Document o f The World Bank

FOR OFFICIAL USE ONLY

Report No: 39375-CF

PROJECT PAPER

ON A

PROPOSED GRANT

IN THE AMOUNT OF SDR 12 MILLION (US$18 MILLION EQUIVALENT)

TO THE

CENTRAL AFRICAN REPUBLIC

FOR AN

EMERGENCY URBAN INFRASTRUCTURE REHABILITATION AND MAINTENANCE PROJECT

May 3,2007

Water and Urban 2 Central Africa 2 Africa Region

This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS (Exchange Rate Effective February 28,2007)

AAA AAP AFD AfDB AGETIP-CAF C A R CEMAC C F A A CFAF CPIP CQS CRS DPO EA E C E M P ENERCA ESMF ESPF EU EUIRMP FBS FMR F M S GDP GF GoCAR GNP IBRD HIPC HIV /A IDS IC ICB IDA IMF ISC JISN

Currency Unit = CFA Franc (XAF) x A F 4 9 3 = US$1

US$1.50122 = S D R l

BUDGET YEAR January 1 - December 3 1

ACRONYMS AND ABBREVIATIONS

Analytical and Advisory Activities Afr ica Act ion Plan Agence Franqaise de De'veloppement (French Development Agency) African Development Bank Agence d 'Exbcution des Travaux d 'Intbr2t Public (Public Works Agency) Central African Republic Central African Economic and Monetary Community Country Financial Accountability Assessment African Financial Community Franc Country Procurement Issues Paper Consultant's Qualifications Catholic Relief Services Development Policy Operation Environmental Assessment European Commission Environmental Management Plans (25) Socibtb Nationale d 'Electricitb de Centrafrique (Power Company) Environmental and Social Management Framework Economic and Social Policy Framework European Union Emergency Urban Infrastructure Rehabilitation and Maintenance Project Selection under a Fixed Budget Financial Monitoring Reports Financial Management Specialist Gross Domestic Product Global Fund Government o f Central African Republic Gross National Product International Bank for Reconstruction and Development Heavily Indebted Poor Countries Human Immunodeficiency Virus/ Acquired Immunodeficiency Syndrome Individual Consultant International Competitive Bidding International Development Association International Monetary Fund Inter-ministerial Steering Committee Joint Interim Strategy Note

FOR OFFICIAL USE ONLY

KfW LCS LDP L ICUS M&E M R E P U L

NCB NGOs OP/BP PDO PRGF PRS PRSP QCBS RAP RFP RPF SBD SDR SMEs SODECA SOE SPP SSA ssc sss S W M THIMO TS UFW UIMF U N D P UNESCO UNFPA UNICEF WB WFP

Kreditanstalt fur Wiederaujbau (German Aid Agency) Least Cost Selection Letter o f Development Policy L o w Income Countries Under Stress Monitoring and Evaluation Ministdre de la Reconstruction des Edifices Publics, de I’Urbanisme et du Logement (Ministry o f Urban Affairs) National Competitive Bidding Non-Governmental Organizations Operations Policy/Bank Procedures Project Development Objective Poverty Reduction and Growth Facil ity Poverty Reduction Strategy Poverty Reduction Strategy Paper Quality Cost Base Selection Resettlement Act ion Plans Request for Proposal Resettlement Policy Framework Standard Bidding Documents Special Drawing Rights Small and Medium Enterprises Socidt6 de Distribution de 1 ’Eau de Centrafrique (CAR Water Utility) Statement o f Expenses Simplified Procurement Plan Sub Saharan Africa Sole Source Contracting Single Source Selection Solid Waste Management Travaux Ci Haute Intensit6 de Main d ’amv-e ( Labor Intensive Works) Technical Secretariat Unaccounted-for water Urban Infrastructure Maintenance Fund United Nations Development Program United Nations Education and Science Organization Uni ted Nations Population Funds United Nations Children’s Fund Wor ld Bank Wor ld Food Program

Vice President: Obiageli Katryn Ezekwesili Acting Country Director: Sector Manager: Eustache Ouayoro Task Team Leader: Kwabena Amankwah-Ayeh

Marie Francoise Marie-Nelly

restricted distribution and may be used by recipients only in the performance o f their off icial duties. I t s contents may not be otherwise disclosed without Wor ld Bank authorization.

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TABLE OF CONTENTS

Project Paper

Project Paper Data Sheet

A. The Emergency Challenge

B. The Bank Response

C. The Project

D.

E.

F.

Key Elements o f Appraisal and Implementation Arrangements

Project Risks and Mitigation Measures

Terms and Conditions for Project Financing

Annexes

Annex 1.

Annex 2.

Annex 3.

Annex 4.

Annex 5.

Annex 6.

Annex 7.

Annex 8.

Annex 9.

Annex 10.

Description o f Project Components and Implementation Arrangements

Results Framework and Monitoring

Summary o f Project Costs

Financial Management and Disbursement Arrangements

Procurement Arrangements

Environmental and Social Safeguards Framework

Project Preparation and Appraisal Team Members

Statement o f Loans and Grants

Summary o f On-going Bank Operations

Country at Glance

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77 Map No. IRD33384

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PROJECT PAPER DATA SHEET

Date: M a y 3,2007 Country: Central A h c a n Republic Project Name: Emergency Urban Infrastructure Rehabilitation & Maintenance Project

Team Leader: Kwabena Amankwah-Ayeh Sectors: Infrastructure Themes: Urban Environmental screening category: B Safeguard screening category: B

stability in the country. Short Description:

-

The project will include two main components as follows:

Project ID: P104595

Proposed terms: Standard

Expected effectiveness date: June 29,2007

Borrower: Central African Republic

ComDonent A: Infrastructure Rehabilitation (US$15 Million equivalent)

Total Amount: US$18 mi l l ion equivalent

Expected implementation period: July 2007- December 20 1 1 Expectedhevised closing date: July 3 1,20 12

Responsible Agency: MinistBre de la Reconstruction des EdiJces Publics, de 1 ’Urbanisme et du Logement (MREPUL)

A. 1 Water Supply US$4.2 Mill ion equivalent-Increasing water supply to Bangui residents, through support to: (i) emergency repairdrehabilitation o f identified critical leakage points on the Water Utility (SODECA) network; (ii) rehabilitation o f two broken water pumps and related electrical installations; and (iii) providing boreholes (powered by solar energy) in ten neighborhoods located on the outskirts o f the c i ty where the current SODECA network does not reach the population.

A.2 Drainage Rehabilitation-US$4.2 Mill ion equivalent: Reducing the number o f people affected by periodic flooding in the neighborhoods through support to: (i) rehabilitation and extension o f substandard and unsound structures, and construction o f new culverts o f the central Bouagba canal; (ii) resurfacing the inner walls o f the collector with stones and cement using mostly labor-intensive works methodology to generate more employment; (iii) rehabilitation o f shoulders and side ditches o f the secondary network that drains into the M a i n Bouagba collector.

A. 3 Solid Waste Management-US$2.8 Mill ion equivalent: Creating an operational solid waste management system, through support for: (i) constructing 4 1 transfer stations; (ii) rehabilitating a dumpsite; (iii) facilitating collection o f solid waste; (iv) training S M E entrepreneurs, communities and municipal officials in solid waste management; and (v) carrying out communication and sensitization activities to increase communities’ solid waste management awareness.

A. 4 This subcomponent aims to rehabilitate about 66 km o f primary and secondary gravel/dirt roads in Bangui, through support for: (i)

Urban Roads Rehabilitation-US$3.8 Mill ion equivalent:

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reshaping identified roads; (ii) reinforcing the base structures; (iii) re-gravelling the roads; and (iv) rehabilitating drainage and crossing structures and thereby increasing access to areas that are currently isolated. This i s expected to restore or significantly improve accessibility by vehicles to parts o f the c i ty where an estimated 420,000 people currently live.

Borrower Total IDA Grant Trust Funds Others

Component B: Institutional Strengthening (US$3 Million equivalent)

7,000,000 1 1,000,000 18,000,000

This component aims to strengthen the capacity o f the institutions involved in the management o f the project (the Ministry o f Urbanism [MREPUL], Ministry o f Public Works, Ministry o f Hydraulic and Agency for Public Works -AGETIP-CAF) and responsible for the delivery o f urban services (Municipality o f Bangui and SODECA) to ensure some level o f sustainability o f the activities to be financed by the project. I t i s clear that this emergency operation will not address al l the important sustainability issues that are associated with the delivery o f the urban and infrastructure services that the project i s supporting, but will help build the foundations for sustainability o f these services through other activities that the Government and other donors will implement. Activities under this component would include: (i) reinforcement o f the Technical Department o f the MREPUL by the provision o f technical assistance; (ii) strengthening the fiduciary functions in the Technical Secretariat; and (iii) acquisition o f software for financial and procurement management, monitoring and evaluation (M&E), environmental and social safeguards, and training o f technical staff o f GoCAR agencies (MREPUL, Ministry o f Public Works, Ministry o f Hydraulic, SODECA, A G E T P - C A F and Municipality o f Bangui) and communities involved in the project to better streamline implementation processes.

Financing Plan (US$m.) Source I Local I Foreign I Total

Fiscal Year 2008 Total IDA Grant 1.8 Trust Funds

2009 2010 2011 I 2012 9 4 1.9 1.3

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Does the emergency operation require any exceptions f rom Bank policies? Have these been approved by Bank management? Are there any critical r isks rated “substantial” or “high”?

Yes [ ] N o [ X 3 Yes [ ] N o [ X ] Yes [X ] N o [ ]

What safeguard policies are triggered, i f any? Environmental Assessment (OP/BP 4.01) and Involuntary Resettlement (OP/BP 4.12)

1. This Project Paper seeks the approval o f the Board for a grant in the amount o f US$18 mi l l ion equivalent to the Central African Republic (CAR) to finance an Emergency Urban Infrastructure Rehabilitation and Maintenance Project (CAR-EUIRMP). The Project will, on an emergency basis, support GoCAR to rehabilitate, restore, expand and maintain parts o f the devastated urban infrastructure in Bangui.

A. THE EMERGENCY CHALLENGE

Country context

2. Development in the Central African Republic has been set back by several years o f recurring conflict. Conflict has been triggered by mutinies within the armed forces in 1996 and 1997, three attempted coups d’Ctat in 1999, 2001 and 2002, and a coup d’Ctat in March 2003. The last o f these brought the current Head o f State to power before a general election confirmed h is position. The 2003 regime marked the culmination o f a long-standing vicious cycle whereby mutinies and conflicts would cripple economic activity and government finances, leading to inability to pay c iv i l service (including military) wages or sustain even basic public services. This, in turn, fueled further discontent and disturbance. Collateral effects o f the conflicts in neighboring countries have been contributing factors in sparking or propagating C A R conflicts. The simmering and growing regional insecurity, when combined with the difficult situation o f the population in Bangui with more than 50 percent o f CAR’S urban population, may trigger an even greater regional emergency. The fragility o f stability in C A R resulting from its own internal, low-intensity, rebels-led violence in parts o f the country causing national emergency in crisis and conflict, is thus further threatened by regional emergencies. Together these crises necessitate the immediate and expanded engagement o f the wider international community to starve o f f further deterioration and a huge potential collapse into insecurity and violence in the country and the region.

3. A huge humanitarian crisis looms over C A R cities and Bangui in particular. Almost all infrastructure services are currently badly dilapidated, breaking down, and creating an urban sector crisis situation. Urbanization i s rapidly increasing in CAR, fed by the mass movement o f rural populations to cities, especially Bangui, as people flee rebel activities in most rural hinterlands o f CAR. High unemployment rate and worsening living conditions define l i f e in Bangui, especially among an active, young and restless growing migrant population with no hope for a better future and receiving l i t t le or no infrastructure or social services. In the absence o f progress in shared economic growth, aggravated by poor access to urban services, the resulting social stress i s fueling potential for reignited instability.

4. Central in this crisis i s the scarcity o f potable water supply which is o f poor quality and o f limited access to the population living in Bangui. Socie‘te‘ de Distribution de Z’Eau de Centrafrique (SODECA), CAR’S water utility company, is on the verge o f total collapse. The utility faces severe shortage o f funds and ageing equipment that has not been maintained for several years as the country faced c iv i l strife and social upheaval. SODECA’s ability to continue to provide safe potable water to the residents o f Bangui is severely constrained and there i s no possibility, without major help from development partners o f CAR, for any extension o f services to the capital’s growing population. Only 31 percent o f Bangui households have access to safe drinking water compared to 93 percent in Dakar. About 68 percent o f the urban population, and

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80 percent o f the population o f the haphazard human settlements o f Bangui, use shallow wells for supply o f poor quality water for non-alimentary consumption.

5. Sanitation i s critically lacking. Nearly eight out o f ten households in Bangui use latrines or rudimentary septic tanks which pollute the water table. Modern toilets are used by only about six percent o f households in Bangui. The increase in housing density and number o f latrines within housing compounds, the proximity o f the water table to the surface, and the occasional flooding o f poorly covered latrines al l contribute to the bacterial contamination o f underground water and to the spread o f waterborne diseases. In the absence o f a reliable solid waste collection and management system in Bangui, several spontaneous dumpsites have emerged in neighborhoods’ open spaces. Fi l led with accumulated trash, these dumps pose a huge health hazard and could easily trigger a health disaster o f unimaginable proportions. Only six percent o f trash produced in the city o f Bangui is collected and disposed o f properly. Dumping trash in the drainage canals is a major cause o f more than 20 days o f recurrent seasonal flooding each year, and i s widespread in Bangui. This flooding adversely affects about 52,000 residents who incur heavy yearly housing (and related) repair and maintenance expenses. The flooding is also the result o f inadequate drainage and maintenance o f city’s canals.

6. The urban roads network i s in poor condition and quickly deteriorating as a result o f severe erosion. In Bangui, only 18 percent o f the 36 km o f paved roads, and 16 percent o f the 104 km o f unpaved roads are in good condition. During the rainy season, secondary roads are often impassable, and access to poor residential areas i s virtually impossible by vehicle. The severe lack o f access to infrastructure services continues to have an increasing detrimental impact on the living conditions o f the poor. The lack o f sanitation services, resulting health hazards and flooding, and the deteriorating road conditions are the result o f absent investment in social services and infrastructure sector operations and maintenance as a consequence o f the economic and social situation o f CAR.

7. The economic situation remains very difficult. The cash-strapped Government o f Central African Republic (GoCAR), with limited assistance from donors, i s facing a difficult time meeting the basic needs o f the population. Efforts made to restructure and stabilize the economy since 2003 are beginning to yield modest gains with growth at about 2.1 percent per annum in a macroeconomic environment that remains stable and yet very fragile. CAR’S fiscal position has been difficult and challenging, characterized by low revenue mobilization, poor expenditure controls, chronic budgetary deficits, with the primary fiscal balance reaching -3.5 percent o f GDP in 2005. With no external support, the government increasingly resorted to accumulating internal and external areas, to finance i t s deficit. GoCAR’s revenue o f 8.2 percent o f GDP in 2005 ranks as one o f the lowest in sub-Saharan Africa (SSA); domestic revenues as a share o f GDP have been insufficient to finance the core functions o f the state. The country’s balance o f payments and current account have been in deficit throughout the last decade and have been financed largely by an accumulation o f external arrears.

8. C A R has a heavy and unsustainable external and domestic debt burden in relation to i t s economic size. The external current account deficit, which reached 4.4 percent o f GDP in 2004, has been affected by the rising cost o f o i l imports and the decreasing value o f exports relative to imports. As o f end 2005, total external debt including arrears was about US$1.07 billion (about 107 percent o f GDP), o f which US$741 million are current maturities and US$328 million represent arrears (27 percent o f GDP). C A R i s in a situation o f debt distress. The problem i s

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further complicated by the existence o f a large stock o f domestic debt and arrears amounting to about 35 percent o f GDP at the end o f 2005.

9. Outside o f the political sphere, the challenge o f stabilizing C A R lies in the economic and social arena. The government needs to deliver “peace dividends” in the form of: (i) visible improvement in employment and income opportunities; (ii) minimum basic infrastructure and social services provision; (iii) engagement o f communities in their own development; (iv) ensuring greater access o f the population to the nation’s natural wealth; and (v) real tangible improvement in the living conditions o f the population. Expectations that the new Government will deliver o n i t s promises are high despite many internal skeptics’ distrust in the potential for lasting peace. If these dividends are not delivered quickly, however, the risk o f regression to violence is high, particularly in the urban centers where a majority o f the population has taken refuge from rebels.

Government Recovery Strategy and Policy Framework

10. During the two-year transition period following the change o f regime in March 2003, a new constitution was drawn up, eventually approved by referendum, and ratified in December 2004. It established a presidential system with terms limited to two five-year mandates and embodying the principle o f separation o f powers. A national dialogue initiated during the transition has, however, been difficult to sustain. This has been exacerbated by a long standing distrust among various factions in a country where the track record o f institutionalized political dialogue between those in power and the opposition has been little and often times, non-existent. Yet, GoCAR continues to press for the disentangling o f a polarized political deadlock in C A R and has facilitated the building o f consensus among various interest groups with diverse and conflicting agendas. A roadmap for sustained national reconciliation and a strengthened democratization process was defined. A set o f key recommendations was adopted to guide the process o f rebuilding the nation’s foundations, and are reflected in different aspects o f the reforms under way. However, the speed o f the process has been constrained by the limited availability o f resources and the consequent inability o f the Government to provide minimum basic public services to the population. In addition, there are deep-rooted challenges to the ru le o f law and good governance, which have qualified the notable progress thus far and contributed to an erosion o f public trust and hope.

11. Protracted internal conflict has caused diff iculties in the preparation and adoption o f a long-term strategic vision. In July 2005, the Government developed a draft Poverty Reduction Strategy (PRS) for 2005-08, which builds on an Interim PRS for 2000-03. However, the final PRS Paper (PRSP) i s not expected to be ready before mid-2007. Consequently, to present donors with a comprehensive view o f i t s strategy and address the most urgent needs o f post- conflict transition while the PRSP is being finalized, the Government has drawn up an 18-month Economic and Social Policy Framework (ESPF). The ESPF, accompanied by a transitional results matrix that outlines the results the GoCAR expects to achieve in its reform process, i s based on a pol icy statement presented to the National Assembly in August 2005 and ongoing work to finalize the PRSP. The policy framework, lays out GoCAR’s reform plans over the following 12-18 months. Adopted by the C A R Cabinet on November 4, 2004, the ESPF constitutes the reference framework behind the Government’s Letter o f Development Policy (LDP) submitted to the International Development Association (IDA) in support o f its request for the November 2006 Development Policy Operation (DPO). An important Government

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objective o f the ESPF i s to help renew dialogue with development partners to kick-start economic recovery and strengthen the government’s capacity to reduce poverty. The ESPF i s built around four central themes from the draft interim PRSP, which are addressed through ongoing reforms supported by IDA, the International Monetary Fund (IMF), France and the European Commission (EC). The four themes include: (i) reinforcement o f security and consolidation o f peace; (ii) improvement o f governance and public sector institutional capacity; (iii) promotion o f macroeconomic stability and economic growth; and (iv) improvement o f the population’s access to essential social services and rehabilitated infrastructure’.

