Document of The World Bank FOR OFFICIAL USE ONLY Report No: 84644-SS INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT PAPER ON A PROPOSED ADDITIONAL GRANTAND RESTRUCTURING IN THE AMOUNT OF SDR 5.9 MILLION (US$9.00 MILLION EQUIVALENT) TO THE REPUBLIC OF SOUTH SUDAN FOR THE SOUTHERN SUDAN EMERGENCY FOOD CRISIS RESPONSE PROJECT February 28, 2014 Agriculture Rural Development and Irrigation Unit (AFTA3) Sustainable Development Department Country Department AFCE4 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 January 30, 2014) Currency Unit = South Sudanese Pound 3.5 = US$1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AF Additional Financing CPS Country Partnership Strategy ESA Environment and Social Assessment ESMF Environment and Social Management Framework ESMP Environmental and Social Management Plan ESSAF Environment and SocialScreening and Assessment Framework FM Financial Management FPCR-MDTF Food Price Crisis Response Multi- Donor Trust Fund FPCR-SDTF Food Price Crisis Response Single Donor Trust Fund GFRP Global Food Crisis Response Program IDA International Development Association ISN Interim Strategy Note M&E Monitoring and Evaluation MAFTARCRD Ministry of Agriculture, Forestry, Tourism, Animal Resources, Fisheries, Cooperatives and Rural Development NGOs Non-Governmental Organizations OP Operational Policy PIU Project Implementation Unit PDO Project Development Objective PMP Pest Management Plan RPF Resettlement Policy Framework SSEFCRP Southern Sudan Emergency Food Crisis Response Project WFP World Food Programme Vice President: Makhtar Diop Country Director: Bella Bird Sector Director Jamal Saghir Sector Manager: Tijan Sallah Task Team Leader: Abel Lufafa ii REPUBLIC OF SOUTH SUDAN SOUTHERN SUDAN EMERGENCY FOOD CRISIS RESPONSE PROJECT ADDITIONAL FINANCING CONTENTS ADDITIONAL FINANCING DATA SHEET .............................................................................. iv  I. INTRODUCTION ...................................................................................................................... 1  II. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ............................ 1  III. PROPOSED CHANGES .......................................................................................................... 5  IV. CONSISTENCY WITH THE COUNTRY PARTNERSHIP STRATEGY (CPS) .................. 8  V. BASIS AND JUSTIFICATION FOR TRIGGERING PARA. 11 OF OP 10.00 ...................... 9  VI. APPRAISAL SUMMARY ....................................................................................................... 9  ANNEX 1: RESULTS FRAMEWORK AND MONITORING .................................................. 13  ANNEX 2: OPERATIONAL RISK ASSESSMENT FRAMEWORK ........................................ 16  ANNEX 3: MAP OF SOUTH SUDAN........................................................................................ 18  iii REPUBLIC OF SOUTH SUDAN SOUTHERN SUDAN EMERGENCY FOOD CRISIS RESPONSE PROJECT ADDITIONAL FINANCING DATA SHEET Basic Information - Additional Financing (AF) Country Director:Bella Bird Sectors: Crops (30%), Other social services Sector Manager/Director:Tijan Sallah/Jamal Saghir (60%), General agriculture/fisheries/forestry Team Leader: Abel Lufafa (10%) Project ID:P147900 Themes: Global food crisis response Expected Effectiveness Date:03/31/2014 (100%) Lending Instrument:IPF Environmental category: B Partial Additional Financing Type:Scale-up Assessment Expected Closing Date:06/30/2016 Basic Information - Original Project Project ID:P113586 Environmental category: B Partial Assessment Project Name:Southern Sudan Emergency Expected Closing Date: 04/30/2015 Food Crisis Response Project Lending Instrument: ERL : AF Project Financing Data [ ] Loan [ ] Credit [ X ] Grant [ ] Guarantee [ ] Other: Proposed terms:IDA Grant terms AF Financing Plan (US$m) Source Total Amount (US $m) Total Project Cost: 9.00 IDA: 9.00 Borrower: 0.00 Total Bank Financing: 9.00 Client Information Recipient:Republic of South Sudan Responsible Agency:Ministry of Agriculture, Forestry, Tourism, Animal Resources,Fisheries, Cooperatives and Rural Development Contact Person: Mathew Udo (Undersecretary) Telephone No.: +211 956 335352 Fax No.: n/a Email:paitemg@hotmail.com AF Estimated Disbursements (Bank FY/US$m) FY 2014 2015 2016 Annual 3.00 4.00 2.00 Cumulative 3.00 7.00 9.00 Project Development Objective and Description iv Original PDO: Increased access to food for consumption by food insecure households or groups living in six of the most distressed counties of Southern Sudan. Current PDO as revised: To support adoption of improved technologies for food production by eligible beneficiaries, increase storage capacity for staples, and provide cash or food to eligible people participating in public works programs in selected counties in SouthSudan. Proposed PDO: To support adoption of improved technologies for food production and storage, and provide cash or food to eligible beneficiaries in South Sudan. Project description:The proposed additional financing will be used to: i) enhance productivity of eligible farmers so as to increase staple crop yields and production and to improve postharvest management; ii) support a safety net program that targets food insecure but able-bodied individuals to participate in high priority public works in exchange for food or cash; as well as direct food support for vulnerable persons - who for several reasons (e.g. insecurity, displacement, old age, disability) are unable to participate in public works; and iii) cover administrative costs of the implementing agency including monitoring of project performance. Safeguard and Exception to Policies Safeguard policies triggered: Environmental Assessment (OP/BP 4.01) [X]Yes [ ] No Natural Habitats (OP/BP 4.04) [X]Yes [ ] No Forests (OP/BP 4.36) [X]Yes [ ] No Pest Management (OP 4.09) [X]Yes [ ] No Physical Cultural Resources (OP/BP 4.11) [ ]Yes [X] No Indigenous Peoples (OP/BP 4.10) [X]Yes [ ] No Involuntary Resettlement (OP/BP 4.12) [X]Yes [ ] No Safety of Dams (OP/BP 4.37) [ ]Yes [X] No Projects on International Waterways (OP/BP 7.50) [ ]Yes [X] No Projects in Disputed Areas (OP/BP 7.60) [ ]Yes [X] No Does the project require any waivers of Bank policies? [ ]Yes [ X] No Have these been endorsed or approved by Bank management? [ ]Yes [ ] No Conditions and Legal Covenants: Grant Agreement Reference Description of Date Due Condition/Covenant Part B, Section 1 No withdrawal shall be made for payments made prior to the date of countersignature of Financing Agreement by the Recipient, except that withdrawals up to an amount not to exceed US$ 1,800,000 equivalent may be made for payments made prior to this date but on or after March 01, 2014, for Eligible Expenditures under the Project. v I. INTRODUCTION 1. This Project Paper seeks the approval of the Executive Directors to: (i) provide an IDA grant in the amount of US$ 9.0 million as additional financing to the Republic of South Sudan- Southern Sudan Emergency Food Crisis Response Project (P113586), and (ii) reformulate the project’s development objective (PDO) to reflect proposed changes to current project components (i.e. level one restructuring)1. The new closing date of both the original project and the additional financing (AF) will be June 30, 20162. 