The World Bank Integrated Community Resilience Project (P506969) @#&OPS~Doctype~OPS^blank@pidaprcoverpage#doctemplate Project Information Document (PID) Appraisal Stage | Date Prepared/Updated: 16-Feb-2025 | Report No: PIDIA01305 The World Bank Integrated Community Resilience Project (P506969) @#&OPS~Doctype~OPS^dynamics@pidaprbasicinformation#doctemplate BASIC INFORMATION A. Basic Project Data Project Beneficiary(ies) Region Operation ID Operation Name MIDDLE EAST AND NORTH Integrated Community Djibouti P506969 AFRICA Resilience Project Financing Instrument Estimated Appraisal Date Estimated Approval Date Practice Area (Lead) Investment Project Social Sustainability and 29-Jan-2025 13-Mar-2025 Financing (IPF) Inclusion Borrower(s) Implementing Agency Ministry of Social Affairs Ministry of Economy and and Solidarity, Djiboutian Finance in charge of Social Development Industry Agency Proposed Development Objective(s) The Project Development Objective (PDO) is to improve access to basic services and safety nets, and enhance economic opportunities for vulnerable communities, including refugees and host communities in target areas. Components Component 1: Social safety nets systems Component 2: Socio-economic infrastructure and Development of economic opportunities Component 3: Project management @#&OPS~Doctype~OPS^dynamics@pidprojectfinancing#doctemplate PROJECT FINANCING DATA (US$, Millions) Maximizing Finance for Development Is this an MFD-Enabling Project (MFD-EP)? No Is this project Private Capital Enabling (PCE)? No SUMMARY Total Operation Cost 31.00 Total Financing 31.00 of which IBRD/IDA 31.00 Financing Gap 0.00 Page 1 The World Bank Integrated Community Resilience Project (P506969) DETAILS World Bank Group Financing International Development Association (IDA) 31.00 IDA Grant 31.00 @#&OPS~Doctype~OPS^dynamics@envsocriskdecision#doctemplate Environmental And Social Risk Classification Substantial Decision The review did authorize the team to appraise and negotiate Other Decision (as needed) B. Introduction and Context Country Context 1. Djibouti, a small country of 23,200 square kilometers with a population of approximately 1 million, faces significant poverty challenges, particularly in rural areas, where 27.2% of the population resides . Limited economic diversification and heavy reliance on imports for basic needs like water and food – due to less than 1,000 square kilometers of arable land and low annual rainfall (130 mm) – leave the economy vulnerable to external shocks and market downturns. Strategically located at the southern entrance to the Red Sea, Djibouti acts as a bridge between Africa and the Middle East and hosts multiple foreign military bases supporting global anti-piracy. However, recent geopolitical tensions have reduced commercial ship traffic, resulting in increased food prices and reduced availability of essential goods, negatively impacting local communities and disproportionately affecting the most vulnerable. 2. Djibouti remains a relatively poor country, with high levels of inequality and vulnerability. Using the World Bank poverty line for Low Middle Income Countries (LMIC) of US$3.65 a day (2017 purchasing power parity), appropriate for an economy at Djibouti’s level of development, the extreme poverty for 2022 is estimated to be 39 percent (World Bank 2023a). Inequality in Djibouti is among the highest in the Middle East and North Africa, with an estimated Gini coefficient of 0.42 in 2017. The highest income decile of the population consumes approximately 16 times as much as the lowest decile and twice that of the ninth decile (World Bank 2019a). Extreme poverty in rural areas of the country is estimated to be 62.6 percent much higher than that of urban Djibouti. 3. Djibouti’s LMIC status is at odds with its low human capital (World Bank, HCR, 2024). Poor human capital is observed throughout the lifecycle, beginning in early childhood, with high rates of infant mortality and stunting. In later Page 2 The World Bank Integrated Community Resilience Project (P506969) years, inadequate learning outcomes and skills; limited labor force participation for men and women; and poor health outcomes for women, including high rates of female genital mutilation and poor maternal health outcomes, are critical obstacles to human capital accumulation. Private sector surveys indicate a shortage of appropriate skills in the labor supply. The situation is worse for women because of entrenched social norms and structural barriers to self-employment and entrepreneurship as measured by the Women, Business, and the Law index (World Bank 2022a). 4. Djibouti is increasingly vulnerable to natural disasters, with both droughts and floods taking a heavy toll on the population and economy. Ten major droughts were recorded between 1980 and 2019, with the 2008-2011 drought alone shrinking GDP by 4% and affecting over 100,000 people, leading to the loss of half of Djibouti’s livestock. More recent flooding events between 2018 and 2020 have caused substantial damage, affecting 250,000 people and requiring an estimated US$25 million for recovery and reconstruction. The growing frequency and intensity of these extreme weather events are putting additional pressure on rural communities, which are already struggling with poverty, underdeveloped infrastructure, and limited access to essential services. 5. The country's small population and low per capita emissions underscore its unique vulnerability to climate shocks. With per capita emissions of 1.4t CO2e, Djibouti is one of the smallest emitters of greenhouse gases globally, ranked 188th among all countries. The country’s heavy interdependence on neighboring countries for trade and migration creates both resilience and vulnerability to climate shocks. As the primary port connecting the Horn of Africa to the global market, Djibouti’s transport infrastructure is crucial for the region’s economic stability. This reliance on international trade, particularly for importing water and food, makes Djibouti vulnerable to disruptions from climate-induced shocks affecting its neighbors. Refugee Situation in Djibouti 6. Djibouti hosts 32,643 registered refugee and asylum-seekers as of 15 January 2025, primarily from Somalia, Ethiopia, and Yemen.1 85% of refugees reside in settlements (56% in Ali Addeh, 23% in Holl Holl, and 6% in Markazi), while 15% live in urban areas. The government’s proactive approach, aligned with the Global Compact on Refugees, includes efforts to integrate refugees into national systems while promoting social and economic inclusion, reinforced by the adoption of a National Refugee Law in 2017 to strengthen institutional and legislative frameworks and ensure access to services to refugees. Djibouti also serves as a key transit corridor for migrants from the Horn of Africa traveling toward the Middle East and Europe – often through Yemen - in search of economic opportunities, and in response to drought and food insecurity in their home countries. The World Bank, following consultation with UNHCR, confirms that the protection framework for refugees continues to be adequate in Djibouti, for the purposes of the Window for Host Communities and Refugees (WHR), as of October 2024. Sectoral and Institutional Context 7. Djibouti’s Vision 2035 prioritizes regional integration and spatial inclusion, focusing on the socio-economic development of rural and peripheral areas through investments in