The World Bank User-centred And Inclusive Service Delivery (P177845) Additional Financing Appraisal Environmental and Social Review Summary Appraisal Stage (AF ESRS Appraisal Stage) Public Disclosure Date Prepared/Updated: 11/27/2024 | Report No: ESRSAFA889 Nov 29, 2024 Page 1 of 11 The World Bank User-centred And Inclusive Service Delivery (P177845) I. BASIC INFORMATION A. Basic Operation Data Operation ID Product Operation Acronym Approval Fiscal Year P177845 Program-for-Results Financing (PforR) UCISD 2023 Operation Name User-Centred and Inclusive Service Delivery Country/Region Code Beneficiary country/countries Region Practice Area (Lead) (borrower, recipient) Albania Albania EUROPE AND CENTRAL Governance ASIA Borrower(s) Implementing Agency(ies) Estimated Appraisal Date Estimated Board Date Ministry of Finance National Agency for Information 30-Sep-2024 18-Feb-2025 and Economy, Society Republic of Albania Estimated Decision Total Project Cost Public Disclosure Review Date 27-Sep-2024 145,000,000.00 Proposed Development Objective To increase the equitable access to and quality of selected digital services. B. Is the operation being prepared in a Situation of Urgent Need of Assistance or Capacity Constraints, as per Bank IPF Policy, para. 12? No C. Summary Description of Proposed Project Activities Based on the identification of key development problems and the Program's Theory of Change, the Government of Albania and World Bank Task Team have identified a set of components and activities. The activities are structured around four Results Areas (RA): RA1: Enhancing E-Service Quality and User Experience, which aims to improve the quality and usability of priority services; RA2: Improving Digital Skills and Digital Inclusion, which aims to improve the acquisition of numerical, literacy and digital skills and to ensure the all citizens, especially the vulnerable, receive assistance in access public services; RA3: Strengthening Priority Service Delivery Enablers, which improves the governance of data, builds accountability, and supports the establishment of an e-procurement platform and the Nov 29, 2024 Page 2 of 11 The World Bank User-centred And Inclusive Service Delivery (P177845) update of the public procurement regulatory and procedural framework and the expansion and upgrade of the AFMIS at both central and local government levels. RA4 : Increased Access to, Quality of, and Efficiency of Selected Local Administrative Services which supports the digitalization of services . The IPF Sub-Component provides the necessary technical assistance, capacity building and change management and communications support to achieve the Program RAs. It also supports the functioning of a Coordinating Unit (CU) which will ensure results-focused data collection and utilization throughout implementation. The Program is aligned with three priorities of the National Strategy for Development and Integration (NSDEI) (2022-2030): (i) strengthening local governments for sustainable economic development; (ii) equality and gender justice; and (iii) digitalization. It also contributes to the EU Digital decade objective on the digitalization of municipal services. Lastly, the Program will support the newly adopted Cross-Cutting Strategy on Decentralization and Local Governance 2023-2030 and the Public Procurement Law. D. Environmental and Social Overview D.1 Overview of Environmental and Social Project Settings The additional finance (AF) PforR operation will be supported by the TA (Technical Assistance) IPF (Investment Project) component same as the parent project was supported. The ESRS is prepared for the IPF component of AF. The IPF component of the AF is 100% TA and will support training, capacity building and staff for program implementation - implementation of the AF PforR: Capacity building and training to enable both the implementation and the uptake of the Program reforms; Design and implementation of a change management strategy, including carrying out activities to support and incentivize the roll out and take up of the program reforms and instruments (such as support to establish the intragovernmental transfer to local government); and Implementation support and monitoring and evaluation, including Training and Operating Costs to the Coordination Unit (CU) for the operation’s management, (including key Public Disclosure experts for day-to-day implementation), implementation, monitoring and evaluation, including the costs for the independent Third-Party Verification (TPV). Project implementation will be focused in Tirana and selected municipal centers and other municipalities through PforR operation. Activities under the PforR are expected to generate small amount of the e-waste. The quantity and generation of waste in Albania have been increasing and additional e-waste from digital technology, and the production of IT hardware is also more generated. Infrastructure for solid waste management is weak in Albania and there is a lack of regulatory enforcement. Albania, along with the rest of the world, struggles with the management of electronic waste disposal. Due to the lack of enforcement of the hazardous waste