for official use only pad2999 international … · bank/ifc collaboration no proposed development...

FOR OFFICIAL USE ONLY Report No: PAD2999

INTERNATIONAL DEVELOPMENT ASSOCIATION

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED GRANT

IN THE AMOUNT OF SDR108.6 MILLION (US$150 MILLION EQUIVALENT)

AND A

PROPOSED GRANT

FROM THE AFGHANISTAN RECONSTRUCTION TRUST FUND

IN THE AMOUNT OF US$50 MILLION

TO THE

ISLAMIC REPUBLIC OF AFGHANISTAN

FOR AN

AFGHANISTAN: ESHTEGHAL ZAIEE ‐ KARMONDENA (EZ‐KAR) PROJECT

November 27, 2018

Social, Urban, Rural And Resilience Global Practice South Asia Region

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

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CURRENCY EQUIVALENTS

(Exchange Rate Effective October 31, 2018)

Currency Unit =

AFN= US$75.55

US$ = SDR 1.38213

FISCAL YEAR

December 21 ‐ December 20

Regional Vice President: Hartwig Schafer

Country Director: Shubham Chaudhuri

Senior Global Practice Director: Ede Jorge Ijjasz‐Vasquez

Practice Manager: David Seth Warren

Task Team Leader(s): Naila Ahmed, Kosuke Anan, Suhail Kassim

ABBREVIATIONS AND ACRONYMS AFMIS Afghanistan Financial Management Information System AFN Afghani (currency of Afghanistan) AFS Annual Financial Statement ALCS Afghanistan Living Conditions Survey ANPDF Afghanistan National Peace and Development Framework APA Alternate Procurement Arrangements APAPPS Afghanistan and Pakistan Action Plan for Peace and Solidarity (APAPPS) ARAZI Afghanistan Land Authority ARTF Afghanistan Reconstruction Trust Fund ATI Access to Information BGA Business Gozar Assembly BSC Business Service Center CCAP Citizens’ Charter Afghanistan Project CCC City Coordination Committee CCNPP Citizens’ Charter National Priority Program CDC Community Development Council CDP Community Development Plan CE Cost Effectiveness CFM Citizens Feedback Model CIP Cities Investment Program CPF Country Partnership Framework CPM Community Participatory Monitoring C4D Communication for Development DAB Da Afghanistan Bank (The Central Bank of Afghanistan) DABS Da Afghanistan Breshna Sherkat (Afghanistan's State‐Owned Utility Company) DB Doing Business DiREC Displacement and Returnee Executive Committee DMM Deputy Ministry of Municipalities EQRA Education Quality Reform in Afghanistan ERR Economic Rate of Return ESMF Environmental and Social Management Framework EU European Union EZ‐Kar Eshteghal Zaiee – Karmondena

The Dari term, “Eshteghal Zaiee,” means ‘job creation.’ The Pashto term, “Karmondena,” means ‘finding a job,’ E&S Environmental and Social FCV Fragility, Conflict, Violence FM Financial Management FMM Financial Management Manual FP Facilitating Partner FY Fiscal year G/BG‐A Gozar/Business Gozar Assembly GA Gozar Assembly GBV Gender Based Violence GDP Gross Domestic Product GEMS Geo‐Enabling Initiative for Monitoring and Supervision GHG Green House Gas

GoIRA Government of the Islamic Republic of Afghanistan GoP Government of Pakistan GRM Grievance Redress Mechanism GRS Grievance Redress Services G2B Government to Business IA Implementing Agency IBRD International Bank for Reconstruction and Development ICT Information and Communications Technology IDA International Development Agency IDLG Independent Directorate of Local Governance IDP Internally Displaced Person IDP/Rs Internally Displaced Persons/Returnees IFC International Finance Corporation ILO International Labor Organization INT Integrity Vice Presidency of the World Bank INTOSAI International Organization of Supreme Audit Institutions IOM International Organization for Migration IPSAS International Public Sector Accounting Standards IUFR Interim Unaudited Financial Report KM Kabul Municipality KMDP Kabul Municipality Development Program KURP Kabul Urban Reconstruction Project KUTEI Kabul Urban Transport Efficiency Improvement Project LIPW Labor Intensive Public Work MAB Municipality Advisory Board MCCG Maintenance and Construction Cash Grant MIS Management Information System MoEC Ministry of Economy MoEW Ministry of Energy and Water MoF Ministry of Finance MoFA Ministry of Foreign Affairs MoRR Ministry of Refugees and Repatriation MoU Memorandum of Understanding MoUDHA Ministry of Urban Development and Housing Afghanistan MPA Multiphase Programmatic Approach MRRD Ministry of Rural Reconstruction and Development M&E Monitoring and Evaluation NGO Non‐Governmental Organization NPA National Procurement Plan NSIA National Statistics and Information Authority OCE Office of Chief Executive OCHA UN Office for the Coordination of Humanitarian Affairs OP/BP Operations Policy/Bank Practice PBA Public Budget Allocation PCC Provincial Capital City PDO Project Development Objective PEFA Public Expenditure and Finance Assessment PFEML Public Finance and Expenditure Management Law

PFM Public Financial Management PIU Project Implementation Unit PL Procurement Law PLA Participatory Learning and Action PMU Provincial Management Unit PP Priority Project PPSD Project Procurement Strategy for Development PPVR Pakistan Population Profiling, Verification and Response PRISEC Executive Committee on Private Sector Development PSC Project Steering Committee RFB/RFQ Request for Bids/Request for Quotations RPF Resettlement Policy Framework SAO Supreme Audit Office SAR South Asia Region SCD Systematic Country Diagnostics SME Small‐ and Micro‐ Enterprise SoAC State of Afghan Cities SORT Systematic Operations Risk‐rating Tool SSAR Solutions Strategy for Afghan Refugees STEP Systematic Tracking of Exchanges in Procurement TPM Third Party Monitoring TTL Task Team Leader UDSP Urban Development Support Project UN United Nations UNAMA United Nations Assistance Mission to Afghanistan UNHCR UN High Commissioner for Refugees USAID United States Agency for International Development US$ United States Dollar U‐NPP Urban National Priority Program WBA Well‐Being Analysis WBG World Bank Group

The World Bank Afghanistan: Eshteghal Zaiee - Karmondena (EZ-Kar) (P166127)

TABLE OF CONTENTS

DATASHEET ................................................................................................................................1

I. STRATEGIC CONTEXT ........................................................................................................ 9

A. Country Context ................................................................................................................................ 9

B. Sectoral and Institutional Context .................................................................................................... 9

C. Relevance to Higher Level Objectives ............................................................................................. 10

II. PROJECT DESCRIPTION ................................................................................................... 12

A. Project Development Objective ..................................................................................................... 14

B. Project Components ....................................................................................................................... 14

C. Project Beneficiaries ....................................................................................................................... 20

D. Results Chain .................................................................................................................................. 20

E. Rationale for Bank Involvement and Role of Partners ................................................................... 21

F. Lessons Learned and Reflected in the Project Design .................................................................... 21

III. IMPLEMENTATION ARRANGEMENTS .............................................................................. 22

A. Institutional and Implementation Arrangements .......................................................................... 22

B. Results Monitoring and Evaluation Arrangements ......................................................................... 22

C. Sustainability ................................................................................................................................... 23

IV. PROJECT APPRAISAL SUMMARY ........................................................................................23 A. Technical, Economic and Financial Analysis ................................................................................... 23

B. Fiduciary…………………………………………………………………………………………………………………………………….23

C. Safeguards .......................................................................................................................................25

V. KEY RISKS ........................................................................................................................27

VI. RESULTS FRAMEWORK AND MONITORING ..................................................................... 29

ANNEX 1: Implementation Support Plan ......................................................................... 56

ANNEX 2: Additional Technical Description of Project Components and Activities .......... 58

ANNEX 3: Transparency and Accountability Framework ................................................. 63

ANNEX 4: Theory of Change ............................................................................................ 66

ANNEX 5: Organizational Structure for Project Implementation and Coordination ......... 67

ANNEX 6: Additional Project Implementation Arrangements ......................................... 68

ANNEX 7: Fiduciary assessment ...................................................................................... 71

ANNEX 8: Population of Cities Targeted by EZ‐Kar .......................................................... 79

ANNEX 9: Technical, Economic and Financial Analysis .................................................... 80


ANNEX 10: Consultative Process with Government, Development Partners and Private Sector ............................................................................................................................. 82

ANNEX 11: Other Substantial Risks to the Project ........................................................... 83

ANNEX 12: Climate Resilience Vulnerability .................................................................... 84


Page 1 of 85

DATASHEET

BASIC INFORMATION BASIC INFO TABLE

Country(ies) Project Name

Afghanistan, Pakistan Afghanistan: Eshteghal Zaiee ‐ Karmondena (EZ‐Kar) Project

Project ID Financing Instrument Environmental Assessment Category

P166127 Investment Project Financing

B‐Partial Assessment

Financing & Implementation Modalities

[ ] Multiphase Programmatic Approach (MPA) [ ] Contingent Emergency Response Component (CERC)

[ ] Series of Projects (SOP) [✓] Fragile State(s)

[ ] Disbursement‐linked Indicators (DLIs) [ ] Small State(s)

[ ] Financial Intermediaries (FI) [ ] Fragile within a non‐fragile Country

[ ] Project‐Based Guarantee [✓] Conflict

[ ] Deferred Drawdown [ ] Responding to Natural or Man‐made Disaster

[ ] Alternate Procurement Arrangements (APA)

Expected Approval Date Expected Closing Date

18‐Dec‐2018 31‐Dec‐2023

Bank/IFC Collaboration

No

Proposed Development Objective(s) The proposed Project Development Objective is to strengthen the enabling environment for economic opportunities in cities where there is a high influx of displaced people. This will be pursued by increasing the returnees' access to civil documents, providing short‐term employment opportunities, improving market enabling infrastructure, and supporting investor friendly regulatory reforms.


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Components Component Name Cost (US$, millions)

Regional and National Integration of Displaced Persons 4.50

Short‐Term Employment Opportunities, Reforms, and Market Enabling Infrastructure under IDLG

120.50

Prioritized Urban Investments in Four Provincial Capital Cities 25.00

Market Enabling Infrastructure and Reforms for Kabul Municipality 40.00

Red Carpet and Program Coordination 10.00

Organizations Borrower: Ministry of Finance, Aid Management Directorate

Implementing Agency: Ministry of Economy

PROJECT FINANCING DATA (US$, Millions)

SUMMARY‐NewFin1

Total Project Cost 200.00

Total Financing 200.00

of which IBRD/IDA 150.00

Financing Gap 0.00

DETAILS‐NewFinEnh1

World Bank Group Financing

International Development Association (IDA) 150.00

IDA Grant 150.00

Non‐World Bank Group Financing

Trust Funds 50.00

Afghanistan Reconstruction Trust Fund 50.00


Page 3 of 85

IDA Resources (in US$, Millions)

Credit Amount Grant Amount Total Amount

Afghanistan 0.00 150.00 150.00

National PBA 0.00 50.00 50.00

Regional 0.00 100.00 100.00

Total 0.00 150.00 150.00

Expected Disbursements (in US$, Millions)

WB Fiscal Year 2019 2020 2021 2022 2023 2024

Annual 36.27 20.43 25.37 25.87 25.05 17.01

Cumulative 36.27 56.70 82.07 107.94 132.99 150.00

INSTITUTIONAL DATA

Practice Area (Lead) Contributing Practice Areas

Social, Urban, Rural and Resilience Global Practice

Finance, Competitiveness and Innovation, Fragile, Conflict & Violence

Climate Change and Disaster Screening

This operation has been screened for short and long‐term climate change and disaster risks

Gender Tag

Does the project plan to undertake any of the following?

a. Analysis to identify Project‐relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF

Yes

b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment

Yes

c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes


Page 4 of 85

SYSTEMATIC OPERATIONS RISK‐RATING TOOL (SORT)

Risk Category Rating

1. Political and Governance High

2. Macroeconomic High

3. Sector Strategies and Policies High

4. Technical Design of Project or Program Substantial

5. Institutional Capacity for Implementation and Sustainability Substantial

6. Fiduciary High

7. Environment and Social Substantial

8. Stakeholders Substantial

9. Other Substantial

10. Overall High

COMPLIANCE

Policy Does the project depart from the CPF in content or in other significant respects?

[ ] Yes [✓] No

Does the project require any waivers of Bank policies?

[ ] Yes [✓] No

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 ✔ Performance Standards for Private Sector Activities OP/BP 4.03 ✔

Natural Habitats OP/BP 4.04 ✔

Forests OP/BP 4.36 ✔

Pest Management OP 4.09 ✔


Page 5 of 85

Physical Cultural Resources OP/BP 4.11 ✔

Indigenous Peoples OP/BP 4.10 ✔

Involuntary Resettlement OP/BP 4.12 ✔ Safety of Dams OP/BP 4.37 ✔

Projects on International Waterways OP/BP 7.50 ✔

Projects in Disputed Areas OP/BP 7.60 ✔

Legal Covenants

Sections and Description The Recipient shall maintain, at all times during the period of implementation of the Project, Project implementation structures within MOEC, MOFA, IDLG, and Kabul Municipality; all with functions and resources satisfactory to the Association, and with staff in adequate numbers and with qualifications, experience and terms of reference satisfactory to the Association. Sections and Description The Recipient shall establish, no later than three (3) months after the Signature Date, and thereafter maintain throughout the period of implementation of the Project, a Steering Committee, chaired by the Deputy Minister of MOEC, with such mandate, composition, and resources, acceptable to the Association, which shall be responsible for, inter alia,: (i) providing overall strategic and policy guidance on all activities carried out under the Project; and (ii) facilitating the coordination of Project activities among the relevant ministries and the effective removal of any obstacles to the timely implementation of the Project. Sections and Description The Recipient, through MOFA, shall establish, no later than three (3) months after the Signature Date, and thereafter maintain throughout the period of implementation of the Project, the MOFA‐PIU with sufficient resources and staff in adequate numbers, including a senior financial management officer, with qualifications and terms of reference satisfactory to the Association, which shall be responsible for, inter alia, the day‐to‐day implementation of Part 1 of the Project. Sections and Description The Recipient, through MOFA, shall establish, no later than three (3) months after the Signature Date, and thereafter maintain throughout the period of implementation of the Project, the EZ‐Kar project committee at MOFA, to be chaired by MOFA’s Deputy Minister for Management and Resources, comprising staff from relevant directorates of MOFA, with such mandate, composition, and resources, acceptable to the Association, which shall be responsible for, inter alia, the overall managerial oversight to Part 1 of the Project. Sections and Description The Recipient, through IDLG, shall maintain, throughout the implementation of the Project, the IDLG‐CCAP PIU, with sufficient resources and staff in adequate numbers, including at least seven (7) financial management officers, a procurement specialist, a procurement officer, a contract management officer, and an environmental and social


Page 6 of 85

safeguards specialist, with qualifications and terms of reference satisfactory to the Association, which shall be responsible for day‐to‐day implementation of Part 2 of the Project. Sections and Description The Recipient, through IDLG, shall establish, no later than three (3) months after the Signature Date, and thereafter maintain throughout the period of implementation of the Project, the IDLG‐CIP PIU, with sufficient resources and staff in adequate numbers, including a senior financial management officer, a financial management officer, and an environmental and social safeguards specialist, with qualifications and terms of reference satisfactory to the Association, which shall be responsible for day‐to‐day implementation of Part 3, including the selection and implementation of eligible Priority Projects under Part 3(a) of the Project. Sections and Description The Recipient, through Kabul Municipality, shall maintain, throughout the implementation of the Project, the KMDP‐PIU, with sufficient resources and staff in adequate numbers, including a senior financial management officer, a financial management officer, a senior procurement specialist, a procurement officer, and an environmental and social safeguards specialist, with qualifications and terms of reference satisfactory to the Association, which shall be responsible for day‐to‐day implementation of Part 4 of the Project. Sections and Description The Recipient, through Kabul Municipality, shall establish, no later than three (3) months after the Signature Date, and thereafter maintain throughout the period of implementation of the Project, an economic infrastructure unit within KMDP‐PIU, all with mandate, terms of reference, and resources acceptable to the Association, to be responsible for supporting with selection of locations, beneficiaries, and selection and implementation of eligible market enabling infrastructure projects under Part 4 of the Project. Sections and Description The Recipient, through MOEC, shall establish, no later than three (3) months after the Signature Date, and thereafter maintain throughout the period of implementation of the Project, the MOEC‐PIU with sufficient resources and staff in adequate numbers, including a financial management officer, a procurement specialist, a contract management specialist, and an environmental and social safeguards specialist, with qualifications and terms of reference satisfactory to the Association, which shall be responsible for, inter alia, the day‐to‐day implementation of Part 5 of the Project, for activities related to the national level regulatory reforms and for the overall coordination of the Project. Sections and Description The Recipient, through MOEC, shall no later than three (3) months after the Signature Date, engage a consulting firm, with qualifications and terms of reference satisfactory to the Association, to carry out a detailed capacity assessment, identify capacity gaps, and thereafter prepare and implement a financial management capacity building plan to strengthen its financial management capacity and that of MOFA, IDLG, and Kabul Municipality. Sections and Description The Recipient, through MOEC, shall no later than six (6) months after the Signature Date, engage a chartered accountancy firm, with qualifications and terms of reference satisfactory to the Association, to carry out a semi‐annual internal audit of the Project.


Page 7 of 85

Sections and Description No later than three (3) months from the Signature Date, the Recipient, through MOFA, shall enter into a memorandum of understanding, or any such arrangement acceptable to the Association, with MORR (“MOFA‐MORR MOU”), under terms and conditions satisfactory to the Association, which shall specify the responsibilities of, and the modalities of cooperation between MOFA and MORR, under Part 1 of the Project, including: (a) the respective obligations to establish a joint communications committee comprising of staff from MOFA and MORR; and (b) the coordination efforts between MOFA and MORR to develop a joint communication strategy. Sections and Description The Recipient shall prepare and furnish to the Association for review and approval, by no later than end of January each year, during Project implementation, a detailed annual work plan and budget (the “Annual Work Plan and Budget”) for the following Fiscal Year in a manner and substance satisfactory to the Association, which plan and budget shall identify the activities under the Project together with their related expenditures and financing sources. Sections and Description The Recipient shall maintain, throughout the period of the implementation of the Project, a grievance redress mechanism for the Project, with staffing and operating procedures acceptable to the Association, for monitoring and addressing the concerns of people affected by the Project and building public and stakeholder support for the Project. Conditions Type Description

Disbursement No withdrawal shall be made under Expenditure Category (1)(b), unless and until the

Association is satisfied, and notified the Recipient of its satisfaction, that the Recipient,

through MOFA, has adopted the Part 1 Operations Manual, in form and substance

satisfactory to the Association for the implementation of Part 1 of the Project. Type Description

Disbursement No withdrawal shall be made under Expenditure Category (2), unless and until the


through IDLG, has adopted the Part 2 Operations Manual, in form and substance satisfactory

to the Association for the implementation of Part 2 of the Project. Type Description



through IDLG, has adopted the Part 3 Operations Manual, in form and substance satisfactory

to the Association for the implementation of Part 3 of the Project. Type Description




Page 8 of 85

through Kabul Municipality, has adopted the Part 4 Operations Manual, in form and

substance satisfactory to the Association for the implementation of Part 4 of the Project. Type Description

Disbursement No withdrawal shall be made under Expenditure Category (5)(b), unless and until the


through MOEC, has adopted the Part 5 Operations Manual, in form and substance

satisfactory to the Association for the implementation of Part 5 of the Project.


Page 9 of 85

STRATEGIC CONTEXT

A. Country Context

1. Substantial improvements in development outcomes have been observed in Afghanistan since 2001, particularly in expanded access to water, sanitation and electricity, and improved outcomes in education and health. Moreover, following the economic shock of the withdrawal of international troops, the associated decline in aid and deterioration in security, the Afghan economy has regained momentum as reforms have been implemented and confidence restored. However, some gains are now being eroded and risks are arising from the prospects of political instability around the 2018‐2019 elections. Business confidence is declining, and economic activity is slowing. Civilian casualties remain at unprecedented levels in 2017 (10,451 killed or wounded) and 2018 (8,050 in the first nine months). Some areas of the country remain difficult to access because of insecurity.

2. Real Gross Domestic Product (GDP) growth, after accelerating to 2.7 percent in 2017 from a low of 1.5 percent in 2015, is projected to moderate to 2.4 percent in 2018 amid growing political and security concerns around the parliamentary and presidential elections. Growth is expected to accelerate further to 3.7 percent by 2021 assuming a smooth political transition after the 2018‐19 elections. With the population growing at 2.7 percent, however, the projected growth path will not be strong enough to improve incomes and livelihoods for most Afghans.

3. The poverty rate in Afghanistan has increased significantly: from 38 percent in 2011/12 to 55 percent in 2016/17. It is expected to remain high in the medium‐term, driven by weak labor demand (despite an increasing labor force) and security‐related constraints on service delivery. Living standards are further threatened by the worsening drought conditions and displacement (more than 1.7 million Afghans are internally displaced, and more than 2 million have been returning to Afghanistan—mostly from Pakistan and Iran—since 2015).

4. Stronger growth is predicated on improvements in security, political stability, steady progress with reform, and sustained aid. Growth could also be enhanced by mobilizing investment in extractives, energy and connectivity, building and harnessing the skills of Afghanistan’s youth and women, and taking steps to realize the job creation potential of agriculture and agribusinesses.