2. The proposed grant would be the fourth AF to the project and will be primarily used to scale-up and expand project activities to areas where recent assessments point to significantly deteriorating food security. The grant will cover the costs associated with:(i) provision of agricultural inputs, production technology and advisory services; (ii) bringing land that is currently out of production back into production; (iii) training farmers on reduction of postharvest losses; (iv) building of food storage facilities to support postharvest handling at the household and community levels; (v) provision of cash or food for work to eligible individuals participating in priority public works; and (vi) provision of direct food support to vulnerable persons - who for several reasons (including area insecurity, displacement, old age, disability etc.) are unable to work or participate in public works in exchange for the food. 3. The additional resources will: (i) increase the number of farmers adopting improved technologies for food production by 1,000; (ii) provide a safety net to an extra 1,500 food insecure beneficiaries participating in a public works program; and (iii) provide direct food support to 138,0003vulnerable beneficiaries (persons) for two months. The financing will increase the number of project beneficiaries from an expected 244,000 to a total of 384,500individuals (a net increase of 140,500 beneficiaries). II. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING 4. South Sudan has faced long-running and continuing food insecurity- mainly a consequence of the breakdown of agricultural support services, institutions and infrastructure and a legacy of the prolonged civil conflict. In the last nine years since becoming semi-autonomous and subsequently independent, the country has only posted two years (2006 and 2009) with a positive food balance. From monitoring data, it is now clear that the country has experienced an overall decline in food production since it gained independence with a corresponding increase in reliance on imports to cover the food deficits. 5. Overall contraction of the economy as a result of the government’s austerity program over the last two years together with the depreciation of the unofficial exchange rate already constrict 1 The proposed restructuring covers only activities under the third AF as the original grant and the subsequent first and second AF (see para 12) are fully disbursed. 2 The new closing date would apply only to the proposed IDA Grant and not to the third AF Grants as the end disbursement date of the third AF Grants cannot be extended beyond November 30, 2015. 3 The proposal is to allocate US$7.5 million to direct food support. According to the World Food Program, it costs US$27.54 to provide a one month food ration to one person, including 15 kg of cereals, 1.5 kg of pulses, 0.9 kg of oil and 0.15 kg of salt. At this cost, the US$7.5 million would support about 138,000 individuals for two months. the amount of food that households can access through the market (as the country heavily depends on food imports). Indeed, earlier projections for the 2013 consumption year indicated that about 4.1 million people would face food insecurity, of which over 1 million would be severely food insecure. 6. Complicating further these ongoing challenges in food security, violence erupted in South Sudan in December, 2013. The hostilities and unrest have led to massive displacement of people (both because of the fighting itself as well as fear of the violence). Available statistics indicate that over 740,000 people are now internally displaced including over 79,000 civilians who have sought protection in the United Nations (UN) protection sites across the country. Many more have lost their livelihood assets, especially food stocks to the contending forcesthus exposing them to food insecurity. In addition, due to area insecurity, many people are now unable to work to meet their daily food needs. 7. The violence has also destabilized food markets mainly because of restrictions to movement especially in commodity supply corridors, destruction of infrastructure, and fleeing of foreign traders. Since the onset of the conflict, prices of essential cereal commodities (maize and sorghum) have risen by up to 30 percent in most markets amidst a slowdown in the economy. These developments have increased the number of people suffering from food deprivation thus escalating the already serious food security situation in the country. The UN now estimates that up to 7 million people - nearly two thirds of the total population - are at risk of some level of food insecurity, with 3.7 million already facing acute food insecurity. 8. A ceasefire agreement was signed on January 23, 2014, and talks are continuing though violence continues in the worst affected states. Even if the current cessation of hostilities endures, the displaced and those who suspended agricultural production due to the uncertainty created by the violence have already missed the current cropping season and this will have knock-on effects on food production and availability and also farm incomes in the country not only in 2014 but also into 2015. There are already reports of distress sales of household assets by vulnerable households to raise money for food and drastic cuts in household food consumption as coping mechanisms. The country is therefore in dire need of food security assistance to meet the basic needs of the most vulnerable and also prevent the escalation of negative coping mechanisms. 