Document of The World Bank Report No: 74138-AFR INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON THREE PROPOSED CREDITS IN THE AMOUNTS OF SDR19.4 MILLION (US$29.8 MILLION EQUIVALENT) TO THE REPUBLIC OF MALAWI SDR19.4 MILLION (US$29.8 MILLION EQUIVALENT) TO THE REPUBLIC OF MOZAMBIQUE SDR19.4 MILLION (US$29.8 MILLION EQUIVALENT) TO THE REPUBLIC OF ZAMBIA AND A PROPOSED REGIONAL GRANT IN THE AMOUNT OF SDRO.4 MILLION (US$0.6 MILLION EQUIVALENT) TO THE CENTRE FOR COORDINATION OF AGRICULTURAL RESEARCH AND DEVELOPMENT FOR SOUTHERN AFRICA (CCARDESA) FOR AN AGRICULTURAL PRODUCTIVITY PROGRAM FOR SOUTHERN AFRICA February 15, 2013 Agriculture, Rural Development, and Irrigation (AFTA2) Africa Country Department (AFCS2) Africa Country Department (AFCS3) Africa Regional Integration Department (AFCRI) Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2012) Currency Unit = United States Dollar (US$) US$ 1.53692 = SDR 1 FISCAL YEAR Malawi: July 1 - June 30 Mozambique: January 1 - December 31 Zambia: January 1 - December 31 ABBREVIATIONS AND ACRONYMS AGRA Alliance for a Green Revolution in Africa APPSA Agricultural Productivity Program for Southern Africa ASTI Agricultural Science and Technology Indicator ASWAp Agricultural Sector Wide Approach Program (Malawi) AUC African Union Commission AWP&B Annual Work Plan and Budget BoZ Bank of Zambia BP Bank Procedures CAADP Comprehensive Africa Agriculture Development Programme CCARDESA Centre for Coordination of Agricultural Research and Development for Southern Africa CGIAR Consultative Group on International Agricultural Research CIPS Chartered Institute of Purchasing and Supplies (UK) COMESA Common Market for Eastern and Southern Africa CUT Conta Unica do Tesuoro (Single Treasury Account) DA Designated Account DAES Department of Agricultural Extension Services (Malawi) DAF Direqdo de Administraqdo e Finanqas (Directorate of Administration and Finance) DAPS Department of Agricultural Planning Services (Malawi) DARS Department of Agricultural Research Services (Malawi) DNO Direqdo Nacional do Orqamento (National Directorate of Budget) DNT Direqdo Nacional do Tesuoro (National Directorate of Treasury) DPP Department of Policy and Planning EA Environmental Assessment EAAPP East Africa Agricultural Productivity Program ESIA Environment and Social Impact Assessment ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan FAAP Framework for African Agricultural Productivity FARA Forum for Agricultural Research in Africa FM Financial Management ii FMS Financial Management System (Zambia) FY Fiscal Year GAC Governance and Anti-Corruption GART Golden Valley Agricultural Research Trust (Zambia) GDP Gross Domestic Product GIS Geographic Information System IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding ICT Information and Communication Technology IDA International Development Association IFMIS Integrated Financial Management Information System IFPRI International Food Policy Research Institute IFR Interim Unaudited Financial Report IIAM Instituto de Investigaqdo Agraria de Moqambique (Agricultural Research Institute of Mozambique) IPC Internal Procurement Committee (Malawi) IPR Intellectual Property Right IRRI International Rice Research Institute M&E Monitoring and Evaluation MAF Manual de Administraqdo e Finanqas (Administration and Finance Manual) MAL Ministry of Agriculture and Livestock (Zambia) MCT Ministry of Science and Technology (Mozambique) MINAG Ministry of Agriculture (Mozambique) MoAFS Ministry of Agriculture and Food Security (Malawi) MoFNP Ministry of Finance (Zambia) MOU Memorandum of Understanding MPD Ministry of planning and Development (Mozambique) MSc Master of Science NAIS National Agricultural Information Services NCB National Competitive Bidding NGO Non-Governmental Organization OP Operational Policy PAD Project Appraisal Document PARP Plano de Acqdo de Reduqdo de Pobreza (Poverty Reduction Strategy - Mozambique) PDO Project Development Objective PEMFA Public Expenditure Management and Financial Accountability (Zambia) PhD Doctor of Philosophy PIM Project Implementation Manual PMP Pest Management Plan PPA Project Preparation Advance P-RAMS Procurement Risk Assessment Management System PSU Procurement and Supplies Unit (Zambia) QCBS Quality and Cost-based Selection R&D Research and Development RAP Resettlement Action Plan iii RCoL Regional Center of Leadership RIAS Regional Integration Assistance Strategy RPF Resettlement Policy Framework SADC Southern African Development Community SCCI Seed Control and Certification Institute (Zambia) SDR Special Drawing Right SIL Specific Investment Loan SOE Statement of Expenditure TA Technical Assistance ToR Terms of Reference TWG Technical Working Group UGEA Unidades Gestoras Executoras das Aquisiq5es (Executive Procurement Management Units) USD United States Dollar WAAPP West Africa Agricultural Productivity Program ZAR South African Rand ZARI Zambia Agriculture Research Institute ZPPA Zambia Public Procurement Authority Regional Vice President: Makhtar Diop Country Directors: Colin Bruce (Regional Integration) Kundhavi Kadiresan (Malawi and Zambia) Laurence C. Clarke (Mozambique) Sector Director: Jamal Saghir Sector Managers: Severin Kodderitzsch Tijan Sallah Task Team Leaders: Michael Morris Melissa Brown Olivier Durand (for Malawi) Aniceto Bila (for Mozambique) Indira Ekanayake (for Zambia) iv AFRICA AGRICULTURAL PRODUCTIVITY PROGRAM FOR SOUTHERN AFRICA TABLE OF CONTENTS Page I. STRATEGIC CONTEXT .......................................................................................................1 A. Regional and country context ............................................. 1 B. Sectoral and institutional context.......................2.... ............2 C. Higher-level objectives to which the Project contributes ....................... 5 II. PROJECT DEVELOPMENT OBJECTIVES ..................................................................7 A. Project Development Objective (PDO) ...................................... 7 B. Project beneficiaries ....................7...........................7 C. PDO Level Results Indicators.............................................. 8 III.PROJECT DESCRIPTION ................................................................................................ 8 A. Project components ......................8.........................8 B. Project financing ........................................ ......... 13 C. Lessons learned and reflected in the Project design ............................ 15 IV. IM PLEM ENTATION ...................................................................................................... 16 A. Institutional and implementation arrangements ............................. 16 B. Results monitoring and evaluation............. .................. ..... 18 C. Sustainability...................................................... 19 V. KEY RISKS AND MITIGATION MEASURES...........................................................20 A. Risk ratings summary table.......................................... 20 B. Overall risk rating explanation......................................... 20 VI. APPRAISAL SUMMARY ............................................................................................... 21 A. Economic and financial analysis ...................................... 21 B. Technical ...................................................... 23 C. Financial management ..................................... ........ 25 D. Procurement .................................................... 25 E. Social (including Safeguards) ................................... ..... 26 F. Environment (including Safeguards) .............................. ...... 27 v Annex 1: Results Framework and Monitoring .................................................................... 30 Annex 2: Detailed Project Description .................................................................................. 34 Annex 3: Implementation Arrangements ............................................................................. 51 Annex 4: Operational Risk Assessment Framework (ORAF)..............................................99 Annex 5: Implementation Support Plan ..................................................................................101 An nex 6: Map .............................................................................................................................105 vi PAD DATA SHEET Regional Agricultural Productivity Program for Southern Africa PROJECT APPRAISAL DOCUMENT AFRICA AFTA2 Basic Information Date: February 15, 2013 Sectors: Agricultural extension and research (75%) Gen. agriculture, fishing and forestry sector (25%) Country Colin Bruce Themes: Rural markets (20%); Directors: Kundhavi Kadiresan Other environment and nat. resources mgt (20%); Laurence Clarke Rural policies and institutions (20%); Regional integration (20%); Technology diffusion (20%) Sector Severin Kodderitzsch EA Category: B - Partial Assessment; non-transferred Managers: Tijan Sallah Sector Jamal Saghir Director: Project ID: P094183 Lending Specific Investment Loan Instrument: (SIL) Team Michael Morris Leader(s): Melissa Brown Olivier Durand (Malawi) Aniceto Bila (Mozambique) Indira Ekanayake (Zambia) Joint IFC: No MALAWI Recipient: Ministry of Finance Responsible Agency: Ministry of Agriculture and Food Security (MoAFS) Contact: Jeffrey Luhanga Title: Principal Secretary Telephone +2651 789 033 Email: agriculture(a,agriculture.gov.mw No.: MOZAMBIQUE Recipient: Ministry of Planning and Development Responsible Agency: Instituto de Investigaqdo Agrdria de Moqambique (11AM) of the Ministry of Agriculture (MINAG) Contact: Inacio Maposse Title: Director General Telephone +258 21 462240 Email: icmaposse@gmail.com No.: vii ZAMBIA Recipient: Ministry of Finance Responsible Agency: Zambia Agriculture Research Institute (ZARI) of the Ministry of Agriculture and Livestock (MAL) Contact: Siazongo D. Siakalenga Title: Permanent Secretary, Administration Telephone +260-211-252552 Email: permanentsecretary@maff.gov.zm No.: CCARDESA Recipient: Centre for Coordination of Agricultural Research and Development for Southern Africa (CCARDESA) Responsible Agency: CCARDESA Secretariat Contact: Timothy Simalenga Title: Executive Director Telephone +267 391 4991/7 Email: tsimaleneap_ccardesa.org No.: Project Implementation Start Date: March 14, 2013 End Date: July 14, 2019 Period: Expected Effectiveness July 14, 2013 Date: Expected Closing Date: January 31, 2020 (IDA Credits) and July 31, 2015 (Regional IDA Grant) Project Financing Data (US$M) [] Loan [x ] Grant [ Other [x ] Credit [] Guarantee For Loans/Credits/Others Total Project 94.64 Total Bank Financing: 90.0 Cost : Total Co- 4.64 Financing Gap: 0.00 financing: Financing Source Amount (US$M) RECIPIENT Republic of Malawi 0.42 Republic of Mozambique 2.07 Republic of Zambia 1.41 IBRD 0.00 IDA (Credit): New 89.40 Regional IDA Grant (to CCARDESA): New 0.60 IDA: Recommitted 0.00 Others (Beneficiaries) 0.74 Financing Gap 0.00 Total 94.64 Expected Disbursements (in US$M) Fiscal Year 2013 2014 2015 2016 2017 2018 2019 2020 (PPA) _____ Annual 3.32 16.30 18.51 17.39 16.14 10.00 7.74 0.60 Cumulative 3.32 19.62 38.13 55.52 71.66 81.66 89.4 90.00 Project Development Objective(s): To increase the availability of improved agricultural technologies in participating countries in the SADC region Viii Components Component Name Cost (US$M) Component 1 - Technology Generation and Dissemination 37.24 Component 2 - Strengthening Regional Centers of Leadership 37.79 Component 3 - Coordination and Facilitation 14.97 Compliance Policy Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [X] Does the project require any waivers of Bank policies? Yes [ ] No [X] Have these been approved by Bank management? Yes[] No [ ] Is approval for any policy waiver sought from the Board? Yes [ ] No [X] Does the project meet the Regional criteria for readiness for implementation? Yes [X] No [ ] Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X Legal Covenants Name Recurrent Due Date Frequency Malawi Effectiveness Condition of Effectiveness: The Conditions of Effectiveness consist of the following, namely, that the Recipient has: (a) adopted a Project Implementation Manual acceptable to the Association; (b) engaged financial management and procurement staff in adequate number, and with qualifications, experience, and terms and reference acceptable to the Association; and (c) installed computer software required for financial management under the Project. Three months after effectiveness Dated Covenant: The Recipient shall cause its Accountant General, by no later than three months after the Effective Date of this Agreement, to assign an additional qualified accountant to strengthen the Project's accounting function. Six months after effectiveness Dated Covenant: The Recipient shall, through MoAFS, by no later than six months after the Effective Date of this Agreement, strengthen MoAFS's internal audit function through provision of training to MoAFS internal audit committee and internal audit unit 1x Mozambique Effectiveness Condition of Effectiveness: The Condition of Effectiveness consists of the following, namely, that the Recipient has adopted a Project Implementation Manual acceptable to the Association. Three months after effectiveness Dated Covenant: The Recipient shall cause IIAM, by no later than three months after the Effective Date of this Agreement, to engage sufficient financial management staff in adequate numbers, with qualifications, experience, and terms of reference acceptable to the Association. Zambia Effectiveness Condition of Effectiveness: The Conditions of Effectiveness consist of the following, namely, that the Recipient has: (a) adopted a Project Implementation Manual acceptable to the Association; and (b) put in place procurement staff in adequate numbers, and with qualifications, experience, and terms of reference acceptable to the Association. Three months after effectiveness Dated Covenant: The Recipient shall through MoF, by no later than three (3) months after the Effective Date of this Agreement, strengthen MAL's internal audit function through provision of training in risk-based internal auditing Recurrent Dated Covenant: The Recipient shall prior to the effectiveness of a contract subject to the Association's prior review, cause ZARI to appoint a contract manager for such contracts, with qualifications, experience and terms of reference acceptable to the Association, to manage the contract performance. Effectiveness Retroactive Financing: No withdrawal shall be made for payments made prior to the date of this Agreement, except that withdrawals up to an aggregate amount not to exceed $100,000 equivalent may be made for payments made prior to this date but on or after January 22, 2013, for Eligible Expenditures under Category (1). CCARDESA Effectiveness Condition of Effectiveness: The Recipient has installed computer software required for financial management under the Project. Six months after effectiveness Dated Covenant: The Recipient shall ensure that its audit committee, not later than six (6) months after the Effective Date, has received adequate training in order to perform audit functions for the expenditures incurred under the Project. Description of Covenant Team Composition Bank Staff Name Title Specialization Unit UPI Michael Morris Lead Agricultural Economist Task Team Leader (TTL) AFTA2 Melissa Brown Economist Co-TTL AFTA2 Olivier Durand Senior Agricultural Specialist Co-TTL (Malawi) AFTA3 Aniceto Bila Senior Rural Development Specialist Co-TTL (Mozambique) AFTA2 Indira Janaki Senior Agriculturist Co-TTL (Zambia) AFTA3 Ekanayake Nathan Belete Sector Leader AFTSN Patrick Verissimo Senior Sector Economist Mozambique AFTA2 X Varalakshmi Vemuru Senior Social Development Specialist AFTCS Cheikh Sagna Senior Social Development Specialist Mozambique AFTCS Lungiswa Thandiwe Senior Environmental Specialist AFTN2 Gxaba Pauline McPherson Senior Operations Officer AFTA2 Juvenal Nzambimana Operations Officer AFTA2 Mei Wang Senior Counsel LEGAM Luis Schwarz Senior Finance Officer CTRLA Wedex Ilunga Senior Procurement Specialist Zambia AFTPE Amos Malate Procurement Analyst Mozambique AFTPE Dirk Bronselaer Senior Procurement Specialist Procurement Hub Coordinator AFTPE Steven Mhone Procurement Specialist Malawi AFTPE Chitambala John Procurement Specialist South Africa AFTPE Sikazwe Patrick Piker Umah Senior Financial Management Specialist/Regional Regional Financial AFTME Tete Coordinator Management Coordinator Trust Chimaliro Financial Management Specialist Malawi AFTME Lingson Chikoti Financial Management Specialist Zambia AFTME Elvis Langa Financial Management Analyst Mozambique AFTME Tandile Msiwa Financial Specialist South Africa AFTME Marie-Claudine Fundi Language Program Assistant AFTA2 Zione Kansinde Team Assistant Malawi AFCS3 Celia Dos Santos Faias Team Assistant Mozambique AFCS2 Hellen Mungaila Team Assistant Zambia AFCS3 Gbangi Kimboko Procurement Assistant AFTA3 Hawanty Page Senior Program Assistant AFTA3 Ofumilayo Fewo Program Assistant AFTA2 Olympio Non Bank Staff Name Title Office Phone City Matt McMahon Consultant Alexandre Diouf FAO Consultant D6sir6 Coquillat FAO Consultant Daniel Sousa Consultant X1 Locations Country First Administrative Division Location Planned Actual Comments Botswana CCARDESA (Gaborone) Malawi MoAFS research stations countrywide Mozambique 11AM research stations countrywide Zambia ZARI research stations countrywide xi REGIONAL AGRICULTURAL PRODUCTIVITY PROGRAM FOR SOUTHERN AFRICA I. STRATEGIC CONTEXT A. Regional and country context 1. Agriculture underpins the economy throughout much of southern Africa. The countries of southern Africa1 are home to about 277 million people and generate total Gross Domestic Product (GDP) of around US$575 billion.2 Agriculture varies in importance from country to country, but across the entire region it is the primary source of subsistence, employment, and income for most of the population. Particularly in the lower income countries, agriculture is the largest contributor to GDP, and the performance of the agricultural sector has a strong influence on growth, employment, food security, and poverty. Agricultural growth contributes to overall economic growth not only because agriculture makes up a significant share of GDP, but also because growth in the agricultural sector has a strong multiplier effect on non-agricultural sectors through production and consumption linkages. 2. Food crops production is the dominant agricultural activity. Agriculture in southern Africa is dominated by production of food crops, including cereals (e.g., maize, sorghum, rice), roots and tubers (e.g., cassava, sweet potato), and food legumes (e.g., groundnuts, beans, soybeans). The performance of the food crops sub-sector significantly affects the performance of the agricultural sector overall, as well as incomes and poverty levels throughout the entire economy, not only because of the scale effect (millions of poor rural households benefit directly from increased production of food crops through own consumption and sales), but also because of price effects (poor households in rural and urban areas benefit indirectly from increased production of food crops, through lower food prices). 3. Agricultural productivity is far below potential. Agricultural productivity has increased in recent years throughout sub-Saharan Africa (SSA) and within southern Africa in particular, but most of the growth has come from bringing previously uncultivated land into production, rather than from intensification made possible by technical change. Comparisons of total factor productivity growth have shown that during the past decade, technical change accounted for a large share of agricultural productivity growth in Asia and Latin America, but a very small share of agricultural productivity growth in Africa. Southern Africa has experienced more technology- driven productivity growth than other regions in Africa, but the gains have occurred mainly in middle income countries. Analysis has identified a number of yield gaps (the difference between actual and potential yields) that could be narrowed with additional investments in technology adaptation and dissemination. 4. Food and nutrition insecurity is widespread. Even though the performance of agriculture in southern Africa has improved recently, the sub-region as a whole suffers from periodic food deficits and recurring food price crises, as well as some of the worst nutrition indicators in the 1 The region referred to in this document as "southern Africa" includes Angola, Botswana, Lesotho, Madagascar, Malawi, Mozambique, Mauritius, Namibia, Seychelles, Swaziland, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. 2 Source: www.sadc.int (accessed January 26, 2013). 1 world. According to UNICEF (2012), southern Africa has shown no improvement since 1990 in reducing the proportion of children who are underweight, and the absolute number of underweight children has actually increased, due mainly to recurring food crises associated with drought, and rising levels of poverty. At the same time, HIV/AIDS has posed serious challenges to nutrition development. One out of five children in Malawi, Mozambique, and Zambia is underweight, and the proportion of underweight children in Lesotho and Zimbabwe is higher today than it was in 1990. 5. Vulnerability to climate change is increasing. Southern Africa is vulnerable to climate shocks, which have the potential to impact food security adversely. Recent analysis has revealed that shifts in climate patterns are likely to expose many countries in southern Africa to greater variability and more pronounced extremes of temperature and rainfall. Adaptation measures- particularly the adoption of climate-smart agricultural practices-will be needed to maintain productivity and ensure resilience in the face of more frequent and more severe shocks. 6. Agriculture has the potential to drive growth and poverty reduction. The World Development Report 2008: Agriculture for Development (World Bank, 2007) concluded that agricultural growth is the key to achieving overall growth, reducing poverty, and increasing food security for the rural poor. Growth originating in agriculture is four times as effective in reducing poverty as growth originating outside of the agricultural sector. Agricultural growth depends greatly on improvements in agricultural productivity, and investments in agricultural research and technology are among the most important determinants of agricultural productivity. The World Development Report emphasized that agricultural growth in Africa has been driven mainly by expanding cultivated area, a strategy that is far from sustainable. An alternative strategy is to create the conditions that enable agricultural productivity to increase. 7. An increasingly integrated regional market presents opportunities for agriculture. Southern Africa includes both low income and middle income countries and hosts two well- established pan-African institutions covering agriculture and commerce-the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA). The presence within the region of seven middle-income countries,3 including South Africa, provides a large regional market for agricultural products. The extensive area falling within the so-called Guinea Savannah zone shows strong potential for highly productive commercial agriculture, similar to that found in similar zones of Latin America and Asia (World Bank, 2006). Reforms instituted at both regional and national levels have resulted in a more conducive policy environment for growth in the agriculture sector. While some exceptions exist, reforms have reduced barriers to trade in agricultural commodities, addressed taxation and price policies that provided negative incentives of producers and improved the availability of improved agricultural technologies-particularly inputs. B. Sectoral and institutional context 8. Investment in agricultural research and development (R&D) is needed to get agriculture going. Improvements in agricultural productivity come from investments in agricultural R&D. Hundreds of published studies have confirmed that the returns to investments in agricultural R&D are consistently very high. For a number of reasons, however, investment in 3 Angola, Botswana, Mauritius, Namibia, Seychelles, South Africa, and Swaziland. 2 agricultural R&D, both in the private sector and in the public sector, is frequently well below optimal levels. Private firms tend to underinvest in R&D because of the difficulty of appropriating the benefits of research. Governments tend to underinvest in R&D because some of the benefits spill over to other countries. 9. Agricultural research i*s underfunded, particularly in Africa. A recent assessment by the Agricultural Science and Technology Indicators (ASTI) initiative shows low levels of investment throughout Africa in agricultural R&D, as well as a high degree of fragmentation (Figure 1). Public agricultural R&D investment in Africa-estimated to total about US$1.7 billion in 2008-is similar to that in Brazil, but in Africa the same level of investment supports more than twice as many full-time-equivalent scientists, implying that operating budgets are much lower in Africa. Similarly, although Africa, India, and the United States have roughly the same cropped area, Africa has approximately 390 public research institutes, compared to 120 in India and only 51 in the United States. The dispersion of R&D investment and agricultural scientists in Africa across so many small institutes makes it difficult to assemble in the same location the critical mass of researchers needed to address the generally more complex problems of African agriculture. Figure 1: Agricultural R&D indicators, southern Africa Public Ag. R&D spending as a % ofAg. GDP # of Public Sector Ag. Researchers Source: A IouScehAfr: 10 Rin arical00 Moornbiq-o Source: ASTI Source: ASTI 10. Regional integration can help agricultural R&D pay off. Regional integration has proven to be an effective strategy that can allow groups of countries facing common research challenges to increase the efficiency of their investments in agricultural R&D. Adoption of a regional approach to research based on the concentration of resources within a reduced number of large, specialized research institutes serving an expansive shared technology space can deliver a number of benefits. First, it can reduce duplication by allowing a single regional research institute to undertake work that otherwise would be done in parallel within multiple national research institutes. Second, it can help capture economies of scale by concentrating resources within a single institute, where they can achieve a critical mass. Third, it can increase the payoffs to research by facilitating dissemination of improved technologies across national borders, thereby vastly increasing the number of beneficiaries. Fourth, it can mitigate the isolation that frequently occurs in small, fragmented research institutes by creating effective mechanisms for facilitating knowledge exchange and technology transfer. 3 Box 1: Benefits of regional research collaboration - An example from East Africa Funded with US$120 million in IDA funds, the East Africa Agricultural Productivity Program (EAAPP) is a regional agricultural research program linking Ethiopia, Kenya, Tanzania, and Uganda. Each participating country holds lead responsibility for a particular commodity or commodity group, research on which is carried out by a regional Center of Excellence working in collaboration with other research institutes in all four countries. The regional approach being used under EAAPP has proved to be an effective mechanism not only for developing new technologies, but also for facilitating the dissemination of scientific knowledge and research materials across national boundaries. For example, in 2011 and 2012, 100 bread wheat lines adapted to optimum wheat growing environments were distributed from the Wheat Regional Center of Excellence in Ethiopia to wheat breeding institutes in Uganda, Kenya, and Tanzania, where they were evaluated under local conditions. Breeders in the latter three countries have identified a number of high- performing lines and are crossing them with superior local materials. Improved varieties developed from these crosses are expected to be released in the coming years, bringing significant benefits to wheat producers and consumers. 11. Southern Africa offers attractive opportunities for regional research. Groups of countries within southern Africa share similar agro-ecological zones and farming systems, suggesting that there is potential for finding shared solutions to common problems. Technology spillover is already occurring within the sub-region, and a number of high-yielding crop varieties and improved crop and livestock management practices have been successfully disseminated across borders. Significant unrealized potential remains, however, for expanding spillovers. Recent analysis done by the International Food Policy Research Institute (IFPRI) identified opportunities for technology spillover between SADC countries based on trends in regional demand for major crop and livestock products, characteristics of local agricultural production environments, and current patterns of production. The analysis revealed numerous instances in which SADC countries could take advantage of existing technologies that are well adapted to their production environments to increase production of crop and livestock products for which there is unmet demand within the sub-region. 12. Agricultural technology generation and dissemination systems in southern Africa can be more effective and more efficient. The policy conditions needed to facilitate the movement of agricultural technology within the sub-region are in place, but national systems face challenges in improving their technology and service delivery systems, including a lack of capacity to implement technology transfer, ineffective extension services, and bottlenecks in information systems for innovation. National systems for generating and disseminating agricultural technology are operating well below their potential, constrained by inadequate facilities, shortages of qualified staff, and low levels of overall investment and budget support. These factors, in turn, are linked to the high degree of fragmentation in the deployment of resources within the sector, as limited financing is spread over a range of priorities. Given the small size of many countries and economies in the sub-region, few can afford fully elaborated technology development systems capable of addressing all of the crops and livestock breeds in their highly diversified production systems. 13. Regional integration is part of the CAADP productivity agenda. The majority of African counties-including many of the countries in southern Africa-are pursuing national agricultural development strategies within the framework of the Comprehensive Africa 4 Agriculture Development Programme (CAADP).4 CAADP has identified lagging agricultural productivity growth as a central constraint that must be overcome if countries are to achieve desired rates of agricultural production increases. CAADP has articulated a set of priorities and best practices needed to boost agricultural productivity growth. These are embodied in the Framework for African Agricultural Productivity (FAAP), which among other things calls for massively scaling up regional collaboration in agricultural R&D as a way to efficiently address capacity constraints and increase technology spillovers. 14. Support for a regional approach to agricultural R&D is growing. SADC has taken a proactive role in pursuing the agricultural productivity agenda. It has expressed strong ownership of a regional approach to agricultural research focusing on programs that are of strategic importance to the region and that have large potential for spillovers across country borders. Public proclamations concerning the commitment to a regional approach are being backed up by concrete actions. For example, SADC member states have adopted a common seed certification policy, with the aim of increasing the movement of improved germplasm across national borders. More importantly, they are in the process of finalizing a regional agricultural policy initiative that would put in place mechanisms to support policy harmonization, improved flow of agricultural information, and increased integration of input and output markets. 15. A new institutional mechanism is in place to help coordinate regional research. In 2011, SADC member states established the Centre for Coordination of Agricultural Research and Development for Southern Africa (CCARDESA) as a sub-regional body to lead collaboration in agricultural R&D. CCARDESA, which became operational in 2012, has identified five major objectives: (i) to coordinate and promote collaboration among regional and national agricultural research and extension systems through regional and international cooperation; (ii) to facilitate the exchange of information and technology among the SADC regional R&D institutions; (iii) to promote SADC region partnerships between public, private, civil society and international organizations in R&D; (iv) to improve agricultural technology generation, dissemination and adoption in the region through collective efforts, training and capacity building; and (v) to strengthen national R&D institutions by mobilizing human, financial and technological resources to implement and sustain demand-driven activities. C. Higher-level objectives to which the Project contributes 16. The Agricultural Productivity Program for Southern Africa (APPSA) seeks to improve technology generation and dissemination within and among participating countries in southern Africa by building capacity within national R&D systems and enhancing regional collaboration. APPSA will be launched with the participation of three countries-Malawi, Mozambique, and Zambia. It is expected that additional countries within the SADC region will join as APPSA evolves and expands. 17. APPSA's focus on agricultural technology within the context of a regional approach is well aligned with the objectives of the World Bank's Africa Strategy. The Africa Strategy emphasizes the need for investments to improve the competitiveness and resilience5 of African 4 CAADP is an African-owned initiative under which African countries are being encouraged to improve the quality of their agricultural planning and policy making, so as to provide the basis for scaled-up investment in the sector. Africa Strategy: Pillar 1 - Competitiveness and Employment; Pillar 3 - Vulnerability and Resilience. 5 agriculture, and it identifies regional integration as an important mechanism to achieve higher rates of growth and poverty reduction. The Africa Strategy also highlights the scope for drawing important lessons from middle income countries and taking advantage of opportunities for them to serve as catalysts for growth and development to the rest of Africa. APPSA is part of a larger commitment by the International Development Association (IDA) to help countries enhance long-term availability of safe and nutritious food by providing a mix of short-term interventions designed to stimulate rapid supply responses and sustainable medium- and longer-term investments in agricultural productivity, taking into account opportunities for food safety and nutrition enhancement. 18. APPSA is consistent with the World Bank's Regional Integration Assistance Strategy (RIAS), specifically with the third pillar, which calls for interventions to boost agricultural productivity; improve preparedness to analyze and respond to trans-boundary pandemics, other infectious diseases, and pests; and the rationalization of regional research and tertiary education efforts. APPSA meets the regional project eligibility criteria of IDA. The Project will: (i) support activities that will be coordinated across three or more countries; (ii) generate benefits that spill over country boundaries; (iii) continue to enjoy strong support from SADC; (iv) provide a platform for policy harmonization; and (v) be part of the regional agricultural strategy. 19. APPSA is aligned with the principal objectives articulated in the national development strategies of the participating countries. * Malawi: APPSA will support the Growth and Development Strategy II, which has targeted agriculture as the driver of economic growth and food and nutrition security. It will also support the Agriculture Sector-wide Approach (ASWAp), which is seeking to increase productivity by supporting, among other things, a cross-cutting program on technology generation and dissemination. * Mozambique: APPSA will support the national poverty reduction strategy, Plano de Acqdo de Reduqdo de Pobreza (PARP), which has three main pillars: (i) increasing production and productivity in the agricultural and fisheries sectors; (ii) promoting employment; and (iii) fostering human and social development. * Zambia: APPSA will support the Sixth National Development Plan 2011-15, which identifies agriculture, livestock, fisheries, mining, tourism, and manufacturing as growth areas that could contribute significantly to Zambia's Vision 2030 and its targets for broad based pro-poor growth, food and nutrition security, employment creation and human development. 