Document of The World Bank FOR OFFICIAL USE ONLY Report No: RES10488 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SOCIAL SAFETY NETS PROJECT (IDA CREDIT NO: IDA-4510 AND IDA GRANT NO: IDA-H424) IN THE INITIAL AMOUNT OF SDR10.6 MILLION (US$16.7 MILLION EQUIVALENT) AND A RESTRUCTURED AMOUNT OF SDR8.96 MILLION (US$14.10 MILLION EQUIVALENT) AND (IDA CREDIT NO: IDA-4750 AND IDA GRANT NO: IDA-H579) IN THE INITIAL AMOUNT OF SDR31.46 MILLION (US$47.8 MILLION EQUIVALENT) AND A RESTRUCTURED AMOUNT OF SDR29.65 MILLION (US$45.05 MILLION EQUIVALENT) TO THE GOVERNMENT OF NEPAL SEPTEMBER 30, 2013 SOCIAL ASIA SOCIAL PROTECTION UNIT SOUTH ASIA REGION 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. ABBREVIATIONS AND ACRONYMS AF Additional Financing CCF Community Challenge Fund DDC District Development Committee DOA Department of Agriculture GON Government of Nepal MOF Ministry of Finance MoFALD Ministry of Federal Affairs and Local Development MoAC Ministry of Agriculture and Cooperatives MIS Management Information System NARC Nepal Agriculture Research Council NPC National Planning Commission ORAF Operational Risk Assessment Framework PAF Poverty Alleviation Fund PDO Project Development Objective RCIW Rural Community Infrastructure Works SAFANSI South Asia Food And Security Nutrition Initiative SIEF Strategic Impact Evaluation Fund SSNP Social Safety Nets Project VDC Village Development Committee WB World Bank WFP World Food Programme Regional Vice President: Philippe H. Le Houerou Country Director: Johannes C.M. Zutt Sector Manager: Pablo Gottret Task Team Leader: Jasmine Rajbhandary/ Frauke Jungbluth 2 NEPAL Social Safety Nets Project CONTENTS A. SUMMARY 2 B. PROJECT STATUS 3 C. PROPOSED CHANGES 5 ANNEX 1: RESULTS FRAMEWORK AND MONITORING 14 ANNEX 2: OPERATIONAL RISK ASSESSMENT FRAMEWORK 20 3 DATA SHEET Nepal Social Safety Nets Project (P113002) SOUTH ASIA SASSP Report No: RES10488 Basic Information Emergency Recovery Project ID: P113002 Lending Instrument: Loan Regional Vice President: Philippe H. Le Houerou Original EA Category: Partial Assessment (B) Country Director: Johannes C.M. Zutt Current EA Category: Partial Assessment (B) Sector Director: Jesko S. Hentschel Original Approval Date: 30-Sep-2008 Sector Manager: Pablo Gottret Current Closing Date: 30-Sep-2013 Team Leader: Jasmine Rajbhandary Borrower: Responsible Ministry of Federal Affairs and Local Development, Department of Agriculture, Agency: Ministry of Agriculture Development Restructuring Type Form Type: Full Restructuring Paper Decision Authority: Regional Vice President Approval Restructuring Level 2 Explanation of The original project was Level: Approval Authority: approved on September 30, 2008 with a Closing Date of September 30, 2011. With the approval of the Additional Financing on May 26, 2010, the Closing Date for the original project was also extended to match that of the Additional Financing, until September 30, 2013. The proposed request for extension would extend the Closing Date until September 30, 2014, which means it is an extension of more than two years from the original Closing Date, and therefore requires RVP approval. Page 4 of 25 Financing ( as of 24-Jul-2013 ) Key Dates Approval Effectiveness Original Revised Project Ln/Cr/TF Status Signing Date Date Date Closing Date Closing Date P113002 IDA-45100 Effective 29-Sep-2008 02-Nov-2008 28-Jan-2009 30-Sep-2011 30-Sep-2013 P113002 IDA-47500 Effective 26-May-2010 18-Aug-2010 06-Oct-2010 30-Sep-2013 30-Sep-2013 P113002 IDA-H4240 Effective 29-Sep-2008 02-Nov-2008 28-Jan-2009 30-Sep-2011 30-Sep-2013 P113002 IDA-H5790 Effective 26-May-2010 18-Aug-2010 06-Oct-2010 30-Sep-2013 30-Sep-2013 P113002 TF-93058 Closed 02-Nov-2008 02-Nov-2008 28-Jan-2009 30-Sep-2011 30-Sep-2010 Disbursements (in Millions) % Cancelle Disburse Undisbur Project Ln/Cr/TF Status Currency Original Revised Disburse d d sed d P113002 IDA-45100 Effective USD 2.70 2.70 0.00 0.97 1.60 36 P113002 IDA-47500 Effective USD 23.30 23.30 0.00 14.85 8.82 64 P113002 IDA-H4240 Effective USD 14.00 14.00 0.00 12.08 1.67 86 P113002 IDA-H5790 Effective USD 24.47 24.47 0.00 24.05 1.22 98 P113002 TF-93058 Closed USD 5.00 5.00 0.00 5.00 0.00 100 Policy Waivers Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ] respects? Does the project require any policy waiver(s)? Yes [ ] No [ X ] A. Summary of Proposed Changes The proposed restructuring entails an extension of the Closing Date and cancellation which are critical to enable the full implementation of pilot activities on social safety nets in Nepal. Evaluation results of the activities will form the basis of government decision-making on key areas of improving nutritional outcomes and safety nets for the most vulnerable. Due to the small size of the remaining allocation, it is unlikely to affect the disbursement profile. The following changes are proposed to reflect agreements reached during the implementation support review in May 2013: (i) An extension of the Closing Date from September 30, 2013 to September 30, 2014, and the related adjustments in the implementation schedule reflecting the proposed extension; (ii) Cancellation of SDR 3,444,000.00 (US$ 5.34 million equivalent) with cancellations detailed as follows: a. SDR 550,000.00 from IDA Credit 4510 b. SDR 1,086,000.00 from IDA Grant H424 Page 5 of 25 c. SDR 1,015,000.00 from IDA Credit 4750 d. SDR 793,000.00 from IDA Grant H579 While all the four IDA financed sources will remain open, this cancellation would leave the project with IDA Credit 4510 and IDA Credit 4750 as financing sources for the implementation of activities during this extension period because Grant funds would have been used. These cancellations will also be reflected in changes to the Financing Plan and changes in Disbursement Estimates. (iii)The addition of two new intermediate indicators in the Results Framework to measure the outcomes under sub-component 1b - “Completion of CCF implementation as designed”, and under sub-component 1c - “Number of districts in which cash transfer beneficiaries receive at least one payment via branchless banking”. Change in Implementing Agency Yes [ ] No [ X ] Change in Project's Development Objectives Yes [ ] No [ X ] Change in Results Framework Yes [ X ] No [ ] Change in Safeguard Policies Triggered Yes [ ] No [ X ] Change of EA category Yes [ ] No [ X ] Other Changes to Safeguards Yes [ ] No [ X ] Change in Legal Covenants Yes [ ] No [ X ] Change in Loan Closing Date(s) Yes [ X ] No [ ] Cancellations Proposed Yes [ X ] No [ ] Change to Financing Plan Yes [ X ] No [ ] Change in Disbursement Arrangements Yes [ ] No [ X ] Reallocation between Disbursement Categories Yes [ ] No [ X ] Change in Disbursement Estimates Yes [ X ] No [ ] Change to Components and Cost Yes [ ] No [ X ] Change in Institutional Arrangements Yes [ ] No [ X ] Change in Financial Management Yes [ ] No [ X ] Change in Procurement Yes [ ] No [ X ] Change in Implementation Schedule Yes [ X ] No [ ] Other Change(s) Yes [ ] No [ X ] Appraisal Summary Change in Economic and Financial Analysis Yes [ ] No [ X ] Appraisal Summary Change in Technical Analysis Yes [ ] No [ X ] Appraisal Summary Change in Social Analysis Yes [ ] No [ X ] Appraisal Summary Change in Environmental Analysis Yes [ ] No [ X ] Appraisal Summary Change in Risk Analysis Yes [ ] No [ X ] Page 6 of 25 B. Project Status SSNP was approved on September 30, 2008 and an Additional Financing (AF) was approved on May 26, 2010. Total International Development Association (IDA) financing is US$69.5 million, including US$16.7 million under the original project and US$47.8 million under the AF, and an additional grant of US$5 million provided from the Food Price Crisis Response (FPCR) Trust Fund (TF). The project was designed to enable the Government of Nepal to improve access to nutritious food for highly food insecure households in the short term and to create opportunities for improved agriculture production in food insecure districts in the long run. As such, the project components focus on supporting immediate responses through public works, medium term responses through seed and fertilizer support, longer term responses through safety net systems and nutrition related behavior change through a Community Challenge Fund. The project has made good progress to date and is on track to achieve its objective. All Project Development Objective (PDO) level indicators have been met. Progress towards the achievement of the PDO is Satisfactory, and has been throughout the project. Other ratings have been MS or higher for the last year, including an upgrade from Moderately Satisfactory to Satisfactory on Financial Management. In fact, the project has improved both the quality and the timeliness of financial management reporting. The project has no outstanding audit reports. However, currently, the third trimester Implementation Progress Report (IPR) of FY2012/13 is overdue. Disbursement is over 80 percent of the total allocation. Since its initiation in 2008, the project has supported over three million people across the country. Component 1a : The Public Works sub-component is focused on the provision of the short term response to the food insecurity in Nepal, through the provision of food/cash for work programs. It was implemented by the Ministry of Federal Affairs and Local Development (MoFALD) with World Food Programme (WFP). Under the Public Works Program, as of May 2012, over 34,000 metric tons (MT) of food had been distributed and US$3.15 million has been disbursed as cash. Over 98 percent of the supported households have reported an increased ability to meet their food needs. The sub-component has surpassed its target of 140,000 households benefiting from assets created for agriculture production activities, as well as its target for physical infrastructure development achieving 405 improved community water points constructed