Document of The World Bank FOR OFFICIAL USE ONLY Report No: 74755-YE PROJECT APPRAISAL DOCUMENT ON A PROPOSED STRATEGIC CLIMATE FUND GRANT IN THE AMOUNT OF US$19 MILLION TO THE REPUBLIC OF YEMEN FOR THE CLIMATE INFORMATION SYSTEM AND PILOT PROGRAM FOR CLIMATE RESILIENCE COORDINATION PROJECT August 5, 2013 Sustainable Development Department Middle East and North Africa Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank’s policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective 05/31/2013) Currency Unit = Yemeni Rial (YR) 1.00 US$ Dollar = 215.08 YR 0.0046 US$ Dollar = 1.00 YR FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AFPPF Agriculture and Fisheries Production and Promotion Fund AMIS Agricultural Information Management System AREA Agricultural Research and Extension Authority AWOS Automated Airport Weather Observing Systems BCM Billions of cubic meters BGR Federal Institute for Geosciences and Natural Resources BP Bank Procedure CAMA Civil Aviation and Meteorological Authority CBO Community Based Organization CBY Central Bank of Yemen CDA Civil Defense Authority CIM Centre for International Migration and Development CLDB Climate Data Base COCA Central Organization for Control and Audits CQS Selection based on Consultants’ Qualifications CSO Civil Society Organization CWMP Community Water Management Project CWMU Central Water Monitoring Unit DA Designated Account DCG Donor Core Group DED Deutscher Entwicklungsdienst DRM Disaster Risk Management EPA Environment Protection Authority ESMP Environmental and Social Management Plan ET Evapotranspiration FAO Food and Agriculture Organization FAR Fourth Assessment Report FM Financial Management GCM Global climate model GDMN General Department of Monitoring Network GDP Gross Domestic Product GFCS Global Framework for Climate Services GIS Geographic Information System GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GNI Gross National Income GOY Government of Yemen GSCP Groundwater and Soil Conservation Project GTS Global Telecommunication System IBRD International Bank for Reconstruction and Development ICRR Implementation Completion and Results Report ICT Information Communications Technology IDA International Development Association of the World Bank IFC International Finance Corporation IFR Interim Financial Reports IIP Irrigation Improvement Project IMCCC Inter-Ministerial Council on Climate Change IPCC Intergovernmental Panel on Climate Change ISA International Standards on Auditing ISN Interim Strategy Note ITCZ Inter Tropical Convergence Zone IWRM Integrated water resource management KfW Kreditanstalt für Wiederaufbau LCS Least Cost-Based Selection LIB Limited International Bidding LWCP Land and Water Conservation Project MAI Ministry of Agriculture and Irrigation MCM Millions of cubic meters M&E Monitoring and Evaluation MIS Management Information System MOF Ministry of Finance MOI Ministry of Interior MOPIC Ministry of Planning and International Cooperation MoPWH Ministry of Public Works & Highways MOT Ministry of Transport MOU Memorandum of Understanding MSG Meteosat Second Generation MWE Ministry of Water and Environment NAPA National Adaptation Program of Action NCB National Competitive Bidding NCS National Climate Service NDMU National Disaster Management Unit NFCS National Framework for Climate Services NGO Non-Governmental Organization NIP National Irrigation Program NMHS National Meteorological and Hydrological Services NMS National Meteorological Services NWRA National Water Resources Authority NWRIS National Water Resources Information System NWSSIP National Water Sector Strategy and Investment Program O&M Operations and Maintenance OP Operation Policy ORAF Operational Risk Assessment Framework PAD Project Appraisal Document PCU Program Coordination Unit PDO Project Development Objective PFS Project Financial Statements POM Project Operating Manual PPCR Pilot Program for Climate Resilience PWS Public Weather Service QBS Quality Based Selection QCBS Quality and Cost Based Selection method RALP Rainfed Agriculture and Livestock Project SADIS Satellite Distribution System SBWMP Sana’a Basin Water Management Project SCF Strategic Climate Fund SIL Specific Investment Loan SOP Standard Operating Procedure SPCR Strategic Program for Climate Resilience SSS Single source selection TC Technical Committee TDA Tehama Development Authority TOR Terms of Reference TPMA Third Party Monitoring Agent UDCS Unified Data Collection System UNESCO United Nations Educational, Scientific and Cultural Organization UNFCCC United Nations Framework Convention on Climate Change WA Withdrawal Applications WIS WMO Information System WMO World Meteorological Organization WSSP Water Sector Support Program WUA Water User Association YER Yemeni Rials YGSMRB Yemen Geological Survey & Mineral Resources Board YMS Yemen Meteorological Service YSVOC Yemen Seismic & Volcanic Observation Center Regional Vice President: Inger Andersen Country Director: Hartwig Schafer Sector Director: Junaid Kamal Ahmad Sector Manager: Charles Joseph Cormier Task Team Leader: Lia Carol Sieghart YEMEN REPUBLIC CLIMATE INFORMATION SYSTEM AND PPCR COORDINATION TABLE OF CONTENTS Page I.  STRATEGIC CONTEXT ................................................................................................................. 1  A.  Country Context ............................................................................................................................ 1  B.  Sectoral and Institutional Context................................................................................................. 1  C.  Higher Level Objectives to which the Project Contributes .......................................................... 4  II.  PROJECT DEVELOPMENT OBJECTIVES ................................................................................... 5  A.  PDO............................................................................................................................................... 5  B.  Project Beneficiaries ..................................................................................................................... 6  C.  PDO Level Results Indicators ....................................................................................................... 7  III.  PROJECT DESCRIPTION ............................................................................................................... 7  A.  Project Components (detailed description can be found in Annex 2) .......................................... 7  B.  Project Financing .......................................................................................................................... 9  Lending Instrument ............................................................................................................................... 9  Project Cost and Financing ................................................................................................................. 10  Retroactive Financing ......................................................................................................................... 10  Program Objective and Phases ........................................................................................................... 11  Lessons Learned and Reflected in the Project Design ........................................................................ 11  IV.  IMPLEMENTATION ..................................................................................................................... 13  A.  Institutional and Implementation Arrangements ........................................................................ 13  B.  Results Monitoring and Evaluation ............................................................................................ 15  C.  Sustainability............................................................................................................................... 15  V.  KEY RISKS AND MITIGATION MEASURES ........................................................................... 16  A.  Risk Ratings Summary Table ..................................................................................................... 16  B.  Overall Risk Rating Explanation ................................................................................................ 16  VI.  APPRAISAL SUMMARY.............................................................................................................. 17  A.  Economic and Financial Analyses .............................................................................................. 17  B.  Technical ..................................................................................................................................... 17  C.  Financial Management ................................................................................................................ 17  D.  Procurement ................................................................................................................................ 18  E.  Social (including Safeguards) ..................................................................................................... 19  F.  Environment (including Safeguards) .......................................................................................... 19  Annex 1: Results Framework and Monitoring........................................................................................ 20  Annex 2: Detailed Project Description ................................................................................................... 25  Annex 3: Implementation Arrangements ................................................................................................ 40  Annex 4: Operational Risk Assessment Framework (ORAF) ................................................................ 54  Annex 5: Implementation Support Plan .................................................................................................. 61  Annex 6: Economic and Financial Analysis ........................................................................................... 62  Annex 7: Team Composition .................................................................................................................. 72  Annex 8: Memorandum of Understanding ............................................................................................. 73  Annex 9: Letter Concerning Project Locations ...................................................................................... 77  Annex 10: Letter Confirming the Appointment of Two Female Staff ................................................... 78  . PAD DATA SHEET Yemen, Republic Climate Information System and PPCR Coordination (P132116) PROJECT APPRAISAL DOCUMENT MIDDLE EAST AND NORTH AFRICA MNSEN . Report No.: PAD433 Basic Information Project ID Lending Instrument EA Category Team Leader P132116 Specific Investment Loan B - Partial Assessment Lia Carol Sieghart Project Implementation Start Date Project Implementation End Date 01-Nov-2013 01-Nov-2018 Expected Effectiveness Date Expected Closing Date 15-Oct-2013 28-Feb-2019 Joint IFC No Sector Manager Sector Director Country Director Regional Vice President Charles Joseph Cormier . Junaid Kamal Ahmad Hartwig Schafer Inger Andersen Recipient: Ministry of Planning and International Cooperation Responsible Agency: EPA (Environmental Protection Authority) Contact: Khaled Saeed Abdullah Al- Title: Chairman Shaibani . Telephone No.: 967-77-109-7850 Email: khaledalshaibani64@gmail.com Project Financing Data(in USD Million) [ ] Loan [X ] Grant [] Other [ ] Credit [ ] Guarantee Total Project Cost: 19.00 Total Bank Financing: 0.00 Total Cofinancing: . Financing Gap: 0.00 Financing Source Amount Recipient 0.001 Strategic Climate Fund Grant 19.00 Total . 19.00 Expected Disbursements (in USD Million) Fiscal Year 2014 2015 2016 2017 2018 2019 0000 0000 0000 Annual 0.80 1.70 5.00 7.30 3.60 0.60 0.00 0.00 0.00 Cumulative 0.80 . 