@#&OPS~Doctype~OPS^dynamics@restrisdscoverpage#doctemplate Report No: ISDSI00283 Integrated Safeguards Datasheet Restructuring ISDS Restructuring Stage | Date ISDS Prepared/Updated: 16-Dec-2024 Regional Vice President: Ousmane Dione Country Director: Stefan W. Emblad Regional Director: Nadir Mohammed Practice Manager/Manager: Irina Astrakhan Task Team Leader(s): Abdalwahab Khatib The World Bank RESTRUCTURING ISDS Finance for Jobs II (P159337) @#&OPS~Doctype~OPS^dynamics@restrisdsbasicinformation#doctemplate BASIC INFORMATION 1. Basic Project Data Project Beneficiary(ies) Region Operation ID Operation Name West Bank and Gaza MIDDLE EAST AND NORTH P159337 Finance for Jobs II AFRICA Estimated Appraisal Date Estimated Approval Date Financing Instrument Environmental Category 13-Mar-2017 27-Jul-2017 Investment Project Financing (IPF) Responsible Unit Task Team Leader EMNF2 (9781) Abdalwahab Khatib @#&OPS~Doctype~OPS^dynamics@restrisdsprojectfinancing#doctemplate PROJECT FINANCING DATA (US$, Millions) SUMMARY (US$, Millions) - Proposed Last Approved Additional Cancellation Total Total Operation Cost 24.50 0.00 0.00 24.50 Total Financing 24.50 0.00 0.00 24.50 Of which IBRD/IDA 0.00 0.00 0.00 0.00 Financing Gap 0.00 0.00 DETAILS (US$, Millions) -NewFinEnh1 Proposed Source Last Approved Additional Cancellation Total Trust Funds 24.50 0.00 0.00 24.50 Special Financing 23.00 0.00 0.00 23.00 State and Peace Building 1.50 0.00 0.00 1.50 Fund Page 1 The World Bank RESTRUCTURING ISDS Finance for Jobs II (P159337) Total Financing 24.50 0.00 0.00 24.50 @#&OPS~Doctype~OPS^dynamics@restrisdsprojectinformation#doctemplate 2. PROJECT INFORMATION Current Development Objective (Approved as part of Approval package on 27-Jul-2017) To test the effectiveness of selected financial interventions in incentivizing private sector investment and job creation. Proposed New Development Objective 3. PROJECT DESCRIPTION The Finance for Jobs II (F4J II) project is part of the Finance for Jobs Series of Projects (F4J SOP) along with F4J I (P151089) and F4J III (P179801). Building on the successful completion of F4J I, which closed satisfactorily with a budget of US$5 million on January 31st, 2022, F4J II1 amounts to US$24.5 million and includes two Additional Financing (AF) grants. The proposed restructuring relates to the second Additional Financing (TF0B5070), of an amount of US$ 10 million, approved in March 2021. The Project Development Objective (PDO) of F4J II is designed to capture the learning and innovative nature of the SOP: “To test the effectiveness of selected financial interventions in incentivizing private sector investment and job creation.� F4J II comprises four main components: - Component 1: Development Impact Bond (DIB) for Skills Development for Employment: this component finances a results-based innovative financing instrument, focusing on jobs and skills development; Component 2: the Investment Co-financing Facility (ICF), a risk-sharing facility aimed at de-risking commercially viable, job-creating private sector investments (ICF subprojects); Component 3: Entrepreneurship Ecosystem Matching Grant (EE-MG), a zero-cost component; and Component 4: Project Management. The following is a synthesis of their status. Component 1: The Development Impact Bond (US$6.25M). This component closed and it has been rated satisfactorily. Key related activities focused on the West Bank, and they were completed in Q3 2023, prior to the conflict in Gaza; however, service delivery continued up to Q2 2024. A pilot project was launched in Gaza as well, but it was interrupted by the conflict halfway in implementation. The final outcomes report, submitted in July 2024, was verified and the results showed that the DIB successfully trained 1,087 beneficiaries, including 550 women, and facilitated the creation of 658 jobs, with 270 being for women, surpassing the expected targets. The verified results include also the achievements of the pilot in Gaza, with 114 youth accepted, of which 69 completed training, while the other 45 youth completed 70% of the training plan, 18 internships started, and even 4 youth employed. The bank team is also conducting an evaluation of the DIB to confirm the robustness of its results, which is showing positive preliminary findings. 