law the electronic waste is disposed in the same way as other waste in the municipal container. Unfortunately, informal recycling methods, such as scavenging valuable materials from electronic waste in informal settings, exist in Albania as they do in many other countries. While this may contribute to resource recovery, it often lacks environmental and safety standards, posing risks to both the environment and human health. The Waste Law and Extended Producer Responsible are in the process of preparation and expected to be adopted by parliament. The two Laws will put in place the govern and the management of electronic waste, proper disposal methods, recycling requirements, and standards for treatment facilities. In meantime, in order to fill the gap until the establishment of an adequate electronic waste management system, there are private initiatives licensed by the ministry, which collect, transport and treat e-waste. Nov 29, 2024 Page 3 of 11 The World Bank User-centred And Inclusive Service Delivery (P177845) Social overview: Albania’s economic and political transition has brought several improvements for citizens: standards of living have improved, labor markets are transforming and providing more jobs, and various promising reforms in the social protection and healthcare sectors have recently been undertaken. However, to improve the long-term prospects of citizens, Albania will need to ensure equal participation of all groups and regions in the labor market and education, as well as access to public services, including e-gov services. The Program will give special attention to vulnerable users struggling the most to access local services. In the Program context the vulnerable would be: persons from rural or high mountainous regions, persons with disabilities (PWDs), children with disabilities (CWDs) and/or with other special education needs, ethnic minorities especially Roma, the elderly, women and girls, youth who are not in education, those without internet/device connections, the poor, especially those persons who have lower education levels and those living below the poverty line, older employees who tend to be less well-versed in the use of technology Digitalization infrastructure: With regard to citizen broadband use, Albania has made great strides in Internet use and penetration. According to the 2019 Institute of Statistics in Tirana (INSTAT) survey, for the use of Information and Communication Technologies (ICT) by individuals and families, it turns out that nationwide 82.2% of Albanian households have access to the Internet. More than 56.6% of them have a fixed broadband connection, and 88.9% of families have mobile internet access. 87.1% of Albanians use the Internet for various purposes, including social media, online purchases, and digital financial services, but also increasingly engage with the public sector through e-services. Despite the improvements in internet use and penetration, gaps still exist mainly between urban and rural areas. The IPF activities, of the AF same as IPF activities of the parent operation, are not expected to have environmental and social impacts as the Project will finance technical assistance and capacity development. The E&S risks from the PforR Public Disclosure component were identified and addressed through ESSA (Environmental and Social Systems Assessment) for the parent operation and is relevant for the AF PforR. The social risks for the TA IPF of the AF of the PforR program are mainly connected with potentially noneffective TA that would not be successful in addressing Program related risks such as unequal benefits from the improved e-services because of the digital divide or the deepening of the divide that may exist There are also considerable environmental benefits from ICT development on climate change mitigation such as reduction in GHG emissions and cost optimization while using green ICT equipment. D.2 Overview of Borrower’s Institutional Capacity for Managing Environmental and Social Risks and Impacts The institutional arrangements will be updated to reflect the expansion of the Program scope. The National Agency for Information Security (AKSHI) with the Program Management Unit (PMU) that has been established in the AKSHI, will remain the implementing agency responsible for the achievement of the Overall Program results. The AKSHI is mapped to the PM’s Office and is leading the development and implementation of the Government of Albania (GoA) Digital Transformation Program. The AKSHI will lead the modernization of municipal services, the development and implementation of the e-procurement platform, and the rollout of the central AFMIS (Albania Financial Management Information System) at local-level. The updated implementation arrangements will include the Public Procurement Agency (PPA), the Public Procurement Commission, the Ministry of State for Local Government (MSLG), selected LGs, and the Association of Local Government (ALG). Other implementation arrangements defined under the Parent Program will remain unchanged. The MSLG, selected LGs, ALG, PPA and PPC will become members of the Steering Committee (SC). The SC is housed in