9. In view of the situation on the ground, the government has placed requests and appeals to several donors – including the World Bank- for assistance especially as oil revenues have declined mainly because of a shutdown of production in one of the oil producing States asa result of insecurity. However, most donors are still assessing their potential support in light of the fluid country conditions. The continued food insecurity amidst limited ability of government to fully respond to the crisis therefore provides a rationale for this AF to the ongoing Southern Sudan Emergency Food Crisis Response Project (SSEFCRP). 10. This AF is in response to the government’s request and though rather modest compared to the current need, it takes advantage of the modular and flexible design adopted for the SSEFCRP-in which additional areas and activities can be covered as more resources are available- to scale up activities to hotspots of food insecurity. The support is in line with 2 government’s policy and strategy4 for addressing food insecurity which not only places emphasis on attaining food security through increased own production but also providing safety net support to those that are unable to producetheir own food. 11. The additional investments that are proposed include: (a) provision of inputs, tools and advisory services to targeted farming households; (b) provision of a safety net to an additional number of food insecure persons through cash/food for work as well as through direct food support in cases where potential beneficiaries are vulnerable and cannot work (for reasons including area insecurity, displacement, old age, disability etc.) in exchange for food; and (c) increasing resources towards project management to cover implementation costs for the extended project duration.Proposed new activities are consistent with the ISN. 12. Original grant: The original project was approved by the Board in October 3, 2008 for a total of US$5.0 million to increase access to food for consumption by food insecure households in select distressed counties in then Southern Sudan. This initial grant (TF093011) has been fully disbursed. On June 29, 2011, a first additional financing of US$2.2 million [US$0.7 million from the Food Price Crisis Response Trust Fund–Bank Surplus (FPCRP-SDTF) and US$1.5 million from the FPCRP-MDTF] was approved for the project to augment support to already participating project beneficiaries. The entire amount of these trust funds (TF099943, TF099946) has been fully disbursed. On June 19, 2012 a second additional financing of US$3.0 million from the FPCRP-MDTF was approved for the project to scale-up and increase benefits to already participating beneficiaries and to expand project activities to two additional counties where the food security situation had considerably deteriorated. During that restructuring, the PDO was restated to accommodate a change in geographical targeting (i.e. discontinued the locational reference to six counties, in light of the expansion of the project to other counties), and revisions were also made to indicators. The entire amount (TF012069) has also been fully disbursed. A third additional financing of US$7.53 million (US$3.80 million from the FPCRP-MDT, TF015935 and US$3.73 million from the FPCRP-SDTF, TF015934) was approved by the Board in October, 2013 to help scale-up project activities to counties where food security had considerably deteriorated. Twenty percent (US$1.5 million) of the third AF has been disbursed as an advance, and implementation has started. 13. The project activities include providing farming households with agricultural inputs and improved technologies to increase production of selected staples, training in postharvest management, construction of food storage facilitiesat farm and community levels, and provision of cash for work to food-insecure households - in exchange for their participation in priority public works - to help them access food through the market. The project has three components and these, together with theirrespective cumulative costs (including the original grant and all the three AF to date), are summarized below. i). Support to Agricultural Productivity (cumulative US$10.93 million): This component seeks to increase farmers’ own production and to improve postharvest handling and management of food crops. This component supports provision of inputs (seeds and tools), technical advice on production and postharvest management, and construction of 4 The Government strategy as outlined in its National Agriculture Investment Plan prioritizes enhancing community resettlement rehabilitation and security and enhancing intensification and sustainable production. 3 low-cost food storage facilities and granaries at household and community levels. It also supports the rehabilitation of facilities at a Basic Seed Center. ii). Strengthening Community Safety Nets (cumulative US$5.2 million): The objective of this component is to create temporary job opportunities and income for the food insecure people to increase their access to food. It supports cash for work activities where target beneficiaries get cash transfers in exchange for labor. Typical activities include: opening of access roads to agriculturally productive areas, construction of grain storage facilities and markets, among others. iii). Support to Project Implementation (cumulative US$1.6 million): This component is designed to finance administrative costs of the Project Implementation Unit (PIU), including, financial management, procurement, environment and social safeguards management, monitoring, reporting and evaluation of activities under the project. 14. Project performance: The performance of the project is rated satisfactory with respect to progress towards attainment of the development objective and moderately satisfactory for implementation progress. The less than fully satisfactory rating for implementation progress is due to delays in contracting Non-Governmental Organizations (NGOs) to implement project activities-owing to the destabilization that occurred when the recent violence broke out in December 2013. The contracting process has now resumed. 15. The project has complied with all legal covenants and there are no unresolved fiduciary issues. The Audits for the year ended December 31, 2012 and Interim Financial Statements for the quarter ended September 30, 2013 did not indicate any internal control or accountability issues. Audit for the year ended December 31, 2013 will commence in March 2014.The project financial management system is satisfactory. FM risk rating is moderate and FM ISR rating is satisfactory. Key safeguard documents and instruments – National ESSAF, ESA, ESMF, PMP and RPF- have been finalized, disclosed and are guiding ongoing safeguards implementation and management. 