or rehabilitated under the project against a target of 200, and 851 km of rural roads rehabilitated against a target of 600 km. During implementation of this sub-component, the household food consumption score was at 48, above the target of 42 for poor and food insecure households in food insecure districts. The food consumption score is a composite score based on dietary diversity, food frequency, and relative nutritional importance of different food groups. This sub-component is completed and no additional funds are required, aside from those expenditures which have been made but not yet claimed. Component 1b: The Community Challenge Fund (CCF) sub-component is a pilot through which performance grants are provided to community organizations for the purpose of improving maternal and young child nutrition. While progress has been slower than expected under this sub-component, this was largely due to delays in the release of the Government budget in the last fiscal year. The budget release has now taken place. Further, all necessary preparation work for the CCF is being carried out in partnership with the Poverty Alleviation Fund (PAF). Implementation is expected to be completed by September 30, 2014 which is why the extension is required. The Memorandum of Agreement between PAF and Page 7 of 25 MoFALD has been signed, the evaluation has been designed and baseline information collection is underway. Component 1c: The Strengthening Safety Net Systems sub-component focuses on strengthening the MoFALD’s safety net systems, particularly in establishing a Management Information System (MIS), a grievance redress mechanism and branchless banking payment system for the cash transfers. Progress has also been made on the activities that support systems strengthening for cash transfers. The MoFALD has approved an implementation design of the key activities under this sub-component which will be implemented over the course of one year in 12 districts and will include: (i) piloting of electronic payments (in six districts), (ii) the development and implementation of a Management Information System, and (iii) institutional strengthening which includes training and capacity development of the staff responsible for implementation of the cash transfers at the national and district levels, as well as the computers, hardware, and back-up systems needed for the improved implementation. This support is expected to improve the efficiency and targeting of Government cash transfers. The MIS firm has completed the development of the MIS system and the MoFALD has already agreed with the Asian Development Bank to roll out the MIS in 15 districts; discussions are underway with Department for International Development (UK) to do the same in an additional two districts. The MIS is also being rolled out in two other districts using funding from another Bank-financed source - Rapid Social Response funding. Component 2: Support to Seeds and Fertilizer is aimed at improving provision of seeds, farmer’s use of fertilizers and technical assistance to the Ministry of Agriculture. Since 2010, under support for this component, the Nepal Agricultural Research Council (NARC) has produced over 129.38 MTs of breeder seeds and 1,654 MTs of foundation seeds, including crop varieties that are better suited to food insecure areas. A total of 11,213.9 MTs of fertilizer and 782.7 MTs of seeds of improved varieties of paddy, wheat, and maize have been made available in remote districts. The Component has met its planned objectives and targets and therefore no further activities or additional funds are required, aside from those expenditures which have been made but not yet claimed. Component 3: Project Coordination and Monitoring and Evaluation component is aimed at improving the project’s coordination as well as monitoring and evaluation. Activities completed include capacity building of MoFALD staff in a Monitoring and Evaluation Training and preparation of monitoring reports for the ministry and the World Bank. During the extension period, several activities are planned, as detailed below in the “cancellation section”. Development Objectives/Results Project Development Objectives (P113002 - Social Safety Nets Project) Original PDO To ensure access to food and basic needs for vulnerable households in the short term in food insecure districts. Current PDO To enable Government to improve access to nutritious food for highly food insecure households in the Page 8 of 25 short term and to create opportunities for improved agriculture production in food insecure districts. Change in Project's Development Objectives Change in Results Framework Explanation: Revision to the Results Framework is limited to the addition of two intermediate indicators. These indicators are being added in order to reflect the results of the Community Challenge Fund (sub- component 1b) and the Strengthening Safety Net Systems subcomponent (sub-component 1c) as these are the main pieces being implemented during the proposed extension period. The intermediate results for the project components are proposed to be revised as follows: For the Community Challenge Fund (sub-component 1b), the indicator being added is “Completion of CCF implementation as designed”. This will allow the project to gauge the implementation under this sub- component. The baseline at this stage is 0, as the implementation has just begun this fiscal year, and no households have benefited yet from the Community Challenge Fund. Due to the rigorous monitoring by the project and the additional monitoring for the impact evaluation, the Poverty Alleviation Fund (PAF), which is implementing this sub-component, collects the information on households benefiting from the pilot every three months. For the Strengthening Safety Nets Systems (sub-component 1c) the indicator being added is “Number of districts in which cash transfer beneficiaries receive at least one payment via branchless banking”. This indicator would help monitor payments via branchless banking and effective establishment and use of the MIS for the cash transfers, which are the two key activities being implemented under this sub-component. The data for this indicator will come from the implementing agency, the MoFALD, to whom the banks implementing the branchless banking will provide this information three times a year, as per the payment cycle of the cash transfers. The MIS will also track this information. To date, no cash transfers beneficiaries in Nepal receive payments through branchless banking, establishing a baseline of 0. The project intends to establish this system in six districts across the country. Financing Change in Loan Closing Date(s) Explanation: The Closing Date would be extended by one year until September 30, 2014 per the Government request dated September 25, 2012. This will enable the MoFALD to complete the establishment and implementation of the MIS for the cash transfer programs and to pilot the payments through branchless banking for a full cycle (i.e. one fiscal year). The MoFALD had prioritized the emergency activities (food related) in the first few years of the project and started the implementation of the cash transfers component more recently. Without the extension, the MIS would only be established in the Ministry and not in the 12 districts as intended by the project. Additionally, the use of the MIS for the full intent of planning and monitoring can only be properly done if the MIS is used at the different implementing levels and different phases, i.e. planning, implementing and monitoring of the program. The lack of a MIS was highlighted by Page 9 of 25 the National Planning Commission in their 2012 review of the cash transfers system. The creation of a MIS is a key method to improve efficiency and remove potential ghost beneficiaries. The MoFALD has already agreed with the Asian Development Bank that in an additional 15 districts, the same MIS will be rolled out, and discussion is underway with DFID to ensure the same in an additional two districts. The MoFALD has begun planning how to roll out the use of the MIS nationwide. The proposed extension of the Closing Date would allow the branchless banking pilot to make more than just one payment through the branchless banking mechanism. One payment through a new modality is insufficient to learn from or gather robust information on the results and impact of systematizing this modality. The MoFALD cash transfer is made three times a year. In addition, the constant change of modality of payments can be confusing to the beneficiaries. Lessons and documentation of this experience are critical for the MoFALD’s national plans to improve the efficiency of cash transfer programs in Nepal. Expansion across the country to areas where infrastructure allows branchless banking is under discussion within MoFALD, as this is the logical next step to their move to a system of bank based payments in municipalities, which they have been implementing for the last two years. The extension of the Closing Date will also allow completion of the implementation of the Community Challenge Fund (sub-component 1b) which was delayed by the late release of the Government budget last fiscal year. Since then, the budget has been released and the Government now has a revised implementation plan to ensure implementation acceleration. Although Nepal has made significant progress towards attaining the Millennium Development Goals (MDGs) in child nutrition, stunting and wasting still affect large numbers of the under-five population. Chronic under nutrition, which manifests as stunting, affects 42 percent of children under- five years of age according to the Nepal Living Standards Survey 2011. The under-five rate of wasting, which reflects acute under nutrition, has changed little over the last decade and currently stands at about 14 