the Inter-ministerial Committee on Innovation and Information Technology led by the Prime Minister. It is composed of Nov 29, 2024 Page 4 of 11 The World Bank User-centred And Inclusive Service Delivery (P177845) representatives of the AKSHI, the Ministry of Finance (MoF), and the contributing ministries and implementing agencies of the Parent Program. The SC composition will be updated to include the PPA, PPC, MSLG, selected LGs and the ALG. The composition and capacities of the Coordination Unit (CU) set up within AKSHI will be expanded. Under the Parent Program a Coordination Unit (CU) was set up to strengthen data collection and results monitoring of the Program. The CU is functioning well and is composed of assigned AKSHI staff and representatives from the MoES, as well as additional CU members financed under the Parent Program’s IPF component. The composition of the CU will be expanded to include one representative from the MSLG (or ALG reporting to the MSLG), the PPA and the PPC. To account for the scaled-up Program, three additional inter-institutional WGs will be added to the Program implementation arrangements. Under the Parent Program, the GoA selected key activities and results that required a high-level of inter-institutional coordination and then effectively set up the relevant high-level WGs, namely for the implementation of the SmartLabs and LEs. For the AF, the GoA will establish three additional high-level WGs to design and oversee: (i) the implementation of the new procurement reforms and the associated e-procurement platform; (ii) the design and roll-out of improvements to central and local AFMIS, as well as associated PFM and PIM reforms; and (iii) the re-engineering and digitalization of selected local services. PMU is located within the AKSHI, with fiduciary management (FM), a dedicated team, Project Director, a Project Coordinator, an FM specialist, a Procurement Specialist, a monitoring and evaluation (M&E) specialist and an Environmental and Social (E&S) Risk Management Focal Point appointed. As this is the continuation of an ongoing project, the AKSHI has become familiar with the WB Environmental and Social Framework (ESF). As the project will be expanded to the local governance and because of the wider scope and the greater need to communicate with the community and different groups, it is necessary to engage additional dedicated (full time) Social and Environmental experienced specialist to ensure that the project is prepared and implemented in line with ESF requirements. The S&E Public Disclosure specialist would have experience in social inclusion including stakeholder outreach, operationalizing the project grievance redress mechanism (GRM), and implementing provisions as part of the Labor Management Procedures (LMP) for the project. The TA will be used for additional capacity building of the beneficiary municipalities on the E&S risk management The Project’s(IPF) component (where ESF applies) overall environmental and social risks are assessed to be low for the environment and low for social. The Project will prioritize engagement with stakeholders under ESS10. There is also a very low risk related to labor and working conditions under ESS2. II. SUMMARY OF ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Low A.1 Environmental Risk Rating Low The AF IPF TA (The Project) is expected to significantly contribute to sustainable development endeavors in Albania, by improving public sector efficiency and public service delivery through the use of digital tools, and no major environmental risks and impacts may arise as a result of the project activities. The IPF component (The Project) of the AF Program will complement the parent program objective to improve and modernize the public sector and public services, with the objective of: “Strengthening local government for sustainable economic development towards European standards” This IPF are assessed to have low environmental risks, as the activities planned will aim to Nov 29, 2024 Page 5 of 11 The World Bank User-centred And Inclusive Service Delivery (P177845) provide targeted capacity development programs and on-demand technical support to build capacity in local and central government for core government operations, with a focus on competencies identified as critical for delivery of public services and their re-engineering (RA4), the new procurement system and the update and expansion of AFMIS at local level (RA3.3, 3.4, 3.5). There will be almost no negative environmental impacts from the TA activities through the IPF. Through IPF will be provided also implementation support and monitoring and evaluation, including Training and Operating Costs to the Coordination Unit (CU) for the operation’s management, ( key experts for day-to-day implementation), implementation, monitoring and evaluation, the costs for the independent Third-Party Verification (TPV). According to the nature of proposed TA activities, it will be ensured that the TORs will include the planning process incorporating adequate assessment of environmental and social implications. The advice provided through the TA for addressing those implications will