16. Project achievements: The project monitoring report for December 2013 was being finalized when violence broke out and has not yet been received by the Bank. However, to date, the project has reached over 218,800 farmers with improved crop production, postharvest management and processing technologies; and 35,281vulnerable persons with cash transfers in exchange for construction of grain storage facilities (both community and household level stores) with a current capacity of 7,038 metric tons (against a target of 2,600 metric tons), repairing roads (about 47.5 km) and construction of solid waste management facilities and latrines in public markets. 17. Through project support for labor saving (especially in the form of ox/donkey ploughs and a tractor revolving fund) associated with cropping operations, approximately 37,400 hectares of fallow and formerly idle land has been re-opened and cropped to several staple food crops. This represents more than 200 percent of the project target. Over 98,000 farmers have adopted new practices and initiatives for postharvest handling and management (against a target of 85,000 farmers). Monitoring data indicates that food availability has improved in project areas, with some farmers registering marketable surpluses and already reporting second generation challenges related to market access. Incomes and productive assets for some households have 4 also improved either through sales of surplus produce or through transfers obtained from the cash for work program. The planned rehabilitation of the seed processing facility at Palotaka Basic Seed Center is ongoing. 18. Key challenges: Major challenges that had beset project implementation and performance prior to the third AF were related to capacity but these were being addressed through Technical Assistance (TA). However, poor road infrastructure still constrains access to some areas, especially during the rainy seasons when farmers are most in need of advisory services, and also partly underlies the high cost of implementation. Insecurity and uncertainty occasioned by the recent violence in some of the project areas has precluded the implementation of project activities geared towards improving agricultural productivity. The fluidity of the security situation makes project planning difficult. III. PROPOSED CHANGES 19. (a) PDO: The current PDO is “to support adoption of improved technologies for food production by eligible beneficiaries, increase storage capacity for staples, and provide cash or food to eligible people participating in public works programs in selected counties in South Sudan”. Under the current project design, the safety net component of the project currently focuses on cash for work on labor intensive public works, such as feeder roads, bridges and communal storage facilities. Some of the current food insecurity hotspots that the project seeks to reach are in areas affected by conflict. Due to area insecurity and other reasons (e.g. displacement, old age, disability) some vulnerable food insecure households may not be able to participate in public works. The proposal is to assist such households under the safety net component through direct food support. 20. To reflect the inclusion of direct food support for vulnerable persons who cannot work, the proposal is to revise the PDO as follows: “to support adoption of improved technologies for food production and storage, and provide cash or food to eligible beneficiaries in South Sudan”.This reformulation would permit, in addition to cash/food for work under Component 2, Strengthening Community Safety Nets, the provision of direct food support to themore vulnerable among the food insecure who are unable to work due to area insecurity or other incapacities.Eligible beneficiaries would be identified based on predetermined criteria to be implemented through a facilitated community targeting process, elaborated in detail in the Project Operational Manual (POM)5, which would determine who, for how long, how much and with what types of food the beneficiary would be supported.The inclusion of direct food support is productive and necessary to meet the PDO as it would: (i) protect socioeconomic assets by preventing negative coping strategies, such as selling productive assets and incurring debt, which would undermine future production and productivity, and (ii) allow for more rapid re- engagement in production and rebuilding of livelihoods when security improves. 21. A new key performance indicator on number of vulnerable persons benefiting from direct food supportis introduced and physical targets for project indicators will be changed to reflect the 5 The targeting process would be implemented by WFP in collaboration with participating communities and other relevant agencies. 5 increased scale of the project (see Table 1 below and the updated Results Framework) resulting from the additional financing. Table 1. Project outcome indicators Original Changes with Revised target target Indicator First AF Second AF Third AF Proposed Fourth AF Number of farmers adopting improved 130,000 60,000 8,000 10,000 1,000 209,000 technologies for food production Number of vulnerable personsbenefiting from direct food n/a n/a n/a n/a 138,000 138,000 support Metric tons of storage capacity built n/a 2,600 1,000 1,600 - 5,200 Number of Project 163,000 52,500 14,000 14,500 140,500 384,500 beneficiaries 22. (b) Reallocation of third AF GrantProceeds: South Sudanhas a fairly complex process of approving World Bank financing which includes authorization by the Council of Ministers and possibly ratification by the Legislative arm of government. Because of the current situation, government (both the executive and the legislature) is preoccupied with many other urgent crises and approval of the proposed US$9 million AF might take some time. Under the third AF grant of US$7.53 million, US$5.23 million (US$3.73 million from the FPCR-SDTF and US$1.5 millionfrom the FPCR-MDTF) is allocated to the “Support to Agricultural Productivity” componentwhile only US$1.5 million is allocated to the “Strengthening Community Safety Net” component (see Table 2 below). Table 2. Sources of financing by component under the third AF grant (US$ M) Project component Source of funds Total FPCR-SDTF FPCR MDTF Support to Agricultural Productivity 3.73 1.50 5.23 Strengthening Community Safety Nets - 1.50 1.50 Support to