2.50 7.50 14.80 18.40 19.00 0.00 0.00 0.00 Proposed Development Objective(s) The project development objective is to improve the quality of hydro-meteorological and climate services provided to end-users. . Components Component Name Cost (USD Millions) Component A: Institutional strengthening and capacity building 3.45 Component B: Modernization and expansion of the national hydrometeorological 7.75 and monitoring networks 1 See page 11 para 23 for government contribution. Component C: Enhancement of service delivery system 4.20 Component D: PPCR program management and knowledge sharing . 3.60 Institutional Data Sector Board Environment . Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Co- Mitigation Co- benefits % benefits % Information and communications General information and 50 100 communications sector Public Administration, Law, and Justice Public administration- 50 100 Water, sanitation and flood protection Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. . Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Environment and natural resources Climate change 100 management Total . 100 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[ X ] 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 Description of Covenant . Conditions Name Type Description of Condition Team Composition Bank Staff Name Title Specialization Unit Jean-Francois L. Barres Consultant Consultant MNSEN Hassine Hedda Finance Officer Finance Officer CTRLA Salenna W. Prince Operations Officer Operations Officer MNSEN Angela Marie Walker Gary Operations Officer Quality Control MNSSD Vladimir V. Tsirkunov Senior Environmental Senior Environmental GFDRR Engineer Engineer Abdoul-Wahab Seyni Senior Social Development Senior Social Development MNSSD Specialist Specialist Jolanta Kryspin-Watson Senior Disaster Risk Peer Reviewer EASIN Management Specialist Edith Ruguru Mwenda Senior Counsel Senior Counsel LEGAM Javier Zuleta Sr. Water Resources Mgmt. Peer Reviewer LCSEN Spec. Mark M. Njore Program Assistant Program Assistant MNSSD David Rogers Consultant Lead Technical Specialist ECSEN Shivendra Kumar Consultant Senior Procurement SASDT Specialist Nabila Ali Al-Mutawakel Program Assistant Program Assistant MNCYE Andrea Zanon Senior Disaster Risk Peer Reviewer MNSUR Management Specialist Moad M. Alrubaidi Financial Management Financial Management MNAFM Specialist Specialist Suiko Yoshijima Environmental Specialist Environmental Safeguards MNSEN Specialist Lia Carol Sieghart Senior Environmental Task Team Leader MNSEN Specialist Saleh Qasem Al-Manary Financial Management Financial Management MNAFM Analyst Analyst Samira Al-Harithi Procurement Analyst Procurement Specialist MNAPC Sahar Safaie E T Consultant Disaster Risk Specialist MNSUR Daniel Werner Kull Senior Disaster Risk Economic Assessment GFDRR Management Specialist Naif Mohammed Abu-Lohom Sr Water Resources Spec. Sr Water Resources Spec. MNSWA Matthieu Bonvoisin Legal Associate Legal Associate LEGAM Non Bank Staff Name Title Office Phone City . Locations Country First Administrative Location Planned Actual Comments Division I. STRATEGIC CONTEXT A. Country Context 1. The Republic of Yemen, situated on the southern end of the Arabian Peninsula, is one of the poorest countries in the world. Yemen has a population of about 24 million – about 76 percent live in rural areas where poverty incidence is particularly high. The country ranks 154th out of 187 in the 2011 Human Development Index.2 The country has a GNI per capita of US$1,070 (2010) compared with an average of US$2,321 for lower middle-income countries. Yemen is among the ten countries in the world with the highest rates of food insecurity. It ranks third for the highest level of malnutrition in the world and is facing rapid population growth of over 3.5 percent a year. The country lacks clear alternatives to the oil economy with limited institutional capacity and outreach of the State, very limited and rapidly depleting water reserves, poor infrastructure, limited human development, and acute gender inequality issues.3 2. The impact of the recent security, political and economic crisis is significant in all key development domains. Yemen experienced intense and far-reaching country unrest from February 2011 until November 2011. The long lasting conflict and turmoil, and severe shortages of food and fuel, combined with high commodity prices have left many poor unprotected. During this period of crisis, the economy contracted by 10.5 percent and the number of those living below poverty line is estimated to have increased from 8 to 50 percent of the Yemeni population. 3. Yemen is particularly reliant on its natural resources outside the extractive industries. Agriculture plays a leading role in Yemen’s economy and employs more than half of the labor force. It also accounts for more than 90 percent of all water use. Unlike most of the world, economic dependence on agriculture is growing because of reduced growth in the industrial, manufacturing and service sectors since 2000. Half of agricultural land is rainfed while 40 percent relies on rapidly depleting groundwater resources. 4. In addition to significant development challenges, Yemen is particularly vulnerable to climate change. Rainfall is erratic and variable, a situation made worse by high evapotranspiration rates. Flash floods and droughts are frequent hazards displacing thousands, causing loss of life and significant damage to assets and livelihoods. The floods of 2008, for example, killed 180 people, displaced 10,000 and caused damage and losses to infrastructure, shelter, and livelihoods at US$1,638 million equivalent to 6 percent of Yemen’s GDP4 with agriculture accounting for nearly 64% of the total losses. In 2010 heavy rains hit the Capital Sana’a causing 9 deaths, the collapse of many houses in the old city of Sana’a, a UNESCO World Heritage Site, and the disruption of electricity service for several days. A lack of long-term, systematic records of rainfall and temperature severely hampers efforts to quantify long-term changes in climate, assess renewable natural resources such as water, prepare climate projections, and develop adequate policies and programs. In addition, institutional weaknesses undermine the state’s ability to adjust to demographic pressures, a problem made more difficult by the poor economic outlook. B. Sectoral and Institutional Context 5. Yemen is located in arid and semi-arid climate zones. The diverse physical and topographical features of Yemen – mountain chains, plateaus, plains and wadis5 – lead to variations in 2 UNDP 2011, Human Development Report. Available online: http://hdr.undp.org/en/reports/global/hdr2011/ 3 Yemen Strategic Program for Climate Resilience (SPCR 2011) - Available online: https://www.climateinvestmentfunds.org/cifnet/?q=country/yemen 4 Government of Yemen (2009). Damage, Loss and Needs Assessment, October 2008 Tropical Storm and Floods, Hadramout and Al- Mahara, Republic of Yemen. Joint Assessment of the Government of Yemen, World Bank, UNISDR and IFRC, supported by GFDRR. 5 Wadi = A valley, gully, or streambed that remains dry except during the rainy season. 1 climatic conditions resulting in distinct agro-climatic zones. There are two main weather patterns – the northerly flow from the Mediterranean in winter and the southwestern monsoon in summer. The monsoon rainfall is highly variable. Lengthy droughts are common to all regions. 6. A comprehensive network of rainfall and temperature observations is needed to accurately assess climate impacts on agriculture and water resources. Long-term, systematic records of rainfall and temperature are scarce. The lack of data hampers efforts to quantify long-term changes in climate and to assess renewable natural resources such as water. Nonetheless, the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (FAR) projects higher rates of warming over East Africa and the Arabian Peninsula than the global average.6 Since the 1950s, summer precipitation has declined across the Sahel, extending into the Yemen Highlands. The seasonal distribution of rainfall is also changing.7 7. Agriculture is most vulnerable to flood risk and has incurred the highest level of losses in physical assets.8 In the 2008 floods losses in agriculture were nearly 64 percent of the total damages.9 Floods are the most recurrent natural disaster in Yemen causing significant economic damage and loss. Reducing and managing flood and drought risk through more reliable forecasts using better hydro- meteorological data and information to improve decision-making would help build resilience of the agriculture sector to climate change. 8. Improving weather, climate and water information services and associated actions in Yemen is essential for stable social and economic development. The need to establish and maintain a data base for climate change is one of the key actions in Yemen’s National Adaptation Program of Action10 (NAPA). Amongst the actions proposed is systematic measurement of water availability, including groundwater occurrence and depth. Upgraded weather, climate and water information will pave the way for early warning systems, disaster reduction strategies to build disaster resilience and reduce vulnerabilities to natural hazards, and improved water resources management on which food and water security depend. Sustainable development of Yemen requires knowledge of climate variability and change, and reliable meteorological and hydrological forecasts and warnings. Monitoring and forecasting of meteorological and hydrological variables would address several of the key risks identified in the NAPA. (i) Improved monitoring and prediction of rainfall and temperature would help assess drought frequency, better manage water resources, increase agricultural productivity and minimize climate-sensitive diseases. (ii) More accurate and timely forecasts and warnings of extreme hydrometeorological events would reduce threats to lives, livelihoods and property. (iii) Climate monitoring, including marine observations, would contribute to understanding the impact of climate change on habitats, biodiversity and the coastal zone. 9. The support provided by Yemen’s Pilot Program for Climate Resilience (PPCR) aims to respond to the NAPA while being based on the comprehensive public consultations which are at the core of the PPCR process by building climatic resilience and adaptation into the water and 6 The Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (FAR) presented global climate scenarios with average warming in the range of 0.6°C to 4°C during the 21st century, and rises in sea level of 0.18 to 0.59m (IPCC, 2007). 