be consistent with the ESF. A list of pre-identified technical assistance needs will be summarized in the Program Operational Manual. Therefore, at the concept stage, the environmental risk of the project is rated as low since its potential adverse risks and impacts on human populations and the environment are likely to be negligible. Potential environmental risks are related to the PfoR component, which have been assessed and elaborated under the ESSA prepared for parent project and adopted for the activities of this AF. Activities under the PforR are expected to generate small amount of the e-waste. The Waste Law and Extended Producer Responsible are in the process of preparation and expected to be adopted by parliament. The two Laws will put in place the govern and the management of electronic waste, proper disposal methods, recycling requirements, and standards for treatment facilities. However, in order to fill the gap until the establishment of an adequate electronic waste management system, there are private initiatives licensed by the ministry, which collect, transport and treat WEEE. Low A.2 Social Risk Rating Public Disclosure The Social Risk Rating for the IPF TA (The Project) operation of the AF Program (The PforR) is proposed to be Low. The IPF TA is going to finance capacity building and other TA to support the Program. Thus the risk of the related TA activities so support the program is low. The key social concerns for the Program are ensuring equitable access to project benefits by all and that people are not hindered by the digital divide, and the Program by its design is addressing these aspects. The design of the Program has embedded activities to mitigate the exclusion because of the digital divide and data privacy as key social concerns . Thus, the nature of the social risk for the Project (the IPF TA) would be a failure to properly implement the TA, which takes into consideration the identified social risks for the Program. The Terms of Reference for the TA will have measures to asses potential social risks emerging from the TA provided to the Program. The provision of the TA to the program would assess how the benefits would be i.e. shared between urban and rural areas. ICT infrastructure is relatively well developed in urban centers, however, there remains a significant gap between urban and rural areas: while rural areas represent 39.7% of the population, only 3.4% of the population that lives in rural areas is connected to the Internet, although in some areas, this figure is higher. For fixed internet penetration, the urban-rural divide is particularly pronounced. Key reasons for the persistent Digital Divide are lack of infrastructure and lack of institutional capacities, but also affordability, for both fixed and mobile broadband access, especially in rural and low-income area. The beneficiaries of the Project are both implementing structures and the population countrywide. Risk related protection of data privacy is secured through parent TA IPF. Legislation is in place but key elements which provide data protection and consumer protection are often weak, thus this is being addressed with the parent IPF TA of the parent PforR program. Also, during the implementation, the TA for protocols to handle e-waste explore the possible potential risks related to child labor and unsafe working conditions for vulnerable populations (like women & Roma) in waste/e-waste dump sites is defined also with the parent TA IPF. Whilst this is not an issue (yet) in Albania, a WHO report on Children and Digital Nov 29, 2024 Page 6 of 11 The World Bank User-centred And Inclusive Service Delivery (P177845) Dumpsites in 2021 state that “the burgeoning global market in electronic and electrical devices, combined with shorter device life expectancies, is fueling an unprecedented health crisis for children – exposing them to dangerous chemicals and air pollutants at home, in their communities, and in places where they often work illegally in exploitative and hazardous conditions. The soaring global popularity of electronic and electrical devices, from computers to cell phones to heavy appliances, combined with ineffective waste management and disposal, is triggering a crisis of e-waste health risks to which millions of children, as well as women of childbearing age, are exposed”. In summary, key social concerns are same as parent IPF TA and relate to the Project being able to effectively support the Program to (i) ensure that any systems established under the Program will include considerations of digital data protection and security (ii) there is appropriate stakeholder engagement at the national and local level with all stakeholders in a manner that is understandable and transparent and explains the benefits and impacts of the activities; (iii) the rights of vulnerable groups, and people with disabilities are considered in the Program to ensure their inclusion and data protection covers such groups as needed. The majority of the Project workers will be direct project B. Environment and Social Standards (ESS) that Apply to the Activities Being Considered B.1 Relevance of Environmental and Social