1 F4J II was approved on July 17th, 2017, and declared effective on November 27th, 2017. Page 2 The World Bank RESTRUCTURING ISDS Finance for Jobs II (P159337) Component 2: Investment Cofinancing Facility (US$13.75M). As of September 2024, 21 ICF projects were signed, mobilizing more than US$61 million in private capital. These projects included 13 in the West Bank and 8 in Gaza, with seven of them fully disbursed. The outbreak of hostilities in Gaza led to the termination of one project in the West Bank and 2 in Gaza, and to the complete destruction of all the 8 projects in Gaza. In addition, two projects in the West Bank were terminated due to other reasons related to incompliance with procurement procedures and licensing. Currently, there are no ICF projects ongoing in Gaza since the Project Implementation Agency (PIA) has recalled the remaining grant funds from the restricted accounts of the ICF grantees. Meanwhile, 5 projects in the West Bank have fully disbursed, while the remaining 5 have been impacted by the movement restrictions and the deteriorating operating environment. About 13 percent of the component funds, approximately US$1.8M, is currently committed for ICF grants in the West Bank, while US$2.75 are left uncommitted. The uncommitted funds are the result of the termination of the ICF projects in both the West Bank and Gaza, while new ICF projects for the West Bank are currently in the pipeline and could be financed under F4J II but they need time to be implemented beyond the current project closing date. Furthermore, under this component a first window of a larger Emergency Response Program (ERP) has been deployed only for the West Bank to provide support and enhance the resilience of the ICF grantees sustaining their operations and ensuring that they can retain their key employees during the crisis, thereby positioning them for sustainability and business continuity. This window is currently under implementation and through an average matching grant of US$50,000 provides co-financing of salaries, utilities and equipment over a 6 month-period, at the maximum. It is estimated that its total size will be about US$300,000 and will sustain about 60 jobs. Overall, the ICF component continues to produce results through all the activities that it finances albeit at a slower pace. Component 3: Entrepreneurship Ecosystem Matching Grant --EE-MG-- (US$0M). The EE-MG component is zero-cost within F4J II, but it was included in case the team would choose to scale up the instrument, which was financed under F4J I with satisfactory results. Component 4: Project Management (US$4.5M). Project management is proceeding well, and it is carried out by the PIA, which is fully operational, with key staff on board. The PIA prepares and submits regularly quarterly reports for F4J II, and monthly unaudited interim financial reports. The year 2023 audit report was completed in May 2024, and it is expected that the 2024 audit report will be completed during the first half of 2025. @#&OPS~Doctype~OPS^dynamics@restrisdssfgdassesment#doctemplate 4. PROJECT LOCATION AND SALIENT PHYSICAL CHARACTERISTICS RELEVANT TO THE SAFEGUARD ANALYSIS (IF KNOWN) The operation location is the West Bank. 5. ENVIRONMENTAL AND SOCIAL SAFEGUARDS SPECIALISTS ON THE TEAM Manal M F Taha, Ekaterina Grigoryeva, Khaled Nassar Page 3 The World Bank RESTRUCTURING ISDS Finance for Jobs II (P159337) Abeer Fuad Mashni Giroud, Najm-Ul-Sahr Ata-Ullah I. KEY SAFEGUARD POLICY ISSUES AND THEIR MANAGEMENT A. SUMMARY OF KEY SAFEGUARD ISSUES 1. Describe any safeguard issues and impacts associated with the Restructured project. Identify and describe any potential large scale, significant and/or irreversible impacts. The project continues to be assessed of Category B under Environmental Assessment Policy (OP 4.01). The restructuring introduces an emergency response program with one window under Component 2 aimed at supporting the sustainability and resilience of private sector businesses and continuing to support the current ICF component. The ICF component under the Project and the AF have supported activities including grant financing to subprojects that fall under category B under environmental assessment policy OP4.01 and of moderate environmental and social risk, potential adverse environmental and social impacts. Grant funding to the private sector has been open to different sectors and have primarily focused on agribusiness, light manufacturing and clean technology. These subprojects have been selected based on a number of criteria, mainly their potential to generate jobs, and can be in various industry sectors. The AF supported a technical assistance sub-component to support firms’ adaptation to COVID-19 crisis. Based on the project implementation so far, these potential adverse environmental and social impacts may include the following: construction-related