Project Implementation - 0.80 0.80 Total 3.73 3.80 7.53 23. To enable the immediate deployment of more resources under the safety net component so as to provide urgently needed food security support to the more vulnerable who are unable to engage in agriculture production (including those who can participate in public works and those who cannot work), the proposal is to reallocate US$ 2.5 million from the FPCR-SDTF funded portion of this componentto the “Strengthening Community Safety Nets” component. This amount would be restored to the component from the proposed AF grant to continue providing support to those who can improve their food security through increased own agricultural 6 production. Table 3 below shows the revised sources of financing by component as proposed for the third AF grant. Table 3.Sources of financing by component under the proposed restructuring of the third AF grant (US$ M) Project component Source of funds Total FPCR-SDTF FPCR-MDTF Support to Agricultural Productivity 1.23 1.50 2.73 Strengthening Community Safety Nets 2.50 1.50 4.00 Support to Project Implementation - 0.80 0.80 Total 3.73 3.80 7.53 24. Table 4 below then shows the revised project costs under the proposed reallocation for the third AF grant. Table 4.Project costs by component under the proposed reallocation of the third AF grant Original cost Changes (US$ million) with Revised cost Component First AF Second AF Third AF Support to Agricultural 3.00 1.30 1.40 2.73 8.43 Productivity Strengthening 1.50 0.70 1.50 4.00 7.70 Community Safety Nets Support to Project 0.50 0.20 0.10 0.80 1.60 Implementation Total 5.00 2.20 3.00 7.53 17.73 25. (c) Project Costs: Taking into account both the proposed reallocation and the proposed US$9 millionAF, the revised cumulative project costs would be as shown in Table 5 below. Table 5: Revised project costs Original cost Changes (US$ million) with Revised cost Component First AF Second AF Third AF Proposed Fourth AF Support to Agricultural 3.00 1.30 1.40 2.73 3.0 11.43 Productivity Strengthening 1.50 0.70 1.50 4.00 5.5 13.20 Community Safety Nets Support to Project 0.50 0.20 0.10 0.80 0.5 2.10 Implementation Total 5.00 2.20 3.00 7.53 9.0 26.73 26. (d) Closing Date Extension: A closing date of June 30, 2016 is proposed to enable completion of activities, especially those related to increasing agricultural productivity. The new 7 closing date would apply only to the proposed IDA grant. This will be cumulatively more than 2 years beyond the original closing date of September 30, 2011 and 14 months beyond the current project closing date. 27. (e) Project Sites and Activities: The project currently provides food security support in the following states: Central Equatoria (Morobo and Terekeka counties); Western Equatoria (Yambio and Nagero counties); Upper Nile (Maban county); Western Bahr el Ghazal (Jur River county); Jonglei (Pochalla county); Northern Bahr el Ghazal (AweilEast county); and Lakes (YirolWest county). With the exception of Northern Bahr el Ghazal and Western Bahr el Ghazal, all the other states have experienced spates of conflict; although stress levels vary across these states. Under the current project design, activities under the two project components (Support to Agricultural Productivity and Strengthening CommunitySafety Nets) are implemented in all sites. Insecurity now precludes in some areas the implementation of activities under the Support to Agricultural Productivity component as well as participation in public works. Given the rapidly changing circumstances in the country (both from a security and food insecurity perspective), the proposal is to adopt a flexible approach to implementation, where the combinations of activities (agricultural production, public works, direct food support) implemented in a site will be dictated by the local circumstances. As a principle, support to agricultural production would be provided only in areas where it is secure; cash for work activities would be supported in areas where security conditions can allow people to work in return for cash, whereas the direct food support will be limited to those areas where vulnerable people cannot engage in production or work. This judgment will be made by the implementing agency. In addition, in line with the government’s proposal, the direct food support will be provided in any food insecurity hotspot in the country (therefore will have a potential national scope) based on a targeting process that is outlined in the POM.Therefore, project component 2 (Strengthening Community Safety Nets) would potentially have a national coverage. 28. No changes in the environmental safeguards category rating of the project are required. Thereare also no changes in the triggered Bank safeguards policies. The safeguards instruments (ESA, ESMF, PMP and RPF) preparedand disclosed under the parent project will be used for the proposed AF.The Integrated Safeguards Data Sheet (ISDS) has been disclosed. IV. CONSISTENCY WITH THE COUNTRY PARTNERSHIP STRATEGY (CPS) 29. South Sudan has no CPS, and Bank assistance to the country is informed by anInterim Strategy Note (ISN) that was approved by the Board on February 28, 2013. The ISN primarily seeks to validate what would be key elements of a longer-term assistance strategy to be articulated at the end of the ISN period and focuses on two program clusters, including: (i) improving economic management and governance for effective local service delivery, and (ii) expanding productive employment opportunities. The ISN also seeks to take advantage of short- term opportunities that arise to make tangible improvements in livelihoods and thus, besides investments in long-term endeavors (such as institutional building), calls for operations which meet immediate needs and manage emerging stresses. 