support to decentralized roads authorities. Establishment of institutional prerequisites for sustain- able and effective road sector management aA establish. an appropriate institutional framework for the sector, including clear separation of the financing and allocation furictions (unider the Road .Fund) from the management bofcontrac'ts and supervision of con- struction and maintenance, and separation of the over- sight and monitoring functions of the Road Board from the executing,agency; A strengthen the administration of the roads network; A establish an effective, transparent and accountable roads management system within the National Road Author- 4 ity (ANE);'and 4 - A establish the most appropriate national financial man- 4 . agement framework for ANE, the Road Fund and for 4 program and projects management. 6 i I I6 Environment ozambique is richly endowed with natural assets: rich biodiversity, a spectacular > coastline with abundant marine resources, gas and mineral deposits, vast ex- panses of woodland, fertile plains and large perennial rivers. It is a country which is highly dependent on environmental resources for its livelihood, and eager to exploit > these resources to make up for years of economic stagnation. Ensuring that this highly > prized economic growth is sustainable, represents one of Mozambique's greatest de- velopmental challenges. Understanding the opportunities presented by the natural t resource base, and the constraints that the management of these resources may place t on development, is the key to meeting this challenge. Mozambique has new and largely untested policy frameworks for the manage- t ment of the environment and natural resources. The World Bank and the Global En- vironmental Facility (GEF) are engaged in supporting the institutions which must turn these broad frameworks into effective policies for sustainability. Considerable > focus is given in these initiatives to integrating biodiversity and environmental values with the economic development aspirations of project stakeholders. ,> Mozambique Transfrontier Conservation Areas (TFCA) V The project, financed by the GEF, is a regional project which aims at enhanc- ing the conservation of some of the most species-rich biogeographic regions > in Africa, with numerous habitats of special interest through a broad-based > ecosystems management approach. Three areas have been identified as Transfrontier Conservations Areas (TFCAs). These are: (a) the Chimanimani > TFCA with linkages to Zimbabwe (Chimanimani National Park); (b) the Gaza TFCA with linkages to the Kruger National Park in - South Africa and Gonarezhou National Park in Zimbabwe (c) the i*W .* - Maputo TFCA, with link- | g j - 4 ages to the Tembe Elephant ¢ .~Park in South Africa. The l . _ _mUai4~ project will simultaneously > A| 1*. strengthen (1) the capacity of the National Directorate 3: ~~~~~~~~~~~~~~of Forestry and Wildlife at both central and provincial levels to manage its protected areas within the TFCAs, such as Banhine and Zinave National Parks, and the Maputo Special Reserve, (n) the participation of local communities in sustamable use activities in and around the protected areas, and (iii) partnerships with local, national and regional stakeholders. The project will also assist the Direc;ao Nacional de Florestas e Fauna Bravia (DNFFB) in developing appropnate policies and legislation that will allow both for conservation-based community development and pnvate sector in- vestment in tourism and conservation activities. Community empowerment through land delimitation and definition of property nghts is considered fun- damental for achieving project objectives. (US$5 million) ' Coastal and Marine Biodiversity Management Project I StatusI Under preparation The project will pilot an integrated approach to achieving sustainable devel- opment focusing on two project areas in northern Mozambique These are: (a) the districts of Mocimboa da Praia and Palma m Cabo Delgado, and (b) Nacala-Porto and Mossuni in Nampula. Both these areas include sites recog- nized as having globally significant biodiversity, including corals, mangroves, sea grass beds and all five species of threatened and endangered turtles and dugongs. The project aims to achieve the following I .. A establish,strategic spatial development plans, approved ahd adopted by national; provincial and district au- thonties in the pilot areas; I 4 A improve institutional capacity for integrated. coastal zone management at provincial and district level, 4 A devolve coastal zone planning to provincial level, .A test different mbdeLs for coastal zone management, including community mnanagement and private sec- tor concessions; A establish effective protection of key marine conserva- I n . tion areas, and A establilk co-ihanagement irm buffer zones of key ma- nne conservation areas cohsisient with conservation objectives (US$9.7 million GEF/IDA) 38 '1 so ' Strategic Environmental Management Framework (SEMF) for Maputo Province Under the auspices of the Borderlands Committee, South Africa, Swaziland and Mozambique have expressed their commitment to the development of a regional Strategic Environmental Management Framework (SEMF). The Bank is supporting the development of the Maputo Province component of this regional SEMF, which also includes part of Mpumalanga Province in South Africa and Swaziland in its entirety The objective of the SEMF is to help establish appropriate capacity and an integrated institutional framework for the three participating countries to achieve sustainable growth in a sub-re- 0 gion characterized by economic and environmental inter-dependence. 