Standards ESS1 - Assessment and Management of Environmental and Social Risks and Impacts Relevant The activities at the AF program level will result in positive environmental impacts in the form of a reduction in resource use, a decrease in the use of paper, carbon footprints, except a minor amount of generation of e-waste, and Public Disclosure a slight increase in electricity use. Most of the activities will be funded under PforR and a small portion, of the TA activities with IPF. Activities under PforR are assessed to have moderate environmental risks as well as moderate social risks, as the Program will finance the procurement of several types of IT equipment items and devices which by the end of life service are expected to generate a small amount of the e-waste which then will increase the amount of the e-waste in the waste stream in Albania. The activities of enhancing the e-services, improving digital skills and digital inclusions, improving the local services, could have environmental impacts, such as increased energy consumption, increased amount of e-waste, electronic pollution, data security and privacy concerns. Proper planning and implementation can help maximize the positive environmental benefits while minimizing negative impacts, with appropriate e-waste management and with the application of appropriate mitigation measures. Whereas the IPF component of AF program will finance TA activities, training and capacity building to achieve the Program RAs, thus no adverse risks and impacts on human populations and the environment are expected. There are no civil works of any kind included in the IPF component. According to the nature of proposed TA activities, it will be ensured that the TORs will include the planning process incorporating adequate assessment of environmental and social implications. The advice provided through the TA for addressing those implications will be consistent with the national legislation requirements and the ESF. A list of pre-identified technical assistance needs will be summarized in the Program Operational Manual. The social risk of the IPF component is also rated as low the activities are not expected to pose adverse impacts. In consultation with the Bank, the borrowers have updated Stakeholder Engagement Plan (SEP) proportional to the nature and scale of the project and associated risks and impacts and a parent LMP will be used as an section of the POM, outlining the expected number and type of workers and work monitoring and supervision arrangements. For the AF PforR Program the Environmental and Social Systems Assessment (ESSA) prepared for the parent project “Improving Universal Access to High Standard Public Services through GovTech” (P177845) in Albania Nov 29, 2024 Page 7 of 11 The World Bank User-centred And Inclusive Service Delivery (P177845) is relevant to address the new activities in the AF, same by its nature as those for the parent PfoR, which are expanding e-service by inclusion of services provided by the subnational government. The environmental and social management under the program is largely based on the existing legal, regulatory, and institutional system in Albania. An experienced social and environmental specialist will be hired to ensure that the project is prepared and implemented in line with ESF requirements. ESS10 - Stakeholder Engagement and Information Disclosure Relevant Stakeholder engagement is a critical tool for social and environmental risk management, project sustainability and success. The project involves a number of stakeholders, and it is important to build a wider support among all stakeholders and beneficiaries, establish clear communication and foster strong relationship with representatives of various government institutions and entities, and encourage ownership and information sharing with a wider public. The updated SEP for the AF IPF includes extra stakeholders such as Ministry of State for Local Self-Governments and the participating sub-national governments for the activities to expand the e-Albania services for sub-national governments as well as Public Procurement Agency and the Public Procurement Commission Key Stakeholders are the same as those for the Parent Project: National Agency of Information Society (NAIS/AKSHI), the Prime Minister's Office, the Ministry of Standards and Service Delivery, the Ministry of Health and Social Protection, the Ministry of Health and Social Protection, Agency for the Delivery of Integrated Services Albania, Association of Albanian Municipalities, Ministry of Education and Sports, Schools that will be beneficiary of the SmartLab activities, the teachers to be engaged, Students and ICT based companies and CSOs because of the Youth Innovation Centers During the preparation of the parent Program but also during the implementation which coincides with the preparation of the AF AKSHI together with the Bank team had intensive consultations with the relevant central government Public Disclosure institutions but also with international organizations. One of the most frequent themes raised with the CSOs and International organizations both for the parent and AF was the inclusion