B. Sectoral and Institutional Context 5. About half of the returnees, regardless of when or from where they returned, have settled in urban areas which

has put enormous pressure on Afghanistan’s inundated service delivery systems, as well as on the economic and physical infrastructure of the communities that host these groups. About two‐thirds of the Afghan population has no access to the electricity grid. While electrification rates have improved over the past decade, particularly in urban areas, barriers to access remain high. The poor market infrastructure constrains the enabling environment, essential for job creation and economic wellbeing, particularly among the urban population.

6. Afghanistan measures poorly in both the Logistics Performance Index (150th in the World) and the Doing Business Trading Across Borders indicator (177th in the world). Inadequate infrastructure has also been a constant complaint of businesses voiced in many recent surveys1. Returnees also struggle with weak logistics. This

1 Doing Business in Afghanistan: A Survey of Sub‐National Performance, 2017 and Economic Cluster Analysis: Study of Food Processing and Informal Manufacturing Activities in Kabul City, prepared by Altai Consulting for the World Bank, March 2015.


Page 10 of 85

is on top of bureaucratic hurdles they face in moving their possessions across borders where approximately 40 percent report having left some property (machinery, inventories, etc.) behind2.

7. The local economy requires reliable infrastructure to connect supply chains and move goods efficiently. The

rapidly widening infrastructure deficit has led to a decline in the number of new businesses established in 2016 compared to 2012/13. Reported infrastructure deficits constraining business activities include road congestion, insufficient power, and urban flooding. Also, lack of serviced land for manufacturing was identified as being a critical obstacle to productive investments in the Provincial Capital Cities (PCCs). As a result, Afghan cities need to invest in infrastructure and utility extensions that encourage economic growth either through the expansion of existing industrial areas, creating new ones, or providing infrastructure improvements to assist in business retention and expansion.

8. Afghanistan is also highly vulnerable to climate change, and internally displaced persons (IDPs), returnees, and their host communities may be particularly vulnerable to such changes. They may not be able to effectively cope with the shocks of climate change when they have limited livelihood options and their access to basic social services and safety‐nets are constrained. Afghanistan faces many stresses that impact food, water and energy security, including those linked to its arid/semi‐arid climate and vulnerability to droughts and floods. In the past 30 years, the country has ranked 24th globally for climate risk and 15th for weather‐related disasters3. The country’s vulnerability is expected to continue— Afghanistan is ranked 8th of 170 countries for its vulnerability to climate change in the next 30 years. Women and children will be more exposed, as they tend to have less control over resources and decisions.

9. While responding to large scale displacement and economic development challenges, the Eshteghal Zaiee–

Karmondena (EZ‐Kar)4 Project also aligns itself with GoIRA’s urban development agenda. At the legal and regulatory front, an outdated and contradictory framework for urban development and management is under review with the aim of updating and aligning institutional roles and mandates within the sector. An Urban Development Law and a Municipal Law by the Independent Directorate of Local Governance (IDLG) and Kabul Municipality (KM) have been recently approved. The laws stipulate greater responsibilities to local governments, streamlining and rationalizing functional responsibilities, and improving overall governance and efficiency in the sector. In October 2016, the Government of the Islamic Republic of Afghanistan (GoIRA) issued the Afghanistan National Peace and Development Framework (ANPDF) as its overarching strategy for the period 2017‐20215. ANPDF cites the important role of cities both as potential engines of economic growth and as hosts of incoming migrants. Also, the extent of urban challenges in Afghanistan calls for a multi‐dimensional, programmatic World Bank engagement that is greater in scale and longer in horizon.

C. Relevance to Higher Level Objectives 10. The project is aligned with all three pillars of the World Bank’s Afghanistan Country Partnership Framework

(CPF) for Fiscal Years 2017‐2020: (i) building strong and accountable institutions; (ii) supporting inclusive growth; and (iii) expanding and deepening social inclusion. There is a strong emphasis in the project on (a) strengthening GoIRA’s ability to support Afghan refugees as they return; (b) building an effective institutional and regulatory environment for economic opportunities at the municipal and national level; and (c) taking on an inclusive‐whole

2 World Bank Phone Survey of Afghan Refugees. 3 Germanwatch (2018). Global Climate Risk Index. 4 Eshteghal Zaiee – Karmondena: The Dari term, eshteghal zaiee means job creation. The Pashto term, karmondena, means finding a job. 5 Afghanistan National Peace and Development Framework (ANPDF), 2017‐2021, GoIRA, 2016.


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of city and community approach that benefits vulnerable households, displaced and host communities with short‐ and medium‐term economic opportunities. A Regional Approach to be Supported by the IDA Regional Program

11. The successful integration of refugees, returnees, and IDPs into national life is a key objective of both GoIRA and the Government of Pakistan (GoP), as well as being a regional public good. Both Governments understand that the spillover benefits over the two country borders and the effects of successful reintegration in an area of instability are significant both economically and politically. This has been reflected in the Solutions Strategy for Afghan Refugees (SSAR) signed by the Governments of Afghanistan, Iran, and Pakistan and by the United Nations High Commissioner for Refugees (UNHCR) in 20116.

12. “An effective management of the situation would include support for Afghan refugees, Afghan returnees, and host communities in both Pakistan and Afghanistan respectively, their protection, voluntary repatriation and social and economic integration into the life of host communities.”7 On the Pakistan side, in September 2017 the World Bank Group (WBG) board approved the GoP’s eligibility request to receive funding from the Refugee sub‐window. Complementary to the proposed program in Pakistan was an annex describing Afghanistan’s need for funding to respond to this cross‐border issue. Since then, the World Bank’s task teams in both Pakistan and Afghanistan have developed complimentary investments in line with the agreed comprehensive regional operational approach. They promote social and economic inclusion, support institutions managing Afghan returnees, and are in line with the SSAR agreements and the September 2016 New York Declaration on Refugees and Migrants.

13. The proposed EZ‐Kar project is consistent with the WBG’s overall approach to addressing forced displacement (endorsed by International Development Association [IDA] deputies during the IDA 18 replenishment) as it focuses on medium‐term socio‐economic responses that complement the humanitarian support. Close collaboration is being forged with United Nations (UN) agencies (see section on consultative process in Annex 10) to strengthen complementarity in displacement responses through more effective and efficient developmental interventions that are better aligned with government priorities. The continued alignment to the regional approach will also involve close working collaboration, information exchange, and monitoring between Afghanistan and Pakistan country teams to maximize results.

14. Following the criteria for Regional IDA programs, the application for use of SAR Regional IDA 18 funds is based on the following eligibility criteria8: (a) Regional fragile states crisis: The proposed project addresses an emerging regional crisis that involves the mutual interest of two IDA countries – Pakistan and Afghanistan – with the latter being a fragile state: (i) Pakistan’s interest is to return Afghans as smoothly as possible, avoiding a humanitarian crisis; and (ii) on the side of GoIRA to receive these returnees and support their rapid and humane re‐integration into Afghan host communities; (b) Cross‐border benefits: The operation has clear cross‐border benefits as effective re‐integration of this population will contribute to regional stability and is in line with the policy

6 The SSAR provides an overall framework for moving towards solutions. There are also other frameworks such as the Afghanistan and Pakistan Action Plan for Peace and Solidarity (APAPPS) that both GoP and GoIRA have been discussing regional efforts to support the process of repatriation and reintegration of all Afghans. 7 IDA 18 Refugee Sub‐Window: Board Consultation on Eligibility, discussed at the technical briefing September 29, 2017. 8 IDA regional funding guidelines: https://spappscsec.worldbank.org/sites/IdaDesk/IDA18/Pages/docs/IDA%20Regional%20Program%20Guidelines.pdf.


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objectives of both countries; (c) Regional and country ownership: The project seeks to respond to a request from GoIRA, which is coping with large scale displacement and is aligned with the policy interests of the GoP as spelled out in the SSAR. The Conclusions of the 28th Tripartite Commission meeting held in February 2017 between GoIRA, GoP, and UNHCR stressed the need for regional efforts to support the process of repatriation and reintegration of Afghan refugees9; and (d) Platform for regional cooperation: The project is a key building block in the long‐term response to the regional crisis and will support policy objectives around migration/displacement in both countries.

15. There is also clear evidence of country and regional ownership in responding to the displacement challenges. The South Asia Region (SAR) of the World Bank acknowledges the strong linkages between the displacement challenges in Pakistan and Afghanistan and seeks to promote socioeconomic integration on both sides of the border. It has also, since 2017, pursued a regional approach within the context of the ongoing and planned support in Pakistan and Afghanistan. The objective of the Pakistan investments from the IDA 18 refugee sub‐window will be to support improved social and economic development outcomes in host communities and to create an enabling environment for better management of refugees and Afghan nationals, with direct interventions proposed at the federal and provincial levels in Khyber Pakhtunkhwa and Balochistan.

16. Of the total US$200 million financing, US$100 million is expected to come from the SAR regional IDA allocation, while US$50 million is being provided through the national IDA allocation. This corresponds to the 2:1 ratio of regional to national IDA allocation for the Project. Another US$50 million is provided from the Afghanistan Reconstruction Trust Fund (ARTF). Community contributions will also be provided under Component 2.

PROJECT DESCRIPTION

The Project is part of a government‐led programmatic approach to support Afghanistan’s economic growth

agenda, while adhering to the principles of GoIRA’s Policy Framework for Returnees and IDPs.

17. In November 2016, the GoIRA formed the ‘Displacement and Returnee Executive Committee’ (DiREC10), to

provide policy and operational support, for the development of a policy framework and coordination of

humanitarian and development efforts. The World Bank is a nominated member.

18. The concept of the EZ‐Kar project derived from the interlinked DiREC strategy and corresponding multi‐

ministerial technical working groups ‐ which agreed on a programmatic approach. The framework and proposed

EZ‐Kar project supports the basic principles endorsed by GoIRA that (i) humanitarian assistance should transition

to permanent solutions based on sustainable development as rapidly as possible; (ii) 100 percent registration for

all undocumented returnees, on a fast track basis is ensured; (iii) GoIRA will provide facilitation services for those

returnees voluntarily relocating or re‐establishing their businesses in Afghanistan; and (iv) a “whole of

community” approach should be followed wherever possible. The decision to focus on developing economic

opportunities in the context of a broad range of needs (social service delivery, housing, and social cohesion) is

9 For the purpose of this project, the term “refugees” refers to both registered and unregistered Afghan refugees. 10 Chaired jointly by nominated representatives from the Office of Chief Executive (OCE), Ministry of Refugees and Repatriations (MoRR), and the United Nations Assistance Mission to Afghanistan (UNAMA). Membership of DiREC comprises nominated representatives from: the Office of the President, the OCE, MoRR, UNAMA, the National Security Council, the Ministry of Finance, the Office of the State Minister for Disaster Management and Humanitarian Affairs, Afghanistan Land Authority (ARAZI), the World Bank, UNHCR, International Organization for Migration (IOM), and UN Office for the Coordination of Humanitarian Affairs (OCHA).


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premised on the idea that it is difficult to build sustainable approaches if returnees and IDPs are not earning

incomes (see Annex 10 for more background on the consultative process).

19. Economic growth and responding to the needs of displaced people requires a multi‐sectoral, multi‐ministerial

approach that is longer in horizon. This is reflected in the proposed EZ‐Kar the choice of cities, interventions

design to work at the national, city, community and household level, selection of multiple implementing agencies,

leveraging ongoing operational systems and structures (i.e. project implementation units [PIUs]) and an inter‐

ministerial platform. Even though this increases the level of complexity of the project, it also reflects the need to

address displacement and the impact it has through multiple approaches. These range from support to Afghans

before they cross the border (Component 1); short‐term jobs which target low skilled vulnerable households

(Component 2.1); the investments which improve the market enabling environment in the medium term

(Components 2.2, 3.1 and 4.2), reforms at the national and city levels to move municipalities and GoIRA towards

an investor friendly way of operating (Components 2.2, 3, 4, and 5.1) and the inter‐ministerial platform (5).

20. In developing synergies with other activities, two dimensions were reviewed to see to what extent: (i)

implementing mechanisms established by the World Bank and other development partners in other projects can be utilized; and (ii) reliance can be placed on other ongoing interventions that are improving economic opportunities. On the first dimension, three Bank‐supported programs, namely Citizens’ Charter Afghanistan Project (CCAP), the Cities Investment Program (CIP), and the Kabul Municipal Development Program (KMDP), have relevant implementing capabilities and mandates. Specifically, Components 2, 3, and 4 heavily rely on these capacities and institutional mechanisms. In addition, to improve transparency and better management of all development projects, EZ‐Kar will leverage the unified Public Investment Management (PIM) framework and process being developed by the GoIRA with support from the World Bank, IMF and other development partners. On the second dimension, encouraging the Red‐Carpet Approach (i.e. the investor friendly way of operating by the municipalities and Government), in addition to the projects mentioned, several other World Bank‐ and International Finance Corporation (IFC)‐supported projects are relevant. These include: (i) the Urban Development Support Project (UDSP); (ii) the Agribusiness Charter for cooperation around agricultural value chains; (iii) the IFC‐led Business Environment project for strong collaboration on regulatory reforms; (iv) planned and current United States Agency for International Development (USAID) projects that support job creation and access to finance; and (v) projects by other development partners such as the European Union (EU) that also aim to support initiatives that address skill gaps of the displaced. The interventions designed in this Project are in general supportive of these other efforts. Figure 1: Overview of components and links with other World Bank projects Regional and National Integration of Displaced Persons

Links with other Projects

Component 1: Increased capacity of MoFA and provision of information to Afghans City‐level Investments and Reforms with high displaced populations

BENEFICIARIES Kabul CIP (4) Cities Other (est. 8) Cities

CDCs Component 2.1: Short‐Term Employment Opportunities CCAP, PIM Gozars & Business Gozars Component 2.2: Market Enabling Infrastructure

Cities Component 3 and 4: Priority Projects Component 2 and 4: Regulatory Reforms

CIP, KMDP, UDSP, PIM

Links with other Projects KMDP CIP, CCAP, UDSP CCAP

National‐level Red Carpet and Program Coordination

Component 5: Regulatory Reforms and Project Management


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A. Project Development Objective PDO Statement

21. The Project Development Objective (PDO) is to strengthen the enabling environment for economic

opportunities in cities where there is a high influx of displaced people.

22. This will be pursued by increasing the returnees’ access to civil documents, providing short‐term employment

opportunities, improving market enabling infrastructure, and supporting investor friendly regulatory reforms.

PDO Level Indicators i. Percentage of Afghan passport applications in Pakistan processed;

ii. Number of households in high IDP/returnee cities provided with short‐term employment opportunities;

iii. Number of market enabling infrastructure built or upgraded;

iv. Number of processing steps reduced for specific Doing Business reform indicators in four cities.

B. Project Components

COMPONENT 1: REGIONAL AND NATIONAL INTEGRATION OF DISPLACED PERSONS (US$4.5 million) 23. In support of the regional commitments that the Governments of Afghanistan and Pakistan set out in the SSAR

framework and tripartite agreements, this component will support Afghan refugees in Pakistan and their voluntary

repatriation. The Ministry of Foreign Affairs (MoFA) will be the Implementing Agency (IA) both in Afghanistan and

Pakistan, while the Ministry of Refugees and Repatriation (MoRR) will be involved in the implementation of

communications activities. The component provides technical assistance, institutional support and training,

necessary equipment, and operational assistance to MoFA to: (a) enhance its capacity to provide consular services

(such as issuance of passports and verification of certificates); (b) develop and implement a joint communication

strategy for MoFA and MoRR to disseminate information to Afghan refugees in Pakistan in order to facilitate their

access to economic opportunities and social services through information centers at MoFA missions in selected

cities of Pakistan, in collaboration with MoRR; and (c) support day‐to‐day implementation of Component 1 of the

Project.

COMPONENT 2: SHORT‐TERM EMPLOYMENT OPPORTUNITIES, REFORMS, AND MARKET ENABLING INFRASTRUCTURE UNDER IDLG (US$120.5 million)

24. This component aims to increase economic opportunities in cities that fall under IDLG’s mandate and that face a

high influx of displaced people, by (i) creating short‐term employment opportunities; (ii) investing in market

enabling infrastructure in cities such as Jalalabad, Kandahar, Herat, Mehterlam, Puli Khumri, Khost Matun,

Asadabad, Taluqan, Kunduz, Chaghcharan, Mailman, and Paroon; and (iii) supporting the implementation of

municipal level regulatory and process reforms, which need to be carried out before funding for Priority Projects

under Component 3 can be released to the Jalalabad, Kandahar, Herat and Khost municipalities.

25. Subcomponent 2.1: Short‐Term Employment Opportunities. This subcomponent supports short‐term

employment in urban areas for vulnerable households that may not benefit from other project activities. It also

recognizes that large numbers of IDPs and/or returnees in urban areas rely on daily wage work. To demonstrate

quick results, it will follow the design, implementation modality, and lessons learned from the ongoing


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Maintenance and Construction Cash Grants (MCCG) scheme under the Citizens’ Charter Afghanistan Project

(CCAP)(P160567) implemented by the Ministry of Rural Reconstruction and Development (MRRD) – while

customizing this to focus on urban communities. Facilitating Partners (FPs)11 will be contracted by IDLG to establish

an estimated 1,16012 urban Community Development Councils13 (CDCs), facilitate their elections, conduct a Well‐

Being Analysis (WBA)14 to identify vulnerable households who will participate in the daily wage work and carry out

all other facilitation processes as set out in CCAP. Grants of up to US$27,000 will be disbursed directly to each

CDC15, at least 60 percent of which will be used for daily wages (for work on repairs, maintenance, and/or light

construction), benefitting an estimated 80,000 vulnerable households16.

26. Subcomponent 2.2: Market enabling infrastructure17. This subcomponent aims to improve the poor market

infrastructure which businesses complain18 constrains the enabling environment for business activity, which is in

turn essential for job creation and economic wellbeing, particularly among the urban population. This will be done

by providing grants to Gozars and Business Gozars, which will invest the grants in priority market enabling

infrastructure. IDLG will establish (i) Gozar Assemblies (GAs) and (ii) Business Gozars Assemblies (BGAs) in the

cities. A Gozar will be formed from four to five CDCs electing one representative each who will be part of the GA.

A Business Gozar is a parallel body which will consist of an estimated range of 100 to 300 businesses19, who will

also elect their representatives into the BGA. Before a BGA is established, IDLG, in consultation with the

municipality, will conduct a Gozar and Business Gozar Assessment (G/BG‐A) to identify opportunities where EZ‐

Kar investments can have a high economic impact. The G/BG Assessment will be conducted in all IDLG project

cities by a firm recruited and managed by IDLG. This assessment will include work to identify locations in the city

with a high density of businesses where potential Business Gozars could be established, before the identification

and recommendations for market‐enabling infrastructure takes place at the Gozar or Business Gozar level.

Subproject proposals identified for implementation by Business Gozars shall be aligned with national public

11 Facilitating Partners means international and/or national non‐governmental organizations and agencies that will assist the CDCs, GAs, and BGAs with the preparation and implementation of subprojects. 12 The coverage is expected to be close to 90 percent of the city if using the Afghanistan’s National Statistics and Information Authority (NSIA, 2018) urban population figures, which shows that there are 1,210 communities in these urban areas. However, data from UN‐Habitat’s ‘State of Afghan Cities’ report (SoAC 2015, updated 2017), shows that there are around 2,035 communities. Saturation beyond 1,160 CDCs in the cities can be carried out under CCAP as more resources are made available. 13 Community Development Council is a community‐based decision‐making body that includes a chairperson, vice‐chairperson, secretary, and treasurer, and is responsible for, inter alia, preparing Community Development Plans and Sub‐Project proposals, and for the implementation and management of subprojects. Each urban CDC comprises approximately 200 households. 14 The Well Being Analysis (WBA) is part of the Participatory Learning and Action (PLA) tools, which is a participatory process that classifies all households in the community into socio‐economic categories (rich or well‐off, middle class, poor, and very poor). Each household in the poor or poorest categories of the WBA with an able‐bodied member willing to participate in paid labor is considered a potential beneficiary for this component. If the total number of such eligible households exceeds 35 percent of the total households in the community, then a lottery approach is used exclusively from among the eligible households only to select the actual beneficiaries. 15 MCCG Agreements will be signed between IDLG and the CDCs before transferring the grants. 16 1,160 CDCs x 200 households per CDC x 35 percent = 81,200 households. 17 Gozar is an urban neighborhood area‐based organization structure at the sub‐district level. A Gozar Assembly is a group of 4‐5 CDCs. A Business Gozar Assembly would consist of 100‐300 businesses. 18 Doing Business 2019; Sub‐National Doing Business in Afghanistan, 2017; and Economic Cluster Analysis: Study of Food Processing and Informal Manufacturing Activities in Kabul City, prepared by Altai Consulting for the World Bank, March 2015. 19 The term “businesses”’ refers to small and medium size enterprises (SMEs) as well as microenterprises. These could be, for example, shops in formal markets, small semi‐formal shops, vendors, workshops or small factories, etc.


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investment management (PIM) approach. IDLG, as the proposing entity, shall submit the proposals for strategic

fit screening and final approval by the Ministry of Economy (MoEC). For such screening and approval, MoEC shall

use a screening tool. It is recommended that IDLG uses the same screening tool, while proposing subprojects to

reduce the risk of rejection/revision of subprojects during MoEC’s subproject approval process. The details of the

process shall be elaborated clearly in the Component 2 Operations Manual.

27. Gozars and Business Gozars will have the same governance structure which has proven to work in Afghanistan

(under CCAP). By applying CCAP’s participatory and transparent process to develop Development Plans, priority

economic infrastructure needs of GAs and BGAs will be identified in an inclusive manner, reflecting the views of

both male and female owned and operated businesses. The Development Plans for the GAs and BGAs will have

similar “positive menus” based on selection criteria, as the objective of their investments will be the same20. Upon

approval of Development Plans, a grant of up to US$200,000 will be channeled to each GA/BGA for implementing

their investments21. GAs/BGAs can choose to pool their resources and will be supported by FPs.