12. The Government i s making huge efforts to reinforce security, consolidate peace, seek lasting economic and social recovery, improve governance and public sector institutional capacity and create a better environment for both foreign and domestic private investment. The Government’s priority actions consist o f intensifying cooperation with neighboring countries (Chad, Cameroon, and Sudan), as well as regional institutions l i ke the Central African Economic and Monetary Community (CEMAC) to secure borders, and to contain and prevent cross border conflicts. To this end, CEMAC countries with financial support from the European Union (EU) and France have provided a multinational force whose mandate expires in July 2007. Support i s also provided by the office o f the United Nations Special Representative o f the Secretary General in CAR, which monitors security, and provides training to the National Police and the Gendarmerie.

13. The Government’s goals in renewing public service include: (i) improving public sector financial management systems, for both revenues and expenditures; (ii) reforming the civil service and public administration; (iii) reforming the justice sector; and (iv) eradicating corruption and money laundering. On the revenue side, the Government i s focusing mainly on improved collection o f internal taxes and customs duties, which represent the bulk o f tax revenues. O n the expenditure side the aim is to: (i) modernize budget and expenditure management procedures; (ii) put in place a unified budget and accounting nomenclature to improve traceability / transparency; and (iii) improve internal and external controls and oversight mechanisms with a view to raising fiduciary standards and enhancing accountability, which wi l l in turn increase the efficiency o f public expenditure, minimize funds leakage, and ensure better correspondence between budgeted and actual expenditures. An overhaul o f the procurement system has also begun with a view to bringing procurement legislation practices more in l ine with best international practices.

14. Legal reforms are based on the recommendations o f a national workshop on Justice supported and hnded by the EC. The reforms seek to strengthen the capabilities o f the legal apparatus by modernizing the legal and judicial services operations, supported by training and equipment. This effort i s reinforced by specific actions to fight corruption and money laundering (the Unit for the Fight against Corruption and the Financial Bench in the Ministry o f Justice, the National Agency for Financial Investigation, and the Inter-Ministerial Committee to Fight against Corruption), that are part o f the framework o f a National Plan for Good Governance. Another principal aim o f the reform i s to improve the legal and regulatory environment for private enterprise and investment, and begin reversing the current climate o f state capture and impunity at various levels o f Government.

’ World Bank’s Joint Interim Strategy Note, JISN, developed in partnership with the African Development Bank, January 2007

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15. Through these reforms, the Government is seeking to reestablish security, reliable public service, a predictable legal regime that affords al l citizens equal protection under the law o f the land, build a wel l trained, educated and healthy society and thereby entrench the foundation for sustainable social, cultural and economic prosperity for the country’s citizens. I t must be noted that despite the severity o f CAR’S difficulties, the current Government has staved o f f collapse, and offers a rare window o f opportunity to foster recovery and longer-term development. The Government’s own resources are limited; i t has thus called o n i t s development partners to provide emergency assistance to support i t s efforts to stabilize the country.

B. THE BANK RESPONSE

16. The country had entered into a non-accrual status with IDA in 2002 due to poor economic performance and a challenging governance regime resulting in social strife, conflict, violence, and imminent collapse o f the GoCAR at the time. Since then, the Bank has mobilized grant assistance totaling US$23 mi l l ion equivalent to contribute to efforts to consolidate peace and stability and to strengthen governance to help the country set the stage for full re-engagement. Activities undertaking as a result o f the grant assistance include:

The World Bank fully re-engaged with C A R in November 2006.

Ex-Combatants Reintegration and Community Support Project (FY05; US$9.8 million) supported the social and economic reintegration o f 7,565 ex-combatants formerly associated with different mi l i t ia groups. Activities include training and employment generation for ex-combatants coupled with rehabilitation o f small infrastructure in their host communities.

Four project preparation facilities, totaling US$2 mi l l ion were mobilized on an exceptional basis from the Multi-sectoral HIV/AIDS project approved in FY02, notwithstanding suspension o f disbursements since early 2002 due to arrears. This support has enabled the country to mobilize significant grant resources from other donors-US$25 mi l l ion from the Global Fund (GF) for access to HIV/AIDS treatment in 2003, and US$16 mi l l ion for orphans and vulnerable children from United Nations Development Program (UNDP), United Nations Population Fund (UNFPA), World Food Program (WFP), Kreditanstalt f i r Wiederaufbau (KfW) and Catholic Rel ie f Services (CRS).

Low Income Countries under Stress (LICUS) Trust Fund Grant I (FY05; US$4 million) for Public Financial Management, Governance, Health and Education.

LICUS Trust Fund Grant 11 (FY07; US$6.8 million), for Public Financial Management and Governance, HIV/AIDS , Mining, Community Driven Development Projects and Human Security.

17. An HIV/AIDS project was approved in 2001 by the Bank, but disbursement was prevented by internal conflict and subsequent non-accrual status o f CAR. This project i s being restructured to take into account available new resources from the Global HIVIAIDS Fund and more pressing social needs including institutional development and support for community initiatives. For the remaining IDA-14 period and timeframe o f the Bank’s and African Development Bank’s (AfDB) Joint Interim Strategy Note (JISN), an exceptional IDA allocation o f US$lOO mi l l ion was set aside to support the process o f reengagement with CAR. CAR qualifies for exceptional treatment under IDA’S allocation rules, which states that “additional

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allocations may be provided on a one-time basis to countries that are in the process o f re- engaging with IDA after a prolonged period o f inactivity o n the basis o f a strong transition plan with concerted donor support”.

18. The Bank response i s part o f a broad and multi-dimensional effort by the international community to help consolidate political stability and security in C A R and to stimulate economic and social recovery. This effort includes an important security component including security services by 370 military personnel from the C E M A C countries, at a cost o f about Euros 5 mil l ion per year financed by France and the EC, and also an additional 400 French military personnel financed by the French Government. The EU, Fruncophonie, and the UN System financed, supported and supervised the 2005 C A R elections, at a cost o f about US$10 million, and the continuation o f political activities through political mediation/dialogue between the Government and the rebels. The EU has earmarked about US$108 mi l l ion for infrastructure and social development, public finance development (about US$80 mi l l ion in annual disbursements over the last few years), and debt r e l i e f (with key Paris Club-creditors not requesting payments o f the amounts due in the immediate future). Much o f the contribution to CAR’S recovery by the international community i s being offered through traditional development programs, most o f which take time to translate into concrete results on the ground.

19. The proposed operation i s consistent with the Bank’s expected role and adds value to the LICUS-approach currently being implemented. Donors, mostly the EU and Agence F runp ise de Dkveloppement (AFD) have been very active in the energy, drainage and water sectors in CAR. After employing i t s convening powers to structure a donor coordination mechanism, the Bank is working closely with other partners to deepen and harmonize operations and build synergies based o n the comparative advantage o f partners’ strengths and expertise. The Bank’s main strengths in providing recovery support to countries emerging from conflict are recognized by donors and the GoCAR, who are increasingly expecting the Bank to play a leading role in getting C A R recovery underway. The Bank i s well positioned to provide such support due to i t s experience in post-conflict countries, the l imited number o f donors active in CAR, the need to address multifaceted governance issues and the deteriorated macroeconomic situation in CAR. Moreover, i t is assumed that the Bank’s initial involvement and convening power wil l provide a positive and necessary lead for other development partners to commit to the financing o f efforts to reconstruct C A R based on their respective comparative advantage.

20. Some major donors, especially the World Bank (WB) and African Development Bank (AfDB), recently got fully reengaged in C A R (by end-2006). A joint AfDB/WB Interim Strategy for FY07-08 was endorsed by the Executive Boards o f the AfDB and World Bank respectively in December 2006 and February 2007. The new strategy supports: (i) economic recovery and strengthening public sector governance and technical capacity; and (ii) the development o f human capital with emphasis on the poor. In the context o f the JISN implementation, the Bank has launched the preparation o f the projects aimed at delivering tangible and visible impacts for the C A R population and strengthening technical capacity and governance: LICUS I1 and 111, restructuring o f HIV/AIDS project, preparation o f an Emergency Urban Infrastructure Rehabilitation and Maintenance Project, and Regional Transport Facilitation Project. The IMF Executive Board approved an economic reform program supported by the Poverty Reduction and Growth Facility (PRGF) in December 2006.

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2 1. Other major donors are also supporting GoCAR infrastructure program. The European Union i s financing €4.5 mi l l ion worth o f infrastructure projects currently under implementation in Bangui, specifically in the area o f Galabadja (project TAG). This project is executed by Agence d’Exkcution des Travaux d’Int6r6t Public (AGETIF-CAF). The GoCAR and EU are negotiating a new cooperation framework for the period 2008-2013 (loth FED). The indicative amount for this negotiation is €109 mi l l ion aimed at supporting rural development @des de developpement) to include rural roads, secondary cities’ infrastructure projects, etc. The AFD financed recently completed a drainage rehabilitation project (THIMO 3) in Bangui. The AFD i s also preparing a new €5 mi l l ion drainage project (THIMO 4) to support rehabilitation o f the drainage network on one o f the secondary canals on the Bouagba collector, and which directly complements the works being contemplated in this World Bank-financed emergency project. A new Cooperation Framework between AFD and the GoCAR, for the period 2007-201 1 , which i s under preparation, retains major focus on the infrastructure sector and wil l be consistent with other donors’ cooperation strategies. China signed a loan agreement with GoCAR in January 2007 for Yuans 20 mi l l ion (about CFAF1.9 billion) to initiate new development projects including support to the infrastructure sector.

22. The project supports donor coordination and harmonization: During the preparation missions in Bangui, the Bank team met regularly with the donor community working in Bangui including the EU, AFD, France, China, UN Agencies, USA, and others to exchange ideas on the project and share documentation, with them. I t was agreed that there wil l be harmonization between donor’s intervention and it also envisaged to have joint supervision missions with AFD and some o f the UN Agencies in the future.

C. THE PROJECT

Project Development Objective

23. The Project Development Objective (PDO) i s to support the Government o f Central African Republic (GoCAR) to increase access to infrastructure and urban services in Bangui, the capital city. The project wil l support GoCAR to rapidly rehabilitate, restore, improve and expand sustainable access to basic infrastructure services for the population o f the most deprived districts o f Bangui. The achievement o f this objective would support GoCAR’s efforts to demonstrate visible and tangible improvements in the lives o f i t s citizens that are critical for sustaining social and political stability in the country. This is done on an emergency basis to address the backlog o f access to these services, to support the rehabilitation and the creation o f the infrastructure and urban services that wil l help improve the living conditions o f many people living in the poor and peri-urban areas o f the capital. The project beneficiaries will have improved access to all-year passable roads, potable water, and solid waste management (SWM) services. The project wil l reduce the number o f households flooded every year, increase the capacity o f the municipality o f Bangui to manage urban services and provide temporary employment to unskilled people. These positive changes in the living conditions that the project intends to introduce wil l likely reduce frustration and distrust in government services o n the part o f a large portion o f the population, create an environment in which reforms can be sustained, and hopefully limit the incentives for the population to revert to violence and further fuel regressions towards social, political and economic instability in the country.

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Summary of project components

24. The project components wil l finance expenditures and activities selected on the basis o f three interlinked criteria: (i) ability and possibility for rapid implementation (Le. relatively simple design, existence or easy availability o f technical studies where necessary, successful experience in implementing similar activities under earlier Bank-financed or other donor- financed operations); (ii) effective improvement o f population livelihood, in particular, the poor; and (iii) complimentarity with other Bank- or donor-funded operations. Upon extensive consultations with a broad range o f actors in C A R (Government, Agencies and Ministries, NGOs, private sector, communities, development partners, etc.), i t was agreed that the project components would include water supply, drainage, solid waste management, urban roads and some institutional strengthening o f the major urban services providers to ensure some level o f sustainability o f the activities to be financed. The project i s also expected to complement other ongoing or planned donor-financed activities, including operations recently launched by AFD and the E C in drainage rehabilitation, urban roads repairs, solid waste management, and which focus on labor-intensive works methodologies.

25. The project wil l include two main components as follows:

Component A: Infrastructure Rehabilitation (US$15 million equivalent)

A.1 Water Supply (US$4.2 million equivalent): Currently, about 68 percent o f the urban population, and 80 percent o f the population o f the haphazard human settlements o f Bangui, use shallow wells for supply o f poor quality water. This subcomponent aims at increasing potable water supply to the residents o f Bangui who are currently connected to the Socie'tk de Distribution d'Eau de Centrafrique (SODECA) network and extend water supply to an additional 100,000 people (about 15 percent o f the Bangui population), many o f whom are poor and would have improved access to potable water supply for the f i rst time. The activities under this subcomponent include: (i) reducing water losses and unaccounted-for-water (UFW) through emergency repairs and rehabilitation o f identified critical leakage points on the SODECA network; (ii) increasing SODECA water delivery capacity by rehabilitating and/or replacing pumping equipment (power pumps, feed pumps, etc.), the supply and installation o f new pumping equipment, as well as the rehabilitation or replacement o f defective electrical installations (old instrument cabinets, etc.); and (iii) providing deep boreholes (powered by solar energy) in ten neighborhoods located on the outskirts o f the city where the current SODECA network does not reach the population.

A.2 Drainage Rehabilitation (US$4.2 million equivalent): This subcomponent aims at reducing the number o f people affected by periodic flooding in the affected neighborhoods. Activities include: (i) rehabilitation and extension o f the central Bouagba canal; (ii) rehabilitation o f substandard and unsound structures, and construction o f new culverts; (iii) resurfacing the inner walls o f the collector with stones and cement using mostly labor-intensive works methods to generate more employment; (iv) rehabilitation o f shoulders and side ditches o f the secondary network that drains into the M a i n Bouagba collector; and (v) pi lot low-cost appropriate technology for lining and paving canals by means o f masonry, wooden piles, or sheet piling. This component wil l protect 52,000 people from being flooded out o f their homes during the rainy season.

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A. 3 Solid Waste Management (US$2.8 million equivalent): This sub-component seeks to create a solid waste management system that i s operational, whi le building the foundations for a long term sustainable service in the most deprived seven districts o f the town. Existing large heaps o f garbage wil l be removed to reduce the public health risks in the city. Collection o f solid waste from households for transport to the transfer stations wil l be carried out by small-sized private entrepreneurs. Three medium-sized entrepreneurs wil l be responsible for moving the solid waste from the transfer stations to the dumpsite outside o f Bangui. The activities under this subcomponent include: (i) construction o f 41 transfer stations in the City o f Bangui which wil l be divided into three S W M Secondary Collection Zones, each zone serviced by one S W M Enterprise; (ii) improving the access and the functioning o f the existing dumpsite, providing financial support for the transfer o f solid waste from the transfer stations to the dumpsite and the operation o f the dumpsite through the provision o f one bulldozer, a weighing bridge and some operating costs o f the dumpsite for i t s f i rst years o f implementation; (iii) provision o f community participation techniques and monitoring and evaluation (M&E) training for the small and medium-sized entrepreneurs, communities and municipality officials; and (iv) communication and sensitization activities to increase communities' S W M awareness to contribute to the sustainability o f this project component. The project wil l finance the operating costs for the transfer o f solid waste from the transfer sites to the dumpsite on a declining basis at 100 percent for the first year, 75 percent for the second year (the Bangui municipality wil l finance 25 percent starting from year two after grant effectiveness), 50 percent for the third year (the municipality wi l l finance 50 percent from year three) and thereafter, the municipality wi l l finance total operating costs for the S W M in Bangui starting from year four. This component wi l l ensure that waste generated by a population o f about 227,000 i s collected and disposed o f in a fashion more conducive to public health than before the project.

A.4 Urban Roads Rehabilitation (US$3.8 million equivalent): This subcomponent aims at rehabilitating 66 km o f primary and secondary gravel or dirt roads in Bangui and increasing access to currently isolated areas. This is expected to restore or significantly improve vehicle accessibility to currently inaccessible parts o f the city where an estimated 420,000 people live. The activities under this subcomponent include: (i) rehabilitation o f the primary and secondary earth roads network in Bangui that provides access to neighborhoods located in the seven districts o f the town by reshaping identified roads, reinforcing the base structures, re-gravelling the roads, and rehabilitating drainage and crossing structures; and (ii) improving the drainage along those roads.

Component B: Institutional Strengthening (US$3 million equivalent)

26. This component aims to strengthen the capacity o f the institutions involved in the management o f the project (the Ministry o f Urban Affairs (MREPUL), Ministry o f Public Works, Ministry o f Hydraulic, and AGETIP-CAF) and responsible for the delivery o f urban services (the Municipality o f Bangui and SODECA) to ensure some measure o f sustainability o f the activities to be financed by the project. I t i s clear that this emergency operation will not address al l the important sustainability issues associated with the delivery o f the urban and infrastructure services that the project i s supporting. It will, however, help build the foundations for sustainability o f these services through other activities that the Government and other donors wil l implement. Activities under this component would include: (i) reinforcement o f the Technical Unit o f the MREPUL by providing technical assistance; (ii) strengthening the fiduciary functions in the Technical Secretariat; and (iii) acquisition o f software for financial and

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procurement management, monitoring and evaluation (M&E), instituting environmental and social safeguards, and training technical staff o f GoCAR agencies (MREPUL, Ministr ies o f Public Works and o f Hydraulic, SODECA, AGETIP-CAF and Municipality o f Bangui) and communities involved in the project to better streamline implementation processes.

27. The cost breakdown i s summarized in the table below.

Component Estimated cost ($ million) 1.1 A. Rehabilitation of critical Urban Infrastructure 15.0 - Water Supply 4.2 - Drainage Rehabilitation 4.2 - Sol id Waste Management 2.8 - Urban Roads Rehabilitation 3.8 1.2 B. Institutional Strengthening 3.0 - Technical Assistance and training: 0.5 - - technical equipment acquisition 0.6 Overall Implementation costs 0.6 ContingenEies 1.3 Total Project costs 18.0

Eligibility for processing under OP/BP 8.00

28. Under Operations Policy (OP) 8.00, emergency support can be provided in response to a request by the Government for urgent assistance with respect to an event that has caused, or i s likely to cause, a major adverse economic and social impact associated with man-made crises. OP 8.00 identifies specific objectives that may be supported through emergency assistance, including the facilitation o f support to mitigate or avert the potential effects o f future crises in countries at high risk.

29. The activities planned under the project are designed to help stabilize the fragile situation facing C A R in the post-conflict, continuing low-intensity violence in parts o f the country including minor clashes in Bangui and other urban centers. I t wil l generate visible benefits to the Bangui population, improve the populations’ trust in Government, bring tangible services to improve the living conditions o f the people, and in the process, contribute to averting a simmering social crisis. The need to show immediate “peace dividends” to the unsettled Bangui population i s immense and the GoCAR is very anxious that the Bank provides support to this project swift ly to avoid ultimately jeopardizing the hard-earned results o f the country’s political transition and gains under the peace process.