30. This proposed AF seeks to address urgent food security needs of distressed people and is therefore consistent with the ISN objective of supporting improvements in people’s livelihoods. The operation also supports a public works safety net program and would thus be aligned with 8 the spirit and substance of interventions under cluster two (expanding employment opportunities) of the ISN. The work also aligns closely with Pillar 2 of the Africa Strategy which emphasizes the need to reduce vulnerability and to buffer countries from myriad shocks including those related to food insecurity, among others. V. BASIS AND JUSTIFICATION FOR TRIGGERING PARA. 11 OF OP 10.00 31. South Sudan just emerged from prolonged civil war less than a decade ago and,up to now,continues to experience frequent bouts of violent conflict within its territory. A key legacy of the chronic conflict has been a diminution in the country’s capacity to produce sufficient quantities of food to meet its needs, and the country therefore continues to experience recurrent episodes of acute food crises. Partly due to the recent violence, over 3.7 million people are estimated to face acute food insecurity; yet prospects for relief through harvests from the current cropping season have been heavily dampened, especially in states where fighting has been intense. The urgent need to address the social impacts that could accrue from the current food crisis together with the capacity constraints as a result of fragility in South Sudan provide justification for triggering paragraph 11 of OP 10.00 on projects in situations of urgent need of assistance. VI. APPRAISAL SUMMARY 32. Project implementation arrangements: Institutional arrangements remain the same, and the project will continue to be implemented by a Project Implementation Unit (PIU) that is embedded in the Ministry of Agriculture, Forestry, Tourism, Animal Resources, Fisheries,Cooperatives and Rural Development (MAFTAFCRD). The PIU is staffed with a consultant Financial Management Specialist, a consultant Environment and Social Safeguards Specialist, a consultant Procurement Specialist, and a consultant Monitoring & Evaluation Specialist. Because of the persistent capacity weaknesses both at the central and state ministries, on-the-ground execution of project activities geared towards improving agricultural production, as well as those under the cash for work program, will continue to be the role of the contracted NGOs. 33. Proposed work on direct food support will be contracted out by the government on a single source selection basis to the World Food Program- the only organization in South Sudan with the demonstrated logistical capabilitiesto source and distribute food to a large number of vulnerable beneficiaries and which has preferential access to areas that might not be secure. The contract to be signed between the Republic of South Sudan and the WFP will include inter alia details of activities to be provided, technical and financial reporting requirement, reporting frequency, safeguards issues, monitoring and evaluation during and at the end of project implementation. Fund management, disbursement arrangements under the original Grant will continue to apply.Procurement arrangements will also be similar to those for the ongoing project and will be carried out in accordance with the “Guidelines for Procurement of Good and Works and Non- Consulting Services under IBRD Loans and IDA Credits & Grant World Bank Borrowers – dated January 2011”and “Guidelines for Selection and Employment of Consultants Under IBRD Loans and IDA Credits & Grants by World Bank Borrowers dated January 2011”.The “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD 9 Loans and IDA Credits and Grants” dated October 15, 2006 and revised in January 2011 will apply. 34. Disbursement and Financial Arrangements: The Designated Account (DA) currently being used for the third additional financing of US$7.53 million (FPCRP-MDTF015935 and FPCRP-SDTF015934) denominated in United States Dollars and maintained in the CFC Stanbic Bank, Juba Branch will also be used for the fourth additional financing for eligible expenditures incurred under categories 1 and 2 as per the project grant agreements. In addition, advances relating to expenditures to be executed by the WFP under category 2 may be deposited into an official UN bank account. The financial management arrangements (e.g. that Statement of Expenditures will continue to be used for the documentation of expenditures) will remain as is and a single DA reconciliation will exist for this account under all financing. The project may also make use of the disbursement methods of Reimbursement, Direct Payment as well as Special commitment as set-out in the Disbursement letter and the World Bank Disbursement Guidelines for projects, dated May 1, 2006. 35. Environmental and Social Safeguards: No significant irreversible environmental and social impacts from proposed project activities are envisaged and therefore the current category (Category B) forenvironmentalassessment remains. There is no change to the triggered Bank safeguard policies: Environmental Assessment (OP/BP 4.01), Pest Management (OP 4.09), Natural Habitats (OP 4.04), Forests (OP 4.36), Involuntary Resettlement (OP 4.12), and Indigenous Peoples (OP 4.10). All the environmental and social impacts that could accrue from the implementation of this project will be addressed through the available project environment and social safeguards instruments (ESMF, ESA, RPF, ESMP, and PMP). These instruments were prepared under the original project and publicly disclosed in South Sudan and in the Bank InfoShop. The project implementing team has been using these instruments to conduct screening and, when needed, develop subproject specific environmental and social assessments and plans. In addition, the national ESSAF discussed by the Bank Executive Directors on March 28, 2013 is applicable to this project and will also be used as an umbrella framework to address potential environmental and social issues during project implementation. 36. Economic and Financial Analysis: Because of the urgency during preparationand the general lack of basic information in South Sudan, no financial or economic analysis was carried out for the ongoing project. Although the project is not directly geared towards achieving purely economic objectives, efforts have been made throughout implementation to collect data that would permit ex- post computation of financial and economic returns or farm income/financial analysis towards the end of project implementation.As pointed out on page 8-9 (economic and financial analysis section)of the third AF Project Paperthat was recently approved by the Board on October 25, 2013), data collection to finalize an economic and financial analysis of the project was to …. “continue throughout the next two cropping cycles” (the current cropping cycle that starts in March 2014 and the one that starts in August 2014).These efforts are still ongoing to collect sufficient information on production to enablethe assessment of returns associated with the broad categories of benefits that are expected to accrue from the project, i.e.,household level improvements in food security or incomeand community level benefits from public works initiatives offered through the cash for work activities. 