20. The objectives of APPSA are well aligned with the World Bank Country Assistance Strategies in all three participating countries, including the Malawi Country Assistance Strategy 2013 to 2016; the Mozambique Country Partnership Strategy 2012 to 2015; and the Zambia Country Partnership Strategy 2013 to 2016. 6 II. PROJECT DEVELOPMENT OBJECTIVES A. Project Development Objective (PDO) 21. In pursuit of the longer term goal of improving productivity and production of safe and nutritious food within priority farming systems in southern Africa, the PDO is to increase the availability of improved agricultural technologies in participating countries in the SADC region. APPSA will pursue this objective by: (i) establishing Regional Centers of Leadership (RCoLs) on commodities of regional importance, thereby allowing regional specialization around priority farming systems and more strategic investment in agricultural research capacity; (ii) supporting regional collaboration in agricultural research, technology dissemination, and training; and (iii) facilitating increased sharing of agricultural information, knowledge, and technology among participating countries. B. Project beneficiaries 22. The primary beneficiaries of APPSA are farmers, livestock producers, and other potential end users of the improved technology and knowledge generated and/or disseminated by the Project. APPSA will work directly with a subset of the primary beneficiaries, namely, Lead Farmers, who will contribute to setting R&D priorities and participate in on-farm trials, technology demonstrations, and training activities. APPSA will also benefit other stakeholders within the national agricultural research systems (NARS): agricultural researchers; extension agents and advisory services providers; and seed producers and suppliers. These groups will benefit by participating in R&D projects and training activities, or by using technology and knowledge made available through the Project. Every R&D project financed under APPSA will have a dissemination plan and will support activities designed to ensure that new technologies do not remain "on the shelf' but instead begin to move into the dissemination pipeline. At least 30 percent of all Lead Farmers and others targeted for participation in APPSA activities will be female. 7 C. PDO Level Results Indicators CoreTagtt PDO Cor Outcome Indicators Baseline Target at Indicator Project end N Number of technologies that are being made 0 93 available to farmers and other end users7 To increase the Percentage of Lead Farmers in targeted availability of N areas who are aware of an improved 0 85 improved technology promoted by the Project8 agricultural technologies Number of technologies generated or iticipatingeN promoted by the Project in one participating incountry that are released in another 0 50 countries in the participating country SADC region Direct Project beneficiaries9 (number) 0 6,100,000 r of whichfemale (percentage) 0 >3000 III. PROJECT DESCRIPTION A. Project components 23. APPSA will support agricultural research, technology dissemination, and capacity building activities associated with RCoLs. Priority farming systems for each RCoL have been identified on the basis of a regional priority-setting study that identified leading R&D priorities for the SADC region, 10 as well as the priorities indicated by each country. Malawi has elected to establish an RCoL focusing on maize and maize-based farming systems. Mozambique has elected to establish an RCoL focusing on rice and rice-based farming systems. Zambia has elected to establish an RCoL focusing on food legumes and food legumes-based farming systems. 24. An RCoL is defined as a leading agricultural technology center or program with established capacity (or the potential to establish capacity) that distinguishes it as a leader in the region and beyond. An RCoL should be in a position to provide leadership in the areas of research, technology dissemination, and training because it has the capacity to: (i) establish a critical mass of qualified staff; (ii) put in place high-quality facilities; (iii) develop and manage complex projects; (iv) connect to the global research system; (v) create partnerships; and (vi) facilitate the process of institutional learning and change that underpins a dynamic technology innovation system. 6 Targets are aggregated across all three participating countnhes. Refers to technologies developed and/or promoted by the Project. Availability of technologies to farmers and other end users will be determined based on simple and pragmatic measures, which will vary depending on the type of technology. In the case of improved germplasm, the technology will be considered available to farmers if seed is being produced and distributed. In the case of improved management practices, the technology will be considered available to farmers and other end users if the practice has been promoted or is currently being promoted by the public or private sector. Technologies will be disaggregated by crop. Awareness will be measured through periodic surveys of farmers. The surveys will measure the awareness of farmers about specific technologies promoted by the Project. This measure is based on a calculation of the numbers of farmers exposed to each technology or technology message. 10 IFPRI (2009). 8 25. APPSA will include three components: (1) Technology Generation and Dissemination; (2) Strengthening Regional Centers of Leadership; and (3) Coordination and Facilitation. 26. Component 1: Technology Generation and Dissemination (US$37.98 million of which US$37.24 million IDA Credit). Component I will finance technology generation and dissemination activities associated with the commodity or commodity group" being targeted by RCoLs. These activities will be guided by a regional R&D agenda developed through a participatory process coordinated by the RCoL and CCARDESA. Preliminary regional R&D agendas for the three targeted commodities were developed as part of the preparation of each country's RCoL proposal. These preliminary agendas will be further refined and periodically updated during implementation as part of the regional planning process. The Project will support not only technology generation activities (research), but also technology dissemination activities (extension, strengthening of innovation systems). During the early years of Project implementation when few, if any, improved technologies will be available that have been generated by the Project, dissemination activities are likely to focus on promotion of technologies developed before the Project got underway. 27. All activities financed under Component I will be undertaken through collaborative R&D projects involving the participation of at least two countries. R&D projects will focus on regional priorities. R&D projects will support collaborative research, technology dissemination, training, and other activities (e.g. knowledge exchange). The proposal for each R&D project will identify a clear objective or specify a well-defined hypothesis and describe a detailed set of activities that will be carried out within a defined time frame and budget. It will outline the collaborative implementation arrangements, detailing the roles and responsibilities of the institutions involved including the participating staff. Every R&D project proposal will present a results framework that is aligned with the RCoL results framework, as well as an explanation of how performance indicators will be monitored. All R&D projects will include a set of activities designed to ensure that technologies generated through APPSA enter the dissemination system and are made available to farmers and other end users. Efforts will be made to take advantage of cutting-edge information and communication technology (ICT) to increase the effectiveness of technology dissemination activities by reaching an expanded set of actors throughout the value chain. 28. R&D projects will be developed through the following process: (i) for each commodity being targeted by APPSA, priorities will be identified and endorsed at national level; (ii) draft concept notes will be developed through communication with other regional partners; (iii) for each commodity being targeted by APPSA, regional planning meetings will be convened by CCARDESA to facilitate the finalization of regional research and dissemination priorities and associated R&D project proposals; (iv) a peer review process facilitated by CCARDESA will provide feedback on the relevance and quality of R&D project proposals; and (v) R&D project proposals will be confirmed and agreed at national level. (R&D project implementation modalities are described in more detail in Annex 2). 29. Each country will participate in R&D projects relating to the commodity farming system being targeted by the RCoL that they are hosting, as well as in R&D projects relating to the commodity farming systems being targeted by RCoLs in other countries. Each country is expected to devote the largest share of its Component 1 funding to R&D projects related to the Research may target the commodity itself, or the larger farming system within which that commodity is produced. 9 commodity farming system being targeted by the RCoL that it is hosting, but a portion of its Component 1 funds will go to support R&D projects related to the commodity farming systems being targeted by RCoLs hosted by other countries. It is expected that most of the R&D projects on a particular commodity system will be led by researchers from the country hosting the RCoL on that commodity system. Some R&D projects, however, could be led by researchers in countries other than the country hosting the RCoL on that commodity system. In cases where a country does not lead an R&D project on the commodity system being targeted by the RCoL that it is hosting, the country will nevertheless participate as a collaborating institution. 30. Technology generation priorities: Research priorities are expected to cover the full range of issues associated with the commodity or commodity group, including germplasm collection and characterization, germplasm improvement (plant breeding), crop management, and post- harvest activities including processing and storage. (See Annex 2 for detailed lists of the research priorities tentatively identified for each RCoL.) 31. Technology dissemination priorities: APPSA will support the dissemination of improved technologies by providing resources for RCoLs to engage with a range of partners in scaling up the use of promising innovations of relevance to the targeted commodities. APPSA will help to strengthen the links between researchers, extension agents, input distributors, and farmers and other end users, but lead responsibility for technology dissemination will remain with the national extension system. 32. Technology dissemination activities supported by APPSA will be designed to encourage participation by diverse partners, in line with FAAP principles of pluralism. The pluralistic and inclusive "innovation systems" approach is expected to focus on: * Improving the content and accessibility of technology messages and knowledge products around maize, rice, and food legumes technologies, including the use of information and communication technologies; * Improving the capacity of advisory service providers through technical training of Lead Farmers, extension agents, and other actors in private sector or civil society; * Strengthening the capacity of dissemination officers or technology transfer specialists in research institutes, to enable them to engage more effectively with farmers, extension agents, and advisory service providers; * Establishing or improving platforms for dialogue and consultation around technology priorities with farmers, private sector, and civil society; * Improving farmer-research-extension feedback mechanisms to obtain a better analysis of farmer preferences; * Exchanging information and experiences with other participating countries; * Conducting research on technology dissemination methods or tools, including those targeting gender specific issues such as household nutrition and food safety. 33. APPSA will support the expansion of seed multiplication capacity within RCoLs, with the goal of increasing the availability of seed for further multiplication (by farmer-producers, farmer associations, NGOs, or private firms). APPSA will also support the production of farm 10 implements and simple farm machinery, as well as the testing of farm implements and farm machinery in pilot schemes. 34. Component 2: Strengthening Regional Centers of Leadership (US$37.85 million of which US$37.79 million IDA Credit). Component 2 will support activities to strengthen the core capacity of the RCoLs. The choice of activities to be financed will be driven primarily by the specific needs of each RCoL, as identified at national level. In general APPSA will support: (i) upgrading of research infrastructure including rehabilitation and construction of physical infrastructure; farm, laboratory, and office equipment; and information technology and knowledge management systems; (ii) improving administration and performance management systems; (iii) developing human capital including by providing scientific training at the post graduate level; by upgrading skills through short courses or targeted training, and scientific exchanges; and (iv) strengthening seed production capacity, seed regulatory functions, and related services.12 35. Malawi: Investments will focus on improving existing facilities at the Chitedze Research Station, the main research facility for the national maize program, as well as other research stations under MoAFS. The quality of physical infrastructure is generally adequate at Chitedze Research Station, so most improvement will take place within satellite stations. Deficiencies in laboratory analytical capacity pose a major constraint across the system, so APPSA financing will be used to purchase scientific equipment for crop breeding, entomology, plant pathology, mycotoxin, soil and plant analysis, and food technology. These latter investments will also strengthen the analytical capacity of MoAFS to perform seed regulatory functions. 36. The national maize program in Malawi currently has capacity in breeding and agronomy, but gaps have been identified in the areas of economics, biotechnology, irrigation, plant pathology, entomology, information systems, and soil science. While some gaps are expected to be filled by re-assignment, additional training in the above categories will be needed. APPSA will finance short term and post-graduate training at the MSc and PhD levels. 37. Mozambique: Investments in Mozambique will focus on strengthening capacity, primarily in the Instituto de Investigaqjo Agraria de Moqambique (IIAM), but also in the extension service of the Ministry of Agriculture (MINAG) and other related institutions. To strengthen the capacity of the national rice program, IIAM proposes to establish a new research facility around Quelimane in Zambezia province, located in central Mozambique. With the help of analysis undertaken by IIAM, a site in Namacurra district has been identified based on proximity to rice production clusters, accessibility, water quality, and level of investment needs. The site is close to the location where the national rice program is currently undertaking field testing and laboratory analysis in a temporary space. Further feasibility assessments including detailed design work are needed to develop a full-fledged facility. The size of the new facility will expand the area available for field testing and multiplication to approximately 50 hectares. 38. APPSA financing will also be used to build laboratory analytical capacity in soil, water, and plant analysis, biotechnology, seed quality, geographic information systems (GIS) and simulation modeling, agro-processing and storage, pests and diseases identification, and grain physical and chemical analysis. The Rice RCoL will draw on scientists from IIAM, the CGIAR system, and private firms, but staffing gaps have been identified in the areas of molecular 12 In some countries, seed regulatory functions and related services are carried out by specialized institutions. 11 biology, agronomy (soil, water, and environment), mechanization and agro-processing, economics, extension, sociology, and innovation systems. APPSA will finance short term and post-graduate training at the MSc and PhD levels. 39. 11AM has relatively few scientists working at headquarters and in zonal research stations. To address human resource gaps, APPSA will finance the recruitment of new research staff. The Government has agreed to gradually absorb the cost of these positions. APPSA financing will initially fund 100 percent of newly recruited research staff, but cost sharing measures will be introduced at the beginning of the second year of Project implementation, and by Project closing the salaries of all staff will be paid entirely by Government. 40. Zambia: Investments in Zambia will focus on the Zambia Agriculture Research Institute (ZARI), with the Kabwe Research Station designated as the main location for the Food Legumes RCoL. APPSA financing will also be used to support other ZARI stations that carry out research on food legumes, including cowpeas, groundnuts, soybeans, common beans, and pigeon peas. Support will also be provided to the Ministry of Agriculture and Livestock (MAL) to strengthen technology dissemination capacity, and to the Golden Valley Agricultural Research Trust (GART) to build capacity for research on cereals that are grown as part of the food legume-, rice-, and maize-based farming systems. 41. The physical infrastructure at ZARI is generally adequate, but some construction, upgrading and refurbishing will be required, particularly rehabilitation of greenhouses and cold rooms. APPSA financing will be used to purchase farm, laboratory, and office equipment needed to carry out field trials and laboratory analyses. APPSA financing will also address gaps in scientific capacity that have been identified in breeding, agronomy, pathology, entomology, biometrics, soil fertility, farming systems, genetic conservation, extension, and information management. APPSA will finance short- and long-term training at the MSc and PhD levels. 42. Component 3: Coordination and Facilitation (US$18.81 million of which US$14.37 million IDA Credit, and US$0.6 million Regional IDA Grant). Component 3 will finance three main categories of activities: 43. National level research coordination and management: At national level, APPSA will finance project coordination activities, including planning and budgeting, management and administration, monitoring and evaluation, safeguards compliance, and regional engagement. If necessary, APPSA could finance consultants to ensure that all essential project coordination activities are carried out effectively. Government counterpart resources will be used to pay staff- related costs not eligible for IDA funding. 44. Regional facilitation by CCARDESA: At the regional level, APPSA will finance regional facilitation activities including: (i) planning, monitoring and evaluation activities related to regional collaboration; (ii) regional exchange of information, knowledge and technologies; and (iii) technical assistance and capacity building. Many of these activities will be carried out by CCARDESA, which will play an important role in facilitating the development of R&D projects, including organizing the peer review process and providing quality control. 45. The regional facilitation activities to be performed by CCARDESA will be supported using funds from two sources. During the first 12 to 18 months of Project implementation, the activities carried out by CCARDESA will be supported using the Regional IDA grant. Once the Regional IDA Grant has been fully used, regional facilitation activities will be financed by the 12 participating APPSA countries through their IDA Credits. Financing will be provided to CCARDESA in tranches on the basis of agreed annual work plans and budgets (AWP&Bs).13 46. R&D policy analysis and dialogue: APPSA financing will support analytical work, needs assessments, and policy dialogue or policy harmonization activities in key areas that affect R&D at national and regional level. Work will focus on analysis of relevant policies and legislation for intellectual property rights, operationalization of the SADC harmonized seed regulatory system, implementation of biosafety regulations, and similar topics. Discussions will take place during implementation to determine whether Project resources could be used productively to advance the regional seed agenda. If the participating countries agree that APPSA could play a useful role by supporting key players other than the RCoLs, support for these key players could be channeled through CCARDESA. Box 2: Support for SADC regional seed regulatory system SADC is currently rolling out its harmonized seed regulatory system, which is expected to (i) strengthen systems and structures for seed inspection, testing, and certification across the region; (ii) establish a regional variety release catalogue; and (iii) strengthen alignment of national seed systems to SADC harmonized seed policy. APPSA investments in Component 2 at the national level are expected to support the national seed authorities in Malawi, Mozambique, and Zambia in building their capacity and aligning national legislation and regulatory systems to the harmonized regional system. Additional support may be provided under Component 3 at the regional level for support by the SADC Seed Center in facilitating these activities, particularly in technical assistance and capacity building; information and knowledge management; and addressing policy gaps in intellectual property rights. B. Project financing Lending instrument 47. APPSA will be financed using a Specific Investment Loan (SIL) covering a period of six years. If additional countries express interest in joining APPSA, these countries could be admitted to the Project by means of additional financing to the original SIL or through a new parallel SIL. In the latter case, even though the new parallel SIL might involve only a single new country, since commitment to the regional approach would be a condition for joining, the operation would still be considered part of the regional program. Project cost and financing 48. The total Project cost is US$94.6 million. Of this amount, each participating country will contribute US$29.8 million in IDA, one third drawn from its IDA envelope and two thirds For CCARDESA to perform its regional coordination role, a US$3 million budget envelope will be required over the six years of Project implementation. Funding for this amount will be sourced from a Regional IDA Grant to CCARDESA in the amount of US$0.6 million equivalent, which will be used during the first 12 to 18 months of implementation. The remaining US$2.4 million will come from the IDA Credits to the participating countries. 13 leveraged from regional IDA resources.14 Each country has agreed to contribute US$0.8 million over six years to finance APPSA-related regional facilitation activities to be carried out by CCARDESA. To enable a quick start-up, US$0.6 million will also be made available in the form of a Regional IDA Grant to CCARDESA. The US$2.4 million will come from the IDA Credits of the three participating countries.15 49. Regional IDA Grant to CCARDESA. The Regional IDA Grant to CCARDESA will be used to jump-start Project implementation and allow regional facilitation activities to be initiated immediately following Board approval. Experience from similar operations has shown that establishing a joint financing mechanism and initiating the transfer of funds to a regional entity can take time. The Regional IDA Grant will finance activities taking place mainly during the first year of implementation, as described in Component 3. These activities will include technical assistance, capacity building, regional consultations, and support for the design of R&D projects. 50. CCARDESA meets the eligibility criteria for Regional IDA Grant financing: (i) it is a SADC institution established through a charter signed by fourteen SADC Member States, and it has the legal status and the fiduciary capacity to receive grant funding, as well as the legal authority to carry out the activities financed; (ii) it is not eligible to directly sign and receive an IDA Credit; (iii) during the early stages of implementation, the costs of the regional coordination activities to be financed by the Regional IDA Grant are not easily allocated to national programs; (iv) the activities to be financed with the Regional IDA Grant are eligible for Regional Grant resources because they are designed to facilitate implementation of APPSA, which has as its objective the production of regional public goods in the form of improved agricultural technologies; (v) grant co-financing for the activity is not readily available from other development partners; and (vi) CCARDESA will perform a regional coordination function in APPSA, an IDA-funded regional operation. 14 Each participating country has secured a Project Preparation Advance (PPA) to undertake key studies and initiate Project preparation activities. The Malawi PPA for US$1.0 million became effective on September 7, 2012. The Mozambique PPA for US$1.23 million became effective on September 19, 2012. The Zambia PPA for US$1.097 million became effective n September 20, 2012. 15 Should additional countries join APPSA in future, each newly joining country would be expected to make a similar contribution to support CCARDESA's regional facilitation role. 14 Table 1: Project costs and financing (US$ million) Project costs Totals with contingencies Project components Overall IDA Credit Regional Percent of Malawi Moz. Zambia Total oal iancit IDA Grant Total IDA financing financing 1. Technology 11.65 11.68 12.41 35.74 37.98 37.24 0.0 42 Generation and Dissemination 2. Strengthening 11.52 11.13 12.46 35.11 37.85 37.79 0.0 42 Regional Centers of Leadership 3. Coordination and 5.68 7.52 4.88 18.08 18.81 14.37 0.60 16 Facilitation Total Baseline Costs 28.85 30.33 29.75 88.93 94.64 89.40 0.60 100 Physical contingencies 0.44 0.36 0.42 1.22 Price contingencies 1.51 1.67 1.31 4.49 Total Project Costs 30.80 32.36 31.48 94.64 94.64 89.40 0.60 C. Lessons learned and reflected in the Project design 51. Lessons learned from other regional agricultural productivity programs. The design of APPSA has been informed by lessons learned under the West Africa Agricultural Productivity Program (WAAPP) and EAAPP. The implementation experience of these two regional programs has highlighted the importance of: (i) developing strong collaboration among participating countries and stakeholders (including building strong communication systems); (ii) focusing on technology adoption in addition to technology generation, which often requires partnerships with other institutions or programs; (iii) supporting implementation readiness at early stages; (iv) developing in timely fashion implementation mechanisms and identifying very early on potential problems in the interface between national and regional arrangements; (v) grounding the Project in a strong results framework and M&E system; (vi) drawing up comprehensive training plans and objectives to guide long-term training initiatives; (vii) securing strong support from regional institutions; (vii) allocating appropriate amounts of resources for preparation and supervision, taking into account the higher costs associated with regional programs; and (viii) accessing additional resources to provide funding for regional facilitation activities while joint financing mechanisms and transfer of funds between countries and regional institutions are established. 52. Support to agricultural technology dissemination systems. A large body of global experience indicates that development and dissemination of agricultural technology is much more likely to succeed when support to agricultural research, extension, and training systems is well integrated. Measures that can help ensure strong linkages between research, extension, and training include: (i) establishment of a two-way feedback system between extension and research to ensure that the technologies made available for transfer to beneficiaries are appropriate; (ii) use of flexible, decentralized, and demand-driven technology delivery systems that involve 15 local professionals and beneficiaries in extension activities; and (iii) creation of responsive training programs that can provide extension staff with the skills necessary to do their jobs effectively, while at the same time sensitizing them to emerging technologies. IV. IMPLEMENTATION A. Institutional and implementation arrangements 53. Links to national programs. At the national level, APPSA will be linked to national projects and programs, and managed if possible through existing coordination units or teams. 54. Malawi: In Malawi, MoAFS will have overall responsibility for APPSA supervision and coordination. APPSA will be implemented through existing country institutions, with day-to-day implementation responsibility delegated to an APPSA Secretariat hosted at the Chitedze Research Station. The Project will be integrated into the ASWAp and its management structure, which includes a multi-stakeholder platform for steering ASWAp activities. The complement of staff at Chitedze Research Station will need to be strengthened, given current high vacancy rates and the additional demands of APPSA implementation. Additional civil service positions to support implementation will be financed through the Government budget. APPSA financing may be used to hire consultants to fill gaps where there is insufficient capacity within the civil service. 55. Mozambique: In Mozambique, MINAG will have overall responsibility for APPSA supervision and coordination. Responsibility for direct oversight of APPSA implementation will lie with the Director General of IIAM. IIAM management structures will be supported by a Technical and Scientific Committee, which will be responsible for assessing the scientific and technical merit of research supported under APPSA. The Technical and Scientific Committee will be comprised of the IIAM research program coordinators, as well as other national and international researchers and academicians invited according to the theme under evaluation. APPSA financing will support consultants to fill gaps where there is insufficient experience or capacity within IIAM. 56. Zambia: In Zambia, MAL will have overall responsibility for APPSA supervision and coordination. APPSA will be implemented by ZARI, which currently is part of MAL. Management and administration personnel-primarily financial management and procurement specialists-will be financed through Government budget if seconded from the public sector or engaged as consultants with APPSA financing. Implementation will be guided by a Steering Committee comprised of key stakeholder institutions and including representatives from farmer organizations, research institutes, the seed certification authority, training institutions, extension services, the private seed industry, processors, and agribusiness. 57. Regional implementation mechanisms. Because APPSA is a regional program, implementation will be based on partnerships and collaboration among the participating countries. Countries will work together in a number of ways: (i) by undertaking joint technology generation and dissemination activities through collaborative R&D projects; (ii) by coordinating activities taking place at the national level to contribute to the achievement of common regional objectives; and (iii) by sharing knowledge and technological outputs from their national programs throughout the region. To the extent possible, APPSA implementation will rely on 16 existing regional platforms, networks, and partnerships to share information and create opportunities for collaboration. 58. R&D project model. Support for research activities provided under Component I will be funded through a sub-project mechanism that is intended to facilitate regional collaboration and ensure that APPSA investments generate not only national but also regional benefits. Sub- projects-referred to in this document as "R&D projects"-will also provide an entry point for ensuring the quality of science by using a peer review process. R&D project concepts will be generated through national and regional planning meetings that result in the identification of priority themes of common interest. Based on concept notes, R&D project proposals will be developed among the three participating countries. R&D project proposals that call for participation by researchers and institutions in at least two countries will be further developed by the respective partners and submitted to a peer review process organized by CCARDESA. The peer review process will draw on experts mobilized from within the region or from outside. The peer review process will ensure that R&D proposals are assessed in terms of: (i) the relevance of the problem to the region; (ii) consistency with the regional agenda as developed by CCARDESA working in collaboration with the participating countries; (iii) compliance with minimum technical and scientific quality standards, as well as social and environmental standards that are consistent with the APPSA ESMF framework; (iv) potential for dissemination, replicability across the region, and potential impact on competitiveness; and (v) compliance with agreed financial and budgeting standards. Once the peer review process is completed and the quality of a proposal has been validated, the proposal is included in the regional work plan. Consistent with the regional focus of APPSA, every R&D project is expected to include collaborative activities involving partners from two or more countries. 59. Regional facilitation mechanisms through CCARDESA. The success of APPSA will depend on a strong commitment on the part of participating countries to work within a framework of regional collaboration. Given differences between the participating countries in terms of institutional structures and implementation capacity, regional facilitation will be needed. CCARDESA will play an important coordinating role in supporting implementation, consistent with its mandate to coordinate agricultural research and development in the SADC Region. CCARDESA is composed of a secretariat based in Botswana, managed by an Executive Director, and governed by a Board of Directors drawn from SADC member states. A dedicated Multi Donor Trust Fund (MDTF) is being prepared to provide core support for CCARDESA and is expected to be in place by mid-2013. The MDTF resources are intended to support regional programs throughout the entire SADC region and will be complementary to APPSA resources. 60. Activities to be implemented by CCARDESA will be governed by a Grant Agreement between the World Bank and CCARDESA and Implementation Agreements drawn up between CCARDESA and the principal executing ministry or institution in each participating country. The Grant Agreement and the Implementation Agreements will describe the roles and responsibilities, activities, and reporting modalities of CCARDESA in facilitating APPSA implementation. The Grant Agreement and the Implementation Agreements will establish a budget ceiling for CCARDESA for the six year period. During implementation, CCARDESA will prepare costed annual work plans for its activities, and these work plans will be endorsed by the participating countries. Based on the annual work plans, resources will be disbursed in tranches by the participating countries to CCARDESA, in the case of IDA Credit resources, and directly from the World Bank to CCARDESA in the case of Regional IDA Grant resources. 17 61. Links to CGIAR centers. The Project will strengthen national agricultural R&D systems in the participating countries and promote a more regional approach to technology generation and dissemination. The national systems will be able to deepen their partnerships with international agricultural research institutes including CGIAR centers, for example by increasing the amount of collaborative research, stepping up exchanges of improved germplasm, and engaging in joint training activities. The Project will not be a funding source for CGIAR centers, however, and RCoLs would not seek to replace CGIAR centers or assume their global mandates. APPSA is expected to complement investments made by the CGIAR centers and to support the ongoing CGIAR reform process by building strong partnership in southern Africa. B. Results monitoring and evaluation 62. APPSA will establish a strong monitoring and evaluation (M&E) system, which will serve as an important tool used to track the use of Project resources, monitor delivery of activities, and quantify impacts. The Project M&E system will be aligned with the regional M&E framework, which will be implemented by CCARDESA working in close collaboration with the three participating countries. Malawi, Mozambique, and Zambia will customize the regional M&E framework to design a system that responds to the information needs of the different stakeholders in each country and is consistent with national systems and structures. Together, Project stakeholders will develop a comprehensive M&E system that will provide clear guidance to the decision-making process of all stakeholders, under the assumption that M&E is most useful when it provides timely and accurate information. 