30. Success o f the project-financed activities in the timeframe needed to have an impact on the social situation depends on the use o f flexible and accelerated procedures as allowed under OPBP 8.00, particularly in the processing o f project preparation, safeguards compliance, procurement, and disbursement arrangements. Without such provisions, the project’s inputs would not be mobilized quickly enough to contribute to stabilization o f the current situation in Bangui and in C A R as a whole.

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Consistency with the Country Assistance Strategy

3 1. Bank assistance to CAR is currently provided under a Joint Interim Strategy Note (JISN) developed joint ly with the African Development Bank. The project i s an integral part o f the JISN, because: (i) the main objectives o f its activities (i.e. consolidation o f social stability, restarting private sector-led activities, rehabilitation o f infrastructure, and restoration o f basic social services) are al l key themes o f the JISN and the Interim Poverty Reduction Strategy Paper; and (ii) it is an essential element in helping manage key social r isks that may affect the entire Bank portfolio, and hence help maintain an environment in which Bank assistance can be effectively delivered. The project was specifically mentioned in the proposed l i s t o f operations identified in the JISN presented to the Bank’s Board o f Directors in February 2007. The project i s also fully aligned with the Afr ica Action Plan (AAP), which seeks to build the capacity o f post-conflict states to deliver essential services.

Expected outcomes

32. Expected outcomes of the activities to be financed under the project are as follows:

Drainage rehabilitation

management

o f priority

output b 11 kilometers o f pipes

b 10 boreholes constructed rehabilitated

6.7 km o f drains rehabilitated

Number of open dumps

Number o f transfer stations

0 400 jobs created

cleared

built

66 km of urban roads rehabilitated in Bangui.

Outcome Access to clean water in target neighborhoods increased from 25% to 40%.

52,000 people less affected by floods.

40% of solid waste produced in Bangui i s collected and disposed of.

420,000 people with access to year-round.

Monitoring Baseline: rapid survey in 2007 to be done by AGETIP-CAF and SODECA. Final: rapid survey in 201 1 (with same methodology) will measure the increase in the number of people provided with water (with incremental measurement done at the end of Dec. 2008,2009 and 2010). Quantity of potable water delivered by SODECA by Dec 2008 compared to quantity at grant effectiveness and quantity of water provided by the ten boreholes. Baseline: rapid survey in 2007 conducted by AGETIP-CAF. Final: rapid survey in 20 1 1 (with same methodology). Number o f households not flooded during 2010 rainy season compared to those flooded in the 2007.

Provide weigh bridge at the dumpsite to monitor quantity o f trash delivered to the site; Annual review o f progress: Municipal officers to ensure households do not dump waste at inappropriate sites and to monitor the contractors in charge o f primary and secondary waste collection and disposal. Active involvement o f communities in monitoring trash collection and disposal

Baseline: rapid survey in 2007 conducted by AGETIP-CAF. Final: rapid survey in 201 1 (with same

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Institutional Strengthening

officials 0 S W M organization and system established in Municipal i ty o f Bangui 0 140 officials f rom the three technical ministries involved, Municipal i ty o f Bangui, SODECA and AGETIP-CAF trained in project management and use o f Bank’s procedures.

passable roads. methodology). 0 Fiduciary and safeguards Operational Baseline: rapid survey in 2007 training delivered to 112 performance o f Annual assessment o f the performance

the waste management team i s improved.

o f the sol id waste unit o f the Municipal i ty o f Bangui.

D. KEY ELEMENTS OF APPRAISAL AND IMPLEMENTATION ARRANGEMENTS

Lessons learned and reflected in the project’s design

33. Use o f private sector operators in managing works contracts has brought about synergies between private and public sector management systems and has provided positive feedback for improving service provision to citizens throughout sub-Saharan Africa. Despite formidable logistical and capacity constraints in CAR, progress has been made in the implementation o f some projects both by the Bank and other donors using private sector managed principles and approaches. The key to most o f the successes i s in the crafting o f simple but effective project design and close attention to implementation procedures and rigorous supervision arrangements. Capacity constraints in C A R are manifold, on both the public and private sector sides, but the Bank has a solid record o f implementation techniques, especially for infrastructure and rehabilitation projects in post-conflict countries and much o f that has been reflected in the design, implementation and supervision plans for this project. O n the other hand, the Bank has also encountered difficulties with specific operations (especially in remote areas), and this varied experience suggests that operational performance i s closely linked to the quality of implementation mechanisms (in terms o f pragmatism, simplicity, and effectiveness o f arrangements, as wel l as quality o f the institutions and individuals involved). In this context, the project design builds on successful, earlier Bank-financed operations, other donors’ experiences and on what has worked well in many countries and projects in the Central African Region and elsewhere.

34. the proposed project:

In addition, the following operational lessons have been incorporated into the design of

The need for solid private-sector-led implementation mechanisms in post-conflict environments to deal with weak government capacity and yield quick results has been the main feature of the implementation arrangements for this project. The tailored project implementation and execution arrangements captured in the project design are to compensate for the lack o f public administrative capacity in CAR. However, considering the need to build governmental capacity in i t s own operations, the design has ensured appropriate involvement o f government agencies to create avenues for learning by doing. Ring-fencing project proceeds, and strengthened fiduciary and safeguard arrangements

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critical to ensuring transparency (and to help resist political pressures and influence towards possible corruption in procurement during implementation) are lessons that have been well-incorporated in the project design.

Effective implementation requires substantial hands-on Bank involvement. A very close working relationship has been developed with the implementing entity and the GoCAR agencies involved in project design and implementation and this will help to overcome obstacles, accelerate activities, and provide frequent technical advice as needed. In addition, close supervision, frequent procurement post-reviews, and close Bank country office involvement are essential ingredients incorporated into the project design to speed implementation and help mitigate fiduciary risks.

Key to implementation and an important aspect of effective oversight and built-in mechanism for sustainability of the project has been the involvement of the public in the project design and implementation structures. Such an involvement requires effective public information campaigns and media-coverage o f activities, as well as proactive outreach efforts towards relevant c iv i l society groups. Public involvement has been fully incorporated into the project.

Monitoring and evaluation systems that are innovative but realistic to manage weak capacity and expectations in the project have been designed with the help of civi l society and the private sector to help measure progress and manage expectations. This has required a degree o f creativity in a context where statistical data (and capacity) are scarce and often unreliable, and baseline information i s missing. Results in some countries regarding the dependence on communities for monitoring, evaluation, and management o f rehabilitated infrastructure have been mixed, but mostly provided better and favorable conditions for ownership and long-term sustainability o f services rehabilitated. This project has included communities and their c iv i l society groups in the design o f the components and the trust built wil l be harnessed and deepened for implementation.

Project coverage and implementation period

35. Upon grant effectiveness, the project i s expected to be fully implemented within four years (the completion date is currently estimated to be July 31, 2011). First visible activities towards cleaning open garbage dumpsites around Bangui wi l l be carried out within a month o f grant effectiveness to rid the informal neighborhood dumpsites o f al l accumulated solid waste. The rainy season o f 2007 wil l be utilized to prepare and complete some o f the technical studies, complete bids processes and finalize many works contracts to be ready for implementation immediately following the wet season. Most activities are expected to be committed by October 2007 and completed within the following 18 to 36 months; some residual activities may be somewhat longer. The longer timeframe for implementation i s envisaged due to country circumstances, but as experience i s gained and Bank procedures are better understood, the implementing entity wil l endeavor to deliver activities more quickly.

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Implementation arrangements

36. In view o f the need for rapid results on the ground, the project has been designed to rely on implementation arrangements that have been successfully tested under development partners' financed activities. In close consultation and collaboration with GoCAR and other stakeholders, the institutional and implementation arrangements for the project have been agreed upon as follows:

0 MREPUL i s the GoCAR-designated Ministry responsible for the project and will be the Bank's main counterpart. I t wil l ensure that the project is correctly implemented in timely fashion, and development objectives are achieved.

Chaired by the Minister o f Planning with the Minister in-charge o f MinistBre de la Reconstruction des e'difices publics, de I 'Urbanisme et du Logement, (MREPUL) acting as i t s Secretary General, an Interministerial Steering Committee ( Comite' Interministe'riel de Supervision, ISC) will be set up with overall oversight and supervision responsibilities for project implementation, coordinating stakeholder actions, and alleviating administrative and political issues that may impact project implementation and achievement o f objectives. The ISC wil l include representatives o f the MREPUL, Ministries o f Public Works and Hydraulic, Ministry o f Planning AGETIP-CAF, SODECA, Municipality o f Bangui, and at least two representatives o f the districts o f Bangui where the project i s implemented (beneficiary communities).

A Technical Secretariat (TS) shall support the ISC in i t s functions. The TS wil l have four main functions: (i) execution o f the project on behalf o f MREPUL and GoCAR, follow- up and evaluation o f work performed by the Project Implementing Entity (AGETIP- CAF), the Municipality o f Bangui (as the entity responsible for management o f solid waste, drainage and road activities in Bangui), and SODECA (as the entity in-charge o f the provision o f water services to be rehabilitated by the project); (ii) act as the technical adviser to the ISC; (iii) prepare consolidated technical and financial project reports for the Bank and GoCAR; and (iv) ensure dissemination o f lessons learned from the project to al l participating agencies, beneficiary communities and other stakeholder institutions, as wel l as manage the overall communications strategy for the project.

The Government will delegate al l project-related works and goods contract management responsibilities to a Project Implementing Entity, AGETIP-CAF. The Project Implementing Entity shall be responsible for the technical and fiduciary aspects (financial management and procurement) o f the implementation o f Component A (Infrastructure Rehabilitation) and Component B (Institutional Strengthening) o f the Project. SODECA wil l provide technical support to AGETIP-CAF for the implementation o f Sub- component A1 (Water Supply) o f the Project; the Municipality o f Bangui for Sub- component A 2 (Drainage), A3 ( S W M ) and A 4 (Urban Roads); and MREPUL for Component B o f the Project. This wil l be specified in a delegated contract management agreement between the Government and the implementing entity. Technical assistance agreements will be signed between the Municipality o f Bangui and AGETIP-CAF for the roads, drainage and solid waste activities, and between Ministry o f Hydraulic and AGETIP-CAF for the water activities. For the water-related activities, AGETIP-CAF

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will prepare the bidding documents, manage the procurement process, sign contracts, supervise and pay contractors and other service providers for a l l works in the project, on behalf o f the Government. Under the technical assistance agreement, SODECA and the Municipality o f Bangui will review under specified timeframe, the technical and operational performances associated with the design and building o f related facilities and equipment and ensure that the facilities are appropriately built. SODECA and the Municipality o f Bangui will also support AGETIP-CAF in the supervision o f the works on facilities which will be handed over to them for operation upon completion.

AGETIP-CAF

Relationships between the Agencies involved in project implementation

MEMBERS: Urban Affairs, Planning, Public Works, Hydraulic, Municipality of Bangui,

t and Rep of beneficiary

Inter-ministerial Steering Committee Coordination

SODECA, AGETIP-CAF,

State (CAR) communities I

Line Ministry -4 MREPUL 1-1

Delegated I Technical SPN , I , Contract

Technical

Municipality of Bangui Ministry of Water

1 I I

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Procurement arrangements

37. Priority will be given to ensuring adequate transparency o f the procurement process to reduce opportunities for corrupt practices. Procurement methods and arrangements to be used under the project wil l build on experience to date with completed and ongoing projects managed by AGETIPs in Africa. MREPUL wil l delegate al l procurement responsibilities to AGETIP- C A F and wil l not be directly involved in procurement. AGETIP-CAF wil l sign al l contracts awarded under the project.

38. Procurement wil l be conducted in accordance with applicable IBRD guidelines. Procurement methods wil l rely on competitive processes in most cases - essentially, International Competitive Bidding (ICB) and National Competitive Bidding (NCB) for goods and works, and Quality-Cost Based Selection (QCBS) for services. The existing N C B standard bidding documents that were prepared as part o f a prior World Bank financing and used by al l the agencies o f the AFRICATIP network (umbrella organization o f al l the AGETIPs in Africa) wil l be amended to add the new requirements from the 2004 World Bank procurement directives (as revised in October 2006) related to fraud and corruption. Sole source contracting (SSC), however, wil l be used in a limited number o f specific cases which meet the criteria set in OP 8 .OO when absolutely indispensable to avoid significant delays in implementation. Detailed procurement arrangements and a Simplified Procurement Plan (SPP) are presented in Annex 5.

Disbursement arrangements

39. The project will finance 100 percent o f al l expenditures, inclusive o f taxes. This i s consistent with the Country Financing Parameters for CAR. Counterpart funding may otherwise be lacking or may be available with delay, which could seriously hamper project implementation and seriously undermine the goal o f quick response to the emergency. The disbursement schedule i s expected to be as follows: 10 percent in FY07; 50 percent in FY08; 22 percent in FY09; 10.5 percent in FY 10; and 7.5 percent in FY 11. The proposed disbursement arrangements include the establishment o f one Dedicated Account managed by AGETIP-CAF on behalf o f MREPUL. Detailed disbursement arrangements are presented in Annex 4.

Financial management, reporting, and auditing

40. The financial management system and performance o f AGETIP-CAF have been determined to be satisfactory by the Bank’s Financial Management Specialist (FMS) and meet the Bank guidelines as stated in OP10.02. This is not the case with MREPUL, the Municipality o f Bangui, and SODECA. Payment modalities are described in detail in the Bank operations manual. Additional staffing requirements in AGETIP-CAF (to deal with the incremental workload due to the project and to maintain sound financial management) have been discussed and agreed upon. AGETP-CAF wil l increase i t s staff to implement this project, and wil l additionally recruit an internal auditor and procurement specialist within three months o f grant effectiveness. The selection o f the procurement specialist i s ongoing and should be completed shortly. Detailed financial management arrangements are presented in Annex 4.

41. AGETIP-CAF wil l be required to submit quarterly Financial Monitoring Reports (FMRs) within 45 days following the first day o f each calendar quarter after effectiveness. The formats and the content o f the FMRs and o f the Annual Financial Statements have been discussed and

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agreed upon. Independent auditors acceptable to IDA will audit the use o f a l l funds available under the project grant, including the Special Account and the statements o f expenditures. Audit reports will be submitted to IDA no later than six months after the end o f the fiscal year. The format and the frequency o f periodic reporting wil l be maintained as defined in the Project Manual.

There wil l be one Dedicated Account managed by AGETIP-CAF o n behalf of the GoCAR represented by the MREPUL.

Compliance with Bank safeguard policies

42. The project i s classified as Environmental Category B as the potential environmental and social impacts are not significant. They are likely to be small-scale, site-specific and thus easily manageable. The project triggers two safeguards policies: OP 4.01 on Environmental Assessment and OP 4.12 o n Involuntary Resettlement. These triggered policies are applicable to the four subcomponents. The two safeguard instruments to be prepared are the Environmental and Social Management Framework (ESMF) and the Resettlement Policy Framework (RPF). The selected proposed works comply with the provisions o f OP 8.00 and are considered to be addressed on an emergency basis. The ESMF and RPF will be prepared and disclosed within six months o f grant effectiveness. Detailed environmental assessments and Resettlement Action Plans (RAPS), if necessary, would be carried out for al l project activities that wil l trigger them and disclosed within six months o f the trigger.

43. As required under OP 8.00, the Bank has prepared an Environmental and Social Screening and Assessment Framework, which outlines the mitigation approach during implementation (see Annex 6).

Implementation support

44. At least four supervision missions per year wil l be conducted by the World Bank in the first two years o f project implementation, followed by supervision missions conducted at least twice a year for the remainder o f the project implementation period. Supervision teams wil l include procurement, financial management, and safeguards specialists in addition to the Task Team Leader and the technical specialists. Implementation support and supervision, through missions as wel l as direct involvement by the Bangui Country Office will, in particular, focus on performance o f the implementing entity in managing contracts, procurement, safeguards, technical and financial management, as well as in completing the agreed upon implementation plans.

45. Annual reviews wil l be carried out after effectiveness, to assess progress, achievement o f the overall objective, as wel l as the role o f the different partners and to eventually restructure the project if needed to ensure achievement o f objectives. The reviews wil l involve visits by specialists to selected sites for first-hand assessment o f progress on the ground and wil l include the participation o f al l stakeholders including the representatives o f the communities who are benefiting from the project. The project has been designed to reduce fraud, corruption and governance failures by increasing transparency and promoting disclosure, strengthening the existing procurement processes, and increasing control and oversight o f project implementation, thus contributing to strengthening the governance framework. Project implementation will take

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these features into account by ensuring that they are effectively carried out throughout the l i f e o f the project.

Expected timing of implementation

46. implementation are expected to be as follows:

Assuming the grant becomes effective by midJune, 2007; the key milestones for

(i) Component A: Infrastructure rehabilitation

9 Completion o f environmental and social impact assessments: end-Sept. 2007; 9 Completion o f resettlement assessments: by end-Sept. 2007.

Sub-component A l : Water supply 9 Des ign o f the detailed management system for communal standposts (by a

consultant and Ministry o f Hydraulic): by end-Nov. 2007; 9 Studies, including Environment Management Plans (EMPs) and Resettlement

Action Plan (RAPs) as may be necessary, and bidding documents: by end-October 2007;

> Works completion and related supervision: by end-May 2009.

Sub-component A2: Drainage Rehabilitation 9 Design o f detailed communication and community participation system: by end-

Nov. 2007; > Update o f technical studies, including EMPs and RAPs, as may be necessary, and

elaborate bidding documents: by end-October 2007; 9 Works completion and related supervision: by end-December 2009.

Sub-component A3: Solid Waste Management 9 Cleaning up o f informal garbage deposits currently located at random sites

throughout Bangui: at mid-October 2007; 9 Design o f detailed communication and community participation system: by end-

Nov. 2007; 9 Update o f technical studies , including EMPs and RAPS as may be necessary, and

elaborate bidding documents: by end-July 2007; > Works completion and related supervision: by end-May 2008.

Sub-component A4: Urban Roads Rehabilitation: For the roads for which studies need only updating:

> Updated studies and elaborate bidding documents: end-August 2007; 9 Works completion and related supervision: by end-December 2009.

For the roads for which studies need to be carried out: 9 Studies, including EMPs and R A P s as may be necessary, and bidding documents:

by end-December 2007; 9 Works completion and related supervision: by end-October 201 1.

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(ii) Component B: Institutional Strengthening

> Recruitment o f Systems Management Consultant/TA for the Technical Secretariat-July 2007;

> Recruitment and award o f management training contract for MREPUL, Municipality o f Bangui, SODECA and AGETIP-CAF: end-August 2007;

> Completion o f procurement o f vehicles, computers, software and other management tools: end-October 2007;

> Completion training o f officials in fiduciary, M&E, and supervision o f contracts and works systems- by June 201 1.

E. PROJECT R I S K S AND MITIGATING MEASURES

47. The main r isks facing this operation are not specific to the project, but rather are a consequence o f the fragile political, economic, and social environment in C A R after ten years o f conflict and political instability. These risks include: regional instability and threats to the peace process; political instability, social upheaval or paralysis; and deterioration o f the macroeconomic situation. It should be noted however that the project precisely aims to help mitigate some o f these risks.