10 37. With the currently available data, the preliminary financial and economic analysis has been focused on valuing direct benefits from cash for work and the direct food support, in addition to the value of increased agricultural production on previously idle land, and the avoided price losses as a result of increasing community grain storage capacity. Firstly, cash wages paid to 37,300 participants in public works projects in the project area were valued at US$ 1.6 million or US$42 per person per year constituting 11 percent of the South Sudan poverty line per person per year. Secondly, direct food support to 138,000 people for 2 months was valued at US$7.6 million at a rate of US$27.5 per person per month equivalent to 86 percent of the poverty line. Finally, the economic benefit cost ratio of increased community grain storage was estimated at 1.3 with an economic NPV of US$1 million and an ERR of 20 percent. The analysis highlights the uncertainties associated with these estimates and points to other benefit flows and indicators that could be analyzed as more data becomes available. Future analyses could have more representative cropping models and a wider selection of public works initiatives and one could include the project's impact on: i) household food gap and caloric availability; ii) availability, sale and purchase of assets; iii) other coping strategies such as migration and withdrawing children from school; iv) ability to obtain credit; and v) use of social services such as for health and education. 38. Technical analysis: This AF builds upon the significant technical work and experience gained over the last five years of SSEFCRP implementation as well as the formulation process for the last three additional financing operations. No changes are proposed to the technical design but, in addition to cash for work activities under the safety net component of the project, the proposal is to address the food security needs of the vulnerable that are unable to work due to area insecurity or other reasons through direct food support. Provision of direct food support is expected to benefit 138,000 people; thus helping secure their livelihoods. 39. Risks: The original project received a substantial overall risk rating at appraisal, an M-I (high impact, low likelihood) rating for implementation of the first additional financing, and a substantial risk rating for the second and third additional financing. Capacity weaknesses anticipated for the third AF were mitigated through TA. The risk of violence that was anticipated in some project areas has materialized. The team has updated the risk matrix in the attached Operational Risk Assessment Framework, and the overall risk is still rated substantial, with the following key issues (besides the country context and the general operating environment):  There is limited experience for the Bank insupporting direct food transfers in South Sudan. For this reason, the government will contract WFP to implement this activity, since they possess unique abilities in this area.  Violence could still spill over to the relatively secure areas and thereby affect the implementation of project activities, especially those related to crop production.The project has a flexible implementation modality where the activities implemented in a site will be dictated by the local circumstances.  South Sudan is, in general, subject to significant risk with regard to fiduciary and governance issues. Specific FM risk is rated moderate and the project FM system is rated satisfactory. 11 40. There are no exceptions to Bank policies. 12 ANNEX 1: RESULTS FRAMEWORK AND MONITORING REPUBLIC OF SOUTH SUDAN: Southern Sudan Emergency Food Crisis Response Project Results Framework Revisions to the Results Framework Comments/ Rationale for Change PDO Current (PAD) Proposed To support adoption of improved To support adoption of improved To enable provision of direct food technologies for food production technologies for food production and support to vulnerable people who by eligible beneficiaries, increase storage, and provide cash or food to cannot participate in public works storage capacity for staples, and eligible beneficiaries in South Sudan. provide cash or food to eligible people participating in public works programs in selected counties in South Sudan PDO indicators Current (PAD) Proposed change* Number of farmers adopting End of project target increased by 1,000 Due to increased funding and improved technologies for farmers expanded geographical scope food production Number of Project beneficiaries End of project target value increased Ditto from 244,000 to 384500beneficiaries Intermediate Results indicators Current (PAD) Proposed change* Number of farmers adopting new - - practices and initiatives for postharvest handling and management Number of hectares of idle land - - brought back into production Number of participants in public End of project target value increased Due to increased funding and works program from 35,800 to 37,300individuals expanded geographical scope REVISED PROJECT RESULTS FRAMEWORK To support adoption of improved technologies for food production and storage and provide cash or food to eligible beneficiaries in South Sudan. UOM Baseline Original Progress Cumulative Target Values Frequency Data Source/ Responsibility Original target To Date Methodology for Data PDO Level Results 2011 2012 2013 2014 2015 Project (2013) Collection Core Indicators Start (2008) Number of farmers adopting Project improved technologies for Number 0 190000 218825 189000 213838 218825 228800 229800 Seasonally MAFTAFCRD Reports food production. Number of vulnerable MAFTAFCRD persons benefiting from Project Number n/a n/a 0 n/a n/a n/a 138000 138000 Quarterly unconditional food or cash Reports transfers Metric tons of storage Project MAFTAFCRD Mt 0 2600 7038 1636 6238 7038 8038 8700 Seasonally capacity built Reports Number of Project Project MAFTAFCRD Number n/a 215500 292587 213462 285881 292587 38400 384500 Seasonally beneficiaries Reports Project MAFTAFCRD Percent of which are female Number n/a 45 50 42 50 50 50 50 Seasonally Reports Intermediate Results and Indicators UOM Baseline Original Progress Cumulative Target Values Frequency Data Source/ Responsibility Original target To Date Methodology for Data Intermediate Results 2011 2012 2013 2014 2015 Project (2013) Collection Core Indicators Start (2008) Number of farmers adopting MAFTAFCRD new practices and initiatives Project Number 0 83000 98300 82675 96772 98300 100300 100700 Annually for postharvest handling and reports management. Number of hectares of idle Annually MAFTAFCRD Project land brought back into Number 0 4000 37393 3200 36393 37393 38800 38800 or reports production seasonally MAFTAFCRD Number of participants in Project Number 0 25462 35281 24462 33781 35281 36300 37300 Quarterly public works program reports MAFTAFCRD Project Percent of which are youth % n/a 50 70 50 70 70 50 50 Annually reports 14 Planned implementation progress based on annual work plans is achieved and Partial Project Y/N n/a n/a n/a n/a Y Y Y Bi-annually MAFTACRD timely actions taken on Yes reports implementation problems including fiduciary issues. 