infrastructure and essential services . It emphasizes stimulating local economies by creating jobs, supporting entrepreneurship, and developing sectors like agriculture, renewable energy, and small-scale industries. The vision addresses climate change vulnerabilities, such as water scarcity and extreme weather, by promoting renewable energy and efficient water management to enhance economic and environmental resilience. Aligned with this vision, the National Strategy for Non-Contributory Social Protection (NSPS, 1 UNHCR (2025), 25 Page 3 The World Bank Integrated Community Resilience Project (P506969) 2023-2027) integrates adaptive social protection systems, basic services, productive inclusion and social behavior change communication (SBCC) to reduce poverty and support economic empowerment targeting the poor and vulnerable through financial inclusion. Refugees and asylum-seekers, included in the 2024 census, are now part of the National Strategy for Non-Contributory Social Protection (2023-2027), and refugees were incorporated into the National Programme of Family Solidarity (PNSF) in 2023. Together, these strategies aim to build a sustainable, inclusive socio- economic landscape, resilient to shocks and conducive to long-term growth across the country. The inclusive social economic development is expected to also reduce poverty and vulnerability significantly. 8. Djibouti’s social protection system for the poor and vulnerable has evolved significantly over the last five years, but enormous challenges remain to attain an effective and efficient social protection system that is adaptive and sustainable. Government has successfully piloted a targeted cash transfer program and laid the foundations for delivery mechanisms using the social registry. But the NSPS highlights challenges of fragmentation, inadequacy, and unpredictability. Djibouti’s social protection system is currently inadequate to shield poor and vulnerable people from adverse lifecycle impacts or encourage desirable investment in human capital. The system is fragmented and provides limited coverage. Social safety net coverage was 9.5 percent in 2012, with government social safety net spending 0.18 percent of GDP, compared with the Middle Eastern and North African average of 1 percent and the world average of more than 1.5 percent. As of 2019, nine safety net programs covered different groups, leading to fragmentation. Social safety net systems are critical in protecting and building the human capital of children threatened by adverse impacts on livelihoods such as environmental shocks. This support is particularly important for the 21 percent of Djiboutians who are extremely poor and have no capacity to smooth consumption and protect their human capital. 9. Djibouti's development indicators highlight significant challenges in service delivery and multidimensional poverty, particularly in rural areas. According to the Human Capital Review for Djibouti (World Bank, 2024), access to basic services such as targeted social safety nets, education and healthcare remains limited, with rural areas experiencing the most pronounced deprivations. On education, refugees experience higher than average school dropouts, and the gross enrolment rate in 2024 for refugee children in primary school was 54% and 43% for secondary school (vs. 99.2% and 66.5% for hosts, respectively).2 limited secondary education possibilities, gender disparities, and a lack of refugee teacher integration into the national payroll.3 Refugee children have, in the past, also faced challenges related to the different curricula and languages they faced in their new schools, as well as discrimination related to their status, although the government has sought to address these in recent reforms.4 UNHCR highlights the inadequacy of social safety nets and the importance of ensuring predictable, adequate and timely safety nets as well as improving the efficiency and effectiveness of the overall social protection system. The multidimensional poverty in these regions is characterized by poor living conditions, inadequate access to clean water and sanitation, and substandard infrastructure, and limitations on the freedom of movement for camp-based refugees.5 While this situation is aggravated for refugees, who can face discrimination and challenges related to documentation, members of the host community also live in precarity. These factors contribute to a lower quality of life and hinder economic opportunities. According to a study, undertaken by MASS, WFP and UNHCR in 2020, the employment rate of refugees in 2020 was 29.2%, with a geographical distribution of: 25.5% 2 UNHCR (2025), Djibouti Education Statistics for Refugees; Ministry of Education and Vocational Training of the Republic of Djibouti (2024), Annuaire Statistique 2023/2024; World Bank (2024), Djibouti: Giving Refugee Children a Chance to Go To School 3 UNHCR, African Development Bank Group, IGAD, EAC (2024), Regional Report Draft: Regional Program on Enhancing the Investment Climate for the Economic Empowerment of Refugee, Returnee and Host/Return Community Women in the East and Horn of Africa and Great Lakes Region 4 World Bank (2024), Djibouti: Giving Refugee Children a Chance to Go To School 5 UNHCR, African Development Bank Group, IGAD, EAC (2024), Regional Report Draft: Regional Program on Enhancing the Investment Climate for the Economic Empowerment of Refugee, Returnee and Host/Return Community Women in the East and Horn of Africa and Great Lakes Region Page 4 The World Bank Integrated Community Resilience Project (P506969) in Ali Addeh, 26.2% in Hol-Hol, 26.9% in Markazi, and 46% in Djibouti-Ville.6 Livelihood opportunities in refugee villages are scarcer than in the capital, exacerbating food security challenges, and even highly educated refugees struggle to find employment, without a command of French. 10. The Dikhil region, an arid and resource-constrained area in southern Djibouti, faces a unique and multifaceted challenge of poverty that requires a comprehensive, integrated rural development approach. The region not only hosts a significant migrant population, primarily from Ethiopia, but also grapples with chronic underdevelopment, reflected in high poverty rates, limited access to basic services (including water, sanitation, healthcare, and education), and high levels of unemployment. The region’s arid climate and vulnerability to climate change exacerbate these challenges, further limiting opportunities for sustainable livelihood. Poverty in Dikhil is not a singular issue; rather, it is characterized by multiple layers of deprivation, including economic exclusion, poor social infrastructure, and environmental fragility. These challenges are compounded by the limited access to markets and the lack of basic infrastructure, leaving local communities and migrants in a cycle of vulnerability. The region’s socio-economic landscape demands a nuanced, multi- sectoral response that addresses these interconnected issues simultaneously. The project’s integrated approach will create sustainable livelihoods for both local residents and migrant communities while contributing to the broader regional economic development goals. The focus on Dikhil exemplifies the project’s ambition to serve as a cross-sectoral rural delivery platform, maximizing investment impact through coordinated efforts in infrastructure, economic opportunities, essential services and safety nets. 