Potential Risks and Mitigation

48. (a) Security concerns and the risk posed by social instability wil l not be eliminated or reduced by the project. These risks wi l l be managed through a series o f practical steps to be taken by the Country Director in l ine with the Bank’s overall country strategy, which may include temporary suspension o f activities in case the risks o f disruptions are too high or f i l l project suspension in the case o f prolonged instability.

The project faces a variety o f r isks which are considered to be high, and include:

(b) Corruption and fraud are o f particular concern with regard to procurement and financial management. This risk wil l be mitigated by: (i) keeping prior review thresholds at a level that i s consistent with local construction industry capacity, maintaining the level o f interest o f the international construction industry, providing procurement training, disclosure o f bid results and conducting regular technical audits; (ii) ensuring close supervision; and (iii) requesting the Government to impose immediate sanctions in case o f misuse o f resources. I t should be noted, however, that the need to ensure speedy implementation is likely to heighten this risk.

(c) There i s a lack o f administrative capacity for project coordination and implementation, especially in the municipality o f Bangui for the supervision o f the solid waste and the MREPUL for project management. This risk will be mitigated by: providing hands-on support and technical assistance as necessary.

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49. Project Risks and Mitigating Measures

Risk Risk M i t i g a t i n g Measures Risk Rat ing wl Mi t iga t i on

The weak capacity o f the MREPUL, the municipality o f Bangui and SODECA, and their inabil ity to manage the project. Any major instability and breakdown o f the security environment in CAR w i l l aggravate this risk.

Polit ical interference in selecting activities to be financed under the grant even as the project is under implementation

Procurement o f works may not be carried out in a fair and transparent way.

L imi ted knowledge and experience with IDA’S procurement procedures causing substantial delays in project implementation.

TO PROJECT DEVELOPMENT OBJECTIVE

Outsource procurement to an independent procurement agent (AGETIP-CAF) through delegated contract management; supervise works and certify contractors’ invoices by specialized supervision firms.

Bank Team has worked through the GoCAR appointed Project Technical Preparation Committee that has included a l l representatives o f stakeholders that made decisions o n the choice o f activities to be financed f rom a long l is t o f priorit ies submitted by the government and the communities. The activities to be financed have been fully agreed with G o C A R and the interministerial Committee ISC has been established to work through such possible occurrence. Part o f the responsibility o f the ISC i s to unclog any such pol i t ical interference that may crop up.

TO PROJECT C O M P O N E N T S

Disclosure o f procurement information and advertisement o f procurement activities.

Encourage national competition during procurement phase; closely check contractors’ effective capacity before award o f contracts; closely monitor performance during implementation, and use incentives and penalties set in the contract.

procurement workload associated with the project and taking care o f procurement planning, processing, monitoring and

Recruit a procurement specialist for addressing

follow-up. Designate a staff - “Chef de Projet”- t o be in charge

Train staff (at least two f rom each entity) o n Wor ld

o f the overall quality control o f bidding documents before issuing.

Bank procurement procedures in specialized institution.

M

H

H

M

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Communities not sufficiently involved in project implementation and as a result, for example, the canals continue to be clogged with trash

SODECA has insufficient cash f l ow for operating and maintenance o f the rehabilitated water infrastructure. SODECA may not receive adequate power supply f r o m ENERCA to ensure continuous operation o f its facilities.

Municipal i ty does not provide funds for SWM.

Poor capacity o f local contractors,

Overall Risk rating

Community involvement has been key to the design o f the project and representatives o f beneficiary communities are included in ISC. Efforts wil l be made through information and communications strategy for the project to ensure that communities are fully involved in the implementation o f the project and that the labor-intensive works takes cognizance o f community participation in the works, monitoring and evaluation o f the project.

Reduced leakage from the SODECA network wil l contribute to increasing SODECA resources for operation and maintenance o f i t s facilities.

0 French Bilateral assistance intends to finance the

0 The decentralized micro water systems (boreholes) financed by the project wil l be managed by private entrepreneurs with the help o f communities to increase their sustainability and also put new sources o f revenue at the disposal o f SODECA for operation and maintenance.

Maintenance Fund (UIMF)2, which i s located within the M R E P U L for the sole purpose o f providing funds for operation and maintenance o f urban infrastructure and must put more resources at the disposal o f SODECA and the Municipal i ty o f Bangui t o better operate and maintain the rehabilitated infrastructure.

Information and communication campaigns wil l increase awareness o f the population for better upkeep o f the facilities Supervision missions o f the Wor ld Bank will ensure that SODECA draws and executes an operations and maintenance p lan that sets adequate measures to ensure that rehabilitated water facilities wil l be maintained.

GoCAR activate Urban Infrastructure Rehabilitation Fund and Municipal i ty t o assign h d s f r o m its revenue for S W M

Capacity building activities wil l be organized, quick payment procedures, strong supervision capacity by specialized firms that can provide hands o n training.

rehabilitation o f ENERCA.

GoCAR has activated the Urban Infrastructure

H

H

M

H

H

F. TERMS AND CONDITIONS FOR PROJECT FINANCING

50. wi l l cover 100 percent o f expenditure as per OP8.00 and the Country Financing Parameters.

The project i s expected to be funded through a US$18 million equivalent grant, which

The UIMF derives a five percent monthly income f rom the CAR Roads Fund (RF). The UIMF is a GoCAR enacted decree for the sole purpose o f providing assured funding o f urban infrastructure maintenance. A copy o f the decree has been delivered to IDA.

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In l ine with OP8.00, conditions are limited to a minimum:

0 Board presentation: None

0 Effectiveness: Receipt by IDA o f a Legal Opinion from the Conseil d’Etat confirming that the Grant Agreement has been duly signed by GoCAR and published in the official gazette, and that the Subsidiary Agreement has been duly authorized and signed by AGETIP-CAF and GoCAR, and that both agreements are valid and enforceable according to their respective terms.

o Additional Conditions o f Effectiveness consist o f the following: (a) The Subsidiary Agreement, in form and substance satisfactory to the Association, has been executed on behalf o f the Recipient and the Project Implementing Entity, and has become effective; and (b) The Recipient has recruited a monitoring and evaluation specialist for the Technical Secretariat o f the Steering Committee with terms o f reference, qualification and experience satisfactory to the Association.

o Additional Legal Matter consists o f the following: (a) The Subsidiary Agreement has been duly authorized or ratified by the Recipient and the Project Implementing Entity and i s legally binding upon the Recipient and the Project Implementing Entity in accordance with i t s terms.

The Effectiveness Deadline i s date ninety (90) days after the date o f the signing of the Financing Agreement.

0 Disbursement: None.

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ANNEX 1 : DESCRIPTION OF PROJECT COMPONENTS AND IMPLEMENTATION ARRANGEMENTS

Component A: Infrastructure Rehabilitation (US$15 million equivalent)

Sub-component A1 : Water Supply (US$4.2 mi l l ion equivalent)

Objective and results indicators

51. This subcomponent aims at increasing potable water supply to the residents o f Bangui who are currently connected to the SODECA network, and to extend water supply to an additional 100,000 people (about 15 percent o f the Bangui population), many o f whom are poor and would have improved access to a potable water supply for the first time. The activities under this subcomponent include: (i) reducing water losses and unaccounted-for-water (UFW) through emergency repairs and rehabilitation o f identified critical leakage points on the SODECA network; (ii) increasing SODECA water delivery capacity by rehabilitating two broken water pumps, making water supply more regular to the population already connected but receiving water only a few hours a day or a week; and (iii) providing deep boreholes (powered by solar energy) in ten neighborhoods located on the outskirts o f the city where the current SODECA network does not currently extend.

52. Performance indicators to measure the outcomes o f this component wil l include the number o f people in targeted communities within the Bangui municipality having access to potable water.

Key elements of background

53. Today, about 68 percent o f the urban population, and 80 percent o f the population o f the haphazard human settlements o f Bangui, use shallow wells for supply o f poor quality water. Water i s supplied to Bangui by the C A R water utility, “Socie‘tk des Euux de Centrufrique” (SODECA). Water supply for Bangui s t i l l depends on the performance o f the electricity utility “Sociktk Nutionale d ’Electricitk de Centrufrique” (ENERCA). There are long periods o f daily power outages, which in turn affect the distribution o f potable water by SODECA. The nominal water treatment capacity o f SODECA i s 1,50Om3/hour, but current delivery capacity has been reduced to 50 percent as a result o f the breakdown o f three water pumps. For lack o f resources, SODECA is frequently unable to buy the chemicals required for water purification. If emergency actions are not taken to restore i t s production and distribution capacity, the utility wil l collapse, causing a major disaster in Bangui, which i s now home to more than 50 percent o f CAR’S urban population. I t must be noted that this emergency project wil l not attempt to address the management issues which require long te rm solutions. The water supply subcomponent o f this project will set up the conditions to strengthen the provision o f potable water in the short term to the population. W h i l e rehabilitation o f the network would ensure more continued water supply to citizens already served by the SODECA network, the project aims to bring potable water supply to an additional 100,000 people who will be receiving this service for the first time, through decentralized production arrangements ut i l iz ing solar powered boreholes and a more efficient use o f the existing water network.

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Key elements of design

Activities financed under the project:

Activity

Civil works and supplies (primary, secondary, and tertiary networks and

Rehabilitation o f the existing network: The works wil l consist o f rehabilitating old pipes on some sections o f the distribution network, and repairing pipes and connections in some areas o f the town that greatly affect output o f the network because o f leaks. The rehabilitation works will include 11 km o f pipe works; Creation o f mini water supply svstems in ten neighborhoods around Bangui not covered by the SODECA network. These areas are Cattin-Plateau (Pelemongo), Cite Jean XXIII (hill slope) and PK13, and Boal i road. The beneficiary communities wil l be involved in the selection process o f the sites. The works wil l consist o f constructing ten drinking water supply microsystems powered by solar energy and comprising ten boreholes fitted with tanks o f 7 m3 each and about 30 public water kiosks. Once completed, the mini water systems wil l be operated and managed by private enterprises, which wil l be selected by SODECA through a competitive process; Works to increase water deliverv to the network: The proposed activities wil l include the rehabilitation and/or replacement o f pumping equipment (power pumps, feed pumps, etc.), as wel l as the rehabilitation or replacement o f defective electrical installations (old instrument cabinets, etc.); and Promotion o f connections and standpipes: This wil l consist o f financing the supply o f equipment required by SODECA to install household connections and standpipes on a stretch o f the network that runs in neighborhoods in the districts without connections. Water kiosks wil l be erected to bring potable water supply through the network to such districts and their populations. I t i s estimated that some 20,000 underprivileged population who previously did not have access to SODECA’s water supply network wil l be brought on-line as a result o f these activities (building more water kiosks) on the network.

Cost (million US$) 3.5

Expected t iming of implementation

boreholes) Studies and supervision, including safeguards

Total component cost Information communication and training campaign

Completion o f environmental and social impact assessments: end-Sept. 2007; Completion o f resettlement assessments: by end-Sept. 2007; Design o f the detailed management system for communal standposts (by a consultant and Ministry o f Hydraulic: by end-Nov. 2007; Studies, including EMPs and RAPS as may be necessary, and bidding documents: by end-October 2007; Works completion and related supervision: by end-May 2009.

0.5 0.2 4.2

Cost breakdown

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Sub-component A2: Drainage Rehabilitation (US$4.2 million eauivalent)

Objective and results indicators

54. This subcomponent aims at reducing the number o f people affected by periodic flooding in the neighborhoods o f Bangui. Activities include: (i) rehabilitation and extension o f the central Bouagba canal; (ii) rehabilitation o f substandard and unsound structures, and construction o f new culverts; (iii) resurfacing the inner walls o f the collector with stones and cement using mostly labor-intensive works methods to generate employment; (iv) rehabilitation o f shoulders and side ditches o f the secondary network that drains into the M a i n Bouagba collector; and (v) pi lot low- cost appropriate technology for lining and paving o f canals by means o f masonry, wooden piles, or sheet piling. This component wil l protect 52,000 people from being flooded out o f their homes each year during the rainy season and wil l help stabilize severe erosion, which threatens existing infrastructure.

55. number o f people in targeted communities protected from periodic flooding.

Performance indicator to measure the outcomes o f this component wil l include the

Key elements of background

56. Bangui is prone to frequent flooding due to the dilapidated state o f the storm water drainage system which serves about 52,000 people. Incidence o f water borne diseases is high. The city does not have an adequate household rehse collection system, and people throw their garbage in the culverts and canals meant for drainage, in turn clogging the city’s 37 km drainage network. The most critical situation is found in the watershed known as Bouagba, where the collector’s f low i s blocked by housing built in its path, as wel l as by huge dumps o f solid waste left uncollected and which also clogs the collector. This situation i s aggravated by increasing population density in the districts o f Bangui ci ty in which Bouagba lies. The watershed i s made up o f waterways, namely the Koro and Bouagba tributaries. Downstream, there is a marshland, which is supposed to act as a reservoir for storm waters but which has been completely blocked by accumulated solid waste and therefore allows water to be discharged upstream flooding Langbassi, Sapkkk, Linguissa and Pelevo neighborhoods, despite the presence o f the Bouagba main drain.

Key elements of design

Activities financed under the Project

57. The works consist in the rehabilitation f the main Bouagba canal over a distance o f 3.25 km and the construction o f a network o f secondary drains over a distance o f 3.5 km which wil l drain storm waters from neighborhoods that are subject to regular flooding. The works wil l concern mainly: (i) cleaning and repairing the beds o f these culverts; (ii) protecting their walls with cement and stonework walls; and (iii) educating the population to refrain from dumping trash in the canal and organization o f refuse collection.

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Expected timing of implementation

I Studies and suDervision. including safeguards I 0.5

> Completion o f environmental and social impact assessments: end-Nov. 2007; > Completion o f resettlement assessments: by end-Nov. 2007; > Design o f detailed communication and community participation system: by end-

Nov. 2007; > Update o f technical studies, including EMPs and RAPS as may be necessary, and

elaborate bidding documents: by end-October 2007; > Works completion and related supervision: by end-December 2009.

I Information communication and training camDaign I 0.2

Cost breakdown

I Total comDonent cost I 4.2

Activity Civi l works and s u m l i e s (Drimarv and secondarv networks)

I cost I 3.5

Activity Civi l works and supplies (primary and secondary networks) Studies and supervision, including safeguards

Total component cost Information communication and training campaign

Cost (million US$) 3.5 0.5 0.2 4.2

(million

Sub-component A3: Solid Waste Management (US$2.8 mi l l ion eauivalent)

Objective and results indicators

58. This sub-component seeks to create a solid waste management system that i s operational, while building the foundations for a long term sustainable service. Existing large heaps o f garbage wil l be removed to improve the level o f cleanliness in the city. Collection o f solid waste from households for transport to the transfer stations wil l be carried out by small-sized private entrepreneurs. Three medium-sized entrepreneurs wil l be responsible for moving the solid waste from the transfer stations to the dumpsite outside o f Bangui. The activities under this subcomponent include: (i) construction o f 41 transfer stations in the City o f Bangui which wil l be divided into three Solid Waste Management (SWM) Secondary Collection Zones, each zone serviced by one S W M Enterprise; (ii) improving the access to, and operations of, the existing dumpsite, providing operational support to the transfer o f solid waste from the transfer stations to the dumpsite, and the operation o f the dumpsite through the provision o f one bulldozer and a weighing bridge; (iii) providing technical support and community participation techniques and monitoring and evaluation (M&E) training for the small and medium-sized entrepreneurs, as wel l as to communities and the municipal officials; and (iv) supporting communication and sensitization activities to increase communities' S W M awareness and contribute to the sustainability o f this project sub-component. The project will finance the operating costs for the transfer o f the waste from the transfer stations to the dumpsite at 100 percent for the first year, 75 percent for the second year (the Municipality o f Bangui wil l finance 25 percent starting from year two after project effectiveness), 50 percent for the third year (municipality will finance 50 percent from year three) and thereafter, the municipality wil l finance total operating costs for the S W M in Bangui starting from year four. This sub-component wil l also finance the operating costs o f the improved dumpsite on the same declining basis as with the transfer o f the waste from the transfer stations to the dumpsite. This component wil l ensure that waste generated by about 227,000 people i s collected and disposed o f in a fashion more conducive to public health than before the project.

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59. The performance indicators to measure the outcomes o f this component include the quantity o f solid waste collected and disposed o f compared to the quantity o f solid waste produced, and number o f jobs created.

Key elements of background

60. Bangui currently faces a serious problem o f household refuse collection, as the current system serves only a few neighborhoods and i s barely functional. Presently, there are two collection chains: one managed on an informal basis by the population through community organizations for on-site handling o f refuse and transfer to intermediate sporadically-created informal dumpsites, and the other, managed by the municipality which consists o f the transfer o f refuse generated by a few households and commercial businesses from the pre-determined dumpsites to the public dump. These chains are not well organized; there are no pre-identified intermediate sites properly equipped and managed where refuse is dumped. This situation leads to the creation o f several illegal informal dumpsites in the town. The municipality has very limited resources (financial and mechanical) to handle the transfer o f the waste to the official dumpsite. In addition, Bangui does not yet have a controlled public dumpsite that meets environmental standards. In many areas in the city, water discharge channels, where they exist, and open public spaces are used illegally as household refuse dumpsites.

Key elements of design

The following activities wi l l be financed:

The creation o f 41 transfer dumpsites made up o f a reinforced concrete platform with a ramp to facilitate access for rickshaws and similar equipment;

The improvement o f one o f the existing dumpsites to receive collected waste. Primary trash collection and delivery to transfer stations wil l be carried out by 15 micro entrepreneurs. Secondary collection and transfer to the final dumpsite wil l be done by three medium-size entrepreneurs. Selection o f entrepreneurs wil l be carried out through a competitive process;

The installation o f a weighbridge and control post on the dump. The weighbridge has the advantage o f providing more reliable data concerning quantities o f waste collected and delivered to the dumpsite; and

Information, education, and communication activities through public meetings and other appropriate means wil l be held to sensitize the population to the importance o f proper handling and management o f solid waste, on the new institutional arrangements for the management o f solid waste in Bangui, and on the need to ensure that they contribute to the financing o f pre-collection and primary collection.

61. The bidding process for cleaning the illegal dumpsites and the canals wil l be carried out before Board approval. The bidding process for trash collection from the households wil l be carried out during the rainy season when it wil l be difficult to carry out any work. Contracts wil l be awarded and ready for execution mid- October or at the end o f the rainy season.

These contracts wil l be awarded upon effectiveness.

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Completion o f environmental and social impact assessments: end-Nov. 2007; Completion o f resettlement assessments: by end-Nov. 2007; Cleaning up o f informal garbage deposits currently located at random sites throughout Bangui: at mid-October 2007; Design o f detailed communication and community participation system: by end- Nov. 2007; Update o f technical studies, including EMPs and RAPS as may be necessary, and elaborate bidding documents: by end-July 2007; Works completion and related supervision: by end-May 2008.

