Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-6560-UG MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 7.5 MILLION TO THE REPUBLIC OF UGANDA FOR AN ENVIRONMENTAL MANAGEMENT CAPACITY BUILDING PROJECT AUGUST 14, 1995 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CtJRRENCY EQUIVALENT Currency Unit = Uganda Shilling (UgSh) US$1.00 = 950 UgSh at appraisal SDR I.00 = USSI.57 as of May 1995 WEIGHTS AND MEASURES Metric System ABBREVIATIONS CAS Country Assistance Strategy CESP Country Environmental Strategy Paper EMCBP Environmental Management Capacity Building Project GDP Gross Domestic Product GEF Global Environment Facility GOU Government of Uganda IDA International Development Association IUCN World Conservation Union NEAP National Environmental Action Plan NEMA National Environmental Management Authority NGO Non-Governmental Organization NRC National Resistance Council PRA Participatory Rural Appraiasal SOE Statement of Expenditure UNDP United Nations Development Program UJNSO United Nations Sahelian Organization USAID United States Agency for International Development WRI World Resource Institute Government Fiscal Year July I - June 30 FOR OFFICIAL USE ONLY REPUBLIC OF UGANDA ENVIRONMENTAL MANAGEMENT CAPACITY BUILDING PROJECT Credit and Project Summary Borrower: Republic of Uganda Implementing Agency: National Environment Management Authority with the assistance of. Local Governments at District and Sub-County Level, Non-Governmental Organizations. Beneficiaries: Government and Non-Government Organizations; Sectoral Ministries dealing with environmental issues; Local Government at District, Sub-County, and Parish Level; Communities in Target Districts. Poverty: Not Applicable Amount: SDR 7.5 Million, (US$11.8 million equivalent) Terms: Standard with 40 years maturity Financing Plan: See Schedule A Net Present Value: Not Applicable Staff Appraisal Report: No. 14015-UG Map: IBRD 26375 Project Identification No. UG-PA-2978 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF UGANDA FOR AN ENVIRONMENTAL MANAGEMENT CAPACITY BUILDING PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed development credit to the Republic of Uganda, for SDR 7.5 million (US$11.8 million equivalent) on standard terms with maturity of 40 years, to help finance an Environmental Management Capacity Building Project (EMCBP). 2. Country and Sector Background. Uganda, with a population of 17.0 million, has a land area of 195,000 square kilometers. With a per capita income of only US$225 (1994), it is one of the poorest countries in the world. Its current economic situation is the legacy of nearly 15 years of political turmoil and economic decline brought about by despotic rule and economic mismanagement. Over the period 1987-1993, real Gross Domestic Product (GDP), grew by an average of 5.4 percent per annum, a gain of about 2.5 percent per year in per capita terms. 3. Uganda faces well-recognized, if not well-evaluated, environmental problems in the degradation of forest resources (particularly in the southwest), soils (again in the southwest), rangelands (especially in the north), wetlands (around Lake Victoria), and fish stocks (Lake Victoria). These problems and their adverse impact on production and conservation will intensify with rising demand for food and energy. Hence, in supporting its economic growth strategy, the Government must take into account the associated economic implications of environmental problems (e.g. forest and rangeland degradation) which could threaten the sustainability of overall economic growth. 4. The Government launched the preparation of a National Environment Action Plan (NEAP) in 1990. A NEAP Secretariat was established to manage the country-driven and highly participatory process of assessing problems, defining issues, and proposing remedial actions. It has been guided by a Cabinet Steering Committee and a Technical Advisory Committee, with financial and technical support from donors and international NGOs, including USAID (lead support), UNDP, UNSO, WRI, IUCN, and the World Bank. The process involved setting up task forces (consisting of representatives from Government, academia, NGOs, and the private sector), regional workshops, and culminated in a national conference (November 1992). 