28. Roll out and coordination: Once CDCs have been formed and have begun utilizing their MCCG, an estimated 230

GAs will be formed (as GAs are a grouping of CDCs). Once formed, IDLG, with the support of FPs, will ensure that

there is close coordination between GAs and BGAs (to avoid any duplication) and there is regular consultation

with nahia (Municipality District) administration and the Municipality Advisory Boards (MABs) in site selection,

alignment with municipal economic development plans for the market enabling infrastructure, and the progress

of project implementation. This coordination is already being done under CCAP.

29. Subcomponent 2.3: Support for Municipal Level Regulatory and Process Reforms. This will be implemented by

IDLG and will focus on reforms at the municipal level and within IDLG’s mandate. To move municipalities towards

an investor friendly way of operating, this subcomponent will support the following activities:

a. Undertake a regulatory assessment for each project city to identify city‐level priorities in Government to Business (G2B) services e.g., obtaining a license, permit, certification, registering a business, paying taxes. Specific consideration will be given to city‐level G2B reforms that can help close the gender economic gap.

b. Support reforms identified by the regulatory assessment. This will be in the form of technical assistance to the Gozars, Business Gozars, and Municipalities across IDLG cities. Priority will be given to simplification of construction permits22 [in coordination with the IFC23 and the Executive Committee on Private Sector Development (PRISEC)], and those related to Doing Business (DB).

20 Illustrative criteria could, inter alia, include: (i) a high‐level assessment of feasibility and basic financial analysis by FPs, given the available funding, timelines and capacity; (ii) promoting businesses; (iii) prioritizing market‐enabling infrastructure that can lead to improved economic opportunities (such as cold storage and warehousing facilities, sanitation facilities, electricity connections). IDLG will ensure that all Gozar and Business Gozar investments are consulted with the Mayor (or acting), whose role will also be to ensure alignment of the investments with municipal economic development plans in consultation with Municipal Advisory Boards. 21 IDLG will sign Gozar Grant Agreements with GAs and Business Gozar Agreement with BGAs before transferring the grants. 22 Construction permits were selected because of the focus on light construction under the EZ‐Kar project (including at community‐level subprojects), complementarities with Cities Investment Program (since construction permits are very relevant for businesses and markets in cities), and the ability of IDLG and Municipalities to implement reforms related to construction permits. Draft action plans for improving the construction permit may include, inter alia, topics such as building inspections, risk‐informed land use planning, automation of processes. 23 Subject to coordination with IFC, green buildings certification may be incorporated in this process.


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30. Subcomponent 2.4: Component 2 Management. Activities under this component will be implemented using the

existing CCAP PIU established under IDLG and will cover all the additional operations and management costs

associated with the EZ‐Kar activities in IDLG (up to 10 percent of Component 2 amount).

COMPONENT 3: PRIORITIZED URBAN INVESTMENTS IN FOUR PROVINCIAL CAPITAL CITIES (US$25 m)

31. In line with the overall objectives and the programmatic approach of EZ‐Kar, this component will leverage the CIP

platform within IDLG to strengthen the municipalities’ public financial management (PFM) systems and invest in

priority investments that enable local economic development and business growth. This component will be

implemented by IDLG in the four PCCs of Jalalabad, Kandahar, Herat and Khost.

32. Subcomponent 3.1: Prioritized Urban Investments. Performance grant allocations for Prioritized Urban

Investments (Priority Projects) will be awarded against achievement of specific performance criteria in three

cycles. Upon Project effectiveness, four participating PCCs will receive 5 percent of the formula‐based allocation

investment financing amount following the submittal of a “Municipal Investment Platform” (Cycle‐1) as required

under the CIP project. The remaining financing for investments will be distributed in two subsequent budgetary

cycles. These will be aligned with budgetary cycles in FY2019 (Cycle 2) and FY2021 (Cycle 3). Performance

allocations in the Cycle‐2 (45 percent of the overall financing allocation) and Cycle‐3 (50 percent of the overall

financing allocation) will be awarded based on the level of compliance by the municipality with the public financial

management triggers (as per the principles of the parallel World Bank funded CIP) as well as the construction

permit trigger. Achieving the latter will be funded and supported by technical assistance provided under

Subcomponent 2.3 of EZ‐Kar. Furthermore, progress in the implementation of reforms under the CIP24 will

determine the rate of release of funds for the implementation of Priority Projects (see Table 1). The payments

would be made upon receipt of third party verification.

Table 1: Release of Funds under subcomponent 3.1 of EZ‐Kar

First Investment tranche (Cycle‐1): 5% Release condition

Available to all four cities upon project effectiveness and following the submittal by each municipality of a “Municipal Investment Platform”. Financing is aimed at helping to establish the project, undertake design work and complete the 2nd tranche release condition.

Second Investment tranche (Cycle‐2): 45% release condition

The three cities of Jalalabad, Kandahar and Herat satisfactorily complete a construction permit reform implementation plan and meet the Cycle‐2 reforms under the CIP. Khost will only need to comply with Cycle‐2 reforms under the CIP.

Third Investment tranche (Cycle‐3): 50% release condition

The three cities of Jalalabad, Kandahar and Herat satisfactorily complete the construction permit reforms and meet the Cycle‐3 reforms under the CIP. Khost will only need to comply with Cycle‐3 reforms under the CIP.

33. Priority Projects will be selected through inclusive and participatory consultations led by municipalities, in

coordination with Municipal Advisory Boards (MABs) and the private sector. Furthermore, budget allocation per

participating city will be allotted according to the number of returnees in the past 3 years (2016‐2018). As such

the four participating cities will receive the following allocations: Jalalabad (US$9million); Kandahar (US$4million);

Herat (US$ 4million) and Khost (US$3million). This subcomponent is also fully aligned behind the implementation

24 Along with Public Financial Management (PFM) reform triggers.


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arrangements under the parallel World Bank‐funded CIP project. A clearing mechanism (within the IDLG CIP PIU)

will be established to decide which of the Priority Projects will be financed under the CIP or the EZ‐Kar Window.

Priority Projects with high economic returns and located within areas of heavy returnees’ presence will be

financed under the EZ‐Kar window.

34. Subcomponent 3.2: Project management. Given that Component 3 will be implemented by the CIP PIU at IDLG,

subcomponent 3.2 will finance the cost of feasibility studies, detailed engineering designs25, construction

supervision, and monitoring and evaluation for a budget equal to US$5million. Progress and financial reporting,

as well as output and outcome monitoring under this component will be reported upon under a separate reporting

system along the same format of the CIP.

COMPONENT 4: MARKET ENABLING INFRASTRUCTURE AND REFORMS FOR KABUL MUNICIPALITY26 (US$40 m). 35. This component aims to address the challenges faced by Kabul’s private sector in accessing economic

opportunities. Kabul’s private sector is dominated by a very large number of small and micro enterprises (SMEs)

located throughout the city in: (a) formal market areas, (b) small semi‐formal shops and factories located in

commercial areas, and (c) on the sides of main transport roads informally. In general, these businesses are

performing in a suboptimal manner due to productivity, value (quality), and connectivity challenges. This

component aims to address these problems by (a) assisting Kabul Municipality to implement selected municipal

level regulatory reforms associated with market upgrading; and (b) financing investments in market upgrading

and connectivity improvements (e.g. roads and drainage) that promote economic opportunities.

36. Subcomponent 4.1: Regulatory and process reforms. Kabul Municipality will develop and implement several

regulatory reforms with the immediate focus on simplification of construction permits. Other reforms relevant to

Doing Business (DB) indicators will also be supported. The reduction in processing steps for construction permits

will be measured against baseline figures from the Afghanistan Doing Business Reform Memorandum (March

2018). The table above outlines the procedures and triggers (but not the PFM reforms) which will be applied to

release the three tranches to the municipality before works can begin. The payments would be made upon receipt

of third party verification by MoEC.

37. Subcomponent 4.2: Prioritized Urban Investments. Kabul Municipality will identify “Priority Project”27

investments through consultations with businesses. The funding for these investments will be released in three

tranches and will be conditional on meeting the regulatory reform triggers for Component 4. The type of

investments that are likely to be funded include work on public markets (including women’s markets) and roads,

the provision of electricity connections, and logistics infrastructure (e.g., warehouses). Investment resources will

25 Feasibility studies and detailed designs will incorporate climate resilient elements. 26 Note: Kabul is the only municipality that does not fall under IDLG’s mandate. For this reason, a separate component has been set up for Kabul, even though the type of activities, reforms and objectives may seem similar to those in Components 2 and 3. 27 “Priority Projects” are urban infrastructure investment projects that will be: (1) selected based on criteria and a permissible menu that will be elaborated in the Operations Manual and provide pro‐market / pro‐business economic opportunities to displaced populations, women, and host communities; (2) aligned to city‐level Strategic Development Frameworks that will determine optimal location and appropriate project types; (3) aligned to any Gozar / Business Gozar subprojects proposed or being implemented under EZ‐Kar in the same geographic catchment area; and (4) under Safeguards Category B. There will be operations and maintenance (O&M) plans in place with a system to ensure user fees are collected where possible. Examples of Priority Projects include, inter alia, construction and/or rehabilitation of markets, shops, connectivity, shared commercial toilets and storage and ICT infrastructure, power grids etc.


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be allocated on a performance basis in three tranches in line with Table 1. These investments will be screened to

ensure: (i) feasibility and (ii) a focus on economic opportunities. Eligible investments will be limited to those that

meet criteria such as: (a) improve economic opportunities through improved productivity (reductions in wastage

and pilfering), (b) increase the value of products (hygiene, packaging, etc.) or (c) improve connectivity to the

market, and that (d) are located on land owned by the municipality, (e) are limited to a maximum of US$2.5 million

(and are of safeguards category B), (f) consistent with Kabul’s master plan (zoning, future development, avoidance

of hazard‐prone areas), and (g) have the concurrence of the private sector. To ensure that Priority Project

proposals identified for implementation by KM are aligned with and inform national development plans, the

approval procedure shall be aligned with the national PIM approach. KM, as the proposing entity, shall submit the

proposals for strategic fit screening and final approval by MoEC. For such screening and approval, MoEC shall use

a screening tool. It is recommended that KM uses the same screening tool while proposing Priority Projects to

reduce the risk of rejection/revision during MoEC’s approval process. The details of the process shall be elaborated

clearly in the Component 4 Operations Manual.

38. Subcomponent 4.3: Component 4 Management. Activities under this component will be implemented using the

existing PIU established under Kabul Municipality Development Program (KMDP). This subcomponent will cover

all the additional operations and management costs associated with implementing the EZ‐Kar activities in Kabul

(up to 10 percent of Component 4 amount).

COMPONENT 5: RED CARPET AND PROGRAM COORDINATION (US$10 million)

39. This component finances the efforts of MoEC in (a) supporting national level regulatory reforms, and (b) program

coordination to oversee the implementation of EZ‐Kar.

40. Subcomponent 5.1: National level regulatory reforms. This subcomponent seeks to move the government from

providing “red tape” (bureaucratic/difficult processes) to providing a “red carpet” (an investor friendly way of

operating). The Project will support red‐carpet measures through the provision of technical and operational

assistance to MoEC for supporting national regulatory reforms, feasibility assessment of business service centers

in selected cities, and development of coordination mechanisms with relevant ministries and agencies (such as

Ministry of Commerce and Industry and Asan Khedmat28).

41. Subcomponent 5.2: Program Coordination. EZ‐Kar is an inter‐ministerial programmatic effort to improve

economic opportunities in cities across Afghanistan and respond to the displacement crisis29. MoEC will serve as

the lead line Ministry responsible for inter‐ministerial coordination within GoIRA and be responsible for overall

management and project oversight across the IAs30. To strengthen the linkages across components during project

implementation, MoEC will establish two inter‐ministerial level bodies that will foster strong project specific

engagement and coordination at the Deputy Ministers level and the technical level. The terms of reference (TOR)

of these two bodies have been agreed with MoEC and will be outlined in the Operations Manual. All Deputy

Ministers of the IAs, MoRR, and MoF have co‐signed a memorandum of understanding (MoU) which outlines their

various roles and responsibilities, reporting timelines, and the general operating modality for the project steering

28 Asan Khedmat is a one stop shop for specific government‐to‐citizen and government‐to‐business services. 29 See Annex 5 for the organizational structure. 30 MoFA, IDLG, Kabul Municipality, and coordination with Ministry of Finance (MoF).


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committee (PSC) and IAs. This subcomponent will also finance operational planning; capacity building;

management information and reporting systems; support the rapid selection of Business Gozar sub‐projects under

Component 2.2; grievance redress mechanisms (GRM); human resource management; communications; donor

and field coordination; financial management (FM) and procurement functions; and safeguards oversight.

C. Project Beneficiaries 42. The EZ‐Kar project will reach Afghan refugees living in Pakistan and Afghans in cities such as Jalalabad (Nangarhar

Province), Kabul (Kabul Province), Kandahar (Kandahar Province), Herat (Herat Province), Puli Khumri (Baghlan

Province), Maimana (Faryab Province), Firozkoh (Ghor Province), Khost (Khost Province), Asadabad (Kunar

Province), Kunduz (Kunduz Province), Mihtarlam (Laghman Province), Taloqan (Takar Province) and Paroon

(Nuristan). These cities have been selected based on the influx of returnees and IDPs with data from GoIRA

(National Statistics and Information Authority: NSIA) sources. (Additional cities can be added if additional financial

resources are made available) (see Annex 8 for the population figures).

43. Available survey data indicate that once returned to Afghanistan, most refugees return to their province of origin

to be in proximity to family and friends or, if they return elsewhere, they do so for safety and economic reasons.

Afghan returnee households are large and although most families have at least one person working for pay, they

have low job stability and low wages. According to survey data, most returnees work as daily wage laborers in

non‐agriculture and they generally experience a decrease in the employment rate, wage, and job stability after

returning to Afghanistan. Data indicate that there were as many men as women among Afghans living in Pakistan

in 2011 but more women (54 percent) than men returned to Afghanistan between 2015 and 2017. 31

D. Results Chain 44. The project supports, through a programmatic, multi‐sector, multi‐implementation agency approach, the short,

medium, and long‐term measures required to increase economic integration of Afghan returnees, IDPs, and host

communities in the cities supported by the project. The project will implement a range of policy and operational

activities identified through multiple consultations and surveys with the GoIRA, potential beneficiaries, and

stakeholders (e.g. UN agencies, civil society, refugees). These measures include, among others: (a) provision of

civil documents and information services to Afghan refugees in Pakistan; (b) creation of job opportunities through

labor intensive public works; (c) removal of regulatory red tapes (such as cumbersome processes of applying for

construction permits), (d) provision of and improvements to market infrastructure at municipal and Gozar levels

which for years have had limited business activity. Together, these measures are expected to strengthen an

enabling environment for economic opportunities in the target cities where there is a high influx of displaced

people which will facilitate new business activities, create immediate short‐term jobs, and promote economic

opportunities. This theory of change is expressed in the flow‐chart in Annex 4.

31 World Bank. “Living conditions and settlement decisions of recent Afghan returnees: Findings from a 2018 World Bank Phone Survey of Afghan Returnees”, forthcoming.


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Climate co‐benefits: The project will also contribute towards the efforts of GoIRA in achieving the United

Nations’ Sustainable Development Goal 13 (Take Urgent Action to Combat Climate Change and its Impacts) by

enhancing the resilience of IDPs, returnees, and host communities to climate change. By issuing civil documents

to the returnees and providing information on return processes, the project will facilitate the returnees to

access social services and economic opportunities that alleviate their vulnerability to shocks. The labor intensive

public works, investments in market infrastructure, and regulatory reforms to promote economic opportunities

are expected to create more jobs and provide for more stable income generation activities in the target cities,

mitigating economic shocks of climate change. Improved connectivity to markets (access roads) and market

infrastructure (e.g. electrification, storage, drainage, sanitation) are also expected to support food security to

an extent by increasing the availability, durability, and hygiene of food supply in general. In addition, depending

on the type of market infrastructure improved or constructed, the project may contribute to the reduction of

heat loss in utilities and/or increased recovery of waste heat (Climate Finance Category 3.3 Energy efficiency

improvements in the utility sector and public services). (See Annex 12 for further details).

E. Rationale for Bank Involvement and Role of Partners

45. The value‐added of the World Bank's support is based on its long‐standing engagement in urban development,

small‐scale infrastructure, public works and employment programs in Afghanistan. There is a strong and

comprehensive architecture of existing engagement that a project of this scale can utilize. In addition, years of

engagement has resulted in good capability in Afghanistan to manage a complex coordination mechanism across

a variety of players in the GoIRA and the donor community. From the World Bank’s perspective, the ability to

support sizable investments over lengthy periods provides a comparative advantage to both facilitate and sustain

reform processes. The delivery of IDA and ARTF resources on‐budget is a distinct comparative advantage over aid

that is delivered off‐budget, as this fosters client ownership, thereby reducing the risk of being supply‐driven.

F. Lessons Learned and Reflected in the Project Design

46. The approach taken by this project is guided by the World Bank’s long experience of working in Afghanistan and

the understanding of what works well on the ground for example:

i. In providing economic opportunities in forced displacement situations, there needs to be a strong focus on

economic growth and the real economy.

ii. The provision of documentation is fundamental to aid the process of reintegration of returnees. Partners such

as UNHCR and IOM have substantial experience over many decades in this area.

iii. Close coordination with humanitarian and development partners such as UNHCR, IOM, International Labor

Organization (ILO), EU, and the bilateral donors is critical in terms of data collection (given WBG’s restricted

access), joint assessments, planning, monitoring, learning, sharing of responsibilities, and maintaining a

coherent dialogue with the authorities.

iv. Displaced populations may not wish to return to their places of origin, preferring to integrate locally and tend

to move to urban areas where there is a higher level of security and opportunities.

v. Effective project implementation depends on the capacity of IAs and the support the World Bank task team

on the ground provides during the implementation period.


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IMPLEMENTATION ARRANGEMENTS

A. Institutional and Implementation Arrangements

47. Responding to large scale displacement and improving economic integration in urban areas requires an inter‐

ministerial programmatic effort, which builds on existing platforms and institutional structures. Based on

recommendations from GoIRA, stakeholder consultations and data on population size and influx of displaced

people, a number of Ministries, municipalities and Directorates will be involved in the project management and

implementation—with each playing a distinct but highly complementary role in responding to what is a

multifaceted programmatic response to displacement. These are summarized in Annex 5 with an organizational

chart of the project).

48. MoEC will serve as the lead line Ministry (under Component 5) responsible for (a) inter‐ministerial coordination

among stakeholders within GoIRA and with the donors, (b) general oversight and reporting, and (c) managing the

leadership and technical coordination of the project across the IAs. Even though each IA will carry out its own

implementation, oversight and monitoring and evaluation (M&E) tasks, MoEC will coordinate, follow up and

consolidate monitoring, reporting on performance, and as needed, provision of technical assistance for all line

ministries. It will also ensure that investments meet an agreed set of criteria and follow the World Bank’s

safeguard and fiduciary requirements. Activities under Components 1, 2, 3, and 4 will be carried out by MoFA,

IDLG and Kabul Municipality. An operations manual will be prepared for each component, and MoEC will compile

these and ensure that the overall Project is carried out in accordance with the arrangements and procedures set

out in this compilation of operations manuals (“Project Operations Manual”).

49. A Deputy Minister Level Project Steering Committee (PSC) will be established and chaired by the Deputy Minister

of MoEC. All IAs, MoRR, and MoF have co‐signed an MoU outlining their roles and responsibilities. IDLG will also

establish an MoU with key stakeholders in urban areas (municipalities, the Ministry of Urban Development and

Housing Afghanistan [MoUDHA], Afghanistan Urban Water Supply and Sewerage Corporation [AUWSSC], Da

Afghanistan Bank [DAB: Central Bank of Afghanistan], and Da Afghanistan Breshna Sherkat [DABS: Afghanistan’s

state‐owned utility company], etc.) to ensure project coordination within each city and to avoid duplication.

B. Results Monitoring and Evaluation Arrangements

50. Each IA will be responsible for their own M&E and reporting for the component they implement. MoEC will

coordinate with the IAs, consolidate their progress reports every quarter, update the results framework, and

ensure that M&E systems across the IAs are functioning well. MoEC will also be responsible for monitoring all

activities under Component 5 (see Annex 6 for details).

51. Learning through regular coordination with IAs and UN agencies will be important, and several studies will be

conducted. The topics of these studies may include, inter alia, the emergence of small business and employment,

the Doing Business reform experiences, the quality and procedures for construction permit reforms in different

cities, the effectiveness of business service centers and of Gozars and Business Gozars to deliver market

opportunities. These studies and mixed method evaluations have been budgeted under Component 5 although

the studies will be conducted jointly with the relevant IAs.


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C. Sustainability 52. Increased capacity to issue passports. The Project will finance the operational costs of passport issuing offices in

the four MoFA missions in Pakistan for only two years. The demand for passports is expected to be concentrated

in the first two years of project implementation, and then return to the previous levels. Therefore, with the new

equipment installed by the project, the MoFA missions in Pakistan are expected to be able to handle the level of

demand from the third year onwards with its pre‐existing capacity. To retain this pre‐existing level of capacity at

the missions, and for legal and security reasons, for the first two years of project implementation, surge‐capacity

staff will be contracted on a temporary basis at the MoFA missions, rather than sub‐contracting a private firm to

provide passport services in Pakistan.