39 Urban and Water Sectors k> National Water Development Project I Status: actively disbursing Closing: October 2003 This project will: (a) re-orient the institutions of the water sector and increase their capacities; (b) prepare for private sector management of the urban water supply systems of the cities Maputo, Beira, Quelimane, Nampula and Pemba, and plan for the provision and enhancement of sanitation and drainage within these cities; (c) re-orient and reform the management and implementation of rural water supply and sanitation (RWSS), and upgrade RWSS services in Inhambane Province using a demand-driven community managed approach; (d) strengthen the management of water resources, support joint studies with upstream countries on the management and development of shared rivers, and implement safety-related rehabilitation works at Corumana Dam; and (e) support a program of human resources development for the water sector. The project will be implemented under the direction of Ministry of Pub- lic Housing (MoPH) with the participation of other stakeholders. It was ap- 40 r~~~~~~~~~~ . -~ -Lvv= o # 54 proved by the World Bank Board on February 12, 1998. IDA will contribute US$36 million equivalent towards its US$56.9 million equivalent estimated total cost, with the GoM, Nordic Development Fund (NDF) , Canadian Inter- national Development Agency (CIDA), Swiss Development Cooperation (SDC) and Swedish International development Authority (SIDA) contributing the rest. The project will have an initiating and integrating role within the Government's National Water Development Program, which will consist of a set of sector reforms, studies and investments that are designed to imple- ment, and further develop the National Water Policy (US$36 million) National Water Development Project II Status: Board approved onJune 17, 1999 Closing: December 2004 This project, which is not yet effective, was prepared to support contracts for the private sector management of the water supply systems of Maputo, Beira, Quelimane, Nampula and Pemba, investments in the extension of water sup- 0 ply services into some of the bairros within these cities where supplies are currently absent or inadequate, and the provision of a regulatory framework. The project will aim at providing a sound platform for long term sustained improvements in service coverage, standards and cost effectiveness. The project will be financed by IDA, the Government of Mozambique, the Netherlands and the African Development Bank, and would be implemented under the MoPH with participation from local governments and other stakeholders. It is planned to become effective in CY 1999. (US$75 million) 41 Table 1. World Bank Loans (by effective date, US$ millions) P Nae N ame 1--> 1r; , Date Date * Investment Credits Energy Technical Assistance & Rehabilitation 20.00 30-Nov-87 31-Dec-94 Education I 15.90 12-Oct-88 31-Dec-95 Urban Rehabilitation 60.00 14-Feb-89 31-Oct-96 Health & Nutrition 27.00 30-Oct-89 30-Jun-97 Urban Household Energy 22.00 27-Apr-90 30-Apr-98 Beira Corridor 40.00 10-Jul-90 - 30-Jun-97 Economic & Financial Management 21.00 29-Jun-90 31-Dec-97 Industrial Enterprise 50.10 6-Aug-90 31-Dec-99 Small & Medium Enterprise 32.00 7-Jun-90 31-Dec-97 Agricultural Rehabilitation 15.40 30-Apr-91 30-Jun-99 Education II 53.70 26-Jul-91 31-Dec-98 Agricultural Services Rehabilitation 35.00 15-Dec-92 31-Dec-00 First Roads & Coastal Shipping 74.30 17-Sep-92 31-Dec-99 Maputo Corridor 9.30 27-Sep-93 31-Dec-98 Capacity Building Human Resource 48.60 1-Dec-93 30-Jun-00 Rural Rehabilitation 20.00 8-Dec-93 30-Jun-00 Food Security Capacity Building 6.30 25-Feb-94 31-Dec-98 Legal & Public Sector Capacity Building 15.50 28-Feb-94 30-Jun-00 Second Roads and Coastal Shipping 188.00 11-Jul-94 30-Jun-01 Local Government 23.20 20-Jul-94 31-Mar-99 Financial Sector Capacity Building 9.00 17-Aug-94 30-Jun-00 Gas Engineering 30.00 30-Dec-94 30-Jun-00 Health Sector Recovery Program 98 70 30-Apr-96 30-Jun-01 National Water I 36.00 4-Jun-98 31-Oct-03 Education Sector Strategic Program 71.00 2-Aug-99 30-Jun-04 PROAGRI 30.00 12-Aug-99 30-Jun-04 4 National Water Development Project II 75.00 31-Dec-04 Enterprise Development Project 26.00 30-Jun-05 Railways and Ports Restructuring Project 100.00 30-Sep-05 Total 1,253.00 Adjustment Operations Rehabilitation Project 45.00 18-Oct-85 31-Mar-89 Second Rehabilitation Project 70.00 22-Oct-87 30-Jun-91 Third Rehabilitation Project 90.00 4-Aug-89 30-Apr-94 Economic Recovery Credit 180.00 3-Aug-92 30-Jun-96 Second Economic Recovery Credit 200.00 19-Jul-94 30-Aug-97 Third Economic Recovery Credit 100.00 21-May-97 31-Dec-98 Total 685.00 * awaiting effectiveness 42 Table 2 Currently Active World Bank Loans (by effective date, US$ million) Investment Credits Agricultural Services Rehabilitation 35.00 15-Dec-92 31-Dec-00 Capacity Building Human Resource 48.60 1-Dec-93 30-Jun-00 Legal & Public Sector Capacity Building 15.50 28-Feb-94 30-Jun-00 Rural Rehabilitation 20.00 8-Dec-93 30-Jun-00 Second Roads and Coastal Shipping 188.00 11-Jul-94 30-Jun-01 Financial Sector Capacity Building 9.00 17-Aug-94 30-Jun-00 Gas Engineering 30.00 30-Dec-94 30-Jun-00 Health Sector Recovery Program 98.70 30-Apr-96 30-Jun-01 National Water I 36.00 4-Jun-98 31-Oct-03 Education Sector Strategic Program 71.00 2-Aug-99 30-Jun-04 PROAGRI 30.00 12-Aug-99 30-Jun-04 National Water Development Project II 75 31-Dec-04 Enterprise Development Project 26.00 * 30-Jun-05 Railways and Ports Restructuring Project 100.00 30-Sep-05 Total 782.80 * awaiting effectiveness 43