5. The over-riding priority established in the NEAP is to introduce an institutional framework and a system to ensure that environmental problems do not escalate beyond the capacity to manage them, and to address the most pressing environmental concerns. The NEAP identifies the following basic objectives within this broad priority: sustainable development through appropriate environmental management, integration of 2 environmental concerns into all development policies, preservation or restoration of the equilibrium of ecological processes, and raising public participation in environmental affairs. The proposed NEAP package, consisting of a national environment policy, umbrella environment legislation, and an institutional structure to oversee implementation of the NEAP, is designed to meet these priorities and objectives. The Country Environment Strategy Paper (CESP), prepared by the Bank, re-affirms these priorities by calling attention to the broad issues of deforestation and the degradation of Lake Victoria. It emphasizes the urgency of building capacity for managing the environment and addressing these issues. 6. The NEAP defines the public sector's mandate as inducing users of environmental and natural resources in rural and urban areas to utilize resources in a way that supports sustainable economic development, in part through conservation of these resources. Interventions to this effect can be grouped into four main categories; (i) establishment and enforcement of regulations designed to control resource use directly, e.g., through limits on production from forests or fish stocks, pollution of water bodies, or drainage of wetlands; (ii) price, taxation measures, and other incentives, such as increasing stumpage fees to restrict consumption of wood products; (iii) investments by central and local governments to redress specific environmental problems, e.g. rehabilitation of degraded forests or wetlands; and (iv) together with NGOs and community organizations, dissemination of technical and other information regarding environment and natural resources to raise public awareness of problems and measures needed to address them. 7. The Government recognizes that it is essential to build a capacity to design and implement comprehensive policy, regulatory, incentives, and monitoring programs. This includes strengthening technical and administrative capacity at central and district/community levels to effectively plan and implement these programs. Unless this work is initiated early on, the prospects of containing future environmental and natural resource degradation will be diminished. 8. The institutional framework for implementation of the NEAP, which was approved by the Cabinet and is specified in the National Environment Statute, 1995, involves the establishment of a National Environmental Management Authority (NEMA), with direct oversight provided by NEMA and an independent Board of Directors under a Cabinet Committee. Options for alternative institutional arrangements were considered which included three different institutional structures: (i) a Presidential Commission on Environment; (ii) an entirely new Ministry; (iii) an autonomous Authority. After careful evaluation of the options, the autonomous Authority structure was chosen as the most efficient institutional arrangement and NEMA was created. NEMA would advise Government on environmental policy based on its monitoring of the state of the environment, set environmental standards, oversee the design and implementation of the regulatory and incentives systems, and promote the integration of environmental objectives into development planning at central and local levels. To perform these functions, NEMA would establish close links with the line ministries which implement and enforce regulations and incentives. NEMA also would establish an outreach program to 3 assist in strengthening the capacity of district administrations for environment management and communities to address local natural resource management concerns. 9. Project Objectives. The objectives of the project are to: (i) build a capacity for environment management at national, district, and community levels through the establishment of the National Environmental Management Authority (NEMA);and (ii) strengthen selected districts (oriented toward support for the community component on natural resource management), and initiate a process for communities to address natural resource degradation problems of local concern. 