air, noise, and water use and quality issues, waste management, and other construction-related disruptions, and workers’ occupational health and safety, as well as labor and working conditions. Potential impacts may include additional agriculture-related effluents within fields, hothouses, and/or warehouses, construction industry management of construction phase impacts, and e-waste and other lifecycle disposal management associated with alternative energy source development, such as batteries and solar panels. An E&S audit has been conducted assessing the ES compliance for a sample of 4 companies, a correction action plan was discussed and agreed with the Bank, the correction action plan identified enhancing environmental and social monitoring of ES for the ongoing projects including (i) maintaining the OHS focal points at the companies, (ii) provide regular Occupational Health and Safety (OHS) training, (iii) continued monitoring to implement essential safety measures, (iv) enhance waste management protocols, and (v) improve the maintenance of equipment and machinery to reduce emissions and ensure operational efficiency in addition to (vi) enhancing the GM at the companies level. The proposed Window two under component 1 will not entail construction or civil works, and mainly assist SMEs in West Bank with operational expenses to address the sever impact of the conflict. The proposed activities environmental impacts are expected to be site specific, limited and preventable and can be mitigated implementing ES measures. Risks include i) occupational health and safety due to operating working conditions, ii)potential release of hazardous and nonhazardous contaminants including solid waste and wastewater, (iii) life and fire safety, (iv) potential social risks such as inequitable access to project benefits for the most vulnerable groups, (v) labor and working conditions, (vi) Gender Based Violence (GBV) and Sexual Exploitation and Abuse/Sexual Harassment. The TA component focusing on building the Ministry of Planning capacity, is expected to be of low environmental and social risk, capacity requirements for addressing E&S requirements will be enhanced as needed. Page 4 The World Bank RESTRUCTURING ISDS Finance for Jobs II (P159337) The project ESMF will continue to screen out for category "A" sub-projects as well as sub-projects that would involve natural habitats, forests, physical cultural resources, dam safety, and involuntary resettlement. The risks identified under Window two will be mitigated under simplified mitigation measures including awareness of occupational health and safety and labor working conditions, hazardous waste management guidelines, compliance with national life and fire safety requirements will be mainstreamed under the SMEs contracts, an ESMF addendum has been prepared and disclosed on DAI and the Bank website. There is not land expected to be involved under Window two, and the project will continue to address any land requirements (temporary or permanent) for investments required to be financed under the project through lands owned by private companies. Any sub-projects that may trigger the World Bank Policy OP 4.12 will be excluded, which include those that involve relocation of households, temporary or permanent land take, and impacts on livelihoods, including those that may occur through restriction of access to resources. To screen for this exclusion, the projects will rely on guidelines in the Operations Manual (OM), which will include a rigorous sub-project screening process to be done by the F4J PIA. In cases where land may be purchased through a willing-seller willing-buyer approach or in cases of voluntary land donation (VLD), the F4J PIA will need to document for power of choice. This documentation must be provided for sub-projects to be considered eligible for screening. In other words, if the appropriate documentation is not provided, the sub-project is considered ineligible. The parent project activities have been assessed against the COVID-19 Specific Risk Considerations and the risks and impacts are not considered significant as per Paragraph 4d (OP/BP 4.01). 2. Describe any potential indirect and/or long-term impacts due to anticipated future activities in the project area. The ESMF screens out for category "A" sub-projects as well as sub-projects that would involve natural habitats, forests, physical cultural resources, dam safety, and involuntary resettlement. 