issue whereby coordination was an important theme in engagement with other central government institutions. SEP identifies the vulnerable groups that could be excluded by the Program, and during the preparation as result, the project design was adopted to accommodate measures to address exclusion as a result of the digital divide. Identified vulnerable groups, at risk to be excluded from the benefits of the Program are the urban poor and those who can not effort ICT equipment, those living in remote areas, Roma, and the elderly who are digitally illiterate. The updated SEP same as the parent project one proposes the use of the intermediaries such as CSOs in outreaching and working with vulnerable to address the digital divide. AKSHi the implementing agency is hiring external social specialist to speed up the procurement of the TA for to help with the inclusion activities. The GRM for the AF is already in place as it is established for the parent project. ESS2 - Labor and Working Conditions Relevant The Standard is relevant. Section of the POM will have aspects of the LMP from the parent project and will be prepared by the borrower, outlining the expected number and type of workers and work monitoring and supervision arrangements. It is expected that the TA IPF operations will have direct workers that will be consultants for the implementation of the project. The Project will also hire contracted workers and these will be also consultants hired through companies for specific TA defined through specific ToR. Child and forced labor is unlike situation for the respective project. ESS3 - Resource Efficiency and Pollution Prevention and Management Relevant Nov 29, 2024 Page 8 of 11 The World Bank User-centred And Inclusive Service Delivery (P177845) The IPF component will finance the capacity-building activities, and training aimed at the project beneficiary's staff to handle technologically driven development. New technologies often call for improved resource use efficiency and more stringent environmental mitigation measures. As such, depending on the scope of the capacity building for project beneficiaries' staff, part of the training could include a session on resource efficiency and the environmental aspects of new technologies and the replacement of old equipment. By virtue of the digitization of the program activities, the use of IT equipment may indirectly result in the generation of some e-waste. Therefore, by using the mitigation hierarchy to reduce and mitigate the risks and impacts of e-waste, the AKSHI in coordination with MoTE and National Environmental Agency will develop apply the related mitigation measures taking into account labor issues (associated with e-waste handling) and community health and safety issues. ESS4 - Community Health and Safety Not Currently Relevant The Standards is not relevant ESS5 - Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Not Currently Relevant The Standard is not relevant for the Project ESS6 - Biodiversity Conservation and Sustainable Management of Living Natural Not Currently Relevant Resources The Standard is not relevant for the Project Public Disclosure ESS7 - Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Not Currently Relevant Local Communities The Standard is not relevant for the Project ESS8 - Cultural Heritage Not Currently Relevant The Standard is not relevant for the Project ESS9 - Financial Intermediaries Not Currently Relevant the standard is not relevant for the Project B.2 Legal Operational Policies that Apply OP 7.50 Operations on International Waterways No OP 7.60 Operations in Disputed Areas No B.3 Other Salient Features Use of Borrower Framework No NA Nov 29, 2024 Page 9 of 11 The World Bank User-centred And Inclusive Service Delivery (P177845) Use of Common Approach No N/A C. Overview of Required Environmental and Social Risk Management Activities C.1 What Borrower environmental and social analyses, instruments, plans and/or frameworks are planned or required by implementation? Update of the SEP and disclose before the conclusion of appraisal Update of the ESCP and disclose before the conclusion of appraisal III. CONTACT POINT World Bank Task Team Leader: Simon Carl O'Meally Title: Senior Public Sector Specialist Email: someally@worldbank.org TTL Contact: Emoke Anita Sobjak Job Title: Senior Governance Specialist Public Disclosure Email: esobjak@worldbank.org TTL Contact: Nalin Jena Job Title: Senior Education Specialist Email: njena@worldbank.org TTL Contact: Sandrine Egoue Ngasseu Job Title: Governance and Public Sector Specialist Email: segouengasseu@worldbank.org TTL Contact: Charles Pierre Marie Hurpy Job Title: Senior Digital Development Specialist Email: churpy@worldbank.org IV. FOR MORE INFORMATION CONTACT Nov 29, 2024 Page 10 of 11 The World Bank User-centred And Inclusive Service Delivery (P177845) The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects V. APPROVAL Simon Carl O'Meally, Emoke Anita Sobjak, Nalin Jena, Sandrine Egoue Ngasseu, Charles Task Team Leader(s): Pierre Marie Hurpy ADM Environmental Shpresa Kastrati Specialist: ADM Social Specialist: Bekim Imeri Public Disclosure Nov 29, 2024 Page 11 of 11