10. Project Description. The project would support the first five-year phase of a longer-term national environmental program, and would consist of two main components: Institutional Support at the National Level (US$8.9 million excluding contingencies), consisting of two sub-components; i) National Environmental Management Authority (NEMA) (US$8.4 million), and ii) Environmental Degradation Studies (US$0.5 million). The Institutional Support component would focus directly on capacity building for environmental management at the national level. It would support the establishment of NEMA as a semi-autonomous agency under the Ministry of Natural Resources, with horizontal linkages to sector ministries, academic institutions, NGOs, and with vertical linkages to districts and communities. Oversight of NEMA will be provided by a Policy Committee made up of nine Ministers and chaired by the Prime Minister. Support for strengthening district environmental management in six initial districts would be provided through NEMA, as well as through district environment officers and district technical planning committees. NEMA's main programs would: (i) enhance the policy and regulatory framework at the national level; (ii) establish an environmental assessment program to ensure that all development policies and strategies at the national, district and local levels are environmentally sound and sustainable; (iii) develop an environmental information system; (iv) build capacity for environmental economic analysis to allow -NEMA to coordinate and harmonize sectoral interests and conflicts, evaluate proposals for environmental protection standards and to carry out environmental assessment work; (v) promote environmental education and awareness; and (vi) establish an outreach program to support district environment policy and management. Also under the Institutional Support component resources will be made available to support studies aimed at identifying and understanding the location, nature and severity of the most pressing environmental problems identified during the NEAP process, with the goal of designing remedial solutions to address the problems in both the short-term and long-term. Possible areas of study include soil and rangeland degradation, fuelwood shortages, loss of biodiversity and deforestation. The District and Community Environmental Capacity Building (US$3.5 million excluding contingencies) component would support the creation of an environmental management system that integrates and strengthens links among all levels and sectors of government and non-government organizations thereby building the capacity for coordinated strategy and policy formulation and management of natural resources at all levels. This will be achieved through three main activities: (i) institutional capacity building at the district and sub-county level for environmental management (through support for basic equipment such as vehicles, bicycles, computers, office supplies, and funds for office renovations); (ii) training of district and community 4 personnel in environmental management technologies; and (iii) identification and funding of micro-projects identified by the district environmental management system process. These activities are linked by a community interactive planning process (i.e. Participatory Rural Appraisal), that will identify micro-projects and enable local governments to base their development and financial plans on community- identified needs and priorities. The general criteria for the micro-projects include the following: (i) micro-projects should address priority environmental problems which have been clearly identified by the community; (ii) benefits of the project should be broadly targeted to the community, (iii) projects must demonstrate a high degree of community initiative and ownership including willingness to pay in cash, kind or labor for a meaningful degree of project costs, not less than 30 percent of the project investment; (iv) projects must be technically feasible and economically beneficial; and (v) micro-projects should be generated from a sub-county development plan or environmental action plan. The total funds available under the micro- project component have been calculated by allowing for US$10,000 per sub-county at the end of each planning cycle. 11. Project Implementation. The institutional support component would be implemented at the national level by NEMA in coordination with the sector ministries, academic institutions, NGOs and resource user groups, and at the district level by the district administration with the assistance of NEMA and with direct project support. The environmental degradation studies would be contracted out to local research organizations. Under the community and district environmental capacity building component, training and capacity building at the district level will be provided and coordinated through NEMA. District staff will be responsible for capacity building and training at the sub-county level. Community initiated micro-projects