53. Investments made under Component 2 are aligned with the Citizens’ Charter National Priority Program (CCNPP).

Institutional sustainability of the democratically elected CDCs and Gozar Assemblies will be obtained through

CCNPP which will subsequently work with these institutions for the roll out of future phases of CCAP and

coordinate with other development programs of GoIRA. Financial and technical sustainability of the infrastructure

constructed will be ensured by channeling all funds on‐budget and via an enhanced focus on operations and

maintenance, including the provision of MCCG, which will help to maintain existing urban infrastructure. IDLG will

also actively promote CDCs (through municipalities, non‐governmental organizations (NGOs), and development

actors at the city level) to serve as the primary focal point for local development purposes for their given

constituents. Similarly, if the CCAP program expands to these urban areas, the same CDCs will be used by CCAP.

54. Investments made under Component 3 (Cities Investment Program) are aligned with the World Bank's urban

program in Afghanistan. The increasing focus at the local level through EZ‐Kar will help expand the urban

program's reach from the national level to providing the tools and incentives for municipalities to take the lead,

which is in line with GoIRA's aim of supporting greater decentralization and sustainability through local asset

ownership and service delivery. The prevailing security situation, continuing mobility of IDPs and returnees,

political uncertainties, and a volatile macro‐fiscal status are key factors that could affect the long‐term

sustainability of the Project. These are beyond the Project's control but have been taken into consideration in

Project design and implementation arrangements. Building to the maximum extent possible on local human

capital and focusing the Project on providing both capacity building support and flexibility to adjust along the way

will help to respond to demands that arise in the challenging implementation context.

PROJECT APPRAISAL SUMMARY

A. Technical, Economic and Financial Analysis 55. The project is expected to result in several direct and indirect benefits that will accrue through development of

municipal infrastructure and labor‐intensive public works. The positive impacts resulting from these investments

have been captured in economic and financial analyses undertaken as part of World Bank‐supported investments

and recent analytical work (details of the economic analysis are found in Annex 9).

B. Fiduciary

Financial management 56. The project FM risk is assessed as ‘High’ due to: (i) limited financial management capacity in terms of number,

qualification and experience of staff; (ii) excess use and delayed liquidation of cash advances; (iii) absence of a


Page 24 of 85

management reporting system to monitor physical and financial progress; (iv) low budget credibility due to weak

planning process; (v) limited scope and coverage of internal audit as well as poor quality of audit reports; and (vi)

non‐compliance with external audit recommendations. To mitigate the risk and strengthen FM capacity, time

bound mitigation measures have been agreed with the implementing agencies. The financial management risk

will be reassessed once the mitigation measures are in place.

57. The project FM arrangements rely on the country systems. GoIRA budgeting processes will apply, and the project’s

budget will be a part of GoIRA’s annual budget. The accounting records will be maintained at the central level by

MOF in Afghanistan Financial Management Information System (AFMIS) based on M16s and the FM department

in MoFA, KMDP, IDLG‐Deputy Ministry for Municipalities (DMM) and MoFA will maintain detailed subsidiary

records. The FM Manual (FMM) for ARTF and IDA projects has been developed that will be adopted for EZ‐Kar.

The FMM provides an elaborate FM and internal control framework that is acceptable to the World Bank. The

internal audit reports by each IA will be submitted to the World Bank within two months of the close of the

semester and financial statements will be prepared in accordance with the Cash Basis International Public Sector

Accounting Standards (IPSAS) and audited by the Supreme Audit Office, in accordance with the International

Organization of Supreme Audit Institutions (INTOSAI) auditing standards. The audited financial statements will be

submitted to the World Bank within six months of the close of the financial year. The FM departments in each IA

will have the responsibility to manage project’s FM matters and incremental staff will be hired to manage the

workload.

58. The audit for Citizens’ Charter and Kabul Municipality Development Project implemented by IDLG and KM

respectively has been delayed for the most recent fiscal year, similar to all projects under the Afghanistan

portfolio, due to delays encountered by the Supreme Audit Office. The team has obtained a waiver from World

Bank Finance and Accounting and Governance departments for this year’s audit requirement, based on the

assurance that the audit reports for both projects would be received by November 30, 2018.

Procurement

59. Procurement will be carried out by Procurement Directorates or Procurement departments/units of MoEC, Kabul

Municipality, IDLG and MoFA and in accordance with Procurement Regulations for Borrowers under the New

Procurement Framework. Based on the initial procurement capacity assessment of the implementation agencies,

the procurement risk is rated “high”. Procurement Directorates and procurement department are preparing a

Project Procurement Strategy for Development (PPSD) to decide procurement methods and approaches for

procurement. Refer to Annex 8 for further details.

60. MoEC will serve as the lead line Ministry responsible for coordination with all the IAs. Other entities involved in

their own component specific Procurement will be MoFA, Independent directorate of local governance and Kabul

Municipality. MoEC Procurement Unit will develop a Procurement Manual for the project. This manual will be

applicable for all implementing ministries and entities in the Project, except those which are already implementing

World Bank assisted projects with established procurement arrangements. The manual will have details on the

roles and responsibility and coordination of different unit for EZ‐Kar procurement and contract management. The

Manual shall be agreed with the World Bank. The World Bank will carry out prior and post review based on the

agreed procurement arrangements and Procurement Plan finalized on completion of development of PPSD.


Page 25 of 85

C. Safeguards 61. The adverse environmental and social impacts of the project are expected to be minor and reversible in nature.

Given the scope and scale of planned activities, mitigation measures are developed. Since the location of the sub‐

projects and area of influence are not known yet, a framework approach is adopted. The environment and social

management framework (ESMF) and Resettlement Policy Framework (RPF) includes necessary provisions to

address and mitigate adverse impacts applicable to each investment and measures to enhance their benefits

throughout the project period. The project will support regulatory reforms to support (a) investor friendly way of

operating; and (b) efficient management of approval processes to set up business and related construction works

for which a Strategic Environmental and Social Assessment will be carried out following the identification of the

reforms. Disclosure: A National level stakeholder consultation on the ESMF and RPF was organized on October

28th, 2018, and the two documents were publicly redisclosed on the MoEC website on October 29, 2018.

62. Environmental Safeguards: OP/BP 4.01 is triggered, as the project can have negative impacts as a result of the

proposed activities. These impacts will be mainly related to (a) occupational health and safety of workers; and (b)

regulatory reforms which may induce environmental and social safeguards impacts. A framework approach has

been adopted as the specific locations and details of activities will only be determined by the borrower during

project implementation. The ESMF prepared for CCAP and CIP has similar scope of work and has been aligned to

the activities under Component 2 and 3 of EZ‐Kar project. The ESMF prescribes guidelines and procedures that

would avoid, mitigate, or minimize adverse environmental impacts, and spells out the policies, guidelines, and

procedures including mitigation plans to minimize and mitigate the likelihood of envisaged negative impacts.

63. Social Safeguards: OP 4.12 (Involuntary Resettlement) is triggered under Components 2, 3, and 4, which will

support rehabilitation or construction of market enabling infrastructure and short‐term employment through

labor‐intensive public works (“LIPW”). Based on the secondary literature review and the lessons learnt from on‐

going Bank supported projects, the RPF and ESMF for the project were prepared that built on those for CCAP and

Kabul Municipality Development Project (KMDP), and in coordination with those of CIP. Additional social

assessment will be carried out as part of series of assessments planned under project activities. These assessments

will capture social issues in areas where the project will be implemented.

Other safeguards

64. Gender: As previously mentioned, women comprise a substantial share of the recent returnees. Returnee women

are even less economically active than Afghan women overall. According to recent survey data, only 13 percent

of documented Afghan refugee women are employed, with an even lower share for recently returned refugee

women at 10 percent (whereas female labor force participation overall in the country is approximately 19

percent).32 Afghan women's labor force participation is as low as 19 percent and most of them are engaged in the

informal sector. Women’s access to markets—both customers and business owners—is constrained by both

social norms as well as poor economic infrastructure. Women mostly rely on their male family members to make

household purchases. Only 5 percent of all registered business belong to women. In addition, there is a significant

gender gap in access to identity. Though reliable data are lacking, it is well‐established that the vast majority of

32 World Bank. “Living conditions and settlement decisions of recent Afghan returnees: Findings from a 2018 World Bank Phone Survey of Afghan Returnees”, forthcoming.


Page 26 of 85

Afghan women do not possess national identity cards, which are a pre‐requisite for passport acquisition. The

gender gap in identity is likely driven by a combination of factors, including lack of awareness/information among

both men and women, and the fact that male family members do not tend to prioritize obtaining

identity/passports for women.

65. The Project will contribute to closing gender gaps in women’s access to markets via investments to improve

economic infrastructure. At least 30 Gozar/Business Gozar investments and five Priority Projects (at least one

each in Kabul, Herat, Jalalabad, Kandahar, and Khost) will be required to target women. This will be implemented

in two ways: (i) specific subprojects exclusively for women, e.g. restoration of women's markets, rehabilitation of

toilet facilities for markets; or (ii) subprojects that are inclusive for (and do not exclude) women, such as extension

and upgrading of pedestrian walkways, bus stops and street lighting that link to markets. The project will also help

to close the gender gap in access to identity. The project will help create demand among women to apply for

passports through outreach and communication and improve women’s access to these services through provision

of special arrangements as needed (for example female‐only window counters at passport agencies). In addition,

the project will support strengthening of data collection and management in order to track the number of passport

applications made by women and the success rate of those applications.

66. As the project includes some civil work, the project will ensure that the risk of gender‐based violence (GBV) is

mitigated and managed to the extent possible taking certain measures through ESMPs ensuring that they assess

the risk of GBV and include measures for mitigating them (e.g. codes of conduct for labors). Another measure is

to have a functional GRM for women and ensure that women are aware of it and able to use it. Under Component

2, it is likely that unskilled wage labor in cities will be largely undertaken by men. There will be no specific

mandatory provisions for including women in the wage labor headcount, but CDCs will be required to include at

least two female CDC members in decision‐making and sub‐project selection.

67. A Transparency and Accountability Framework (TAF) is being implemented under the project to help achieve

outcomes by enhancing value for money and maximizing benefits to citizens. This framework ties together various

country systems and community‐based transparency and accountability mechanisms under the project

components in IAs. Details of the TAF are provided under the Annex 3.

68. Citizen Engagement (CE) is an integral part of project implementation to enable an effective two‐way interaction

between citizen and government officials from the relevant government departments. Component 1 supports a

communication strategy and plan to reach out to Afghan refugees in Pakistan. Deeper engagement with host

communities and displaced people will be carried out under Components 2, 3 and 4 of the project. This also

includes consultation, GRM, and community participatory monitoring. The ESMF for the project provides detail

guidelines on citizen engagement for the EZ‐Kar project. During the implementation stage, the client will carry out

beneficiaries’ satisfaction survey in the selected sites to evaluate public satisfaction with citizen engagement

measures through phone surveys, workshops, and customer score cards. For Component 1, MoFA’s Directorate

of Consular Affairs has a GRM in place, which receives inquiries and complaints through emails, phone calls, and

online chat systems and the Project will upgrade the online GRM systems. The CE models developed by CCAP and

KMDP will be applied to Component 2 and 4 activities. IDLG will use the approach of Community Participatory

Monitoring (CPM), which is a community‐level process that remains independent from the CDC or GA. The


Page 27 of 85

beneficiaries will be involved in monitoring project quality and holding locally elected councils accountable for

effective utilization of public funds, implementation of projects, and ultimately the management of Community

Development Plans.

69. Grievance Redress: Communities and individuals who believe that they are adversely affected by a World Bank

(WB) supported project may submit complaints to existing project‐level grievance redress mechanisms or the

WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order

to address project‐related concerns. Project affected communities and individuals may submit their complaint to

the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of

WB non‐compliance with its policies and procedures. Complaints may be submitted at any time after concerns

have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity

to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress

Service (GRS), please visit http://www.worldbank.org/en/projects‐operations/products‐and‐services/grievance‐

redress‐service. For information on how to submit complaints to the World Bank Inspection Panel, please visit

www.inspectionpanel.org.

KEY RISKS .

70. The overall risk for this project is “High”. The risks that are rated high are: (i) political and governance risks; (ii) macroeconomic risks; (iii) security risks; (iv) social protection risks; and (v) implementation risks due to the

following factors: (a) the multiplicity of agencies that the project will be working through, (b) the wide geographic

spread of the project which covers an estimated 13 cities throughout the country; and (c) the fluid movement of

people and changing regional policies around refugees and their integration. (See Annex 11 for other risks.)

71. Political and Governance: Current political arrangements and the possibility of a change of government pose high

risks to achievement of the PDO. The immediate challenge of the returnees will still be there and will need to be

addressed. Mitigation measures include implementing the transparency and accountability mechanism. The

project will assign a designated access to information focal point who will also be the main focal point for strategic

communication. Various communications and community engagement tools will be used to enhance project

transparency and accountability. (See Annex 3 for further details on the Transparency and Accountability

Framework.)

72. Macroeconomic: This is subject to high risks given the uncertain and limited nature of both domestic and external

fiscal resources and continued high level of security expenditure. This project focuses on generating economic

opportunities, which is likely to generate growth and help with the macroeconomic outlook.

73. Security: Continued insurgent activity represents another source of risk to achievement of the PDO, movement

and recruitment of technical expertise, high costs, and monitoring the activities. Like the observation on political

turmoil, failure to address the challenge of the returnees is only likely to increase security risks.

74. Social Protection: With any large returning situation, the displaced will be subject to a variety of protection related

risks ranging from harassment, GBV concerns, preservation of their assets, and ability to access services on arrival.


Page 28 of 85

The red carpet and returnee integration components of the project are aimed at managing these risks. Also, the

‘whole of community’ approach aims to maintain social cohesion.

75. Implementation risks: This is a complex project that is addressing a complex problem with several ministries

involved. Two of these ministries do not have any experience with the World Bank processes and have low

capacity. It is also being implemented in multiple locations throughout the country which will stretch supervision.

The ‘Transparency and Accountability Framework’ builds on what works in Afghanistan and other FCV contexts,

such as Third‐Party Monitoring (TPM) and Geo‐Enabling Initiative for Monitoring and Supervision (GEMS),

strengthening two‐way communications, better use of country systems for FM and Procurement under the

project, and adopting functioning community‐based accountability mechanisms of CCAP. This will require

resources at MoEC to prepare and implement a comprehensive communication strategy that will include a project

website with links to various components of the project. Pro‐active disclosure of information as required under

the Access to Information Law, GRM, could also be included.

76. The unpredictable returnee environment, which is largely driven by policies and events in Pakistan, is also

influenced by geo‐political developments. There has been significant coordination with the World Bank in

Pakistan as well as consultation with the potential Afghan returnees in Pakistan. In the recent regional workshop

between Afghanistan and Pakistan teams of World Bank and UNHCR, it was agreed to work together, and activities

included under Component 1 are based on these consultations. A citizen feedback mechanism will be tested for

the service of providing passports to Afghan nationals in Pakistan. In addition to the above, UNHCR has committed

to work with the World Bank on Component 1, which will be implemented through MoFA. Similarly, the two World

Bank teams in Afghanistan and Pakistan agreed on operational linkages, especially on the issues of documentation

and asset transfers, messaging and consistency of data. This will require sharing of documents, periodic face‐to‐

face meetings, and video conferences.

77. Fiduciary: In addition to normal fiduciary risks in Afghanistan, additional risks may arise due to multiple spending

units, community contracts, grants, and multiple projects working with the same agencies (especially in the case

of IDLG and Kabul Municipality). The World Bank is developing a detailed FM Manual for the projects which will

provide an internal control framework. A strong third‐party monitoring mechanism will also be an important risk

mitigation measure.


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VI. RESULTS FRAMEWORK AND MONITORING

Results Framework COUNTRY: Afghanistan

Afghanistan: Eshteghal Zaiee ‐ Karmondena (EZ‐Kar) Project

Project Development Objectives(s)

The proposed Project Development Objective is to strengthen the enabling environment for economic opportunities in cities where there is a high influx of displaced people. This will be pursued by increasing the returnees' access to civil documents, providing short‐term employment opportunities, improving market enabling infrastructure, and supporting investor friendly regulatory reforms.

Project Development Objective Indicators

RESULT_FRAME_TBL_PDO

Indicator Name DLI Baseline End Target

ACCESS TO CIVIL DOCUMENTS

Percentage of Afghan Passport Applications in Pakistan Processed (Percentage)

0.00 80.00

Percentage of Afghan Passport Applications in Pakistan Processed (for female applicants) (Percentage)

0.00 80.00

SHORT‐TERM EMPLOYMENT OPPORTUNITIES

Number of vulnerable households in high IDP/returnee cities provided with short term employment support (number) (Number)

0.00 80,000.00

Of which IDP/Returnee households (Number) 0.00 10,000.00

RED CARPET REFORMS AND MARKET FACILITATING INVESTMENTS


Page 30 of 85

RESULT_FRAME_TBL_PDO


Number of market enabling infrastructure built or upgraded (Number)

0.00 1,115.00

Of which at the community level (Number) 0.00 900.00

Of which at the Gozar level (Number) 0.00 180.00

Of which at the Business Gozar level (Number) 0.00 30.00

Of which at the city level (Number) 0.00 5.00

Number of procesing steps reduced for specific Doing Business reform indicators in four cities (Number)

0.00 13.00

Of which in the three cities of Jalalabad, Herat, and Kandahar (Number)

0.00 10.00

Of which in Kabul (Number) 0.00 3.00 PDO Table SPACE

Intermediate Results Indicators by Components

RESULT_FRAME_TBL_IO


Support for Afghan Refugees in Pakistan

Number of passports issued to Afghan refugees in Pakistan during the project implementation period (Number) 0.00 1,500,000.00

of which women (Number) 0.00 600,000.00

Percentage of passport applications processed within ten (10) working days (Percentage) 0.00 80.00

of which women (Percentage) 0.00 80.00


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RESULT_FRAME_TBL_IO


Number of people reached through communications activities implemented through the Project (Number) 0.00 750,000.00

of which women (Number) 0.00 300,000.00

Short‐Term Employment Opportunities

% of CDC members who are women (Percentage) 0.00 40.00

Market Facilitating Investments

Number of municipalities where IDLG holds EZ‐Kar coordination meetings with government authorities, Gozar assemblies and Business Gozar assemblies (Number)

0.00 11.00

Number of Gozars (hh and business) that have prepared their Gozar economic development plans (Number) 0.00 276.00

Businesses in urban areas provided with access to “Improved Water Sources” under the project (Number)

0.00 0.00

Of which through Priority Projects in Kabul (Number) 0.00 0.00

Of which through Priority Projects in the four cities of Herat, Kandahar, Khost, and Jalalabad (Number) 0.00 0.00

Of which through Gozar and Business Gozar Grants (Number) 0.00 0.00

Businesses in urban areas provided with access to "Improved Sanitation" under the project (Number) 0.00 0.00



Businesses in urban areas provided with access to all‐season roads within a 500‐meter range under the project (Number) 0.00 0.00

KM of roads constructed (Kilometers) 0.00 0.00

KM of roads rehabilitated (Kilometers) 0.00 0.00

Businesses in urban areas provided with access to regular solid waste collection at the markets under the project (Number) 0.00 0.00


Page 32 of 85

RESULT_FRAME_TBL_IO




Businesses in urban areas provided with access to electricity under the project by business connections (Number) 0.00 0.00

Generation Capacity of Renewable Energy (other than hydropower) rehabilitated under the project (Megawatt) 0.00 0.00

Generation Capacity of Renewable Energy (other than hydropower) constructed under the project (Megawatt) 0.00 0.00

Improved access to access to ICT services for business (number of business subscribers) (Number)

0.00 0.00


Of which through Priority Projects in the four cities of Herat, Kandahar, Khost, and Jalalabad (Number) 0.00 0.00


Number of market enabling investments under the project that address the gender gap in access to urban economic centers/ markets (Number)

0.00 35.00


Of which through Priority Projects in the four cities of Herat, Jalalabad, Kandahar, and Khost (Number)

0.00 4.00


Red Carpet Reforms

Number of reform implementation plans prepared (Number) 0.00 5.00

Of which at national level (Number) 0.00 1.00

Of which in the three cities of Herat, Jalalabad, and Kandahar (Number) 0.00 3.00

Of which in Kabul (Number) 0.00 1.00


Page 33 of 85

RESULT_FRAME_TBL_IO


Reduction in time taken to obtain a construction permit for commercial properties in Jalalabad, Kandahar, Herat, and Kabul (Days)

0.00 77.00

Of which in Jalalabad (Days) 0.00 14.00

Of which in Kandahar (Days) 0.00 6.00

Of which in Herat (Days) 0.00 18.00

Of which in Kabul (Days) 0.00 39.00

Project Management

Number of access to information inquiries responded to within agreed service standards (Number)

0.00 50.00

Percentage of complaints / grievances resolved following agreed EZ‐Kar service standards (Percentage) 0.00 80.00

IO Table SPACE

UL Table SPACE

Monitoring & Evaluation Plan: PDO Indicators

Indicator Name Definition/Description Frequency Datasource Methodology for Data Collection

Responsibility for Data Collection

Percentage of Afghan Passport Applications in Pakistan Processed

During the project implementation period, number of Afghan Passport Applications in Pakistan processed, divided by the number of Afghan Passport Application received in Pakistan

Quarterly

MoFA's administrative data

Administrative data collected through MoFA's passport issuing system.