11. Refugee-hosting areas face ongoing challenges in providing consistent access to essential services . In regions such as Obock, Ali Addeh, and Holl Holl, which host significant refugee populations from Somalia, Ethiopia, and Yemen, difficulties persist in the delivery of adequate water supply, sanitation and electricity. While efforts have been made to improve conditions, refugees and host communities still experience shortages in these critical services. However, in terms of health services, refugees and hosts appear to have similar levels of access7. Access to reliable water sources is particularly limited, contributing to health vulnerabilities in both refugee sites and host communities. Similarly, electricity coverage remains inadequate, with many households and public facilities still dependent on unreliable or nonexistent power supply, hampering their access to essential services. Geographic isolation, especially in Obock, further compounds these issues. The region's remote location and underdeveloped infrastructure inhibit service delivery, especially during extreme weather events. With the continuous flow of refugees, there is increasing pressure on local resources, which may contribute to competition for services between refugees and host populations. Refugees’ access to finance is limited by their lack of inclusion in the national ID system; underdeveloped credit markets; and limited awareness of their right to work. Refugee self-sufficiency is limited by a lack of access to vocational training, business development support services, and decent jobs8. 12. In underserved and rural areas, women and girls are disproportionately affected by socio-economic challenges. More than 53% of young girls (15-24 years old) compared to 47.4% of boys are neither in employment, education, nor training (NEET), with even higher figures in rural areas—83.4% for girls and 69.9% for boys. Adult women are more likely to be unemployed (36%) than men (22 %). In rural areas, the employment gap widens further (36.5% of women and 17.4 % of men). Among youth, activity rate is 12% for girls and 18.1% for boys, with women in households with children 6 Government of Djibouti (2024), Stratégie Livelihoods et Inclusion Economique Djibouti 2024 – 2028 7 The Ministry of Health and UNHCR signed a cooperation agreement in 2018 for the inclusion of refugees in the national health system 8 UNHCR, African Development Bank Group, IGAD, EAC (2024), Regional Report Draft: Regional Program on Enhancing the Investment Climate for the Economic Empowerment of Refugee, Returnee and Host/Return Community Women in the East and Horn of Africa and Great Lakes Region. Page 5 The World Bank Integrated Community Resilience Project (P506969) experiencing higher unemployment gaps compared to those without children. Additionally, employed women are more likely to hold vulnerable jobs (44.5% compared to 18.5% for men), work part-time (62.6% compared to 47.4% for men), and engage in informal employment (58.3% in non-farm employment compared to 34% for men). Moreover, socio-cultural challenges such as early marriage and female genital mutilation/cutting (FGM/C) remain prevalent, particularly in rural areas. The rate of early marriage among girls aged 10-14 is 32.7% in rural areas compared to 24.7% in urban settings. 13. Climate change exacerbates the vulnerabilities of already underserved and rural communities in Djibouti . Djibouti’s marginal climate is characterized by high temperatures and extreme water scarcity. The country has no perennial rivers, and seasonal rivers (wadi) play a critical role in supporting oases and recharging shallow aquifers. Climate change is expected to further worsen extreme heat, with projections showing a near doubling of high heat index days, from 66 currently to 123. This will profoundly affect livelihoods, particularly in rural areas where livestock rearing—a key source of income—is projected to see a reduction in revenues by up to 24%. Climate change will also directly affect human productivity, with heat expected to reduce labor output by as much as 3.5% by mid-century. The poor, who rely heavily on natural resources, are the most vulnerable to these impacts. Additionally, climate-induced diseases such as malaria have increased significantly, with a 37-fold rise in cases over the past two decades, which, combined with heat-induced health issues, is expected to reduce labor supply by up to 1.5%. 14. The project is fully aligned with the World Bank’s Country Partnership Framework (CPF) for Djibouti (2022 - 2026), which emphasizes support for rural development, infrastructure improvement, and social protection systems. The CPF addresses the multidimensional aspects of poverty by promoting economic diversification, improving access to basic services, and enhancing resilience among vulnerable populations. The CPF also supports initiatives that align with the government’s priorities on refugee integration, promoting inclusive development efforts that address the needs of both local and displaced populations. It aligns with Djibouti’s Vision 2035, reinforcing the mutual goals of reducing poverty and enhancing socio-economic stability. The project also aligns with the CPF first pillar, which emphasizes job creation and human capital. This CPF’s emphasis on gender parity and good governance will also be emphasized. The project also supports the findings in the World Development Report 2023 on Migrants, Refugees and Societies,9 in that it looks to strengthen refugee and host community freedoms, bolster their self-reliance, and ensure their inclusion in national delivery systems. 15. The Project is fully aligned with the goals of the Paris Agreement. The project is aligned with Djibouti’s commitment to combatting climate change as outlined in the 2023 revised NDC. The government prepared a draft version of a revised NDC outlining both mitigation and adaptation measures aligned with the Djibouti Vision 2035 and the National Development Plan and was submitted at the UNFCCC COP 29 in November 2024. The revised NDC sets out Djibouti’s new goal to reduce GHG emissions to 41.3 percent by 2030. It also specifies key priority areas for emission reductions in energy, agriculture, forestry, land use, and waste management, and adaptation priorities in agriculture, water resources, and coastal areas.10 16. The project is also aligned with the National Adaptation Plan (NAP) (2019), aiming to reduce vulnerability to climate change and to facilitate integration of adaptation into all levels of development planning including (i) access to water for all; ii) the promotion of best practices in the agricultural, forestry, fishery, and tourism sectors and reduced vulnerability to the effects of climate change and increase the resilience of the most exposed socioeconomic or 9 World Bank (2023), World Development Report 2023: Migrants, Refugees and Societies 10 World Bank, 2025, Djibouti Climate Change Development Report (CCDR) Page 6 The World Bank Integrated Community Resilience Project (P506969) geographical sectors; iii) the protection of ecosystems and ecosystem services; and iv) the resilience of key strategic infrastructure. The project will contribute to the objectives of the NAP with climate adaptation activities outlined in component 2 and financial inclusion under component 1. 