63. A consolidated results framework for APPSA showing the results chain that links outputs to outcomes is depicted in Figure 2. The results framework will form the basis for the regional M&E framework to be used by the three participating countries and will be further developed under a process to be led by CCARDESA to incorporate mutually agreed monitoring, reporting, and evaluation mechanisms. The regional M&E framework will serve the following purposes: (i) promote accountability and learning on APPSA across the three participating countries; (ii) guide APPSA stakeholders in making strategic choices and decisions as to how best to support and work in improving their performance for the benefit of the farmers and other end users; and (iii) ensure consistency in data collection, analysis, and reporting at the country and regional level. The regional M&E framework will include an agreed monitoring, evaluation and reporting system for R&D projects. 64. It is anticipated that national M&E frameworks will be functional in the first three months following Project approval. Separate Project Implementation Manuals (PIMs) for Malawi, Mozambique, and Zambia will be drafted by effectiveness. These PIMs will include national M&E frameworks and M&E implementation plans. 65. Four evaluations are planned to take place over the life of the Project: a baseline evaluation at the onset of the Project, two in-course evaluations, and a final evaluation. The two in-course evaluations will take place at two-year intervals, i.e., at the beginning of Years 3 and 5 of implementation. Survey data will be collected as part of these evaluations and will be the primary means of measuring progress toward the Project objectives. APPSA will also support impact assessment work to assess the adoption of technologies promoted under the Project and to estimate the resulting productivity gains. 18 Figure 2: APPSA consolidated results framework showing results chain 0 -0 IncreasedavaibIty of mprovedagridctural techoogirsn part pat ing coutrsin the SADC region Collaborativetechnology improvedtechnicalcapacity Effedive strudures and generation and dissemination to lead national and regional systems for regional around priorityfarm[ngystems research and disseminaton collaboration and R&D agenda management s Full scientficcapacity Mechanismsfor Enabling policy - Successfulregonal R&D (human capital and R&D planning environmentfor - projectsimplemented for physical resources}in M&E, and peer seed and; targeted farming systems place in targeted review fully intellectual researchprograms funional property rights * Identification and testing of a improved infrastrudure * National and regional promising technoEogies and equipmentfor coordination systems in place * * Dissemination packages and targeted agriutural and fundional toolsdesignedandtested researchcentersand * Advanced learning and . * Production, supply and related systems(seeds) knowledge sharing mechanisms 0O deliveryofseed a MScand PhDtraining * Multi-stakeholderplatforms * Useof communication and a Targetedtraining of staff a Po[icydiogueand - information technology in technica[ areas and harmonizat[on . packages research management * Adoption of peerrevlew . * Development of Farmer- * Expanded staffing leveEs findings Research-Extension platforms C. Sustainability 66. Because much of the investment made under APPSA will result in the generation of public goods, continued financial support for the Project will depend on the relevance and quality of technology outputs generated in each participating country. In addition to generating relevant outputs, the Project will have to show that more can be achieved through a regional approach than could be achieved by the participating countries acting alone. 67. APPSA will support the establishment of strong partnerships with other institutions and organizations, such as agricultural services providers, input and equipment dealers, national and international agricultural research centers, universities and other public and private educational institutions, farmer associations, and non-governmental organizations (NGOs), among others. It is expected that the participation and the empowerment of these potential partners in APPSA activities will contribute to a sense of ownership and enhance the impact of the Project, contributing to longer term sustainability. 68. RCOLs have identified a number of potential opportunities to introduce cost recovery mechanisms, for example through the sale of rights to breeding materials or finished varieties, 19 production of foundations seed or certified seed, offering fee-based training, or establishment of commodity promotion funds (e.g., which could be financed through the imposition of taxes on imported commodities). Sustainability strategies will be evaluated as part of the mid-term review of RCoL implementation. V. KEY RISKS AND MITIGATION MEASURES A. Risk ratings summary table Project Stakeholder Risk Moderate Implementing Agency Risk Capacity High Governance Moderate Project Risk Design Substantial Social and Environmental Moderate Program and Donor Moderate Delivery Monitoring and Sustainability Moderate Overall Implementation Risk Moderate B. Overall risk rating explanation 69. The two major risks facing the Project relate to: (i) Capacity constraints in the implementing agencies. These constraints exist both within national agricultural research systems (which might slow implementation) and within CCARDESA (which is still at an early stage of establishment and may face difficulties in carrying out the regional facilitation function). In recognition of these constraints, implementing agency capacity risk is rated High. (ii) Uncertainties inherent in the Project design. As is always the case, the payoffs to investments in agricultural research are uncertain, either because farmers' technology needs may be incorrectly identified, or because researchers may fail to generate technologies that adequately address farmers' needs. In recognition of these uncertainties, Project design risk is rated Substantial. 70. To mitigate these risks, the Project will support capacity building activities intended to address longer term capacity constraints in the implementing agencies. The most urgent capacity gaps in national agricultural research systems will be filled in the short term by relying on partnerships and technical assistance. CCARDESA is currently recruiting, and it is expected that by Project effectiveness, core staff and key systems will be in place to support APPSA implementation. With respect to the uncertainties inherent in the Project design, the demand- driven design and emphasis on complementing research with dissemination are expected to help 20 ensure the relevance of APPSA research outputs and ensure their availability to farmers and other end users in multiple countries. VI. APPRAISAL SUMMARY A. Economic and financial analysis 71. Ex-ante analysis of the likely economic and financial profitability of APPSA is not warranted, because of the difficulty of quantifying the benefits of the investments to be made under all three Project components. Investments to be made under Component 1 in R&D projects are expected to generate benefits in the form of increased agricultural productivity and production, greater stability of production, enhanced resilience in the face of climate shocks, more diversified farming systems, improved nutritional status of rural households, etc. However it is impossible to predict with precision the types of improved technologies that will be generated, their distribution across the targeted commodities and commodity groups, and the degree to which they will eventually be taken up by farmers and other end users., 72. Investments to be made under Component 2 in strengthening RCoLs are expected to generate benefits in the form of increased capacity of the RCoLs to design and carry out high- quality scientific research and to make the results of that research available to farmers and other end users. While increased capacity will translate into a more productive research and extension system that will generate and disseminate an increased flow of technologies, it is not possible to quantify the economic value of the increased capacity per se. Investments to be made under Component 3 in enhancing regional coordination and promoting regional dialogue around key regulatory and policy issues could play a catalytic role in stimulating important changes in the policy environment that could lead to increased efficiency in regional research and facilitate flows of technology, information, and knowledge throughout the SADC region, but these benefits also are difficult to quantify. 73. Despite the practical difficulty of quantifying at the micro level the expected economic and financial benefits to be generated from APPSA investments, analysis conducted at the macro level suggests that it is highly likely that the Project will generate attractive rates of return. IFPRI/RESAKSS (2011) collected data in all 15 SADC countries to create a model of regional market demand for agricultural products based on various growth scenarios. The analysis identified the degree of correlation between the agricultural production environments of SADC countries for 10 major crops (beans, cassava, cotton, groundnut, millet, potato, rice, sorghum, sugarcane, and wheat) and four major livestock production systems (cattle, pigs, sheep/goats, and poultry). Country coefficients were generated that showed the degree of similarity for each crop or livestock model between countries; these coefficients were then combined with data on variations in yields to identify opportunities for technology spillover. The analysis revealed numerous opportunities for technologies that are suitable for a given production environment to spill over across national boundaries. These results were then incorporated into a larger model that estimated potential contribution to agricultural growth based on regional demand for each product. The analysis concluded that the potential benefits generated from technology spillovers are enormous, vastly exceeding the investments that would theoretically be needed to generate the spillovers. These results instill confidence that the APPSA investments will generate attractive returns. 21 74. The IFPRI/RESAKSS study generated a prioritized list of the most attractive opportunities to generate technology spillovers in the SADC region. Table 2 shows the priority ranking based on the study - with maize, cassava, rice, cattle, fruits and vegetables in the top five priorities for technology generation and dissemination. Table 2: R&D priorities based on growth and technology spillover potential Potential contribution to Final ranking agricultural growth reo spilloeional (weighted ranking based (0 (share of total regional oncnibtntogoh Commodity (% share in higher agricultural spillover gains)on contribution to growth growth scenario) and spillover potential) all SADC low income all SADC low income all SADC low income countries countries countries countries countries countries Maize 25.6 31.4 39.1 39.1 1 1 Cassava 14.5 13.7 8.4 8.6 2 3 Rice 8.9 13.3 13.6 13.9 3 2 Cattle 5 3.5 9.4 9.5 4 4 Fruit and Veg. 10.2 10 0.9 0.9 5 5 Beans 3.2 2.2 5.9 6.0 6 7 Fisheries 7.3 7.3 0.9 0.9 7 6 Sorghum 1.6 0.9 6.1 6.0 8 8 Wheat 4.3 0.9 2.3 2.3 9 13 Potato 3.5 3.7 2.5 2.6 10 9 Source: IFPRI, 2011 75. These findings about the likely profitability of APPSA are well supported by an extensive body of empirical literature showing that investments in agricultural research and development frequently generate attractive rates of returns, often as high as 40-60 percent per year. A frequently cited meta-analysis carried out by the International Food Policy Research Institute (IFPRI) covering 293 studies on agricultural R&D published between 1953 and 1997 found returns to certain sub-categories of agricultural research-for example, plant breeding targeting the leading food staples-have been particularly high.16 Spillover of research benefits across national borders can be important and can raise overall rates of return considerably. Abdulai, Diao, and Johnson (2005) showed that investments yielding regional benefits in African agriculture delivered as much as three to four times the gain over and above the direct benefits in the country of origin.17 Not all commodities produce the same high returns to research, confirming the need for selection of commodities and prioritization of effort. 16 Alston, J.; C. Chan-Kang; M. Mara; P.G. Pardey; and T.J. Wyatt. 2000, A Meta-Analysis of Rates of Return to Agricultural R&D: Ex Pede Herculum, Research Report 113, IFPRI, Washington, DC. 17 Abdulai, A.; X. Diao; and M. Johnson, 2005. Achieving Regional Growth Dynamics in African Agriculture, Development Strategy and Governance Decision Discussion Paper No. 17, IFPRI, Washington, DC. 22 B. Technical 76. Systems-oriented approach. The Project will adopt a systems approach that focuses on the full range of the research and dissemination actors, but within the context of specific commodity-based research centers or programs. Selection of the commodities and of the centers or programs to host the RCoLs was based on a number of criteria. The commodity had to be recognized as a national priority, with sufficient importance in other countries to provide attractive opportunities for generating significant regional spillovers. The center or program chosen to host the RCoL had to demonstrate potential for leadership in the selected commodity and had to be endorsed by the host country. 77. Support to innovation. APPSA will build on ongoing initiatives within national agricultural research and extension systems to address institutional bottlenecks to innovation. Many national systems in the region are in the process of implementing lessons learned with regard to improving the effectiveness of technology generation and dissemination systems, as well as training programs. This includes: (i) establishing close linkages and feedback mechanisms between extension and research to ensure that appropriate technologies are available for transfer to beneficiaries; (ii) putting in place flexible, decentralized, and demand-driven delivery systems; (iii) building pluralistic research systems that facilitate increased involvement of private sector and university systems in addition to traditional public research bodies; and (iv) introducing competitive, rigorously reviewed research programs linked to international, regional and national knowledge sources. APPSA is expected to strengthen these efforts and to provide financing to extend them within the regional landscape of R&D actors. 78. Incremental benefits to regional collaboration. By adopting a regional approach to research, participating countries can expect to benefit from increased availability of improved technologies, compared to what would have occurred in the absence of a regional approach. As a result of the Project, it is expected that 50 improved technologies generated in one country will become available in at least one other country. These 50 improved technologies testify to the added value of adopting a regional approach to research. 79. Policy environment for technology generation and dissemination - Intellectual property rights and regional seed systems. A conducive enabling environment will be needed if APPSA investments in technology generation are to result in dissemination within participating countries and across the region. Systems currently in place to enable the exchange of germplasm for breeding purposes are functioning relatively well. With respect to seed, SADC has developed harmonized systems to support the movement of seed technologies. The SADC harmonized seed framework comprises a common variety release system, which allows for streamlined variety release in multiple countries; a common seed certification and quality assurance system that establishes standards and harmonized approaches for certification to be applied across all SADC countries; and a common quarantine and phytosanitary system to establish standards to address pest and disease issues within seed material. SADC countries endorsed the system in 2011 and are in the process of harmonizing their national legislation and building capacity to implement common standards. Investments in APPSA will contribute to building this capacity at national level and will contribute to supporting regional activities that involve raising awareness and supporting the roll out of the new system. 80. With respect to intellectual property rights, legislation on plant breeders' rights has been drafted or enacted in most SADC countries. 23 * In Malawi, plant breeders' rights legislation is pending. Component 3 of APPSA will support technical studies and dialogue around IPR issues that may be constraining germplasm flows and seed exchange. Initial work on these issues is being supported using PPA financing. * In Mozambique, the government has signed the Memorandum of Understanding (MoU) promulgated by SADC confirming its intention to follow regional protocols for: (i) varietal registration, (ii) seed certification and quality assurance, and (iii) phytosanitary measures for seed exports and imports. The national authorities consider that an essential next step needed to support effective implementation of these regional protocols will be the creation of the SADC Seed Center. To ensure harmonization with the SADC guidelines, a decree has been approved setting out the principles governing Plant Breeders Rights in Mozambique. Legislation needed to give these principles the force of law has yet to be prepared and approved. * In Zambia, plant breeders' rights have been adopted, and seed /germplasm exchange rules have been enacted, both guided by SADC and COMESA regional policy frameworks. While seed exchanges for crop breeding purposes are working relatively well, there has been little large-scale seed exchange within the region for commercial purposes. The proposed technical studies that will be carried out by ZARI using PPA funds will provide up-to-date information on IPRs and seed systems issues. 81. Gender. The agricultural sectors in Malawi, Mozambique, and Zambia provide employment to a significant proportion of the national labor force in each country, including large numbers of poor people, especially poor women. For this reason, technology generation and dissemination services must be sensitive to the needs and circumstances of the poor, and of the needs and circumstances of poor women in particular. Maize, food legumes, and rice have a range of domestic and commercial uses and vary in their importance to different groups of women. The selection of R&D projects under APPSA will take into account gender differentiated priorities. Similarly, because the timing, location, language, and mode of communication are all crucial in reaching information to farmers, technology dissemination activities to be supported by APPSA will take into account gender dimensions. Extension strategies in all three countries will be designed not just to ensure successful transfer of new technologies, but rather successful transfer in ways that ensure that uptake by significant numbers of women. APPSA will directly support a range of technology dissemination activities, and it will seek to increase its overall impact in this area by developing linkages with other ongoing extension projects and programs. 82. In addition to devoting attention to the special needs of women end users (mainly farmers and livestock producers), APPSA will seek to increase participation of women professionals in the agricultural research, extension, and training systems of the participating countries. Efforts will be made to ensure that women scientists, extension specialists, and trainers participate actively in the R&D projects financed under Component 1 and that women are well represented in the short- and long-term training programs to be supported under the Project. 24 C. Financial management 83. The World Bank's financial management team conducted financial management assessments of CCARDESA in Botswana, Chitedze Research Station in Malawi, IIAM in Mozambique, and ZARI in Zambia. Details of the assessments are included under Annex 3, including the action plans that show the actions the institutions need to take to improve their financial management arrangements. 84. Risk mitigation measures discussed and agreed during preparation include: (i) engagement of qualified financial management staff; (ii) acquiring appropriate accounting software and hardware; (iii) provision of training on financial management policies and procedures; (iv) preparation of financial management modules as part of the Project Implementation Manuals; and (v) strengthening of internal audit functions including through training provided to internal audit committees and internal audit units. During preparation, all implementing entities agreed on the format of the Interim Financial Reports and the audit terms of reference with IDA. 85. The conclusion of the assessments is that the financial management arrangements in place meet the World Bank's minimum requirements under OP/BP10.02 and therefore are adequate to provide, with reasonable assurance, accurate and timely information on the status of the Project required by the World Bank. The overall Financial Management residual risk rating of the project is Substantial for Chitedze Research Station, IIAM, and ZARI, and Moderate for CCARDESA. D. Procurement 86. Procurement for the proposed operation will be carried out in accordance with the World Bank's "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" published by the World Bank in January 2011 ("Procurement Guidelines"), in the case of goods, works and non-consulting services; the World Bank's "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" published by the World Bank in January 2011 ("Consultant Guidelines") in the case of consultants' services; and the provisions stipulated in the Financing Agreements. Further, the World Bank's "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006, and revised in January 2011 will apply. 87. In Malawi, a procurement assessment was conducted on November 26, 2012 of Chitedze Research Station. The Project risk assessed was High, as staff lack experience in procurement of goods, works, or services, and they have never implemented a World Bank-financed project. Proposed risk mitigation measures include recruitment of additional staff and capacity building in the use of international procurement procedures and specifically World Bank procurement procedures. Following the implementation of these risk mitigation measures, the residual risk rating would change to Moderate. 88. In Mozambique, a procurement assessment was conducted in August 2012. The Project risk was assessed as Substantial based on a review of the procurement unit (UGEA) at the Directorate for Planning, Finance, and Administration, which will provide procurement support 25 to IIAM. The experience of UGEA in procurement of works and selection of consulting services is very limited, and UGEA has no experience working with projects financed by the World Bank or other donors. Following the implementation of risk mitigation measures, the residual risk rating for the Project would change to Moderate. 89. In Zambia, the Procurement Risk Assessment Management System (P-RAMS) was used to assess the procurement capacity of ZARI as the implementing agency for APPSA. The assessment was carried out on November 23, 2012. The assessment gauged ZARI's procurement capacity, and it proposed risk mitigation measures needed to carry out required procurement activities under the project. Given the proposed set of new Project activities and the current capacity in place the Implementation Agency Procurement Risk for the ZARI is assessed to be High. Procurement staff at ZARI are relatively inexperienced in public procurement using competitive methods, and they have had no exposure to large and complex procurement and selection of consultants. After implementation of risk mitigation measures, the residual risk rating would change to Moderate. Proposed risk mitigation measures include capacity strengthening of procurement staff and updating of the procurement manual. 90. At CCARDESA (based in Gaborone, Botswana), a procurement capacity assessment was carried out. CCARDESA has already prepared an acceptable Procurement Manual. The project risk assessed was High, as CCARDESA now needs to complete the recruitment of the Procurement Officer, and as other CCARDESA staff has limited capacity to assure adherence to World Bank Procurement and Consultant Guidelines. Proposed risk mitigation measures that have been agreed with CCARDESA management include: recruitment of the Procurement Officer, training of key CCARDESA staff on World Bank Procurement and Consultant Selection Methods and Procedures and strengthening of procurement systems at CCARDESA, and periodic revision of the Procurement Manual to take into account evolutionary changes in the institutional arrangements for the Program and the related changes in procurement arrangements. Following the implementation of risk mitigation measures, the residual risk rating would change to Moderate. E. Social (including Safeguards) 91. APPSA is expected to have significant positive effects on rural households, especially those engaged in smallholder farming, and more specifically on the women and children in these households who disproportionately bear the burden of food insecurity and nutritional deficiency. APPSA seeks to enhance agricultural productivity by supporting technology development and dissemination, with the ultimate goal of increasing growth, employment, and food security, while reducing poverty. The Project will bring together a range of stakeholders (e.g., government officials, public-sector researchers and extension agents, private firms, NGOs, learning institutions, community organizations) to improve agricultural technology and facilitate transfers of technology and information. The Project will also enable farmers-including women farmers-to identify priorities for research, partner with research agencies, and participate in technology demonstrations, field learning, and other training activities. In addition, technologies generated and disseminated under the Project, such as plant varieties that are tolerant to heat and moisture stress, conservation agriculture practices that allow more efficient management of land and water, and post-harvest technologies that permit more efficient processing and more secure 26 storage of crops, are expected to improve the resilience of poor rural households in the face of climate shocks and reduce their vulnerability to food insecurity and poverty. 92. Women make up a significant proportion of agricultural work force in Malawi, Mozambique, and Zambia. The Project will work to ensure that R&D projects will be sensitive to gender-differentiated priorities as these relate to household food security and nutritional sufficiency. Recognizing that research and extension programs in the participating countries in the past have attracted mainly men as participants, the Project is committed to ensuring that at least 30 percent of the farmers and other end users who participate in Project-supported activities will be women. 93. The Project design has been enriched through extensive consultations with researchers, extension agents, public officials at the local and national level, civil society organization, private firms, and local community groups. A gender-sensitive, easily understood and widely accessible approach will be adopted by APPSA for engaging these various stakeholders on an ongoing basis and for disseminating technology messages and knowledge products in the participating countries. 94. Involuntary Resettlement (OP/BP 4.12): Safeguards Policy OP/BP 4.12 (Involuntary Resettlement) is triggered. While the Project is not expected to involve large-scale acquisition of land or lead to any denial of access for usual means of livelihood, some of the R&D projects to be supported under the Technology Generation and Dissemination component may involve land acquisition on a small scale, relocation of residents, and/or restriction of access to sources of livelihoods. OP/BP 4.12 is not triggered for Malawi, because sites where Component 1 activities will be implemented are known and have been screened. However for Mozambique and Zambia, where the exact locations and numbers of people likely to be affected will be known only during implementation, Resettlement Policy Frameworks (RPFs) have been prepared, consulted upon, and disclosed prior to appraisal. The RPFs describe and clarify the policies, principles and procedures to be followed in order to minimize and mitigate adverse social and economic impacts that could be caused by APPSA during the course of implementation. Trials carried out in farmers' fields for purposes of research, testing, or demonstration will be based on prior consent and agreement. Resettlement Action Plans will be prepared as and when necessary during Project implementation. 95. An Environmental and Social Management Framework (ESMF) for Zambia and Mozambique and an Environmental and Social Impact Assessment (ESIA) for Malawi have been prepared to guide the screening and mitigation of any negative impact of the Project. Safeguards implementation capacity in the respective implementing agencies will be enhanced through dedicated staffing and training programs. F. Environment (including Safeguards) 96. APPSA is expected to have a positive impact on the environment by supporting the development and dissemination of agricultural technologies that promote sustainable use of land and water. The Project will also contribute towards reducing the vulnerability of poor rural households to climate shocks by promoting the adoption of climate smart agricultural practices. 97. The Project is classified as Environment Assessment (EA) Category B. The Project triggers OP/BP 4.01 Environmental Assessment because (i) research activities to be supported 27 under Component I could include work in the areas of plant breeding, farm management, and processing; and (ii) capacity building for RCoLs to be supported under Component 2 are likely to include investment in infrastructure and equipment. For Project intervention sites that were already known at appraisal (such as identified research stations and sub-stations), in Malawi an Environmental and Social Management Plan (ESMP) has been prepared. For Project intervention sites that were not known at appraisal in Mozambique and Zambia (such as fields in which on- farm trials will be conducted), screening processes have been put in place and will be implemented before any Project investments are made. The screening processes are described in the Environmental and Social Management Frameworks (ESMF) that have been prepared (see Annex 3 for a summary). Where relevant, the ESMFs have drawn on current ESMFs in use within MoAFS, IIAM, or ZARI for similar World Bank-financed operations. Once sites and works have been finalized, ESMPs will be prepared during Project implementation. 98. Pest Management OP/BP 4.09: Safeguards Policy OP 4.09 (Pest Management) is triggered. Technology generation and dissemination activities to be supported under the Project could result in increased pesticides and agrochemical use on research stations and among farmers reached by the program. Pest Management Plans (PMPs) currently being used in each of the participating countries have been assessed and adopted for use under the Project. 99. Natural Habitats (OP/BP 4.04): In the cases of Malawi and Zambia, Safeguards Policy OP/BP 4.04 (Natural Habitats) is not triggered. The environmental safeguard studies undertaken in Malawi and Zambia determined that APPSA will not cause conversion of natural habitats, either directly or indirectly. In the case of Mozambique, Safeguards Policy OP/BP 4.04 (Natural Habitats) is triggered. The impact of Project-supported activities on natural habitats is expected to be small in Mozambique, but on-farm trials could have non-negligible impacts if large numbers of trials are located in natural habitats. Therefore OP4.04 is triggered as a precautionary measure, and the ESMF includes proposed measures for mitigating impacts. 100. Safety of Dams (OP/BP 4.37): In the cases of Malawi and Zambia, Safeguards Policy OP/BP 4.37 (Safety of Dams) is not triggered. The environmental safeguard studies undertaken in Malawi and Zambia determined that any construction or rehabilitation of irrigation works to be funded under the Project would not involve construction of water retention structures that would pose potential hazards to human or animal health and safety. In the case of Mozambique, Safeguards Policy OP/BP 4.37 is triggered. The Project will not fund any large dams, as defined by OP4.37. However as part of the establishment of the Rice RCoL, the Project may fund simple diversion weirs and other small-scale water control structures. For this reason, OP 4.37 is triggered as a precautionary measure. A detailed ESMP will be undertaken for the new site, and any dam-related activity will be undertaken following the guidelines of the FAO manual Small Earth Dams: A Guide to Siting, Design and Construction (2010), which has been formally disclosed as part of the safeguards documentation. 101. Malawi, Mozambique, and Zambia have national biosafety frameworks in place, as well as associated regulatory legislation in line with the Cartagena Protocol on Biosafety, to which all three countries are signatories. All research activities funded under the Project will be carried in conformity with the relevant national policies and regulations. Research on transgenic crops is neither explicitly planned nor excluded. If research on transgenic crops becomes part of the research agenda supported under the Project, it will proceed with environmental safeguards consistent with international good practice and the regulatory framework of the host country. 28 102. Disclosure: All safeguards documents for the three countries were originally disclosed in country and through the World Bank InfoShop between December 17, 2012 and January 2, 2013. 18 Updated versions of some safeguards documents were subsequently re-disclosed through InfoShop. 29 Annex 1: Results Framework and Monitoring Agricultural Productivity Program for Southern Africa (APPSA) Baseline Cumulative Target Values Original Fre- Data Source/ Responsibi- PDO Level Results Indicators Q Unit Project lity for Data Comments Start Yi Y2 Y3 Y4 Y5 Y6 quency Methodology Collection (2013) 1. Number of technologies that are 20 RCoL M&E See footnote for being made available to farmers No. 0 20 39 65 82 90 93 B, IC,F RCoL reports Manager definition and other end users'9 . RCoL reports 2. Percentage of Lead Farmers in targeted areas who are aware of Random RCoL M&E See footnote for an improved technology promoted 0 60 65 80 80 80 85 B, IC, F sampling Manager definition by the Project21 among Lead Farmers 3. Number of technologies generated or promoted by the Project in one RCoL M&E participating country that are E No. 0 0 0 10 20 35 50 Annual RCoL reports Manager released in another participating country Beneficiaries 4DietPormbnfcais22 RCoL M&E In thousands of 4. Direct Program beneficiaes2 Z No. 0 605 1,805 3,606 5,406 6,051 6,100 Biennial RCoL reports Manager farmers (number)Maae frms In thousands of of which Lead Farmers(number) 0 5 5 6 6 6 6 Annual RCoL reports farmers of which other farmers(number) 0 600 1,800 3,600 5,400 6,045 6,094 Annual RCoL reports In thousands of farmers of which female (percentage) z % 0 >30 >30 >30 >30 >30 >30 Annual RCoL reports 19 Technologies developed and/or promoted by the Project. Availability will be measured by whether seed is being produced and distributed, or a technology has been or is being promoted by the public or private sector. Technologies will be disaggregated by crop and according to whether they address a cross cutting priority - such as climate change adaptation, gender, nutrition, etc. 20 Baseline, In Course (beginning of Year3 and Year 5), Final 21 Awareness will be measured through periodic surveys of farmers that will measure their awareness of specific technologies promoted by the Project. This indicator will be disaggregated by gender. 22 This measure includes Lead Farmers, contact farmers and other farmers who will benefit from the program knowledge, information, materials transfer.. Targets are calculated on the number of technology or technology messages that a farmer has been exposed to during implementation. 