Activity

Solid waste transfer and dimosal contracts Civil works and equipment

Cost breakdown

Cost (million US$) 0.8 1.5

Studies and supervision, including safeguards

Total component cost Information, communication and training campaign

0.3 0.2 2.8

Sub-comDonent A4: Urban Roads Rehabilitation (US$3.8 mi l l ion equivalent)

Objective and results indicators

62. This subcomponent aims at rehabilitating 66 km o f primary and secondary gravel or dirt roads in Bangui and to increase access to currently isolated areas. This i s expected to restore or significantly improve vehicle accessibility to parts o f the city where an estimated 420,000 people currently live. The activities under this subcomponent include: (i) rehabilitation o f the primary and secondary earth roads network in Bangui that provides access to neighborhoods located in the seven districts o f the town by reshaping identified roads, reinforcing the base structures, re- gravelling the roads, and rehabilitating drainage and crossing structures; and (ii) improving the drainage along those roads.

63. number o f people with access to the city v ia roads that are usable al l year-round.

Performance indicators to measure the outcomes o f this component will include the

Key elements of background

64. Bangui ci ty has about 140 km o f urban road networks, o f which about 36 km is paved. The balance, about 66 percent (compared to 43 percent in Dakar and 52 percent in comparable cities in Africa), is gravel covered. The road network i s in an advanced state o f degradation, due mainly to the lack o f an adequate drainage network and maintenance failures associated with the long instability that the country has faced. During the rainy season, secondary roads are often impassable and access to poor residential areas i s virtually impossible to even trucks and all- wheel-drive vehicles. Despite the extensive deterioration and destruction o f the road infrastructure, little investment has been made over the past years on the urban roads network. The municipality o f Bangui does not have the technical and financial resources to maintain it. The most recent investment in the roads sector was the construction o f 10.5 km o f gravel road in

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a neighborhood in Bangui through labor-intensive operations, financed by AFD. Furthermore, the EC intends to finance the rehabilitation of 11 km o f asphalted roads in Bangui.

Activity Rehabilitation o f road sections for which studies are available Rehabilitation o f road sections for which studies are not available Studies and supervision, including safeguards Total component cost

Key elements of design

Cost (million US$) 2.0 1.4 0.4 3.8

65. The following activities wi l l be financed: rehabilitation o f the primary and secondary earth roads network in Bangui that provides access to currently isolated neighborhoods across seven districts. This wil l require reshaping 66 km o f roads, re-gravelling the road structure, and rehabilitation and construction o f drainage.

Expected timing of implementation

> Completion o f environmental and social impact assessments: end-Nov. 2007; P Completion o f resettlement assessments: by end-Nov. 2007;

For the roads for which studies need only updating: > Updated studies and elaborate bidding documents: end-August 2007 ; > Works completion and related supervision: by end-December 2009.

For the roads for which studies need to be carried out: > Studies, including EMPs and RAPS as may be necessary, and bidding documents:

by end-December 2007; > Works completion and related supervision: by end-October 201 1.

Cost breakdown

Component B: Institutional Strengthening ($3 Million equivalent)

Objective and results indicators

66. This component aims to strengthen the management capacity o f the institutions involved in the management o f the project (the MREPUL, Ministry o f Public Works, and AGETIP-CAF) and responsible for the delivery o f urban services (Municipality o f Bangui and SODECA) to ensure some level o f sustainability o f the activities to be financed by the project. Activities under this component would include: (i) reinforcement o f the Technical Department o f the MREPUL through the provision o f technical assistance; (ii) strengthening o f the fiduciary functions in the Technical Secretariat (TS); and (iii) acquisition o f financial, M&E, and procurement management software for the MREPUL, Ministries o f Public Works and o f Hydraulic, SODECA, AGETIP-CAF, and Municipality o f Bangui, to better streamline implementation processes as well as capacity building activities at the above mentioned institutions including the small local private sector.

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67. Performance indicators to measure the outcomes o f this component will include: (i) the number o f officials trained in project management and supplied with appropriate software to enable them to carry out their official responsibilities and better supervise implementation o f the project, and (ii) increased operational performance o f the technical department o f the Municipality o f Bangui dealing with solid waste management, drainage, and roads.

Key elements of background

68. Detailed capacity assessment by the Procurement Specialist and the Financial Management Specialist has shown weakness in the management capability o f the Municipality o f Bangui, the MREPUL, and SODECA.

Key elements of design

69. Activities under this component would include: (i) hiring a consultant to assist the Technical Secretariat in i t s oversight functions throughout the l i fe o f the project; (ii) acquisition o f fiduciary (financial & procurement) management software to better streamline implementation processes; (iii) acquisition o f software to increase the efficiency o f SODECA flowing o f water from the water treatment plant and the in-city storage facilities; (iv) training in community participation, communication, conflict resolution and management; and (v) contract management fees for AGETIP-CAF, payment for studies (including for the ESMF, the RPF, the EMP and RAPS if necessary, etc.), design and supervision engineers, safeguard specialists, and technical assistance for the Technical Secretariat in MREPUL.

The project will: >

9

>

9

>

Support institutional strengthening, technical assistance and training in Fiduciary, Monitoring and Evaluation (M&E), supervision o f works & contracts, community participation techniques, etc.; Provide resources to enable the Municipality o f Bangui to better function in i t s roles as regulator o f urban infrastructure services and through better strategic planning efforts; Provide management training for the Municipality to better support SWM, drainage and urban roads; SODECA to better manage water systems in Bangui, and MREPUL and Ministry o f Hydraulic to better undertake strategic planning for proper implementation o f the project; Support training o f MREPUL, Municipality and AGETIP-CAF officials in the proper use o f the Urban Infrastructure Maintenance Fund; Provide four vehicles, ten computers, and standard office software, fiduciary and management software, and some tools for management (accounting, auditing and M&E systems, etc).

Overall arrangements: MREPUL will delegate procurement responsibility to AGETIP-CAF and wil l not be directly involved in procurement. AGETIP-CAF- will s ign al l contracts awarded under the project.

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Expected timing of implementation

> Recruitment o f Monitoring and Evaluation Consultant/TA for the Technical Secretariat-July 2007;

k Recruitment and award o f management training contract for MREPUL, Municipality o f Bangui, SODECA and AGETIP-CAF: end-August 2007;

> Completion o f procurement o f vehicles, computers, software and other management tools: end-October 2007;

> Recruitment o f trainers and training o f officials in fiduciary, M&E and supervision o f contracts and works systems- by June 201 1.

Equipment wil l be procured during the year o f proj ect implementation.

Cost breakdown

Activity Cost (million US$) Technical equipment and software acquisition 0.6 Technical assistance and studies, design and supervision o f works and 0.5 training Project management and supervision cost 0.6 Contingencies (10 % o f works) 1.3 Total component cost 3.0

Key Implementation Support Arrangements

80. Four supervision missions per year wil l be conducted by the World Bank in the f i rst two years o f project implementation, followed by supervision missions conducted twice a year for the remainder o f the project implementation period. Supervision teams wil l include procurement, financial management and safeguards specialists in addition to the Task Team Leader and the technical specialists. Implementation support and supervision, through missions as wel l as direct involvement by the Bangui Country Office wil l focus, in particular, on performance o f AGETIP- C A F in managing contracts, procurement, safeguards, technical and financial management, as wel l as in completing the agreed upon implementation plans. The mission wil l also focus on the performance o f the TS in the MREPUL as wel l as o f the Municipality o f Bangui and SODECA. Missions wil l review the effectiveness o f the Inter-ministerial Steering Committee (ISC).

8 1. Annual reviews will be carried out after effectiveness, to assess progress, achievement o f the overall objectives, the role o f the different partners, and to eventually restructure the project if needed to ensure achievement o f objectives. The reviews wil l involve visits by specialists to selected sites for first-hand assessment o f the implementing entity’s performance and wil l include the participation o f al l stakeholders including the representatives o f the communities who are benefiting from the project. The project has been designed to reduce fraud, corruption and governance failures by increasing transparency and promoting disclosure, strengthening the existing procurement processes, and increasing control and oversight o f project implementation, thus contributing to strengthening the governance framework. Implementation o f the project wi l l take into account these features by ensuring that they are effectively carried out throughout the l i f e o f the project.

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(i) Transparency and disclosure: Posting o f the project procurement plan (which includes a complete list o f activities to be funded under the project and their corresponding cost estimates) in local newspapers in addition to Development Gateway (dgMarket) and United Nations Development Business (UNDB); and Complete disclosure o f procurement notices, award o f contracts, winners o f contracts and contract costs/amounts to be published in dgMarket, UNDB and local newspapers.

(ii) Strengthen the procurement process: AGETIP-CAF wil l recruit a procurement specialist and an internal auditor who wil l be trained in one o f the Bank’s sponsored procurement training institutes located in Dakar, Senegal; The project wil l provide fiduciary training for procurement staff in MREPUL, Municipality o f Bangui, and SODECA; and The bidding documents in the procedures manual o f AGETP-CAF have been reviewed and found to be satisfactory to the World Bank. The Bank’s new requirements on fraud and corruption as contained in the 2004 World Bank Procurement Guidelines have been incorporated in AGETIP-CAF’s procedures manual. In addition, a Complaints Management Mechanism wil l be included in the AGETP-CAF procedures manual.

(iii) Increase control and oversight of project implementation: A large number o f contracts wi l l be subject to prior-review by the Bank. Four supervision missions per year wil l be carried out in the first two years o f project implementation and wil l include Financial Management and Procurement Specialists with close supervision support by the country office in Bangui; Technical audits wil l be carried out o n an annual basis to ensure that procurement processes have been properly followed and that the quality o f works and studies are consistent with unit costs and terms o f reference; C iv i l society and beneficiary communities wil l be involved in the Annual Reviews o f project performance;

0 Information and communication campaigns will provide needed visibility o f the project for the populations; and

0 The Inter-ministerial Steering Committee in charge o f oversight wil l include beneficiaries’ representatives.

82. Specific indicators measuring the performance o f transparency in the procurement processes, as wel l as the control and oversight o f project implementation, will be actively followed during project supervision. In particular, the following indicators wil l be monitored during Bank supervision missions:

The number o f days between the date o f Bank non-objection and the signature o f a contract and contract’s approval (benchmark: 15 days); The number o f days taken by the AGETIP-CAF Evaluation Committee to review the bids evaluation report and prepare a report (Benchmark: 15 days); The number o f days between receipt o f the Bank’s “no objection” to the recommendation o f contract award and the publication o f results (within two weeks o f receiving the Bank’s “no objection” to the recommendation o f contract award, the Recipient shall

0

0

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publish results in UNDB online and in dgMarket for large value contracts and at least in one newspaper o f national coverage for N C B contracts); The number o f cases o f misprocurement (Benchmark: 0 cases); and The number o f days taken to respond to complaints (benchmark: 15 days).

0

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ANNEX 2: RESULTS FRAMEWORK AND MONITORING

Number o f kilometers o f newly constructed / rehabilitated drainage network.

RESULTS FRAMEWORK

Assess the actual implementation o f drainage works.

83. Project design has been guided by a results framework used for both project management and Bank supervision. This framework focuses on the project development objective (PDO) and the intermediate results expected from implementing each component. The matrix below wil l be used to track progress towards the PDO and wil l be changed accordingly if modifications are needed for the project during implementation.

PDO

The Project Development 3bjective (PDO) i s to support the 3overnment o f Central Afr ican Republic (GoCAR) to increase iccess to infrastructure and urban services in Bangui, the capital city.

Intermediate Results: One per component

Results Framework Outcome Indicators

Number o f people protected against periodic flooding.

Number o f people getting access to potable water.

Number o f people getting access to year-round passable roads.

Number o f people getting access to an operational sol id waste management system.

A solid waste management team i s established and i s functioning in the Municipal i ty o f Bangui.

Results Indicators for each Component

ComDonent A: Infrastructure Rehabilitation

Improved infrastructure and

Use of Outcome Information

Assess project impact o n targeted population in protecting them against flooding.

Assess project impact o n population in providing access to potable water.

Assess project impact o n population in providing access to public transport.

Assess project impact on population in providing access to solid waste management services.

Assess prospects for sustainability in solid waste management in Bangui.

Use of results monitoring

AI - Water Suppry

rehabilitated water supply network. implementation o f water supply works.

Assess the actual implementation o f boreholes.

Number o f newly constructed boreholes.

A2- Drainage Rehabilitation

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priority basic services in water supply, drainage, solid waste management and urban roads.

Quantity o f solid waste collected and disposed.

A3- Solid Waste Management

Assess effectiveness o f solid waste management system in place.

Number o f transfer stations constructed. Assess actual implementation o f transfer stations.

Number o f sensitization activities undertaken. Assess effectiveness o f sensitization activities.

Percentage o f solid waste collected I total waste produced.

Number o f jobs created under sol id waste management activities.

Assess effectiveness o f solid waste management system.

Assess solid waste management contribution to jobs creation.

A4- Urban Roads Rehabilitation

Number o f kilometers o f primary & secondary roads constructed / rehabilitated in Bangui.

Strengthened management capacity o f institutions involved in project management.

Assess actual implementation o f urban roads works.

I

ComDonent B: Institutional Strengthening

Number o f people trained in institutions involved in project implementation.

Assess progress in capacity building.

41

- m E

2

3 3 I- d

3

+ d 3 3 -

3 3 - - 3 3

d 8

3

8 VI m - 8 8 VI -

8 8 m r 4

8 z 8

3

VI m

0

C

c c L 5

! d i I i

t U Q

r

4 c a c i i

H cv 9 9

8 8 m - - I d

d I - O cv cv rg

rg

8 2 8 0

VI

0 0

d 8 T

2

0 3 N

6

0 rg

wl 1 - f cv I n s VI m

VI 0 VI

0 N

wl 2 0

n 0 0

0 : o

ANNEX 3: SUMMARY OF PROJECT COSTS

Project Costs Total Project Financing Percent from IDA

Table A Project Costs Summary by Component

(US$ million) Project Components Local Foreign Total Component A - Rehabilitation o f critical urban infrastructure 5.88 9.12 15 Sub-component A1 - Increased Access to Portable Water 1.65 2.55 4.2 Sub-component A 2 - Drainage Rehabilitation o f the Bouagba 1.65 4.2 Collector Sub-component A3 - Solid Waste Management 1.10 1.70 2.8 Sub-component A 4 - Rehabilitation o f Priority Urban Roads in 1.49 3.8 Bangui

Total Base line Costs 6.31 9.79 16.1 Project Implementation Coordination & Contingencies 0.75 1.15 1.9

2.55

2.3 1

Component B - Institutional Capacity Building 0.43 0.67 1.1

Total Project Costs in US$ million 7.06 10.94 18.0

Implementation period (FY July 1 - June 30; FYOS FY09 FYlO FYl l FY12 Total

1.8 9 4 1.9 1.3 18.0 1.8 9 4 1.9 1.3 18.0 100 100 100 100 100 100%

44

ANNEX 4: FINANCIAL MANAGEMENT AND DISBURSEMENT ARRANGEMENTS

A. Country issues

84. World Bank assistance to the C A R has been disrupted by the recurrent conflicts during much o f the past decade. The C A R has been under suspension o f IDA disbursements since January 2002 with protracted arrears o f approximately US$62.09 mi l l ion as o f November 20, 2006.

85. An exceptional IDA allocation o f US$lOO mi l l ion for the IDA-14 period was provided to the C A R on grant terms to support re-engagement through both budget support and investment funding. As part o f this allocation, the Bank provided an US$82 mi l l ion re-engagement and Institution Building Support Program Grant. The balance o f IDA resources o f U S $ l 8 mi l l ion was to be used to address basic infrastructure and other critical needs.

86. During 2006, the Bank also prepared technical reports on public procurement (Country Procurement Issues Paper (CPIP)), on trade and on public finance management (Country Financial Accountability Assessment (CFAA)). In the latter area, reports were prepared on cash management and accounting nomenclature, on c iv i l service reform and payroll control. The results o f these reports show that there is a high risk in the entire framework o f the public financial management system o f the CAR, including budget preparation, budget execution, reporting, and control. All these areas need strong improvement. Other diagnostic studies on the C A R fiduciary and economic framework are currently underway, including: (i) the Diagnostic Trade Integration Study (AAA, FY07); (ii) the Poverty Reduction Strategy paper (PRSP, FY07); (iii) the Country Procurement Issues Paper (AAA, FY07); and (iv) the Poverty Report (AAA, FY07).

B.

87.

a

a

a

a a

88. system:

Financial Management system

The objectives o f the project’s financial management system are to:

Ensure that funds are used only for their intended purposes in an efficient and economical way; Ensure that funds are properly managed and f low smoothly, regularly, and predictably in order to meet the project objectives; Enable the preparation o f accurate and timely financial reports; Enable project management to monitor the efficient implementation o f the project; and Safeguard the project assets and resources.

Furthermore, the following are necessary features o f a strong financial management

The implementing entity should have an adequate number o f skilled and experienced staff;

45

0 The internal control systems should ensure the conduct o f an orderly and efficient payment and procurement process, and proper recording and safeguarding o f assets and resources; The accounting system should support the project’s requests for funding and meet i t s reporting obligations to fund providers whether IDA or other donors;

0 The system should be capable o f providing financial data to measure performance when linked to the outputs o f the project; and An independent, qualified auditor should be appointed to review the project’s financial statements and internal controls.

Strengths and w eakn ewes

89.

a

e

a

90.

a

e

0

The project financial management i s weakened by the following salient features:

Numerous incompatible positions inside AGETIP-CAF have been identified. For example, the Financial Management Specialist (FMS) i s involved in the procurement process and the accountant is also the cashier; AGETIP-CAF’s operations with donor agencies do not appear in the financial statements; and There i s no internal audit service or staff.

The project financial management is strengthened by the fol lowing salient features:

The General Manager and the FMS possess strong experience in donors’ and the Bank’s financial management and disbursement procedures; AGETIP-CAF’s procedures manual is elaborate, wel l adapted to the situation o f the entity, and responds appropriately to the Bank’s requirements; and The accounting software i s acceptable at this stage. However, i t wil l need to be replaced by a more powerful one that can better manage Bank’s funds and other eventual financing. This replacement must be done three months after grant effectiveness.

Risk Rating

H

Risk Assessment and Mitigation

Risk Mitigating Measures Incorporated into Project

Design

GoCAR i s committed to a re form program that includes strengthening o f the budget classifications, and implementation o f an interim financial management system. A new legal framework i s being prepared. There are s t i l l weaknesses in capacity and in audit and preparation o f first set o f accounts. Efforts are

N

Remarks

The FM assessment o f GoCAR f inancial procedures revealed significant FM weaknesses at government level as we l l as sector ministries level in terms of: (i) budget formulation and execution, f inancial reporting, and oversight systems, (ii) weak linkage between agreed policies, budget planning and execution; (iii) lack o f an adequate tracking and reporting

46

Entity level

?roject level

Municipality o f Bangui, and 30DECA

4GETIP-CAF,

3veral l inherent risk

Control Risk

Budgeting

Accounting

Internal Control

Funds F l o w

H

S

H

S

S

M

M

M

:ontinuing to strengthen iccounting and audit capacity. Jse o f IDA FM procedures is ,equired for this project.