MoFA (DG Consular Affairs)


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Percentage of Afghan Passport Applications in Pakistan Processed (for female applicants)

Number of vulnerable households in high IDP/returnee cities provided with short term employment support (number)

Number of households that have participated in labor intensive public works undertaken through MCCG subprojects

Semi‐annually

Project MIS

CDC profiles and MCCG progress reports

IDLG‐CCAP PIU with FPs

Of which IDP/Returnee households

Number of vulnerable IDP/Returnee households that have participated in labor intensive public works undertaken through MCCG subprojects

Semi‐annually

Project MIS

CDC profiles and MCCG progress reports


Number of market enabling infrastructure built or upgraded

Number of infrastructure built, upgraded, or maintained through MCCG, Gozar and Business Gozar Grants, and Priority Projects

Semi‐annually

Project MIS

Subproject and Priority Project proposals, quarterly progress reports, evaluation

IDLG‐CCAP PIU, IDLG‐CIP PIU, KMDP PIU

Of which at the community level Number of infrastructure upgraded or maintained through MCCGs

Semi‐annually

Project MIS

MCCG subproject proposals, quarterly progress reports, evaluation


Of which at the Gozar level Number of infrastructure built or upgraded through Gozar Grants

Semi‐annually

Project MIS

Subproject proposals, quarterly progress reports, evaluation


Of which at the Business Gozar level Number of infrastructure built or upgraded through Business Gozar Grants

Semi‐annually

Project MIS

Subproject proposals, quarterly progress reports, evaluation



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Of which at the city level Number of infrastructure built or upgraded through Priority Projects

Semi‐annually

Project MIS

Priority Project proposals, quarterly progress reports, evaluation

IDLG‐CIP PIU and KMDP‐PIU

Number of procesing steps reduced for specific Doing Business reform indicators in four cities

Number of processing steps reduced for obtaining construction permits for commercial properties

Semi‐annually

Evaluation Reports

Independent Evaluation

Independent Evaluation Agent contracted by MoEC

Of which in the three cities of Jalalabad, Herat, and Kandahar


Semi‐anuually

Evaluation Reports



Of which in Kabul


Semi‐annually

Evaluation Reports



ME PDO Table SPACE

Monitoring & Evaluation Plan: Intermediate Results Indicators

Indicator Name Definition/Description Frequency Datasource Methodology for Data Collection

Responsibility for Data Collection

Number of passports issued to Afghan refugees in Pakistan during the project implementation period

Number of machine‐readable passports issued for the applications received at the Afghan Embassy and consulates in Pakistan.

Quarterly

MoFA's administrative data



of which women

Number of machine‐readable passports issued for applications made by women at the Afghan

Quarterly

MoFA's Administrative Data




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Embassy and consulates in Pakistan.

Percentage of passport applications processed within ten (10) working days

The number of machine‐readable passports issued within 10 working days of application received, divided by the number of complete passport applications received during the reporting period at the Afghan Embassy and consulates in Pakistan. The baseline is zero, as machine‐readable passports have not been issued in Pakistan, and there is no monitoring system in place.

Quarterly


Administrative data collected through MoFA's passport processing system.


of which women

The number of machine‐readable passports issued for women within 10 working days of application received, divided by the number of complete passport applications received from women during the reporting period at the Afghan Embassy and consulates in Pakistan. The baseline is zero, as machine‐readable passports

Quarterly


Administrative data collected through MoFA's passport processing system.



Page 37 of 85

have not been issued in Pakistan, and there is no monitoring system in place.

Number of people reached through communications activities implemented through the Project

Sum of the numbers of (a) followers of the social media accounts created by the project; (b) help/support cases logged by helplines and information centers; (c) people reached by awareness campaigns.

Quarterly

Social media account statistics, administrative data from helplines and information centers, and implementation reports by the firm conducting awareness campaigns.

Administrative data, attendance records, and campaign implementation records.

Component 1 PIU with data provided by the helpline and information centers and the communications firm.

of which women

Sum of the numbers of (a) female followers of the social media accounts created by the project; (b) help/support cases to women logged by helplines and information centers; (c) women reached by awareness campaigns.

Quarterly

Social media account statistics, administrative data from helplines and information centers, and implementation reports by the firm conducting awareness campaigns.

Administrative data, attendance records, and campaign implementation records.

Component 1 PIU with data provided by the helpline and information centers and the communications firm.


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% of CDC members who are women

Number of women in the CDCs established under the project, divided by the total number of members of the CDCs established under the project.

Semi‐annually

CDC profiles

Data recorded in CDC profiles.

IDLG‐CCAP PIU with FPs.

Number of municipalities where IDLG holds EZ‐Kar coordination meetings with government authorities, Gozar assemblies and Business Gozar assemblies

Number of cities that have held meetings with EZ‐Kar stakeholders in the cities where Gozar and Business Gozar Grants are implemented.

Semi‐annually

Minutes of meetings

Aggregated number of meetings reported by the municipalities, verified with minutes of meetings.

IDLG‐CCAP PIU with FPs.

Number of Gozars (hh and business) that have prepared their Gozar economic development plans

Number of approved Gozar Economic Development Plans

Semi‐annually

Project MIS (IDLG‐CCAP MIS)

CDC and GA/BGA profiles


Businesses in urban areas provided with access to “Improved Water Sources” under the project

Number of businesses that are provided with access to improved water sources through Priority Projects and Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will

Semi‐annually

Project MIS

CDC profiles, GA/BGA profiles, quarterly progress reports, evaluation

IDLG‐CCAP PIU with FPs, IDLG‐CIP PIU, KM PIU.


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not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

Of which through Priority Projects in Kabul

Number of businesses that are provided with access to improved water sources through Priority Projects in Kabul. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of Priority Projects to be implemented cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

Semi‐annually

Project MIS (KM‐MIS)

Quarterly progress reports

KM‐PIU

Of which through Priority Projects in the four cities of Herat, Kandahar, Khost, and Jalalabad

Number of businesses that are provided with access to improved water sources through Priority Projects in the cities of Heart, Jalalabad, Kandahar, and Khost. Target value for this

Semi‐annually

Project MIS (CIP‐MIS)

Quarterly progress reports

IDLG‐CIP PIU


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indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of Priority Projects to be implemented cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

Of which through Gozar and Business Gozar Grants

Number of businesses that are provided with access to improved water sources through Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from

Semi‐annually

Project MIS (CCAP MIS)




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implementation.

Businesses in urban areas provided with access to "Improved Sanitation" under the project

Number of businesses that are provided with access to improved sanitation through Priority Projects and Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

Semi‐annually

Project MIS


IDLG‐CCAP PIU with FPs, KM PIU.


Number of businesses that are provided with access to improved sanitation through Priority Projects in Kabul. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of Priority Projects

Semi‐annually

Project MIS (KMDP MIS)

Quarterly progress reports, evaluation

KM PIU


Page 42 of 85

to be implemented cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.


Number of businesses that are provided with access to improved sanitation through Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

Semi‐annually



IDLG‐CCAP PIU

Businesses in urban areas provided with access to all‐season roads within a 500‐meter range under the project

Number of businesses that are provided with access to all‐season roads within a 500‐meter range through

Semi‐annually

Project MIS




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Priority Projects and Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

KM of roads constructed

Kilometers of roads constructed through Priority Projects and Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when

Semi‐annually

Project MIS

Quarterly progress reports and evaluation

IDLG‐CCAP PIU, IDLG‐CIP PIU, KM PIU


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there will be more information from implementation.

KM of roads rehabilitated

Kilometers of roads rehabilitated through Priority Projects and Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

Semi‐annually

Project MIS



Businesses in urban areas provided with access to regular solid waste collection at the markets under the project

Number of businesses that are provided with access to regular solid waste collection through Priority Projects and Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and

Semi‐annually

Project MIS


IDLG‐CCAP PIU with FPs, KM PIU.


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numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.


Number of businesses that are provided with access to regular solid waste collection at the markets through Priority Projects and Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of Priority Projects to be implemented cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

Semi‐annually



KM PIU


Page 46 of 85


Number of businesses that are provided with access to regular solid waste collection at the markets through Priority Projects and Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

Semi‐annually




Businesses in urban areas provided with access to electricity under the project by business connections

Number of businesses that are provided with access to electricity through Priority Projects and Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the

Semi‐annually

Project MIS

Technical designs, CDC profiles, GA/BGA profiles, quarterly progress reports, evaluation



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Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

Generation Capacity of Renewable Energy (other than hydropower) rehabilitated under the project

Generation Capacity of Renewable Energy (other than hydropower) rehabilitated through Priority Projects and Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

Semi‐annually

Project MIS

Technical designs, CDC profiles, GA/BGA profiles, quarterly progress reports, evaluation


Generation Capacity of Renewable Energy (other than hydropower)

Generation Capacity of Renewable Energy (other

Semi‐annually

Project MIS

Technical designs, quarterly progress

IDLG‐CCAP PIU with FPs,


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constructed under the project than hydropower) constructed through Priority Projects and Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

reports, evaluation

IDLG‐CIP PIU, KM PIU.

Improved access to access to ICT services for business (number of business subscribers)

Number of businesses that are provided with access to ICT services through Priority Projects and Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target

Semi‐annually

Project MIS

CDC profiles, GA/BGA profiles, nahia level administrative data, quarterly progress reports, evaluation

IDLG‐CCAP PIU with FPs, IDLG‐CIP PIU, KM PIU


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value may be set by the mid‐term review by when there will be more information from implementation.


Number of businesses that are provided with access to ICT services through Priority Projects in Kabul Municipality. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

Semi‐annually


Nahia level administrative data, quarterly progress reports, evaluation

KM PIU

Of which through Priority Projects in the four cities of Herat, Kandahar, Khost, and Jalalabad

Number of businesses that are provided with access to ICT services through Priority Projects in Herat, Kandahar, Khost, and Jalalabad. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐

Semi‐annually

Project MIS (CIP MIS)

Nahia level administrative data, quarterly progress reports, evaluation

IDLG‐CIP PIU


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driven approach and the types and numbers of Priority Projects to be implemented cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.


Number of businesses that are provided with access to ICT services through Gozar/Business Gozar Grants. Target value for this indicator is currently set at ‘0’, since this Project takes on a demand‐driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target value may be set by the mid‐term review by when there will be more information from implementation.

Semi‐annually


CDC profiles, GA/BGA profiles, nahia level administrative data, quarterly progress reports, evaluation

IDLG‐CCAP PIU

Number of market enabling investments under the project that address the gender

Number of market enabling investments under the

Semi‐annually

Project MIS

Subproject and Priority Project proposals,

IDLG‐CCAP PIU with FPs,


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gap in access to urban economic centers/ markets

project that close gender gaps in women’s access to markets, which can be in the form of (i) specific subprojects exclusively for women, e.g. restoration of women's markets, rehabilitation of toilet facilities for markets; or (ii) subprojects that are inclusive for (and do not exclude) women, such as extension and upgrading of pedestrian walkways, bus stops and street lighting that link to markets.

technical designs, quarterly progress reports, evaluation

IDLG‐CIP PIU, KM PIU.


Number of market enabling investments under the project that close gender gaps in women’s access to markets in Kabul, which can be in the form of (i) specific subprojects exclusively for women, e.g. restoration of women's markets, rehabilitation of toilet facilities for markets; or (ii) subprojects that are inclusive for (and do not exclude) women, such as extension and upgrading of pedestrian walkways, bus

Semi‐annually


Priority Project proposals, technical designs, quarterly progress reports, evaluation

KM PIU


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stops and street lighting that link to markets.

Of which through Priority Projects in the four cities of Herat, Jalalabad, Kandahar, and Khost

Number of market enabling investments under the project that close gender gaps in women’s access to markets in the cities of Herat, Jalalabad, Kandahar, and Khost, which can be in the form of (i) specific subprojects exclusively for women, e.g. restoration of women's markets, rehabilitation of toilet facilities for markets; or (ii) subprojects that are inclusive for (and do not exclude) women, such as extension and upgrading of pedestrian walkways, bus stops and street lighting that link to markets.

Semi‐annually

Project MIS (CIP MIS)

Priority Project proposals, technical designs, quarterly progress reports, evaluation

IDLG‐CIP MIS


Number of market enabling investments implemented through Gozar and Business Gozar Grants that close gender gaps in women’s access to markets, which can be in the form of (i) specific subprojects exclusively for women, e.g. restoration of women's

Semi‐annually

Project MIS (IDLG‐CCAP PIU)

Subproject proposals, technical designs, quarterly progress reports, evaluation



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markets, rehabilitation of toilet facilities for markets; or (ii) subprojects that are inclusive for (and do not exclude) women, such as extension and upgrading of pedestrian walkways, bus stops and street lighting that link to markets.

Number of reform implementation plans prepared

Number of construction permit reform implementation plans prepared

Semi‐annually

Project MIS

Reform Implementation Plans

IDLG, KM, MoEC

Of which at national level

Number of construction permit reform implementation plans prepared

Semi‐annually

Project MIS


MoEC

Of which in the three cities of Herat, Jalalabad, and Kandahar

Number of construction permit reform implementation plans prepared in Herat, Jalalabad, and Kandahar

Semi‐annually

Project MIS


IDLG

Of which in Kabul

Construction permit reform implementation plans prepared for Kabul Municipality

Semi‐annually

Project MIS


KM

Reduction in time taken to obtain a construction permit for commercial properties in Jalalabad, Kandahar, Herat, and Kabul

Number of average days reduced for obtaining construction permits for commercial properties

Semi‐annually

Evaluation Report

Survey


Of which in Jalalabad Number of average days reduced for obtaining

Semi‐annually

Evaluation Reports

Survey

Independent Evaluation Agent contracted by


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construction permits for commercial properties in Jalalabad

MoEC

Of which in Kandahar

Number of average days reduced for obtaining construction permits for commercial properties in Kandahar

Semi‐annually

Evaluation Report

Survey


Of which in Herat

Number of average days reduced for obtaining construction permits for commercial properties in Herat

Semi‐annually

Evaluation Report

Survey


Of which in Kabul

Number of average days reduced for obtaining construction permits for commercial properties in Kabul

Semi‐annually

Evaluation Report

Survey


Number of access to information inquiries responded to within agreed service standards

Number of individuals and organizations (including media and NGOs) that received project related information in accordance with agreed service standards.

Semi‐annually

Project MIS

Administrative data on information inquiries received and responded to by the IAs.

MoEC‐PIU

Percentage of complaints / grievances resolved following agreed EZ‐Kar service standards

The number of project related complaints or grievances resolved in accordance with EZ‐Kar

Semi‐annually

GRM Systems

Administrative data collected through GRM systems

MoEC‐PIU


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service standards, divided by the number of project related complaints or grievances received.

ME IO Table SPACE

Note: Intermediate Results Indicators are organized by objectives, rather than components, since multiple components contribute to the same set of outcomes. Target values for some of the Intermediate Results Indicators are currently set at ‘0’, since this Project takes on a demand-driven approach and the types and numbers of subprojects to be implemented under the Project cannot/should not be predetermined, as it will not be accurate. The target values may be set by the mid‐term review by when there will be more information from implementation.


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ANNEX 1: Implementation Support Plan

COUNTRY: Afghanistan

Afghanistan: Eshteghal Zaiee ‐ Karmondena (EZ‐Kar) Strategy and Approach for Implementation Support The implementation support plan of EZ‐Kar Project is designed to (a) address specific challenges of each component and project implementation agency; and (b) provide additional technical guidance to operate in an FCV environment and meet with the World Bank’s operations policy requirements. Table 1.1: Resource Requirement Estimates

Time Focus Skills Needed Resource Estimate

First 18

months

Work‐planning, PMU

formation, Operations

Manual, Training Materials,

Project Roll‐out, Review and

clearance of documents

Project Management,

Operations, Training

TTL: 36 weeks

TTL Operational Support: 60 weeks

Training Specialist: 6 weeks

Passport Issuing Systems ICT ICT Specialist: 4 weeks

Short‐Term Employment

Opportunities

Public Works/Jobs Public Works Specialist: 6 weeks

Private Sector Reforms and

Priority Projects

Private Sector Reforms Private Sector Specialist: 36 weeks

Urban Specialist: 12 weeks

Gozar Projects CDD CDD Specialist: 12 weeks

Financial Management FM Specialist FM Specialist: 8 weeks

Procurement Procurement Specialist Procurement Specialist: 8 weeks

Environment and Social

Safeguards, Gender

E&S Safeguards, Gender Environmental Safeguards Specialist: 6

weeks

Social Safeguards Specialist: 6 weeks

Gender Specialist: 4 weeks

Communications,

Transparency and

Accountability Framework

Communications, GRM Communications Specialist: 18 weeks

Construction Works Civil Engineering Civil Engineer: 6 weeks

18‐60

months

Resource and program

management,

Implementation status

reporting, Review and

clearance of documents

Project Management,

Operations, Training

TTL: 84 weeks

TTL Operational Support: 140 weeks

Short‐Term Employment

Opportunities

Public Works/Jobs Public Works Specialist: 8 weeks

Private Sector Reforms and

Priority Projects

Private Sector Reforms Private Sector Specialist: 84 weeks

Urban Specialist: 14 weeks


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Gozar Projects CDD CDD Specialist: 14 weeks

Financial Management FM Specialist FM Specialist: 7 weeks

Procurement Procurement Specialist Procurement Specialist: 7 weeks

Environment and Social

Safeguards, Gender

E&S Safeguards, Gender Environmental Safeguards Specialist: 7

weeks

Social Safeguards Specialist: 7 weeks

Gender Specialist: 4 weeks

Communications,

Transparency and

Accountability Framework

Communications, GRM Communications Specialist: 42 weeks

Construction Works Civil Engineering Civil Engineer: 7 weeks


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ANNEX 2: Additional Technical Description of Project Components and Activities

COMPONENT 1: REGIONAL AND NATIONAL INTEGRATION OF DISPLACED PERSONS (US$4.5 million)

1. Subcomponent 1.1: Enhancement of MoFA’s capacity to meet the documentation requirements of Afghan refugees in Pakistan. This subcomponent will finance costs associated with increasing MoFA’s capacity to provide consular services (e.g. issuing or verifying passports, birth certificates, marriage certificates, school certificates, etc.) in Pakistan, such as, but not limited to (a) purchasing equipment; (b) increasing the number of temporary local staff working at the Operations Support Center in Kabul and the four MoFA missions in Pakistan; and (c) training MoFA staff on the operation of equipment. The procurement of equipment will focus on the database and IT equipment. This subcomponent will not finance the costs of salary of civil servants, and only finance the salary of temporary local staff, who are contracted on an annual basis by MoFA. The operating costs of the MoFA missions, including the salary of temporary local staff, will be financed for two years.

2. Subcomponent 1.2: Provision of information to Afghan refugees in Pakistan. This subcomponent will provide information services to the Afghan refugees in Pakistan to help facilitate their access to economic opportunities and social services. This subcomponent will be implemented in collaboration with MoRR, who will have a key role in the development and implementation of communications activities 33. The information will be provided in both demand‐driven (responding to inquiries made by individuals) and supply‐driven (widely disseminating commonly helpful information) methods. To provide demand‐driven (responsive) information, information centers will be set‐up at four MoFA missions (Islamabad, Karachi, Peshawar, Quetta) in Pakistan to receive and respond to specific questions by refugees related to legal issues, business registration, asset transfers, transaction of assets (real estates, business investments), education certificates, among others. The Information Centers will be complemented by a helpline (call center) and a website, which will respond to similar queries. A response manual will be developed for the help‐desk personnel, who will be trained with the manual. On the supply‐driven side, key information that can be beneficial and helpful to Afghan refugees in Pakistan will be widely disseminated through various communication means, such as announcements in social media, distribution of posters/brochures/flyers, TV/radio commercials, and other advertisements. A joint‐MoFA/MoRR communications strategy that defines contents (including key policy parameters such as “facilitation of returns” as opposed to “promotion of repatriation”), audience, and modalities of information to be provided in detail will be developed. Once the joint communications strategy has been developed, a social media coordinator and a communications firm will be hired to implement the communications strategy. Additional consultants will also be recruited to support the MoRR to enhance its information and knowledge management capacity. A Joint Communications Committee will be established between MoFA and MoRR to review and approve communications materials.

3. Subcomponent 1.3: Component 1 Management. This subcomponent involves (a) financial management, (b) procurement, (c) environmental and social safeguards, (d) monitoring and evaluation, and (d) the grievance redress mechanism for the component. Efforts will be made to recruit female staff to make services more accessible to female refugees, especially in the information center and the call center. Efforts will also be made

33 MoRR was party to the MoU signed among all the implementing agencies.


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to gather gender disaggregated data that can form the basis of further interventions for female refugees34, and to have a dissemination strategy and GRM that has a broad outreach. COMPONENT 2: SHORT‐TERM EMPLOYMENT OPPORTUNITIES, REFORMS AND MARKET ENABLING INFRASTRUCTURE UNDER IDLG (US$120.5 million)

4. Subcomponent 2.1: Short‐Term Employment Opportunities. The urban MCCG scheme will be implemented by

IDLG, whose presence will be expanded from the three CCAP cities (Jalalabad, Kandahar, Herat) they currently

operate in, into estimated additional nine cities where a total of 1,160 Community Development Councils35 (CDCs)

will be established all together.36 In alignment with CCAP, FPs will be contracted by IDLG to establish urban CDCs,

and support communities in the elections of CDCs. In line with the CCAP‐MCCG selection process, the FPs will also

conduct a WBA to identify vulnerable households who will participate in the daily wage work.

5. Each CDC selected will undertake repair, maintenance, and/or light construction activities, which fall under the

permissible menu of “eligible” public works subprojects. The permissible menu will be based on selection criteria

(to be elaborated in the Operations Manual) that meet the EZ‐Kar objectives, specifically: (i) create short‐term job

opportunities and (ii) improve the business environment. Grants of up to US$27,000 will be disbursed to each

CDC. At least 60 percent of which will be used for paid labor which is expected to generate an estimated 40 days

of work per household.37 Details of the subcomponent design, selection process, costs and benefits, monitoring

indicators, and governance systems will be outlined in the Operations Manual. It is estimated that around 80,000

vulnerable households will benefit from the MCCG scheme in an estimated 12 cities. These activities are also

expected to increase the target cities’ and households’ resilience to shocks (including those related to climate

change) by creating short‐term jobs and source of income through labor intensive public work.