7 Ibid. 8 Source: Yemen Strategic Program for Climate Resilience (SPCR 2011). Available online: https://www.climateinvestmentfunds.org/cifnet/?q=country/yemen 9 Ibid. 10 Environment Protection Authority (EPA), 2009: National Adaptation Program of Action. Available online: http://unfccc.int/resource/docs/napa/yem01.pdf 2 agricultural sectors, and coastal zones, which are considered to be the three areas most at risk. The PPCR will enable knowledge generation of human and ecological adaptation to climate change in a number of diverse areas of Yemen and provide a framework to integrate this knowledge to regional and national levels. It includes development of permanent mechanisms for stakeholder participation from the local to the national level. Effective adaptation to the consequences of climate variability and change depends on access to timely and reliable meteorological and hydrological information to inform the decision making process. This project strengthens the institutions primarily responsible for monitoring and evaluating the weather, climate and water; increases their capacity to observe and analyze this information; and enables climate-informed decision making by improving the utility and delivery of weather, climate and water information to those most affected by the climate and resulting hydrometeorological hazards. In an effort to strengthen the institutional capacity related to climate change the Government has established the Inter-Ministerial Committee on Climate Change (IMCCC), which was approved by the Cabinet on November 10, 2009 (Cabinet Decree No. 349). The IMCCC reflects the Government’s strategic institutional framework that adaptation initiatives need to be implemented as part of a broader set of actions within Yemen’s existing development processes, decision cycles and institutional arrangements. The IMCCC is a Sub-Committee of the Cabinet, and is chaired by the Minister of Planning and International Cooperation and constituted by the Ministers of all line Ministries.11 The IMCCC has the full support of the Government of National Reconciliation. A thorough stakeholder consultation process guided by the IMCCC identified the key institutions involved in the PPCR for this project, which form the IMCCC Technical Committee. These are the Environment Protection Authority (EPA), Civil Aviation Meteorological Authority / Yemen Meteorological Service (CAMA/YMS) within the Ministry of Transport (MOT), Ministry of Agriculture and Irrigation (MAI)12 and the National Water Resources Authority (NWRA) within the Ministry of Water and Environment (MWE). These agencies support the project implementation. The EPA is the National Focal Point to the United Nations Framework Convention on Climate Change (UNFCCC). The EPA includes a Climate Change Unit which has taken the lead in the coordination and development of the Initial National Communication to the United Nations Framework Convention on Climate Change (UNFCCC; 2001) and is presently finalizing the Second National Communication to the UNFCCC. The EPA also took the lead in the development of the NAPA, which was finalized with the endorsement of the document by the Cabinet in June 2009. The EPA is mandated to host the Technical Secretariat to the IMCCC. 10. There are a range of entities operating fragmented and largely outdated or damaged networks and, with the exception of civil aviation, the benefits to end-users are limited. CAMA/YMS is the national authority for weather and climate forecasts and warnings, providing aviation weather services, public weather services, and weather services to government and to the private sector. Currently, CAMA/YMS competently operates a network of synoptic meteorological stations that underpin its forecasting and warning services. While suitable to meet international aviation requirements, this network neither covers the entire country nor all climate-sensitive sectors. Additional meteorological and hydrological data are collected by Yemen Geological Survey & Mineral Resources Board (YGSMRB), Yemen Seismic & Volcanic Observation Center (YSVOC), National Disaster Management Unit (NDMU) at the Civil Defense Authority, and the Ministry of Public Works and Highways (MoPWH); however, the existing climatological record is based on the CAMA/YMS network of synoptic observations. The principal Government stakeholders for the provision of climate 11 The Inter-Ministerial Committee on Climate Change (IMCCC) comprises of all line Ministries of the Government of Yemen as provided for in Cabinet Decree 349. 12 with the Agricultural Research and Extension Authority (AREA) and the Tehama Development Authority (TDA). 3 information are MAI and NWRA, as well as governorate stakeholders, such as Tehama Development Authority (TDA). Each operates its own agro-meteorological and hydro-meteorological networks, which were extensively damaged or destroyed during the recent unrest, or simply outdated and need to be refurbished to meet international standards for agro-meteorological and hydro-meteorological monitoring, and integrated into a National Framework for Climate Services (NFCS) creating a more sustainable and integrated “network of networks.”13 This would allow the development of new products and services for rainfall and climate prediction for agricultural production, as well as the development of forecasts for flood control measures, improved disaster risk management through the Ministry of Interior (MOI) Civil Defense Authority (CDA), and other services which would be supplied by CAMA/YMS in coordination with the participating organizations and other beneficiaries. The Disaster Risk Management Unit (DRMU) in CDA, the Remote Sensing and GIS Center, and the Environmental Emergencies Unit in the MWE, and the EPA are all critical entities that carry responsibilities for data analysis, and climate and weather related disaster outreach to communities. However there is little coordination, cooperation, or sharing of data between and amongst these agencies. For example, in 2010 the Remote Sensing and GIS Center published a comprehensive national Atlas that did not include climate. While there is a sufficiently large number of trained people in CAMA/YMS, NWRA and MAI to provide a basis for a strengthened weather, climate and water services system, their climatic work needs to be technically coordinated following quality standards and assurance on the technical level provided by CAMA/YMS. 11. Improving weather, climate and water services in Yemen will help build resilience to climate change and reduce vulnerabilities. The project focuses on supporting the collection, processing and delivery of weather, climate and water data and information needed to cope with climate change and resulting high impact weather. It will achieve this by strengthening the key agencies involved in the collection and processing of weather, climate and water data and information. These are CAMA/YMS, MAI and NWRA. The beneficiaries are all individuals and communities, and the organizations and government entities responsible for community support, which can use this information to reduce vulnerability to meteorological and hydrological hazards. The project is particularly sensitive to the specific information needs of women – given their role in the community and livelihood development, they are particularly vulnerable and a primary goal is to ensure that they have adequate information for the protection of life and livelihoods. In summary, three areas need addressing: (i) institutional capacity, including overcoming the factors inhibiting data sharing and coordination; (ii) improving the meteorological and hydrological observing and forecasting systems; (iii) improving hydrometeorological services delivery to stakeholders including the Government and the public. Success would lead to the development of knowledge systems that could contribute to stable social and economic development and stem recurring economic losses and the loss of human lives from weather- and climate-related disasters. C. Higher Level Objectives to which the Project Contributes 12. The project directly addresses the first and third pillar of the Interim Strategy Note (ISN) FY 2013-2014: Achieving Quick Wins and Protecting the Poor, as well as Enhancing Governance and Local Service Delivery. The ISN supports the transition period in Yemen by helping the Government produce tangible results to stabilize the country in the short term, while laying the groundwork for medium-term reforms and sustainable longer-term benefits. The ISN highlights climate change as one of the main threats to economic development and stresses the lack of long-term, systematic records of rainfall and temperature which severely hampers efforts to quantify long-term 13 A “network of networks” refers to independently supported observing networks that are integrated in such a way that the data from any part of the system are easily shared among all of the network operators. 4 changes in climate, assess potential of renewable natural resources such as solar radiation, water and wind, prepare climate projections, and outline possible policy and program responses. 13. The project is aligned with the World Bank Middle East and North Africa Strategy on Engaging towards Shared Prosperity and supports the pillar of social inclusion.14 This highlights the ongoing need to address poverty and gender inequity in Yemen. The project will have a specific focus on gender equity. Yemen is the lowest-ranked country for the sixth consecutive year in the 2011 Global Gender Gap Index.15 Intensifying participation and inclusion of women and youth is one of the main principles of the ISN. The project will promote gender equity by actively responding to the particular information needs of women, and adapting information to their specific circumstances. This would include, for example, tailoring hazards warnings that affect households to women to provide them with sufficient time to evacuate or to take other appropriate action to protect their families. The project would also promote professional networking and development for women by aiming to recruit women for at least 30% of new Program Coordination Unit (PCU) staff positions and seconding women from key Government agencies to the PCU. Throughout the project, every effort will be made to implement and conform to the World Meteorological Organization (WMO) policy on gender mainstreaming, which aims to achieve gender equality in National Meteorological and Hydrological Services (NMHSs) and in the provision of services16, and to the World Bank Group and Climate Investment Funds PPCR commitment to gender equality.17 14. The project is also aligned with the Government’s commitment to its Strategic Program for Climate Resilience (SPCR) and the Climate Investment Funds’ Pilot Program for Climate Resilience (PPCR). Yemen is one of the 9 single-country pilots under the PPCR, which aims to pilot and demonstrate ways in which climate risk and resilience may be integrated into core development planning and implementation and promote transformational change. The PPCR is implemented in two phases, with the first Phase underway and focused on the design of the country led SPCR including the identification of priority investments and the development of relevant studies that feed into the implementation of Phase II. The SPCR, a country-owned strategic document, builds on existing programs and projects and the NAPA. The SPCR was developed by the Government in cooperation with the World Bank and the International Finance Corporation (IFC) through a 2 year comprehensive stakeholder consultation process. The overarching objectives of the SPCR are to develop an integrated crosscutting approach to mainstream climate resilience; provide knowledge generation and management; and implement adaptation measures.18 This project is one of the 4 priority investments identified in Yemen’s SPCR. The PPCR Sub-Committee endorsed the SPCR in April 2012 as a basis for the further development of three of the investments. A total of US$58 million in grant financing has been allocated to Yemen from the PPCR, of which US$19 million will be used for this project. II. PROJECT DEVELOPMENT OBJECTIVES A. PDO 15. The project development objective is to improve the quality of hydro-meteorological and climate services provided to end-users.19 This objective would be achieved through improved forecasts resulting from improved observing networks, the introduction of new technologies, and 14 Regional Update 2013 – Middle East and North Africa: Engaging Towards Shared Prosperity (World Bank 2013) 15 Global Gender Gap Index is a composite indicator of gender inequalities in economic participation and opportunity, educational attainment, political empowerment, and health and survival. 16 Available online: http://www.wmo.int/pages/themes/gender/gender_policy_en.html. 17 Regional Update 2013 – Middle East and North Africa: Engaging Towards Shared Prosperity (World Bank 2013) 18 Source: Yemen Strategic Program for Climate Resilience (SPCR 2011). Available online: https://www.climateinvestmentfunds.org/cifnet/?q=country/yemen 19 Reference is made to para 17(b) for definition of the end-users 5 access to higher resolution global weather and climate products. Service improvements will also depend on training both the providers and users of services to be able to tailor information more effectively to users’ needs. The geographical focus will be countrywide. B. Project Beneficiaries 16. The main beneficiaries of this project will be providers and users of meteorological and hydrological services. (a) The primary providers of weather, climate, hydrological and related services to the public and specific sectors are CAMA/YMS, MAI20, NWRA and EPA.  