percent. The completion of this innovative pilot will support the learning in Nepal as well as the broader regional and global learning in how to improve the nutritional status of children in their first 1000 days. Ln/Cr/T Original Closing Current Closing Proposed Closing Previous Closing Status F Date Date Date Date(s) IDA- Effective 30-Sep-2011 30-Sep-2013 30-Sep-2014 30-Sep-2011 45100 IDA- Effective 30-Sep-2013 30-Sep-2013 30-Sep-2014 30-Sep-2013 47500 IDA- Effective 30-Sep-2011 30-Sep-2013 30-Sep-2014 30-Sep-2011 H4240 IDA- Effective 30-Sep-2013 30-Sep-2013 30-Sep-2014 30-Sep-2013 H5790 TF- Closed 30-Sep-2011 30-Sep-2010 30-Sep-2011 93058 Cancellations Explanation: Page 10 of 25 The proposed cancellation totals SDR 3,444,000.00 (estimated to be equivalent to US$ 5.34 million) detailed as follows: a. SDR 550,000.00 from IDA Credit 4510 b. SDR 1,086,000.00 from IDA Grant H424 c. SDR 1,015,000.00 from IDA Credit 4750 d. SDR 793,000.00 from IDA Grant H579 The cancellation reflects the Government request, dated July 21, 2013, to cancel US$5.3 million and to retain funds necessary in those activities which still need to be completed during the proposed extension period, as discussed above for the proposed adjustments include: The proposed allocations for Components 1a and Component 2 reflect funds needed to cover expenditures already made but yet unclaimed. Credit allocation for Community Challenge Fund (component 1b) is being reduced by SDR 0.5 million, from the original allocation of SDR1.65 million, which reflects the total amounts that are required for the completion of this activity. As such, although it was envisaged that the costs of the evaluation of the CCF would be funded by the project, these project funds are no longer required. The difference in the total allocation from the original reflects Additional grant funds which became available from the South Asia Food And Security Nutrition Initiative (SAFANSI) to support the design of the evaluation, and from the Strategic Implementation Evaluation Fund (SIEF) to support the evaluation. The allocation for the Strengthening Safety Net Systems (sub-component 1c) and for the Project Coordination, Monitoring and Evaluation (Component 3) is SDR 3.85 million. This is being reduced by SDR 0.55 million bringing it SDR 3.33 million. With the project activities now focused only on two sub-components during the extension period (Community Challenge Fund and Strengthening Safety Nets Systems), there is less to coordinate and therefore costs under this component are reduced. Under Component 3, during the extension period, specific activities include the review of changes made in the Public Works Program to make it gender friendly and a beneficiary assessment of the Strengthening Safety Nets Systems activities as well as some activities to support implementation and monitoring capacity. Curren Current Amount (in Cancelled Amount (in Proposed Amount (in Ln/Cr/TF Status cy currency) currency) currency) Effecti IDA-45100 XDR 1,700,000.00 550,000.00 1,150,000.00 ve Effecti IDA-47500 XDR 15,345,000.00 1,015,000.00 14,330,000.00 ve Effecti IDA-H4240 XDR 8,900,000.00 1,086,000.00 7,814,000.00 ve Effecti IDA-H5790 XDR 16,120,000.00 793,000.00 15,327,000.00 ve TF-93058 Closed USD 5,000,000.00 0.00 5,000,000.00 Change to Financing Plan Page 11 of 25 Explanation: Based on the cancellations detailed above, the proposed change to the Financing Plan is a cancellation of SDR 3,444,000.00 (equivalent to US$5.3 million) The Trust Fund of US$5 million (TF-93085) has fully disbursed and closed. Note that figure detailed below have been entered manually as portal has not included Additional Financing resources. Source(s) At Approval Current (from AUS) Proposed BORR 0.00 IDA 2,700,000.00 26,000,000.00 23,585,000.00 IDAT 14,000,000.00 38,500,000.00 35,572,000.00 SPF 5,000,000.00 5,000,000.00 5,000,000.00 Total 21,700,000.00 69,500,000.00 64,157,000.00 Disbursement Estimates Change in Disbursement Estimates Explanation: With the proposed cancellation of US$5.3 million, equivalent, and the Closing Date extension of one year, the disbursement estimates will be updated in the system after the restructuring package has been approved. Disbursement estimates are below. Fiscal Year Current (USD) Proposed (USD) 2009 11,000,000.00 10,630,000.00 (actual) 2010 12,000,000.00 1,100,000.00 (actual) 2011 30,310,000.00 36,700,000.00 (actual) 2012 9,700,000.00 1,370,000.00 (actual) 2013 1,490,000.00 2,150,000.00 (actual) 2014 6,000,000.00 2015 1,207,000.00 Total 64,500,000.00 59,157,000.00 Note that the current disbursement does not reflect the US$5 million grant from the Food Crisis Response Page 12 of 25 Trust Fund which was part of the original project, but has now been closed. This grant is reflected in the current component costs in the next section. Fiscal Year Current (USD) Proposed (USD) 2009 11,000,000.00 0.00 2010 12,000,000.00 0.00 2011 30,310,000.00 