The World Bank Transport Corridors for Economic Resilience - Mozambique – SOP 2(P510427) @#&OPS~Doctype~OPS^blank@pidconcoverpage#doctemplate Project Information Document (PID) Concept Stage | Date Prepared/Updated: 23-Apr-2025 | Report No: PIDDC01272 The World Bank Transport Corridors for Economic Resilience - Mozambique – SOP 2(P510427) @#&OPS~Doctype~OPS^dynamics@pidbasicinformation#doctemplate BASIC INFORMATION A. Basic Project Data Project Beneficiary(ies) Operation ID Operation Name Malawi, Mozambique P510427 Transport Corridors for Economic Resilience - Mozambique – SOP 2 Region Estimated Appraisal Date Estimated Approval Date Practice Area (Lead) EASTERN AND SOUTHERN 08-May-2025 20-Jun-2025 Transport AFRICA Financing Instrument Borrower(s) Implementing Agency Investment Project Republic of Mozambique Ministry of Transport and Financing (IPF) Logistics Proposed Development Objective(s) The PDO of SOP2 is to improve regional transport connectivity, climate resilience, and road safety along the Nacala corridor in Mozambique. @#&OPS~Doctype~OPS^dynamics@pidprojectfinancing#doctemplate PROJECT FINANCING DATA (US$, Millions) Maximizing Finance for Development Is this an MFD-Enabling Project (MFD-EP)? Yes Is this project Private Capital Enabling (PCE)? No SUMMARY Total Operation Cost 121.80 Total Financing 121.80 of which IBRD/IDA 121.80 Financing Gap 0.00 DETAILS World Bank Group Financing International Development Association (IDA) 121.80 of which IDA Recommitted 121.80 Page 1 The World Bank Transport Corridors for Economic Resilience - Mozambique – SOP 2(P510427) IDA Grant 121.80 @#&OPS~Doctype~OPS^dynamics@envsocriskclassification#doctemplate Environmental and Social Risk Classification Concept Review Decision Substantial The review did authorize the preparation to continue Other Decision (as needed) B. Introduction and Context Country Context Mozambique is a key transit hub for Malawi and Zambia, with trade corridors such as Nacala, Beira, and Maputo . During the last 15 years, trade flows along the Nacala Corridor have grown significantly due to public and private investment. Despite this, the corridor still faces high per-kilometer transport costs and significant non-tariff barriers, which prevent it from increasing its competitiveness and economic opportunities. It ranks low in the World Bank Logistics Performance Index (LPI) due to poor infrastructure and high transport costs. Agriculture and economic activity in Nampula and Niassa depend on the Nacala Corridor. There is widespread poverty and inequality in Mozambique, particularly in Nampula and Niassa. Despite its natural resource wealth, Mozambique remains one of the poorest countries in the world - ranking 183 out of 191 in the 2023 Human Development Index, with 54 percent of the population unable to afford a nutritious diet and 37 percent of children under five suffering from stunting. Agricultural productivity remains low due to limited access to markets, poor infrastructure, and vulnerability to climate change. Nampula is among the poorest provinces. Mozambique is among the world's most climate-vulnerable countries, facing frequent cyclones, floods, and droughts. Extreme weather events, such as Cyclone Freddy in 2023, resulted in 18,500 square kilometers of flood areas, affecting over 1.2 million people. Strengthening flood resistance, improving drainage capacity, and integrating climate- adaptive designs are essential to ensure long-term sustainability of the target roads. Sectoral and Institutional Context The Ministry of Transport and Logistics (MTL) is responsible for transport policy development and regulation. It oversees road, rail, maritime, and air transport. The National Roads Administration (Administração Nacional de Estradas – ANE) manages the road network, while the Road Fund (Fundo de Estradas) administers financial resources for road maintenance and infrastructure development. The Mozambique Ports and Railways Company (Caminhos de Ferro de Moçambique – CFM) is in charge of the operations and maintenance of the country's railway and port systems, ensuring efficient connectivity to landlocked neighboring countries. Road safety and traffic management fall under the jurisdiction of the National Institute of Road Transport (Instituto Nacional de Transportes Rodoviários – INATRO). Page 2 The World Bank Transport Corridors for Economic Resilience - Mozambique – SOP 2(P510427) Relationship to CPF The proposed Program is aligned with the World Bank’s Country Partnership Framework (CPF) for Mozambique FY23-FY27. Among the CPF objectives for the period of FY23-FY27, the SOP 2 is aligned with: (i) objective 5 “enabled sustainable growth in selected natural resource sectors�; and (ii) objective 6 “expanded infrastructure services�. In addition, SOP2 contributes directly to High-Level Objective 2 (HLO) “Inclusive green job creation� by expanding transport infrastructure services and supporting last-mile connectivity that integrate Mozambique’s agricultural value chains with domestic and international markets. C. Proposed Development Objective(s) The PDO of SOP2 is to improve regional transport connectivity, climate resilience, and road safety along the Nacala corridor in Mozambique. Key