30 Objectives and Indicators Baseline Cumulative Target Values Original Data Source/ Responsibi- Intermediate Results Indicators { Unit Project Frequency lity for Data Comments Start YI Y2 Y3 Y4 Y5 Y6 Methodology Collection (2013) Intermediate Result 1:Collaborative technology generation and dissemination around priority farming systems 5. Number of collaborative research RCoL Collaborative or extension projects under No. O 7 20 35 42 50 55 Semi semi-annual RCoL M&E means involving orpetenion Annual seiana Manager at least two implementation reports institutions 6. Percentage of collaborative CCARDESA RCoL M&E research or extension projects E % 0 35 60 75 85 90 95 Semi RCoL Manager completed Annual semi-annual CCARDESA reports 7. Number of technologies RCoL M&E Direct measure generated23 E No. 0 10 45 70 95 110 115 Annual B,JC,F Manager among farmers Intermediate Result 2: Improved technical capacity to lead national and regional research and dissemination agenda Assumes each 8. Number of clients (RCoL staff) RCoL service provider days of training semi-annual RCoL M&E will benefit from Semi- reports two five-day Z No. 0 2,100 3,600 6,000 6,300 6,400 6,500 Annua Tr g Manager trai ery (disaggregated by gender and type of session Trainers Does not include training) reports MSc and PhD training Level of investment for 9. Number of research centers RCoL RCoL M&E each center to be rehabilitated or equipped24 E No. 0 0 0 9 18 27 27 Annual annual reports Manager determined during baseline evaluation 23 To be monitored separately for each targeted commodity farming system, (maize, rice, food legumes). Nutrition-related technologies will be flagged. 24 Based on the minimum threshold defined during appraisal and taking into account the original RCoL proposals. 31 Objectives and Indicators Baseline Original Data Source/ Responsibi- Intermediate Results Indicators Unit Project Cumulative Target Values Frequency Methodology lity for Data Comments Start Collection (2013) Intermediate Result 3: Effective structures and systems for regional collaboration and R&D management 10. Common M&E system being Yes/ Progress used by APPSA participating E N/A Y Y Y Y Y Y Annual rors CCARDESA institutions One report for RCol annual each commodity 11. Number of APPSA annual work reports (rice, food plans drafted, discussed, and E No. 0 4 8 12 16 20 24 Annual RES CCARDESA (e , ood agred ontimeCCARDESA legumes, maize) reports and another one for CCARDESA 12. Number of countries with redrafted/revised seed policy in H No. TBD 0 0 3 3 3 3 Annual B, IC, F CCARDESA compliance with SADC harmonization framework 32 Supplemental impact indicators 1. Adoption rates and productivity gains are not included as performance indicators in the Results Framework, for two main reasons. First, technology adoption and farm-level impacts depend on a number of factors that lie outside the control of the Project, such as farmers' knowledge and skills, the availability and cost of inputs including credit, the availability and cost of labor, land tenure systems, weather, and prices. Second, APPSA will be implemented in areas in which many other agricultural development projects will be present, the majority of which will also support the development and dissemination of promising agricultural technologies. In that context, it would be extremely challenging, if not impossible, to single out the unique contribution made by APPSA. 2. Despite these challenges, it is acknowledged that promoting the adoption of improved technologies as a way of stimulating productivity gains is an important goal of the Project. Therefore, in addition to holding itself accountable for producing improved technologies and for making them available, the Project will accept shared responsibility for ensuring that improved technologies developed under the Project are disseminated effectively and adopted by farmers and other end users. This shared responsibility will be reflected in two ways. First, every R&D project proposal submitted for funding under Component I will articulate a clear impact pathway through which the technology or technologies to be developed is expected to generate benefits. Second, every R&D proposal will describe arrangements for collaborating with partners that are expected to share responsibility for dissemination (e.g., extension services, seed companies and other input distributors, NGOs). 3. While not included as part of the formal Results Framework, technology adoption rates and productivity gains will be assessed during the two in-course evaluations and at closing as part of the Project's impact assessment activities. The supplemental impact indicators appearing below will be used to capture information on adoption of improved technologies (including plant varieties, crop and resource management practices, and processing methods) and on the productivity increases resulting from adoption of improved technologies. Additional impact indicators may be developed as part of the first mid-term review. Similar impact indicators are being used by EAAPP and WAAPP, so it should be possible to aggregate impacts across the three projects. Cumulative Data Source! Responsibility Impact Indicators Unit Target Frequency for Data Comments Values Collection Impact 1. Rate of increase in Also being adoption of new varieties, new % No target IC, F Survey/ RCoL, used by handling and processing methods or established studies CCARDESA WAAPP / management practices (%) EAPPP Impact 2. Increase in productivity at Also being farm level over control technology % No target IC, F Survey/ RCoL, used by for all disseminated new established studies CCARDESA WAAPP / technologies (%) EAPPP Impact 3. Beneficiaries using Also being technologies generated in other No. No target IC, F Survey/ RCoL, used by countries established studies CCARDESA WAAPP / EAPPP 33 Annex 2: Detailed Project Description Agricultural Productivity Program for Southern Africa (APPSA) A. Principles of project design 1. Regional implementation modalities. APPSA seeks to increase the efficiency of investments in agricultural research by promoting regional collaboration and by putting in place mechanisms to encourage technology dissemination across national borders. An investment program in agricultural research and dissemination based on this approach should meet the goals set out in the PDO. 2. As a regional project, APPSA will be based on partnerships and collaboration among participating countries. Countries will work together in a number of ways: by undertaking joint technology generation, dissemination and training activities; by coordinating their respective activities in pursuit of common objectives; and by exchanging knowledge and technological outputs from their research programs. To the extent possible, APPSA implementation will rely on existing regional platforms, networks, and partnerships to share information and create opportunities for collaboration. 3. Role of the Regional Centers of Leadership. The main implementing agencies for the regional approach will be the RCoLs. An RCoL is a center or program with established capacity (or the potential to establish capacity) in the areas of agricultural research, technology dissemination, and training that distinguishes it as a leader in the region and beyond. An RCoL should be in a position to coordinate activities at the regional level because it has potential or actual capacity to: (i) establish a critical mass of qualified staff; (ii) establish and maintain high- quality facilities; (iii) develop and manage complex research and dissemination programs and projects; (iv) stay well connected to the global system of research; (v) create effective partnerships throughout the SADC region and beyond; and (vi) facilitate the process of institutional learning and change that underpins a dynamic technology innovation system. 4. Each RCoL will serve as the focal point for regional research on a particular commodity system. Priority commodity systems being targeted by the RCoLs have been identified on the basis of (i) a regional priority setting study that identified top R&D priorities for the SADC region, and (ii) research priorities indicated by each country. Malawi has elected to establish an RCoL focusing on maize-based farming systems. Mozambique has elected to establish an RCoL focusing on rice-based farming systems. Zambia has elected to establish an RCoL focusing on food legume-based farming systems. In addition to carrying out research on topics of national and regional interest, the RCoLs will coordinate regional research on their commodity system. Coordination in this context is understood to include leading (in partnership with CCARDESA) the development of a strategic regional research agenda, providing technical assistance to scientists in the development of concept notes and project proposals, acting as a liaison with CCARDESA for peer reviews of concept notes, partnering with other agencies in the implementation of regional research and dissemination activities, and preparing annual technical reports to document scientific results and measure progress achieved against the regional agenda. 5. In addition to their research coordination function, RCoLs will perform a range of other functions, including conducting cutting-edge research in their selected commodity, offering training and technical assistance, organizing scientific meetings, maintaining and sharing information resources, providing research support services (e.g. laboratory analyses), 34 coordinating M&E activities for APPSA, building and maintaining partnerships with the international research community, and providing independent and credible scientific guidance. 6. Technology priorities. Cereal and legume production systems in the region are characterized by their low productivity, attributable in large measure to a fragile natural resource base whose potential to support productive agriculture continues to be impaired by the widespread use of unsustainable farming practices. In addition to the need to increase productivity, there is a need to diversify agricultural production to provide adequate nutrition to the population-especially those in the lower income strata. 7. Achieving these objectives will not be easy, however, because the systems needed to drive productivity growth are performing poorly. Recent assessments carried out by the ASTI initiative show low levels of investment in agricultural research in southern Africa and high levels of fragmentation. 8. Given the large number of problems to be addressed and the fact that research resources are limited, the RCoLs need to set priorities and seek out efficient ways to come up with solutions. Some technologies can be acquired from external sources, such as the CGIAR centers or the private sector, and adapted for use within the region at relatively low cost. APPSA will attempt to exploit such opportunities, while at the same time leveraging investments to support research on problems that demand home-grown solutions because they are specific to the agro- climatic conditions and farming systems of southern Africa. During implementation, there will be a continued need to elucidate these priorities that are unique to the region and to ensure that they are being addressed through APPSA. 9. In addition to seeking to increase the efficiency of investments in agricultural research by promoting specialization and capturing economies of scale, APPSA will seek to magnify the benefits of research by providing mechanisms to increase technology spillovers. R&D projects supported under Component I will encourage testing of promising technologies across national boundaries. Policy dialogue and regulatory reform work supported under Component 3 will reduce barriers to technology transfers across national borders. B. Detailed Project description Component 1: Technology Generation and Dissemination (US$37.98 million of which US$37.24 million IDA Credit) 10. R&D projects. Component I will support technology generation and dissemination activities by financing R&D projects. 11. R&D projects will involve research, dissemination, and training activities designed to address the priorities defined in the regional R&D agendas to be developed by the APPSA participating countries under the coordination of the RCoL. The regional R&D agendas will identify research problems of relevance to multiple countries and lay out a set of priorities for technology generation and dissemination within the region. The regional R&D agendas will be 35 part of, or complementary to, CCARDESA's larger strategic planning and coordination - - - - - - 25 initiatives within the region. 12. R&D projects will support research, technology dissemination, training, and other activities (e.g., knowledge exchange) that will contribute to and benefit from enhanced regional collaboration. The proposal for each R&D project will identify a clear objective and describe in detail a set of activities that will be carried out within a defined time frame and budget. It will outline the implementation arrangements, detailing the roles and responsibilities of the collaborating institutions and the participating staff. It will include also a results framework that is aligned with the RCoL results framework, as well as an explanation of how performance indicators will be monitored. Every R&D proposal will include a set of activities designed to ensure that technologies generated through APPSA enter the dissemination system and are made available to farmers and other end users. 13. In order for an R&D project to be eligible for financing, it will have to meet the following criteria: * Participation of at least two countries; * Consistency with the regional R&D agenda (e.g. aimed at solving a regional research problem, dissemination priority or draw on a regional resource or expertise); * Potential for dissemination across the region (including an action plan for dissemination); * Compliance with peer reviewed technical and scientific quality standards; * Compliance with social and environmental standards; * Compliance with minimum financial and budgeting standards. 14. Development of R&D projects. A six-step process will be used to develop R&D projects. 15. Step 1: National planning. Development of R&D projects will start at the country level. One or more consultations will be organized by each country coordination unit, bringing together the principal stakeholders involved in research, training, and dissemination. It is expected that these consultations will form part of the annual national research planning meetings that are already taking place. The results of these consultations will be incorporated into a draft country Annual Work Plan (AWP) with budget that covers all APPSA components. The AWP will identify priority themes for R&D projects that have received endorsement at national level; researchers and other individuals that the national authorities have deemed eligible to prepare APPSA proposals are cleared to develop concept notes around these priority themes. 16. Step 2: Concept note development at national level. Concept notes will be developed for R&D projects in each of the three RCoL commodity systems (maize, rice, and food legumes). Concept notes will be based on a standard template of 2-3 pages and will identify: the focal point for the R&D project; other participating partner(s); and indicative research activities and budgets. The R&D project concept notes should be endorsed at national level. Informal communication among partners in projects under development will be advisable to produce a 25 Consistent with its mandate to coordinate research throughout SADC, CCARDESA will convene technical meetings of researchers and other stakeholders to defining regional research priorities and research agendas. 36 concept note, but in some cases countries could develop concept notes to take to the regional planning meetings in order to identify partners. 17. Step 3: Regional planning and concept note endorsement at regional level. CCARDESA will convene regional planning meetings of technical staff during which concept notes will be finalized in consultation with other country partners and the final list of R&D projects selected. Participants in the meetings will agree on R&D projects to be implemented. The final list of R&D project concept notes will be assured funding, subject to the proposal preparation process being completed (Steps 4-6, below). 18. Step 4: R&D project preparation. Following the regional meetings and the emergence of a consensus on the final list of R&D project concept notes, teams will further develop the concept notes into full project proposals, using an agreed template. The proposals will describe: research/dissemination objective(s), activities, arrangements for implementation including individual roles and responsibilities, expected outcomes, detailed results and supporting technical/scientific information. 19. Step 5: Peer review. CCARDESA will organize a peer review process to ensure that the R&D project proposals meet certain minimum levels of quality. For each commodity/commodity group, a peer review panel consisting of two to three experts will assess the proposals. Experts will be drawn from within and outside the SADC region. The roster of peer reviewers will be developed by CCARDESA and endorsed by national programs. Every proposal will be reviewed by two peer reviewers; if the two peer reviewers cannot agree on the quality of the proposal, a third peer reviewer will be added. 20. The purpose of the peer review is to promote quality within R&D projects. The peer reviewers will not have the power to approve or reject proposals. Peer reviewers will assess proposals for: (i) technical quality; (ii) the relevance of the problem to the region; (iii) consistency with the regional priority agenda as developed by RCoLs, CCARDESA and approved by the participating countries; (iv) compliance with minimum technical and scientific quality standards, and social and environmental standard that are consistent with the APPSA ESMF framework; (v) potential for dissemination, replicability across the region and potential impact on competitiveness; and (vi) compliance with minimum financial and budgeting standards. 21. The peer review process is intended to provide recommendations to strengthen R&D projects, but it may also identify proposals that do not meet minimum quality standards. If the peer reviewers judge that an R&D project proposal does not meet minimum quality standards, a separate process will be triggered to provide technical assistance to improve the proposal, after which it would be reviewed again. Once the peer review process has been completed and the quality of the proposal has been ensured, the proposal will be included in the regional work plan. 22. Step 6: Agreement on R&D project implementation. The proposed partners in R&D projects will formally indicate their intention to participate by having an authorized representative sign the MOU cover page. By doing so, the proposed partners will commit to financing the activities described in the R&D project proposal and meeting all of the implementation obligations. 23. Following the signing of the MOU, the R&D project will be implemented in accordance with the proposal. Funds will flow to the R&D project through the primary implementing agency 37 (Chitedze Research Station, IIAM, or ZARI) as part of the overall work plan, and not as a separate sub-grant, and the primary implementation agency will retain responsibility for all fiduciary functions. In some cases, the implementing agency for an R&D project may however be other than the primary implementing agency of APPSA (for example, it could be a civil society organization, a university, or a private firm). In these cases, a sub-grant arrangement will be needed to allow the transfer funds from the primary implementing agency to the secondary implementing agency. The arrangements for sub-grants will be described in detail in the Project Implementation Manual for the Project. 24. Reporting on implementation progress and financial management will take place on a six monthly and quarterly basis, in line with the overall arrangements for APPSA implementation. Regional meetings will also serve as fora for reporting on R&D project progress and findings. Figure 2.1: R&D project implementation process Periodic development of regional R&D agenda Timing Step 1: Annual national planning To be determined based on planning Key output: Draft combined annual work plan and budget consisting of approved R&D b ycl cycle Step 2: Concept note development at national level Within one month Key output: Draft concept notes that identify lead focal point, partners, activities and of national budgets planning meeting Step 3: Regional planning and concept note endorsement termined based on planning Key output: Agreed list of R&D project concept notes consistent with regional R&D cycle agenda. Recommended updates to regional R&D agenda. Step 4: R&D Project preparation on on Key output: R&D project proposals that conform to the agreed format planning meeting Step 5: Peer reviewemn Key output: Peer review report on quality of proposals and recommendations on areas following requiring improvement. If a proposal does not meet minimum standards, a separate submission of process will be triggered to develop an action plan and provide TA to bring proposal up proposal to standard. Step 6: Agreement on R&D project implementation diately Key output: Agreed R&D project proposal with formal agreement of partners to following peer implementation arrangements. review 38 25. Research priorities under the Maize RCoL. The main goal of the Maize RCoL will be to improve the productivity and resilience of the maize-based farming systems encountered in the different agro-ecological areas of the participating countries. The Maize RCoL will support activities ranging from developing and promoting improved varieties, cropping techniques, post- harvest practices, and agro-processing technologies to strengthening research capacities, quality control systems, and maize seed certification procedures. The Maize RCoL will work in close collaboration with CCARDESA to ensure that R&D projects proposed and developed under APPSA will have spillover effects across countries. 26. Malawi shares many agro-ecological similarities with its neighboring countries that will facilitate joint programming of research activities and technology dissemination across borders. The maize research teams from Malawi, Mozambique and Zambia have identified the following common constraints: * Abiotic constraints: Drought and heat stress, low soil fertility, low soil pH, and salinity. * Biotic constraints: Diseases (down mildew, gray leaf spot, leaf rust, maize streak virus) and pests (larger grain borer, weevils, stem borers). * Others: Lack of micro nutrients (zinc, iron, Vitamin A, lysine and tryptophan). 27. Based on these constraints, the following thematic areas have been identified for regional collaboration and joint research projects: * Breeding for yield, quality, resistance to pests and diseases, tolerance to abiotic stresses (drought and heat), and nutritional value (including work on quality protein maize); * Use of biotechnology to enhance and accelerate varietal development; * Crop management research covering soil fertility management and macro- and micro- nutrient management; linkages with legumes research for intercropping to reduce fertilizer dependency; * Water use and water management techniques, water harvesting and storage in conservation agriculture; * Integrated pest and disease control in production and post-harvest; weed management and development of maize varieties with enhanced resistance to Striga; * Germplasm collection, characterization, and conservation; * Processing, marketing and value addition; and development of labor saving technologies (sowing, storage). 28. APPSA-supported activities are also expected to consolidate and expand other ongoing research collaborations, such as: germplasm exchanges through CGIAR centers; policy and regulatory work being done under the Seed Policy Enhancement for African Reform (SPEAR) initiative; seed and agronomic research supported by the Alliance for a Green Revolution in Africa (AGRA). 29. Research priorities under the Rice RCoL: IIAM, which has long supported rice research, currently has a research program for irrigated ecosystems located at Umbelizi and Ch6kwe 39 (Maputo and Gaza Provinces) and a research program for rainfed lowland ecosystems located in Quelimane (Zambezia Province). Research activities for rice also take place in a number of satellite stations, such as Matutuine and Marracuene (Maputo Province); Xai-Xai (Gaza Province); Dondo (Sofala Province); Mopeia, Maganja da Costa and Nicoadala (Zambezia Province); Angoche (Nampula Province); and Namuno (Cabo Delgado Province). 30. In 2011, 11AM released the variety Macassane for irrigated and rainfed lowland ecosystems. It expects to release another variety for rainfed lowland ecosystem in 2012. Some commercial varieties such as Limpopo and IR 64 have been purified, and sufficient quantities of breeder seed are available for multiplication at IIAM's Basic Seed Unit. 31. In collaboration with IRRI, training programs for researchers and extension officers have been carried out. These training programs have focused on techniques for land preparation, crop management, and post-harvest technologies. 32. At the regional level, IIAM has established partnerships with breeding programs in Tanzania, Kenya, Burundi, Rwanda, and Uganda. These partnerships, which were developed with support from IRRI, have identified "hot spot" sites where observation nurseries have been established and materials are being selected for testing and eventual release. The sites in Tanzania are for irrigated ecosystems, the sites in Mozambique are for rainfed lowland ecosystems, and the sites in Burundi are for cold ecosystems. 33. Common research priorities shared by the three participating APPSA countries were identified during a regional workshop held in Maputo in May 2012. These common priorities were used to develop an initial regional R&D agenda for rice. They include: (i) development of high yielding varieties and associated agronomic packages; (ii) development of varieties tolerant to biotic and abiotic stresses; (iii) weed management, water use and water management regimes, soil fertility management; (iv) appropriate tillage systems; (v) harvest and post-harvest technologies; and (vi) crop management practices for better climate change adaptation. 34. Collaborative research under the Rice RCoL is expected to focus on seven main priorities/themes (the themes will be updated periodically through regional and international consultations): * Genetic diversity for rice in the country and in the region. R&D activities would likely focus on germplasm collection, characterization, mapping and registration; creation of gene banks for conservation and dissemination; and research on genetic diversity for the relevant characteristics for rice breeding. * Rice crop improvement. R&D activities would likely focus on breeding of varieties for: (i) cooking qualities demanded by the local and regional market (aromatic, long grain, translucent, intermediate amylase content, high head rice recovery); (ii) use in intensive production systems; (iii) hybrids for commercial farming; and/or (iv) tolerance to diverse biotic and abiotic factors (pests and diseases, water stress, thermal regime, salinity/sodicity and other toxicities) and adapted to climatic changes. * Agronomy, water, and farming systems management. R&D activities would likely focus on cropping practices and water control measures needed to boost productivity of irrigated and rainfed rice (e.g., direct seeding/transplanting, dates of seeding/ transplanting, population density, fertilizer, pest control, diseases and weeds); land preparation technology aiming at improving soil fertility, water management, and 40 weed control; conservation agriculture technologies for upland production systems; impact of climate changes on rice production systems and agriculture practices and mechanisms that promote adaptation capacity. * Agricultural mechanization including development of farm implements. R&D activities would likely focus on developing or testing machinery and agricultural tools at different technology levels for pre and post-harvest operations; and testing local operation and maintenance of appropriate agricultural equipment with local artisans. * Post-harvest technologies. R&D activities would likely focus on testing technologies and business models for rice post-harvest products, to increase product quality and market value; * Socio-economic studies, market search and impact evaluation. R&D activities would likely involve socio-economic studies carried out in different rice production regions to identify and evaluate the technology needs of farmers and consumers; market studies to quantify the rice demand (types, tastes and quality, new products derived from rice, use of byproducts and residues and its degree of quality); and establishment of a database on research results and technological advancements. * Innovation and technology development. R&D activities would likely focus on developing innovative tools for training and communication; technology extension and dissemination capacity development; and development of sustainable and user friendly rice technology packages. 35. Research priorities under the Food Legumes RCoL. ZARI has developed an extensive farming system research program on cowpea, groundnuts, beans, soybean, and pigeon pea. Research is currently under way in Kabwe (which leads the food legumes research program), as well as at research stations in Golden Valley, Mount Makulu, Misamfu, Mutanda, Mochipapa, Msekera, Mongu, Nanga, Kabwe, Mufulira, and Mansa. This research is aimed at developing cultivars appropriate for food use as well as industrial use. The program is multi-disciplinary, involving breeders, soil scientists, germplasm conservationists, entomologists, pathologists, agronomists, food technologists and industrial technologists, among others. Research is being carried out in all three of Zambia's agro-ecological zones, and technologies being developed are either of specific or wide adaptation. 36. ZARI's food legume program has developed a number of bilateral and international partnerships, including with the Brazilian Enterprise for Agricultural Research (EMBRAPA), AGRA, the Asian Vegetable Research and Development Center (AVRDC), the International Maize and Wheat Improvement Center (CIMMYT), the International Institute of Tropical Agriculture (IITA), and the International Center for Tropical Agriculture (CIAT). The Southern Africa Bean Research Network (SABRN) and Pan African Bean Research Network (PABRA) are also important networks. These partnerships have supplied elite lines/germplasm for in- country evaluation and technologies for conservation agriculture, among others. 37. Current technologies with potential for immediate scaling out nationally and within the region include: (i) bean varieties (Lyambai, Kalambo, Chambeshi, Lwangeni, Kapisha, Kabulangeti, Kalungu, Lukupa, Kabale, Sadzu); (ii) groundnut varieties (MGV4, MGV-5, Chishango, Katete, Luena, Chipengo, Champion); (iii) soybean varieties (Lukanga, Magoye, Hernon 147, Kaleya); (iv) cowpea varieties (Lutembwe, Bubebe, Msandile and Namuseba); 41 (v) agronomic food legume packages (fertilizer recommendations, inoculums, agricultural lime, spacing, integrated pest and disease management options, integrated soil fertility management options); (vi) post-harvest crop protection; (vii) processing machinery and mechanization (shellers, ground strippers); (viii) utilization technologies for soybean, groundnut, beans and cowpeas; (ix) conservation agriculture and soil fertility improvement technologies; and (x) fodder research technologies. 38. Common research priorities shared by the three participating APPSA countries were identified during a regional workshop held in Livingston in November 2012 and were used to develop the initial regional R&D agenda for food legumes. 39. The Food Legumes RCoL will focus on a range of food legume systems (involving beans, cowpea, groundnut, soybean, and pigeon pea), as well as mixed food legume-cereals systems. Collaborative research under the Food Legumes RCoL is expected to focus on the following main priorities/themes (the priorities will be updated periodically through regional and international consultations): * Varietal development and adaptation for abiotic and biotic stresses and high oil and protein content. R&D activities will likely focus on addressing major pest and diseases that affect legume crops within the region: for beans (bean stem maggot, bean fly); for soybean (Asian soybean rust, Brown Spot or Red Leafy Blotch); and for cowpea (fungal disease, aphids, legume pod borers, mosaic virus), among others. Breeding would also likely focus on drought tolerance, early maturity, and consumption qualities (e.g., oil and protein content, leaf size, taste). * Development of agronomic packages. R&D activities will likely focus on soil fertility improvement, including conservation agriculture. Research supported under APPSA would build on current regional research on the maize/soybean and maize/cowpea rotations. It would also support work on crop management, with the aim of increasing yield and improving pest and disease management. * Maintenance of germplasm. R&D activities will likely focus on germplasm collection, characterization, mapping and registration; creation of gene banks for conservation and dissemination; and research on genetic diversity for characteristics of relevance to breeding. * Nutrition and health. R&D activities will likely focus on food security and the utilization of protein-rich food legume crops for nutrition and health impacts; and possible methodologies to promote legume production, particularly beans, cowpeas, and pigeon peas. * Post-harvest technology development and value addition. R&D activities will likely focus on increasing use of food legumes in the food and feed industries, for example by improving processing technologies and by exploring potential new commercial applications for groundnut (paste/peanut butter and oil) and soybean (for cake, oil, feed). * Grain quality research. R&D activities will likely include a focus on reducing the incidence of aflatoxin, a major constraint to exports with serious health consequences. Research would also include work on improving grain quality and size to increase suitability for processing (primarily for groundnuts and soybeans). 42 * Mechanization (labor saving devices). R&D activities will likely include research on eliminating labor-intensive production and processing practices, which are significant for most legumes and are undertaken mainly by women, who face a number of competing priorities. 40. Technology dissemination priorities. The payoffs to investments in agricultural R&D made under APPSA will depend ultimately on the success of technology dissemination efforts, so promoting technology adoption remains an important long-term goal of the Project. While APPSA lacks the resources to finance dissemination activities on a large scale, it will leverage existing technology transfer systems and focus on supporting linkages between research and extension systems. It is expected that some of the R&D projects supported under Component I will focus exclusively on dissemination activities. During the first few years of Project implementation when few, if any, technologies developed with APPSA funding will be ready for transfer to farmers, dissemination activities could involve technologies developed prior to the launching of the Project and already available "on the shelf." 41. APPSA financing will be used to address a range of bottlenecks known to slow technology dissemination: weak research-extension links; lack of human capacity within the national extension systems; inadequate technology reference manuals, bulletins, information leaflets at extension level; lack of harmonization of information packaging; inappropriate packaging of extension messages; limited information flow and feedback within the system; limited use of mass communication channels; and inadequate training. While it cannot and should not replace national extension systems, APPSA can play a useful role in addressing some of the bottlenecks between technology generation and dissemination, for example by improving the content and accessibility of technology messages and knowledge products; improving the capacity of lead farmers, extension agents and advisory service providers; and improving farmer- research-extension feedback mechanisms. 42. Through R&D projects, APPSA will support a range of activities designed to promote enhanced dissemination of improved agricultural technology. * On-farm participatory research will be carried out in collaboration with a range of partners, including researchers, extension agents, seed companies, and NGOs. The data generated will be used to improve plant breeding efforts and meet varietal registration requirements. * Demonstrations, field days, and science fairs will be supported to promote interaction with the farming community, raise awareness of new technologies, and facilitate their dissemination. * Electronic and print media will be mobilized to communicate information about research and dissemination activities being supported by APPSA. * Posters, brochures, pamphlets and other technical publications will be produced for use in technology transfer activities. * Training manuals, booklets, policy briefs and scientific publications will be produced to facilitate knowledge transfer. 