would be identified, prepared, implemented and co-financed by the communities with assistance from the sub- county and district administration and NEMA District Coordination Unit. 12. Project Financing. Total project cost is estimated at US$15.2 million (including US$0.7 million for the PPF). The foreign exchange component of the project is estimated at US$5.0 million, which is equivalent to 33 percent of the total project cost. The proposed IDA credit of US$11.8 million would finance about 78 percent of project costs, net of duties and taxes. A breakdown of costs and the financing plan are shown in Schedule A. Amounts and methods of procurement and disbursements, and the disbursement schedule, are shown in Schedule B. A timetable of key processing events and the status of Bank group operations in Uganda are given in Schedules C and D respectively, and a Map- IBRD 26375, is attached. The Staff Appraisal Report, No. 1401 5-UG is being distributed separately. 13. Project Sustainabilty. The major sustainability questions relate to (i) the role and effectiveness of the proposed NEMA; (ii) district administrative capacity; (iii) interactive planning and implementation capacity in support of community initiatives; and (iv) continued Government commitment and financing. The issues regarding NEMA would be addressed during implementation through agreed mechanisms and its role would be reviewed at the mid-term review. Sustainability at the district level will be enhanced by S relating environmental management to administrative capacity and initially only 6 districts are being supported under the project. Building capacity at the district and community level through enhanced interactive planning techniques is one of the objectives of the project and will therefore be addressed during implementation. The President of Uganda has stated that environmental management is a high priority for the Government. Efforts are being made to ensure that this function is prioritized and integrated into the overall development program, and mechanisms/conditionality are being introduced to implement agreements essential to project success. In terms of fiscal/budgetary burden for the Government, the up-front costs would be only US$ 1.8 million (UgSh 1.70 billion excluding duties and taxes) over the next five years. The district and community component would eventually be self-financing i.e. beneficiary contributions. 14. Lessons Learned from IDA Involvement. There have been no previous IDA projects in Uganda directly focused on the environment, but the Forestry Rehabilitation Project and the Bwindi GEF Project have important environmental impacts. Experience from the Forestry Rehabilitation Project along with regional experience with environmental projects provide the following lessons: (i) widespread participation in preparation and implementation and community ownership of the project is essential for its success; (ii) project interventions should be simple, so that the communities can manage them; (iii) the program should expand only as the absorptive capacities of the districts and communities improve; and (iv) building capacity of the communities, participating NGOs and the Government's institutional structures are essential to the success of development intervention. These lessons have been incorporated into the project design and proposed implementation arrangements. For instance, community participation has a pivotal role in carrying out project activities and capacity building at all levels is one of the primary project objectives. 15. Country Assistance Strategy and Rationale for IDA Involvement. The project would support the objectives of both the Government's development strategy and the Bank's Country Assistance Strategy (CAS) discussed by the Board on June 1, 1995, which seek to reduce poverty within a framework of economic stability, and support the protection of the environment and natural resources. The primary objective of the Bank's assistance strategy for Uganda is to reduce poverty. The key elements of this strategy are to: (i) maximize labor intensive economic growth with the view to maximizing employment and income opportunities; (ii) strengthen economic and social infrastructure; (iii) support human resource development; and (iv) enhance the provision of public services. The strategy includes strong gender and environmental protection aspects. The main thrust of IDA's strategy over the medium term is to support government's efforts to accelerate economic growth. The link between this strategy and environmental problems which this project addresses is sustainability. Sustainable growth and economic development requires that natural resources are used judiciously and that priority environmental problems are addressed at an early stage. Sustainable economic growth also requires adequate human resources and capacity at all levels of government. The development of both these aspects are primary objectives of the project. 