Results (From PCN) Objective 1: to improve regional transport connectivity along the Nacala Corridor in Mozambique • Direct users that benefit from improved access to sustainable transport infrastructure and services (number, corporate scorecard) • Traffic (containers full/empty) using the Nacala corridor section in Mozambique (number) Objective 2: to improve climate resilience along the Nacala Corridor in Mozambique • Population benefiting from the climate resilience of the Nacala Corridor in Mozambique (number) • Traffic disruption during cyclone season at targeted sections on the Nacala corridor in Mozambique (number of days) Objective 3: to improve road safety along the Nacala Corridor in Mozambique • Reduction in number of fatalities along the Nacala Corridor in Mozambique (percent) • Reduction in number of pedestrian fatalities at targeted sections along the Nacala Corridor in Mozambique (percent) D. Concept Description The TRACER SOP is a regional approach to improve the physical performance of key regional transport corridors (road, rail, ports and aviation), the associated trade and transport facilitation, and the transport and logistics services on these corridors. The target corridors are the Dar es Salaam / North-South corridor (connecting Zambia, DRC and Tanzania) - which is part of the SOP 1, the Nacala corridor (connecting Tanzania, Malawi and Mozambique) and the Walvis Bay / Trans-Caprivi corridor (connecting Zambia and Namibia). The SOP also aims to support economic activities along these corridors. SOP2 – this operation - will support transport connectivity along the Nacala Corridor. It will implement a combination of physical, institutional, and regulatory measures to enhance transport and trade facilitation. The project will focus on developing climate-resilient road sections, and piloting innovative safety and mobility solutions. It will finance preparatory studies for future SOPs, including multimodal transport hubs along the Nacala and Beira corridors. SOP2 will promote corridor-oriented development by enhancing food supply connectivity and supporting SME businesses for regional Page 3 The World Bank Transport Corridors for Economic Resilience - Mozambique – SOP 2(P510427) exports. The project will have a strong emphasis on resilience, and economic integration. By enhancing regional connectivity and market integration, SOP 2 will contribute to Mozambique’s regional trade facilitation agenda, which aims to expand commercial opportunities for small-scale farmers and increase the country’s participation in regional and global value chains. The components are detailed in the paragraphs below. Component 1 (Regional transport connectivity along the Nacala corridor), will finance civil works activities to enhance regional connectivity, resilience, road safety and feeder roads along the Nacala road corridor. The component will support: (i) the development of key feeder roads to economic hubs, including the upgrade, rehabilitation, and maintenance of the R696 road between Rapale and Mecuburi (57.26 km) and the N360 road between Cuamba and Metarica (67.00 km), along with supervision, technical audits, and RAP implementation; (ii) the enhancement of climate resilience along the corridor through civil works and technical assistance guided by a climate vulnerability assessment, with interventions including slope protection, improved drainage, culverts, bridge reinforcement, nature-based solutions, and a review of existing maintenance contracts to potentially finance targeted maintenance works; and (iii) improvements in road safety through the development of an integrated speed management plan based on safety audits, iRAP assessments, crash data, and stakeholder input. The component will incorporate low-cost engineering measures such as reduced speed limits, speed humps, roundabouts, raised platforms, and gateway treatments, along with piloting a post-crash emergency response system, implementing iRAP Star Rating for Schools interventions and financing road safety improvements at eight high- crash locations, as well as feasibility studies for a SMART (Safety, Mobility, Automated, Real-time Traffic Management) corridor concept. Component 2 (Enhanced logistics and operational efficiency along the Nacala corridor), will finance technical assistance to enable the full regional potential of the Nacala transport corridor and address some of the institutional constraints to regional trade. The activities will include: (i) enabling multimodality and consolidation hubs, through financing technical assistance to undertake the preparatory work for interventions that improve multimodality and encourage private sector participation in the logistics operations (Sub-component 2.1); (ii) financing support to the Nacala Development Corridor Management Committee (NDCMC) to strengthen regional coordination; and (iii) project management, monitoring and evaluation, through financing of incremental administrative costs for project management to ensure project implementation, and all activities associated with program monitoring and evaluation (M&E) and impact evaluation (IE). Component 3 (Contingent Emergency Response) will facilitate access to rapid financing for