CAMA/YMS is the National Meteorological Service of Yemen. The YMS provides services to aviation, the public, agriculture, health, transport, and in support of energy research and applications. Based on legislation, the YMS is financed entirely through CAMA, which currently supports all of the operational costs of CAMA/YMS and the modernization and development of services from aviation and airport revenues.  The Central Water Monitoring Unit (CWMU) of the MAI Irrigation Department is responsible for monitoring water use for the agricultural sector in Yemen. Water distribution from spate irrigation structures is controlled by the MAI through its offices in the Governorates or through the regional development authorities, which also support part of the agrometeorological and hydrometeorological observing networks.  The NWRA, which operates under the MWE, is the sole authority for water resources management and enforcement of water-related laws in Yemen. It is still developing capacity with branches in some water basins in addition its headquarters in Sana’a. Monitoring is one of the most essential activities of NWRA.  The EPA, also operating under the MWE, is Yemen’s focal point on issues relating to climate change, the national focal point to the United Nations Framework Convention on Climate Change (UNFCCC), as well as the Technical Secretariat to the IMCCC and the national focal point to the PPCR. The EPA is entrusted with a wider environmental mandate, including providing support in the formulation of environmental policies, strategies and action plans, drafting and implementation of program and projects, drafting of environment-related laws and by-laws, provision of technical feedback and advice on regional and global environmental conventions. (b) The primary end-users of meteorological and hydrological services are the DRMU in CDA and other disaster management entities at the national and local level, the general public, farmers, health and energy sectors, water basin committees and water user associations, and community based organizations with specific responsibilities for social and economic development and disaster reduction. Most of society is vulnerable; in rural communities, women are more at risk because of their role in society and in livelihood development. Yemeni women would be primary beneficiaries since female farmers contribute to over 85 percent of plant production and 95 percent of animal management.21 The rural farming population accounts for about 60 percent of the total population; the impact of the project, therefore, should have a measurable positive impact for over 13 million people – if they are able to use weather, climate 20 With the Agricultural Research and Extension Authority (AREA) and the Tehama Development Authority (TDA). 21 Governorate Preparation Report (2004) 6 and water information more effectively to improve productivity and reduce losses. In addition, given the public goods nature of hydrometeorological services, the entire population will benefit from better warnings of hydrometeorological hazards and more accessible, equitable and quality-assured climate information and services. Information will be provided in specific forms most useful to different end-users and in close cooperation with existing end-user organizations, wherever possible. C. PDO Level Results Indicators 17. Proposed PDO Indicators are: (a) Skill (0-1) of weather forecasts of 24 hours lead time for main administrative centers (b) Data collected at observation stations reaching data centers in line with standard operating procedures (SOPs) (c) Direct project beneficiaries (number) of which female (percent) (d) Operation and maintenance funds for essential operational needs covered by CAMA/YMS, MAI, NWRA budget allocations 18. PDO and intermediate level indicators are where applicable aligned with Core Sector Indicators as well as the PPCR Results Framework22, and are relevant to the project scope and context. Some of the meteorological and hydrological indicators have existing baselines; for several, however, there are none. These will be established during the first year of project implementation. The detailed Project Results Framework and Monitoring is provided in Annex 1. III. PROJECT DESCRIPTION A. Project Components (detailed description can be found in Annex 2) 19. The project would increase climate resilience – better managing water resources, increasing agricultural productivity and reducing the risk of climate-sensitive diseases – by improving the monitoring and assessment of climate variability and change and providing targeted and reliable information for decision making. The project will have social and economic benefits by managing risk in weather-related disasters that disproportionately affect the poor and vulnerable populations through improving forecasting, early warning systems and the observed climatology of Yemen. This would be achieved by building up a National Framework for Climate Services as proposed by and supporting the provision of data and information to the Global Framework for Climate Services (GFCS), through: i) upgrading the existing meteorological and hydrological observing networks, ii) improving the timeliness and accuracy of weather and flood forecasts and warnings, and iii) delivering better weather, climate and water services. Activities funded through the project would help improve climate-sensitive decision-making and planning in key vulnerable and water resources dependent sectors, particularly agriculture, and contribute to building resilience for communities and sectors at risk. Better uptake and use of weather, climate and water information would be achieved by strengthening partnerships between the providers and users of weather, climate and water information through dedicated climate working groups and existing community organizations. The project would also improve coordination and information sharing among all agencies responsible for the collection of climate data, analysis and decision-support as well as maintain the oversight of the overall PPCR program, particularly in regards to knowledge management, awareness rising and information sharing with stakeholders of information developed throughout the program. 22 Climate Investment Funds (2012): Revised PPCR Results Framework 7 20. The project consists of the following four components, which are elaborated in detail in Annex 2. Component A. Institutional Strengthening and Capacity Building (PPCR Financing US$3.45 million including contingencies): This component aims to improve climate resilience in Yemen through provision of weather, climate and water services that meet stakeholders’ needs by creating the conditions that ensure institutional, staffing and financial sustainability of the key providers (CAMA/YMS, MAI, EPA and NWRA). This includes revising and updating institutional strategies taking into account new requirements for climate services. It will support revision and adoption of legal frameworks and standard operating procedures, in line with international common practice to share data and information to improve intra-government cooperation to cope with weather, climate and water related hazards. It will build capacity through training providing access to new skills and opportunities within each of the participating organizations. The component will also support the technical design and implementation of the overall modernization program to ensure that the new components can be integrated into the current operational systems. Component B. Modernization and Expansion of the National Hydrometeorological and Monitoring Networks (PPCR Financing US$7.75 million including contingencies): This component aims to upgrade and expand the observations networks for meteorology, agro-meteorology and hydro- meteorology, ensuring that these networks are interoperable between CAMA/YMS, MAI, NWRA and the development authorities to enable the efficient and timely transmission of information that is essential for management of disaster risks, agriculture and water resources. Collection and timely communication of high-quality data is the foundation of producing reliable weather forecasts and warnings as well as monthly and longer term climate outlooks based on a national climatology. The modernization of the observing networks includes rehabilitating and extending the MAI and NWRA agrometeorological and hydrometeorological networks; extending the CAMA/YMS weather and climate surface and upper air network, and installing Doppler radar for enhanced precipitation measurement, severe weather and flood forecasting. It requires modernizing the communication and ICT system to transmit data efficiently. The component also includes the design and pilot operation of an environmental monitoring system, which will be operated by EPA. Component C. Enhancement of Service Delivery System (PPCR Financing US$4.20 million including contingencies): This component aims to enhance the delivery of weather and climate services to end-users. It provides for the implementation of a systematic upgrade of the weather, climate and water-related end-to-end services provided to all agencies, communities and individuals. In particular, it will extend the forecasting, analysis and service delivery capabilities of CAMA/YMS to provide guidance to agriculture, water resources and irrigation, DRM, media, civil aviation, health and renewable energy. It will also provide demographic-specific services where differentiated information targeted to specific vulnerable groups and individuals. Information specific to rural women will be developed and highlighted because of their vulnerability in livelihood development. Given the importance of warning systems for flash floods – two pilots will focus on implementing end-to-end early warning systems developed together by CAMA/YMS, MAI, NWRA and CDA, on behalf of the wider disaster risk management community, and in consultation with other DRM efforts. This component will also help CAMA/YMS, MAI and NWRA improve the quality of their services to their various stakeholders. It provides the foundation for a National Framework for Climate Services, which would increase access to high quality climate information, facilitate sharing of knowledge and know- how, and strengthen or establish community-level partnerships between the users and providers to understand and use weather, climate and water information more effectively and ultimately reduce vulnerability to climate change. Information will be delivered in a variety of ways depending on the specific local circumstances ranging from radio and mobile telephone messages that inform users 8 directly to bulletins delivered through community based organizations. All of which are standard procedures for existing weather and climate information. Component D: PPCR Program Management and Knowledge Sharing (PPCR Financing US$3.60 million including contingencies). This component has three distinct subcomponents—Oversight of the overall PPCR implementation; Support for the PPCR-PCU; and knowledge sharing including public education and outreach. The first part of this component will carry out the oversight of the overall PPCR implementation, including synthesizing the main results achieved by the investments under the SPCR to inform relevant decision-making. This would also include monitoring and evaluation of gender sensitive approaches to project implementation. The second part of this component supports and strengthens the PPCR-PCU to carry out the fiduciary responsibilities and reporting in a timely and effective fashion as required by the legal and binding agreement entered into between the Bank and the Government of Yemen. The third part of this component focuses on knowledge sharing and outreach. It will be carried out across all of the Yemen PPCR investments to increase public awareness of climate variability and change and its impact on day-to-day activities in Yemen. It will include the initial development of a climate database management system and establish procedures to ensure open access to climate information by all users. It will develop public education and outreach activities, which will be geared towards improving information access and awareness raising of the challenges caused by climate change. Particular attention would be given to communities, which need to take preparatory action to mitigate adverse consequences of the climate and hydrometeorological hazards – improving community response to flood warnings, improving management of surface water resources, improving food security, improving health outcomes, improving climate-resilient coastal zone management, and improving rural livelihoods. B. Project Financing Lending Instrument 21. The proposed lending instrument is a Specific Investment Loan (SIL), financed through grants provided by the Pilot Program for Climate Resilience (PPCR) which is one of the targeted programs of the Strategic Climate Fund (SCF). The estimated project cost is US$19 million covered by the SCF/PPCR grant. There is only grant financing for this project. The implementation period is five years. 