43 Component 2: Strengthening Regional Centers of Leadership (US$37.85 million of which US$37.79 million IDA Credit) 43. Component 2 will support core capacity building activities within the RCoLs, with investments in each country driven by the specific needs of that country's RCoL. In general APPSA will support: (i) upgrading of research infrastructure, including construction and rehabilitation of physical infrastructure and equipment; (ii) improving management and performance systems, including knowledge and information systems; (iii) human capital development, including scientific training at the post graduate level, upgrading of skills through short courses or targeted training, and scientific exchanges; and (iv) strengthening of seed, regulatory and related services. 44. Malawi: Investments will focus on improving existing facilities at Chitedze Research Station, which is the main research facility for the Maize RCoL, as well as other research stations under MoAFS. APPSA will finance rehabilitation of physical infrastructure, primarily within satellite centers in the three targeted agro-ecological zones. Gaps in laboratory analytical capacity pose a constraint, so APPSA financing will be used to improve scientific equipment within the crop breeding, entomology, plant pathology, mycotoxin, soil and plant analysis, molecular biology, and food technology laboratories. These latter investments will also serve to increase the analytical capacity for regulatory purposes, including quality control and mycotoxin analysis. APPSA will pay particular attention to seed testing and certification capacities, to ensure that the seed services unit of MoAFS remains accredited and fully compliant with the standards of the International Seed Testing Association. APPSA will also procure vehicles to increase researchers' mobility, needed to enhance the implementation and supervision of on-farm trials and to facilitate interaction with extension services and farmers as part of technology dissemination programs. 45. The Malawi maize program currently has capacity in breeding and agronomy, but human resource gaps have been identified in the areas of economics, biotechnology, irrigation, plant pathology, entomology, nutrition and gender linkages, information systems, and soil science. While some gaps are expected to be filled by re-assignment under the Maize RCoL, it is anticipated that additional training will be needed in the above categories, primarily at the MSc level. It is anticipated also that PhD level training will be needed in biotechnology. 46. Mozambique: Investments in Mozambique will support capacity strengthening, primarily within IIAM, but also in the extension services of MINAG and other related institutions. To build the capacity of the rice program, IIAM will establish a new research facility near Quelimane. Based on analysis undertaken by IIAM, a potential site has been identified in Namacurra District. Criteria used to select the site include proximity to rice production clusters, accessibility, water quality, and level of investment needs. The preferred site is located in a zone where the rice program is currently undertaking field testing and laboratory analysis in a temporary space. Further feasibility and design assessments will be undertaken prior to effectiveness using PPA resources. Completion of the new facility will expand field research capacity to approximately 50 hectares. 47. APPSA financing will be used to build laboratory analytical capacity in a number of areas: soil and water quality testing, analysis of plant materials, biotechnology, identification of pests and diseases, grain physical and chemical analysis, and seed quality. 44 48. To ensure that the RCoL is adequately staffed, the RCoL will draw on IIAM scientists, researchers from CGIAR centers, and representatives from private firms. Nevertheless, it may be difficult to fill gaps that have been identified in the areas of molecular biology, agronomy (soil, water and environment), nutrition, mechanization and agro-processing, and economy, extension, gender and sociology and rural innovation. To help fill these gaps, APPSA will finance long term training at the MSc and PhD level. 49. 11AM has relatively few scientists employed at headquarters and in regional facilities, so APPSA financing will be used to finance the recruitment of new research staff. APPSA financing will initially support up to 100 percent of the cost of newly recruited research staff, but cost sharing measures will be introduced in the second year of implementation to migrate all staff-related costs to the Government budget by Project closing. 50. Zambia: Investments in Zambia will support ZARI. Kabwe Research Station has been designated as the main location for the RCoL. Financing will also cover a number of other ZARI stations, since research on cowpea, groundnut, soybean, common beans, and pigeon pea is conducted at multiple stations. Support would also be provided to the Department of Agriculture and to GART. 51. ZARI has adequate physical infrastructure, but some construction, upgrading, and rehabilitation will be required, particularly in rebuilding greenhouses and cold rooms. APPSA financing will be used to fill gaps in farm and laboratory equipment, which currently pose major constraints to laboratory analysis and field trials. APPSA financing will also address human capacity gaps that have been identified in the areas of plant breeding, agronomy, pathology, entomology, biometrics, nutrition, soil fertility, farming systems, gender, genetic conservation, extension agronomists, and information management. Capacity building activities will include a mix of short term, MSc, and PhD training. Component 3: Coordination and Facilitation (US$18.81 million of which US$14.37 million IDA Credit, and US$0.6 million Regional IDA Grant) 52. Component 3 will support activities in three main areas: (i) coordination at the national level, which will be managed through the establishment of coordination units or teams within existing structures in the implementing agencies; (ii) coordination at the regional level, to be undertaken by CCARDESA, and dissemination of information among the participating countries; and (iii) policy analysis and dialogue to assess policies needed to facilitate technology generation and dissemination activities within the region. 53. National level research coordination and management: At national level, APPSA will finance project coordination activities, including planning and budgeting, management and administration, monitoring and evaluation, safeguards compliance, and regional engagement. If necessary, APPSA could finance consultants to ensure that all essential project coordination activities are carried out effectively. Government counterpart resources will be used to pay staff- related costs not eligible for IDA funding. 54. Regional facilitation by CCARDESA: At the regional level, APPSA will finance regional facilitation activities including: (i) planning, monitoring and evaluation activities related regional collaboration; (ii) regional exchange of information, knowledge and technologies; and (iii) technical assistance and capacity building. Many of these activities will be carried out by 45 CCARDESA, which will play an important role in facilitating the development of R&D projects, including organizing the peer review process and providing quality control. 55. The regional facilitation activities to be performed by CCARDESA will be supported using funds from two sources. During the first 12 to 18 months of Project implementation, the activities carried out by CCARDESA will be supported using the Regional IDA grant. Once the Regional IDA Grant has been fully used, regional facilitation activities will be financed by the participating APPSA countries through their IDA Credits. Financing will be provided to CCARDESA in tranches on the basis of agreed AWP&Bs.26 56. R&D policy analysis and dialogue: APPSA financing will support analytical work, needs assessments, and policy dialogue or policy harmonization activities in key areas that affect R&D at national and regional level. Work will focus on analysis of relevant policies and legislation for intellectual property rights systems, operationalization of the SADC harmonized seed regulatory system, implementation of biosafety regulations, and similar topics. Discussions will take place during implementation to determine whether Project resources could be used productively to advance the regional seed agenda. If the participating countries agree that APPSA could play a useful role by supporting key players other than the RCoLs, support for these key players could be channeled through CCARDESA. 26 For CCARDESA to perform its regional coordination role, a US$3 million budget envelope will be required over the six years of Project implementation. Of this amount, US$0.6 will be provided in the form of a Regional IDA Grant to CCARDESA, and US$ 2.4 million will come from the IDA Credits to the participating countries. 46 Project Costs Table 2.1: Malawi Component Summary (US$ millions) Components/Activities Local Foreign Total IDA Component 1: Technology Generation and Dissemination 1. RCoL Collaborative Generation Projects (National level for one 5.36 5.36 5.72 selected crop) 2. RCoL Collaborative Generation Projects (with other countries 1.35 1.35 1.43 for one selected crop (1)) 3. RCoL Collaborative Generation Projects (with other countries 1.35 1.35 1.43 for one selected crop (2)) 4. Technology Dissemination 2.91 0.68 3.59 3.44 Sub-total 10.97 0.68 11.65 12.02 Component 2: Strengthening Regional Centers of Leadership 1. Upgrading of Research Infrastructure 3.90 3.89 7.79 8.59 2. Improving Management and Performance Systems 0.20 0.20 0.40 0.42 3. Developing Human Capacity 1.07 1.72 2.79 2.94 4. Strengthening Seed, Regulatory and Related services 0.21 0.33 0.54 0.57 Sub-total 5.38 6.14 11.52 12.52 Component 3: Coordination and Facilitation 1. APPSA Coordination and Management 4.01 0.67 4.68 4.46 2. CCARDESA Facilitation 0.22 0.78 1.00 0.80 Subtotal 4.23 1.45 5.68 5.26 Total BASELINE COSTS 20.58 8.27 28.85 29.80 Physical Contingencies 0.21 0.23 0.44 Price Contingencies 1.13 0.38 1.51 Total PROJECT COSTS 21.92 8.88 30.80 Table 2.2: Malawi Financing Plan (US$ millions) Foreign Local Total Percent Government 0.00 0.42 0.42 1.4 IDA 8.73 21.07 29.80 96.8 Beneficiary 0.00 0.38 0.38 1.2 Total 9.88 21.92 30.80 100.00 47 Table 2.3: Mozambique Component Summary (US$ millions) Components/Activities Local Foreign Total IDA Component 1: Technology Generation and Dissemination 1. RCoL Collaborative Generation Projects (National level for one 5.29 5.29 5.62 selected crop) 2. RCoL Collaborative Generation Projects (with other countries 1.58 1.58 1.68 for one selected crop (1)) 3. RCoL Collaborative Generation Projects (with other countries 1.58 1.58 1.68 for one selected crop (2)) 4. Technology Dissemination 3.03 0.20 3.23 3.13 Sub-total 11.48 0.20 11.68 12.11 Component 2: Regional Center of Leadership Strengthening 1- Upgrading of Research Infrastructure 3.86 3.89 7.75 8.50 2- Improving Management and Performance Systems 0.23 0.29 0.52 0.54 3- Developing Human Capacity 1.02 1.60 2.62 2.79 4- Strengthening Seed, Regulatory and Related services 0.21 0.03 0.24 0.25 Sub-total 5.32 5.81 11.13 12.08 Component 3: Coordination and Facilitation 1- APPSA Coordination and Management 6.06 0.52 6.58 4.81 2- CCARDESA Facilitation 0.25 0.69 0.94 0.80 Subtotal 6.31 1.21 7.52 5.61 Total BASELINE COSTS 23.12 7.21 30.33 29.80 Physical Contingencies 0.14 0.22 0.36 Price Contingencies 1.30 0.37 1.67 Total PROJECT COSTS 24.56 7.80 32.36 Table 2.4 Mozambique Financing Plan (US$ millions) Foreign Local Total Percent Government 0.00 2.07 2.07 6.4 IDA 7.65 22.15 29.80 92.1 Beneficiary 0.00 0.29 0.29 0.9 Total 7.80 24.56 32.36 199.99 48 Table 2.5: Zambia Component Summary (US$ millions) Components/Activities Local Foreign Total IDA Component 1: Technology Generation and Dissemination 1. RCoL Collaborative Generation Projects (National level for one 6.80 6.80 7.19 selected crop) 2. RCoL Collaborative Generation Projects (with other countries 1.27 1.27 1.36 for one selected crop (1)) 3. RCoL Collaborative Generation Projects (with other countries 1.27 1.27 1.35 for one selected crop (2)) 4. Technology Dissemination 2.78 0.29 3.07 3.21 Sub-total 12.12 0.29 12.41 13.11 Component 2: Strengthening Regional Centers of Leadership 1. Upgrading of Research Infrastructure 3.70 4.85 8.55 9.22 2. Improving Management and Performance Systems 0.10 0.12 0.22 0.23 3. Developing Human Capital 3.08 3.08 3.10 4. Strengthening Seed, Regulatory and Related services 0.23 0.38 0.61 0.64 Sub-total 4.03 8.43 12.46 13.19 Component 3: Coordination and Facilitation 1. APPSA Coordination and Management 2.88 1.05 3.93 2.70 2. CCARDESA Facilitation 0.30 0.65 0.95 0.80 Subtotal 3.18 1.70 4.88 3.50 Total BASELINE COSTS 19.33 10.42 29.75 29.80 Physical Contingencies 0.20 0.22 0.42 Price Contingencies 1.04 0.27 1.31 Total PROJECT COSTS 20.57 10.91 31.48 Table 2.6 Zambia Financing Plan (US$ millions) Foreign Local Total Percent Government 0.00 1.41 1.41 4.5 IDA 10.77 19.03 29.80 94.7 Beneficiary 0.00 0.07 0.07 0.2 Total 10.91 20.57 31.48 100.0 49 Table 2.7: Component 3 CCARDESA Facilitation (US$ thousands) IDA Credit Activities Regional from Malawi, Total IDA Grant Mozambique and Zambia Component 3: CCARDESA Facilitation Regional Technical Review and Strategic Meetings 60.0 453.1 513.1 Supporting Regional RCoL R&D Projects 90.0 740.9 830.9 Training and Workshops 69.0 295.8 364.8 Policy harmonization and advocacy 26.0 61.0 87.0 Peer review 210.0 470.0 680.0 Project coordination 120.0 280.0 400.0 Recurrent and Administration Costs 45.0 100.0 145.0 Total 600.0 2,400.0 3,000.0 50 Annex 3: Implementation Arrangements Agricultural Productivity Program for Southern Africa (APPSA) Project institutional and implementation arrangements National level implementation mechanisms 1. At the country level, APPSA activities will be governed by separate credit agreements, with funds disbursed directly through established institutional structures within each country's national system. A PIM will be developed for each country that will govern all aspects of Project implementation at the national and regional level. Malawi 2. In Malawi, overall responsibility for implementing APPSA activities will lie with MoAFS. The Chitedze Research Station, under MoAFS will serve as the RCoL and will be in charge of coordinating Project-supported activities. The Department of Agricultural Extension Services (DAES) will be in charge of dissemination activities to be developed under APPSA and will work closely with Chitedze Research Station on the design and implementation of APPSA- related extension programs. 3. Consistent with the Government's policies on harmonization and alignment of donor projects, APPSA will be fully integrated in the ASWAp investment framework and aligned to its existing management structure. 4. MoAFS, through the ASWAp Executive Management Committee, will oversee APPSA coordination and take the lead in providing policy and strategic direction and ensure inter- ministerial coordination on research and extension activities under the Project. The ASWAp Executive Management Committee will also be responsible for reviewing and validating the Project's AWP&B. 5. As part of the ASWAp process, a Technology Generation and Dissemination Technical Working Group (TWG) co-chaired by the Directors of the Department of Agricultural Research Services (DARS) and DAES has been established to coordinate and harmonize research and extension activities. This TWG will be used by APPSA to review and refine its AWP&Bs before they are submitted to the ASWAp Executive Management Committee. The TWG will ensure coordination of APPSA activities with other MoAFS investments and similar Bank-funded operations. 6. To ensure closer and more regular supervision and coordination of APPSA during implementation, an RCoL Steering Committee will be established. The Steering Committee will be chaired by the representative from DARS, with the representative from DAES as deputy. The Steering Committee will include representatives from relevant agricultural departments, other ministries (for example, the Ministry of Industry and Trade), representatives of farmer organizations and private companies, as well as representatives from the Lilongwe University of Agriculture and Natural Resources. Membership of the Steering Committee will not exceed 12 to 15 people. The Steering Committee will review and approve the RCoL AWP&Bs before they are submitted to the ASWAp Executive Management Committee. The Steering Committee will be 51 charged with ensuring that APPSA investments are well coordinated with other MoAFS investments and similar projects. 7. A light RCoL Secretariat will be created under MoAFS and hosted by Chitedze Research Station. The Secretariat will be headed by the Chitedze Research Station manager, who will be supported by key scientific and administrative staff. The Secretariat will be responsible for implementation and monitoring of APPSA activities, communication and information sharing, reporting, and coordination with CCARDESA and other participating countries. More specifically, the Secretariat will be in charge of: (i) coordinating the preparation of APPSA AWP&Bs, including liaising with the Department of Agricultural Planning Services (DAPS) and the ASWAp Secretariat to ensure incorporation of APPSA proposals in the overall MoAFS budget; (ii) compiling information for proper coordination and supervision by MoAFS; (iii) preparing quarterly progress reports and organizing meetings of the technical implementation coordination committee; and (iv) preparing annual implementation reports for presentation to the TWG. APPSA will provide technical assistance to this Secretariat for activities related to financial management, procurement, monitoring and evaluation, and environment and social safeguards supervision. 8. The proposed organogram for the Maize RCoL is depicted below. Figure 3.1: Organogram for the Maize RCoL ASWAp Executive Management Committee ASWAp Maize RCoL APPSA Regional Technology Steering Committee Steering Generation and - (Chair: DARS, Deputy Chair: Committee, Dissemination DAES) CCARDESA Committee I. Maize RCoL Steering Committee (Chair: DARS, Deputy Chair: DAES) ------ Satellite RCoL research stations District extension offices 52 Mozambique 9. Four institutions will play key roles in the implementation of the Project: (i) MINAG, (ii) IIAM, (iii) the Rice RCoL, and (iv) CCARDESA. Figure 3.2 below illustrates the relationship of the four main institutions that will be involved in the project implementation. Figure 3.2: Organogram for the Rice RCoL MINAG Supervision and policy orientation Consultation forum (MINAG, MCT, UEM, private sector) CCARDESA H1AM Regional coordination, training, CGIAR I I Management, coordination, technology transfer, and research and dissemination sharing of knowledge Rice producer Regional Center of Leadership organizations implementation and coordination of activities Plant breeding, agronomy, soil and water Private sector management, agro processing, mechanization, Rice value socioeconomics, training and dissemination, chain support services Central research stations and RCoL HQ: Rainfed Extension lowland rice (Nawacurra) Northeast research Services stations: Rainfed upland rice (Nampula) Southern research stations:, irrigated rice Training (Chokwe, Umbeluzi) Institutions 10. MINAG will have overall responsibility for APPSA supervision and coordination. MINAG will provide overall strategic guidance to the Project and to IIAM, ensure inter- ministerial coordination, and review and approve AWP&Bs. MINAG will also ensure that the Project responds to the research agenda outlined in the Agriculture Development Strategy and is well aligned with its investments programs. 11. IIAM will be responsible for coordination, day-to-day management, and implementation of research activities. The Director of IIAM will be the executive, responsible for providing strategic direction to the Project. IIAM will establish a coordination unit within IIAM. The coordination unit will be staffed with a Project Manager, a Financial Management Specialist, a Procurement Specialist, a Monitoring and Evaluation Specialist, and other functions that may be found necessary. 53 12. The Rice RCoL will be headquartered in Zambezia Province, Namacurra District, and will have under its responsibility the coordination, day-to-day management, and implementation of activities in the different areas of research and development. Since the RCoL will form part of the organic functional structure of IIAM, the activities of the RCoL will be undertaken through the Zonal Research Centers of IIAM (South, Centre and Northeast). 13. For research areas in which MINAG and IIAM do not have the required capacity, partnerships will be formed with other research and academic institutions at national, regional and international level (e.g., universities, CGIAR centers, other international centers, and private firms). With respect to technology dissemination activities, potential partners/collaborators of the RCoL include the national extension service, rice producers and their organizations, private firms, and NGOs. The RCoL will establish linkages with other RCoLs located in the APPSA participating countries (Maize RCoL in Malawi, Food Legume RCoL in Zambia) to pursue collaborative training activities and to share knowledge and technologies of regional relevance. 14. The management structure of the Rice RCoL will provide three types of input: strategic direction, regional coordination, and operational oversight. 15. Strategic direction: At a more strategic level, the management structure will make sure that the RCoL agenda for research and development takes into consideration the principles established in the Strategic Plan for Agricultural Sector Development (PEDSA), the Strategic Plan of IIAM, and strategic priorities at regional level. IIAM will work closely with CCARDESA in developing the regional agenda for rice research and development and in supporting its programmatic implementation. 16. Regional coordination: Regional coordination will be needed to ensure that mechanisms and procedures are in place to ensure that the portfolio of research programs and projects is well aligned with development priorities at regional level. Regional coordination is also needed to ensure that the core functions of the RCoL are carried out effectively (e.g., research and development, technology dissemination, knowledge exchange, training, institutional development). The IIAM management structure will be supported by a Technical and Scientific Committee, which will be responsible for assessing the scientific and technical merit of R&D projects supported under APPSA, as well as their relevance and impact. The Technical and Scientific Committee will be comprised of the IIAM research program coordinators, as well as other national and international researchers and academicians invited according to the theme under evaluation. 17. Operational oversight: Operational oversight functions to be performed by IIAM include day-to-day management of R&D projects, supervision of the researchers who will carry out those projects, and administrative and financial oversight of the units to which those researchers report. 18. At regional level, CCARDESA is expected to play a coordination role with respect to developing the regional research agenda, assuring the technical quality of R&D proposals, promoting technology sharing and knowledge exchange, and monitoring and evaluation. IIAM and RCoL will partner with CCARDESA as needed in all of these areas of activity. 54 Zambia 19. The Food Legumes RCoL will be established with a main technical unit based at Kabwe Research Station serving as the hub of a network of satellite centers active in food legumes- related research. Kabwe Research Station will take on responsibility for technical leadership within the Food Legumes RCoL. The choice of the Kabwe Research Station was based on its central geographical positioning, the diversity of soils for field research trials for the selected commodities, and its current leadership of the Food Legumes Research Program. Other stations that will form part of the Food Legumes RCoL include Msekera (groundnut), Mochipapa (cowpea), Misamfu (beans), Mount Makulu Research Station (all commodities). In addition to hosting the Food Legumes RCoL, Kabwe Research Station will also lead on activities related to soybean. Other R&D activities financed by APPSA for maize, rice, and technology dissemination will take place across ZARI stations, MAL, and other partners. In particular, Mutanda technology sites will be used for technology evaluation and ZARI cross cutting programs on Farming Systems and Social Sciences will undertake the on-farm validation of developed technologies prior to dissemination. Information dissemination of validated technologies will be the responsibility of the Department of Agriculture within MAL and other organizations, such as NGOs and universities. 20. Program implementation will be guided by a Steering Committee, which will be chaired by the Permanent Secretary of MAL, with members drawn from representatives of: farmer organizations, research (NARS), the seed certification authority, training institutions, extension agencies, and the private sector (seed industry, processors, and agribusiness firms). The Steering Committee will guide the general operations of the Food Legumes RCoL. 21. Overall oversight of APPSA will be responsibility of ZARI and MAL. ZARI will assume the role of Secretariat to the Steering Committee and will take the lead in coordinating APPSA activities. Administration and management of APPSA will be integrated into ZARI management structures, which are led by the Director of ZARI (reporting to MAL) and supported by the management and administrative staff at ZARI headquarters and at ZARI research stations. Technical leadership for the Food Legumes RCoL will rest with the Center Manager based at Kabwe Research Station. 55 Figure 3.3: Organogram for the Food Legumes RCoL Steering Committee "~ Secretariat (ZARI) Food Legume RCoL stations Other APPSA R&D activities Kabwe (lead) Mochipapa GART Other R&D institutions Misamfu Msekera LMt Makulu Mongu R&D project implementation mechanisms 22. It is expected that most R&D projects will be implemented by ZARI, IIAM, or MoAFS/Chitedze. In some cases, another entity, such as a civil society organization, university, or private firm, could be selected to undertake implementation of an R&D project. R&D projects implemented partly or entirely by entities other than ZARI, IIAM or MoAFS will be governed by a sub-grant, service contract, or MOU. The choice of financing mechanism will depend on the nature of the R&D project (technical expertise required, scope of work, duration, and cost), and the characteristics and numbers of entities capable of performing the work (civil society organizations, universities, private firms) and their ability to manage and account for funds according to World Bank fiduciary requirements. The criteria used to select among the various types of financing mechanisms and the procedures used to manage them will be described in the PIM, including specific fiduciary requirements for institutions selected to receive funds. Regional implementation mechanisms 23. Support from CCARDESA. As the sub-regional organization mandated to coordinate agricultural research throughout the SADC region, CCARDESA is well placed to contribute to the achievement of the APPSA goals of increasing research efficiency and facilitating research spillovers. It is expected that each RCoL will assume a regional leadership role with respect to its focal commodity. For example, in addition to carrying out R&D activities that are purely of 56 national interest, the RCoL in Malawi will coordinate regional R&D activities related to maize- based cropping systems. Similarly, the RCoLs in Mozambique and Zambia will coordinate regional activities related to rice-based and food legumes-based cropping systems. CCARDESA will facilitate the implementation of regional R&D activities by providing assistance for networking, capacity building, and technical backstopping, M&E, regional coordination and supervision, and policy analysis. Each country will establish implementation arrangements with CCARDESA detailing the nature of the technical support and coordination expected and the level of financial support to be provided by each participating country. The following table envisions a typology of support that CCARDESA will support in the implementation of APPSA. Table 3.1: Types of support to be provided by CCARDESA under APPSA 1. Convening Convene regional meetings involving APPSA participating countries to identify regional strategic research priorities and develop regional strategic research agendas. Convene regional meetings involving APPSA participating countries and broader groups of APPSA stakeholders and partners for purposes of scientific exchange, policy dialogue, operational coordination, etc. 2. Networking Support the development of information-sharing platforms to facilitate spillovers and enable sharing of benefits generated by technologies developed by RCoLs Facilitate exchanges between APPSA, APPSA participating countries, and RCoLs and the international R&D community 3. Technical backstopping Establish a roster of peer reviewers and manage the peer review of R&D proposals that have been approved for funding Assist the RCoLs in developing standardized research guidelines and scientific protocols 4. Monitoring and evaluation Using M&E information generated by the R&D projects and compiled and forwarded by the RCoLs, produce annual technical reports showing overall APPSA implementation progress Provide capacity building for M&E staff working in RCoLs, participate in impact assessment activities, and facilitate and participate in APPSA evaluations and reviews 5. Policy harmonization and advocacy Encourage the rationalization and harmonization of policies, procedures, and regulations related to technology generation and dissemination in APPSA participating countries by supporting technical studies and promoting dialogue 6. Capacity building Participate in capacity building organized by the RCoLs (i.e. long and short-term training, workshops, study tours, etc.) 7. Administration and management of APPSA Report on and be accountable for activities and resources managed by CCARDESA 24. Operational oversight. CCARDESA was formally established in 2011. Classified as a SADC subsidiary organization, it is governed by an independent Board and reports on its activities to the SADC Council of Ministers. The CCARDESA Secretariat is headquartered in Gaborone, Botswana and staffed by an Executive Director and a complement of technical and administrative staff. Interim staff operated the Secretariat in 2011 and 2012. A new Executive Director took office as of November 1, 2012, and other core staff (including fiduciary and 57 technical specialists) have been competitively selected and will assume their positions on February 1, 2013. A dedicated APPSA Coordinator will be hired to lead the support functions described above. Financial management, disbursement, and procurement Financial management 25. The World Bank FM team conducted FM assessments of Chitedze Research Station in Malawi which will host the APPSA Secretariat under MoAFS, IIAM in Mozambique, ZARI in Zambia, and CCARDESA in Botswana. The objective of the FM assessments was to determine whether the FM arrangements: (a) are capable of correctly and completely recording all transactions and balances relating to the Project; (b) will facilitate the preparation of regular, accurate, reliable and timely financial statements; (c) will safeguard the Project's entity assets; and (d) will be subjected to auditing arrangements acceptable to the World Bank. The assessment complied with the Financial Management Manual for World Bank-Financed Investment Operations that became effective on March 1, 2010, as well as with AFTFM Financial Management Assessment and Risk Rating Principles. 26. In the case of R&D projects implemented by entities other than ZARI, IIAM, and MoAFS/Chitedze, eligibility to receive funds will be contingent upon meeting financial management requirements detailed in the PIM. These requirements will ensure that the entity has the capacity to account for the funds received and report on their use, so that the eligibility of expenditures can be confirmed. Budgeting arrangements 27. Chitedze Research Station: Budget preparation and monitoring will follow national procedures. The Financial Management Consultant will take the lead in the preparation of the budgets based on the AWPs. IFRs will be used for budget monitoring, and significant variances between actual expenditures and budgeted amounts will have to be reconciled. 28. IIAM. Budget preparation and monitoring will follow national procedures. The Project budget will be included as part of the IIAM / MINAG budget. This will be done by IIAM's Direqdo de Planificacdo, Administraqdo e Finanqas (DPAF), working in coordination with the contracted FM specialist. The procedures for budget preparation are well defined on the Manual de Administraqdo e Finanqas (MAF). The DPAF is experienced in budget preparation, as it is required to prepare budgets on an annual basis. The approved activities appearing in the budget will be captured in AWPs, which for IDA purposes will be the documents driving implementation. The Project budget will be registered with the National Directorate of Budget (DNO) and National Directorate of Treasury (DNT) prior to effectiveness, so that the Project will be fully integrated into the country FM systems, including the Government's accounting system (e-SISTAFE) and the Conta Unica do Tesuoro (CUT). 29. ZARI: Budget preparation and monitoring will follow national procedures. ZARI will prepare AWPs, which will be the basis for budget preparation. The Government's current budget preparation process will be followed. The Project budget will be prepared under the Ministry using existing national budget classifications of programs and subprograms linked to IFMIS Chart of Accounts, with ZARI separately identified. The approval process will follow 58 government procedures and will be expanded in the Project Financial Procedures Manual to be developed by effectiveness. Capacity within ZARI to monitor project budgets in compliance with World Bank FM procedures is weak, and therefore Project staff will receive training from the World Bank Financial Management Specialist to strengthen their skills. 30. CCARDESA: The CCARDESA Finance Manager will prepare an annual budget based on the approved operational plan for the Project and will be responsible for producing variance analysis reports comparing planned to actual expenditures on a monthly and quarterly basis as documented in the organization FM manual. The budgets will be prepared and monitored using the proposed SUN SYSTEM, to be acquired by effectiveness. The periodic variance analysis will enable the timely identification of deviations from the budget. These reports will be part of the interim unaudited financial reports (IFRs) that will be submitted to the World Bank on a quarterly basis. Accounting arrangements Staffing 31. Chitedze Research Station will need to strengthen its complement of financial management staff given the additional demands of APPSA implementation. Additional civil service positions to support implementation will be financed through the Government budget. APPSA financing may be used to hire consultants to fill gaps where there is insufficient capacity within the civil service. Chitedze Research Station will recruit a Financial Management Specialist for the Secretariat as a condition of effectiveness. The Financial Management Specialist will assist the accountant who will be assigned by the Accountant General to Chitedze Research Station to account for Project funds. The assignment of the accountant will be a dated covenant to be completed within three months after effectiveness. 32. 11AM will prepare Project accounts under the DPAF. Due to weak capacity among the IIAM accounting staff, IIAM will recruit a Financial Management Specialist within three months after effectiveness. It will be critical for the Financial Management Specialist to have access to the IFMIS e-SISTAFE in order to prepare the Project accounts. 33. ZARI has three accountants, who will be responsible for Project-related accounting. They will also be accountable for Government funds handled by ZARI. Staffing arrangements are considered to be adequate for Project implementation. 