17. Climate Co-Benefits. Local communities are vulnerable to extreme weather events due to their location’s exposure to these events and limited adaptive capacity due to multidimensional poverty. The project will provide C4N support to help vulnerable individuals cope during shocks. The financial inclusion subcomponent will further build communities’ resilience to these shocks. Resilient infrastructure supported by the project will contribute to the objectives of the NAP strengthening community resilience. 18. Gender. In Djibouti gender disparities in access to social protection, basic services, livelihood and involvement in childcare are high. To promote gender equality and women empowerment, the project will promote health and nutrition practices by directly targeting mothers and involving male partners/caregivers while providing access to financial resources and services. The project will also ensure women and female-headed households are targeted to enhance their access to basic services and productive facilities and economic opportunities. The project will enhance women and female- headed households' access to basic services and economic opportunities by targeting their specific needs. C. Proposed Development Objective(s) The Project Development Objective (PDO) is to improve access to basic services and targeted safety nets, and enhance economic opportunities for vulnerable communities, including refugees and host communities in target areas. Development Objective(s) (From PAD) The Project Development Objective (PDO) is to improve access to basic services and safety nets, and enhance economic opportunities for vulnerable communities, including refugees and host communities in target areas. Key Results • Beneficiaries of cash for nutrition safety net under the project, of which women (number) • Households registered in the social registry, of which women, and refugees (number) • People in project target areas provided with improved access to socio-economic infrastructure and services (number), of which women, and refugees (number), disaggregated by access to renewable energy/ electricity, water supply/sanitation, healthcare, education, and productive economic assets; • People provided with increased access to economic opportunities, of which women, and refugees (number) D. Project Description 19. The project will be financed by a US$22 million equivalent IDA credit and a US$9 million equivalent grant from the WHR, and 11will be composed of three components, as follows: Page 7 The World Bank Integrated Community Resilience Project (P506969) Table 1: Components and breakdown of allocated amounts Component Allocation (US$ M) WHR funding (US$ M) C1: Social Safety Net System 15.0 4.5 SC 1.1.: Cash for Nutrition 12.0 1.5 SC 1.2.: Financial Inclusion 1.0 1.0 SC 1.3.: Strengthening the Social Registry 2.0 2.0 C2: Access to Socio-Economic Infrastructure and Development of Economic 14.0 4.5 Opportunities SC 2.1.: Development of Socio-Economic Infrastructure and Productive 11.0 3.5 Facilities SC 2.2.: Development of Economic Opportunities 3.0 1.0 C3: Project Management 2.0 0.0 TOTAL 31.0 9.0 20. The project’s dual focus on human capital development – through improved consumption smoothing, nutrition, behavior change and resilience – and economic empowerment, lays the foundation for vulnerable groups, including refugees and host communities, to transition from dependency to sustainable self-sufficiency. By investing in essential infrastructure, job creation, economic opportunities, and an adaptive safety net system, the project stimulates regional development that aligns with local priorities and leverages existing community assets. This socio-economic development focus not only enhances access to services but also empowers communities to drive their own economic solutions and benefit from economic growth, fostering a more resilient social and economic environment. Integrating Social Protection (SP) measures along with socio-economic development interventions will ensure that foundational support mechanisms bolster human capital while economic infrastructure promotes sustainable livelihoods, maximizing the project’s overall impact on community resilience. Component 1: Social Safety Net System (total IDA US$ 15 Million equivalent, including WHR US$ 3.9 Million) 21. The objective of the component is to alleviate extreme poverty and build adaptive capacity for the poor and vulnerable households to cope with the risks and impacts of droughts and floods that have negatively impacted the population’s food security, health and productive capacity. The component will deliver: (i) Cash for Nutrition (C4N) to support nutritional consumption needs - accompanied with SBCC to promote human development behavior change good practices; (ii) financial inclusion services (FIS) to strengthen the economic resilience of poor and vulnerable households; and (iii) support for strengthening the Social Registry (SR) so that it becomes a stronger underpinning for effective coordination of social programs, ensures better targeting of safety nets, and provides credible information for measurement of results and impacts for all vulnerable populations, including refugees and hosts. 22. Sustainability of the social safety nets. Sustainable financing is critical to building an effective and efficient safety net system in Djibouti that can mitigate the adverse impacts of the perennial crises on the poor and vulnerable. The government committed to making efforts to increasing government financing for social safety nets as project financing declines. This commitment is being renewed and related technical simulations will be mainstreamed into the technical assistance that is being provided by the World Bank under the Strengthening Adaptive Social Protection Systems Page 8 The World Bank Integrated Community Resilience Project (P506969) (P166220). Recommendations from the Technical Assistance will be discussed with the MASS and the Ministry of Economy and Finance (MEFI) and be mainstreamed into the project at the mid-term review. Sub-component 1.1.: Cash for Nutrition (total IDA US$ 12.0 Million equivalent, including WHR US$3.3 Million) 23. This sub-component will finance the C4N in target communities among eligible households, including refugees and host communities. The C4N will include a cash transfer, fixed at 10.000 FDJ (approximately US$169 per quarter or US$56 per month), along with SBCC to enhance selected human development good practices including raising awareness about the impact of extreme weather events on health. The cash transfers will be disbursed every three months as has been the practice but gradually make improvement to two monthly to reduce the time lag it takes to deliver support given the evolution over the last five years. The duration of C4N will be 24 months (2 years) whereas SBCC will be phased throughout the life of the project implementation. 24. A total of 2,860 refugees - including student refugees in Djibouti-Ville will benefit from the C4N. This support, which proved critical for children from rural vulnerable households during covid-19, will help refugee children remain in school longer and improve their educational outcomes, addressing barriers such as school fees and additional basic costs. 