9 Project Cost and Financing SCF/PPCR Project cost % Project Components Financing (US$M) Financing (US$M) A. Institutional Strengthening and Capacity Building 3.45 3.45 100% A.1. Institutional strengthening and development of a legal and 0.25 0.25 100% regulatory framework A.2. Capacity building and training 0.90 0.90 100% A.3. Detailed design and technical implementation support of the 2.30 2.30 100% project B. Modernization and Expansion of the National 7.75 7.75 100% Hydrometeorological and Monitoring Networks B.1. Technical modernization of the observing networks 5.35 5.35 100% B.2. Modernization of the communication and ICT system 1.90 1.90 100% B.3. Pilot operation of an environmental monitoring system 0.5 0.5 100% C. Enhancement of Service Delivery System 4.20 4.20 100% C.1. Enhancement of Public Weather Services 1.35 1.35 100% C.2. Support of Disaster Risk Management 1.10 1.10 100% C.3. Improvement of Service Delivery 0.85 0.85 100% C.4. Creation of the National Climate Service 0.90 0.90 100% D. PPCR Program Management and Knowledge Sharing 3.60 3.60 100% D.1. PPCR Program Management 0.95 0.95 100% D.2. Project Management 0.95 0.95 100% D.3. Knowledge Sharing amongst all stakeholders and the public 1.70 1.70 100% Total Project Costs 19.00 19.00 Interest During Implementation n.a. n.a. 22. Operation and Maintenance (O&M) costs of the existing hydromet equipment operated by MAI, NWRA, CAMA/YMS and EPA, and for new equipment procured under the project and once operational would be financed by the Government though yearly recurrent budget allocations to the respective agencies based on a clear plan to be reviewed and approved by the Ministry of Finance. O&M should be within the range of US$ 1 – 1.5 million annually based on requirements and reasonable costs. Operating cost for the PPCR-PCU will be provided by the Government in the amount of US$ 100,000 to US$ 155,000 annually based on clear plans and reasonable costs, and will include rent and maintenance for the office of the PCU, incentives for local staff, transportation cost for local staff, Implementation Committee Secretary, administrative costs, fuel for the generator, incentives for the two female seconded specialists, travel and per diem to support the meetings of the Implementation Committee and other relevant costs, which are not financed by the grant. Retroactive Financing 23. It was agreed with the Government that key PCU staff (PCU Director and Procurement Manager) would be hired using retroactive financing. The hiring of PCU Staff (PCU Director and Procurement Manager) was completed to initiate such preparatory activities as drafting TORs, opening the designated accounts and other priority activities. The amount and type of expenses, which are expected to be retroactively financed, will be those consultancy services in the amount of US$50,000, including the procurement of office furniture, computer and printer for these two key staff as well as 10 advertisement costs. Retroactive financing up to 20 percent of the Financing amount will be allowed for eligible expenditures made on or after April 1, 2013 and up to date of the Financing Agreement signing. Payments will only be made for items procured in accordance with applicable procurement procedures. Program Objective and Phases 24. This project is part of Phase II of the Yemen PPCR. The SPCR developed over a period of two years and endorsed in 2012 guides the preparation and subsequent implementation of priority investments under PPCR Phase II. The overall objective of the Yemen PPCR is to mainstream climate resiliency into development planning at a strategic level, along with a “knowledge response” and introduce adaptation measures to the risks and opportunities posed by climate variability and change. The development objective is to improve institutional capacity at local and national levels and to address climate change risks and increase resilience of communities to climate change impacts. There are three related investments – Investment I) Climate Information System and PPCR Coordination (this project); Investment II) Pilot Schemes to Improve the Resilience of Rural Communities to Climate Change in Yemen, and Investment III) Climate Resilient Integrated Coastal Zone Management. Lessons Learned and Reflected in the Project Design 25. The project design takes into account the extensive consultations with Government officials, corporations, academia and CSOs including women’s groups, NGOs, farmers’ and fishers’ unions and societies that took place during the preparation of the SPCR. Several key messages were conveyed and are reflected in the project design: (a) Gender and inclusion are important. This resulted in the inclusion of the “Gender Smart Management Framework” in the SPCR; (b) Targeting the poor and most vulnerable should be emphasized; (c) Governance and institutions should be strengthened; and (d) Specific investments to manage the impacts of climate risks should be supported. 26. The project design also takes into account lessons learned from similar World Bank hydrometeorological modernization projects: (a) Procurement. The project requires the purchase of significant, sophisticated equipment. Experience with similar Bank projects suggests an early emphasis on procurement is needed to avoid delays in implementation. This issue will be mitigated by strengthening the PPCR-PCU to finalize preparation of a procurement plan and develop TORs and bid documents for priority procurement packages. Early procurement of the services of a General Consultant/Systems Integrator will be undertaken with the objective of having a Systems Integrator in place right after project effectiveness. (b) Implementation Capacity. Implementation capacity is important for a successful project. There is experience in CAMA/YMS with hydromet modernization, which has been undertaken systematically and continuously to maintain the operational capacity of CAMA/YMS as requirements have changed. The General Consultant/Systems Integrator will assist CAMA/YMS in the development of the detailed technical design of the future systems and development of the technical specifications and bid documents, and provide implementation support throughout the lifetime of the project. 11 (c) Sustainability. Hydromet projects in developing countries have a poor record of sustainability. Designing an appropriate system with equipment well-suited to the geography, needs, and capacities of the country is essential. The General Consultant/Systems Integrator will assist CAMA/YMS, MAI and NWRA by backstopping the technical design. Since CAMA/YMS has considerable experience with sophisticated equipment and is knowledgeable about what will work, most of this effort will be needed to ensure the sustainability of the agro- meteorological and hydrometeorological observing networks and their overall integration into a “network of networks”. Experience from other projects in Yemen clearly indicates that significant portion of observation and IT equipment became inoperable soon after completion of the project due to lack of operational and maintenance resources and lack of institutional responsibility. The project team believes at this stage that additional Operation & Maintenance (O&M) for sustainable operation of new systems should be within the range of US$1-1.5 million annually based on the requirements. More specific assessment of O&M needs of future modernized systems of CAMA/YMS, MAI and NWRA was undertaken at appraisal and will be finalized during the first year of implementation by the General Consultant/Systems Integrator. O&M costs are expected to be affordable. If necessary, corrections to the project design can be made to reduce O&M costs. It is expected that, the Government will commit to allocating (and supporting thereafter) sufficient regular budget to cover all operational and maintenance needs of the regular operations of these main implementing agencies of the project. The agencies will develop on an annual basis realistic O&M budgets for approval by the Ministry of Finance and subsequent inclusion into their respective annual budgets. (d) Institutions. The institutional relations in hydromet projects are often complex because there are many disparate uses for water, weather and climate services. Unclear roles, weak capacity and insufficient cooperation and coordination among agencies can diminish project effectiveness. This has been addressed by the development and signing of a Memorandum of Understanding (MOU; Annex 8) regarding data sharing, which will provide some safeguards regarding cooperation between the participating agencies. Additional instruments may include bilateral data sharing agreements between participating agencies which will specify types, amounts and formats of data and information products. This will facilitate the implementation of an observing “network of networks”. (e) Maintaining ownership by supporting the counterpart team to take the lead in designing the project. During the identification and preparation stages, the EPA took the full responsibility and lead in cooperation with CAMA/YMS, MAI and NWRA. The EPA remained in full consultation with all relevant stakeholder groups in preparing the project and valuable guidance was received by the IMCCC. The details of the project were discussed throughout the preparation phase of both the SPCR and the project itself and the resulting project design is fully owned by the counterparts. (f) Employing existing implementation arrangements. Lessons learned from ongoing World Bank projects point to the fact that project implementation is likely to be smooth and timely if the implementation arrangements are streamlined and well understood by all implementers. Therefore the project builds on the existing PPCR-PCU while strengthening its capacity. (g) Relevant ongoing projects. The consultation phase with the donor community allowed establishing good synergies and coordination with relevant donor projects and programs. Some examples are the Fisheries Resource Management and Conservation Project, the Water Sector Support Project (WSSP), the Agro-biodiversity and Climate Adaptation Project, the Labor Intensive Program, etc. There are also a range of activities supported by international and 12 bilateral donors, such as the German Development Cooperation, namely the Integrated Water Resource Management Program funded by KfW and the GIZ (including CIM/DED) and the National Water Resources Information System (NWRIS) Project supported by the Federal Institute for Geosciences and Natural Resources (BGR). UN International Fund for Agricultural Development (IFAD) finances ‘Mapping climate change impacts on smallholder agriculture in Yemen using GIS modeling approaches’. The project will continue the close dialogue and consultation with the donors and build strong operational links where possible to plan joint field activities with relevant ongoing projects. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 27. Project Oversight. Oversight of the project would be entrusted to the Inter-Ministerial Committee on Climate Change (IMCCC)23, which is chaired by the Minister of Planning and International Cooperation. The IMCCC is assisted by a Technical Secretariat, the EPA, and by a Technical Committee (TC), which advises the IMCCC on technical matters. An Implementing Committee (IC) comprised of the Project Partners – CAMA/YMS, EPA, MAI, and NWRA, as well as the Ministry of Planning and International Cooperation (MOPIC) and the Ministry of Finance has been established. A seventh, ex officio, member would be the PPCR-PCU Director. CAMA/YMS, MAI, and NWRA are the institutions responsible for the collection and processing of weather, climate and water related data and information and for its distribution to the public and specific social and economic sectors. CAMA/YMS is the official weather service of Yemen and represents Yemen in the WMO; MAI is responsible for weather, climate and water information for agriculture and farmers; and NWRA is responsible for the management and coordination of Yemen’s water resources. The mandate of the EPA is to coordinate development of general environmental policy, environmental laws and standards, in addition to enhancing environmental awareness, dissemination of environmental information and development of national capacities. Other agencies receive data and information from and provide data and information to these primary mandated entities. 28. Project Coordination. The IMCCC would delegate the responsibility for supervising and monitoring the execution of all project activities to IC and for implementation, coordination and fiduciary management of the Project to the PPCR-PCU. 29. Project Management. The PPCR-PCU already established for Phase 1 would be expanded to coordinate the project on behalf of the Recipient. In line with the assessment carried out and the needs for this project, it would be significantly strengthened by recruiting a PCU Director, a Procurement Manager, an M&E Specialist, a Procurement Assistant, an Accountant, an IT Specialist, a part-time Environmental Advisor, a part-time Social Advisor and a part-time Gender Specialist. The Financial Manager already in place for “PPCR - Phase 1”24 will be retained for Investment I. The PCU Director would be recruited to manage this project while also overseeing Phase 1. The Director would report to the IC. To support the Government’s efforts to increase female participation in the specialist workforce, the aim would be to recruit women for a minimum of 30% of the above positions. In addition the PPCR-PCU will be supported by a minimum of 2 female specialists seconded by the participating organizations in support of a “Gender Smart Management Framework” outlined below. 30. Fiduciary Responsibility of the PPCR-PCU. The PPCR-PCU will facilitate the implementation of project activities through financial management (FM), procurement of goods and services with the technical assistance of the General Consultant/Integrator and in accordance with IDA regulations and 23 The Inter-Ministerial Committee on Climate Change (IMCCC) comprises all line Ministries as provided for in Cabinet Decree 349. 24 (P118304) 13 procedures elaborated in the Project Operating Manual (POM). The PCU has acquired some experience in the implementation of Phase I project, and the current staffing will be augmented as described above. The PPCR-PCU will: (i) monitor outcome and output indicators; (ii) support CAMA/YMS, EPA, MAI and NWRA in executing the Implementation Plan; (iii) ensure compliance with the signed MOU; (iv) resolve implementation issues; (v) prepare and submit progress reports to the IMCCC and the Bank, including the baseline and values of specific implementation indicators by component; and (vi) submit the quarterly Interim Financial Reports and the annual Audit Reports to the Bank in a timely manner. 31. Technical Implementation. CAMA/YMS will be responsible for the technical implementation of Components A, B, and C, in close coordination with MAI, EPA and NWRA and with the assistance of the General Consultant/Integrator. More specifically, CAMA/YMS will be in charge of: (i) preparing the main tasks/TORs for and controlling performance of the General Consultant/Integrator; (ii) preparing, with support of the General Consultant/Integrator and in consultation with MAI, EPA and NWRA, detailed technical specifications and bidding documents for equipment procured under components A, B and C of the Project; (iii) jointly with General Consultant/Integrator, providing guidance on installation, operation and maintenance of the equipment; (iv) developing new information formats and products for analyzing weather and climate information; (v) maintaining a publically accessible climate database; and (vi) strengthening partnerships with end-users to ensure the uptake of new weather, climate and water services. EPA will be responsible for the technical implementation of Component D, in close cooperation with CAMA/YMS, MAI and NWRA and with the assistance of the General Consultant/Integrator. 32. Data accessibility. A Memorandum of Understanding (MOU) on cooperation and data exchange between CAMA/YMS, MAI, EPA and NWRA was signed by the Ministers of MAI, MOT and MWE on January 28, 2013 (Annex 8). CAMA/YMS has demonstrated in its current operating model that cost-recovery based on civil aviation use can ensure sustainability. This can also result, however, in limiting access to data because all of the costs of providing and managing the data and information are provided by the customer for their own use. Creating a shared database and information exchange mechanism would be in the best interests of all parties, and of the country in general, since this would maximize access to climate information by everyone. Operating and Maintenance costs for such a system would need to be factored into the long-term operation of the system. As has been demonstrated elsewhere, this does not necessarily limit opportunity to add-value and generate additional revenue from the sale of bespoke services, which do not compromise public safety or limit public access to basic data and information. 33. Project Operating Manual. All eligible activities included in this project will be implemented according to the POM approved by the Government and acceptable to the Bank. The POM describes decision making processes, roles and responsibilities of implementing organizations and PPCR-PCU staff, detailed administrative, procurement, financial management and disbursement aspects of the project, safeguards arrangements, reporting and evaluation procedures. The POM also includes the terms of reference for the additional PCU staff. 34. Gender Smart Management Framework. To support the Government’s efforts to increase the participation of women in the specialist workforce, the project should aim to recruit women for a minimum of 30% of the newly advertised PCU positions. While respecting the cultural setting, the PPCR- PCU will be staffed by minimum 2 female specialists seconded by the participating entities participating in project implementation allowing for hands-on specialist training. TORs of the PPCR- PCU Director will be enhanced by making specific reference to ensuring inclusion of female colleagues as well as ensuring targeted training aimed at female colleagues are carried out. 14 35. Project Implementation Support by the World Bank. The PPCR-PCU will fully participate in the joint project implementation support missions and will regularly communicate with the World Bank on all implementation matters. Due to security concerns, the ability of the Bank to conduct missions in the field remains restricted. Recently, the World Bank signed a contract with a Third Party Monitoring Agent (TPMA) to assist the World Bank in monitoring project implementation in Yemen especially focusing on infrastructure projects. The role of monitoring agent is expected to be expanded and the team will request support, if required, during project implementation. B. Results Monitoring and Evaluation 36. The project Results Framework in Annex 1 will be used for monitoring and evaluation of the project. The PDO indicators will be monitored through Government official data and intermediate outcome indicators as well as Public User Surveys designed and delivered according to WMO recommendations. Results will be included in the implementation progress reports. The PPCR-PCU will prepare and submit implementation progress reports to the IMCCC and the World Bank in an agreed format no later than 45 days after the end of each semester. The PPCR-PCU will also ensure that progress by component and a technical summary are included in those progress reports. Performance assessment of public weather services will be carried out under WMO guidelines25. 37. The mid-term review of the project is planned for 2016. EPA will submit to the Bank an Implementation Completion and Results Report (ICRR) within three months of the project closing date. 38. Incremental costs associated with M&E are estimated at US$250,000 and will be financed from this project. C. Sustainability 39. Capacity. While Yemen’s political transition is in progress, insecurity in some areas of the country continues to affect the delivery of climate services. In addition, the Government remains largely contingent on external funding as a result of the recent political and economic crisis which had a negative impact on the country’s fiscal sustainability. Despite this challenging period, the EPA has continued to demonstrate solid commitment to the PPCR process, while CAMA/YMS has managed to sustain the main elements of the existing synoptic network and expressed strong commitment to expand and upgrade the hydrometeorological system in cooperation with MAI and NWRA. Each of these agencies is committed to developing more integrated observing networks that will benefit from the shared capacity and expertise of the participating organizations. 40. Demand. Ultimately, the sustainability of this investment will rest on whether or not there is continued demand for weather, water and climate products such as warnings, forecast and advisories. Many hydromet projects have failed due to a focus on data collection only. Unless data are analyzed and transformed into actionable information, there is little appreciation of their value – and therefore very little demand. Globally, there has been a decline in the availability of water resources data over the past few decades. At the national level, particularly in many poorer countries, hydrological information systems have often been among the first functions to be sacrificed when budgets tighten. The project has therefore been designed to transform the current system from a traditional data gathering organization into one that is modernized and service-oriented. Reliable forecasts and advisories delivered to farmers (i.e., advisories on planting and harvesting dates, seasonal forecasts to better inform cropping decisions), and disaster risk managers (i.e., early warnings for flash floods, 25 Guidelines on Performance Assessment of Public Weather Services, WMO, 2000 http://www.wmo.int/pages/prog/amp/pwsp/pdf/TD-1023.pdf 15 hailstorms and landslide risks) could immediately save lives and money, and generate strong sustained demand for the upgraded system. 