4GETIP-CAF’s complete mderstanding o f and use o f IDA FM system requirements i s x i t ica l for the mitigation o f fiduciary r isk o f the project.

An internal auditor o f AGETIP- CAF wil l be recruited to undertake a l l internal auditing functions o f the entity.

The entity i s used to build annual budgets. FY07 budget has already been implemented but the budgets are not integrated in the computerized accounting system. This needs to commence now.

The current software needs to be replacedupdated.

There is n o internal audit organ although a Financial Management Manual i s in place. AGETIP-CAF needs to recruit an internal auditor with TORs acceptable to IDA.

The design o f f low o f funds has been created to mitigate the risk: One designated account with double signatures will be held by AGETIP-CAF on-behalf o f

N

N

N

N

N

N

system and a formal accounting system within the ministries; (iv) the lack o f transparency and predictability in public resource management at central government and public enterprise levels; and (v) the insufficiently qualif ied staff in the areas o f financial management.

The assessment o f key ministries by the F M S revealed significant internal control weaknesses; lack o f an accounting system acceptable to IDA; and non-familiarity o f the staff with IDA financed-projects o r FM procedures.

The budget for the f i r s t financial year must be presented three months after the end o f each financial year. FY & AGETIP-CAF budget must be integrated into the entity’s accounting system by M a y 3 1, 2007.

The accounting software i s acceptable but needs to be replaced to handle more complicated operations.

TORs submitted by AGETIP-CAF have been reviewed and the entity has been given the go-ahead to launch the selection process now. The recruitment contract should be terminated three months after the grant closure.

47

with sound TOR acceptable to IDA will be recruited.

Overall control risk

AGETIP-CAF i s currently audited.

M

Overall risk rating

S This rating i s substantial due to country issues.

H-High, S-Substantial, M-Moderate, L-Low.

C. Institutional and Implementation Arrangements

91. Given the need for rapid results on the ground, the project has been designed to rely on implementation arrangements which are already in place and have been successfully tested under activities financed by development partners. In close consultation and collaboration with GoCAR and other stakeholders, the institutional and implementation arrangements for the project have beep agreed upon as follows:

MREPUL i s the GoCAR-designated Ministry responsible for the project and wil l be the Bank's main counterpart. I t will ensure that the project i s correctly implemented in timely fashion, and development objectives are achieved.

Chaired by the Minister o f Planning, with the Minister in-charge o f Ministgre de la Reconstruction des bdipces publics, de 1 'Urbanisme et du Logement (MREPUL) acting as i t s Secretary General, an Inter-ministerial Steering Committee (ISC) wil l be set up with overall oversight and supervision responsibilities for project implementation, coordinating stakeholder actions, alleviating administrative and political issues that may impact project implementation and achievement o f objectives. The ISC wil l include representatives o f the MREPUL, Ministries o f Public Works, Hydraulic and Planning, AGETP-CAF, SODECA, Municipality o f Bangui and at least two representatives o f the districts o f Bangui where the project i s implemented (beneficiary communities).

A Technical Secretariat (TS) shall support the ISC in i t s functions. The TS will have four main functions: (i) execution o f the project on behalf o f MREPUL and GoCAR, follow- up and evaluation o f work perfonned by the Project Implementation Entity (AGETIP- CAF), the Municipality o f Bangui (as the entity responsible for management o f solid waste, drainage and road activities in Bangui), and SODECA (as the entity in-charge o f the provision o f water services to be rehabilitated by the project); (ii) act as the technical adviser to the ISC; (iii) prepare consolidated technical and financial project reports for

48

the Bank and GoCAR; and (iv) ensure dissemination o f lessons learned from the project to the participating agencies, beneficiary communities and other stakeholder institutions, as wel l as manage the overall communications strategy for the project.

Accountant [AGETIP-CAF must recruit two more accounting personnel - an assistant accountant and accounts clerk - to achieve some segregation o f functions in the entity.]

The Government wil l delegate al l project-related works and goods contract management responsibilities to a Project Implementing Entity, AGETIP-CAF. The Project Implementing Entity shall be responsible for the technical and fiduciary aspects (financial management and procurement) o f the implementation o f Component A (Infrastructure Rehabilitation) and Component B (Institutional Strengthening) o f the project. SODECA will provide technical support to AGETIP-CAF for the implementation o f Sub- component A1 (Water Supply); the Municipality o f Bangui for Sub-component A 2 (Drainage), Subcomponent A3 ( S W M ) and Subcomponent A 4 (Urban Roads); and MREPUL for Component B o f the project. This will be specified in a delegated contract management agreement between the Government and AGETIP-CAF as the Project Implementing Entity. Technical assistance agreements will be signed between the Municipality o f Bangui and AGETIP-CAF for the roads, drainage and solid waste activities, and between the Ministry o f Hydraulic and AGETIP-CAF for the water activities. For the water-related activities, AGETIP-CAF will prepare the bidding documents, manage the procurement process, s ign contracts, supervise and pay contractors and other service providers for al l works in the project, on behalf o f the Government. Under the technical assistance agreement, SODECA and the Municipality o f Bangui wil l review under a specified timeframe, the technical and operational perfonnances associated with the design and building o f related facilities and equipment and ensure that the facilities are appropriately built. SODECA and the Municipality o f Bangui wil l also support AGETIP-CAF in supervision o f the works on facilities which wil l be handed over to them for operation upon completion.

Nine years o f professional experience. accounting.

First year university degree in

D. Staffing

92. The following staffs are currently employed by AGETIP-CAF in the financial management department:

Name and function Assistant financial and administrative manager experience, o f which six in

Wor ld Bank-funded projects. Banking Second year university degree in accounting

93. In addition, the General Manager (GM) has ten years experience in Bank-funded operations. To ensure the project i s effectively implemented, the TS wil l ensure appropriate

49

staffing arrangements are maintained throughout the l i fe o f the project. An internal auditor wil l be recruited by AGETIP-CAF to oversee al l internal auditing issues within the implementing entity.

E. Description of Financial Management Arrangements

Internal Controls and Financial Management Manual (FMM)

94. AGETIP-CAF currently has a financial management procedures manual (FMPM) which i s acceptable to the Bank. The FMPM describes the major transaction cycles o f the project, funds f low processes, accounting records, supporting documents, computer files and specific accounts in the financial statements involved in the processing o f transactions. The manual needs to be updated to take into account current arrangements no later than three months after grant effectiveness. AGETIP-CAF currently uses the new generic manual that was prepared with the support o f the Bank for al l AGETIPs in Africa.

Planning, Budgeting and Budgetary Control

95. Annual budgets wil l be prepared based on specific guidelines contained in the project FMPM. This Project Paper (EPP) wil l include a disbursement schedule, which wil l be used as the basis for the preparation o f annual budgets. The plan wil l be updated as part o f project implementation.

96. The budget wil l be prepared for al l significant activities o f the two components in sufficient detail to provide a meaningful tool with which to monitor subsequent performance. Procedures wil l be put in place to plan project activities, collect information from various stakeholders, and prepare budgets. The budget format wil l be based on project components described in the EPP and aide-memoire and wil l be integrated into the project accounting system within AGETIP-CAF through defined budget codes. The budget wi l l be used as a management tool while, expenditures will be authorized in accordance with agreed budgets.

Standard budget execution reports will be produced to facilitate analysis and control.

Books of accounts and list o f accounting codes

97. AGETIP-CAF wil l create a new folder in the software system to separate its operations from the project’s operations. The books o f accounts should include a cash book, ledgers, journal vouchers, fixed asset register, and a contract register maintained on a computerized system. A l i s t o f account codes (Chart o f Accounts) for the project should be drawn up. This should match with the classification o f expenditures and sources and application o f funds indicated in the Grant Agreement.

Audit arrangements

(a) Internal Audit

98. An internal auditor shall be recruited by AGETIP-CAF within three months o f grant effectiveness. The internal auditor will report on a regular basis on his duties to AGETIP-CAF

50

management. These reports wi l l be reviewed by the GM and will be available to the external auditors. The reports wi l l also be included in the project execution reports which wil l be issued every three months by the TS.

(b) External Audit

99. The external audit wil l be subcontracted to a firm o f private auditors. The selected external auditor wil l be acceptable to IDA in terms o f independence, qualifications, and experience, and wil l conduct year-end audits based on Terms o f Reference (TOR) cleared by IDA. Appropriate TORS for the external auditor must also be developed and agreed upon within three months o f Grant Effectiveness. The external audit work for the Emergency Urban Infrastructure Rehabilitation and Maintenance Project wil l include al l IDA funding, and other funds being handled by AGETIP-CAF. The project audit report should be submitted to IDA within six (6) months after the end o f each financial year.

100. In addition to the audit report, the auditor wil l be required to prepare a Management Letter where internal control weaknesses and recommendations for improvements are highlighted.

Report Monitoring

101. Formats o f the various periodic financial monitoring reports to be generated from the financial management system will be developed. There wil l be clear linkages between the information in these reports and the accounting data. The financial reports wil l be designed to provide quality and timely information to project management, implementing agencies, and various stakeholders on project performance.

The content o f the quarterly FMRs to be produced by AGETIP-CAF is as follows:

1.

2.

3.

4.

5.

6.

Discussion o f Project Progress

Sources and Uses o f Funds Statement

Uses o f Funds by Project Activities (supports the Sources/Uses o f Funds)

Physical Progress Report - physical outputs

Physical Progress Report - status o f large works and services

Procurement Monitoring Report - narrative and tables

The formats have been discussed with the AGETIP-CAF management and are acceptable.

102. The financial statements should be prepared in accordance with International Accounting Standards. The IDA Grant Agreement requires the submission o f audited financial statements to the Bank within six months after the year-end.

51

The project financial statements will be comprised of:

Action

1. A Statement o f Sources and Uses o f FunddCash Receipts and Payments which recognizes al l cash receipts, cash payments, and cash balances controlled by the entity; and separately identify payments by third parties on behalf o f the entity.

Due Date I Responsible Entity

2. A Balance Sheet indicating the assets and liabilities being managed by the implementing entity.

2

3

3. The Accounting Policies adopted and Explanatory Notes. The explanatory notes should be presented in a systematic manner with items on the Statement o f Sources cross referenced to any related information in the notes. Examples o f this information include a summary o f fixed assets by category o f assets, and a summary o f Statement o f Expenditures (SOE) withdrawal schedule, listing individual withdrawal applications.

m - y ) Recruit an external auditor acceptable to IDA. No later than 3 months

after grant effectiveness GOCAR

Per project management Agree on the format o f the FMRs. IDA and AGETIP-CAF

Information Systems

4

103. AGETIP-CAF currently has a computerized accounting system which needs to be replaced. The new computerised accounting system should be acquired within the f i rst quarter o f project effectiveness.

manual

manual (Procurement already Acquire new computerized accounting software. Per project management AGETIP-CAF

underway)

Financial Management Action Plan

104. Upon discussions with GoCAR and the implementing entity, AGETIP-CAF satisfactorily opened the Designated Account for the project on March 26, 2007. The Bank also reviewed and provided its “no objection” to the terms o f reference developed by GoCAR for the recruitment o f an External Auditor for the project. AGETIP-CAF has (March 01, 2007) also opened, to the satisfaction o f the Bank, books o f account and completed chart o f accounts for the project.

I grant effectiveness I mkfid-d I I t o I D A .

Supervision

105. The World Bank will carry out supervision missions, at least every three months for the f i rs t two years o f the project, and two times a year thereafter for the remainder o f the project. The mission’s objectives wil l include: (i) ensuring strong financial management systems are

52

maintained throughout the l i f e o f the project; and (ii) expenditures incurred by the project remain eligible for IDA funding. The Implementation Status Report wi l l include a financial management rating for the component.

F. Disbursement Arrangements

Flow of Funds-Bank Accounts

106. implementing the project:

The following bank account wi l l be maintained by AGETIP-CAF for the purposes o f

Only one designated account shall be operational for project implementation and shall be denominated in local currency (CFAF Francs). This account will receive funds from IDA. This bank account will be opened at a major local bank and wi l l be jointly signed (mandatory) by the General Manager (GM) o f AGETIP-CAF and the financial management specialist o f AGETIP-CAF. The technical director o f AGETIP-CAF will be authorized to sign in case o f absence o f either the GM or the FMS.

0 Designated Account:

Furthermore, the following measures have been taken: The local commercial bank (BCAC) where AGETIP-CAF opened the dedicated account has agreed in writing, satisfactory to the World Bank, to respect the mandatory double signature and to pay back any amount disbursed in violation o f the proposed double signature regime. The local commercial bank named above also agreed in writing not to accept any alienation o f IDA’S funds related to OHADA law for debts accumulated by AGETIP- CAF outside the framework o f the current operation.

Initial deposit

107. Funds flow arrangements for the project through the designated account wi l l be as follows:

The amount authorized and the initial deposit in Designated Account A will be CFAF 500,000,000, representing approximately four-months o f reccrrent payments

IDA FUNDS K= in various works.

DESIGNATED ACCOUNT Initial deposit:

CFAF 500,000,000

53

Disbursement

108. From the grant proceeds, IDA will deposit 500,000,000 CFAF into AGETIP-CAF's Designated Account, an amount approximately equal to four months o f predicted expenditures in various subcomponents. Upon grant effectiveness, AGETIP-CAF will be required to present a withdrawal application for ini t ial deposit to the Designated Account, drawn from the IDA grant, in the above amount agreed at appraisal.

Retroactive Financing (Financing of $250.000)

109. The Borrower (GoCAR) may wish to proceed with the init ial steps o f procurement before signing the related Bank grant. The Borrower has requested prior agreement ("no objection") from the World Bank to pre-finance up to US$250,000 so that i t can hire consultants for monitoring and evaluation, procurement, and internal auditing, and obtain fiduciary and safeguard training to improve project implementation staff readiness ahead o f project Effectiveness. Considering the emergency nature o f the project, the World Bank has "no objection" to the request o n condition that the Borrower completelv understands that i t pre- finances any expenditure ahead o f grant effectiveness at i t s own r isk. The procurement procedures, including advertising, shall be in accordance with World Bank Guidelines in order for the eventual contracts to be eligible for Bank financing, and the Bank shall review the process used by the Borrower. A Borrower undertakes such advance contracting at i t s own risk, and this concurrence by the Bank with the procedures, documentation, or proposal for award does not commit the Bank to make a grant for the CAR-EUIRMP in question. If the contract i s signed, reimbursement by the Bank o f any payments made by the Borrower under the contract prior to the signing o f the grant, referred to as retroactive financing, is only permitted within the limits specified in the Financing Agreement.

Transaction-based disbursements

110. Disbursements would be made on the basis o f incurred eligible expenditures. Replenishment o f h n d s from IDA to the Designated Account wil l be made upon evidence o f satisfactory utilization o f the advances, reflected in Statement o f Expenditures (SOEs) and/or in full documentation for payments above SOE thresholds. Replenishment applications would be required to be submitted regularly o n a monthly basis. If ineligible expenditures are found to have been made from the Designated Account, the Borrower wil l be required to refund these amounts. If the Designated Account remains inactive for more than six months, the Borrower may be requested to rehnd to IDA amounts advanced to the said Designated Account.

Direct vavment

111. The option o f disbursing funds through direct payments on contracts above a predetermined threshold wi l l also be available. Withdrawal applications for such payments wil l be accompanied by relevant records such as copies o f contracts, contractors' invoices, and appropriate certifications.

Letter of Credit

112. Payments may also be made to a foreign commercial bank for expenditures against an IDA special commitment covering a local commercial bank's irrevocable Letter o f Credit (LC).

54

IDA’S Disbursement Letter stipulates a minimum application value for direct payment and special commitment procedures.

Component Amount o f Grant Allocated in US$ million

A. Rehabilitation of Critical Urban 15.0 Infrastructure - A 1 Water Supply 4.2 - A2 Drainage Rehabilitation 4.2 - A3 Solid Waste Management - A 4 Urban Roads Rehabilitation B. Institutional Strengthening 3.0 - Technical Assistance and training - Technical equipment acquisition 0.6 Overall Implementation costs 0.6 Contingencies 1.3 Total Amount 18.0

2.8 3.8

0.5

Local taxes

Percentage of Expenditures to be Financed

100%

100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

113. Funds wil l be disbursed in accordance with project categories o f expenditures, as shown in the financing agreement. Financing o f each category o f expenditure wil l be authorized at 100 percent, including taxes.

Uses of Statement of Expenditures (SOE)

114. Disbursements for al l expenditures wi l l be made against fill documentation, except for items claimed under the Statement o f Expenditures (SOE) procedure. SOEs wil l be used for payments claimed under contracts for: (a) works in an amount less than US$500,000, (b) goods in an amount less than US$200,000; (c) consulting f i r m s in an amount less than US$lOO,OOO (d) individual consultants in an amount less than US$50,000. SOEs wil l also be utilized for al l small equipment, office supplies, and training, and for expenditures submitted by the MREPUL. Documentation supporting al l expenditures claimed against SOEs wil l be retained by AGETIP- CAF. They wil l be made available for review when requested by IDA periodic supervision missions and project external auditors.

Allocation of Grant Proceeds

55

ANNEX 5: PROCUREMENT ARRANGEMENTS

A. Procurement Environment

115. A Country Procurement Assessment Review (CPAR) for the Central African Republic (CAR) was carried out in January 2006. The CPAR highlighted that the existing procurement rules needed to be strengthened and no standard bidding documents are available. The current regulation on public procurement i s the “Decret” No. 61/136 dated August 1961. The principal deficiencies identified in the CPAR are: (i) absence o f a procurement regulatory body; (ii) the lack o f formal recourse available to the bidders to allow them to dispute any procurement decision; (iii) lack o f regular procurement audits.

116. For c iv i l works and goods contracts below the International Competitive Bidding (ICB) thresholds, procurement would be advertised at the national level, using specific procedures described in the AGETIP-CAF Procedures Manual which includes standard bidding documents acceptable to the Bank. The existing National Competitive Bidding (NCB) standard documents that were prepared through World Bank financing and used by al l the agencies o f the AFRICATIP network wil l be amended to add the new requirements from the 2004 and 2006 World Bank procurement guidelines related to fraud and corruption. GoCAR wil l provide written assurance during technical discussions, in form and substance acceptable to IDA, stipulating that: (i) Standard Bidding Documents (SBD) wil l not include any provision precluding bidders from introducing complaints; (ii) sound mechanisms to handle complaints will be established; and (iii) contract awards wil l be published on a website within five (5) days after the contract award decisions.

1. The action plan put in place for the reform i s under implementation by the Government. So far, no special exceptions, permits, or licenses need to be specified in the Grant documents for ICB, since CAR’S procurement practices allow the Bank procedures to take precedence over any contrary provisions in local regulations.

2. The Procurement arrangements for the Emergency Urban Infrastructure Rehabilitation and Maintenance Project have been designed in consideration o f the country’s post- conflict situation and the weaknesses o f national procurement rules and procedures, resulting in appropriate procurement thresholds, taking into account the past experience in procurement, and the fact that the Central African Republic i s a high risk country.

