INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Public Disclosure Copy Report No.: ISDSC6041 Date ISDS Prepared/Updated: 19-Nov-2013 Date ISDS Approved/Disclosed: 17-Dec-2013 I. BASIC INFORMATION A. Basic Project Data Country: Armenia Project ID: P146994 Project Name: Trade Promotion and Quality Infrastructure (P146994) Task Team Feyi Boroffice Leader: Estimated 17-Mar-2014 Estimated 29-May-2014 Appraisal Date: Board Date: Managing Unit: ECSPF Lending Investment Project Financing Instrument: Sector(s): Other domestic and international trade (40%), General industry and trade sector (40%), SME Finance (20%) Theme(s): Export development and competitiveness (50%), Micro, Small and Medium Enterprise support (25%), Other Private Sector Development (25 %) Financing (In USD Million) Total Project Cost: 40.00 Total Bank Financing: 40.00 Public Disclosure Copy Financing Gap: 0.00 Financing Source Amount Borrower 0.00 International Bank for Reconstruction and Development 40.00 Total 40.00 Environmental B - Partial Assessment Category: Is this a No Repeater project? B. Project Objectives The project’s objective is to increase the efficiency and effectiveness of the government’s interventions to support the competitiveness of Armenian enterprises. The project is focused on helping the entities that have been charged with supporting Armenian enterprises to upgrade their quality - so that they are able to compete at home and abroad - to fulfill their mandate. The primary beneficiaries of the project will be the enterprise sector, particularly SMEs. The Ministry of Economy, the revamped enterprise support agency, the National Metrology Institute, the National Institute for Standardization and the Accreditation Center are also expected to be major beneficiaries. The administrator to be selected to administer matching grants component will also benefit from the Public Disclosure Copy technical assistance and know-how to manage these activities. C. Project Description The project will consist of four components. Component 1. Strengthening the institutional framework in support of Investment and export promotion - seeks to strengthen the institutional framework which supports of investment and export promotion. With a proposed allocation of $12 million, this component comprises a $10 million results-based sub-component as well as $2 million of technical assistance. The main areas of focus will include: (i) adoption of a national Foreign Direct Investment (FDI) policy and strengthening the investment law in line with international best practice; (ii) assessment and institutional restructuring of the enterprise support agencies; (iii) restructuring and reorganization of the National Metrology Institute (NMI); and (iv) creating flagship export promotion and investment promotion programs. Component 2. Modernizing the National Quality Infrastructure - aims to support the Government of Armenia with the modernization of the National Quality Infrastructure using traditional investment project financing of $7.5 million. The first goal of this component is the modernization of the metrology system. This activity will encompass the renovation of the National Metrology Institute building, installation of laboratories within this building, purchase of equipment, and capacity building of the staff. There will also be extensive training to build the capacity of the staff to operate the equipment and training on the skills needed to run a modern metrology institute. The second goal of this component is to provide capacity building and financial support for the Accreditation Center. The third subcomponent will be to support the capacity building of the other actors in the National Quality System including the National Institute of Standardization, and the Market Surveillance unit. Finally, the component will also focus on improve the efficiency of service delivery of the entire National Quality system. Public Disclosure Copy Component 3. Upgrading Technological Capabilities and expanding Market Access for Enterprises - seeks to upgrade technological capabilities and expand market access for enterprises with an allocation of $19.5 million of traditional Investment Project Financing. This component encompasses two main actions. First it provides the resources ($5.5 million) for the setting up and financing of an Export Credit Insurance mechanism. Second, the project envisions the creation of a Matching Grants Facility to support quality improvement, technology absorption, and investments in public goods by multinationals ($14 million). Component 4. Focusing on Project Management and Monitoring and Evaluation with a proposed allocation of $1 million to set up a Project Management Unit (PMU) that will be responsible for all the day-to-day project implementation activities. This component will finance consultants employed as part of the PMU, training, office equipment and incremental operating costs. D. Project location and salient physical characteristics relevant to the safeguard analysis (if