41. Design and affordability. Another threat to the sustainability of hydromet systems is inappropriate and unaffordable design. Systems must be designed to utilize equipment that is well- suited to the geography, climate and communities in which they will be installed. Similarly the sustainable O&M of the system must also be designed in context, ensuring in particular adequate skills and financing. With regard to financing, it is expected that the Government will explicitly assume O&M responsibility of the system upon project implementation and thereafter. The annual incremental O&M costs are estimated at this stage in the range of US$1-1.5 million26 and considered affordable based on international comparators. MAI, NWRA, EPA and CAMA/YMS will ensure to have a sufficient budget for O&M under their budget as agreed with the Ministry of Finance. The Ministry of Finance (MOF) has confirmed that sustainability through adequately Government financed operating and maintenance budgets must be addressed.27 It has invited the participating entities to develop on an annual basis realistic operating and maintenance budgets for the observing networks for approval by the MOF and subsequent inclusion into their respective annual budgets. V. KEY RISKS AND MITIGATION MEASURES A. Risk Ratings Summary Table Risk Rating Risk Rating Stakeholder Risk Project Risk Stakeholder Risk S Design M Implementing Agency Risk Social and Environmental L Capacity H Program and Donor M Governance S Delivery Monitoring and Sustainability S Others S Overall Implementation Risk S B. Overall Risk Rating Explanation 42. The overall risk for this operation is Substantial because of country context, as well as capacity and governance issues, particularly: (a) Coordination among the stakeholders. Competition and weak coordination among the stakeholders may become an issue. Lack of coordination and decision mechanism could hamper project implementation. This risk is addressed through a Memorandum of Understanding (MOU), which was signed by the concerned Ministers on January 28, 2013 (See Annex 8) and the formation of an Implementing Committee, which is already functioning. (b) Limited capacity. EPA will have the overall responsibility for the project implementation. While the EPA project management capacity has improved as implementation of Phase I PPCR progresses, it remains weak because of limited experience in implementing World Bank projects. In order to mitigate this risk, the project will provide for additional staffing of the PPCR-PCU, capacity building and training in various areas of project management. 26 O&M costs are typically 10-15 percent of the total budget of National Meteorological Services purchased equipment, slightly higher for more complex equipment – computers and radars. Precision of O&M estimate depends on knowing the final design of the networks, actual costs of operating the existing systems and performing a comparison with similar institutions. This assessment will be carried out by the General Consultant/Systems Integrator, jointly with the implementing organizations, during initial phases of project implementation. 27 Climate Information System and PPCR Coordination – Aide Memoire November 2012. 16 (c) The potential inability for Bank staff to conduct sufficient in-country project implementation support. Close implementation support is necessary to mitigate capacity risks. However, if the current security situation persists during implementation, the Bank’s capacity to conduct supervision may be affected. In order to mitigate the risk local consultants will be hired and the TPMA will be also utilized to ensure regular on-site monitoring. Furthermore, the staff of the country office is currently being increased which will provide additional implementation support capacity. 43. Annex 4 shows the Operational Risk Assessment Framework detailing the risks and mitigation measures for the project. VI. APPRAISAL SUMMARY A. Economic and Financial Analyses 44. As was shown in a number of cases, investments in improvement of hydromet services, particularly in weather and climate vulnerable countries like Yemen, are cost effective. This conclusion is confirmed by a cost-benefit analysis of the project (see Annex 6) which shows that the proposed project is a cost effective investment, exhibiting potential benefit/cost ratios of at least 2 under the most conservative assumptions, with a more optimistic but still realistic estimate of about 10. This can be interpreted in a way that each dollar invested in strengthening hydromet system in Yemen will generate from 2 to 10 US$ of economic benefits. The tfollowing two main factors were taken into account in estimating the benefits of the project: (i) reduction of economic damages from the short- term weather and climate events (floods, dust storms, etc.) and (ii) improvement of productivity of weather dependent sectors (agriculture, water resources management, transport, etc.) due to improved quality of hydromet services. Other benefits such as reduced loss of life, reduction of damages due to long-term events (drought, climate change) were not taken into account. It should be noted that floods have the highest economic impacts on Yemen (with estimated annual damages over US$70 million); therefore investments in early warning for disaster reduction will concentrate on flood management and mitigation. The 2008 flood, which is estimated as a 50-100 year occurrence (equivalent to 1-2% annual probability), generated damages and losses approximately equivalent to 6% of national GDP, with the greatest sector impacts in agriculture (63% of total), industry, commerce and tourism (13%), housing (11%) and transportation (5%). B. Technical 45. Upgrading the technical infrastructure of CAMA/YMS, MAI and NWRA will focus on structural and non-structural measures. CAMA/YMS will build on its existing capacity focusing on improving areas where it already has core competency but requires additional technical support. CAMA/YMS will work closely with NWRA, MAI and EPA, with the support of a General Consultant/Systems Integrator. The modernization will conform to best practices based on WMO standards, already established by CAMA/YMS, which will be extended to include the agro- meteorological and hydrometeorological observing networks of MAI and NWRA, respectively. C. Financial Management 46. The project’s financial management and disbursement functions will be the responsibility of the PPCR-PCU. The PPCR-PCU is implementing the Bank-administered Project “PPCR - Phase 1”28 and has been performing Moderately Satisfactory in terms of the financial management. There are no overdue audit reports. The PPCR-PCU in its extended capacity will be responsible for the Project’s Financial Management (FM) arrangements. The PPCR-PCU has retained qualified staff and 28 (P118304) 17 maintained a well-functioning FM system which includes: (i) an automated accounting system following cash basis accounting and capable of adding new projects to record/report on all financial transactions; (ii) experienced financial management staff and will be strengthened by retaining the Financial Manager of Phase 1 for Investment I and recruiting an Accountant; (iii) an adequate internal controls system based on documented procedures (i.e. FM Manual) has been revised to reflect the complexity of this project; and (iv) quarterly financial reports and annual financial statements, reviewed and audited, respectively, by an independent external auditor, selected by the Central Organization for Control and Audits29 (COCA) and acceptable to the IDA, based on agreed Terms of Reference (TORs). 47. The PPCR-PCU will continue to submit to IDA quarterly unaudited Interim Financial Reports (IFRs) not later than 45 days after each calendar quarter and annual audited financial statements not later than six months after each calendar year. To ensure that funds are readily available to start the implementation process, a segregated Designated Account (DA) in US$ will be opened at the Central Bank of Yemen (CBY) in Sana’a and will be managed by the PPCR-PCU. 48. Given the nature of the inherent risks in the country system and the project, the overall FM risk rating of the project has been assessed as High. The mitigating measures include the reliance on the existing FM arrangements in the PCU, building the capacity of their financial staff and revising the FM manual. The successful implementation of the mitigation measures, which have been agreed upon with the recipient, will eventually reduce the project financial management risk to Substantial. Detailed FM arrangements designed to mitigate FM risks are outlined in Annex 3. D. Procurement 49. Procurement activities under the project would be carried out in accordance with the “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 January 2011 (“Anti-Corruption Guidelines”). Procurement of goods, works and non-consultant services would be carried out in accordance with the IDA’s “Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011, consultant firms and individuals will be selected in accordance with the IDA’s “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers” dated January 2011,and the provisions stipulated in the Legal Agreement. The PPCR-PCU will be responsible for overall administrative work concerning the procurement process. It will also be responsible for consultant TORs and technical specifications for equipment for component D. CAMA/YMS, in coordination with NWRA, MAI, and EPA, will be responsible for the preparation of detailed technical specifications for equipment, detailed design for works, and preparation of consultant TORs for Component A, B, and C with the support of the General Consultant/Systems Integrator. CAMA/YMS will also participate in the bid evaluation for the meteorological equipment concerning and related to works. EPA, supported by PPCR-PCU, has prepared a first Procurement Plan (dated June 10, 2013), acceptable to the Bank, showing the contracting to be undertaken during the project. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 50. The World Bank prior review thresholds and the procurement methods for each category are specified in the procurement plan. The plan will be updated annually or earlier if required to reflect the latest requirements. A General Procurement Notice will be prepared and published. 29 Government’s audit bureau (i.e. Supreme Audit Institution) 18 51. All procurement process and documentation will be recorded by the PPCR-PCU. Procurement arrangements will be documented in a Manual of Procurement Procedures as agreed at appraisal and reflected in the legal agreement between the WB and the beneficiary. E. Social (including Safeguards) 52. The project is expected to generate positive social impacts through its efforts to deliver improved warnings of meteorological hazards and better agro-meteorological and hydrometeorological data to improve agricultural and water management among farmers, fishers, women, and other users throughout Yemen. OP4.12 will not be triggered for this project. This has been ensured by the requested Government official letter confirming that the project location will be on public land only (See Annex 9). F. Environment (including Safeguards) 53. This project triggers OP4.01 Environmental Assessment and is categorized as Category B. Minor impacts on the environment are expected especially for the activities under Component B.1 such as installation of monitoring equipment and Doppler weather radar, and upgrading marine observation stations. Upgrading marine observation will be done in three already established standard stations in Mukallah, Aden, and Al Mokha. A Doppler weather radar will be installed next to the monitoring station in Dhamar on the existing Government-owned and already fenced-in land. Site visits were conducted by a local consultant who prepared an ESMP which confirmed that those locations are existing Government-owned sites and installation will not cause any noticeable harm on the environment. 