6 16. Agreed Actions. The following are the conditions of credit effectiveness, (i) the GOU would prepare and adopt an action plan and timetable for actions required to eliminate any overlap or duplication of functions and tasks of the Department of Environment and NEMA; (ii) Government would ensure that the 1995/96 national budget contains provision for funding NEMA in line with NEMA's annual work plan and budget, (iii) evidence that the GOU had established a Project Account and had deposited its share of funding representing three month's operating expenses; (iv) a rudimentary structure of NEMA consisting of the following key NEMA staff, Executive Director and the four division chiefs, would have been appointed; and (v) a Project Implementation Plan has been finalized. 17. Poverty Category. While this project is not a targeted poverty reduction initiative, the implications for poverty alleviation are significant. The establishment and implementation of improved sustainable production practices and improved agriculture, forestry and livestock production would contribute to a better standard of living and quality of life for the communities involved in the project. The association between poverty and poor land management means that serious efforts to improve land management will tend to be targeted to poorer households and communities. Ultimately, an increased capacity for natural resource management would result in welfare gains and would therefore have a significant positive impact on efforts to alleviate poverty. 18. Environmental Aspects. The proposed project would help establish the necessary framework and conditions for addressing environmental objectives and concerns in Uganda. Therefore the project would have a positive environmental impact and is classified as Category C. 19. Program Objective Categories. The project's principal contribution is toward environmentally sustainable development. It would also directly address the program objective of local capacity building and human resource development, with an emphasis on participatory natural resource management at the community level. Through its impact on sustainable resource use and growth the project would directly address the poverty reduction objective. 20. Participatory Approach. The project has been developed in a highly participatory way. It is an outcome of the NEAP process which involved extensive discussions at the community level, regional workshops covering all of Uganda's 39 districts and considerable inputs from technical task forces. In addition there was extensive involvement of representatives of academia, non-governmental organizations and the private sector. This culminated in a National Conference and the formal approval of the NEAP by the Government in January, 1994. The proposed project is a result of that process and involved the formation of four task forces which held extensive discussions at the national, district, sub-county and community levels. The IDA missions also had consultations at all levels and, in particular, worked closely on its visits with the preparation teams and with the NEAP/NEMA Secretariat. A GOU proposed project launch workshop will continue this participatory approach in the early stages, and 7 subsequently, when the district and community component starts, the whole process of identifying community-based natural resource management initiatives involves continual local community participation. 21. Benefits. The project intends to build capacity and improve the management of environmental resources by both the Government and the people in an effort to achieve sustainable development through appropriate environmental management. The benefits from the project would be several. First, it would assist in laying the basis for long-term sustainable development by strengthening environmental management capacity and by increasing national and local awareness of the environmental consequences of economic policies and actions. Specifically the development of environmental impact assessments and the design of environmental awareness and education programs at all levels will result in more information on the environment becoming available. Second, environment management capacity