6. In an effort to ensure sustainability of the CDCs created under this subcomponent and to maximize the socio‐

economic returns on the investment made, IDLG will actively promote CDCs (through municipalities, non‐

governmental organizations (NGOs), and development actors at the city level) to serve as the primary focal point

for local development purposes for their given constituents. Similarly, when the CCAP program expands to these

urban areas, the same CDCs will be used by CCAP. The CDC’s Community Development Plans (CDP) will be updated

34 For example, in the preparation of the communications strategy and the manual for the helpline staff, the processes and requirements for applying for civil documents like passports will be documented, and specific requirements and barriers to women, as well as their information and support needs would be analyzed and identified. Gender disaggregated data on the number of passport applications and issuances can also be analyzed to assess gender‐based barriers that may need to be addressed. 35 Community Development Council is a community‐based decision‐making body that includes a chairperson, vice‐chairperson, secretary, and treasurer, and is responsible for, inter alia, preparing Community Development Plans and Sub‐Project proposals, and for the implementation and management of subprojects. 36 Covering only communities that are not covered by CCAP. 37 The MCCG will be calculated as per the following: 35 percent of the total households in the community x 40 days @ AFN 350/day = 60 percent of the total grant amount. The wage rate is proposed at AFN 350 per day for unskilled labor and AFN 650 per day for skilled labor – which is aligned with the CCAP‐MCCG scheme.


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as needed under CCAP.38

7. Subcomponent 2.2: Market enabling infrastructure—Gozar & Business Gozar grants. A Gozar will be formed

from four to five CDCs electing one representative each who will be part of the Gozar Assembly. A Business Gozars is a parallel body which will consist of an estimated range of 100 to 300 businesses, who will also elect their representatives to be part of the Business Gozar Assembly.

8. Subcomponent 2.3: Support for Municipal Level Regulatory and Process Reforms (a) Reduction in processing steps for obtaining a construction permit for commercial properties in the three

PCCs of Jalalabad, Kandahar, and Herat will be implemented by the three Municipalities under IDLG oversight. Compliance will be verified by an Independent Evaluation Agent procured under the project and by using the Doing Business methodology to verify targets. The reduction in processing steps will be accomplished by December 2020 in line with the following targets:

Table 2.1: Expected Reduction in Processing Steps for Obtaining Construction Permits

Jalalabad Kandahar Herat

Reduction in processing steps – PDO Indicator

‐ Baseline 21 14 23

‐ Target 17 12 19

Source for Baseline: Sub‐National Doing Business in Afghanistan 2017

It is expected that the reduction in processing steps will be accompanied by a reduction in time taken for obtaining a construction permit for commercial properties in the three CIP cities with targets as follows:

Table 2.2: Expected Reduction in Processing Time for Obtaining Construction Permits

Jalalabad Kandahar Herat

Reduction in time (days) – Intermediate Indicator

‐ Baseline 104 96 133

‐ Target 90 (14) 90 (6) 115 (18)

Source for Baseline: Sub‐National Doing Business in Afghanistan 2017

9. Subcomponent 2.4: Component 2 Management. Costs associated with facilitating the activities of CDCs, Gozars,

and Business Gozars; support for regulatory reforms; staffing; office and vehicle rentals; office/ IT equipment and accessories; training; and other incremental operating costs. The existing CCAP coverage extends only to 700 communities in three of the 12 cities selected for EZ‐Kar implementation; hence, EZ‐Kar specific Provincial Management Units (PMUs) will be set up in the remaining eight cities which can eventually be used by CCAP once they roll out to those same cities.

38 A CDC’s mandated tenure is for three years. If the CCAP is not rolled out within the three‐year mark from when the EZ‐Kar CDCs are formed, the CDCs would need to hold new elections.


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COMPONENT 3: PRIORITIZED URBAN INVESTMENTS IN FOUR PROVINCIAL CAPITAL CITIES (US$25 million) Table 2.3: Priority Projects Indicative Positive List

Buildings and Public Spaces Road and Traffic Management Streetscape Improvements

Greening of open spaces

Reforestation of new/existing public parks and women’s public parks

Restoration of public markets and women’s markets with resource efficient materials and designs

Small scale restoration of historic/cultural sites

Rehabilitation of toilet and storage facilities for markets including cold storage and warehousing facilities

Paving of flood‐prone primary and secondary streets

Construction of/ improvements to infrastructure for improving market accessibility, connectivity

New/rehabilitated bus stops/stations

Traffic management systems and signaling and calming

Parking facilities

New/restored storm water drainage canals

Solar powered/energy efficient street lighting

Sidewalk and pedestrian crossings

0.

11. Subcomponent 3.2: Project Preparation. Given that Component 3 will be implemented by the CIP PIU at IDLG,

subcomponent 3.2 will finance the cost of feasibility studies, detailed engineering designs39, construction supervision, and monitoring and evaluation for a budget equal to US$5million. Progress and financial reporting, as well as output and outcome monitoring under this component will be reported upon under a separate reporting system along the same format of the CIP.

COMPONENT 4: MARKET ENABLING INFRASTRUCTURE AND REFORMS FOR KABUL MUNICIPALITY (US$40 m)

12. Subcomponent 4.1: Regulatory and process reforms. The reduction in processing steps for construction permits and time will be accomplished by December 2020 in line with the following targets:

Table 2.4: Expected Reduction in Processing Steps and Time for Obtaining Construction Permits in Kabul Municipality

Reduction in processing steps for construction permits

‐ Baseline 13

‐ Target 10

Reduction in time (days)

‐ Baseline 199

‐ Target 160

Source: 2019 Doing Business Report

13. Subcomponent 4.2: Prioritized Urban Investments. The funding for ‘priority project’ investments will be conditional on regulatory reform achievements. The type of likely investments include work on public markets (including women’s markets) and roads, the provision of electricity connections, and logistics infrastructure (e.g. warehouses). Investment resources will be allocated on a performance basis in three tranches. As with the market infrastructure of Subcomponent 3.2, these processes are also expected to increase the resilience of businesses and households in the target cities to shocks (including those related to climate change) by improving

39 Feasibility studies and detailed designs will incorporate climate resilient elements.


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public infrastructure, such access roads, that would contribute to improved accessibility to services and economic opportunities. In addition, depending on the type of market infrastructure improved or constructed, the project may contribute to the reduction of heat loss in utilities and/or increased recovery of waste heat (Climate Finance Category 3.3 Energy efficiency improvements in the utility sector and public services). COMPONENT 5: RED CARPET AND PROGRAM COORDINATION (US$10 million)

14. Subcomponent 5.1: National level regulatory reforms. This subcomponent will support the following red‐carpet measures:

(a) National level regulatory reforms. The national regulatory reform agenda will be identified and informed by: (i) the priority national reform agenda; (ii) the city level economic assessment; and (iii) issues that arise in the implementation of the economic opportunities infrastructure at both the city and Gozar/Business Gozar levels. The work will involve: (i) a mapping of reform processes; (ii) development of an implementation plan; (iii) implementation; (iv) monitoring; and (v) coordination with other stakeholders (the national level PRISEC process, the GoIRA, and the private sector). Specific challenges faced by women or women’s businesses in starting or operating a business will also be analyzed and addressed by the reform implementation plan as appropriate. At the national level, while a range of G2B regulatory reforms will be considered over the course of Project implementation, the immediate priority is the simplification of construction permits (in coordination with IFC and PRISEC) and will aim to accomplish the following by December 2020:

(i) Reviewing and assessing the gaps in existing national level legal and regulatory framework related to

construction permit for commercial properties;

(ii) Developing a national level regulatory reform plan with detailed recommendations;

(iii) Updating the national level legal and regulatory framework as per the recommendations;

(iv) Developing a national level Building Code40 for Afghanistan; (v) Developing a risk‐based inspection system based on type of buildings;

(vi) Developing an action plan for establishing quality control and safety mechanisms prior to occupation of newly

constructed buildings; and

(vii) Identifying ICT and technical assistance needs for automation of construction permitting procedures (online

application and approval processes).

(b) Feasibility assessment of business service centers (BSCs) in cities that do not already have them. A BSC is a

municipal‐level one stop shop for providing G2B services and will be housed in existing municipal premises. At the city level, the individual cities in coordination with IDLG will be responsible for the actual city level interventions and infrastructure development of the BSCs. However, the feasibility studies for these centers will be procured and financed under MoEC’s framework contract.

(c) Development of coordination mechanisms with: (i) relevant central GoIRA ministries and the PRISEC reform process; (ii) the different units of the city government that interface with the private sector; and (iii) the private sector (in Kabul’s case this only applies to the PRISEC coordination). Implementing the Red‐Carpet program will require: (i) strong coordinating mechanisms; and (ii) access to technical assistance. Coordination will be achieved through establishing steering committees at the national and city levels. This coordination will be supported through the establishment of memorandums of understanding for coordination and collaboration. The technical assistance will be provided through a combination of firms and individuals.

40 Best practices, including on resilient and low‐carbon building codes and construction, will also be considered in developing these codes.


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ANNEX 3: Transparency and Accountability Framework

1. The Transparency and Accountability Framework (TAF) for EZ‐Kar Project aims to help achieve outcomes by enhancing value for money and maximizing benefits to citizens. This framework ties together various country systems and community‐based transparency and accountability mechanisms. Principles:

2. Principles behind this framework are: (1) Flexibility with continuous review and adjustments given the changing ground realities; (2) Building on country systems and on the learning of what works in Afghanistan; (3) Testing new interventions that have worked in other relevant situations; (4) Informed by the country anti‐corruption programs; and (5) Implementing interventions at the component level in implementing agencies with user friendly project level reporting. Transparency:

3. Transparency is enhanced by creating a comprehensive communications strategy with two‐way communication at both project and component levels. Supply side interventions include: (a) Compliance with Afghanistan Access to Information (ATI) Law – pro‐active disclosure requirements, (b) Development of a project website with information on project progress (M&E, Results, procurement, FM), (c) Awareness campaigns, (d) Geo‐enabled data ‐ using rocket, pocket and socket technologies. Demand side interventions include: (a) GRM, (b) Call Centers, (c) Beneficiary feedback, and (d) On‐demand ATI requests. Communication:

4. Ministry of Economy (MoEC), as the coordinating ministry for EZ‐Kar project implementation, will lead the project communication efforts. MoEC will also coordinate communication with other implementing agencies and use their existing communication platforms for the purposes of EZ‐Kar communications and engage with beneficiaries at different levels. In addition, a robust communication and awareness raising campaign will be carried out for Afghan refugees in Pakistan under Component 1.

5. MoEC will develop a community strategy and potentially outsource the implementation and creative production part of the strategy to a qualified communication and outreach firm. This approach addresses the capacity constraints of MoEC and enhances its coordination and monitoring role.

6. The project will employ two factor communications approach, which consists of: (i) Communication for Development (C4D), where communication is used as a tool to inform, motivate, and mobilize communities around projects development objective. Through this approach, behavioral change campaigns will be implemented to address social and environmental barriers that could hinder project progress, including barriers towards women’s engagement and participation in project activities; (ii) Communication for Citizens Engagement, which will enhance project accountability by mobilizing citizens to actively monitor project progress. This approach will raise citizens’ demand for effective project performance and delivery. Through provision of timely information, citizens and beneficiaries will be empowered to have a voice in highlighting their needs and community priorities. Access to Information Law:

7. All implementing agencies of the project will be required to fully comply with the Access to Information Law. Under the provisions of the law, the project can be scrutinized from different stakeholders such as media and civil society organization that are active in the field of good governance and counter/anti‐corruption initiatives.


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Once the project proactively commits to transparency and accountability, it can also increase the demand for information on its progress and achievements. To ensure compliance with Afghanistan’s Access to Information Law, the client will take the following measures: (a) Appoint a dedicated Access to Information Law focal point under Component 5, who will ascertain

project compliance with the law and will be the main point of contact for all project related inquiries. (b) Make project documents available through the project website (pro‐active disclosure of information).

This will include project financial and budgetary information, procurement plans, details of contracts awarded, and its awardees.

(c) Update and upload project implementation progress reports on the project website. (d) Disclose detailed information about project beneficiaries in reports and the website. This will include the

names of Gozars and Community Development Councils. This approach will make beneficiaries aware of the first level of information that they can receive or submit their grievances to.

Geo‐Enabling Initiative for Monitoring and Supervision (GEMS):

8. In the FCV context of Afghanistan, the ability of the project team to effectively monitor project implementation is greatly restricted, due to security constraints. This situation calls for innovative solutions that can enhance the ability of the project team to systematically conduct accountability and M&E activities remotely. To this effect, the project will utilize the Geo‐Enabling Initiative for Monitoring and Supervision (GEMS), which uses geo‐referenced data collected by mobile devices (e.g. smartphones or tablets) to monitor and verify project implementation. GEMS is an open source program that can be easily customized through simple training workshops provided by the World Bank task team to project implementing agencies. It can be linked with the existing MIS of implementing agencies and the EZ‐Kar website. Accountability:

9. Accountability is enhanced through better use of formal country systems and community‐based accountability interventions of the project. Formal accountability mechanisms include: (i) Third Party Monitoring (TPM), (ii) Procurement controls‐ National Procurement Authority (NPA), ex‐post reviews, (iii) FM – strengthened internal controls. Community or citizens accountability mechanisms could include: (i) CCAP accountability mechanisms, (ii) Citizens Feedback Model (CFM). Citizens’ Feedback Model (CFM):

10. As part of the citizen feedback mechanism, an SMS‐based feedback collection system will be piloted for Component 1. It will reach out to passport applicants on their mobile phones and seek their feedback on (a) the time required in receiving the passport; (b) the fees paid for the service; and (c) general satisfaction with the service. This pilot is informed by successful implementation in several countries. After reviewing the results of this intervention, it could be replicated for other services under the project. Third Party Monitoring (TPM):

11. EZ‐Kar project is eligible for Third Party Monitoring (TPM) by the ARTF Supervisory Agents under the overall anti‐corruption efforts of CMU. Components of the project which embody high level of implementation risk will be monitored via third party. TPM could be utilized whenever the risk associated with project implementation is


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considered high. If the context and situations deem necessary, the project task team can opt for TPM. This decision will be made on case by case basis once the risk is identified. Grievance Redress Mechanism:

12. EZ‐Kar is a multi‐stakeholder project implemented through different governmental organizations targeting a variety of beneficiaries with diverse geographical, social, gender, and economic backgrounds. The project is required to take into consideration the accessibility of all its beneficiaries to the grievance redress mechanism. To establish a strong and functioning GRM system, the following will be considered: (a) EZ‐Kar project will link its GRM system with its communications strategy, making sure that all

beneficiaries are aware of the grievance systems and how they can be accessed; (b) GRM reports shall be made available online and linked to the project MIS. Reports and feedback received

from the GRM processes will be utilized to assess project functions and/or to refine processes to address and mitigate similar grievances from repeated occurrences;

(c) There will be a central GRM system at MoEC, which will have links to the already existing GRM systems in implementing agencies. Complaints will be collected through the already established systems and reported to MoEC to be recorded in the central GRM system at MoEC, as per the institutional arrangements. However, the existing GRM systems at the implementing agencies will first be assessed to ensure their functionality. A technical working group will be established under the project and will serve as a platform for sharing and resolving cross‐cutting grievances. Beneficiaries will have the choice to directly contact MoEC, if they wish to.


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ANNEX 4: Theory of Change


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ANNEX 5: Organizational Structure for Project Implementation and Coordination


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ANNEX 6: Additional Project Implementation Arrangements

1. The Ministry of Finance will be the Borrower and will disburse funds directly to the various line ministries and

directorates [namely MoFA (for Component 1), IDLG (for Components 2 and 3 in separate designated accounts), Kabul Municipality (for Component 4) and MoEC (for Component 5)] during the project period.

2. The Ministry of Economy (MoEC) will serve as the lead line Ministry (under Component 5) as explained the main text of the PAD. MoEC will also receive funds to carry out these coordination and project management tasks from resources provided under Component 5. MoEC will also serve as the lead agency to support policy formulation, national regulatory reforms and incentives that are recommended through PRISEC and other assessments (as outlined under component 5.1)

3. The Displacement and Returnee Executive Committee (DiREC) will continue to serve as the inter‐ministerial coordination body for displacement across GoIRA with humanitarian, civil society and development actors. MoEC will participate in DiREC to report on the progress EZ‐Kar is making in terms of supporting displaced people and hosting cities economically and on policy formulation and implementation.

4. National Deputy Minister Level Project Steering Committee (PSC): A national level coordination body for the EZ‐Kar will be established and chaired by the Deputy Minister of MoEC. It will consist of Deputy Ministers from MoF, MoFA, IDLG, and the Mayor or Deputy Mayor of Kabul.

5. Memorandums of Understanding (MoU) for Coordination and Collaboration: All IAs and MoEC have co‐signed an MoU outlining their roles and responsibilities, reporting arrangements to MoEC, and the general operating modality for the PSC. MoRR has also co‐signed this MoU. Key mandates of the PSC will be to ensure that the disbursement conditions and legal covenants in the EZ‐Kar Financing/Grant agreements are met in a timely manner, overall project quality and coordination is maintained, and that sub‐programs or future expansions of the project are collaboratively designed. MoEC will also form a technical level steering committee (at the level of PIU directors, director generals and technical staff) which will meet at least once a month to discuss project progress, report on implementation issues etc.

6. The activities under Components 1, 2, 3, and 4 will be carried out by separate line ministries, directorates, and municipalities. The implementation arrangements by component are as follows:

7. Component 1: MoFA will be the implementing agency for Component 1. A Project Implementation Unit (PIU) will be established and led by a Coordinator, who will report to the General Directorate of Consular Affairs of MoFA. At the MoFA level, an EZ‐Kar Project Committee, chaired by the DM for Management and Resources, and comprising staff from the Directorate of Administration and Finance, Procurement Department, and the Directorate of Consular Affairs, will provide managerial oversight to the Project. The locally recruited staff (consultants) at the Operations and Support Unit (OSC) and the MoFA missions in Pakistan who will be involved in the civil documents activities under Subcomponent 1.1 will also report to the General Directorate of Consular Affairs. Subcomponent 1.2 will be managed by the Communications Coordinator, who will report to both the Component 1 Coordinator and the Director of Information and Communications of MoRR. The Communications Coordinator will oversee the activities of the staff at the information centers, helpline call‐centers, social media


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coordinator, etc. In order to ensure alignment, a Joint Communications Committee will be established between MoFA and MoRR to review and approve all communications materials to be used under Subcomponent 1.2.

8. Component 2: IDLG will manage all activities under Component 2 through the PIU set up and functional under its Deputy Ministry for Municipalities (DMM) for the CCAP. The DMM will manage the overall implementation, M&E, fiduciary, and safeguards oversight for work in the cities covered under Component 2 and will provide technical guidance, contract FPs, and strengthen the capacity of municipalities.

9. The implementation arrangements for Component 2 will build on existing GoIRA systems, structures (such as the CCAP) and local institutions (such as CDCs, Gozars). Establishment of new CDCs through EZ‐Kar will follow the same operational guidelines set out in CCAP for membership (including the same provisions for the inclusion of settled IDP/Returnees41), participatory processes, governance systems, and implementation arrangements. EZ‐Kar will be rolled out in coordination with CCAP to ensure there is a plan to transition FP contracts and CDCs from EZ‐Kar support into CCAP.42 FPs will be contracted to support IDLG to establish CDCs and manage the EZ‐Kar MCCG mobilization, planning, and execution as well as all Gozar and Business Gozar related work.

10. Municipalities are accountable to IDLG, which reports to the President’s Office according to Presidential Decree 73 of August 2007. For the project, the IDLG DMM will lead a municipality level coordination body in each city, called the EZ‐Kar City Coordination Committees (CCCs). The EZ‐Kar/ urban CCAP PIU in each city will serve as the secretariat for these CCCs, while members will include representatives from the Municipality, Provincial Governor’s office, provincial directorates of MoEC, MoF, Ministry of Urban Development and Housing Afghanistan (MoUDHA), Ministry of Energy and Water (MoEW), Da Afghanistan Bank (DAB), and Da Afghanistan Breshna Sherkat (DABS). This Committee will be responsible for coordination between stakeholders of the EZ‐Kar at the city level. Any grievances against the FP, PIU or of the city level project implementation will be handled at this level. The CCC is required to meet at least once every 6 months.

11. MoUs for Coordination and Collaboration: A part of IDLG’s role will be to establish MoUs with key stakeholders including each of the Municipalities, MoEC, MoUDHA, MoEW, DAB, DABS, and others (as required) to ensure project coordination within each city, create synergies, and avoid duplication. The MoUs will outline briefly what the EZ‐Kar objectives and working modalities related to the particular Ministry/entity are, and the key roles and responsibilities with regard to EZ‐Kar. IDLG will also be a member of the Project Steering Committee (PSC) chaired by MoEC.

12. Component 3: At the national level, IDLG will be responsible for overall implementation of the component. It will be fully aligned behind the implementation arrangements under the parallel CIP project and its PIU. IDLG will assume the main project implementation responsibilities, while the four provincial capital cities of Jalalabad, Kandahar Herat, and Khost will have a substantial role. Their role includes involvement in the selection committee for civil works and technical assistance assignments, overseeing infrastructure investments on the ground, gathering data, coordinating inputs to reporting documents, and supporting verification of performance improvements against acceptable benchmarks over time. At the center of project implementation will be an IDLG

41 The CDC Law provides the legal basis for CDCs and Gozar assemblies to include representation from IDP/Returnees. 42 Under CCAP, as of July 2018, 500 out of 800 CDCs in the 4 cities have so far been established.