34. CCARDESA's Finance Manager will be responsible for preparing the Project accounts. Staffing arrangements are considered to be adequate for Project implementation. Financial management manuals 35. Chitedze Research Station is using the Government treasury instructions, but it will need to develop a Financial Management Manual for the Project as part of the PIM. This should be done by effectiveness, so that all Financial Management aspects of the Project are well covered, particularly in relation to financial reporting. 36. 11AM will make use of the MAF for accounting procedures, which will be complemented with a Financial Management Procedures Manual as part of the PIM by effectiveness, which will elaborate on procedures and relations between IIAM and the World Bank, particularly as these relate to reporting and disbursement of funds. 59 37. ZARI will develop a project Financial Management Procedures Manual as part of the PIM by effectiveness that will document the accounting policies and procedures to be used for the Project. 38. CCARDESA accounting procedures are spelled out in the organization's policies and procedures, which were approved by the Board in May 2012. Information systems 39. Chitedze Research Station plans to use IFMIS to handle accounting for all projects. Since IFMIS is not yet operational, Chitedze Research station will need to acquire alternative software to handle Project financial information management needs by effectiveness. 40. 11AM will use the government's IFMIS, e-SISTAFE, to prepare Project accounts. 41. ZARI plans to use IFMIS as its standard financial management information system to handle accounting. IFMIS software and necessary hardware have been installed at MAL, but full integration with ZARI is still pending. Integration with ZARI is expected to be completed by March 31, 2013. 42. CCARDESA will use SUN SYSTEM accounting software to prepare Project accounts. Acquisition of the accounting software should be completed by effectiveness. Accounting basis 43. Chitedze Research Station, IIAM, ZARI, and CCARDESA will use cash basis accounting, in line with International Public Sector Accounting Standards (IPSAS). Internal control and internal auditing arrangements Internal auditing 44. Chitedze Research Station is serviced by the Internal Audit Unit of MoAFS. The Internal Audit Unit's responsibilities will be expanded to cover APPSA-related transactions. The internal auditing function is weak, however, and will need to be strengthened through training of the Internal Audit Unit and the Audit Committee to give them the capacity to follow up and resolve both internal and external auditing issues. The training should be completed within six months after effectiveness. 45. 11AM does not have an internal audit unit. Internal audit activities for 11AM therefore will be handled by the internal control oversight body of MINAG, the Inspeqdo Geral da Agricultura (IGA), and by the Ministry of Finance's Inspeqdo Geral das Finanqas (IGF). Inspections will take place at least once per year. The IGA is independent and reports directly to the Minister of Finance. The Project will need to be included in the work plan for both institutions in order to ensure internal control oversight. 46. ZARI will rely on the internal audit of MAL. Given the additional demands expected under APPSA, technical capacity is considered inadequate in certain areas, for example risk-based auditing and forensic auditing. Therefore staff will need to receive training within three months after effectiveness. ZARI uses the audit committee of MAL and will continue to do so under APPSA, but further training for the audit committee will be followed up by the Country 60 Financial Management Specialist in order to ensure that audit reports are appropriately reviewed and issues arising are followed up with the Project's management. 47. CCARDESA will not have an internal auditor, due to the small size of the organization. CCARDESA is therefore expected to rely on the external audit and on World Bank supervision for assurance that funds are being used for the intended purposes. Should the need arise during implementation to have an internal auditor, for example as a result of weak internal control systems, CCARDESA will need to recruit one. Internal control systems 48. Chitedze Research Station uses Government internal control policies and procedures (Treasury Instructions). The application of these policies and procedures to meet the needs of the Project will be spelled out in the FM module of the PIM that will be prepared as a condition of effectiveness. 49. 11AM internal control procedures relating specifically to the Project, including those governing disbursements and reporting, will be finalized and captured in the FM module of the PIM. The procedures will be modeled on those being used in other World Bank-financed operations in Mozambique that use the FM country systems. These include accounting procedures and supporting documentation needed for approval of transactions, travel, and per diem - areas frequently flagged by independent audits. The FM module will also specify procedures to ensure good coordination across the IIAM system as well as with other beneficiary institutions. 50. ZARI will process transactions using the rules and regulations specified under the existing Finance Act 2004 and Financial Regulations 2006. While the current accounting regulations are adequate to assure a strong control environment, risks identified include lack of compliance and enforcement. To mitigate these risks and ensure compliance with World Bank procedures, a financial management procedures module acceptable to the World Bank will be produced as part of the PIM to provide guidance to staff. The module will document policies and procedures that are specific to the Project and will identify expenditures that are ineligible for financing under the Project. 51. CCARDESA has developed financial policies and procedures which were approved by the CCARDESA Board in May 2012. The policies and procedures were reviewed during preparation and confirmed to be adequate for the Project. 61 Funds flow and disbursement arrangements 52. Chitedze Research Station: A Designated Account (DA) for the Project will be opened in the Reserve Bank of Malawi denominated in United States Dollars. The Project will also have an operating account with a commercial bank denominated in Malawian Kwacha from which payments will be made. Based on CCARDESA's approved AWP&B, the Ministry of Finance will periodically request IDA to advance on its behalf tranches of the IDA funds that will be passed on to CCARDESA. These funds will be advanced into a DA in Botswana to be opened and maintained by CCARDESA. The funds flow will be as depicted in Figure 3.4. Figure 3.4: Flow of funds - Malawi -M-dan Miistr-of Designated account in Dollars at Finwan-coehnocicaon. the Reserue Bank of Malawi Holding account in Malawi Kwacha at the Reserve Bank of Malawi loerating account in Malawi Kwacha at a commercial Bank suppliers /Srsice Prosiders CCARDE5ACCARDESA Desgnte OPerating Account Account 53, IIAM will operate one DA in USD at the Banco de Moqambique managed by IIAM, covering all Project payments going through transfers to the CUT. Based on projected needs, limited amounts of funds may also be transferred from the DA to the four IIAM regional centers for the purpose of carrying out activities at these locations. The regional centers will need to open segregated bank accounts, which will receive and expend only funds related to the Project. The portion of the IDA Credit to be passed through to CCARDESA based on an approved 62 AWP&B will be transferred from the DA at Banco de Mogambique to the CCARDESA operating account in Botswana. 54. In coordination with the DNO and DNT, the funds will be coded to ensure that only the Project has access. Upon submission of acceptable withdrawal applications, funds will be advanced to the DA held in the Banco de Mogambique. Based on the Project's need for funds, IIAM will request the DNT to transfer funds into the government's single treasury account CUT, from which payments will be made directly to suppliers in: (i) Meticais, (ii) USD, (iii) Euros, and (iv) ZAR. Expenditures will be posted directly into e-SISTAFE, enabling the Project Finance Manager to collate expenditure information and produce the necessary reports. 55. Financial management procedures and reporting arrangements relating to the use of these funds will be described in the PIM. Guidelines from the DNT on Project funds flow through the CUT will also be shared with the Project team for a seamless insertion of the Project on to the government's systems. The funds flow will be as depicted in Figure 3.5. Figure 3.5: Flow of funds - Mozambique World Bank Banco de Mozambique Designated Account (USD) MOF (DNT) IIAM - Regional Transit Account Centers MT (USD/MT) Segregated bank CUT (MT, USD, ZAR, EURO) CCARDESA Operating Suppliers/Service Providers Account (USD) in Botswana 56. ZARI will use a system under which funds will flow from the World Bank to a DA or a Holding Account, denominated in USD at the Bank of Zambia (BoZ), to be operated by ZARI. 63 57. Funds from IDA will be transferred to the DA at the BoZ.27 MAL, on behalf of ZARI, will transfer funds from the DA through Control 99 (treasury account) to a Project sub-account held at BoZ. Funding slips will be issued to MAL showing the Kwacha equivalent amount transferred to the sub-account. All payments will be made from the sub-account through a mirror account (zero balance) held at a commercial bank. The portion of the IDA Credit to be passed through to CCARDESA based on an approved AWP&B will be transferred from the DA at BoZ to the CCARDESA operating account in Botswana. 58. All the bank accounts that will be involved in the flow of funds will be reconciled on a monthly basis, and all non-reconciled items will be dealt with expeditiously. 59. Some risks related to the flow of funds through the central treasury have been identified. The channeling of Project funds by the World Bank through the national treasury account system is new, so the procedure has not been in place long enough to allow a determination to be made that it works well and efficiently. A possible consequence could be delays in the flow of funds to the Project, which would need to be mitigated by the BoZ improving on its banking systems. The flow of funds is depicted in Figure 3.6. Figure 3.6: Flow of funds - Zambia World Bank Bank of Zambia DA Holding account in USD Bank of Zambia Treasury Control 99 account in ZMK and USD Bank of Zambia Sub Control in ZMK Sub Control Mirror account at a Commercial Bank in ZMK ZMK denominated payments to various CCARDESA Operating Account (USD) in suppliers Botswana 27 During preparation, the Association indicated that it will not authorize the opening of any new designated accounts in Zambia until the Government of Zambia addresses pending issues with recently lapsed loans. Until these issues are addressed, disbursement methods would be restricted to reimbursement or direct payment. Once the outstanding loans have been cleared, the Recipient will be notified that this restriction has been lifted. 64 60. CCARDESA: CCARDESA will be required to open a DA in USD at a commercial bank to receive the funds from the World Bank for the Regional IDA Grant of US$600,000 and a separate account to receive the remaining US$2.4 million from the participating countries, as there will be no co-mingling of Regional IDA Grant funds and funds from participating countries. Each participating country is expected to make transfers to CCARDESA based on agreed AWP&Bs and in accordance with the Implementation Agreements. Figure 3.7: Flow of funds - CCARDESA Regional IDA World Bank Grant IDA Credit Malawi Ministry of Finance authorization , F - - - - - - ------- --Mozambique Zambia Designated Designated Account Account CCARDESA Designated , Accountt L / CCARDESA Operating Account Suppliers/Service Providers Disbursement arrangements 61. Chitedze Research Station, IIAM, ZARI, and CCARDESA (with respect to US$600,000 from the Regional IDA Grant) will use the transaction-based method of disbursements (Statements of Expenditure). Other methods of disbursements will include reimbursement, direct payment, and use of special commitment (e.g., letters of credit). Additional details regarding disbursement are provided in the various disbursement letters. With respect to the US$2.4 million that CCARDESA will receive from the participating countries, these funds will be 65 disbursed to CCARDESA following the procedures described in the Implementation Agreement to be put in place between CCARDESA and each participating country. Financial reporting arrangements 62. Chitedze Research Station, IIAM, ZARI, will submit quarterly IFRs, in a format agreed with the World Bank, within 45 days of the end of each calendar quarter. These quarterly reports will include: * Statement of Sources and Uses of Funds; * Detailed Statement of Uses of Funds by Project Activity/Component. 63. CCARDESA will prepare two types of IFRs, to account respectively for the funds received from the Regional IDA Grant and the funds received from participating countries through their IDA Credit. IFRs prepared by CCARDESA will be submitted to both IDA and the participating countries. IFRs for the funds channeled from participating countries should be submitted within 30 days after the end of the quarterly period, as they will form part of the accountability of funds disbursed from each participating country's IDA Credit. IFRs for the Regional IDA Grant will be submitted directly to IDA within 45 days of the end of each calendar quarter. 64. All implementing entities will prepare annual accounts within three months after the end of the financial year, in accordance with accounting standards acceptable to IDA. All implementing entities will be responsible for ensuring their reports are audited and submitted to IDA within six months after the end of the financial year. Auditing arrangements 65. Project activities will be audited every year. Chitedze Research Station, IIAM, and ZARI fall under the oversight of the apex audit institutions of their respective governments, which may elect to contract private audit firms acceptable to IDA to conduct Project audits on their behalf. The CCARDESA audit will be carried out by a private external auditor acceptable to IDA. All audits should be carried out in accordance with the International Standards on Auditing. ToRs for audits of the implementing entities were agreed upon prior to negotiations. Audit reports together with management letters should be submitted to IDA within six months after the end of each reporting year. Audit reports will be publically disclosed by IDA in accordance with the World Bank's disclosure policy. 66 Table 3.2: Financial management action plan Action Date due by Responsible 1. Engage for the Secretariat in Chitedze, Effectiveness condition Chitedze/MoAFS financial management staff in adequate number and with acceptable qualifications, experience, and terms of reference 2. Install computer software required for Effectiveness condition Chitedze/MoAFS and financial management under the Project CCARDESA 3. Adopt a PIM acceptable to the World Bank Effectiveness condition ZARI, 11AM, and including a Financial Management module Chitedze/MoAFS 4. Malawi Accountant General to assign an Three (3) months after Malawi Accountant additional qualified accountant to strengthen effectiveness General the Project's accounting function 5. Engage for 11AM sufficient financial Three (3) months after 11AM management staff in adequate numbers and effectiveness with acceptable qualifications, experience, and terms of reference 6. Strengthen MoAFS internal audit function Six (6) months after MoAFS through provision of training to MoAFS's effectiveness internal audit committee and internal audit unit 7. Strengthen MAL's internal audit function Three (3) months after Zambia Ministry of through provision of training in risk-based effectiveness Finance internal auditing 8. Ensure that the CCARDESA audit committee Six (6) months after CCARDESA has received adequate training to perform effectiveness audit functions for the expenditures incurred under the Project Implementation support plan 66. FM supervision will be conducted based on the risk rating of each entity. Two on-site supervisions per year will be carried out for Chitedze Research Station, ZARI, and 11AM. One supervision per year will be carried out for CCARDESA. Other forms of supervision will include desks reviews of IFRs and audit reports. Conclusion of the assessment 67. The conclusion of the assessment is that the financial management arrangements in place meet the World Bank's minimum requirements under OP/BP 10.02, and therefore are adequate to provide, with reasonable assurance, accurate and timely information on the status of the Project required by the World Bank. The overall Financial Management residual risk rating of the Project is Substantial for Chitedze Research Station, 11AM, and ZARI and Moderate for CCARDESA. 67 Allocation of credit Table 3.3: Allocation of credit by expenditure category - Malawi Amount of the Percentage of Expenditures Category Financing Allocated to be Financed (US$ millions) (inclusive of taxes) (1) Goods, works, non-consulting services, consultants' services, Training, Operating 28.00 100% Costs, and Sub-financings for the Recipient's Respective Parts of the Project (2) Goods, consultants' services , Training and Operating Costs for CCARDESA's 0.80 100% Respective Parts of the Project 3 Amount payable pursuant to Section (3) Refund of Preparation Advance 1.00 Aon aal usatt eto 2.07 of the General Conditions TOTAL AMOUNT 29.80 Table 3.4: Allocation of credit by expenditure category - Mozambique Amount of the Percentage of Expenditures Financing Allocated to be Financed Category (US$ millions) (inclusive of taxes) (1) Goods, works, non-consulting services, consultants' services, Training, Operating 27.77 100% Costs, and Sub-financings for the Recipient's Respective Parts of the Project (2) Goods, consultants' services , Training and Operating Costs for CCARDESA's 0.80 100% Respective Parts of the Project Amount payable pursuant to Section (3) Refund of Preparation Advance 1.23 20of the nranition 2.07 of the General Conditions TOTAL AMOUNT 29.80 68 Table 3.5: Allocation of credit by expenditure category - Zambia Amount of the Percentage of Expenditures Category Financing Allocated to be Financed (US$ millions) (inclusive of taxes) (1) Goods, works, non-consulting services, consultants' services, Training, Operating 27.90 100% Costs, and Sub-financings for the Recipient's Respective Parts of the Project (2) Goods, consultants' services , Training and Operating Costs for CCARDESA's 0.80 100% Respective Parts of the Project Amount payable pursuant to Section (3) Refund of Preparation Advance 1.09 20of the nra ondition 2.07 of the General Conditions TOTAL AMOUNT 29.80 Table 3.6: Allocation of grant by expenditure category - CCARDESA Amount of the Percentage of Expenditures Financing Allocated to be Financed Category (US$ millions) (inclusive of taxes) (1) Goods, consultants' services , Training 0.60 100% and Operating Costs TOTAL AMOUNT 0.60 Procurement 68. All procurement under the Project involving IDA funds will be carried out in accordance with applicable World Bank procurement guidelines for goods, works, and non-consulting services, as well as with World Bank procurement guidelines for consultants. In the case of goods, works and non-consulting services, the applicable guidelines are detailed in the publication "Guidelines: "Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 ("Procurement Guidelines"). In the case of consultants, the applicable guidelines are detailed in Sections I and IV of the publication "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011. 69. The World Bank will as part of its regular mandate undertake at least twice yearly implementation support missions. During these missions the World Bank will review implementation of procurement activities to ensure that procurement plans are monitored and updated regularly and published on the World Banks external website, as required by the World Bank's disclosure policies. 70. In the case of R&D projects implemented by partners other than ZARI, IIAM, and MoAFS/Chitedze Research Station, eligibility for the institutions to receive funds will be 69 determined upon meeting procurement requirements included in the PIM that will ensure the selected institution has the capacity to carry out procurement according to World Bank procedures. Mala wi 71. On November 26, 2012, an assessment was undertaken to determine the capacity of Chitedze Research Station to carry out the procurement to be undertaken for APPSA. The assessment focused on the specific responsibilities of Chitedze Research Station as they relate to the implementation of the Project. The assessment was meant to identify the gaps that could impede the execution of Project-related procurement activities, the associated risks, and proposed mitigation measures. The project risk assessed was High, as staff lack experience in procurement of goods, works, and services and have never implemented a World Bank-financed project. Proposed risk mitigation measures include capacity building in the use of World Bank procedures. 72. The procurement activities carried out by Chitedze Research Station are governed by the Public Procurement Law, its Regulations and Desk Instructions. The Office's annual budget and Procurement Plan provides a framework for checks and balances for the smooth running of procurement, disbursement, and disposal in accordance with Section (3) of the Public Procurement Act. Procurement is triggered by requisition from user sections for the required kind of goods or services. 73. Chitedze Research Station has an Internal Procurement Committee (IPC), which is chaired by an appointee of the Station Manager. The Deputy Station Manager is the Chairperson of the IPC, which has the responsibility for award of contracts. Other members of the IPC include the National Research Officers, Commodity Team Leaders, Human Resources Officer, and the Accountant. The Assistant Procurement Officer is Secretary to the Committee. 74. The Procurement Section includes three positions: a Senior Stores Supervisor (Vacant), an Assistant Procurement Officer, and a Stores Clerk. The Assistant Procurement Officer serves as Head of the Section and reports to the Human Resources Officer. The Assistant Procurement Officer has a Malawi Certificate of Education and is a CIPS Diploma graduate. At the time of assessment, the Assistant Procurement Officer had 20 years of experience. The Stores Clerk held a Junior Certificate and had 20 years of experience. Chitedze Research Station has in the past implemented various projects financed by various donors, but these were not IDA financed projects. The acquired knowledge and experience in procurement of works and services and in the use World Bank guidelines and procedures is very limited. 75. The determination of the assessment was that the then current procurement staff lacked the requisite profiles and did not have adequate knowledge of international procurement and World Bank procurement procedures. 76. The Procurement Section will need to be strengthened by the creation of a Senior Procurement Officer position (to serve as Head of the unit in place of the Senior Stores Supervisor) and a Procurement Officer position by effectiveness. The Senior Procurement Officer would be part of the Station's senior management team and would attend management meetings. These staff should be fully qualified procurement professionals with adequate public procurement knowledge, as well as international experience and preferably World Bank 70 procurement experience. The Project should finance short-term international procurement training for both. In addition, Chitedze Research Station should be supported by a consultant Procurement Specialist, to be recruited as soon as possible to fill the gap prior to installing permanent staff and with terms of reference (TOR) focused on the provision of hands-on training, mentoring support, and troubleshooting. The consultant would provide guidance with the preparation of a procurement manual that would detail the procedures that apply to the Project, to be ready by effectiveness. There is also need to include in the training activities staff from other key departments who will support APPSA-related procurement activities, such as the preparation of bid specifications, TOR, and technical evaluations. 77. The procurement assessment found that record keeping in the Procurement Section is not done in a satisfactory manner. All documents are filed in a single file, and they are not classified according to type of procurement. Improvements are needed to ensure that records are sorted following the chronology of the procurement processing, and a check list should be added at the beginning of the folder. Financial information about contract execution should be included in records. 78. The Assistant Procurement Officer and the Stores Clerk use a total of three offices in the Procurement Section. They share a single computer. There is need for at least two computers, and more secure storage facilities. Table 3.7: Summary assessment of capacity, risk, and mitigation - Action plan for Malawi Issues Risks Mitigation measures By when Inadequate staffmg Underperformance due to under Recruitment / secondment of a One of the two and lack of staffing and/with limited Senior Procurement Officer (head positions by professional international/ World Bank of unit) and a Procurement Officer effectiveness, the experience procurement experience other as soon as possible thereafter Prepare procurement manual (part Effectiveness of the overall Project Implementation Manual) Recruit temporary procurement Upon availability consultant of trainer(s), and Train Chitedze Research Station continuously staff in World Bank procedures thereafter Weak reporting Reduced transparency, Train Chitedze Research Station Upon availability management effectiveness and staff in World Bank procedures of trainer(s), and regional integration and learning continuously thereafter Weak record keeping Reduced transparency, Train Chitedze Research Station Upon availability management effectiveness and staff in World Bank procedures of trainer(s), and institutional memory and continuously evaluation thereafter Inadequate Inefficiency and Procure adequate office equipment As soon as equipment underperformance package possible 71 Review by the World Bank 79. The review thresholds are shown in Table 3.8 below. The Procurement Plan shall set forth those contracts which shall be subject to the prior review by the World Bank. All other contracts shall be subject to post review by the World Bank. Table 3.8: Prior review and procurement method thresholds - Malawi Contract value threshold Procurement Contracts subject to (US$) method prior review 1. Works > 3,000,000 ICB All > 50,000 - <3,000,000 NCB None <50,000 Shopping None Direct Contracting All 2. Goods and Services > 500,000 ICB All (other than Consultants' > 50,000 - <500,000 NCB None Services) <50,000 Shopping None Direct Contracting All 3. Consulting Firms > 200,000 QCBS, All <200,000 LCS, QBS, and CQS None Single Source All 4. Individual Consultants > 100,000 IC All <100,000 IC None Single Source All 80. Post procurement reviews will be undertaken by the World Bank on annual basis throughout Project implementation and will be governed by the procedures set forth in paragraph 4 of Appendix I to the relevant Guidelines. All documentation used for the procedures of contracting, recruitment of consulting services, evaluation and award shall be retained for subsequent examination by auditors and World Bank supervision missions. Use of national standard bidding documents 81. National Competitive Bidding (NCB) will be in accordance with the Malawi Public Procurement Act of August 2003, which has been reviewed and found satisfactory to the World Bank, with the following exceptions: (a) No bidder or potential bidder shall be declared ineligible to bid for reasons other than those provided in Section I of the Procurement Guidelines; (b) Bidding documents acceptable to the World Bank shall be used; 72 (c) The bidding documents and contract shall include provisions reflecting the World Bank's policy relating to firms or individuals found to have engaged in fraud and corruption as defined in the Procurement Guidelines; (d) Each bidding document and contract shall provide that bidders, suppliers and contractors, and their subcontractors, agents, personnel, consultants, service providers, or suppliers, shall permit the World Bank to inspect all accounts, records, and other documents relating to the submission of bids and contract performance, and to have them audited by auditors appointed by the World Bank. Acts intended to materially impede the exercise of the World Bank's inspection and audit rights provided for in the Procurement Guidelines constitute an obstructive practice as defined in the Procurement Guidelines; (e) Unquantifiable criteria, such as local content, technology transfer, and managerial, scientific, and operational skills development, shall not be used in the evaluation of bids; and (f) Contracts may not be split into small lots, and their award may not be restricted to small enterprises for purposes of promotion of the participation of small enterprises. Procurement plan 82. During Appraisal, the Borrower developed a procurement plan covering the first 18 months of project implementation. This plan was agreed between the Borrower and the World Bank on December 11, 2012 and will be made available at Chitedze Research Station and in the Project database. It will also be accessible through the World Bank external website. The procurement plan will be updated annually, or as often as required. Procurement arrangements Goods and works 83. Particular methods of procurement of goods and works are as follows: (a) International Competitive Bidding. Except as otherwise provided in the next paragraph, Goods and Works shall be procured under contracts awarded on the basis of International Competitive Bidding (ICB). (b) Other methods of procurement of goods and works. The following list specifies the methods of procurement, other than International Competitive Bidding, which may be used for goods and works. The Procurement Plan shall specify the circumstances under which such methods may be used. (i) National Competitive Bidding (ii) Shopping (iii) Direct Contracting Schedule for goods and works 84. Procurement of Works: Works to be procured under the Project are likely to include: construction and/or rehabilitation of warehouses, offices, laboratories, research stations, fencing, 73 road grading, and irrigation infrastructures. International Competitive Bidding (ICB) will be used for works at Chitedze Research Station. National Competitive Bidding (NCB) will be used for other works, following Malawi Public Procurement Law and Regulations, and with the exceptions listed above may be used for contracts estimated to cost less than US$3,000,000 equivalent per contract. Small value works estimated to cost less than $50,000 per contract may be procured using the Shopping procedure based on comparing price quotations obtained from several contractors, with a minimum of three, to assure competitive prices. 85. Procurement of Goods and Non Consultant Services: Goods to be procured under the Project are likely to include: Vehicles, tractors, a coaster bus, IT equipment, office equipment, laboratory equipment, irrigation equipment, procurement and financial management software among others. Non Consultant Services to be procured will include vehicle maintenance, ICT maintenance, and office stationary, cleaning services, security services and promotional services (TV, radio, calendars, posters) amongst others. Procurement will be done using the World Bank's Standard Bidding Documents for all International Competitive Bidding contracts. National Competitive Bidding (NCB), carried out in accordance with the Malawi Public Procurement Law and Regulations and with the exceptions listed above, may be used for contracts estimated to cost less than US$500,000 equivalent per contract. Small value goods estimated to cost less than $50,000 per contract may be procured using the Shopping procedure based on comparing price quotations obtained from several suppliers, with a minimum of three, to assure competitive prices, and is an appropriate method for procuring readily available off-the- shelf goods. Consultants' services 86. Particular methods of procurement for consultants' services are: (a) Quality and Cost-Based Selection (QCBS). Except as otherwise provided in the paragraph below, consultants services shall be procured under contracts awarded on the basis of Quality and Cost-Based Selection. (b) Other methods of procurement of consultants' services. The following list specifies selection methods, other than Quality and Cost-Based Selection, which may be used for consultants' services. The Procurement Plan shall specify the circumstances under which such methods may be used: (i) Quality-based Selection (QBS) (ii) Selection based on the Consultant's qualifications (CQS) (iii) Least-cost selection (LCS) (iv) Single-source selection for firms (SSS) (v) Individual Consultants (IC) (vi) Single-source selection for IC (SSS) 74 Schedule for consulting services 87. Consulting Services procured under the Project will likely relate to the positions of Financial Management Specialist, Monitoring and Evaluation Officer, Environmental Specialist, Procurement Specialist and Project Account. These positions will be Individual Consultants for the Project Management Unit. In light of the many works contracts to be undertaken under the Project, a firm will be recruited to undertake engineering designs and supervision of the works. Consultants will be selected using World Bank Guidelines Selection and Employment of Consultants, January 2011 version. Prior review of selection of consultants above the threshold of US$200,000 will be undertaken by the World Bank, while short lists of consultants estimated to cost less than US$200,000 equivalent per contract may consist entirely of national consultants. Individual Consultant's contracts above the threshold of US$100,000 and all Single Source Selection of all values will be subject to prior review by the World Bank. Mozambique 88. A procurement assessment for Mozambique was conducted in August 2012. The Project risk was assessed as Substantial, with a residual risk rating of Moderate. The Procurement Management Unit (Unidade Gestora Executora das Aquisiq5es - UGEA) at IIAM reports to the Director of Planning, Finance, and Administration. The Director acts as the Competent Authority who approves all procurement decisions and sign the contracts on behalf of IIAM, as defined in the Mozambican Procurement Regulation Decree 15/20 10. 89. UGEA comprises three staff, including the Head of the unit. These staff were identified in 2007 to make up UGEA, and they have since participated in short-term procurement trainings conducted by UFSA and KPMG under the Government procurement regulations. Each UGEA staff has been assigned a specific role and given specific responsibilities. The Head of UGEA is responsible for preparing bid documents, participating in the evaluation of bids, and preparing reports. The second staff is responsible for managing communications with suppliers, delivering requests for quotations, and reception of goods. The third staff is responsible for filing and record keeping. All three staff have been working in procurement or logistics for the past 10 years or more and are familiar with procurement of goods using national procedures. However they have limited experience in procurement of works and selection of consulting services, and they have no experience at all working with projects financed by the World Bank or other donors. UGEA does not prepare regular procurement plans, does not have a procurement manual, and does not have a formal internal control unit. 90. UGEA is well housed and reasonably well equipped with basic tools and equipment needed to carry out routine activities, such as computers, printers, and file cabinets. The filing system needs to be improved, however. There is no agreed filing structure that could provide necessary comfort that the filing is done properly. 91. To enhance the capacity of UGEA, the staff should attend a training organized in the region for procurement of works and consulting services. In addition, IIAM should assign a consultant as a full time Procurement Specialist attached to UGEA. The consultant would support UGEA by providing hands-on training, mentoring staff, and troubleshooting. The consultant would also help with the preparation of a procurement manual that would detail the procedures applicable to the Project. 