building at the district level will facilitate the integration of environmental concerns into overall district development plans - an important priority as the decentralization process to the district level gathers momentum in Uganda. Third, at the community level, the project will establish a process by which local communities will be empowered to achieve sustainable management of their natural resource base and to take, through the grant funding supported by local contributions, actions to both reverse local degradation and improve the management of limited resources in a sustainable fashion. Finally, the environment and natural resource management experience gained under the project could be extended to other parts of the economy not covered under the project. Thus, there is the potential benefit of replicability. Uganda's capacity to maintain and assess the sustainable utilization of its natural endowments would be strengthened, as would its economic development potential resulting in overall welfare gains. 22. Risks. Inherently there are both policy and financial risks in a project which contains a number of innovative features. Developing a national and district framework, particularly with a strong emphasis on local participation is time-consuming and there are risks that overall project implementation will lag behind the modest implementation plan set up. Risks to the project on the NEMA side are: (i) the possibility that the Authority will become isolated and bureaucratic and begin to exist per se. Provision has been made for annual reviews and a comprehensive mid-term review, for relatively intensive participatory supervision during the early stages of the project's life; (ii) the continued existence of overlapping functions in the Directorate of the Environment, although provision has been made for a review of possible duplicating functions as early as July, 1995 and elimination thereof within sixty days; and (iii) lack of Government support in the form of challenges to NEMA's autonomy and inadequate funding. Other risks are associated with the project's approach to capacity building at the district and community levels and with implementation of the micro-projects. The local capacity to design and implement natural resource management initiatives currently is limited. However, experience with other, limited local and NGO initiatives (not necessarily specifically in the context of the proposed project), indicated a responsiveness at the community level which the proposed project intends to use as models for implementation. 8 23. Recommendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and I recommend that the Executive Directors approve it. James D. Wolfensohn President Attachments Washington, D.C. August 14, 1995 9 Schedule A Government of Uganda Environment Management Capacity Building Project Project Cost Summary (US$ million) Component | Local Foreign Total Institutional Component NEMA Front Office 2.2 1.3 3.5 Policy, Planning and Legal 0.6 - 0.6 Information and Monitoring 2.1 1.2 3.3 Education, Awareness and 0.6 - 0.6 Training Finance and Administration 0.4 - 0.4 Studies 0.1 0.4 0.5 Sub-total 6.0 2.9 8.9 District and Community Develpment Capacity Building 0.8 0.3 1.1 District and Comm. Support 0.6 0.6 1.2 Micro-Projects 1 .0 0.2 1.2 Sub-total 2.4 1.1 3.5 PPF 0.3 0.4 0.7 Total Base Cost 8.7 4.4 13.1 Physical Cont. 0.8 0.4 1.2 Price Cont. 0.7 0.3 1.0 Total Project Cost 10.2 5.0 15.2 Notes: 1. Amounts are inclusive of duties and taxes 2. Totals may not add up due to rounding Financing Plan (US$ million) Local Foreign Total IDA a/ 6.8 5.0 11.8 Government of Uganda 3.4 - 3.4 Total 10.2 5.0 15.2 Note a/ includes US$0.3 million Project Preparation Facility lo Schedule B Page 1 of 2 GOVERNMENT OF UGANDA ENVIRONMENT MANAGEMENT CAPACITY BUILDING PROJECT Summary of Proposed Procurement Arrangements (US$ million) Category Procurement Method ICB NCB Other NIF Total 1. Civil Works - 0.4 - 0.4 (0.3) (0.3) 2. Goods Vehicles 0.6 - - 0.6 (0.4) (0.4) Office Equipment 1.2 - 0.2 - 1.4 (0.9) (0.2) (1.1) Software materials, - 0.6 0.5 - 1.1 supplies (0.4) (0.4) (0.8) 3. Training and T.A. _ _ _ Training - - 2.0 - 2.0 (2.0) (2.0) Technical Assistance - - 1.0 - 1.0 (1.0) (1.0) 4. Miscellaneous Incremental Staff - - 3.2 0.5 3.7 (2.4) (-) (2.4) Operations & Maintenance - - 2.7 0.2 2.9 (1.8) (-) (1.8) Micro-projects - - 1.4 - 1.4 (1.3) (1.3) PPF - 0.1 0.6 - 0.7 (0.1) (0.6) (0.7) Total Procurement Costs 1.8 1.1 11.6 0.7 15.2 (1.3) (0.8) (9.7) ( (11.8) Notes: 1. Figures in parentheses are the respective amounts financed by IDA. 2. "Other" comprises non-ICB/NCB and non-NIF (non-IDA funded) procurement. 