25. The C4N will cover all 6 regions with beneficiary coverage in each region determined based on a predetermined set of targeting criteria. In accordance with the principle of convergence which the project promotes, efforts will be made to achieve overlap of C4N and SBCC interventions with component 2 interventions in Dikhil by maximizing beneficiary coverage in the region. A combination of geographical targeting, categorical targeting, Proxy-Means Targeting (PMT) and community-based targeting (CBT) mechanisms will be used in a complementary way to identify beneficiaries and minimize exclusion and inclusion errors that may arise from inadequate coverage of the social registry and biases that result from community beneficiary identification. The main basis for beneficiary targeting will be the PMT using information from the social registry. However, the CBT will be done in areas not covered by the social registry while enrolled beneficiaries will be validated through community visits and public meetings. Among the target households, C4N will specifically prioritize families with young children and pregnant women living in extreme poverty, recognizing that these households encounter significant barriers in accessing essential nutrition and health services. Female recipients will be disproportionately targeted (women to make up at least of 75 percent of cash transfers beneficiaries). 26. With regard to the SBCC, the sessions will seek to empower mothers, including from households among refugees and host communities, with knowledge about proper nutrition and meal preparation, good hygiene practices, exclusive breastfeeding, positive parenting and other basic early childhood and community health practices. The sessions will be conducted by mother counselors (mères-conseillères) present in all regions. Refugee mothers who may have specific vulnerabilities and challenges will be actively included in these sessions, with adapted content where necessary to reflect their unique circumstances. The sessions will also extend to fathers who will be encouraged to attend such sessions. The SBCC intervention will be implemented in collaboration with the Empowering Communities for Better Nutrition Project (P170014), a US$2.5 Million project financed by the World Bank with funding from the Japanese Social Development Fund (JSDF). This alignment will ensure complementarity and avoid duplication of efforts. Additionally, partnerships with UN agencies (WFP, HCR) working in refugee sites will be strengthened to expand outreach and ensure that refugee populations fully benefit from these interventions. Page 9 The World Bank Integrated Community Resilience Project (P506969) Sub-component 1.2.: Financial Inclusion Services (total IDA US$ 1 Million, including WHR US$0.3 Million) 27. This sub- component will support FIS activities for 1,500 beneficiaries who are members of households receiving C4N (including an estimated 500 refugees). This initiative aims to enhance financial inclusion and promote economic resilience by providing a one-off US $500 financial inclusion grant and technical support services for the poor and vulnerable households so they can try out household self-help activities. Eligible beneficiaries must meet key criteria, including (i) being part of a household benefiting from cash transfers, (ii) willingness to engage in small household self- help activities focused on improving their wellbeing, (iii) completing training on household self-help activities to be provided by a service provider that will be selected by the MASS, and (iv) presenting a concise action plan outlining their proposed self-help activity. Among refugee beneficiaries, it is expected that some households may opt for in-kind support from other development partners – and where this will be the case, their election into the FIS will not be constrained by not being participants into the C4N. 28. This subcomponent will also seek to achieve greater financial inclusion for women by promoting more women representation among the beneficiaries (women to make up at least 60 percent of beneficiaries). Leveraging the CPEC’s experience and capacity in promoting the financial inclusion of women in Djibouti12 will be encouraged and the greater representation of women will be promoted among refugees- and host communities as well. The selected activity will show links and/or prospects for contributing to broader community resilience efforts under Component 2. 29. Since most of the C4N beneficiaries hold accounts in the CPEC branches, the project will also strengthen CPEC’s institutional capacity so that they can provide better services to the C4N beneficiaries. This will include enhancing its operational framework, providing staff training on risk management and financial advisory services, and equipping CPEC with digital tools, building on multi-year technical assistance from the World Bank and other donors, to leverage CPECs proven capabilities and streamline advisory services to the C4N beneficiaries as well as those that will benefit from the FISs. Sub-component 1.3: Strengthening the Social Registry (total IDA US$ 2 Million equivalent, including WHR US$0.3 Million) 30. This sub-component will finance the scale-up of the SR among all Djiboutians, refugees and host communities, toward full coverage which will be a critical foundation for coordinating support across ministries and development partners. The social registry will play a crucial role in coordinating existing funding and mobilizing additional resources to enhance Djibouti’s responsiveness to shocks, such as economic crises and natural disasters. To achieve this, the project will expand interoperability between the social registry and other essential databases, including civil registries and public health systems, thereby improving the accuracy and efficiency of targeting vulnerable households while reducing errors of exclusion and inclusion. Based on the piloting undertaken under the PITCH and the Social Protection Emergency Crisis Response Project, inclusion of refugees will be enhanced with the objective of enrolling more refugees, facilitating their access to services. The MASS in collaboration with ANSIE are undertaking a comprehensive audit of the SR that will result into a comprehensive plan for revising its operational manual, a plan of action of which will inform key stakeholders. This initiative will also support better coordination with United Nations humanitarian agencies and development partners, 12 Malaeb, B.; Duplantier, A., Maarraoui, G., Fluet, E. (2023). Towards a More Equitable Development: Constraints and Opportunities of Women in Djibouti. The World Bank, Washington Page 10 The World Bank Integrated Community Resilience Project (P506969) ensuring that refugee populations are better documented and ascertained so that they can benefit from a wider range of integrated services. Interoperability with other databases will also enhance responsiveness in the event of a natural disaster. 