0.00 2012 9,700,000.00 0.00 2013 1,490,000.00 4,270,000.00 Total 64,500,000.00 4,270,000.00 Other Change(s) Change in Implementation Schedule Explanation: The implementation plan has been adjusted in line with the proposed Closing Date extension. The plan has been reviewed by the Bank team and found satisfactory. Page 13 of 25 Annex 1 Results Framework Project Project Social Safety NetsProject (P113002) Restructuring Status: DRAFT Name: Stage: Team Requesting Jasmine Rajbhandary SACNP Created by: Maria E. Gracheva on 06-May-2013 Leader: Unit: Product Responsible IBRD/IDA SASSP Modified by: Jasmine Rajbhandary on 19-Sep-2013 Line: Unit: Country: Nepal Approval FY: 2009 Lending Region: SOUTH ASIA Emergency Recovery Loan Instrument: Project Development Objectives Original Project Development Objective: To ensure access to food and basic needs for vulnerable households in the short term in food insecure districts. Current Project Development Objective: To enable Government to improve access to nutritious food for highly food insecure households in the short term and to createopportunities for improved agriculture production in food insecure districts. Results Core sector indicators are considered: Yes Results reporting level: Project Level Project Development Objective Indicators Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target No Change Household food consumption Text Value 42 48 >42 score above baseline of 42 for Date 30-Jun-2010 03-May-2013 30-Sep-2013 poor and food insecure households in food insecure Comment The FCS is a No change as districts composite public works Page 14 of 25 score based on (component 1a) dietary implementation diversity, food completed prior frequency, and to July 2012 relative nutritional importance of different food groups. No Change Direct project beneficiaries Number Value 0.00 185934.00 170000.00 Date 01-Sep-2008 03-May-2013 30-Sep-2013 Comment No change as 80,000 (SSNP) public works and + 90,000 (AF) majority seed and fertilizer implementation (component 1a and 2) completed prior to last review FY08/09 = 29,300+7,500+ 180,758 = 217,558 HHs FY 10-current: 43,500 + 142,434 = 185,934 HHs Comment: Fertilizer and seed = 43,500beneficiari es (August 2012) Page 15 of 25 Assets = 180,758 HHs (FY 08-09) and 142,434 HHs (FY 10 – 11). Figures cannot be added as it mayincludean overlap of HHs. Assets Data figures are for all activities by MOFALD and WFP including funding WB and otherdonors. Rehabilitation projects(SSNP): 7,500 HHs No Change Number of HHs benefiting Number Value 0.00 142434.00 140000.00 from assets created for Sub Type Date 01-Sep-2008 31-Jul-2012 30-Sep-2013 agriculture production activities. Breakdown Comment No change as The original public works SSNP assisted (component 1a) 51,000 HHs by completed prior the food for to last review: work programs. 180,758 HHs in FY 08/09, 226,028 HHs in FY 09/10, and 142,434 HHs in FY 10/11 Comment: Data figures are Page 16 of 25 for all activities by MOFALD and WFP including funding from WB and other donors. Intermediate Results Indicators Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target No Change # of days of food/cash for work Text Value 0 60-80 60 per household per annum Date 30-Sep-2008 31-Jul-2012 30-Sep-2013 Comment No change as WFP and RCIW component 1a target 60-80 completed prior days of food but to last review WFP calculates this as 80 person From WFP: 40 days and RCIW per season (2 calculates on seasons) volume of work completed No Change % of targeted households Percentage Value 0.00 98.00 95.00 reporting increased ability to Date 30-Aug-2012 30-Sep-2013 meet their food needs Comment source: Latest Beneficiary Assessment, Aug 2012. Beneficiaries report indicated increased improved food security due to the projectfor (weighted) average of four Page 17 of 25 months. No Change Maintain or Increase current Number Value 484.98 11213.90 3500.00 level of fertilizer availability in Date 30-Sep-2008 31-Jul-2012 30-Sep-2013 remote districts Comment No change as Target is to majority maintain or implementation increase from of this component last year ( componet2) had occurred prior to last review. The indicator is cumulative total quantity of fertilizer transported (in MT) in years 2008/9, 2009/10, 2010/11 and 2011/12, and is based on DOA reporting No Change Improved community water Number Value 0.00 405.00 200.00 points constructed or Date 31-Jul-2012 30-Sep-2013 rehabilitated under the project Comment No change as implementation was completed prior to last review: 301 schemes during FY08/09 and 104 during FY10/11 Source :WFP/MLD Page 18 of 25 No Change Roads rehabilitated, Rural Kilometers Value 0.00 851.00 600.00 Date 31-Jul-2012 30-Sep-2013 Comment No change as implementation of 1c was completed prior to last review. 