75 92. Risk mitigation measures discussed and agreed with 11AM during the assessment are summarized in Table 3.9 below. Table 3.9: Summary assessment of capacity, risk, and mitigation - Action plan for Mozambique Issue Risk Mitigation measures By when Inadequate Reduced Establish proper records and filing system (keeps Continuously filing system transparency, the files in the same location, numbered and management labeled). effectiveness and institutional memory and evaluation Procurement Inadequate Prepare a Procurement Manual (part of the overall Effectiveness procedures accountability and Project Implementation Manual) and incorporate not laid out institutional applicable procedures under APPSA. properly arrangements Inadequate Underperformance Recruit full time Procurement Specialist In process procurement knowledgeable of WB procedures. Upon capacity Procurement team (UGEA) should attend training availability, organized in the region on procurement of works and continuous and consultants. thereafter Review by the World Bank of procurement decisions 93. The review thresholds are shown in Table 3.10 below. The procurement plan shall set forth those contracts which shall be subject to the prior review by the World Bank. All other contracts shall be subject to post review by the World Bank. 76 Table 3.10: Prior review and procurement method thresholds - Mozambique Contract value threshold Procurement Contracts subject to Expenditure category 28 (US$) method prior review 1. Works > 5,000,000 ICB All > 100,000 - <5,000,000 NCB None <100,000 Shopping None Direct Contracting All 2. Goods and Services > 500,000 ICB All (other than Consultants' > 75,000 - <500,000 NCB None Services) <75,000 Shopping None Direct Contracting All 3. Consulting Firms > 200,000 QCBS, All <200,000 LCS. QBS, and CQS None Single Source All 4. Individual Consultants > 100,000 IC All <100,000 IC None Single Source All Additional procedures to National Competitive Bidding (NCB) General 94. The procedures to be followed for National Competitive Bidding (NCB) shall be those set forth in the Regulamento de Contratagdo de Empreitada de Obras Publicas, Fornecimento de Bens e Prestagdo de Servigos ao Estado of the Republic of Mozambique of May 24, 2010, as per Decree No. 15/20 10, with the modifications described in the following paragraphs. Eligibility 95. No restriction based on nationality of bidders and/or origin of goods shall apply. Foreign bidders shall be allowed to participate in NCB without restriction and shall not be subject to any unjustified requirement that would affect their ability to participate in the bidding process, such as, but not limited to, the proof that they are not under bankruptcy proceedings in Mozambique; have a local representative; have an attorney resident and domiciled in Mozambique; form a joint venture with a local firm In cases of joint ventures, they shall confirm joint and several liability. 96. Prior registration, obtaining a license or agreement shall not be a requirement for any bidder to participate in the bidding process. 97. Government-owned enterprises or institutions of the Republic of Mozambique shall be eligible to participate in the bidding process only if they can establish that they are legally and financially autonomous, operate under commercial law, and are not dependent agencies of the Borrower or Sub-Borrower. 28 The World Bank may, at its own discretion, require that a sample of contracts below the threshold be subject to prior review, at any time or when the Procurement Plan is updated 77 Bidding documents 98. Standard bidding documents acceptable to the World Bank shall be used. Preferences 99. No domestic preference shall be given for domestic bidders and/or for domestically manufactured goods. Applicable procurement method 100. Subject to these provisions, procurement shall be carried out in accordance with the "Public Competition" method (Concurso Publico) set forth in the Regulation. Bid preparation time 101. Bidders shall be given at least twenty eight (28) days from the date of the invitation to bid or the date of availability of bidding documents, whichever is later, to prepare and submit bids. Bid opening 102. Bids shall be opened in public, immediately after the deadline for their submission in accordance with the procedures stated in the bidding documents. Bid evaluation (a) Qualification criteria shall be clearly specified in the bidding documents, and all criteria so specified, and only such criteria so specified shall be used to determine whether a bidder is qualified; the evaluation of the bidder's qualifications should be conducted separately from the technical and commercial evaluation of the bid. Qualification criteria shall be applied on a pass or fail basis. (b) Evaluation of bids shall be made in strict adherence to the criteria declared in the bidding documents; criteria other than price shall be quantified in monetary terms. (c) A contract shall be awarded to the qualified bidder offering the lowest-evaluated and substantially responsive bid. (d) Bidders shall not be eliminated on the basis of minor, non-substantial deviations. Rejection of all bids and re-bidding 103. All bids shall not be rejected and new bids solicited without the World Bank's prior concurrence. Complaints by bidders and handling of complaints 104. The Borrower shall establish an effective and independent protest mechanism allowing bidders to protest and to have their protest handled in a timely manner. 78 Right to inspect / audit 105. In accordance with paragraph 1.16(e) of the Procurement Guidelines, each bidding document and contract financed from the proceeds of the Financing shall provide that: (i) the bidders, suppliers, and contractors and their subcontractors, agents, personnel, consultants, service providers or suppliers, shall permit the World Bank, at its request, to inspect their accounts, records and other documents relating to the submission of bids and contract performance , and to have them audited by auditors appointed by the World Bank; and (ii)the deliberate and material violation by the bidder, supplier, contractor or subcontractor of such provision may amount to obstructive practice as defined in paragraph 1.16(a)(v) of the Procurement Guidelines. Fraud and corruption 106. Each bidding document and contract financed from the proceeds of the Financing Agreement shall include provisions on matters pertaining to fraud and corruption as defined in paragraph 1.16(a) of the Procurement Guidelines. The World Bank will sanction a firm or individual, at any time, in accordance with prevailing World Bank sanctions procedures, including by publicly declaring such firm or individual ineligible, either indefinitely or for a stated period of time: (i) to be awarded a World Bank-financed contract; and (ii) to be a nominated sub-contractor, consultant, supplier or service provider of an otherwise eligible firm being awarded a World Bank-financed contract. Debarment under the national system 107. The World Bank may recognize, if requested by the Borrower, exclusion from participation as a result of debarment under the national system, provided that the debarment is for offenses involving fraud, corruption or similar misconduct, and further provided that the World Bank confirms that the particular debarment procedure afforded due process and the debarment decision is final. Procurement plan 108. The Borrower has developed a procurement plan for the first 18 months of Project implementation. This plan was agreed between the Borrower and the World Bank on December 11, 2012 and will be made available at 11AM, in the Project's database, and in the World Bank's external website. The procurement plan will be updated annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 109. The frequency of procurement supervision missions will be once every six months. Special procurement supervision for post procurement reviews will be carried out at least once every twelve months. 79 Procurement arrangements Goods and works 110. Particular methods of procurement of goods and works are as follows: (a) International Competitive Bidding. Except as otherwise provided in the next paragraph, Goods and Works shall be procured under contracts awarded on the basis of International Competitive Bidding (ICB). (b) Other methods of procurement of goods and works. The following list specifies the methods of procurement, other than International Competitive Bidding, which may be used for goods and works. The Procurement Plan shall specify the circumstances under which such methods may be used. (i) National Competitive Bidding (ii) Shopping (iii) Direct Contracting Schedule for goods and works 111. Procurement of Works: Works under the Project will mainly consist of rehabilitation and construction of offices, laboratories, conference rooms, warehouses, training facilities, guest houses, green houses, screen houses, breeding chambers, cold rooms, irrigation schemes, access road, fencing works etc. Procurement will be done using the World Bank's Standard Bidding Documents (SBD) for all International Competitive Bidding (ICB) contracts estimated to cost starting US$5,000,000 equivalent per contract. National Competitive Bidding (NCB) for the contracts estimated to cost less than US$5,000,000 equivalent per contract may use national procedures and documents including the use of Portuguese language in accordance with the Mozambican Procurement Regulations as per Decree Number 15/2010 with the WB exceptions below. The bidding documents will be agreed by the World Bank. Minor Works expected to be procured under the Project would mainly consist of rehabilitation and maintenance of offices under contracts estimated to cost less than US$100,000 equivalent per contract. These works will be procured using the Shopping procedures by comparing written price quotations obtained from several qualified contractors with a minimum of three, to assure competitive prices. 112. Procurement of Goods and non-consulting services: Goods and non-consulting services procured under the Project will include procurement of IT equipment, furniture, air conditioners, a standby generator, irrigation equipment, motor vehicles, agricultural machinery, farm equipment and accessories, laboratory equipment, seed processing equipment, among others. Procurement will be done using the World Bank's Standard Bidding Documents for all International Competitive Bidding (ICB) estimated to cost starting US$500,000 equivalent per contract. National Competitive Bidding (NCB) for the contracts estimated to cost less than US$500,000 equivalent per contract may use national procedures and documents including the use of Portuguese language in accordance with the Mozambican Procurement Regulations as per Decree Number 15/2010 with the WB exceptions below. The bidding documents will be agreed by the World Bank. Small value goods estimated to cost less than US$75,000 per contract may be procured under the Shopping procedures by comparing written price quotations obtained from 80 several qualified and reputable suppliers with a minimum of three, to assure competitive prices, and is an appropriate method for procuring readily available off-the-shelf goods. Consulting services 113. Particular methods of procurement for consulting services are: (a) Quality and Cost-Based Selection (QCBS). Except as otherwise provided in the paragraph below, consultants services shall be procured under contracts awarded on the basis of Quality and Cost-Based Selection. (b) Other methods of procurement of consultants' services. The following list specifies selection methods, other than Quality and Cost-Based Selection, which may be used for consultants' services. The Procurement Plan shall specify the circumstances under which such methods may be used: (i) Quality-based Selection (QBS) (ii) Selection based on the Consultant's qualifications (CQS) (iii) Least-cost selection (LCS) (iv) Single-source selection for firms (SSS) (v) Individual Consultants (IC) (vi) Single-source selection for IC (SSS) Schedule for consulting services 114. Selection of Consultants: Consulting services to be procured under the Project will likely include: design and supervision of works, design, planning and supervision of field irrigation works, technical assistance for handling laboratories equipment, technical assistance for the establishment of an MIS system, technical assistance for the establishment of a scientific database including the rice knowledge bank, technical assistance for coordinating regional RCoL R&D projects, financial audits, M&E technical audits, technical assistance for research and management, financial management, procurement, technology transfer, amongst others. All consulting service contracts estimated to cost more than US$200,000 equivalent per contract for firms will be awarded through Quality and Cost Based Selection (QCBS) method. Contracts for assignments estimated to cost less than US$200,000 equivalent may be contracted through Consultants' Qualification (CQS), Least Cost Selection (LCS). For the selection of Consulting Services estimated to cost less than the equivalent of US$200,000 per contract, the short list may be comprised only of national consultants, and the provisions of the Decree 15/2010 apply. Zambia 115. A Procurement Risk Assessment (P-RAMS) of ZARI was undertaken on November 23, 2012 in accordance with the World Bank's Procurement Risk Management System. The Implementation Agency Procurement Risk for ZARI, which operates under MAL, was assessed as High. Implementation of the risk mitigations actions would reduce it to Moderate. 116. Procurement manual: The procurement arrangements to be used under the Project, including packaging of procurement, maintaining clarity of accountability over procurement, 81 record keeping, and frequency and scope of prior and post review will be elaborated in the procurement module of the PIM ("the procurement manual") and in the procurement plans. The procurement manual will be prepared and finalized by effectiveness, to be ready for Project implementation. The procurement manual will address the needs of the various implementation agencies, including the needs and procedures for procurement at community level. The manual will outline the identified risks and provide risk mitigation actions. It will cover the legal and regulatory framework, roles and responsibilities of the institutions and staff involved in procurement, internal and external controls and quality assurance checks or systems, approval systems and accountability, and contracts register. It will spell out the roles and responsibilities of various players in contract management, based on both Government regulations and as required for prior review of IDA contracts. 117. Procurement decentralization: With effect from January 1, 2013, all procuring entities will carry out procurement in a fully decentralized environment. This means that the Zambia Public Procurement Agency (ZPPA) will not be involved in reviewing bidding documents and bid evaluation and contract award recommendations. All procurement activities will be carried out internally by the procuring entities using their own institutional arrangements, controls and quality checks, without ZPPA participation. ZPPA will transform itself into a regulatory and oversight body for public procurement in Zambia. 118. Procurement risk mitigation measures: Based on the P-RAMS, the main risks and proposed risk mitigation measures are shown in Table 3.11 below. 82 Table 3.11: Summary assessment of capacity, risk, and mitigation - Action plan for Zambia/ZARI Issues Risks Mitigation measures By when Accountability for Experience from other ZARI to prepare and publish Effectiveness procurement decisions in projects in Zambia and MAL procurement manual (part of ZARI have shown that the Project Implementation accountability and Manual) clearly describing institutional arrangements for responsibilities of MAL PSU procurement are inadequately and User Departments (UD) documented Record keeping and Records need to be protected Develop good filing and data Immediate, document management from loss and unauthorized management system and to be systems access, and storage space is Carry out training reviewed inadequate throughout the Secure and adequate storage life of the for files Proect Proj ect Staffing Agency does not have Secondment from the public Within three adequate key staff with sector or engagement of months of practical experience in public external consultants with Project procurement. adequate experience in effectiveness ZARI may have insufficient competitive bidding at higher access to contract level than the Procurement management expertise, given Assistant (PA) proposed Project activities Contract management Experience from other MAL PSU to help ZARI build Upon and administration projects in Zambia and MAL skills in contact management availability of has shown: Training in contract trainer(s), and - Inadequate mechanisms management for selected key continuously in place for procurement staff may be appropriate thereafter and/or contract For every contract, ZARI By the time of monitoring should appoint a contract contract - Invoices from vendors not manager in line with the effectiveness always paid within the Zambia public procurement contractual terms Act No 12 of 2008 - At times contracts not manement o eece ke contios implemented according to Hare ctay n topriae Asereafted contract terms 119. Procurement Post Reviews (PPRs) and Independent Post Reviews (IPRs) by the World Bank. Based on the assessed agency implementation risk for procurement, which is High, the World Bank will carry out PPRs or JPRs for all contracts that will based on the procurement plan not having been subject of prior review by the World Bank using a sample of 20 percent. Based on continuing assessment of risk and the success of risk mitigation measures implemented, the sample size will be reduced as risk mitigation measures are successfully implemented. Substantial risk will represent a sample size of 15 percent, Moderate risk 10 percent, and Low risk 5 percent. These changes will be communicated to the MAL as outcomes of the PPR / IPR exercise, which also result in the revisions of the prior review and National Competitive Bidding thresholds. The review thresholds are shown in Table 3.12 below. 83 Table 3.12: Prior review and procurement method thresholds - Zambia Contract value threshold Contracts subject to Expenditure category WS)Procurement method pirrve (US$) prior review 1. Works > 3,000,000 ICB All > 100,000 - <3,000,000 NCB As in procurement plan <100,000 Shopping None All values Direct Contracting All 2. Goods and Services > 500,000 ICB All (other than Consultants' > 50,000 - <500,000 NCB As in procurement plan Services) <50,000 Shopping None All values Direct Contracting All All values UN Agency All 3. Consulting Firms > 200,000 QCBS All <200,000 CQS, LCS, QBS As in procurement plan Single Source All 4. Individual Consultants > 100,000 IC All <100,000 IC None Single Source All NOTE: Contracts selected on basis of CQS should not exceed US$200,000 equivalent. This same value will constitute the limit up to which a short list may comprise entirely national firms. 120. Applicable legal and regulatory framework for National Competitive Bidding: The procurement procedure to be followed for National Competitive Bidding ("NCB") shall be the open international bidding procedure set forth in the Public Procurement Act, 2008, Act. No.12 of 2008, as amended by the Public Procurement (Amendment) Act, 2011, Act No. 15 of 2011 (the "PPA"), and the Public Procurement Regulations, 2011, Statutory Instrument No. 63 of 2011 (the "Regulations"); provided, however, that such procedure shall be subject to the provisions of Section I and Paragraphs 3.3 and 3.4 of Section III, and Appendix 1 of the "Guidelines for Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers" (January 2011) (the "Procurement Guidelines"), and the additional provisions in the following paragraphs: 121. Eligibility: Eligibility to participate in a procurement process and to be awarded an IDA- financed contract shall be as defined under Section I of the Procurement Guidelines; accordingly, no bidder or potential bidder shall be declared ineligible for contracts financed by IDA for reasons other than those provided in Section I of the Procurement Guidelines. No restriction based on nationality of bidders and/or origin of goods shall apply, and foreign bidders shall be allowed to participate in NCB without application of restrictive conditions, such as, but not limited to, mandatory partnering or subcontracting with national entities. 122. Domestic Preference: No margins of preference of any sort shall be applied in the bid evaluation. 123. Bidding Documents: Procuring entities shall use bidding documents acceptable to IDA. 84 124. Bid validity: An extension of bid validity, if justified by exceptional circumstances, may be requested in accordance with Appendix 1 of the Procurement Guidelines. A corresponding extension of any bid guarantee shall be required in all cases of extension of bid validity. A bidder may refuse a request for extension of bid validity without forfeiting its bid guarantee. 125. Qualification: Qualification criteria shall be clearly specified in the bidding documents. All criteria so specified, and only such specified criteria, shall be used to determine whether a bidder is qualified. Qualification shall be assessed on a "pass or fail" basis, and merit points shall not be used. Such assessment shall be based entirely upon the bidder's or prospective bidder's capability and resources to effectively perform the contract, taking into account objective and measurable factors, including: (i) relevant general and specific experience, and satisfactory past performance and successful completion of similar contracts over a given period; (ii) financial position; and where relevant (ii) capability of construction and/or manufacturing facilities. 126. Prequalification procedures and documents acceptable to IDA shall be used for large, complex and/or specialized works. Verification of the information upon which a bidder was prequalified, including current commitments, shall be carried out at the time of contract award, along with the bidder's capability with respect to personnel and equipment. Where pre- qualification is not used, the qualification of the bidder who is recommended for award of contract shall be assessed by post-qualification, applying the qualification criteria stated in the bidding documents. 127. Bid Evaluation: All bid evaluation criteria other than price shall be quantifiable in monetary terms. Merit points shall not be used, and no minimum point or percentage value shall be assigned to the evaluation criteria or significance of price in bid evaluation. No negotiations shall be permitted. 128. Guarantees: Guarantees shall be in the format, shall have the period of validity and shall be submitted when and as specified in the bidding documents. 129. Cost Estimates: Detailed cost estimates shall be confidential and shall not be disclosed to prospective bidders. No bids shall be rejected on the basis of comparison with the cost estimates without IDA's prior written concurrence. 130. Rejection of bids and re-bidding: No bid shall be rejected solely because it falls outside of a predetermined price range or exceeds the estimated cost. All bids (or the sole bid if only one bid is received) shall not be rejected, the procurement process shall not be cancelled, and new bids shall not be solicited without IDA's prior written concurrence. 131. Fraud and corruption: In accordance with the Procurement Guidelines, each bidding document and contract shall include provisions stating IDA's policy to sanction firms or individuals found to have engaged in fraud and corruption as set forth in the Procurement Guidelines. 132. Inspection and audit rights: In accordance with the Procurement Guidelines, each bidding document and contract shall include provisions stating IDA's policy with respect to inspection and audit of accounts, records and other documents relating to the submission of bids and contract performance. 85 Procurement plan 133. ZARI has with the support of the World Bank developed a procurement plan for the first 24 months of Project implementation. The World Bank has reviewed and approved this plan as of December 11, 2012. The procurement plan includes all the procurement packages identified for the first 24 months of Project implementation. The procurement plan will be updated as required at least once a year throughout the life of the project. Procurement arrangements Goods and works 134. Particular methods of procurement of goods and works are as follows: (a) International Competitive Bidding. Except as otherwise provided in the next paragraph, goods and works shall be procured under contracts awarded on the basis of International Competitive Bidding (ICB). (b) Other methods of procurement of goods and works. The following list specifies the methods of procurement, other than International Competitive Bidding, which may be used for goods and works. The Procurement Plan shall specify the circumstances under which such methods may be used. (i) National Competitive Bidding (ii) Shopping (iii) Direct Contracting Schedule for goods and works 135. Procurement of works: Works to be procured under the Project are likely to include: construction and/or rehabilitation of storage facilities, cold rooms, offices and research stations, fencing, road grading, water reticulation among others. There will be no International Competitive Bidding (ICB) and National Competitive Bidding (NCB) will follow Zambia Procurement Regulations and with the exceptions listed above, may be used for contracts estimated to cost less than US$3,000,000 equivalent per contract. Small value works estimated to cost less than US$100,000 per contract may be procured under the Shopping procedures based on comparing price quotations obtained from several contractors, with a minimum of three, to assure competitive prices. 136. Procurement of goods: Goods to be procured under the Project are likely to include: Vehicles, IT equipment, office equipment, laboratory equipment, office furniture, irrigation equipment, among others. The procurement will be done using the World Bank's Standard Bidding Documents for all International Competitive Bidding contracts. National Competitive Bidding (NCB) documents, in accordance with the Zambia Procurement Regulations and with the exceptions listed above, may be used for contracts estimated to cost less than US$500,000 equivalent per contract. Small value goods estimated to cost less than US$50,000 per contract may be procured under the Shopping procedures based on comparing price quotations obtained from several suppliers, with a minimum of three, to assure competitive prices, and is an appropriate method for procuring readily available off-the-shelf goods. 86 Consulting services 137. Particular methods of procurement for consulting services are: (a) Quality and Cost-Based Selection (QCBS). Except as otherwise provided in the paragraph below, consultants services shall be procured under contracts awarded on the basis of Quality and Cost-Based Selection. (b) Other methods of procurement of consultants' services. The following list specifies selection methods, other than Quality and Cost-Based Selection, which may be used for consultants' services. The Procurement Plan shall specify the circumstances under which such methods may be used: (i) Quality-based Selection (QBS) (ii) Selection based on the Consultant's qualifications (CQS) (iii) Least-cost selection (LCS) (iv) Single-source selection for firms (SSS) (v) Individual Consultants (IC) (vi) Single-source selection for IC (SSS) Schedule for consulting services 138. No consulting services were identified at the time of appraisal. CCARDESA 139. A Procurement Risk Assessment of the CCARDESA Secretariat was conducted on November 13, 2012. CCARDESA is still in its initial startup phase but will transition to full scale operations in early 2013. Five staff are currently in place: an Executive Director, a Finance Manager, a Finance Assistant, an ICT Manager, and a Personal Assistant. To date all payments and verification of procurement procedures have been handled by CCARDESA's fiduciary agents, namely the Forum for Agricultural Research in Africa (FARA) based in Ghana and International Water Management Institute, a CGIAR center based in South Africa. CCARDESA has been involved in several shopping contracts by obtaining quotations and conducting evaluations and submitting these to the fiduciary agents for onward review and payment. Currently CCARDESA is hiring staff to complement its functions. The Procurement Officer has already been identified following a competitive process and is to be on board by February 2013. CCARDESA has already developed an acceptable Procurement Manual. 140. The key issues concerning procurement of relevance to Project implementation that have been identified so far include the following: (a) the need for CCARDESA to complete the recruitment of the Procurement Officer; and (b) limited capacity for staff at CCARDESA to assure adherence to World Bank Procurement and Consultant Guidelines. Following the completion of the assessment but prior to negotiations CCARDESA finalized recruitment of the procurement officer. 141. Proposed corrective measures to mitigate the overall risks and agreed with the recipient include: (a) training to be provided to key CCARDESA staff on World Bank Procurement and Consultant Selection Methods and Procedures; (b) procurement systems at CCARDESA to be 87 strengthened, (c) CCARDESA to periodically revise its Procurement Manual to take into account the existing institutional / organizational structure and the procurement arrangements to be agreed for the Project. 142. The Risk Assessment gauged the procurement risk to be High. Based on the Procurement Risk Assessment, the main risks and proposed risk mitigation measures are provided in Table 3.13 below. Table 3.13: Summary assessment of capacity, risk, and mitigation - Action plan for CCARDESA Issues Risks Mitigation Measures By When Limited adherence to Training of key CCARDESA staff on World Bank Upon hd World Bank Procurement and Consultant Selection Methods and availability adequate Procurement and Procedures of trainer(s) Consultant Selection Strengthening of procurement systems at CCARDESA Continuous Guidelines Periodical revision of Procurement Manual follow-up Procurement plan 143. CCARDESA, with the support of the World Bank, developed a procurement plan for the first 24 months of Project implementation. The World Bank reviewed and approved this plan as of December 11, 2012. The procurement plan will be updated as required and at least once a year throughout the life of the project. Procurement arrangements Goods, works and non-consulting services 144. Procurement of works by CCARDESA is not envisioned under APPSA. Particular methods of procurement of non-consulting services are as follows: (a) Methods of procurement of non-consulting services. The following list specifies the methods of procurement, other than International Competitive Bidding, which may be used for non-consulting services. The Procurement Plan shall specify the circumstances under which such methods may be used. (i) Shopping (ii) Direct Contracting Schedule for non-consulting services 145. Non-consulting services to be procured under the Project are likely to include: print and publication services to be procured under the Shopping procedure based on comparing price quotations obtained from several suppliers, with a minimum of three, to assure competitive prices, and is an appropriate method for procuring readily available off-the-shelf goods. Consulting services 146. Particular methods of procurement for consulting services are: 88 (a) Quality and Cost-Based Selection (QCBS). Except as otherwise provided in the paragraph below, consultants services shall be procured under contracts awarded on the basis of Quality and Cost-Based Selection. (b) Other methods of procurement of consultants' services. The following list specifies selection methods, other than Quality and Cost-Based Selection, which may be used for consultants' services. The Procurement Plan shall specify the circumstances under which such methods may be used: (i) Quality-based Selection (QBS) (ii) Selection based on the Consultant's qualifications (CQS) (iii) Least-cost selection (LCS) (iv) Single-source selection for firms (SSS) (v) Individual Consultants (IC) (vi) Single-source selection for IC (SSS) Schedule for consulting services 147. Selection of Consultants: Consulting services under the Project will include: monitoring and evaluation services, impact assessment, technical assistance for project coordination and procurement support, amongst others. All consulting service contracts estimated to cost more than US$ 200,000 equivalent per contract for firms will be awarded through Quality and Cost Based Selection (QCBS) method. Contracts for assignments estimated to cost less than US$ 200,000 equivalent may be contracted through Consultants' Qualification (CQS), Least Cost Selection (LCS). Environmental and Social (including safeguards) 148. APPSA is expected to have significant positive effects on rural households, especially those engaged in smallholder farming, and more specifically on the women and children in these households who disproportionately bear the burden of food insecurity and nutritional deficiency. APPSA seeks to enhance agricultural productivity by supporting technology development and dissemination, with the ultimate goal of increasing growth, employment, and food security, and reducing poverty. The Project will bring together a range of stakeholders to develop improved agricultural technology and facilitate transfers of technology and information. The Project will also enable farmers-including women farmers-to identify research priorities, partner with research agencies, and participate in technology demonstrations, field learning, and other training activities. In addition, technologies generated and disseminated under the Project, such as plant varieties that are tolerant to heat and moisture stress, conservation agriculture practices that allow more efficient management of land and water, and post-harvest technologies that permit more efficient processing and more secure storage of crops, are expected to improve the resilience of poor rural households in the face of climate shocks and reduce their vulnerability to food insecurity and poverty. 149. Women make up a significant proportion of the agricultural work force in Malawi, Mozambique, and Zambia. The Project will work to ensure that R&D projects will be sensitive to gender-differentiated priorities as these relate to household food security and nutritional 89 sufficiency. More specifically, the Project will use a proactive approach to enhance the participation of women farmers in research priority-setting, implementation of field demonstrations, and capacity building activities. Extension activities also will be designed to reach women in the participating countries. In recognition of the fact that research and extension programs in the participating countries in the past have attracted mainly men as participants, the Project is committed to ensuring that at least 30 percent of the farmers and other end users who participate in Project-supported activities will be women. 150. The Project design has been enriched through extensive consultations with researchers, extension agents, public officials at the local and national level, civil society organization, private firms, and local community groups. A gender-sensitive, easily understood and widely accessible approach will be adopted by APPSA for engaging these various stakeholders on an ongoing basis and for disseminating technology messages and knowledge products in the participating countries. Key channels will include provision of technical training to Lead Farmers, extension agents and private or civil society advisory services providers; greater engagement of researchers with extension agents; establishment of multi-stakeholder dialogue and consultation platforms on technology; and consistent collection of feedback. Among the methods to be used are field days and demonstration; radio, visual and print media; pamphlets, brochures and pictorial charts targeted at famers and other end users; and reports, training manuals, policy notes and publications for other stakeholders. 151. Involuntary Resettlement (OP/BP 4.12). Safeguards Policy OP/BP 4.12 is triggered. Component 1 (Technology Generation and Dissemination) of APPSA will finance activities that will take place in part on research station lands. It is anticipated that some research stations in Mozambique and Zambia may be home to squatters, who would have to be relocated to accommodate Project-supported activities. In addition, it is believed that some research stations in Mozambique and Zambia may be subject to encroachments by users whose access to livelihood sources would be restricted by Project-supported activities. For this reason, OP/BP 4.12 is triggered. Since the exact locations and the number of people to be impacted are not known at this time, the Borrowers in Mozambique and Zambia have prepared Resettlement Policy Frameworks (RPFs). The RPFs describe and clarify the policies, principles and procedures to be followed in minimizing and mitigating adverse social and economic impacts that will be caused by APPSA in the course of implementation. The RPFs provide a practical tool (e.g. screening checklist) to guide the preparation of Resettlement Action Plans (RAPs) for sub-projects under APPSA's Component 1. The RAPs prepared for subprojects that involve land acquisition or relocation of people or a loss of access to income sources or livelihood will need to be cleared by the Bank, prior to work commencing on the said sites. With respect to the demonstration plots or adaptation trials on farmer fields, these will be based on prior consent and agreement. 