31. In addition to reinforcing the social registry, the sub-component will support enhancing the operational capacity of existing social counters (guichets sociaux) in urban areas and regions. These social counters will be upgraded to reach a greater number of individuals, enabling the registration of additional households, as well as the regular updating of data. The enhanced social counters will be equipped to handle grievances, ensuring timely and effective responses. These centers will also serve as key points for connecting refugees with essential services, facilitating their inclusion in national programs for social protection and economic empowerment. The centers will evolve into fully integrated one-stop service hubs, serving as entry points for basic services, beneficiary monitoring and grievances management. By implementing these measures, the project aims to create a robust and dynamic social registry that will not only address current needs but also adapt to future challenges. Component 2: Access to Socio-Economic Infrastructure and Development of Economic Opportunities (total IDA US$ 14 Million equivalent, including WHR US$ 4.5 Million) 32. This component will finance basic socio-economic infrastructure to increase access to services (e.g., electrification, water and sanitation, renewable energy, health and education facilities, roads and utilities) for vulnerable communities, including refugees and hosts, in addition to productive economic assets (US$ 11 Million). Additionally, it will provide targeted support to facilitate or enhance access to economic opportunities and sustainable livelihoods in target rural areas (US$ 3 Million). As such, activities under this component will aim to create social and economic development opportunities for the populations in underserved areas, and for refugees and host communities in refugee-hosting areas, and facilitating sustainable solutions to protracted refugee situations. 33. Supporting an integrated service delivery platform to foster economic growth and jobs creation, the approach will leverage socio-economic infrastructure investments in underserved target locations. It will support productive facilities and strengthen market access. The compounded effect of these investments – expanding access to basic services and productive assets – will promote sustainable economic growth, enhance service delivery, and create new markets in underserved areas. Sub-component 2.1.: Development of Socio-Economic Infrastructure and Productive Facilities (total IDA US$ 11 Million equivalent, including WHR US$ 3.5 Million) 34. This sub-component will finance the development and rehabilitation of essential socio-economic infrastructure in targeted rural communities of Dikhil (including chef-lieu and surrounding areas), and refugee-hosting areas, namely Ali Addeh, Holl Holl and Obock. This sub-component will aim at increasing access to basic services such as electrification and renewable energy, water and sanitation, small roads, health and education facilities for refugees and host communities. It will also include rehabilitation of existing basic services, such as piped water to reduce leakages. In flood prone areas, the construction of small-scale infrastructure, such as culverts and drainage systems, will prevent climate- induced disasters. Page 11 The World Bank Integrated Community Resilience Project (P506969) 35. In addition, the sub-component will prioritize establishing productive facilities in Dikhil, including manufacturing and agricultural units that are climate-resilient and compatible with arid environment (e.g., grain mills, post-harvest processing units, drought-resistant seed centers, agricultural perimeters, honey production facilities, dairy processing units, date palm processing units, local markets, etc.). Where feasible in refugee-hosting areas, productive units adapted to arid environments will be financed in Ali Addeh and Holl Holl, while facilities suitable for coastal environment will be supported in Obock (e.g. refrigerated chambers, ice production units for conservation and processing of sea catch, etc.). This sub-component will catalyze livelihood activities directly and indirectly; create jobs and opportunities; thereby providing a supportive environment for income-generating activities financed under sub- component 2.2. 36. Investment proposals will be assessed against the following eligibility criteria Table 1: Selection criteria for investments under Component 2 Criteria Eligibility description Demand-driven The investment will be driven by the needs and priorities of the local communities to ensure that the projects align with their specific needs and foster long-term social cohesion. Shared benefits among various groups, Vulnerable groups will be engaged to select investments and to ensure including for women, host communities ongoing operation and management of the facilities is carried out to and refugees in refugee-hosting areas. foster social cohesion. (e.g. all-weather roads will improve access to maternal healthcare services in underserved areas, while the extension of maternity wards will directly enhance service availability. Together, these investments will help reduce maternal mortality and contribute to closing gender gaps in healthcare access). Targeting refugees and host Refugees and host communities will be included as widely as possible, to communities reflect their particular development challenges and needs. Addresses concerns of marginalized The subproject must be accessible to persons with disabilities. groups Long-term sustainability The PIU will need to request a commitment letter from the sectoral minister in charge of the supported investment after the investment has been pre-selected. The letter should pledge to ensure maintenance and sustainability, including budget allocation and staffing. Climate-resilient Sub-projects fostering resilience to climate change (e.g., reducing water transmission losses, producing clean energy while enhancing resilience to extreme heat, preventing flooding, supporting all-weather roads, etc.) No significant adverse negative social or The subprojects do not have potential adverse social and environmental environmental impacts impacts. Consistent with regional investment The subproject is identified as a priority in relevant regional investment plans as appropriate plans. Page 12 The World Bank Integrated Community Resilience Project (P506969) Gap-financing The proposed subproject fills an existing gap but does not substitute for other available sources of funds. 37. The above list of criteria may expand to include other conditions, which will be detailed in the Project Operations Manual (POM). The POM will also provide functioning details of the steering committee, which will serve as the decision-making body for the selection of infrastructure projects based on the established criteria and the inclusive participation of relevant stakeholders at community and central levels. 38. The participatory development approach is expected to strengthen resilience and social cohesion in the target areas. The project will facilitate inclusive planning through a community-driven process to ensure active participation by all segments of the local communities, responding to the unique development challenges and needs of vulnerable, women, refugees and marginalized groups in the formulation of priorities, the allocation of budget and the monitoring of outcomes at community level. While specific investments are not pre-determined at appraisal, the project’s interventions are expected to contribute significantly to improving living conditions by enhancing access to basic social services, creating economic opportunities, and reducing poverty. Sub-component 2.2.: Development of Economic Opportunities (total IDA US$ 3 Million equivalent, including WHR US$ 1 Million) 39. This sub-component will support 1,500 beneficiaries, including 200 refugees and 325 host community members, by providing them with the skills, tools, and resources to initiate and/ or develop economic opportunities. It aims to enhance and sustain livelihoods, particularly for vulnerable individuals – women, youth, and refugees – in target communities. 