emergency response and reconstruction during an eligible crisis, either by a formal declaration of a national or provincial government of emergency or upon a formal request from the Government of Mozambique. @#&OPS~Doctype~OPS^dynamics@legalpolicyandscreeningrisk#doctemplate Legal Operational Policies 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 Page 4 The World Bank Transport Corridors for Economic Resilience - Mozambique – SOP 2(P510427) The project’s overall environmental and social (E&S) risk is currently rated Substantial (Environmental – Substantial; Social – Substantial). The environmental risk is rated as Substantial considering that (i) the project will finance small to large-scale works to rehabilitate, upgrade and maintain 125 km of road segments (N360 and R696) and to enhance climate resilience and road safety along the Nacala corridor, which are not expected to cause significant adverse risks and impacts on areas of high value or sensitivity, (ii) the environmental risks and impacts potentially generated by the planned works and TA activities are expected to range from low to substantial and mitigated with readily available and reliable measures, (iii) the Borrower is committed and building its capacity to manage EHS risks and impacts in a manner consistent with ESF, but presents relevant capacity gaps related to OHS management, as borne out by its track record and performance implementing current WB projects, and (iv) the absence of relevant contextual factors that can exacerbate the project's environmental risks and impacts. The project's potential adverse environmental risks and impacts will be mainly associated with the civil works planned under Component 1, and include (i) soil erosion, (ii) environmental pollution (mainly related to accidental contamination, dust and noise emissions), (iii) H&S risks for The World Bank Transport Corridors For Economic Resilience - Mozambique – Sop 2 (P510427) Apr 23, 2025 Page 5 of 9 Public Disclosure workers and communities, and (iv) biodiversity loss and interference with natural habitats (limited to vegetation clearing and wildlife mortality during construction and maintenance). These risks and impacts are expected to be moderate (for enhancing climate resilience and road safety works) or substantial (for works to rehabilitate and upgrade N360 and R696), primarily site-specific, temporary, reversible and manageable through readily available and cost-effective mitigation measures. The anticipated downstream implications of the planned TA activities are expected to range from low to moderate, depending on the type of TA provided, and to be manageable through ToR consistent with the ESF. The social risk rating of the project is assessed as Substantial due to interventions that have the potential to generate some degree of economic displacement during rehabilitation road works. Most of the potential adverse social risks will be posed by activities under Component 1, which among others will finance small to large-scale civil works in remote areas. The anticipated risks include: (i) involuntary resettlement required as a result of the civil works for targeted sections (including embankment protection, drainage, culverts); (ii) risks associated with discrimination and equal opportunities for labor; (iii) challenges in ensuring meaningful stakeholder engagement, participation and consultation, especially for vulnerable and disadvantaged groups; (iv) risk of inequitable distribution of project benefits among project beneficiaries; (v) risk of exclusion, in relation to access information and services, due to remoteness; (vi) sexual exploitation and abuse, and/or sexual harassment (SEA/SH) risks associated with the presence of project workers during civil works, especially for women and youth, that may exacerbate existing GBV risks due to the shifting of traditional gender roles; (vii) indirect risks with labor influx, and poor working conditions for workers; and (viii) possible risks of increasing child labor with primary suppliers of construction materials or service providers. These social risks are further complicated as community health and safety risks are anticipated to be limited to potential spread of communicable diseases. Although the project activities will not take place in Cabo Delgado province, there is a spillover risk of the conflict prevalent in the north due to the Internally Displaced Persons (IDPs) in Nampula and Niassa provinces. Page 5 The World Bank Transport Corridors for Economic Resilience - Mozambique – SOP 2(P510427) @#&OPS~Doctype~OPS^dynamics@contactpoint#doctemplate CONTACT POINT World Bank Monica Augustina Cristina Moldovan Senior Transport Specialist Emmanuel Taban Senior Transport Specialist Borrower/Client/Recipient Republic of Mozambique Implementing Agencies Ministry of Transport and Logistics Ambrosio Sitoe Permanent Secretary ambrosioadolfo@yahoo.com.br 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 @#&OPS~Doctype~OPS^dynamics@approval#doctemplate APPROVAL Task Team Leader(s): Monica Augustina Cristina Moldovan, Emmanuel Taban Approved By Practice Manager/Manager: Karla Gonzalez Carvajal 02-Apr-2025 Country Director: Mohammed Dalil Essakali 23-Apr-2025 Page 6