B. Use of Bank Guidelines

117. Procurement for the proposed project would be carried out in accordance with the World Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated M a y 2004, revised October 1 st, 2006; and “Guidelines: Selection and Employment o f Consultants by World Bank Borrowers” dated M a y 2004, revised October lst , 2006, and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Grant, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement

56

Plan, and has been prepared and agreed during Negotiations. The Procurement Plan wil l be updated at least annually, or as required, to reflect the actual project implementation needs.

118. The procurement procedures and the Bank’s Standard Bidding Documents for I C B and for NCB, the AGETIP-CAF standard bidding documents, prepared for al l AGETIPs and included in the entity’s manual o f procedures, wil l be used by the implementation entity for each procurement method defined in the Project (PIM). The SBD wil l be updated to include clauses related to Fraud and Corruption consistently with the World Bank procurement guidelines dated M a y 2004, revised in October 2006.

C. Advertising

119. A General Procurement Notice (GPN) wil l be prepared and published in United Nations Development Business (UNDB), in Development Gateway (dgMarket), and in at least one national newspaper after the project i s approved by the Bank Board and before effectiveness. The GPN will show al l International Competitive Bidding for works and goods contracts and al l consulting services involving international f i rms. Specific Procurement Notices for al l goods and works to be procured under ICB, and Expressions o f Interest (EOI) for al l consulting services to cost the equivalent o f US$200,000 and above, would also be published in the UNDB, dgMarket, as wel l as in at least one national newspaper o f large distribution.

D. Procurement Methods

120. Procurement o f works: Civ i l Works procured under this project would include: (i) emergency repairs at certain critical sections on the water supply network, rehabilitation and extension o f canal, rehabilitation o f shoulders and side ditches o f the primary drainage network, and construction and rehabilitation o f urban roads, etc. The procurement wil l be done using the Bank’s SBD for al l International Competitive Bidding and the amended AGETIP-CAF standard bidding documents agreed in advance with the Bank when applying National Competitive Bidding (NCB) procedures. . . Each c iv i l works contracts package estimated to cost equal to, or more than, US$500,000

would be procured through International Competitive Bidding procedures. Each c iv i l works contract package estimated to cost less than the equivalent of US$500,000 may be procured using National Competitive Bidding procedures. N C B would be carried out in accordance with the AGETIP-CAF Procedures Manual which includes standard bidding documents acceptable to IDA. Smaller works contracts estimated to cost less than US$50,000 each may be procured through shopping procedures on the basis o f three written price quotations. The contract award will be made to the lowest evaluated responsive bidder who has appropriate experience and financial resources to complete the works successfully.

.

121. Procurement of Goods: Goods procured under this project would include office support equipment, computers and accessories, software, and communication office equipment. Each goods contract package estimated to cost the equivalent o f US$200,000 per bid package shall be procured using International Competitive Bidding procedures. Contracts package estimated to cost less than the equivalent o f US$200,000 and locally available at commercial prices would be procured through National Competitive Bidding procedures acceptable to IDA. The

57

procurement wil l be done using the Bank’s SBD for al l ICB, the to-be-approved SBD o f AGETIP-CAF for National Competitive Bidding (NCB), and advertised locally in accordance with CAR’S procurement laws and regulations acceptable to IDA. Procurement for readily available off-the-shelf goods that cannot be grouped, or standard specification commodities for individual contracts o f less than US$50,000 equivalent, may be procured under shopping procedures as detailed in paragraph 3.5 and 3.6 o f the “Guidelines: Procurement under IBRD Loans and IDA Credits” and the June 9,2000 Memorandum “Guidance on Shopping” issued by the Bank.

122. Selection of Consultants: The consulting services financed by the project include: technical assistance, activities under the institutional strengthening component, engineering designs and supervision o f works, audit services etc. The selection method would include: Quality- and Cost-Based Selection (QCBS); Least-Cost Selection (LCS) which may be used for standard tasks such as financial and technical audits; Selection under a Fixed Budget (FBS); and Selection based on the Consultants’ Qualifications (CQS). In case o f assignment requiring Individual Consultant (IC), the selection wil l follow the procedures stipulated in Section V o f the Consultants Guidelines. . For consultants services estimated to cost less than US$lOO,OOO equivalent per contract,

short-lists may be composed entirely o f national consultants, as determined in the procurement plan, based on the nature o f the assignment and the availability o f local expertise in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. However, i f foreign f i rms expressed interest, they would not be excluded from consideration. Single-Source Selection (SSS): In exceptional cases, this method would be used in accordance with the provisions o f paragraphs 3.9 to 3.13 o f the Guidelines, with IDA’S prior agreement (no-objection).

. A Bank standard Request for Proposals (RFP) and evaluation report form for consultants wil l be used for the selection o f consultants

E. Training, Workshops, Seminars and Conference

123. Training activities wil l comprise workshops and training in the region and abroad, based on individual needs as wel l as group requirements, on-the-job training, and hiring consultants to develop training materials and conduct training. All training and workshop activities will be carried out on the basis o f approved annual programs that identify the general framework o f training activities for the year, including: (i) the type o f training or workshop; (ii) the personnel to be trained; (iii) the institutions which wil l conduct the training; and (iv) the duration o f the proposed training as wel l as the outcome and impact o f the training.

124. Operating costs: The Grant would finance the operating costs o f the Technical Secretariat and remuneration o f the Implementing Entity. Operating costs would be procured using the project procedures that were reviewed and found acceptable to the IDA.

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F. Procurement Implementation Arrangements

125. Given the current volatility o f the country, the Government o f C A R decided that the procurement activities for the new project will be performed by AGETIP-CAF to ensure expeditious processing, efficiency, and adequate resource management. On July 07, 2006, the Board o f AGETIP-CAF adopted its Procedures Manual, which is acceptable to the Bank and consistent with the Bank-approved standard procedures manual prepared for al l AGETIPs operating in the Afr ica Region. A formal capacity assessment o f AGETIP-CAF was carried out in January 2007. The assessment revealed that AGETIP-CAF has experience in implementing World Bank-financed projects.

126. Technical Secretariat (TS) within the Ministdre de la reconstruction des e'dfzces publics, de I'urbanisme et du logement (MREPUL) wil l be responsible for the general coordination o f project and program activities to be implemented by the project. The Technical Secretariat wil l prepare annual programs o f approved activities before the end o f the previous fiscal year for transmission to AGETIP-CAF (Agence d 'Exe'cution des Travaux d 'Intkrgts Publics) for implementation.

127. The Implementing Entity: AGETIP-CAF. To facilitate the procurement o f c iv i l works contracts to local Small and Medium Enterprises (SME), the C A R authorities have created an autonomous implementation entity. Being established as a non-profit organization, AGETIP- C A F wil l be the implementation entity for a l l project procurement activities and wil l be remunerated for services provided. AGETIP-CAF i s currently implementing some urban infrastructure activities financed by the Agence Franqaise de Dkveloppement (AFD) and the European Union (EU), and has performed satisfactorily. The size o f the staff wil l be adapted to the new volume o f activity to be undertaken. It wil l use simple and rapid procedures for managing bidding process, contract awards, and payment o f consultants and contractors, which i s crucial for the participation o f SMEs with limited financial resources. As proposed by MREPUL, AGETIP-CAF wil l be exceptionally selected on a Single Source Selection (SSS) basis, and an agreement, using the standard format o f AGETIP agreements, wil l be signed between MREPUL and AGETIP-CAF. AGETIP-CAF's Procedures Manual wil l regulate the procurement process in accordance with IDA guidelines and the provisions stipulated in the Legal Agreement.

128. The Sociktk de Distribution de I'Eau de Centrafrique will work closely with AGETIP-CAF on the Water Supply Sub-component component and the Municipality o f Bangui wil l provide similar technical support in the drainage, SWM, and urban roads rehabilitation sub-components. These two entities will help on the preparation o f the technical specifications.

SODECA and Municipality o f Bangui.

G. Assessment of the entity's capacity to implement procurement

129. Procurement risks at the country level: In Central African Republic, the key issues and r isks the project wil l face with respect to procurement during implementation include: (i) inadequate contract management systems that are common in the public sector; (ii) lack o f appropriate regulation; (iii) lack o f standard bidding documents; (iv) absence o f procurement planning; (v) lack o f appropriate record keeping; (vi) lack o f local regulation for publishing contract awards; and (vii) lack o f mechanisms to handle complaints by bidders.

59

130. Procurement risk at the Project level: A formal procurement capacity assessment o f the project’s possible implementing agencies was carried out by the Bank’s Procurement Accredited Staff during the project appraisal mission on January 2007 in accordance with Procurement Services Policy Group (OCSPR) guidelines dated August 11, 1998. The assessment reviewed among other issues, the organizational structure for project implementation, the institutional arrangement, the procurement arrangement, the control systems, procurement methods and procedures applicable to each component, and the capacity o f project staff responsible for procurement. A procurement capacity assessment report has been prepared and supporting evidence i s kept in the project files.

131. World Bank-financed projects.

The assessment revealed that AGETIP-CAF has the required experience to implement

132. The key issues and risks concerning procurement for the implementation o f the project have been identified and include: (i) need to increase the number o f procurement staff in place to manage the additional workload associated with this operation; (ii) lack o f adequate record keeping; and (iii) lack o f procurement planning.

133. Corrective measures are: (i) recruitment o f an appropriate and experienced procurement specialist; (ii) training o f relevant project staff on Bank procurement procedures before grant effectiveness and on a continuous basis during project implementation; (iii) establishment o f electronic filling system for project records; (iv) re-assessment o f procurement capacity o f the implementing entity one year after project effectiveness to ensure that appropriate capacity i s being built; and (v) equip the Technical Secretariat (TS) and AGETIP-CAF with the “Client Connection” software and accessibility, to allow for streamlined procurement and disbursement procedures.

134. Reinforcement of procurement capacities: AGETIP-CAF Designated the Director General as “Chef de project”. Among other things, he wil l be in charge o f the overall quality control o f the bidding documents before issuing. AGETIP’s N C B documents have been agreed during negotiations.

135. negotiations is summarized below.

For hrther reinforcement o f procurement capacities, the resulting action plan agreed at

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I Action Plan for Strengthening Procurement Capacity

1. 1 Recruitment of a procurement specialist f i l l y I Within months of

2.

3.

responsible for procurement planning, processing, AGETIP-CAF effectiveness. monitoring, and follow-up. Training of staff (at least two from each entity) on MREPUL, SODECA, Within three World Bank procurement procedures in specialized Municipality o f Bangui months o f institution. AGETIP-CAF effectiveness

Adequate filing system to better keep procurement Within three documents and reports and identify a staff AGETIP-CAF months o f

H. Procurement Plan

4.

5.

6.

136. The Borrower (GoCAR), at appraisal, developed a draft procurement plan for the f i rst 18 months o f project implementation indicating the procurement methods. The procurement plan was discussed in detail and finalized before negotiations. Immediately upon approval o f the Grant, with the borrower’s agreement, the plan wil l be published on the Bank’s public website and the Borrower’s intranet website. Once approved the procurement plan shall be updated by the Borrower on an annual basis or as required to reflect the actual project implementation needs.

responsible for this task. effectiveness Update the Project Implementation Manuel regarding Before the organizational chart and task distribution. AGETIP-CAF effectiveness Inclusion of the procurement system (planning, Within three monitoring and contract management) with the AGETIP-CAF months o f computerized project financial management system. effectiveness

Streamline the existing organization, including proper internal control and better distribution o f tasks to support the implementation of the project.

AGETIP-CAF By effectiveness

Publication of Results and Debriefing

137. Online (dgMarket, UN Development Business, and/or Client Connection) publication o f contract awards would be required for al l International Competitive Bidding (ICB), Direct Contracting, and the Selection o f Consultants for contracts exceeding a value o f US$200,000. In addition, where prequalification has taken place, the l i s t o f pre-qualified bidders wil l be published. With regard to I C B and large-value consulting contracts, the Borrower would be required to assure publication o f contract awards as soon as IDA has issued its “no objection” notice to the recommended award in UN Development Business (UNDB) online and dgMarket. With regard to Direct Contracting and National Competitive Bidding (NCB), publication o f contract awards could be in aggregate form on a quarterly basis and in local newspapers. All consultants competing for an assignment involving the submission o f separate technical and financial proposals, irrespective o f i t s estimated contract value, should be informed o f the result o f the technical evaluation (number o f points that each firm received) before the opening o f the financial proposals. AGETIP-CAF would be required to offer debriefings to unsuccessful bidders and consultants should the individual firms request such a debriefing.

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Fraud, Coercion, and Corruption

Procurement Method

138. All procuring entities, as wel l as bidders, suppliers, and contractors shall observe the highest standard o f ethics during the procurement and execution o f contracts financed under the project in accordance with paragraphs 1.15 & 1.16 o f the Procurement Guidelines and paragraphs 1.25 & 1.26 o f the Consultants Guidelines.

Contracts Subject to Prior Review

H. Frequency of Procurement Supervision

ICB

139. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment o f the implementing agencies has recommended four supervision missions yearly to visit the field to carry out post-review o f procurement actions for the f i rst two years and twice a year in the subsequent years.

(US$ million) Al l

Procurement audit

NCB Three Quotations

ICB NCB Shopping Direct contracting

QCBS QCBS, LCS, CQS, Other

See Section V o f Guidelines See Section V o f Guidelines

140. A technical audit wil l be carried out once a year during the project implementation, to report on the procurement process, contract management, fiduciary compliance, the quality o f the works and the goods provided, and the value for money, etc.

First 3 contracts None (Post Review)

A l l First 3 contracts None (Post Review) A l l

A l l First 3 contracts (Post Review)

A l l Review o f TOR only

I. Details of the Procurement Arrangements Involving International Competition

141. A detailed procurement plan for the 18 months o f implementation was prepared at appraisal and was discussed and finalized at technical discussions (cf. attachment 1). Thresholds for procurement methods and Bank prior review are the following:

Thresholds for Procurement Methods and Prior Review

Expenditure Contract Value Category (Threshold)

(US !$ thousand)

Below 500,000 Below 50,000

200,000 and more Below 200,000 Below 50,000

1. Works 500,000 and more

2. Goods

3. Consultants Firms 100,000 and more

Below 100,000

Individuals 50,000 and more Below 50.000

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Single Source Selection/ Firms & Indiv iduals

Total value o f contracts subject to prior review:

Overall Procurement Risk Assessment:

All

High Average

Frequency of procurement supervision missions proposed: One every 3 month(s) (includes special procurement supervision for post-review) rev iewing a sample o f one (1) in five(5) contracts signed.

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APPENDIX 1 : SIMPLIFIED PROCUREMENT PLAN

1 2

Ref. No.

1.

(a) List of contract Packages which will be procured following ICB and Direct contracting:

Goods, Works and non-consulting services

3 4 5 6 7 8 9 Contract Estimated Procurement Prequ. Review Start Estimated Co (Description) Cost (‘000) Method Yes/No byBank Date Duration mm

US% (Prior / Post) ents

3.1

3.2

3.3

4

A. Rehabilitation of Critical Urbai 1 I A.1 Water Supply

Management Construction o f 41 transfer stations

Rehabilitation of dumpsite

Supply o f equipment to facilitate the collection o f solid waste

A.4 Urban Roads

Creation of mini water

282

40

975 (678)

3,450

NCB N o Yes

NCB No Yes

Yes IcB No

Yes ICB No

I Rehabilitation I Rehabilitation of 66 km 4.1

1

primary and secondary gravel/dirt roads in

2 3 4 5 6 7 Estimate Selection Review by Estimate Estimated

Description of Assignment d Method Bank (Prior / d Start Duration’

(*) Flexibility o f procurement method for drainage component will be reflected in the Project Agreement. Contract packages will be prepared according to the capacity of local SMEs.

2. Consulting Services

(b) List of Consulting Assignments with short-list of international firms.

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No. I I I I I I

A.1 I Control and supervision o f water I 282,000 I QCBS I Prior I Oct. 07 I 36months

cost US$ Post) Date Comments

Short lists composed entirely of national consultants:

142. For consultants services estimated to cost less than US$lOO,OOO equivalent per contract, short-lists may be composed entirely o f national consultants, as determined in the procurement plan, based on the nature o f the assignment and the availability o f local expertise in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines.

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3. Implementing Entity Capacity Building Activities with Time Schedule

In this section, the agreed upon Capaci ty Building Act iv i t ies are l is ted in a t ime schedule.

No.

1.

2.

3.

4.

5.

6.

7.

Expected outcome I Activity Description

rraining for the small and medium-sized entrepreneurs, communities, and municipal officials on solid waste management (SWM).

Communication and informational or educational activities to increase communities’ S W M awareness.

Deployment o f one engineer for procurement activities.

Hiring o f a consultant to assist the Technical Secretariat in its oversight functions.

Training officials in control, results, M&E, strategic planning, community participation in decision making processes, communication, conflict resolutiodmanagement.

Study tours to other countries such as Chad, Burundi, Burkina Faso, others.

Procurement and Financial Management training for staff who w i l l be implementing the project.

Estimate d Cost US$ TBD

184,226

TBD

TBD

TBD

TBD

TBD

Estimated Duration

TBD

TBD

For the duration o f the project

For the duration o f the project

TBD

TBD

TBD

Start Date

After Grant Effectiveness

After Grant Effectivenes

Prior to Grant Effectiveness

After Grant Effectiveness

After Grant Effectiveness

After Grant Effectiveness

After Grant Effectiveness

Comments

AGETIP-CAF

Capacity building to be provided for staff to acquire knowledge in procurement and financial management implementation.

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ANNEX 6: ENVIRONMENTAL AND SOCIAL SAFEGUARDS ASSESSMENT FRAMEWORK

143. This Environmental and Social Screening and Assessment Framework (ESSAF) component aims to describe the approach and principles to be followed to ensure due diligence in managing the potential adverse environmental and social impacts and risks associated with the project.

144. The proposed operation is consistent with the Bank’s expected role and adds value to the L o w Income Countries Under Stress (L1CUS)-approach currently being implemented. Donors, mostly the European Commission and AFD have been very active in the energy, drainage, and water sectors in CAR. After employing its convening power to structure a solid donor coordination mechanism the Bank i s working closely with the partners to deepen and harmonize operations and build synergies based on comparative advantage o f partners’ strengths and expertise. The Bank’s main strengths in providing recovery support to countries emerging from conflict are recognized by partners and the GoCAR who are increasingly expecting the Bank to play a leading role in getting CAR’S recovery underway. The Bank i s well-positioned to provide such support due to its experience in post-conflict countries, the limited number o f donors active in CAR, the need to address multifaceted governance issues, and the deteriorated macroeconomic situation in CAR. Moreover, it i s assumed that the Bank’s initial involvement and convening power wil l provide a positive and necessary lead for other development partners to commit to the financing efforts to reconstruct C A R

Project Development Objective

145. The EUIRMP will, on an emergency basis, support GoCAR to rehabilitate, restore, expand and maintain parts o f the devastated urban infrastructure. The development objective o f the proposed project i s to increase sustainable access to infrastructure services by the population o f the most deprived districts o f Bangui. I t wil l help with poverty reduction among Bangui’s urban and peri-urban populations by creating short-term employment opportunities associated with the works contracts and by improving living conditions for Bangui citizens through better access to rehabilitated infrastructure services. The project will: increase the number of inhabitants having access to passable roads al l year round and to improved solid waste management services; reduce the number o f households flooded every year; increase the capacity o f the municipality o f Bangui to manage urban services; increase access to water supply services; and increase the number o f people with temporary employment. This i s expected to help create an environment in which reforms can be sustained and prevent political and economic regression which may otherwise result in social instability, c iv i l unrest, and possibly reversion to conflict. The project’s objective i s consistent with the current Government’s reconstruction agenda and i s fully aligned with the objectives o f the ongoing support under LICUS I and I1 operations.