152. The implementing agencies for APPSA in the three participating countries are Chitedze Research Station in Malawi, IIAM in Mozambique, and ZARI in Zambia. These implementing agencies have been involved in the preparation of the environmental safeguards instruments (ESIA, ESMFs), which present the implementation areas, relevant institutional roles, and the institutional and collaboration arrangements. The responsibility for environmental and social safeguards including impact monitoring and reporting for the respective country implementation agencies is also elaborated in the ESMFs/ESIA. While capacity exists in all three countries at the Ministry level to monitor safeguards compliance, owing to on-going engagement on other World 90 Bank-supported projects, specific capacity for addressing safeguards under APPSA will be enhanced through dedicated staffing and training programs. 153. APPSA is expected to have a positive environmental impact on the environment by supporting the development and dissemination of agricultural technologies that promote sustainable use of land and water. The Project is classified as Environment Assessment (EA) Category B - non-transferred. The Project triggers OP/BP 4.01 Environmental Assessment because (i) research activities to be supported under Component I could include research on plant breeding, farm management, and agro-processing; and (ii) capacity building for RCoLs to be supported under Component 2 are likely to include investments in infrastructure and equipment. Where Project intervention sites were already known at appraisal, including identified research stations and sub-stations in Malawi, an Environmental and Social Management Plan (ESMP) has been prepared. For Project intervention sites which were not known in Mozambique and Zambia, such as farmers' fields used for on-farm trials, a screening process will be put in place before any Project investments are made. The screening process is described in the Environmental and Social Management Framework (ESMF) for each country (see Annex 3 for a summary). The ESMFs build on or update ESMFs currently in use within ZARI, IIAM, or MoAFS for similar World Bank operations. Once sites and works are finalized, ESMPs will be prepared during project implementation. 154. Pest Management (OP/BP 4.09). Safeguards Policy OP/BP 4.09 is triggered. Technology generation and dissemination activities to be supported under the Project could result in increased use of pesticides and agrochemicals, on research stations and in the fields of participating farmers. Pest Management Plans (PMPs) currently being used in each of the participating countries have been assessed and adopted for use under the Project. 155. Natural Habitats (OP/BP 4.04): Safeguards Policy OP/BP 4.04 (Natural Habitats) is triggered for Mozambique only. In Malawi and Zambia, the Project will not involve significant conversion of natural habitats, either directly or indirectly. It will encourage the expansion of agricultural production through the adoption of improved technologies, but interventions will target areas that are already being cultivated, so Project-supported activities are not expected to bring significant areas of unused land under cultivation. In Mozambique, the impact of Project- supported activities on natural habitats is expected be small, but on-farm trials could have non- negligible impacts if large numbers of trials are located in natural habitats. For this reason, OP4.04 is triggered as a precautionary measure, and the ESMF includes proposed measures for mitigating impacts. 156. Safety of Dams (OP/BP 4.37): In the cases of Malawi and Zambia, Safeguards Policy OP/BP 4.37 (Safety of Dams) is not triggered. The environmental safeguard studies undertaken in Malawi and Zambia determined that any construction or rehabilitation of irrigation works to be funded under the Project would not involve construction of water retention structures that would pose potential hazards to human or animal health and safety. In the case of Mozambique, Safeguards Policy OP/BP 4.37 is triggered. The Project will not fund any large dams, as defined by OP4.37. However as part of the establishment of the Rice RCoL, the Project may fund simple diversion weirs and other small-scale water control structures. For this reason, OP 4.37 is triggered as a precautionary measure. A detailed ESMP will be undertaken for the new site, and any dam-related activity will be undertaken following the guidelines of the FAO manual Small Earth Dams: A Guide to Siting, Design and Construction (2010), which has been formally disclosed as part of the safeguards documentation. 91 157. The Zambian parliament approved on the Biosafety Bill No. 10 of 2007, 145 that was drafted by the Parliamentary Committee on Education, Science and Technology, to regulate genetically modified organisms (GMOs), and allowing for to formally incorporating modern agricultural biotechnology into its national development plan. The bill allowed for the domestication of the Cartagena Protocol on Biosafety, to which Zambia is a signatory. Cartagena Protocol aims to provide protection in the transfer, handling and use of living modified organisms resulting from biotechnology. The bill also set the stage for establishing a National Biosafety Authority (NBA), promotes public awareness of biosafety, and provides mechanism for liability and redress for any harm or damage caused to human and animal health by GMO. Although the enactment of the policy framework to regulate GMOs is not yet fully functional the cotton sector led by the Cotton Development Trust (CDT) is in the process of drafting and submitting a request for field testing of GMO cotton under controlled and field environments. 158. Disclosure: All safeguards documents for the three countries were originally disclosed in country and through the World Bank InfoShop between December 17, 2012 and January 2, 2013. Governance and Anti-Corruption (GAC) - Zambia only 159. Background. All Zambia projects presented to the World Bank Board of Executive Directors are currently required to prepare a Governance and Anti-corruption (GAC) Framework in response to political economy considerations described in Annex 4 (ORAF) and substantial operating environment risks referred to in the risk rating summary table. A GAC Framework for APPSA has been drafted and adopted by the implementing agency to mitigate risks associated with governance and accountability issues. The Government of Zambia has confirmed their commitment to the implementation of the Governance Management Framework (GMF) that is attached below. The GAC Framework considered a number of mitigation measures for each identified risk that could arise during project implementation. The activities described below are fully funded through the APPSA Zambia budget. 160. Some of the key considerations described in the Zambia risk assessment framework that are relevant to the GAC framework include: (a) programs/projects implemented by the Government have had limited development impact due to limited administrative capacity and poor coordination among relevant implementing agencies; and (b) poor institutional internal control systems put financial and procurement functions at risk. 161. The key risk management entry points common to all sectoral projects in Zambia including APPSA include: * The World Bank is working in close collaboration with Government and other cooperating partners to support the continuing reform program. Government is addressing its diversification agenda through program support and policy dialogue on structural reforms, evidenced by recent increases in Zambia's exports of non-mineral products of about US$1 billion annually. The Bank and other donors are supporting capacity building through the public sector management and public financial management reform programs. * In 2008, a new Procurement Act was passed and the former National Tender Board was replaced by the Zambia Public Procurement Authority In implementing the Act, there have been some delays in project-level procurement activities, and World Bank continues to work with the Government to address critical issues. 92 * Government has launched the rollout of an Integrated Financial Management System (IFMIS) to improve public financial management by providing the necessary hardware and software. The roll-out has been negatively affected by line ministry capacity constraints. The World Bank is working with the Ministry of Finance IFMIS project team to address outstanding critical issues. Table 3.14: Governance and Anti-Corruption Management Framework (GMF) Issues identified Proposed for monitoring mitigation measures Country - Sector Level Reinforcement of Country office Zambia Risk Assessment Review GAC issues at Governance and Anti- based on draft Governance Country, Sector, and corruption Committee Management Framework Project level (ZGAC) provided input was held in November 2012 during the risk review prior to project Quality meetings of the project Enhancement Review and will continue to (QER) meeting provide input during Based on actual needs and project implementation Agriculture sector timing, topics are included Continuous dialogue with monitoring indicators as agenda items in the ZGAC to ensure included in the donor monthly troika meetings agriculture sector inclusion in country level engagement with the government Include sector constraints on Agriculture Donor budget allocation, FM Coordination group would capacity enhancement in the provide additional CP agenda and on-going linkages and entry points dialogue for improved dialogue Project Level - Institutional Issues Understaffing in MAL will continue All vacant technical and Six months following MAL requesting Public Service fiduciary positions critical effectiveness Management Division for Project implementation (PSMD) to fill vacant filled with qualified positions candidates using Government recruitment procedures Lack of ownership Continue engaging key Project launch workshops Periodic events during by key stakeholders, stakeholders, partners and held; and involve Project implementation partners, and beneficiaries at project beneficiaries in annual beneficiaries which design stage planning and review could impede meetings implementation and reduce impact 93 Issues identified Proposed for monitoring mitigation measures Wide scale A Steering Committee Steering Committee seated Quarterly implementation of will be formed between and holding regular crop demonstrations partners to guide meetings with multiple implementation of the implementing work program and partners could fall manage partner MOUs to behind plans due to closely monitor field conflicting priorities activities. of the partners Project Level - Implementation Relevance of R&D Use project as vehicle to: ZARI technical staff and During the Project period priorities and (a) promote diversity decentralized team members participation by within the commodity and stake holders participate stakeholders in priorities of MAL in line regularly in research priority technology testing with diversification setting and planning and dissemination agenda, (b) ensure activities widespread participation of farmers and private sector stakeholders mr setting priorities and (c) emphasize technology dissemination though support for demonstration activities Fiduciary Issues - Financial management Ineligible Tracing and monitoring Audit reports generated; As needed Expenditures, transactions beyond the forensic audits conducted as Financial traditional audits and required Management Fraud withdrawal applications Monitoring and A comprehensive Preparation of PIM includes the M&E Evaluation (M&E) Management Information PIM module by effectiveness System to produce timely and accurate information including financial information to enable management to monitor the Project effectively Information sharing and Preparation of M&E module is ready by commumcation strategy to , pIM effectiveness be considered 9Project M&E Module All stakeholders (public Methodology developed by Six months after sector, private sector and effectiveness and included effectiveness civil society) engaged for in the PIM M&E review and to Mapping of stakeholders provide input for external active in the project areas ISR drafting and capacity identified 94 Issues identified 1 Proposed Specific milestones By when for monitoring mitigation measures Fiduciary Issues - Procurement Procurement Improve procurement Include budget for training Training plan developed challenge at project capacity in ZARI in Project during preparation and will level be reviewed and updated regularly during implementation Safeguards Environmental and Prepare and execute Preparation of ESMF and ESMF and RPF ready and Social issues project level ESMF and RPF disclosed by December RPF framework 2012 (completed) documents and site specific Environmental Management Plans Preparation and (EMPs) and Resettlement implementation of site RAPs to be prepared as Action Plans (RAPs) as specific EMPs and RAPs needed when sites are relevant once the sites are determined Grievance mechanism Grievance Redress Grievance redress and PIM - to describe the Grievance and redress and Complaints complaints handling process mechanisms are described in handling of APPSA mechanisms will be the PIM by effectiveness included in the PIM; and updated periodically redress facilitation will be handled through ESMF and/or RPF - decentralized research proposed grievances ESMF and RPF drafted and stations; in addition some handling methods are to be disclosed issues will be handled used in decentralized offices through the of public service Environmental Social administration method; Management Framework (ESMF) and site specific Local government and local instruments courts method Monitoring & Evaluation 162. APPSA will establish a strong monitoring and evaluation (M&E) system, which will serve as an important tool used to track the use of Project resources, monitor delivery of activities, and quantify impacts. The Project M&E system will be aligned with the regional M&E framework, which will be implemented by CCARDESA working in close collaboration with the three participating countries. Malawi, Mozambique, and Zambia will customize the regional M&E framework to design a system that responds to the information needs of the different stakeholders in each country and is consistent with national systems and structures. Together, Project implementing agencies and CCARDESA will develop a comprehensive M&E system that will provide clear guidance to the decision-making process of all stakeholders, under the assumption that M&E is most useful when it provides timely and accurate information. 95 163. APPSA will use a four-pronged approach to ensure that Project-supported activities are effectively monitored and evaluated: * Regional coordination and dedicated staffing: APPSA M&E functions will be coordinated at the regional level by CCARDESA. The CCARDESA M&E specialist will provide leadership and technical guidance to the three participating countries. Within each country, a dedicated M&E specialist will provide support and technical assistance in the areas of qualitative and quantitative data collection, analysis, processing and management. * Rigorous methodology and standardized protocols: All Project performance indicators and data collection tools will be tested, revised, and standardized to ensure that the appropriate data are collected to inform program decision-making, measure impact, and meet stakeholders' information needs. * Innovation and capacity building: APPSA staff capacity will be reinforced through training and on the job learning. As part of the national M&E system, a learning needs assessment will be undertaken, and a capacity building program implemented for the benefit of APPSA staff. * Communication, information sharing, and data management: The country-level M&E specialist and the CCARDESA M&E specialist will manage quantitative and qualitative data to ensure that relevant information is readily available to APPSA stakeholders and partners. The analyses and reports will be completed in timely fashion and shared with the appropriate stakeholders. 164. The M&E specialist in each participating country will: * Prepare detailed Monitoring and Evaluation plan; * Determine baselines and confirm targets for key Project indicators; and * Set up and maintain a functional M&E system, complete with appropriate technical staff and an M&E manual that describes protocols for tracking results, monitoring progress, and analyzing impacts. 165. Monitoring. All indicators, inputs, processes, outputs, and outcomes will be tracked on a regular basis. The M&E plan will enable stakeholders and partners, as well as Project management, to make appropriate decisions concerning the progress achieved toward achieving the PDO, as well as emerging opportunities and constraints affecting implementation. 166. The Project will use a range of monitoring tools and instruments to collect and analyze field data. Although the Project will support the participation of multiple stakeholders and partners, it will develop a single M&E standard that applies to all program activities in all intervention zones. The M&E tools and instruments applied will be based on best practices to enhance the validity and reliability of the critical data required for decision-making. The Project M&E plan will incorporate environmental and social monitoring as described in the safeguards documents. 167. Routine monitoring. This will include the regular monitoring of all Project, inputs, processes, activities, and outputs, and will form the bulk of the data collection process. Trained personnel will use standardized forms and data collection procedures to collect the quantitative and qualitative data required for effective Project monitoring. In addition, records of notes, field 96 visit forms, material and stock tracking forms, pre-and post-training tests and checklists will also be used to track contacts between Project staff and beneficiaries with gender disaggregation. Routine monitoring will be conducted by the Project M&E staff and will guide the Project decisions and re-alignment. The M&E framework will include formats for monthly, quarterly, semiannual and annual reports to be used by the different stakeholders. The reports to be submitted by each of the stakeholders will be clearly identified and shared with them. 168. Special studies. Annual surveys will be conducted to test assumptions related to the performance of technologies, and the results of activities intended increase productivity of legumes cropping systems. Such studies and surveys will include a tracking of annual crop yields, market prices during harvest and post-harvest seasons, post-harvest losses, changes in beneficiary revenues. The Project will also look at issues such as gender equity, client perception and behavior change at the farm level. 169. Quality control and verification. Periodic random checks and data verification will be completed to verify the validity and reliability of data collected. 170. Evaluation. Four qualitative and quantitative evaluations will be conducted: an initial baseline survey, two in-course evaluations (process), and a final impact assessment (summative). The in-course evaluations will be conducted at the beginning of Year 3 and Year 5 of the Project. To ensure community participation, ownership, and usage of the evaluation/reviews results, the program will use participatory approaches to assess collective perceptions and insights into the contribution of the Project to the generation and dissemination of promising agricultural technologies. Accordingly, at the community level, APPSA will train community groups, especially farmers' organizations and Lead Farmer groups to use different data collection tools to identify and document activities and observed changes in their farming. The Project will use personnel from the national and regional governmental entities, as well as independent consultants. Designated M&E advisors will be consulted in the design of the evaluation methodology and the collection and analysis of field data. 171. The in-course evaluations will track progress made towards the achievement of Project objectives. The results of the in-course evaluations will enable the program stakeholders to identify the strengths and weaknesses in the Project and develop strategies to improve Project design and delivery. The final evaluation will be conducted in the sixth year of the Project. It will assess Project impact and will provide the bases for post-Project planning of the anticipated second phase. APPSA stakeholders will select consultants with considerable experience in agricultural research/rural development issues to undertake the activity. Role of partners 172. Public, private or civil society R&D technical institutions operating at the regional level (such as CGIAR centers, the Alliance for a Green Revolution in Africa (AGRA) and the Forum for Agricultural Research in Africa (FARA) could play a partnership role in APPSA by jointly implementing R&D activities with RCoLs, exchanging knowledge or materials with RCoLs, and/or coordinating their own R&D activates with the Project to avoid duplication or achieve synergies. In addition, regional or continental political bodies such as SADC, COMESA and the AUC could play a role in facilitating the broader policy and regulatory environment with respect 97 to R&D activities and in particular, establishing the appropriate policy and regulatory environment governing the movement of technology within the region. 98 Annex 4: Operational Risk Assessment Framework (ORAF) Agricultural Productivity Program for Southern Africa (APPSA) Stage: Board Project Stakeholder Risks Rating Moderate Description: Some national level stakeholders may question regional Risk Management: Strong consultative processes were used during Project preparation. IDA funds transferred focus of investments and reject such investments if seen not to benefit at the regional level will be linked to specific services to be delivered by CCARDESA. Accountability national systems - including the transfer of country IDA funds to a mechanisms built into CCARDESA's governance structure have been reinforced through the Project design. regional entity. Each participating country has allocated funds for collaboration with CCARDESA. Negative perceptions about biotechnology within agricultural Research on transgenic crops is neither explicitly planned nor excluded. All Project-supported activities will be research (as it relates to transgenic/ genetically modified organisms firmly embedded with national bio-safety frameworks. All project countries are signatory to the Cartagena (GMO) crops) may affect the Project. Protocol on Biosafety. Resp: Bank Stage: Prep/Impl. Due Date: 7/14/2019 Status: Not yet due Implementing Agency Risks (including fiduciary) Capacity Rating: High Description: Institutional capacity for regional coordination and Risk Management: Project design builds in coordination mechanisms, with CCARDESA assuming a role in implementation at the national and regional levels may limit effective facilitating regional coordination. Linkage to existing national operations is intended to mitigate some capacity regional collaboration issues. Meetings will be convened by CCARDESA at which all Directors of Agricultural Research will participate and address Project design and implementation issues. Proactive dialogue is on-going to strengthen Limited capacity and familiarity with World Bank procurement regional research collaboration with CGIAR centers mandated and/or located in the Southern Africa region. procedures in implementing agencies Procurement capacity of all four implementation agencies will be strengthened by effectiveness, and staff will Financial management risks as documented under Annex 3 include enjoy continuous training based on regular needs assessment updates weak staffing arrangements to account for project funds, lack of computerized accounting systems, inadequate Financial Management Financial Management risks will be mitigated by hiring qualified and experienced staff to strengthen the Manuals (FMM) to have adequate internal control systems, weak implementing agencies, training internal auditors to enhance theft skills in risk-based auditing, acquiring internal audit skills and weak audit committees to ensure follow up accounting software to computerize the Project accounting, finalizing and agreeing on the FMM (as part of the that audit issues have been addressed. PIM) with World Bank before effectiveness, and training audit committees to become effective and functional. Resp: Clients Stage: Prep/Imp. Due Date: 12/14/2013 Status: Not yet due 99 Governance Rating: Moderate Description: Participating country R&D actors may not fully engage Risk Management: The Project design process used a highly consultative approach. Work programs and in or commit sufficient resources for collaborative activities; budgets will be discussed as part of regional plans. Strong buy-in to be sought during preparation following the including IBRD countries that would self-finance own participation. proposed implementation arrangements and decision matrix. The approval and quality assurance process for R&D projects (including quality control and subsequent monitoring) should allow control measures. The Project builds on existing similar operations, national programs and their mechanisms for controlling fraud and corruption in the IDA portfolio in participating countries. Resp: Clients Stage: Prep/Impl. Due Date: 7/14/2019 Status: Not yet due Project Risks Design Rating: Substantial Description: Delay in production of technologies or technologies Risk Management: Rigorous technical vetting of research proposals, including peer review by external may not correspond to the needs of farmers. scientists, should increase the likelihood that R&D projects will be successful. Meetings will be convened by CCARDESA in which all Directors of Agricultural Research will participate and during which issues relating to Outputs generated by RCoLs may remain national, rather than the design and implementation of R&D projects will be addressed. generating regional benefits The Project design includes a strong focus on regional dissemination activities. All funded R&D-projects must correspond to regional priorities. Resp: Bank Stage: Preparation Due Date: 7/14/2019 Status: Not yet due Social & Environmental Rating: Moderate Description: Potential risks could include impacts associated with Risk Management: Safeguards instruments have been prepared for each of the participating countries (ESMFs, use of agricultural chemicals but this is expected to be low intensity, ESIA/ESMP, RPFs, and PMPs). The proposed safeguard measures will reinforce those already in place for minor, site specific (on research stations, limited number of farm ongoing activities (most countries are implementing national agricultural productivity programs with existing fields). Research on transgenic crops is neither explicitly planned nor ESMFs, PMPs, and resettlement frameworks where applicable). ESMPs and RAPs have been prepared where excluded. Project intervention sites are already known. Resp: Clients Stage: Prep/Impl. Due Date: 7/14/2019 Status: Not yet due Program & Donor Rating: Moderate Description: Project highly dependent on: (a) effectiveness of the Risk Management: The support provided under the Project to CCARDESA will complement and build on regional program of CCARDESA, and (b) individual national World Bank support being provided to CCARDESA. programs that support/underpin national systems. Resp: Client Stage: Implementation Due Date: 7/14/2019 Status: Not yet due Delivery Monitoring & Sustainability Rating: Moderate Description: Long-term sustainability of RCoLs may be limited due Risk Management: The commodity focus of the Project is intended to ensure that activities being supported will to a lack of national and regional level commitment. have high priority; regular consultation on benefits and impact will be important. Resp: Clients Stage: Prep/Impl.. Due Date: 7/14/2019 Status: Not yet due Overall Implementation Risk Rating: Moderate 100 Annex 5: Implementation Support Plan Agricultural Productivity Program for Southern Africa (APPSA) Strategy and approach for implementation support 1. A detailed Implementation Support Plan (ISP) has been prepared to ensure timely and effective implementation of the Project. The aim is to ensure that implementation support activities provide effective protection against the Project's key risks and increase the likelihood of achieving the expected results. 2. The ISP focuses on the principal implementation risks identified in the ORAF (see Annex 4) and describes strategies and actions designed to mitigate those risks. The ISP also includes a detailed schedule summarizing the planned supervision missions and indicating the effort and resource commitment by the World Bank that will be needed to ensure successful implementation of the Project. Implementation strategy (IS) 3. The IS approach for APPSA entails close monitoring of technical project design and implementation aspects, as well as scrutiny of governance, fiduciary, and safeguard issues. 4. Project design: A number of potential risks have been identified in the design of the Project, such as unforeseen delays in the generation of improved technologies, or generation of technologies that do not correspond to the needs of farmers. Another risk is that improved technologies generated by the RCoLs may be useful in addressing only national problems, leaving them incapable of generating regional benefits. To help mitigate these risks, APPSA participating countries will prepare and agree on annual work plans comprising R&D project proposals that can be completed on schedule, that are relevant to the needs of farmers and other targeted end users, that address problems of regional relevance. Rigorous technical vetting of R&D proposals, including the use of well-qualified external peer reviewers, will help to increase the likelihood of success of R&D projects. Annual meetings will also be convened by CCARDESA at which senior research managers from the national agricultural research programs will review progress and address any design-related issues, should these emerge. 5. Implementation: Institutional capacity constraints in national and regional institutions may limit effective regional collaboration. To mitigate possible institutional capacity constraints at the national level, the Project design designates significant resources to be used for improving research facilities and strengthening human capacity among the RCoLs. To mitigate possible institutional capacity constraints at the regional level, the Project design provides for flow- through funding to allow CCARDESA to backstop the RCoLs effectively. To ensure that Project resources are being used effectively in pursuit of the PDO, the World Bank will undertake biannual implementation support missions. In addition, two mid-term reviews (MTRs) are envisaged over the six-year implementation period. The first MTR will take place at the end of the second year, and the second MTR will take place at the end of the fourth year. 6. Governance: Governance aspects of the Project will be monitored during implementation support missions. In the case of Zambia, an agreed GAC Management Framework and Action Plan will be implemented by the client and reviewed by the World Bank. 7. M&E: The World Bank will complement the M&E activities called for under the Project's implementation plan by carrying out biannual implementation support missions during which 101 performance indicators will be closely monitored. Field visits will be made on the ground to verify the information appearing in regular M&E reports to ensure that the M&E system is generating a complete and accurate picture of Project's performance. 8. Environmental and social safeguards: Potential risks include adverse impacts on the environment and/or human populations living in areas being targeted by the Project associated with improper use of agricultural chemicals on research stations and in farmer fields. Research on transgenic crops is neither explicitly planned nor excluded. Each APPSA participating country has prepared, consulted upon, and disclosed its own applicable safeguards instruments, such as ESIA/ESMP, ESMF, RPF, and PMP. Implementation of these safeguard instruments will entail rigorous screening of areas being targeted by the Project; in situations where site-specific ESMPs or RAPs are needed, clearance of such plans by the World Bank will be required. Each APPSA participating country will make a budget provision for safeguards monitoring over the life of the Project. 9. Procurement: Procurement assessments have been carried out in each participating country and CCARDESA. Procurement capacity risks are assessed between substantial and high given the institutions' limited or no experience implementing World Bank-financed projects. Proposed mitigating measures include strengthening the Client's procurement capacity through recruitment of staff and training. The World Bank will complement its support through regular bi-annual implementation support visits, prior and post-procurement reviews and providing training and capacity strengthening. 10. Financial management: Financial Management supervision will be conducted based on the risk rating of each entity. Two on-site supervisions per year will be carried out for Chitedze Research Station, IIAM, and ZARI. One supervision mission per year will be carried out for CCARDESA. Other forms of supervision will include desks reviews of IFRs and audit reports. Table 5.1: Main focus of support to APPSA during Project implementation Resource Partner Time Focus Skills Needed esurce rtle Estimate Role First 12 Project effective Lead Agricultural US$250,000 months and withdrawal of Economist/Economist (TTLs) per year initial deposit of the Senior Agriculture/Rural Designated account Development Specialists (co-TTLs for each country) Regional meeting M&E Specialist for R&D annual work planning and generation of research proposals Prepare and agree on a regional M&E framework linked to each RCoLs M&E system; undertake baseline evaluation 102 Resource Partner Time Focus Skills Needed esurce rtle Estimate Role Monitor and review Environmental / Social Safeguard safeguards Specialists implementation Initiate procurement Financial Management Specialist activities related to Procurement Specialists rehabilitation and/or construction works 12-48 months Regional meetings Lead Agricultural US$200,000 for R&D annual Economist/Economist (TTLs) per year work planning and Senior Agriculture/Rural generation of Development Specialists (co-TTLs research proposals for each country) M&E Specialist Environmental /Social Safeguard Specialists Financial Management Specialist Regional Lawyer Senior Disbursement Officer Procurement Specialists 48 -60 Regional meeting Lead Agricultural US$200,000 months for R&D annual Economist/Economist (TTLs) per year work planning and Senior Agriculture/Rural generation of Development Specialists (co-TTLs research proposals for each country) Undertake MTRs M&E Specialist after year 2 and year Environmental / Social Safeguard 4 Specialists Financial Management Specialist Procurement Specialist 60-72 months Undertake final Lead Agricultural US$250,000 project evaluation Economist/Economist (TTLs) per year Senior Agriculture/Rural Development Specialists (co-TTLs for each country) 103 Table 5.2: Skills mix required Number of Skills Needed SafWek Number of Trips Comments Staff Weeks Lead Agricultural Economist (TTL) 12 field visits Washington-based Economist (co-TTL) 12 field visits Washington-based Senior Agricultural Specialist 12 field visits Country Office-based (Malawi co-TTL) Senior Rural Development Specialist 12 field visits Country Office-based (Mozambique co-TTL) Senior Agriculturist (Zambia co-TTL) 12 field visits Country Office-based Senior Environmental Specialist 12 field visits Pretoria-based Senior Social Development Specialist 12 field visits Washington-based Operations Officers 4-6 field visits Washington-based Financial Management Specialists 12 field visits Country Office-based Procurement Specialists 12 field visits Country Office-based Regional Lawyer Senior Disbursement Officer Team Assistants 12 field visits Country Office-based Table 5.3: Role of other partners Name Institution/Country Role Regional and country based staff CIMMYT Facilitate technology ICRISAT exchange, capacity IRRI development and training IITA AGRA FARA SADC Facilitate harmonized COMESA approach to movement of seed technology across SADC countries 104 Annex 6: Map Agricultural Productivity Program for Southern Africa (APPSA) 105 ，스