3. Category totals include duties and taxes. 4. Totals may not add up exactly due to rounding. ii SCHEDULE B Page 2 of 2 GOVERNMENT OF UGANDA ENVIRONMENT MANAGEMENT CAPACITY BUILDING PROJECT Summary of IDA Disbursement Schedule Category Amount % of Expenditures (US$ million) 1. Civil works 0.3 100 % of foreign expenditures and 95% of local expenditures 2. Vehicles 0.4 100 % of foreign expenditures and 95% of local expenditures 3. Office Equipment 0.9 100 % of foreign expenditures and 90% of local expenditures 4. Materials and Supplies 0.7 100 % of foreign expenditures and 90% of local expenditures 5. Training and T.A. 2.6 100 % 6. Incremental Staff 2.0 65 % of local expenditures 7. Operations & Maintenance 1.5 100 % of foreign costs plus 55 % of local expenditures 8. Micro-projects 1.1 95% 9. PPF 0.7 100 % I 0. Unallocated 1.6 TOTAL 11.8 Note: All amounts and percentages are exclusive of taxes. The Unallocated category is equal to the sum of physical and price contingencies which have been taken out of the amounts for the other categories. Estimated IDA disbursements, 1/ (US$ Million) IDA Fiscal Year 1996 1997 1998 1999 2000 2001 Annual 2.2 2.7 2.3 2.0 1.8 0.8 Cumulative 2.2 4.9 7.2 9.2 11.0 11.8 Note: 1/ the disbursement profile includes the PPF in FY96 12 SCHEDULE C UGANDA ENVIRONMENTAL MANAGEMENT CAPACITY BUILDING PROJECT TIMETABLE OF KEY PROCESSING EVENTS (a) Time taken to prepare: 14 months (b) Prepared by: NEAP/NEMA Secretariat (c) First IDA Mission: September, 1993 (d) (i)Appraisal Mission departure: June 27, 1994 (ii)Post-Appraisal Mission departure: January 23, 1995 1/ (e) Negotiations: June 19-23, 1995 (f) Planned Effectiveness Date: November 15, 1995 (G) Relevant ICRs/PPARS: None Note:- 1/ The Appraisal mission, which visited Uganda, comprised of Messrs. J. Evans (Mission Leader and Senior Management Specialist, AF2AE), N. Jodha (Community Development Specialist, ENVSP), R Carroll (Consultant, Financial Analyst) and Ms. N. Johnson (Environmental Specialist, AF2AE). The Post-Appraisal mission consisted of the above less Mr. N. Jodha. 13 SCHEDULE D Page I of 2 STATUS OF BANK GROUP OPERATIONS IN UGANDA A. STATEMENT OF BANK LOANS AND IDA CREDITS (as of June 30, 1995) x.;. ...............~~~~~~~~~~~~~~~~~*.:. ........ . ... One (1) Loan and forty two (42) Credits fully disbursed, 8.40 1047.83 6.24 of which SECALs, SALs and Program Loans/Credits: (572.18) Cr.18690 1988 Uganda South West Ag. Rehab. 10.00 4.38 Cr.19340 1988 Uganda Health Rec. 42.50 7.32 Cr.19910 1989 Uganda Telecom II 52.30 4.97 Cr.20880 1990 Uganda Poverty & Soc. Costs 28.00 1.05 Cr.21240 1990 Uganda Water Supply 11 60.00 55.44 Cr.21760 1991 Uganda Livestock 21.00 18.10 Cr.21900 a/ 1991 Uganda Ag. Sector Adj. Credit 100.00 7.33 Cr.22060 1991 Uganda Urban 1 28.70 18.95 Cr.22680 1991 Uganda Power III 125.00 96.60 Cr.23150 1992 Uganda Enterprise Development 41.85 44.14 Cr.23620 1992 Uganda Northern Reconstruct. 71.20 57.80 Cr.24180 1993 Uganda Econ. & Financial Management 29.00 12.55 Cr.24240 1993 Uganda Agric. Extension Prog. 15.79 9.55 Cr.24460 1993 Uganda Agric. Res. & Trg. 25.04 20.50 Cr.24930 1993 Uganda Primary Educ. 52.60 51.56 Cr.24960 a/ 1993 Uganda Financial Sector Adjustment Cr. 100.00 57.49 Cr.25830 b/ 1994 Uganda Small Towns Water 42.30 47.61 Cr.25870 1994 Uganda Transport Rehab. 75.00 82.77 Cr.26030 1994 Uganda Sexual Trans. Infections 50.00 55.19 Cr.26080 a/ 1994 Uganda SAC 11 80.00 46.36 Cr.26090 1994 Uganda Cotton Sector Development 14.00 13.75 Cr.26081 a/ 1994 Uganda SAC II 0.60 0.63 Cr.26790 1995 Uganda District Health 45.00 48.40 Cr.27360 b/ 1995 Inst. Capacity Building 36.40 39.16 Total 8.40 2194.11 801.60 of which repaid 8.40 45.44 Total held by Bank & IDA 0.00 2148.67 Amount sold 8.32 of which repaid 8.32 TOTAL Undisbursed 801.60 a/ Indicates SAL/SECAL or Program Loan/Credit. b/ Not yet effective. 14 SCHEDULE D Page 2 of 2 B. STATEMENT OF IFC INVESTMENTS [N UGANDA (as of June 30, 1995) 199. A va r P 0. ... *. =. 