Project components

The project wil l include two main components as follows:

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Component A: Infrastructure Rehabilitation

A. I Water Supply-Increasing water supply to Bangui residents, through support to: (i) emergency repairs and rehabilitation o f identified critical leakage points on the SODECA network; (ii) rehabilitation o f two broken water pumps; and (iii) providing boreholes (powered by solar energy) in ten neighborhoods located on the outskirts o f the city where the current SODECA network does not reach the population.

A. 2 Drainage Rehabilitation-Reducing the number o f people affected by periodic flooding in the neighborhoods through support for: (i) rehabilitation and extension o f substandard and unsound structures, and construction o f new culverts o f the central Bouagba canal; (ii) resurfacing the inner walls o f the collector with stones and cement using mostly labor-intensive works methodology to generate more employment; and (iii) rehabilitation o f shoulders and side ditches o f the secondary network that drains into the M a i n Bouagba collector.

A. 3 Solid Waste Management-Creating an operational solid waste management system, through support to: (i) construct 41 transfer stations; (ii) rehabilitate a dumpsite; (iii) facilitate collection o f solid waste; (iv) train SME entrepreneurs, communities, and municipal officials in solid waste management; and (v) carry out communication and sensitization (informational and educational) activities to increase communities' solid waste management awareness.

A.4 Urban Roads Rehabilitation-This subcomponent aims to rehabilitate about 66 km o f primary and secondary gravel or dirt roads in Bangui, through support to: (i) reshape identified roads; (ii) reinforce the base structures; (iii) re-gravel the roads; and (iv) rehabilitate drainage and crossing structures and thereby increase access to areas that are currently isolated. This i s expected to restore or significantly improve vehicle accessibility to parts o f the city where an estimated 420,000 people currently live.

Component B: Institutional Strengthening

146. This component aims to strengthen the capacity o f the institutions involved in the management o f the project (the MREPUL, Ministry o f Public Works, and AGETIP-CAF) and responsible for the delivery o f urban services (Municipality o f Bangui and Socie'te' de Distribution de 1 'Eau de Centrafrique (SODECA)) to ensure some level o f sustainability o f the activities to be financed by the project. This emergency operation wil l not address al l the important sustainability issues that are associated with the delivery o f the urban and infrastructure services that the project i s supporting. I t will, however, help build the foundations for sustainability o f these services in support o f other activities that the Government will implement with the help o f donors active in the country. Activities under this component would include: (i) reinforcement o f the Technical Secretariat o f the MREPUL by the provision o f technical assistance; (ii) strengthening o f the fiduciary functions in the Technical Secretariat; and (iii) acquisition o f financial, monitoring and evaluation, and procurement management software for the MREPUL, MinistBre de 1 'Equipement, MinistBre de 1 'Hydraulique, SODECA, AGETIP- CAF, and Municipality o f Bangui, to better streamline implementation processes.

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The cost breakdown is summarized in the table below.

Component Estimated cost ($ million) A. Rehabilitation of critical Urban Infrastructure 15.0 - Water Supply 4.2 - Drainage Rehabilitation 4.2 - Solid Waste Management 2.8 - Urban Roads Rehabilitation 3.8 B. Institutional Strengthening 3.0 - Technical Assistance and training 0.5 - Technical equipment acquisition 0.6 Overall Implementation costs 0.6 Contingencies 1.3 Total Project costs 18.0

Compliance with Safeguard Policies

147. The project i s classified as Environmental Category B because the potential environmental and social impacts are not significant. These potential impacts are likely to be small-scale, site-specific, and thus easily managed. The project triggers two safeguards policies: OP4.01 on environmental assessment (EA) and OP4.12 on involuntary resettlement. These triggered policies are applicable to component A and i t s four sub-components.

148. The approach to safeguards wil l be to develop an Environmental and Social Management Framework (ESMF) and a Resettlement Policy Framework (RPF) to cover al l activities to be financed under the project, in particular, the rehabilitation o f urban roads, drainage, water supply and solid waste management. Due to limited safeguard management capacity in the implementing entity, AGETIP-CAF wil l recruit a Safeguards Consultant within three months after grant effectiveness to manage safeguards aspects under the project. The consultant wil l work to strengthen the ESMF and RPF procedures that wil l improve sub-component project quality and sustainability through compliance with safeguards. For works that require Environmental Assessments (EAs) and/or Resettlement Action Plans (RAPS), a sequenced approach wil l be adopted so that necessary assessments and actions are undertaken to address the high risk issues.

149. However, due to the emergency nature o f the operation, disclosures o f these instruments wil l not be a condition o f appraisal, rather they wil l need to be prepared and disclosed within six months after effectiveness. Before then, the Safeguards Consultant attached to the team wil l undertake three activities: (i) assess the institutional arrangement for environmental and social safeguards within the Government implementing entity, i.e. AGETIP-CAF; (ii) assess the Government environmental disclosure requirements and EA consultation process and ascertain if there i s an Environmental Impact Assessment (EIA) law in place; and (iii) provide ASPEN Toolkit for ESMFs for small-scale projects and run a two-day workshop on how to apply the guidelines to screen subprojects. This i s critical, as c iv i l works may start right after grant effectiveness, and there is need to equip the implementing entity with the tools to screen the subprojects, including mitigation measures to be adopted.

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150. The Safeguards Consultant wil l provide environmental and social management oversight in the design and execution o f subcomponent and proposed investments, screening them for potential impacts and risks, planning mitigation measures, including consultation and disclosure requirements, to ensure due diligence, and facilitate consistent treatment o f environmental and social issues by the implementing agency and contractors.

Social

Key Social Issues Relevant to the Project Objectives.

151. The project is expected to increase sustainable access to infrastructure services to the population o f the most deprived districts o f Bangui and to deliver significant social benefits for the beneficiaries by improving their living and environmental conditions. I t wi l l help reduce poverty among Bangui's urban and peri-urban populations by creating short-term employment opportunities associated with the works contracts and by improving living conditions o f Bangui citizens through better access to rehabilitated infrastructure services. The project wil l increase the number o f inhabitants with access to year-round passable roads and to improved solid waste management services; i t wil l also reduce the number o f households flooded every year, increase the capacity o f the municipality o f Bangui to manage urban services, increase access to water supply services, and increase number o f people with temporary employment. By improving living and sanitary conditions and services in poor areas and slums, and reducing flooding, the project wil l also contribute to addressing human and social development issues.

152. The potential social impacts (such as temporary resettlement o f households in targeted project areas) o f subcomponent projects under the project wil l be small-scale and site-specific. I t is anticipated that project activities might not lead to land acquisition or major restriction o f access to sources o f livelihood. However, a resettlement pol icy framework (RPF) wil l be prepared and disclosed within six months o f grant effectiveness and this wil l be translated to Resettlement Action Plans (RAPS) as and when the need arises during project implementation.

Participatory Approach

153. The project implementation process wil l aim to involve women, youth, and marginalized groups in key decision-making, and also ensure equal benefits to women and vulnerable groups. The Social and Environment Specialist in the Project Implementation Team wil l ensure that gender issues are adequately reflected in the project implementation process.

154. Project implementation wil l incorporate consultation or collaboration with NGOs, other c iv i l society organizations, and other partners. The project design has involved key stakeholders, local NGOs working in urban development, water supply, solid waste management (SWM), and sanitation, as wel l as intervening partners such as l ine ministries. The project preparation was shared with many donor partners including the European Commission, UN system, AFD, American Embassy, French Embassy, the Chinese Embassy and others, some o f which are very active in the water, drainage, S W M and roads sectors in CAR. The Bank Team deepened coordination with other development partners to harmonize operations and build synergies based on comparative advantage o f partners' strengths and expertise. The implementation process i s designed to fol low a similar path and thus obtain community buy-in into the activities supported by the project thereby ensure maintenance o f the rehabilitated facilities.

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Implementation Support

155. Annual reviews wil l be carried out every 12 months after effectiveness to assess progress, achievement o f overall objectives, as well as the role o f the different partners, and to eventually reorient the project i f needed to ensure achievement o f objectives. Supervision missions wil l take place quarterly in the f i rst two years o f project implementation. The reviews wil l involve visits by specialists to selected sites for first-hand assessment o f progress in achieving the project’s objective and the performances o f AGETIP-CAF, the TS, the Municipality o f Bangui, and SODECA. Implementation o f the project will take into account these features by ensuring that they are effectively carried out throughout the l i f e o f the project.

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ANNEX 7: PROJECT PREPARATION AND APPRAISAL TEAM

Kwabena Arnankwah-Ayeh

Zie Coulibaly

Mahine Diop

Kossi Eguida

Etienne Nkoa

Aissata Zerbo

Armele Vilceus

Ernestina Attafuah

Helene Bertaud

Ousseynou Guene

Africa Eshogba-Olojoba

Agnks Albert-Loth

Renee Desclaux

Abdoul-Wahab Seyni

Michael Ochieng

Barbara Weber

Task Team Leader

Infrastructure Specialist

Municipal Engineer

Economist

Sr. Financial Management Specialist

Procurement Analyst

Program Assistant

Program Assistant

Sr. Counsel

Consultant ( S W M Specialist)

Sr. Environmental Specialist

Sr. Finance Officer

Finance Officer

Sr. Social Scientist

Lead Finance Officer

Sr. Operations Officer

72

ANNEX 8. STATEMENT OF LOANS AND GRANTS

Difference between expected and actual

disbursements Original Amount in US$ Millions

Proiect ID FY Pumose IBRD IDA SF GEF Cancel. Undisb. O r i ~ Fm. Rev’d

P 102576 2007 CF-Development Policy Operation DPO 0.00 0.00 0.00 0.00 0.00 2.98 -80.28 0.00

PO73525 2002 CF-HIV/AIDS (FY02) 0.00 17.00 0.00 0.00 0.00 19.99 16.97 0.00

FY07

Total: 0.00 17.00 0.00 0.00 0.00 22.97 - 63.31 0.00

CENTRAL AFRICAN REPUBLIC STATEMENT OF IFC’s

Held and Disbursed Portfolio In Millions o f U S Dollars

Committed Disbursed

IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.

Total portfolio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic.

Total pending commitment: 0.00 0.00 0.00 0.00

73

ANNEX 9: SUMMARY OF ON-GOING BANK AND DONOR OPERATIONS

ACTIVITIES BY MAJOR DONORS AND BY SECTOR

Major donors especially the World Bank and African Development bank (AfDB) have been fully reengaged recently in CAR since year end-2006. A Development Policy Operation (DPO) was approved by the Board on November 28,2006 which helped clear the arrears to IDA and provided additional resources for upcoming debt service and budget support. Arrears were also cleared towards the African Development Bank (AfDB) in December 2006. The donor community has r e c o n f i i e d its commitment to continue supporting the Government in its reform program. Donor detail activities are:

A joint AfDB/WB Interim Strategy for FY07-08 was endorsed by the Executive Boards o f the AfDB and World Bank in December 2006 and February 2007 respectively. The new strategy supports: (i) economic recovery and help to strengthen public sector governance and technical capacity; and (ii) the development o f human capital with emphasis on the poor. In the context o f the JISN implementation, the Bank has launched preparation o f the projects aimed at delivering visible impacts on the CAR population and strengthening technical capacity and governance: LICUS I1 and 111, restructuring o f HIV/AIDS project, preparation o f an Emergency Urban Infrastructure Rehabilitation and Maintenance, and Regional Transport Facilitation project.

France and AFD's assistance since 2003 stood at €95 million. In 2006, it focused on providing technical assistance in the areas o f health, education and research, and economic and financial management. The French Development Agency (AFD) provided support in transportation and infrastructures, forestry and the rural sector, and health. A new cooperation framework for the period 2007-201 1 i s under preparation, and w i l l be consistent with other donors' cooperation strategies. AFD recently financed an infrastructure project (THIMO 3) in Bangui and i s also preparing a new (THIMO 4) to support the rehabilitation o f the drainage network (total amount i s €5 million).

The IMF Executive Board approved an economic reform program supported by the PRGF in December 2006. A Paris Club meeting on CAR was scheduled for mid-April 2007 update to discuss rescheduling o f arrears to Paris Club members. A Preliminary HIPC document was approved by the Executive Boards o f the Bank and the IMF in March 2007, and a HIPC Decision Point i s scheduled to be presented to the Executive Board in September 2007. The donor community has r e c o n f i i e d i t s commitment to continue supporting the Government in i t s reform program

UNDP and UN agencies (UNICEF, WHO, WFP, FAO, etc) provided humanitarian assistance in their respective areas o f specialization. UNDP i s providing technical assistance in the CAR PRSP preparation. GoCAR plans to complete its PRSP document by June 2007. The UNDP has offered assistance in the preparation o f a donor Round Table in collaboration with the Bank, the European Union and France, which i s planned to be held in June or September 2007, to share with the donor community i t s economic program and its poverty reduction strategy. This w i l l hopefully help mobilize financial support for CAR economic development, especially the infrastructure sector.

European Union (EU) i s supporting several activities in CAR. In July 2005, project agreements for a total amount o f €60.5 mil l ion were signed. Moreover, an envelope o f €12 mil l ion w i l l be allocated in the form o f budgetary assistance. In 2007, within the framework o f the AREMIF project supporting public finances management, four long-term experts w i l l be recruited to build capacity in the Customs General Directorate, the Tax General Directorate, and the Budget. The EU i s supporting the infrastructure sector; an active project o f a total amount o f €4.5 mil l ion i s under implementation in Bangui, specifically in the area o f Galabadja (project TAG). This project i s executed by AGETIF-CAF. GoCAR and the EU are negotiating a new cooperation framework for the period 2008- 2013 (10" FED) (indicative amount i s € 09 million) aimed mainly to support development in rural areas (P6les de developpem ent) . China provided some tranches o f interest-free loans to CAR recently. These loans were followed by grants for the continuation o f work on the Bangui Stadium, the financing o f a feasibility study for the construction o f a cement factory, and construction o f health centers in Bangui. Finally, China signed with CAR authorities in January 2007 a loan agreement o f Yuan 20 mil l ion (about CFAFl.9 billion) to initiate new development projects including support to the infrastructure sector.

74

ANNEX 10: COUNTRY AT A GLANCE

POVERTY and SOCIAL

2005 P 0 pulat io n, mid-year (millions) GNI per capita (Atlas method, US$j GNI (Atlas method, US$ billions)

Average annual growth. 1999.05

Population (%) Laborforce(%)

Central Sub- Af r lcan Saharan Low-

Afr ica Income Republlc

4.0 350

14

14 14

M os1 recent est imate ( latest year avallabie. 1999-05)

Poverty (%of population belo wnatlonal poverty line) h n population (%of totalpopulation) 38 Life expectancy at birth (pars) Infant mortality(per lOoOlive births) 115

Access to animprovedwtersource (%ofpopulation) 75 Literacy(%ofpopulation age 69 49 Gross pnmaryenrollment (%ofschoolage population) 84

39

Child malnutrition (%ofchildran under5) 24

Male 76 Female 52

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1985 1995

GDP (US$ billions) Gross capital formationlGDP Exports of goods and sewiceslGDP Gross domestic savings1GDP Gross national savings1GDP

Current account balancdGDP Interest paymentsIGDP

Total debt sewicdewrts Present value of debtIGDP Present valueof debtlexports

Total debtIGDP

0.86 16.4

20.5 3.4 9.1

-5.6 0.8

39.7 14.2

11 0.5

20.4 6.2 6.3

-7.2 0.3

84.3 8.8

1985-95 1995-05 2004 (average annualgrowth) GDP 0 3 0 9 13 GDP percapita -27 -07 0 0 Exports of goods andsewices 0 5

741 745 552

2.3 2.3

35 46 m 29 56

93 99 87

2004

13

-3.1 0.2

62.4 6.5

67.7 762.2

2,353 580

1364

19 2.3

30 59 80 39 75 62 a 4 111 99

2005

14

14.0

-2.8

2005 2005-09

2.2 3.1 0.9 17

Development dlamond'

Life expectancy

-

Access to impmvedwtersource

-CentralAfrican Republic ~ Lowincome group

;Economic rat ios'

Trade I

T

Indebtedness

~ -Central African Republic ~ Lowincome OUD

- STRUCTURE o f the ECONOMY

I 1985 1gg5 IGrowth o f capi ta l and GDP (%) /%ofGDPJ Agriculture Industry

Services Manufacturing

476 462 556 B g 2 H 218

365 327 226 9 8 a 2

Household final consumption expenditure 814 78.6

Imports of goods andsewices 32.5 27.7 General gov't final consumption expenditure 16.1 16.2

1985-95 1995-05 2004 2005

Agriculture 12 4.0 0.5 2.6 Industry 0.4 3.3 2.4 2.6

Services 3 . 0 -6.8 8.1 0.2

Household final consumption eqmnditure 0.5 General gov't final consumption expenditure 0.0 Gross capital formation 0 .3 Imports of goods andsewices 16

Note: 2005 data are preliminaryestimates. This tablews producedfrom the Development Economics LDB database. 'Thediamondsshowfourkeyindicators inthecountry(in bo1d)comparedwithits income-groupaverage. lfdataaremissing,thediamondwili

(average annual growth)

Manufacturing 0.2 2.3

be incomplete.

75

PRICES and GOYEKNM ENT FlNANCE % & S

26 20

2s 5 1

c 33 44

7 3 0

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76

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BaoroBaoro

MarkoundaMarkounda

PaouaPaoua

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DamaraDamara

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GamboulaGamboula

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NolaNola

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BiraoBirao

MbaMbaïïkiki

MobayeMobaye

BambariBambari

BerberatiBerberati

BangassouBangassou

BossangoaBossangoa

KagaKagaBandoroBandoro

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Mongoumba

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Bocaranga

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Batangafo

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Bambari

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C h â i n e d e s B o n g o s

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Mt. Ngaoui(1,420 m)

16°E 18°E 20°E 22°E

16°E 18°E 20°E 22°E 24°E

2°N

4°N

6°N

8°N

10°N

6°N

8°N

10°NCENTRALAFRICANREPUBLIC

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

0 40 80 120 160

0 40 80 120 Miles

200 Kilometers

IBRD 33384

SEPTEMBER 2004

CENTRAL AFRICANREPUBLICSELECTED CITIES AND TOWNS

PREFECTURE CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

PRFECTURE BOUNDARIES

INTERNATIONAL BOUNDARIES