40. Building on proven models of community-based development, this sub-component will focus on several key approaches. One of these proven approach is the the Groupes d’Entraide par Affinité (GEA), or Affinity Support Groups, which have demonstrated success in fostering collective economic initiatives among all-female groups. Sixty groups consisting of 15 women each, totaling 900 women and including refugees and host communities, will receive a total of US$10,000 (including the business license fee) to start and develop income generating activities (IGAs). By specifically targeting female affinity groups in developing IGAs, they will be accompanied to increase their potential to grow into small businesses. Other 226 IGAs will be supported by targeting individuals, including the youth. Regarding the IGA package, it will provide beneficiaries with practical on-the-job technical training, mentorship, start-up capital (in-kind and/or grants), and follow-up support, ensuring that supported income-generating activities can be sustained and possibly scaled. Tailored support will address market needs, promote financial independence, and integrate climate considerations into business planning. Training will focus on skills for small-scale, climate-smart agriculture (e.g., drought-resistant seeds, water efficiency), crafts, IT, renewable energy, and entrepreneurship including digital. Beneficiaries will also receive training in resource management and scaling their activities for long-term viability. Additionally, the package will incorporate climate risk awareness and opportunities, covering areas such as sustainable livestock practices, water- efficient grazing, hydroponics, and solar-powered solutions. 41. In addition to IGAs, support will be provided to cooperatives, family businesses and individual entrepreneurs, including those with existing business activities and potential for growth. These interventions will help beneficiaries scale their operations, improve productivity, and access markets. Beneficiaries, including refugees and host communities, will collaborate on IGAs or business ventures, utilizing peer learning, skills-sharing, and value-chain integration to expand Page 13 The World Bank Integrated Community Resilience Project (P506969) market access. Priority for business support will be given to sectors that generate jobs, particularly those that leverage value chains and cross-border economic opportunities. The project will strengthen market linkages and value chain integration, helping beneficiaries connect with local, national, and regional markets. This approach will include training on business development, understanding value chains, accessing new markets, and procurement, which will increase the sustainability of their activities and expand their reach. Finally, the sub-component will provide ongoing mentorship and technical assistance to ensure business sustainability. Animateurs will work closely with beneficiaries to provide tailored support in managing and growing their businesses, helping them overcome challenges and build resilience over time. 42. Furthermore, this sub-component aims to enhance the resilience of livelihood systems for vulnerable groups, including refugees and host communities, by building their capacity to anticipate, adapt to, and recover from climate risks and other shocks. Activities will promote women’s leadership and participation in climate action (e.g. via the female affinity groups (GEAs)), leveraging their roles in resource management and economic diversification. Community resilience will be strengthened through trainings and inclusive decision-making processes. 43. Through these diverse and integrated approaches, sub-component 2.2 aims to create a dynamic, sustainable livelihood opportunities for women, youth, refugees and host communities, ensuring that IGAs, small business and cooperatives all contribute to economic empowerment and development in target areas . By aligning Sub-component 2.2 activities with the socio-economic infrastructure and productive facilities developed under Sub-component 2.1, the project aims to maximize productivity, improve market access, and bolster local economies. Together, these efforts will foster inclusive growth and resilience by ensuring that IGAs benefit from essential infrastructure, such as grain mills, seed centers, other productive facilities and local markets, creating a supportive environment that amplifies the economic impact across communities. The project will strengthen private sector linkages, drawing from good practices identified in the Yemen Emergency Crisis Response Program (ECRP) (2016-2022) (P159053), which used a community-driven approach to sector and business selection, and provided support to SMEs and MSMEs to finance productive investments and support financial inclusion for vulnerable communities. The World Bank’s Private Sector for Refugees (PS4R) initiative also offers good practice on how to create mutually beneficial relationships between the private sector and refugee communities on entrepreneurship, employment, investment, and products and services13. 44. A technical expertise will be mobilized to identify key opportunities and effective strategies for catalyzing local economic initiatives. This expertise will provide specialized guidance and advice, ensuring the successful implementation of the economic development approaches and the development of sustainable, market-driven solutions in the target regions. Component 3: Project Management (Total IDA US$ 2 Million equivalent, including WHR US$ 0.6 Million). 45. This component will finance the overall management, coordination, and monitoring of project activities to ensure effective implementation. Specifically, this component will cover: (i) project management for the coordination and implementation of activities including some operational costs of both Project Implementation Units (PIUs) housed at the Ministry of Social Affairs and Solidarity (Ministère des Affaires Sociales et des Solidarités - MASS) and at the Djiboutian Social Development Agency (Agence Djiboutienne de Développement Social – ADDS); (ii) project monitoring and evaluation (M&E) activities, including baseline/ endline surveys and an impact evaluation; (iii) procurement and financial management, and environmental and social risk management. Capacity-building and communication and awareness initiatives for relevant stakeholders will also be included to enhance project oversight and sustainability. 13 World Bank (2025), Private Sector for Refugees Page 14 The World Bank Integrated Community Resilience Project (P506969) @#&OPS~Doctype~OPS^dynamics@pidaprlegalpolicy#doctemplate Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Area OP 7.60 No Summary of Screening of Environmental and Social Risks and Impacts 46. The project covers complex operations in underserved and remote areas (Component 2) while maintaining a national scope under Component 1, presenting a broad array of E&S risks and impacts and implementation challenges. 