15 ANNEX 2: OPERATIONAL RISK ASSESSMENT FRAMEWORK REPUBLIC OF SOUTH SUDAN: Southern Sudan Emergency Food Crisis Response Project (P149700) Project Stakeholder Risks Rating Moderate Description: The possibility that equally food insecure communities Risk Management: that are not selected to benefit from project support oppose or frustrate i) The project will rely on community and political leadership in selecting target project activities where they are implemented. beneficiaries. There will also be clear and transparent criteria for accessing benefits ii) The project design keeps the daily wage for the cash-for-work activities below the local level for unskilled labor thus providing an ‘in-built” self-targeting mechanism for the cash transfers under the safety net component. Resp: Status: Stage: Recurrent: Due Date: Frequency: Recipient/Bank Ongoing Implementation n/a n/a Implementing Agency Risks (including fiduciary) Capacity Rating: Substantial Description :The risk that shortage of capacity in the sector ministry Risk Management: will undermine project implementation. Shortage of capacity in the ministry will be addressed by contracting out implementation of activities to NGOs and recruitment of Technical Assistants to support implementation. Resp: Status: Stage: Recurrent: Due Date: Frequency: Recipient Ongoing Implementation 04/30/2014 n/a Governance Rating: Substantial Description: There is the risk of elite capture especially of the Risk Management : proposed grain storage facilities, the direct food support and a risk of (i) The project will use collective action approaches in beneficiary selection. With respect to distortion in results monitoring/reporting by the NGOs. A capture of direct food support, predetermined criteria will be used for field level identification of project benefits and exclusion of most vulnerable owing to ethnic beneficiaries through a carefully facilitated process, elaborated in the PIM, implemented by identities is a potential risk. WFP in consultation with the communities. (ii) The project has a dedicated Project Support Officer in the PIU to help triangulate results from NGOs Resp: Status: Stage: Recurrent: Due Date: Frequency: Recipient/Bank Ongoing Implementation n/a n/a Project Risks Design Rating: Substantial Description: Risk Management: (i) Project activities are dispersed over a wide geographical area (i) Project implementation schedule ensures that pertinent activities take place during the with poor accessibility especially in the rainy seasons dry season and only in relatively accessible and secure areas (ii) Efforts will be undertaken to source for NGOs that have experience or that can (ii) Project seeks to extend activities to new territory where the adequately work in the new areas implementing agency has no prior experience Resp: Status: Stage: Recurrent: Due Date: Frequency: Recipient/Bank Ongoing Implementation n/a Seasonally 16 Social & Environmental Rating: Low Description: Risk Management : (i) Risk that construction of grain storage facilities would have negative (i) ESMF, ESA, PMP and RPF prepared for the original project was publiclydisclosed and environmental effects will guide safeguards implementation and management under the AF (ii) The project will deliberately avoid constructing storage facilities in areas deemed to be (ii) The risk that farmers encroach on forestland in pursuit of their crop susceptible to environmental damage production goals (iii) The project will not fund cropland expansion into forest or other protected areas Resp: Status: Stage: Recurrent: Due Date: Frequency: Recipient/Bank Ongoing Implementation n/a n/a Program & Donor Rating: Low Description: The risk that interventions might overlap with initiatives by Risk Management : Working through the donor working group, efforts will be made to avoid other donors overlaps in project implementation areas Resp: Status: Stage: Recurrent: Due Date: Frequency: Recipient/Bank Ongoing Implementation n/a n/a Delivery Monitoring & Sustainability Rating: Substantial Description: There is a risk that constructed storage facilities will not be Risk Management: run and maintained by the communities after the project ends The project is engaging with the local authorities and farmer’s cooperatives to re-establish cooperative mechanisms where they existed as part of a successful mechanism of managing storage facilities Resp: Status:O Stage: Status: Due Date: Frequency: Recipient ngoing Implementation Ongoing n/a n/a Overall Risk Implementation Risk Rating: Substantial Risk Description:Rating due to issues related to governance and current country circumstances 17 28˚E 30˚E 32˚E To 34˚E This map was produced by the Map Design Unit of The World Bank. Khartoum The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. Renk 0 50 100 150 Kilometers SUDAN To To Kadugli Ed Damazin 0 50 100 150 Miles SOUTH To To Babanusa SUDAN Nyala Paloich Arab Bahr el ' 10˚N To 10˚N Nyala UPPER NILE ABYEI Kodok Abyei l Ghazal NORTHERN Ba h r e Malakal BAHR EL Bentiu Lol GHAZAL UNITY ETHIOPIA So Jur ba Aweil Nasser t f ara Raga Bahr ez Z I Meshra’ r WESTERN Warrap Waat o 8˚N n BAHR EL GHAZAL Ayod 8˚N s WARRAP t o po o n S Wau N u b i a n Akobo e Ak JONGLEI ob Ton o P CENTRAL go l Shambe a LAKES Pon AFRICAN t e Rumbek Pibor a REPUBLIC W u Sue hite Bor Ka Nil ng e en 6˚N SOUTH SUDAN To Djema Tambura Li Yubu WESTERN CENTRAL EASTERN EQUATORIA EQUATORIA EQUATORIA CITIES AND TOWNS 5˚N STATE CAPITALS Maridi JUBA Kapoeta Yambio NATIONAL CAPITAL Torit t o n g RIVERS I m o M t s . D.R. OF CONGO Kinyeti KENYA MAIN ROADS 4˚N 4˚N Yei (3187 m) IBRD 38572R RAILROADS Nimule To MARCH 2013 To STATE BOUNDARIES Isiro UGANDA Nakuru INTERNATIONAL BOUNDARIES 28˚E 30˚E 32˚E 34˚E