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Core PIU located in Kabul and linked to provincial offices of IDLG in the relevant PCC regions. It will support packaging of tender documents to facilitate procurement.

13. Component 4: Kabul Municipality will be the implementing agency for Component 4. The project will be coordinated with the ongoing KMDP, and parallel activities will be pre‐aligned to prevent duplication and inefficiencies. Kabul Municipality will receive funds directly from MoF to carry out activities associated with Component 4. The implementation arrangements will build on existing systems and structures (KMDP PIU). KM will establish within the existing PIU, an economic infrastructure unit that will provide support in the selection and implementation of locations, beneficiaries and sub‐projects. Results Monitoring and Evaluation Arrangements

14. Each Implementation Agency (IA) will be responsible for all their own M&E and reporting for the component they implement. MoEC will coordinate with the IAs, consolidate their progress reports every quarter, update the results framework, and ensure that M&E systems across the IAs are functioning well. Project progress will be monitored based on the project results framework and where relevant and possible, progress against indicators will be disaggregated by internally displaced people/returnees (IDP/R) and gender. MoEC will hire an M&E Specialist to oversee the monitoring, reporting, and coordination of project monitoring activities implemented across components as well as with the implementing agencies of partner projects, including CIP, KMDP, and CCAP. Under Component 1, MoFA will be using the database for processing passport applications to track data on related indicators. The inquiry cases attended to by information centers and helplines will also be logged and monitored through an M&E system. Under Component 2, the CCAP MCCG has a functional M&E MIS platform, which will be updated and used for the EZ‐Kar activities. Similarly, the M&E system used by CIP and KMDP will be used to track the indicators for Components 3 and 4 respectively. At the project level, MoEC will develop a simple MIS, that will be fed by data provided by the MISs of other implementing agencies. The simple project‐level MIS will allow MoEC to consolidate and generate reports based on data fed by the implementing agencies’ MISs and periodic reports to be submitted to MoEC.

15. MoEC on a sample basis will conduct site visits of the project activities in the municipalities to verify that IAs are reporting correctly. The reports from the IAs and site visits will be gathered on a monthly basis, which will be entered into the project Management Information System (MIS) that will be managed by MoEC. The MIS will be used to generate Quarterly Progress Reports (QPRs) that will be shared with the World Bank.

16. The project will conduct rapid assessments to capture qualitative details and unintended consequences of project implementation and recommend measures for course correction. Assessments will be carried out by the M&E Unit under Component 5, while the IAs can also conduct their own assessments under their respective components.


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ANNEX 7: Fiduciary Assessment

Financial Management Assessment

1. The overall financial management (FM) risk of the project is assessed “High” due to several weaknesses noted in the FM system of the implementing agencies. The development budget utilization rate of all the implementing agencies is less than 50 percent due to weak budget making process where detailed cost estimates are not prepared. Advances and petty cash are excessively used for expenditure payments and are frequently adjusted with significant delays due to lack of monitoring. For project implementation, significant cash advances are to be provided to the embassy and consulates in Pakistan, timely adjustment of which is a high risk. There is no management reporting system requiring the subsidiary (provincial/regional/sub) offices to periodically report physical and financial progress of development projects to their central office, that could result in weak monitoring. Due to the limited capacity and scope, the coverage of the internal audit is limited to recurrent budget, and the quality of audit process and results is poor. There is no audit follow‐up mechanism in any of the implementing agencies and there are number of unresolved audit observations. MoFA (one of the implementing agencies) has not implemented a donor funded projects and the qualification, capabilities and experience of its FM staff is not adequate to manage the project. In IDLG, though the PIU responsible for implementing development projects has adequate capacity, the finance department of the Deputy Ministry of Municipalities (DMM) is not involved which would be important for sustainability. To mitigate the financial management risk, the following mitigation measures have been agreed: i. Within three months of project effectiveness, MoEC as the lead line Ministry will engage a consulting firm

to strengthen the FM capacity of the implementing agencies. The firm will prepare and implement a capacity

building plan for the relevant departments based on the results of the capacity assessment as well as the

World Bank’s fiduciary assessment. The cost of the consulting firm will be shared by all the implementing

agencies. With the World Bank’s assistance, TORs will be finalized to start the procurement process.

ii. All the implementing agencies will adopt and implement the Financial Management Manual for IDA and

ARTF projects that has been jointly prepared by the World Bank and MOF.

iii. Within two months of project effectiveness, the implementing agencies will hire two Senior FM Specialists

(MoEC–1, IDLG—1), five Senior FM Officers (MoEC—1, KMDP – 1, IDLG – 1 and MOFA – 2) and one FM

Officer (KMDP – 1) for project implementation as per the TORs agreed with the World Bank.

iv. Within six months of project effectiveness, MoEC as the lead line Ministry will engage a chartered

accountancy firm, as per the TORs agreed with the World Bank, to carry out semi‐annual internal audit of

the project. The firm will be hired by MoEC and the cost will be financed through Component 5.

Financial Management Arrangements 2. MoEC as the lead line Ministry will have the responsibility to coordinate the project financial management matters including preparing project level financial reports, processing the withdrawal applications and timely completion of annual project audit. A comprehensive Financial Management Manual (FMM) has been developed that sets out the Finance and Accounting policies and procedures applicable to IDA and ARTF funded projects. The FMM includes a comprehensive internal control framework by defining preventive, detective and corrective controls for different processes and transactions. For each process, the FMM defines key tasks, responsibilities, specific steps and timelines so it also serves as a benchmark for management to measure its performance. The FMM provides a source of instruction and guidance to employees working in the Finance sections of the projects


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for the application of policies and procedures. The FMM will be adopted by the implementing agencies to manage the financial management matters of the project. 3. Staffing: The existing financial management units of the implementing agencies will be responsible to manage the project financial management arrangements. Based on the workload analysis, the following incremental FM staff will be hired for the project purposes within two months of project effectiveness, as per the TORs agreed with Bank:

Entity Sr. FM Specialist FM Specialist Sr. FM Officer FM Officer

MoEC 1 ‐ 1 ‐

MoFA ‐ ‐ 2

IDLG‐CCAP 1 ‐ 1 ‐

KMDP ‐ 1 1

MoFA will introduce one finance focal person from each of the MoFA missions in Karachi, Peshawar and Quetta who will be reportable to FM Officer in Islamabad embassy. The FM officer will compile the expenditure reports and submit to the financial management unit in MoFA. To build the financial management capacity of the implementing agencies, a firm will be hired to conduct detailed capacity assessment, identify capacity gaps, and thereafter prepare and implement a financial management capacity building plan. The firm will be hired within three months of project effectiveness and the World Bank will provide technical assistance to prepare the TORs for this assignment. 4. Budgeting: For annual budget preparation, detailed guidelines are available in the FMM that will be followed. The Project budget would be based on the procurement plan and annual work plan. The annual budget will be broken down into quarters to facilitate budget monitoring. Actual expenditures will be monitored against quarterly plan and the progress will also be reported to the World Bank. 5. Accounting and Reporting: Each implementing agency will maintain separate books of accounts for the activities executed under their respective DAs in accordance with FMM. Monthly, financial extracts from the books of accounts will be submitted to MoEC (using a specified format) for consolidation purposes. In each set of books of accounts, payment vouchers will be prepared for each transaction and the relevant accounting codes, disbursement category and project component will be mentioned on the payment vouchers. The following financial reports will be prepared:

Monthly reports: (i) Each implementing agency will prepare budget monitoring report and submit to

MoEC within 10 days of the close of each month; (ii) MoEC will prepared the consolidated budget monitoring

report within 15 days of the close of the month.

Quarterly reports: (i) Each implementing agency will prepare and submit the Interim Financial Report (IFR)

to MoEC on the prescribed template, for consolidation and onward sharing with the World Bank within 30

days of the close of the quarter; (ii) MoEC will prepare and furnish to the World Bank, within 45 days of the

close of the quarter, a consolidated IFR for FM reporting that will report funds receipt and utilization during

the quarter according to project components and disbursement categories. The format and content of the IFR

has been agreed during Negotiations and included as part of the Disbursement and Financial Information

Letter.


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Annual report: MoEC will prepare project level annual financial statements (AFS) in accordance with Cash

Basis – International Public‐Sector Accounting Standards (IPSAS). The financial statements will cover one

financial year and will be submitted to the auditors within two months of the close of the financial year.

6. Internal Audit Arrangements: The internal audit of the project will be carried out by a chartered accountancy firm to be hired under the project. The semi‐annual internal audit reports will be submitted to the World Bank within two months after the end of each semester. The same firm will also cover the other World Bank funded/managed projects implemented by KM and IDLG. 7. External Audit Arrangements: The Supreme Audit Office (SAO), with the support of consultants, carries out the annual audit of all ARTF/World Bank‐funded projects. The same audit arrangements will be used. The SAO will submit to the World Bank, annual audited project financial statements and Management Letters within six months of the close of the fiscal year. The financial statements of the project audit will be prepared by MoF based on AFMIS records. There are common TORs for the audit of all projects that are reviewed by the World Bank annually. The first audit report will be due on June 21, 2020. 8. Disbursement Arrangements: The project will be jointly co‐financed by IDA and ARTF and the withdrawal categories table will reflect that each disbursement will be financed by 75 percent IDA and 25 percent ARTF resources. Disbursement will be report‐based. Three implementing agencies (MoFA, KM and MoEC) will have one separate designated account each to be set up in the DA Afghanistan Bank to channel both IDA and ARTF grants. IDLG will set up two designated accounts for EZ‐Kar (one to be managed by CIP team and one by CCAP team). Designated Accounts will be denominated in US Dollars, and funds will be front loaded based on six months’ cash forecast. Subsequent IFRs will be used to document the expenditure and determine the amount of advance. 9. Funds Flow to CDCs, Gozars and Business Gozars: For CDC grants, IDLG will make payment to each CDC in one tranche. The amount of release would be decided based on the approved cost estimates of local costs. This amount will be captured in the bilateral agreement between IDLG and each CDC before the actual construction commences. An MoU would be signed with DAB to make special banking arrangements for CDCs similar to the CCAP. The Gozar and Business Gozar grant installments will be disbursed following the CCAP modality. Contribution from the Business Gozar members (in cash43, kind, or labor) is required, and the minimum value of the contribution will be defined in the Operations Manual. The Operations and Training Manuals will outline the collection, distribution and use of the community contribution for the Business Gozar subprojects. 10. IDLG will process batch payment requests for grants to the CDCs, and DAB upon receiving the transfer request from MoF will transfer the funds to the IDLG clearance account. Thereafter the funds will be transferred to the CDCs. 11. The clearance account will be maintained only for the grants’ transfers and to aid reconciliation. Funds transferred into the clearance accounts should be transferred out within 1–3 working days and the account should be zeroed out. Funds remaining in the clearance accounts for longer periods will mean the funds have not reached the intended beneficiaries and this will help IDLG to follow up on time. IDLG will have access to the

43 These cash contributions will be managed separately outside the Gozar and Business Gozar accounts through which EZ‐Kar resources are managed.


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clearance account bank statements daily. However, the CDCs will maintain complete accounting record; and after completion of the construction, any unspent balance will be refunded. The interim unaudited financial report (IUFR) format will be designed in a way to reflect: (a) the amount of grant proceeds transferred from the DA to the Gozars’, Business Gozars’ and CDCs’ accounts, (b) the amount withdrawn by the Gozars, Business Gozars and CDC, and (c) the remaining balance in the Gozars’, Business Gozars’ and CDCs’ accounts. Only withdrawals by the Gozars/Business Gozars/CDCs for completion of payment of incurred expenditures will be documented with the World Bank. Separate budget books of account and bank statements would ensure that expenses are charged to the relevant financing sources and there is no double accounting. 12. Funds Flow to Embassy and Consulates: Funds to Pakistan will be channeled through an account “MoFA sub‐account” to be opened for the project in a commercial bank in Pakistan. The funds of the project will not be merged with other operational funds transferred to the embassy for tracking and reconciliation of component allocation. Reporting from the embassy to MoFA will be monthly and liquidation will be on a quarterly basis. The annual operational advance plan will be shared with the World Bank for review and clearances. No additional advance will be released until 80 percent of the previous advances have been liquidated. 13. Retroactive financing: Withdrawals up to an aggregate amount not to exceed US$4 million equivalent (SDR2.19 million from IDA and US$1 million from ARTF) for categories as mentioned in the Financing Agreement/Grant Agreement may be made for payments made from August 1, 2018 till the signing date of the Financing Agreement/Grant Agreement, for Eligible Expenditures.


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Procurement Assessment 14. Procurement reforms have been underway in Afghanistan since 2005, when a Procurement Law (PL) was adopted that radically transformed the legal and regulatory framework. All responsibilities presently rest with the National Procurement Authority (NPA). In addition, an NPA website facilitates the publication of procurement notices and contract awards in addition to similar actions on the websites of the line ministries, as applicable. 15. Procurement under all EZ‐Kar components under each implementing agency (including procurement for the embassy and consulates in Pakistan) will be carried out in accordance with the World Bank’s Procurement Regulations for Borrowers for Goods, Works, Non‐Consulting and Consulting Services and applicable to Investment Project Financing (IPF) hereinafter referred to as “Regulations”. The project will be subject to the World Bank’s Anticorruption Guidelines, dated October 15, 2006, and revised in January 2011 and July 1, 2016. The World Bank’s Standard Procurement Documents, Requests for Proposals, and Forms of Consultant Contract shall be used for Open International Competition. Goods, works, and non‐consultancy services following Open National Competition shall be procured using agreed bidding documents for Afghanistan. In case of conflict/contradiction between the World Bank’s procurement procedures and any national rules and regulations, the World Bank’s procurement procedures will take precedence according to the Article 4(2) of the Procurement Law of the Islamic Republic of Afghanistan dated 27/06/1396 (September 17, 2016) published in the Official Gazette No. 1223. 16. Systematic Tracking of Exchanges in Procurement (STEP) and procurement planning: The project will implement STEP, a World Bank planning and tracking system, which will provide data on procurement activities and establish benchmarks. The Procurement Plan will be prepared in STEP and the same will be updated in agreement with the project team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 17. Afghanistan Civil Services Commission in coordination with NPA recently completed mass recruitment of procurement staff for almost all budget entities. MoEC, KM, and IDLG are among the agencies where newly hired individuals are deployed. Almost all the procurement staff of these procurement department are new, and they are less familiar with complex procurement and are also not familiar with World Bank procurement regulations. All procurement units should work in coordination with the procurement department to build their capacity and integrate the contracted staff into the procurement department within the first year of project implementation. 18. Based on the initial procurement capacity assessment of all the agencies (MoEC, MOFA, IDLG and KM), the applicable procurement risk rating will be high for all implementing agencies.

Procurement arrangements:

Ministry of Economy:

19. The MoEC will serve as the lead line Ministry responsible for procurement coordination with all the implementing agencies. Under the project, MoEC will have limited packages for consultancy service of monitoring and some specialized studies. 20. MoEC has nine civil servants in its procurement department, and a majority of their procurement staff and contracted staff have not worked with World Bank‐financed projects using World Bank procurement regulations (or procurement and consultant guidelines) in the recent past. The procurement systems in the MoEC


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procurement department is weak, and the staff in the MoEC procurement department and other units have limited experience to carry out procurement independently. 21. The procurement under MoEC will be carried out by the MoEC procurement department (Ameriat Tadarukat). They will hire a Procurement Specialist who can provide support to the MoEC procurement department. No procurement will be conducted by other MoEC units under the project. Ministry of Foreign Affairs: 22. MoFA will implement Component 1 of the project. This component will, inter alia, include consultancy services for communication and awareness firms, passport printing machines, and different types of heavy cartridges. The details of all activities will be laid out in Project Procurement Strategy for Development (PPSD) and in the procurement plan. 23. MoFA has never worked with the World Bank. Therefore, they are not familiar with the World Bank’s procurement system, and there is limited capacity in the ministry to carry out procurement under the project. MoFA has a small procurement unit and the staff are not fully trained on complex procurement and procurement regulations of the World Bank. MoFA is conducting procurement through embassies as well, but there need to be improvements in the systems and thresholds to segregate the procurement done by the embassy consulate or the Ministry procurement unit. 24. Due to the lack of clarity in carrying out procurement between the embassy, consulate, and ministry, it could be risky to conduct procurement by the embassy and consulates in Pakistan. Thus, all the procurement for ministry, embassy, and consulates will be carried out in the procurement unit of MoFA. The consultancy services for the embassy and consulates only applies the Request for Bids/Request for Quotations (RFB/RFQ) method, and Request for Proposals (RFP) distribution and bid opening will be undertaken there with due consultation and presence of MoFA procurement unit representatives. Any procurement directly carried out by the embassy and consulates will not be financed under the project due to the risk of not following the correct rules. If any procurement is required to be carried out by the embassy and consulates in Pakistan, it should be duly agreed with the World Bank before it is initiated. Independent Directorate of Local Governance/ Citizens’ Charter National Priority Program: IDLG already implements the Citizens’ Charters National Priority Program (CCNPP). This entity will be conducting procurement for facilitating partners, procurement of civil works, and the major portion will be community procurement. The procurement arrangement under this component will remain the same as for the CCNPP project. Currently there are six contracted staff which include senior procurement specialists, procurement specialist, senior procurement and contract management officer. The project will hire one procurement specialist, one procurement officer and one contract management specialist for EZ‐Kar, providing support to the procurement unit of IDLG and CCNPP.


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25. The project officials will work with the procurement unit of IDLG (Ameriat Tadarukat) and prepare a comprehensive action plan in the first month following project approval for the capacity building and integration of PIU staff into the procurement unit within the next two years. 26. The project will revise the Operations Manual for community procurement and procurement conducted in CCNPP to include EZ‐Kar activities or prepare new manuals if the existing manual is not applicable for EZ‐Kar. This will be duly agreed with the World Bank. IDLG CIP Core PIU: 27. Component 3 of EZ‐Kar is linked with the CIP. Procurement will involve the selection of a consulting firm for facilitating the selection of investments, development of feasibility reports, and engineering designs in the first year. As the project is linked with CIP implementation, the firm will also support consultations with Municipal Advisory Boards and the private sector. Kabul Municipality: 28. Kabul Municipality (KM) will implementing Component 4 which mainly includes civil works. KM is currently implementing two World Bank‐financed projects: KMDP and Kabul Urban Transport Efficiency Improvement (KUTEI) Project. Despite having extensive resources, the procurement systems and capacity in the KM procurement unit (Ameriat Tadarukat) could be further improved. There is insufficient coordination among the PIU procurement units and the KM procurement department. KM will hire one senior procurement specialist and one senior procurement officer for EZ‐Kar, who will work under the direct supervision of the KM procurement department, using the KMDP arrangements for coordination with technical units. EZ‐Kar procurement will be fully implemented by the officials hired under this project and the KM procurement unit. The project will hire a contract management specialist once the procurement process of major procurement is started. 29. Staffing: The overall procurement staffing under EZ‐Kar is summarized in the table below: Entity Sr. Procurement

Specialist Procurement Specialist

Sr. Procurement Officer

Contract Mgt. Specialist

Procurement Officer

MoEC 1

1

MoFA

1 ‐

IDLG‐CCAP ‐ 1 1 1

KMDP 1

1 1

30. Procurement audit and review: In addition to prior review, WB staff or WB‐appointed consultants will carry out post procurement review once per year and the GoIRA auditing institutions will undertake the procurement audit. 31. Governance and Anticorruption: All contract opportunities and contract awards will be widely published in the internet, NPA website, IA’s website, and when required in United Nations Development Business (UNDB). Other actions include: (a) alerting implementing agencies’ officials/staff about any fraud and corruption issues; (b) alerting bidders against adopting fraud and corruption practices; (c) awarding contracts within the initial bid validity period, and closely monitoring the timing; (d) taking action against any corrupt bidder in accordance with the laws of the GoIRA and informing the Integrity Vice Presidency (INT) of the World Bank; (e) preserving records and all documents regarding public procurement, in accordance with the Procurement Law provisions; (f) publishing contract award information in UNDB online, NPA’s website, and agencies’ websites within two weeks


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of contract award; (g) ensuring timely payments to the suppliers/contractors/consultants and imposing liquidated damages for delayed completion; and (h) enforcing a procurement filing system. 32. Grievance Redress Mechanisms: Complaints Handling: With regard to procurement complaints, the IAs will be guided by the World Bank’s Procurement Regulations for Borrowers for Goods, Works, Non‐Consulting, and Consulting Services and applicable to IPF hereinafter referred to as ‘Regulations’. The IAs will inform the World Bank as soon as the procurement complaint is received and subsequently of the final outcome. The IAs will prepare a comprehensive complaint handling mechanism, and this will be published on NPA and the IAs’ websites. This mechanism should have a system to register and monitor the receipt and resolving of complaints, such as through the proposed hotlines. The progress of such action will be reviewed during implementation support missions.