47. The Environmental risk is Substantial due to several factors. This project includes construction activities like road infrastructure, water and electricity networks, public buildings, classrooms, and public spaces. These are small-scale, site- specific, and manageable. However, industrial units pose risks through water consumption and waste impact on local flora and fauna. Agricultural facilities for honey, dairy, date palm processing, grain mills, agricultural perimeters, and seed centers also present significant risks. These include high water use, chemicals, and waste generation causing pollution. Poor practices can lead to soil erosion, nutrient depletion, salinization, and pesticide exposure, which risk human and animal health. 48. The Social risk is rated as Substantial. Component 1 activities, such as Cash for Nutrition, Productive Inclusion, strengthening the social registry, and distributing community resilience kits, may present risks of elite capture, social conflict, and excluding vulnerable individuals like women, young mothers, and persons with disabilities due to inadequate beneficiary targeting. These activities might also increase risks of Sexual Exploitation and Abuse/Sexual Harassment (SEA/SH), corruption, fraud, and theft from households receiving benefits and kits. Additional risks include poor stakeholder engagement, weak grievance management, exclusion from beneficiary lists, payment delays, road safety especially of project workers, and insufficient enforcement and training for Codes of Conduct. 49. Component 2.1 will finance developing and rehabilitating essential infrastructure in rural communities of Dikhil and refugee-hosting areas in Ali Addeh, Holl Holl, and Obock, aiming to increase access to services like electrification, water and sanitation, renewable energy, health and education facilities, roads, and utilities. Risks related to land acquisition and physical and/or economic displacement are unknown, but activities causing these risks are expected to be ineligible for financing. Some key risks under this component includes: SEA/SH from labor/project workers in remote areas; accidents from unsecured civil work sites (affecting children, elderly, and persons with reduced mobility); road safety due to transportation of materials/work related activities; labor risks, including child, forced, and informal labor (workers working without contracts), weak grievance management and stakeholder engagement, and weak monitoring during project implementation due to weak client capacity and remoteness of locations. 50. Instruments: Draft Stakeholder Engagement Plans (SEP) (for both components) and an Environmental and Social Management Framework (ESMF) (for component 2) were developed prior to appraisal. Other plans such as site-specific Environmental and Social Management Plans (ESMPs) for construction-related activities and Environmental and Social Impact Assessments (ESIAs) for each industrial and agricultural activity, will be developed in compliance with the Page 15 The World Bank Integrated Community Resilience Project (P506969) requirements of ESS1 and national legislation before the start of each activity. LMPs will be developed during implementation. ADDS and MASS will develop a SEA/SH Action Plans each SEA/SH risk was assessed as Substantial during preparation. SEA/SH risk will be re-evaluated during implementation. The grievance mechanism (GM) (inclusive of a process to handle incidents related to SEA/SH) of both Implementing Agencies shall be in place prior to the start of project activities. The GM will be accessible, responsive, transparent, and inclusive, taking into consideration the needs of vulnerable groups including refugees, women, illiterate persons, persons with disabilities, those without access to information technology, digital/electricity access, etc. It will include multiple access channels, including channels that are free of charge, as per the requirements of ESS 10. @#&OPS~Doctype~OPS^dynamics@padlegalpolicy#doctemplate Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Area OP 7.60 No Grievance Redress Services: 51. Grievance Redress. Communities and individuals who believe that they are adversely affected by a project supported by the World Bank may submit complaints to existing project-level grievance mechanisms or the Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the Bank’s independent Accountability Mechanism (AM). The AM houses the Inspection Panel, which determines whether harm occurred, or could occur, as a result of Bank non-compliance with its policies and procedures, and the Dispute Resolution Service, which provides communities and borrowers with the opportunity to address complaints through dispute resolution. Complaints may be submitted to the AM at any time after concerns have been brought directly to the attention of Bank Management and after Management has been given an opportunity to respond. For information on how to submit complaints to the Bank’s Grievance Redress Service (GRS), visit http://www.worldbank.org/GRS. For information on how to submit complaints to the Bank’s Accountability Mechanism, visit https://accountability.worldbank.org. E. Implementation Institutional and Implementation Arrangements 52. The Ministry of Social Affairs and Solidarity (MASS) will serve as the primary implementing agency for the project, leading the implementation of Component 1: Social Safety Nets Systems, while the Djiboutian Social Development Agency (ADDS) will take on fiduciary and operational responsibilities for the Component 2: Access to Socio-Economic Infrastructure and Development of Economic Opportunities. Each agency will manage separate designated accounts to ensure clear, effective financial management aligned with their respective components. 53. The capacities of the MASS and ADDS to manage the new proposed project were assessed carefully during project preparation. MASS has considerable experience in implementing social protection programs, including cash transfers, social registries, and behavioural change communication. ADDS brings experience in managing development projects in rural areas involving civil works, sustainable economic opportunities and service delivery. Page 16 The World Bank Integrated Community Resilience Project (P506969) 54. A Financial Management assessment has been conducted according to IPF policy and directives to verify that the current systems provide reasonable assurance of resource allocation for their designated purpose. The assessment focuses on the capacities of the implementing agencies, leveraging insights from the previous projects. Detailed arrangements for budgeting, accounting, staffing, internal controls, fund flow, reporting, and auditing have been outlined during project preparation, with measures to mitigate fiduciary risks. @#&OPS~Doctype~OPS^dynamics@contactpoint#doctemplate CONTACT POINT World Bank Djeina Issa Kalidi Senior Social Development Specialist Alex Kamurase Senior Social Protection Specialist Borrower/Client/Recipient Ministry of Economy and Finance in charge of Industry Ali Mohamed Ali Gadileh Director of External Financing aligadileh@mefip.gouv.dj Implementing Agencies Ministry of Social Affairs and Solidarity Amina A. Warsama Secretary General aminaliban8@gmail.com Djiboutian Social Development Agency Mahdi Mohamed Djama Director General mahdi.mohamed.djama@gmail.com FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects Page 17 The World Bank Integrated Community Resilience Project (P506969) @#&OPS~Doctype~OPS^dynamics@approval#doctemplate APPROVAL Task Team Leader(s): Djeina Issa Kalidi, Alex Kamurase Approved By Practice Manager/Manager: Senait Nigiru Assefa 23-Jan-2025 Country Director: Fatou Fall 16-Feb-2025 Page 18