Public Disclosure Copy The World Bank Implementation Status & Results Report Afghanistan: Sustainable Development of Natural Resources Project II (P118925) Afghanistan: Sustainable Development of Natural Resources Project II (P118925) SOUTH ASIA | Afghanistan | Energy and Mining Global Practice | IBRD/IDA | Technical Assistance Loan | FY 2011 | Seq No: 6 | ARCHIVED on 28-Jun-2015 | ISR19820 | Implementing Agencies: Key Dates Key Project Dates Board Approval date:31-May-2011 Effectiveness Date:21-Sep-2011 Planned Mid Term Review Date:27-Jan-2014 Actual Mid-Term Review Date:27-Jan-2014 Original Closing Date:30-Jun-2016 Revised Closing Date:30-Jun-2016 Project Development Objectives Project Development Objective (from Project Appraisal Document) to assist the Ministry of Mines (MoM) and the National Environmental Protection Agency (NEPA) in further improving their capacitiesto effectively regulate Afghanistan‘s mineral resource development in a transparent and efficient manner, and foster private sectordevelopment. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Component A. Award of Contracts and Licenses:(Cost $8300000.00 M) Component B: Regulation and Monitoring of Operations:(Cost $19100000.00 M) Component C: Preservation of Aynak Antiquities and Support for Alternative Livelihoodsthrough Sustainable ASM:(Cost $6600000.00 M) Component D: Project Implementation Support:(Cost $9000000.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Moderately Unsatisfactory Overall Implementation Progress (IP)  Satisfactory  Moderately Unsatisfactory Overall Risk Rating  Substantial  Substantial 6/28/2015 Page 1 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Afghanistan: Sustainable Development of Natural Resources Project II (P118925) Implementation Status and Key Decisions This ISR is based on discussions with the PMU, other relevant government counterparts, and project consultants (i.e GAF, UNICON,DAFA, GIZ) which took place from November 2014 - June 2015. Key achievements and implementation status during the reporting period include the following: Component 1 Award of Contracts and Licenses: Transaction based activities around Hajigak iron ore have been impeded by a weakening commodity price, delays in passage of the new Mining Law and delays in appointment of a new Minister following a long post-election transition period and Acting Interim Minister having limited decision-making authority. At the request of the government, SDNRP2 will provide support toward the procurement of transaction advisors for the Independent Power Plant at Mazar-sharif. Component 2 Regulation and Monitoring of Operations: An independent external inspection and contract compliance monitoring system is in place, but field security has impeded field inspection. Capacity building of National Environmental Protection Agency(NEPA) on inspectorate service functions and regulatory monitoring (around ESIA’s) has begun. This consultancy was mobilized in August 2014 and its main objectives are to strengthen the existing Environmental and Social Impact Assessment (ESIA) procedures. Over the last 9 months they have undertaken a functional review of the environmental legal and policy frame work and SESA-EI Recommendations and Implementation Status, and provided a series of recommendations for reforms and a capacity development plan to which they are implementing. The MoMP continues to struggle to implement the first Resettlement Action Plan (RAP) for Aynak in a timely manner and prepare adequate documentation regarding the process and the associated Grievance Redress Mechanism (GRM); further, the MoMP has initiated further acquisition without following the standards set out in the first RAP or in the subsequent Resettlement Policy Framework included in the ESMF. To address these weaknesses in MoMP. the Aynak Monitoring & Compliance consultant (GAF) has been asked to reinforce the social development consultants within its’ team. According to the results framework, the project aims to support the promulgation of six mine related regulations by project closure. Preparation of Mining Regulations in the areas of technical, HSE, Explosives, social and environmental, and financial with support from the World Bank, currently is underway. The Bank has urged the government to ensure that all relevant stakeholders are adequately consulted with and inputs are considered in the preparation of the regulations. The Bank is encouraged by the commitment of Minister Saba to the EITI and his undertaking to meet with Minister Hakimi to establish a more effective approach to government management of the process. The EITI Board has given Afghanistan a further 18 months to fully transition to the more stringent requirements of the EITI Standard. However the Bank is concerned that Afghanistan may not be capable of complying with the full set of requirements of the Standard, and recommends considering the possibility of applying for adapted implementation. This, along with addressing the outstanding issues highlighted in the recent review of AEITI will be the focus of Bank support in the medium term. Component 3 Preservation of Aynak antiquities and support for alternative livelihoods through sustainable artisanal and small-scale mining (ASM): As indicated in the results framework, 80 percent of the archeological site located in the "red zone" has been covered by archeological study. Progress has been severely limited by field security that led to a draw-down of international archeologists and field mobility. Over the past year, the MoMP and Ministry of Information and Cultural (MoIC) has significantly increased t heir level of coordination (a bottleneck to progress in the past) and ownership over the project. The Bank also team is pleased to note that UNESCO has begun to provide technical assistance to the MOMP and the MOIC on the intersection between the extractive industries and cultural heritage. As a first course of action, an interim report has been prepared by UNESCO, which includes a preliminary assessment on 5-6 prioritized areas throughout the country and the potential mining concessions, active or at preliminary stages of development, within them. As reported by the UNESCO team, they are now in the process of identifying the 5-6 sites, in consultation with the MoMP, for which they will undertake more detailed and in-depth cultural resource assessments. Risks Systematic Operations