known) The National Metrology Institute is located in the capital city of Yerevan. Civil works activities are expected to be located within the existing footprint of the NMI. Beneficiaries of the Matching Grants Facility are not known upfront and may be located anywhere in the country. E. Borrowers Institutional Capacity for Safeguard Policies The Ministry of Economy is expected to be the Implementing Agency for this project. It is expected that a Project Management Unit (PMU) established within the Ministry of Economy will be Public Disclosure Copy responsible for all the day-to-day management of the project activities, while financial management will be provided by the Foreign Financing Projects Management Center (FFPMC), as is customary for projects implemented with World Bank support in Armenia. FFPMC is well experienced handling fiduciary aspects. The Ministry of Economy has not had previous exposure or experience with implementation and oversight of Word Bank safeguard policies. Therefore, it will be essential that the Ministry staffs its PMU with adequate capacity for managing environmental and social aspects of the project interventions. Detailed arrangements for ensuring institutional capacity for safeguards application will be worked out before the project appraisal. F. Environmental and Social Safeguards Specialists on the Team Darejan Kapanadze (ECSEN) Sarah G. Michael (ECSSO) Ekaterine Imerlishvili (ECSSO) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/ Yes The project will support rehabilitation of BP 4.01 premises for the National Institute of Metrology, including its laboratory facilities. No need for a new construction is expected. The use of explosive and/or toxic substances in the laboratories if the Institute is not likely, however that will be confirmed before the project appraisal. Present design of the Public Disclosure Copy Matching Grants Facility does not envisage financing civil works. That is also subject to confirmation at a later stage of the project preparation. If works are excluded from the grant financing, that will be documented in the Operational Manual (OM) to be developed for the project. In this case the OM will also carry provisions for screening grant applications for their potential indirect environmental and social impacts. Alternatively, if small works are eligible for financing under the Matching Grants Facility, an Environmental Management Framework (EMF) will be developed for this grant scheme, to guide environmental screening, selection, review and approval of grant proposals. Regardless of the final decisions on the design of the Matching Grants Facility, environmental risks of the entire project is expected to be small to moderate, because no new construction is expected to be financed and all reconstruction Public Disclosure Copy works are expected to be of a modest scale. Therefore, the project is classified as environmental Category B. An Environmental Management Plan for work in the National Institute of Metrology will be developed before appraisal. Disclosure and public consultation on this EMP, as well as on the EMF, if required, will be organized also before appraisal. Natural Habitats OP/BP 4.04 No Forests OP/BP 4.36 No Pest Management OP 4.09 No Physical Cultural Resources OP/ No BP 4.11 Indigenous Peoples OP/BP 4.10 No Involuntary Resettlement OP/BP TBD It is not expected that renovations under 4.12 Component 2 will involve land acquisition/use or resettlement. However, a final decision on the triggering of OP 4.12 would be made prior to the decision stage. If triggered, a project RPF would be prepared, cleared and disclosed in- country prior to appraisal. The Matching Grants Facility under Component 3 will include a Public Disclosure Copy ‘negative list’ to exclude any sub-projects which included land acquisition/use or resettlement from eligibility for funding. The “negative list” as well as the procedure for screening sub- projects for land acquisition/use will be clearly described in the OM to be developed by the project. Safety of Dams OP/BP 4.37 No Projects on International No Waterways OP/BP 7.50 Projects in Disputed Areas OP/BP No 7.60 III. SAFEGUARD PREPARATION PLAN A. Tentative target date for preparing the PAD Stage ISDS: 31-Mar-2014 B. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing1 should be specified in the PAD-stage ISDS: 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons. EMP for the rehabilitation of the National Metrology Institute will be drafted, disclosed, discussed with stakeholders and finalized before appraisal. The same procedure will be applied to the EMF and RPF, if there are needs to develop them. Site-specific EMPs and RAPs, if required, will be Public Disclosure Copy subject to the same consultation, review and disclosure procedures. IV. APPROVALS Task Team Leader: Name: Feyi Boroffice Approved By: Regional Safeguards Name: Agnes I. Kiss (RSA) Date: 19-Nov-2013 Coordinator: Sector Manager: Name: Aurora Ferrari (SM) Date: 17-Dec-2013 Public Disclosure Copy