1993 AEF-Clovergem Canning Preserv & Process 0.85 0.00 0.85 1993 AEF-NGE-GE Canning Preserv & Process 0.65 0.00 0.65 1993 AEF-NILE ROSES Agricultural & Livestock Prod. 0.30 0.00 0.30 1995 AEF-POLYPACK Spinning Weaving & Finishing 1.00 0.00 1.00 1995 AEF-RAINBOW Other 0.79 0.00 0.79 1994 AEF-RWENZORI Real Estate & Business Service 0.81 0.19 1.00 1994 AEF-SKYBLUE Hotels & Restaurants 0.51 0.64 1.15 1995 CLOVERGEM CELTEL Communication 4.96 0.00 4.96 1984,1993 DFCU Development Finance Companies 0.00 0.98 0.98 1993 JUBILEE Insurance Companies 0.00 0.10 0.10 1965 MULCO Spinning, Weaving& Finishing 4.32 0.71 5.03 1984 TAMTECO Mfg of Food Products NEC 1.62 0.00 1.62 1972 TPS Tourism Services 1.11 0.00 1.11 1994 Uganda Leasing Leasing Companies 0.00 0.32 0.32 1984 Uganda Sugar Cocoa Chocolates, Sugar 8.00 0.00 8.00 1985 Uganda Tea Food Products NEC 2.81 0.00 2.81 Total gross commitments 27.73 2.94 30.67 Less: Repayments, cancellations, exchange adjustments, terminations and sales 9.76 0.71 10.47 Total Commitments now held by IFC: 17.97 2.23 20.20 Total Undisbursed 6.31 0.00 6.31 Total Outstanding IFC 11.66 2.23 13.89 15 Schedule D Page 3 of 3 UGANDA: IMPLEMENTATION ISSUES 1. The IDA portfolio for Uganda as of June 30, 1995 consists of 23 projects with a total commitment of about US$1.1 billion. Of these, 20 are investment projects, with an undisbursed amount of about US$700 million. Following Government's decision to classify projects in the development budget into core and non-core in order to make more effective use of scarce counterpart funds, four projects where classified as non-core in FY94. Following restructuring, two project (First Health and Livestock) have been declared core. Of the remaining two projects, one (Enterprise Development Project) has been restructured and is awaiting to be declared core, while the other one (Public Enterprises Project) has been closed. As a result, all projects in the portfolio are now in the Government's core program. 2. Over the last six years, the investment portfolio showed a trend of rapidly increasing undisbursed balances, which have more than doubled from about US$300 million in FY89. This is partly an indication of the country's limited implementation capacity. However, the portfolio's modest performance is also due to its relatively young age, with 30 percent of the commitments for investment operations (in value) being committed for projects approved in FY94 and FY95. In addition, time taken towards meeting conditions of credit effectiveness has been excessive. The recent Country Portfolio Performance Review (CPPR) in April 1995 identified other implementation issues which have undermined progress during the last year, and actions to resolve these problems have now been agreed. These include an agreement on new guidelines for the selection of auditors, the strengthening of activities of the External Aid Coordination Department in the Ministry of Finance and Economic Planning through the establishment of an exclusive desk for coordinating IDA projects, and a more active role of the Resident Mission in the processing of procurement requests. 3. In the ongoing Annual Review of Portfolio Performance (ARPP), there are only two projects rated unsatisfactory in terms of implementation progress (and none in terms of development objectives): the First Urban (Cr. 2206-UG) and the Enterprise Development projects (Cr. 2315-UG). While the First Urban project, despite the recent restructuring, is likely to take longer to turn-around, the Enterprise Development Project is likely to be upgraded by the supervision mission which is currently in the field, in view of progress made in hiring investment bankers to assist in the privatization of the Uganda Commercial Bank (UCB) and UPTC (Uganda Posts and Telecommunications Corporation). 4. Although some projects in the Portfolio still exhibit high disbursement lags (i.e. Transport Rehabilitation Project, Water Supply II, Power III, Livestock), in most cases this was due to delays in procurement, which are now being addressed. Close supervision of slow disbursing projects during the course of the fiscal year, together with the planned more active role of the Resident Mission in dealing with procurement and disbursement issues, should speed up project implementation considerably. SUDAN A UGANDA w f . \-N_./ 2 ENVIRONMENT MANAGEMENT g - X Jb'Y CAPACITY BUILDING PROJECT ) ~~~~~~~~~KITGUM J! TOt U M KDISTRICT CAPITALS o .'ARUA KOIDO * NATIONAL CAPITAL j RUA GULU 'N DISTRICT BOUNDARIES ZAIRE . . RIVERS | NEBBI,, ' ' MOROTO\ - INTERNATIONAL BOUNDARIES LIRA . LIEA ,, ~~~~~~~~~~~~~\ *Dr.rl ,uo eoo,c,de .;thD,str,r Copeto!s wrthooe -2PAC4 evetp,2n FoPool S 2 D.so,cI Top!l of Kgborole Dorc, ?- APAC MASINDI &SOROTI j y ~~~~~~~~~~~~~~~~~~~~KUM. Iootoo ,Ia / HOlMA,., KUMi KAPCHORWAf / fi 5 Tti W, lVd So-k G-o, PALLISA or adorsemn *1 KIBOGA KAMULI @ t ~~~~~~~~~~~LUWERO -*KIBALE *, BUNDIBUGYO 4., ~~~~~~~~~~~~~~~~~~TOROROG.I -FORT MUBENDE IGANGA _______M_ t___ 50 ___ 50 PORTAL KAMPALA JINJA- ( MESO 50 / KASESE -, MUKONO MPIGI / KENYA tMASAKA KALANGALA | BUSHENYI j , . ~~~~MBARARA l. ?RUKUNGIRI N ARAKAI < *LABAt K. TANZANIA N RWANDA N, i2 ~ ~ ~ ~~~ ~~~~~~~~~~~~~~~~~~~~ N Oak|_ I 1,