3. Describe any potential alternatives (if relevant) considered to help avoid or minimize adverse impacts. The project restructuring is designed to overcome the adverse socio-economic situation affecting the beneficiary companies and SMEs. The Project is anticipated to remain of category 'B' under OP 4.01 the environmental assessment policy. Environmental and social mitigation measures will be addressed under the ESMF addendum and applied as needed. Monitoring procedures have been identified in the ESMF and the addendum to ensure that project implementation meets the E&S guidelines. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Since the start of project implementation, overall safeguards rating has been Satisfactory, there are no non- compliance issues. The SORT risk rating for Environmental and Social is Moderate as per the latest Implementation Status Report in October 2024. The change in the overall project institutional arrangements from Ministry of Finance to Ministry of Planning has not affected the E&S safeguards capacity, as the PIA will continue implementing the project, and has a safeguards specialist – an Environmental and Social Specialist familiar with Bank’s safeguards policies, who ensures compliance Page 5 The World Bank RESTRUCTURING ISDS Finance for Jobs II (P159337) with the ES requirement during the project implementation, regularly monitor and report on the project ES compliance. No additional safeguards policies will be triggered and there will be no change in the project’s safeguards category, and the project will continue functioning as per the ESMF and the agreed correction action plan, the new activities will be addressed under the ESMF addendum. A project-level Grievance Redress Mechanism (GRM) will be maintained at the PIA with the following features: an assigned contact to manage the system, accessibility to communities, documentation of complaints using a log, and timely written responses to complaints. The GRM will be enhanced at the company level as per the agreed correction action plan. The project stakeholder engagement plan section under the parent ESMF has been updated in the ESMF addendum to include selected SMEs and newly identified beneficiaries affected parties (workers in the SMEs, private sector…etc.), other interested parties (NGOs, Municipalities...etc.), and vulnerable groups (women, youth...etc.). The PIA shall conduct stakeholder engagement activities to consult on the project’s restructuring activities and disseminate information on the Project’s GM including SEA/SH uptake channels prior restructuring approval. Due to the political situation on the ground, consultations will be conducted virtually. During implementation, the PIA will conduct awareness-raising activities to promote women’s participation and ensuring their equal access to the grants. This will be achieved through the organization of specific outreach activities designed to engage and inform potential female applicants about the availability of these financial resources. 5. Identify the key stakeholders and describe the mechanism for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Key stakeholders include the Ministry of Planning and International Cooperation; international, regional, and local private sector investors and entities; local job skill development, marketing, and matchmaking private sector entities and NGOs; as well as local private sector enterprises. Each sub-project ESMP will include a site-specific consultation process, to take place during project implementation. @#&OPS~Doctype~OPS^dynamics@restrisdssfgddisclosure#doctemplate B. DISCLOSURE REQUIREMENTS Environmental and Social Management Framework Addendum In Country Disclosure: West Bank and Gaza. Date: December 10th, 2024. Disclosure on External Website: Date: December 16. 2024. @#&OPS~Doctype~OPS^dynamics@restrisdssfgdcompliance#doctemplate C. COMPLIANCE MONITORING INDICATORS AT THE CORPORATE LEVEL Page 6 The World Bank RESTRUCTURING ISDS Finance for Jobs II (P159337) The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank for Yes disclosure? Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project- Yes affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities Yes been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project Yes cost? Does the Monitoring and Evaluation system of the project include the Yes monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the Yes borrower and the same been adequately reflected in the project legal documents? @#&OPS~Doctype~OPS^dynamics@restrisdsapproval#doctemplate II. APPROVALS Task Team Leader(s): Abdalwahab Khatib Approved By Safeguard Advisor: Practice Manager/Manager: Page 7