675 Km. under the original SSNP (2008-09)and 176 Km. under additional financing(2010- 11) Source: WFP/MLD New Completion of CCF Percentage Value 0.00 0.00 100.00 implementation as designed Date 30-Sept-2013 30-Sep-2014 Comment New Number of districts in which Number Value 0.00 0.00 6.00 cash transfer beneficiaries Date 30-Sept-2013 30-Sep-2014 receive at least one payment via branchless banking Comment Page 19 of 25 Annex 2 Operational Risk Assessment Framework (ORAF) Nepal: Social Safety NetsProject (P113002) Project Stakeholder Risks Stakeholder Risk Rating Low Risk Description: Risk Management: Project is important to Ministry of Finance and Ministry of Orientation to the District and VDC staff will be critical part of the project as will Federal Affairs and Local Development as it initially placement of project technical staff in the field to ensure smooth implementation. supported them to respond to the food crisis. The project Resp: Status: Stage: Recurrent: Due Date: Frequency: remains important as it seeks to improve the efficiencies of cash transfers which provide longer term safety nets. Client Not Yet Due Implementation 31-Dec-2013 This has gained importance with the release of National Planning Commission's report citing leakages and inefficiencies as well as media reports of anecdotal cases of leakage. As such public perception of the project is also positive. Donors active in social protection, through the Social Protection task team are also supportive of the objectives of the project. The DDC and VDC staff, particularly VDC secretaries, may have an interest in ensuring the project is stalled as they could perceive the development of MIS to manage and monitor beneficiaries and payment of cash through banks as a threat to their opportunities to gain from the cash transfers. Implementing Agency (IA) Risks (including Fiduciary Risks) Capacity Rating Moderate Risk Description: Risk Management: Page 20 of 25 Poverty Alleviation Fund (PAF)as implementing agency for component 1b has The lead implementing agency is Ministry of Federal responsibility for this component under MoFALD and they have the experience of Affairs and Local Development (MoFALD). The staff has working with both WB systems and community groups. In addtion WB will be been managing the project for the past 4 years and has providing technical support (TA) to PAF for the 1b pilot been successful, with limited turnover of staff. However Resp: Status: Stage: Recurrent: Due Date: Frequency: the remaining activities of the project (largely component 1b and 1c) require the MoFALD to be fully engaged and Bank In Progress Implementation Monthly proactive as these are new activities for them. There may be many challenges to implementation as the MoFALD's Risk Management: systems will be challenged to procure new partners i.e. Vital registration and population section (VRPS) which is the implementing agency for banks as well as ensure local level staff are also on board. component 1c will be adding several technical staff at both the center and in each of the 12 districts, to support them to engage and gain local and central ownership Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Implementation 02-Dec-2013 Governance Rating Moderate Risk Description: Risk Management: The policy direction of the project has been agreed with The Project Implementation team will include members who are responsible for all the Secretary and relevant Joint Secretary. Decision components and this structure is the key for implementation acceleration or discussion making for the separate components have been delegated of project implementation issues. This is chaired by the Project Director. to responsible individuals in different relevant units. Resp: Status: Stage: Recurrent: Due Date: Frequency: Overall project accountability and decision making lies with the Project Director and Project Manager who are Client Completed Implementation 01-Jun-2013 responsible for public works, which was initially the major component of the project. However, neither of these two officials are directly responsible for implementing the remaining activities implemented by a different unit within the ministry. Risk Management: Project activities include development of a Management Information System which will allow central monitoring of the cash transfers and beneficiaries as delivery of the cash in 6 districts is being made through banks, which will decrease opportunity for fraud and corruption systematically. Page 21 of 25 Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Implementation 31-Jan-2014 Risk Management: The Governance Accountability Plan includes activities focused on public and social audits, as well as various transparency measures. This will be monitored as part of every project implementation/supervision review. Resp: Status: Stage: Recurrent: Due Date: Frequency: Bank In Progress Implementation Quarterly Risk Management: MoFALD developed a Public Expenditure and Financial Accountability and Fiduciary Reduction Action Plan to increase and improve their own systems about a year ago. The implementation of this continues to check irregularities and bring about financial discipline. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Implementation Quarterly Project Risks Design Rating Moderate Risk Description: Risk Management: For component 1b, in addition of delegation of the implementing responsibility to the The project design, particularly of remaining activities is Poverty Alleviation Fund, WB will also be providing technical support in the specific largely untested in Nepal as it includes innovation in the activity design and planned impact evaluation. pilot of component 1b and includes use of new technology (branchless banking) in component 1c. Resp: Status: Stage: Recurrent: Due Date: Frequency: Bank In Progress Implementation Monthly Risk Management: For component 1c, the WB provides technical support on Management Information Systems and Branchless banking. In addition, the Ministry will hire technical staff on MIS (center and district) and Branchless banking (ministry level) to support implementation. Page 22 of 25 Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Implementation 02-Dec-2013 Social and Environmental Rating Low Risk Description: Risk Management: Outreach campaign for payments will ensure all eligible beneficiaries are aware of new Minimal environmental risk associated. payment modality As the project pilots a new modality of cash payments in 6 districts, there is some risk that not all eligible Resp: Status: Stage: Recurrent: Due Date: Frequency: beneficiaries receive information of the new modality of Client Not Yet Due Implementation 30-Nov-2013 payments, and thereby might miss some payments. Under the CCF there is some risk that the intervention Risk Management: (knowledge/cash) is not accessible to all the target group CCF implementation and monitoring strategy includes a household survey, which is (pregnant women and women with young children) used both by the community organization and facilitators to identify women who meet equally the criteria. The regular 3 monthly monitoring and impact evaluation monitoring will also be reviewing who receives intervention and who does not. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Implementation CONTINUO US Program and Donor Rating Low Risk Description: Risk Management: There is minimal dependency of this project on other All DPs are regularly being informed of the project activities through donor group on donors or programs, as there are no other Development Social Protection. Partners involved in the project. Resp: Status: Stage: Recurrent: Due Date: Frequency: Bank In Progress Implementation Quarterly Delivery Monitoring and Sustainability Rating Moderate Risk Description: Risk Management: The ability of the project coordinators of largest Component 1c will be supported by additional staffing which includes a full time components (1b and 1c) to effectively monitor delivery is procurement officer to ensure timely and efficient procurement, especially of large and high, as is ownership of the activities. PAF coordinator is critical procurement activities. There will also be temporary staffing/consultants added Page 23 of 25 well experienced in delivering and WB processes as is the at the center and in each of the districts to support government teams responsible for 1c coordinator. However the time frame and design implementation. allows little space for slippage and many of the later Resp: Status: Stage: Recurrent: Due Date: Frequency: activities are dependent on large procurement activities completed earlier in the year. Bank In Progress Implementation 02-Dec-2013 The implementation of component 1a continues under government's own funding as well as WFP support. Implementation of most activities under component 2 are continuing through government and other WB supported projects. The component 1c helps start up systems and piloting delivery via branch less banking. The government has already planned to scale up these activities across the country, including a request for possible support from WB. The component 1b is a pilot with an impact evaluation which will determine whether there is a need to sustain activities or learnings. Other (Optional) Rating Risk Description: Risk Management: Resp: Status: Stage: Recurrent: Due Date: Frequency: Other (Optional) Rating Risk Description: Risk Management: Resp: Status: Stage: Recurrent: Due Date: Frequency: Overall Risk Overall Implementation Risk: Rating Moderate Risk Description: Page 24 of 25 While the country and fraud and corruption ratings are high and substantial, all other risk ratings are low to moderate. The design of one of the components of the project seeks to address the fraud and corruption inherent in the cash transfer system, and helps to mitigate it. In addition, the commitment and ownership of the implementing agency is high. As such the overall implementation risk is rated moderate. Page 25 of 25