33. The IAs will ensure that all invitations for bids and Expressions of Interest are publicized widely using their own websites, NPA website, UNDB, and national newspapers. Furthermore, for individual consultants, the Request for Expression of Interest/vacancy notice will be published on the following websites: www.npa.gov.af, www.acbar.org, www.devnetjobs.org, and www.reliefweb.int. 34. Incremental Operating Cost (IOC): IOC will be procured using Afghanistan’s Procurement Law procedures. The operating costs will include operations and maintenance of equipment and vehicles, hiring of vehicles, office rent, costs of consumable, fuel, office utilities and supplies, bank charges, and advertising expenses, but exclude any salaries and allowances of civil servants. 35. Project Implementation staff/individuals: Project Components shall distinctly identify financial resources allocated for Project Implementation Staff/Individuals costs with details of proposed positions and number, required minimum qualifications, time scale and fee/salaries. As per Procurement Framework 2016, Procurement Regulations for IPF Borrowers July 2016, such Project Implementation Staff/Individuals contracted by Borrower are not treated as Individual Consultants for the project. Such Project Implementation Staff/Individuals may be selected by the Borrower according to its hiring procedures agreed between the World Bank and GoIRA for such activities. The project will submit the TOR and selection details including proposed candidates to the World Bank for review and clearance. It may be noted that ‘Individual Consultants’ required for delivering a specific assignment under the project will be different from Project Implementation Staff/Individuals. Individual consultants are hired when a team of experts is not required; no additional home office professional support is required; and the experience and qualifications of the individual are of paramount requirement for delivering the assignment. All Individual Consultants will be included in the Procurement Plan and the selection will be subject to provisions in the Procurement Regulations. 36. Advance Procurement: All the IAs will undertake some advance procurement. The timelines and targets are already agreed with all the IAs. If the procurement process of the agreed activities is completed prior to project approval, the contract will not be signed until the project is approved or funds are made available from other sources (unless paid through retroactive financing).


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ANNEX 8: Population of Cities Targeted by EZ‐Kar

Province No.

Province Name

District Name

Total Population

Urban Population

Area Pop

density Total

Returnees Total IDPs

% (Returnees + IDPs)

District Code

1 Kabul 101 Kabul 3,961,487 3,961,487 414.13 9,566 68,078 78,677 3.7

6 Nangarhar 601 Jalalabad 239,968 239,968 23.92 10,032 55,426 31,223 36.1

7 Laghman 701 Mihtarlam 136,810 5,410 406.4 337 14,944 26,524 30.3

9 Baghlan 901 Pul‐i‐Khumri 224,665 113,470 695.88 323 23,056 22,427 20.2

14 Khost 1401 Khost 145,443 12,307 402.28 362 21,088 40,603 42.4

15 Kunarha 1501 Asad Abad 35,557 14,607 81.26 438 13,667 13,671 76.9

16 Nooristan 1601 Paroon 14,256 0 892.64 16 504 4,774 37.0

18 Takhar 1801 Taloqan 240,089 76,954 856.5 280 13,664 4,617 7.6

19 Kunduz 1901 Kunduz 331,517 167,088 641.91 516 30,346 14,665 13.6

23 Ghor 2301 Chagcharan /Firozkoh

143,178 7,439 9031.06 16 1,076 50,725 36.2

27 Kandahar 2701 Kandahar 563,885 461,864 4008.66 141 25,176 69,455 16.8

29 Faryab 2901 Maimana 88,044 88,044 57.14 1,541 5,512 64,330 79.3

32 Herat 3201 Herat 506,896 506,896 234.2 2,164 26,236 179,296 40.5

Notes: (i) Population estimates are for urban populations in the districts coded as Provincial Centers or district 1; municipal boundaries may vary; (ii) Population density is estimated as total population divided by the total area of the district. This is an underestimate of urban population density in districts with rural areas; IOM DTM estimates for returnees are at the district level; % returnees are estimated relative to total population. Source: NSIA estimates for 2017‐18; IOM DTM

1. Afghanistan is among a handful of countries without any recent census data. The first and only national population census of Afghanistan was conducted in 1979 and covered only two‐thirds of the districts due to insecurity. For those areas where the census could not be conducted, household estimates from a pre‐census household listing were used, and population growth rates were derived from a comparison between this pre‐census household listing and the census count. Official population estimates were subsequently revised and rebased in 2004, based on the 2003‐05 household listing exercise in 29 provinces.

2. NSIA’s official population estimates and growth rates are lower than those derived from either the US Census Bureau model or the UN model, both of which estimated the national population at 33‐34 million in 2016[3]. In contrast, NSIA’s official population estimates put Afghanistan’s national population at 29 million in 2016‐17. Recently, the NSIA attempted to undertake half‐censuses in the form of the Socio‐Demographic and Economic Surveys (SDES) to fill this critical data gap. The SDES includes a full household enumeration and detailed data collection for 50 percent of households. However, due to insecurity, only 13 provinces could be covered by the SDES (and some only partially)[4]. For the remaining provinces, population estimates continue to be based on the 2003‐05 household listing, and for three provinces[5], solely on the 1979 population census, while being unable to account for changes in fertility, mortality and net immigration.

[3] UN Population Division, World Population Prospects 2017; US Census Bureau, International Database [4] Kabul, Kapisa, Daykundi, Bamyan, Samangan, Ghor, Takhar, Balkh, Parwan, Nimroz, Herat and Khost [5] Daykundi population estimates now based on SDES. 1979 population census continues to be the base for population projections for Helmand, Paktika and Zabul.


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ANNEX 9: Technical, Economic and Financial Analysis 1. The project is expected to result in several direct and indirect benefits that will accrue through the development

of municipal infrastructure and labor‐intensive public works. Since most components and activities financed by EZ‐Kar (i.e., types of MCCG subprojects, Gozar and Business Gozar subprojects, city‐level Priority Projects) are demand‐driven, an ex‐ante quantifiable cost‐benefit analysis was not feasible. Instead, a qualitative listing of component‐level benefits and costs are provided below. In addition, since EZ‐Kar is providing complementary financial support to ongoing World Bank‐funded projects such as CCAP (under Component 2), CIP (under component 3) and KMDP (under Component 4), the economic cost‐benefit analysis for these EZ‐Kar Components relies on the economic analysis of these individual projects.

2. Component 1: Economic analysis was not specifically conducted for Component 1 activities (civil documentation and information services) and regulatory reforms, since the economic impacts of these “enabling” interventions will depend on many variables that cannot be estimated with adequate precision. These activities, however, are expected to have broad positive economic impacts, including direct and in‐direct effects on the above interventions (short‐term employment opportunities and market‐enabling infrastructure).

3. Component 2.1: The project will finance investments in labor‐intensive public works that will result in the provision of short‐term employment opportunities and emergency cash income for urban residents. The additional 40 days of work per household would have a considerable ‘income effect’ for the large proportion of urban households whose main income source is the sale of unskilled daily wage labor (40 days constitutes anywhere from 25 percent to 50 percent additional labor days per year). In addition, the rehabilitated and/or newly constructed infrastructure in the host communities, particularly in small‐scale energy and transport infrastructure, are also estimated to benefit the returnees and host communities. Under the National Solidarity Program III (NSP III), the cost‐benefit analysis of sample power sub‐projects found an average Economic Rate of Return (ERR) of 40.2 percent, while the cost‐benefit analysis of sample transport sub‐projects found an average ERR of 30.8 percent.44 Similar gains are expected in urban areas that will be targeted under EZ‐Kar.

4. Component 2.2: Each Gozar subproject will be selected based on criteria such as, inter alia: (i) a high‐level assessment of feasibility and financial analysis conducted by FPs, (ii) pro‐business impact, and (iii) prioritizing market‐enabling infrastructure that can lead to improved economic opportunities. A scoring template (agreed with the World Bank) can be developed for the selection and screening of subprojects. Business Gozar subprojects shall be selected based on a screening tool developed by MoEC.

5. Regulatory Reform under Components 2.3 and 4.1: The proposed investments will be complemented with regulatory and process reforms that are expected to result in direct economic benefits through stronger private sector development, as well as lead to a multiplier effect by relaxing binding infrastructure constraints. Recent analytical work by the World Bank that has reviewed 750 cities worldwide show a statistically positive correlation at the 10 percent level for regulatory reform interventions (similar to those under EZ‐Kar) vis‐à‐vis local economic growth, improved disposable incomes of city residents, and increased firm‐level productivity.

6. Component 3: Priority Projects (PPs) selected to be financed will be subjected to feasibility studies. Many PPs are expected to have a multiplier effect; and where such positive externalities can be measured and quantified, this will be done and monitored as a project impact within the Results Framework. PPs will be carefully vetted, ensuring that they present a strong "value for money proposition for public investments." Given the difficulty of

44 Atos Consulting (2014). National Solidarity Program III, Financial and Economic Analysis Report.


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monetizing benefit streams in a largely informal market with limited access to verifiable data, Cost Effectiveness (CE) will be used as the methodology to determine the economic justification for these PPs. The PPs will be ranked by the degree to which they contribute to enhancing municipal services for residents and businesses. In addition, all PPs will be required to use Least Cost method as a design criterion: this measure will serve to minimize the cost while providing the same functional value. For ranking subprojects based on the CE Ranking Method, the calculation will be based on the cost of upgrading a road segment to meet basic access standards divided by the population served by the road segment, which will yield the CE Ratio on which the ranking will be carried out:

𝐶𝑜𝑠𝑡 𝑜𝑓 𝑅𝑜𝑎𝑑 𝑈𝑝𝑔𝑟𝑎𝑑𝑒 𝑡𝑜 𝐵𝑎𝑠𝑖𝑐 𝑆𝑡𝑎𝑛𝑑𝑎𝑟𝑑

𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑆𝑒𝑟𝑣𝑒𝑑 𝑏𝑦 𝑅𝑜𝑎𝑑 𝑆𝑒𝑔𝑚𝑒𝑛𝑡 𝐶𝐸 𝑅𝑎𝑡𝑖𝑜

7. A market analysis will be prepared by the PCC for each PP feasibility study. The assumption to be confirmed by

the feasibility study will be that these quasi‐public goods without an interested private sector investor will be cost effective if the completed asset is generating revenue streams sufficient to cover the estimated operating and maintenance costs for the facility (based on the Operations Manual developed for the asset at project handover) with surplus revenues accruing to the PCC at a Proportion of the cost of the facility. This percentage will be determined based on revenue stream estimates from existing market leases, incremental increases in public transit ridership fees, and any other additional revenues that are being generated by the PCC.

8. Component 4: In Afghanistan, a recent cost‐benefit analysis carried out to identify land and property value increases in select neighborhoods upgraded under Kabul Urban Reconstruction Project (KURP) and KMDP, identified several indirect benefits to the residents of Kabul. These indirect benefits included increased local economic growth, time savings due to the provision of all‐weather road access to homes, and expansion of drinking water supply, which also reduced income loss due to sickness and medical expenses. Overall, the analysis conducted for three representative sites has indicated an economic rate of return ranging between 74 percent and 95 percent. On average, the net present value of upgrading was found to be approximately US$1.24 million/hectare at a 10 percent discount rate.45 A similar effect (viz. indirect benefits to local residents and positive economic rates of return) is expected under EZ‐Kar on account of the Kabul‐level PPs, as was the case in KURP and KMDP.

9. Economic benefits of integration of returnees: There are likely to be potential economic benefits arising from the integration of returnees in the Afghan economy. These benefits are expected to accrue through their entrepreneurial and vocational skills, as well as their participation in the urban economy. Data from a phone survey of 3,575 Afghan returnees from Pakistan showed that, among the breadwinners, 66 percent indicated that they want to engage in or own their business, but only 9 percent did so. About 4 percent of the returnees left behind business assets. This group, including those engaged in informal economic activity, has the potential to develop businesses and employ others, in part with support from the project.

45 World Bank (2014). Project Appraisal Document, Kabul Municipal Development Program.


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ANNEX 10: Consultative Process with GoIRA, Development Partners and Private Sector 10. During the EZ‐Kar project preparation period, DiREC’s technical working groups provided the platform for

consultations and recommendations, many of which are reflected in the activities and design choices of EZ‐Kar. Some of key features include the following: (i) a stakeholder driven design approach; (ii) the opportunity to develop synergies with other Bank and IFC projects and projects of other donors; (iii) considering the absorptive capacity of GoIRA to implement; and (iv) a sharp focus on the short‐medium to long term economic opportunity aspect of the returnee and IDP challenge. The project also tries to address the inherent complexity of dealing with returnees in Pakistan by supporting only those measures considered necessary.

11. There was significant engagement with stakeholders to design the regional and national interventions. GoIRA established four working groups, which included all concerned ministries and the private sector to inform project design. These working groups looked at incentives, infrastructure, regulatory reform, and skills. A parallel engagement with city mayors sought municipal perspectives. The views of returnees were obtained through direct consultation with Afghan repatriation shuras, the Embassy of Afghanistan in Pakistan, and surveys. The World Bank task team also ensured that humanitarian actors and other international agencies, such as Office of (OCHA), UNHCR, and International Organization for Migration (IOM), were involved during the design discussions. UNCHR has been heavily involved in the design of Component 1 and will continue to work with the World Bank task team during implementation and supervision of this work.

12. The decision to focus on developing economic opportunities for a broad range of needs (social service delivery, housing, and social cohesion) is premised on the idea that it is difficult to build sustainable approaches if returnees and IDPs are not earning incomes. In addition, it recognizes other short‐ to medium‐term parallel efforts by GoIRA to address basic service delivery and short‐term daily wage work. Specifically, the multi‐sector displacement response took on four broad initiatives that range from short to long term development support by: ‐ Strategically engaging with the GoIRA through DiREC to develop a phased action matrix, analytics and

consultations that can inform the government dialogue (e.g. the existing legal and regulatory framework and a commercial assessment of the Afghan refugee and returnee eco‐system in Pakistan, surveys, and consultations with private sector and diaspora);

‐ Developing partnerships with humanitarian actors (e.g., UNHCR and IOM) for data‐sharing and analysis, which enabled the World Bank to link UNHCR’s refugee registration with its own socioeconomic databases, particularly the Afghanistan Living Conditions Survey (ALCS) and the Pakistan Population Profiling, Verification and Response (PPVR) Survey, covering approximately one million documented and undocumented Afghan refugees. This analysis has informed EZ‐Kar on the socioeconomic characteristics of the returnees, IDPs and host communities. The World Bank‐UNHCR partnership has also resulted in mobile phone card distribution to all returnees at the Pakistan border, who will be tracked via surveys to generate monthly information on labor market conditions and employment of returnees;

‐ Conducting a portfolio wide review, to leverage existing ARTF and IDA projects to quickly respond in key sectors e.g. health and education, the CCAP by establishing a quick disbursing mechanism to generate daily wage work with US$172 million from IDA 18 regional funds targeting 14 districts of high IDPs and returnees;

‐ Developing medium‐ to long‐term investments in economic opportunities through EZ‐Kar, supporting inclusive health care and education, which will benefit children of forced displaced groups and their host communities through the Education Quality Reform in Afghanistan (EQRA), and the Health (Sehatmandi) Project, also to be implemented in areas with the high concentrations returnee and IDP populations.


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ANNEX 11: Other Substantial Risks to the Project

1. In addition to the project risks highlighted in the main text, other risks that are rated “Substantial” include the following:

2. Sector Strategies and Policies: This project is being implemented in the context of a major effort by GoIRA to strengthen urban governance with the help of the World Bank through CIP. EZ‐Kar requires punctual investments in three of the twelve EZ‐Kar cities included in the CIP (Herat, Jalalabad and Kandahar). This could distract GoIRA from important governance priorities and develop infrastructure that impinges on the performance‐based financing system that will be developed in the future. This risk will be managed through jointly agreed site and scheme criteria in close coordination with the CIP team. Operational alignment will be strengthened through a common PIU that will be used for CCAP, CIP, and EZ‐Kar, and an Economic Infrastructure Unit will be set up within this PIU specifically for EZ‐Kar and CIP to help with coordination.

3. Technical Design of Project: The broad scope of the project means a diversity of project activities. This risk of an over ambitious scope will be mitigated through procurement consolidation, phased implementation (complexity is added when capability is proven), leveraging existing systems and structures put in place by ongoing projects such as the Citizens’ Charter Afghanistan Project, and the use of output measures for some activities.

4. Beneficiaries: Many of the project beneficiaries on the returnee and IDP side will be subject to various traumas. For the host communities, competition for the same jobs especially through ongoing labor intensive public works schemes in cities (e.g. the sanitation workers in Kabul) could lead to resentment that the newcomers are getting jobs that the host communities would have benefitted from. The whole‐of‐community approach to be applied by the project for the selection of the beneficiaries for labor intensive public work would ensure that vulnerable people, including both host communities and IDPs/R would benefit equally.

5. Expectations Management: The communications campaign activities proposed under Component 1 can raise the expectations of Afghan refugees (both documented and un‐documented) in Pakistan on the assistance and opportunities available to them in Afghanistan beyond the realistic level. Unmet expectations can generate grievances and fuel social and political disturbances by disgruntled returnees placed in vulnerable conditions. In order to prevent false expectations, the project will be enhancing the information management capacity of MoRR through recruitment of information management staff, who will be responsible for verifying information with other relevant ministries and agencies. All communications materials that will be used under Subcomponent 1.2 will be reviewed and approved by a Joint Communications Committee that will be established among MoFA, MoRR, and the Ministry of Interiors (MoI) to validate the accuracy of information.

6. Inclusion: Some refugees may not possess all the required documents to apply for an Afghan passport. The costs of obtaining these documents, in addition to the passport application fee, may discourage or impede Afghan refugees from applying for the passport. This can be perceived as exclusive. The Project will help the refugees by clarifying the application requirements and ways to obtain the required documents. The Project, however, will not introduce any new changes to the passport issuance policies or procedures of MoFA for reasons related to security, fairness, and consistency.


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ANNEX 12: Climate Resilience Vulnerability Note: The following climate co‐benefits relate to activities that will be carried out under component 2, 3 and 4. Please see the component wise descriptions in the main PAD section above.

1. Afghanistan is highly vulnerable to climate change, and IDPs, returnees, and their host communities may be particularly vulnerable to such changes. They may not be able to effectively cope with the shocks of climate change when they have limited livelihood options and their access to basic social services and safety‐nets are constrained. Afghanistan faces many stresses that impact food, water and energy security, including those linked to its arid/semi‐arid climate and vulnerability to droughts and floods. In the past 30 years, the country has ranked 24th globally for climate risk and 15th for weather‐related disasters46. The country’s vulnerability is expected to continue— Afghanistan is ranked 8 of 170 countries for its vulnerability to climate change in the next 30 years. The high poverty rate, exposure to climate change events, and reliance on flood/drought prone agricultural land are significant contributing factors47. With significant temperature increases projected as well as changes in the timing and volume of precipitation, droughts will become a norm by 2030 and flood events will be more intense. Afghanistan’s rangelands and forests are already degraded and by 2060, large parts of the agricultural economy could become marginal without significant investment in water management and irrigation. Afghanistan could also see a 2 to 6 percent increase (in a more pessimistic scenario) in the number of extremely poor people by 2030 linked to the vulnerability of its agriculture and health sectors to climate change and exposure to climate‐related natural disasters48. Women and children will be more exposed, as they tend to have less control over resources and decisions.

2. The Afghanistan Multi‐Hazard Risk Assessment provides detail on the significant risks faced by the country from disaster risk and climate change. The risk assessment consists of analysis at the national level, including in depth assessments for selected geographic areas, and includes information on current and future risks from the following perils: fluvial floods, flash floods, drought, landslides, snow avalanches and seismic hazards in the country, and takes into consideration projected climate change. The risk assessment is made available through the published Afghanistan Risk Profile49 as well as through an online open‐data platform50, which provides critical information for effective risk mitigation, development planning and decision making.

3. Recognizing the vulnerability to climate change, the project will contribute towards the efforts of GoIRA in achieving the United Nations’ Sustainable Development Goal 13 (Take Urgent Action to Combat Climate Change and its Impacts) by enhancing the resilience of IDPs, returnees, and host communities to climate change. By issuing civil documents to the returnees and providing information on return processes, the project will facilitate the returnees to access social services and economic opportunities that alleviate their vulnerability to shocks. The labor intensive public works, investments in market infrastructure, and regulatory reforms to promote economic opportunities are expected to create more jobs and provide for more stable income generation activities in the target cities, mitigating economic shocks of climate change. Improved connectivity to markets (access roads) and market infrastructure (e.g. electrification, storage, drainage, sanitation) are also

46 Germanwatch (2018). Global Climate Risk Index. 47 Maplecroft (2011). Climate Change Risk Atlas. 48 World Bank Group (2016). Shock Waves, Managing the Impacts of Climate Change on Poverty. 49 https://www.gfdrr.org/sites/default/files/afghanistan_low_FINAL.pdf 50 www.disasterrisk.af


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expected to support food security to an extent by increasing the availability, durability, and hygiene of food supply in general.

4. Each CDC selected will undertake repair, maintenance, and/or light construction activities, which fall under the

permissible menu of “eligible” public works subprojects. These activities are expected to increase the target

cities’ and households’ resilience to shocks (including those related to climate change) by creating short‐term jobs

and source of income through labor intensive public work that are less sensitive to climate change. In addition,

depending on the type of market infrastructure improved or constructed, the project may contribute to the

reduction of heat loss in utilities and/or increased recovery of waste heat (Climate Finance Category 3.3 Energy

efficiency improvements in the utility sector and public services).

5. The available Afghanistan disaster risk platform (www.disasterrisk.af) will be used to screen selected

infrastructure projects. The risk information will inform (i) site selection; and (ii) simple risk mitigation measures

to be incorporated into the design to protect infrastructure against location‐specific risks like floods, earthquake,

landslides or avalanches. This will strengthen infrastructure adaptation aspects, support lives and livelihoods and

secure overall sustainability of investments. IDLG engineers, working on CCAP activities, have already been trained

in the use of the disaster risk platform, but another round of training is planned, under the ongoing advisory

services and analytics (ASA) work—Establishing Critical Risk Information (P155025), to take place in early 2019.

6. According to the preliminary assessments made by the Climate Co‐Benefits Assessment Team on the climate co‐

benefits of the project, the total climate co‐benefits in this project amounts to US$ 10.51 million (5.3 percent).