Risk-rating Tool 6/28/2015 Page 2 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Afghanistan: Sustainable Development of Natural Resources Project II (P118925) Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  High  High Macroeconomic  --  Moderate  Moderate Sector Strategies and Policies  --  Substantial  Substantial Technical Design of Project or Program  --  Moderate  Moderate Institutional Capacity for Implementation and Sustainability  --  Moderate  Substantial Fiduciary  --  Moderate  Moderate Environment and Social  --  High  High Stakeholders  --  Moderate  Moderate Other  --  --  -- Overall  --  Substantial  Substantial Results Project Development Objective Indicators PHINDPDOTBL  Cumulative number of tenders for larger mining and hydrocarbon deposits (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.00 10.00 10.00 4.00 Date 01-Sep-2011 25-Nov-2014 17-Jun-2015 30-Dec-2016 PHINDPDOTBL  Production data collected and reported for medium scale and for large scale mining and hydrocarbon operations (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.00 1.00 3.00 10.00 Date 01-Sep-2011 24-Nov-2014 17-Jun-2015 30-Dec-2016 PHINDPDOTBL  Number of corporatization plans drafted (cumulative) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 1.00 2.00 6/28/2015 Page 3 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Afghanistan: Sustainable Development of Natural Resources Project II (P118925) Date 01-Sep-2011 01-Apr-2014 17-Jun-2015 30-Dec-2016 PHINDPDOTBL  EITI Reconciliation Reports issued (cumulative) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.00 3.00 3.00 3.00 Date 01-Sep-2010 24-Nov-2014 17-Jun-2015 30-Dec-2016 PHINDPDOTBL  Field investigation reports for HSE compliance at medium and large scale mining and oil/gas operations (reports prepared, issued, corrective actions taken by operator) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.00 1.00 1.00 5.00 Date 01-Sep-2011 24-Nov-2014 17-Jun-2015 30-Dec-2016 PHINDPDOTBL  Percent of Women trained (as a percentage of total trained) in gemstone cutting, polishing and jewelry making. (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- 0.00 0.00 40.00 Date 01-Sep-2011 24-Nov-2014 17-Jun-2015 30-Dec-2016 PHINDPDOTBL  Percentage of sites in Aynak Valley with antiquities where protection activities have started versus total number of sites within the red zone (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 80.00 80.00 50.00 Date 01-Sep-2010 24-Nov-2014 17-Jun-2015 30-Dec-2016 6/28/2015 Page 4 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Afghanistan: Sustainable Development of Natural Resources Project II (P118925) Overall Comments Intermediate Results Indicators PHINDIRITBL  Publication of a new Mining Sector Development Strategy and new policies and plans regarding quarrying and ASM mining (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target One main and 18 One main and 18 Overarching national individual policies individual policies ASM Mining Extractive Industries Value including ASM have including ASM have plan approved Excellence Program been made approved been made approved and published (NEIEP) published in draft and published. and published. Date 01-Sep-2011 24-Nov-2014 17-Jun-2015 31-Dec-2015 PHINDIRITBL  % of new geodata collected as a percentage to total area (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 85.00 85.00 85.00 Date 01-Sep-2011 24-Nov-2014 17-Jun-2015 30-Dec-2016 PHINDIRITBL  Percent of licenses digitized (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 5.00 90.00 90.00 85.00 Date 01-Sep-2011 24-Nov-2014 17-Jun-2015 30-Dec-2016 6/28/2015 Page 5 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Afghanistan: Sustainable Development of Natural Resources Project II (P118925) PHINDIRITBL  Number of days to process medium scale licenses (Days, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 180.00 150.00 90.00 -- Date 01-Sep-2011 02-Dec-2014 17-Jun-2015 30-Dec-2016 PHINDIRITBL  Number of trained mine inspectors (cumulative) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 30.00 32.00 32.00 50.00 Date 01-Sep-2011 02-Dec-2014 17-Jun-2015 30-Dec-2016 PHINDIRITBL  Staffing and annual budget for the compliance office at NEPA (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target One National (Translator/Interpreter). The contract of The contract of Consultancy Services Consultancy Services for Building Regulatory Additional staff for Building Regulatory Capacity in the National positons Value 0 Capacity in the Environmental identified and in National Environmental Protection Agency was the process of Protection Agency was awarded to SIM S.p.A being filled. awarded to SIM S.p.A and commenced their and commenced their work on 1st Sep. 2014 work on 1st Sep. 2014. Date 01-Sep-2011 02-Dec-2014 17-Jun-2015 31-Dec-2015 PHINDIRITBL  Number of inspectors trained in inspecting appropriate mining techniques and environmental management (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 10.00 10.00 30.00 Date 01-Dec-2011 02-Dec-2014 17-Jun-2015 30-Jun-2016 6/28/2015 Page 6 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Afghanistan: Sustainable Development of Natural Resources Project II (P118925) PHINDIRITBL  Number of Mining Regulations Promulgated (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 2.00 6.00 Date 12-Aug-2014 02-Dec-2014 17-Jun-2015 30-Jun-2016 PHINDIRITBL  NEPA Promulgates sector standards for mining (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Final draft Value 0 0 0 standard tabled for adoption Date 12-Aug-2014 24-Nov-2014 17-Jun-2015 30-Jun-2016 PHINDIRITBL  Annual Report for contract compliance monitoring of Aynak and Hajigak prepared and publicly disseminated (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 2.00 3.00 5.00 Date 30-Sep-2012 24-Nov-2014 17-Jun-2015 30-Jun-2016 Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P118925 IDA-H6990 Effective XDR 32.80 26.89 5.91 14.16 12.73 53% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P118925 IDA-H6990 Effective 31-May-2011 16-Jul-2011 21-Sep-2011 30-Jun-2016 30-Jun-2016 6/28/2015 Page 7 of 8 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Afghanistan: Sustainable Development of Natural Resources Project II (P118925) Cumulative Disbursements Restructuring History Level 2 Approved on 25-Nov-2014 Related Project(s) There are no related projects. 6/28/2015 Page 8 of 8 Public Disclosure Copy