54. The location of specific stations of the monitoring networks is still unknown. However, since monitoring networks are basically an installation of small ready-made sensing equipment, which is a Category C type of activity that takes approximately no more than one day to install, a negative checklist will be adequate to cover each site as long as site selection is done properly to avoid sensitive locations. Therefore, site selection criteria have been prepared as part of an ESMP to avoid setting up monitoring equipment in highly sensitive areas such as natural habitats and disputed areas. The locations will be selected according to the selection criteria and need to be approved by the safeguard specialists of the World Bank team before installation in order to ensure the compliance with the selection criteria. Priority would be given to existing Government-owned and fenced-in sites to minimize the risk of vandalism and theft. 55. An ESMP was prepared. The ESMP as well as the Arabic summary was disclosed through the project website on February 13, 2013. The ESMP was also disclosed on the Bank’s website on February 19, 2013. Consultations with Government stakeholders as well as public stakeholders including farmers, water users, fishers and women were held in December 2012 in Dhamar, Aden, and Hadhramout. The risk on environmental impacts will be managed during the implementation by following the mitigation measures (including site selection criteria) described in the ESMP. The main elements of the ESMP are incorporated in the POM. 19 Annex 1: Results Framework and Monitoring Yemen, Republic: Climate Information System and PPCR Coordination (P132116) . Project Development Objectives . PDO Statement Project Development Objective(s): The development objective is to improve the quality of hydro-meteorological and climate services provided to end- users30. . Project Development Objective Indicators Data Responsibility Cumulative Target Values Source/ for Indicator Unit of End Frequenc Methodolo Data Core Baseline YR1 YR2 YR3 YR4 Name Measure Target y gy Collection PDOI.1: Number 0.65 0.65 0.70 0.75 0.80 0.85 Annually CAMA/YMS CAMA/YMS,PP (Improved quality Average CR-PCU of weather Forecasts score for information) only for few main Skill (0-1) of administrative administra weather forecasts centers tive of 24 hours lead centers time for main administrative centers PDOI.2: Percentage CAMA:80 % 80% 80% 85 % 90% 92% Bi-annually CAMA/YMS CAMA/YMS (Improved quality reports of services and MAI: 0% 10% 20% 40% 60% 75% data access31) NWRA: 0% 10% 20% 40% 60% 75% Data collected at observation stations reaching data centers in 30 See para 17(b) in the PAD for detailed definition of the end-users 31 A survey instrument will be developed, commonly referred to as a Composite Satisfaction Index (see IRI.C3), which NMSs use to measure the impact of their services on users. Each SI is tailored to measure the impact of the specific services provided by an NMS (see IRI.C1). This would be developed during the first phase of implementation following the definition of user requirements and in consultation with users 20 line with SOPs PDOI.3: Number 0 0 100,000 500,000 1,000,000 3,000,000 Annually PPCR-PCU PPCR-PCU (End-users using improved tools, Percentage 0% 0% 40% 45% 50% 50% information and instruments to cope with the effects of CC) Direct project beneficiaries (number) of which female 32 (percent) PDOI.4: Percentage 40% 50% 60% 75% 90% 100% Annually CAMA/YMS, CAMA/YMS, (Sustainability MAI, NWRA MAI, NWRA, and reports, PPCR-PCU mainstreaming PPCR-PCU climate resilience) Operation and maintenance funds for essential operational needs covered by CAMA/YMS, MAI, NWRA budget 33 allocations . Intermediate Results Indicators Responsibility Cumulative Target Values Data Source/ for Unit of End Methodology Data Collection Indicator Name Core Baseline YR1 YR2 YR3 YR4 Frequency Measure Target Component A: Institutional Strengthening and Capacity Building 32 Relates to PPCR Core indicator A.1.3: Number of people supported by the PPCR to cope with the effects of climate change 33 Relates to PPCR Core Indicator B2: Evidence of strengthened government capacity and coordination mechanism to mainstream climate resilience 21 IRI.A1: Number 0 1 3 7 10 12 Annually CAMA/YMS, CAMA/YMS Updated and PPCR-PCU PPCR-PCU approved regulations, SOPs, or guidelines IRI.A2: Number Eligible Bi-annually Based on CAMA/YMS, Number of staff to be CAMA/YMS PPCR-PCU beneficiary identified & WMO agency’s reports and professional staff Percentage 0% 50 % 60 % 75 % 90 % 100 % GC/ receiving Integrator technical training verifications or re-training (CAMA/YMS) (MAI) Number Eligible Bi-annually Based on MAI/PPCR-PCU staff to be MAI reports identified and GC/ Integrator Percentage 0% 30 % 50 % 75 % 90 % 100 % verifications ( NWRA) Number Eligible Bi-annually Based on NWRA/PPCR- staff to be NWRA PCU identified reports and GC/ Percentage 0% 30 % 50 % 75 % 90 % 100 % integrator verifications Component B: Modernization and Expansion of the National Hydrometeorological and Monitoring Networks IRI B1: Number 20 20 21 30 40 50 Bi-annually CAMA/YMS CAMA/YMS CAMA’s AWSs reports and PPCR-PCU operating in line with standard operating procedures (SOPs) IRI.B2: Percentage 0% 5% 20 % 40 % 70 % 80 % Bi-annually MAI reports, MAI/PPCR- Rain gauges reports PCU, operating in line with SOP in MAI network 22 IRI.B3: Percentage 0% 5% 20 % 40 % 70 % 80 % Bi-annually NWRA NWRA, PPCR- Rain gauges reports PCU operating in line with SOP in NWRA network Component C. Enhancement of Service Delivery System IRI.C1: Percentage 0% 0% 0% 45 % 55 % 60 % Annually Public survey, PPCR-PCU Population disaggregated based on surveyed in pilot Survey Survey for gender and consultant’s regions satisfied methodol tested vulnerable report with public ogy and groups 34 target weather service populatio n identified IRI.C2: Percentage 0 0 20% 40% 70% 100% Quarterly Report of CAMA/YMS National Climate CAMA/YMS Service NCS Framework35 Work Program Program 36 prepared implemented IRI.C3: Percentage 0% 0% 0% 45% 55% 60% Annually Public surveys, PPCR-PCU Composite conforming based on satisfaction index Survey Survey with WMO consultant’s of CAMA/YMS methodolo tested methodologies, report services expressed gy disaggregated as a %, where 100 developed for gender and % is completely vulnerable satisfied groups Component D: PPCR Program Management and Knowledge Sharing 34 Relates to PPCR Core indicator B5: extent to which climate responsive instruments/investment models are developed and tested and B1: extent to which vulnerable households, communities businesses and public sector services use improved PPCR supported tools, instruments, strategies, activities to respond to CV&CC 35 National Framework for Climate Services would increase access to high quality climate information, facilitate sharing of knowledge and know-how, and strengthen or establish community-level partnerships between the users and providers to understand and use weather, climate and water information more effectively and ultimately reduce vulnerability to climate change. 36 Relates to PPCR Core indicator A.2.1: degree of integration of CC in national, including sector planning and B2: Evidence of strengthened government capacity and coordination mechanism to mainstream climate resilience 23 IRI.D1: Number 0 12 24 36 48 60 Bi-Annually PPCR-PCU PPCR-PCU Information Other PPCR sharing materials projects on program initiatives made public37 IRI.D2: Text No open Needs Pilot Website Website with Website Bi-Annually CAMA/YMS CAMA/YMS. CAMA/YMA access assessme website with climate and with PPCR PCU puts the climate nt and establishe climate weather date climate and weather data design d and operational and on the website38 weather weather date date operational operation al IRI.D3: Number (per 0 3 6 10 10 10 Annually PPCR-PCU PPCR-PCU Consultations and annum) Other PPCR workshops at projects program level with decision makers and 39 donors 37 Relates to PPCR Core indicator B2: Evidence of strengthened government capacity and coordination mechanism to mainstream climate resilience 38 Relates to PPCR Core indicator A.2.1: degree of integration of CC in national, including sector planning 39 Relates to PPCR Core indicator A.2.1: degree of integration of CC in national, including sector planning and B2: Evidence of strengthened government capacity and coordination mechanism to mainstream climate resilience 24 Annex 2: Detailed Project Description Yemen, Republic: Climate Information System and PPCR Coordination (P132116) A. Purpose 1. This project would increase climate resilience – better managing water resources, increasing agricultural productivity and reducing the risk of climate-sensitive diseases – by improving the monitoring, prediction and assessment of severe weather events, climate variability and change. The project will have social and economic benefits by managing risk in weather-related disasters, especially floods that disproportionately affect the poor and vulnerable populations, through improving forecasting and early warning of hydrometeorological hazards. This would be achieved by strengthening the capacity of the institutions responsible for meteorology, agriculture, and water resources to provide better agrometeorological and hydrological services integrated into a National Framework for Climate Services (NFCS). This requires improving cooperation among the relevant agencies, upgrading the existing meteorological and hydrological observing networks, improving the timeliness and accuracy of weather and flood forecasts and warnings, strengthening partnerships among users and providers of climate related information, and delivering better weather, climate and water services. Activities funded through the project would help improve climate-sensitive decision- making and planning in key vulnerable and water resources dependent sectors, particularly agriculture, and contribute to building resilience for communities and sectors at risk. The project would also improve coordination and information sharing among all agencies responsible for the collection of climate data, analysis and decision-support as well as maintain the oversight of the overall PPCR program, particularly in regards to knowledge management, raising awareness and information sharing with stakeholders. B. Background a. Civil Aviation Meteorological Authority /Yemen Meteorological Service 2. By international convention, under the auspices of the World Meteorological Organization40 (WMO), the organization with primary responsibility for weather and climate services in most countries is the National Meteorological Service (NMS). In Yemen, this is the Civil Aviation Meteorological Authority /Yemen Meteorological Service (CAMA/YMS). Based on a recent World Bank review and in comparison with similar sized NMSs elsewhere, CAMA/YMS is a well-organized, well-run and efficient NMS capable of technical implementation of the relevant components of the project to enhance weather and climate services in Yemen. Challenges for CAMA/YMS include sustaining an expanded observing network and forecasting system that requires financial support beyond the current limited remit of CAMA/YMS to support primarily aeronautical meteorology for civil aviation; and improving cooperation and integration among the Ministry of Agriculture and Irrigation (MAI), National Water Resources Authority (NWRA), and related development authorities that support and use meteorological and hydrological observations, products and services in Yemen. A high priority is providing early warning of hydrometeorological hazards – floods and droughts – and helping integrate this information into the activities of the partnering organizations and the Ministry of Interior (MOI) Civil Defense Authority. Meteorological Observations and Services 40 World Meteorological Organization is a specialized agency of the United Nations with responsibility for the international coordination of meteorological data, information and services. The WMO is supported and governed by its 192 Member States and Territories. This governance is enacted through the Permanent Representatives of the Members with WMO, who are normally the Directors of the National Meteorological or Hydrometeorological Services. WMO sets standards in observations, numerical prediction, service delivery, and international data exchange, agro-meteorology, hydrology, aviation and marine meteorology. WMO also provides training courses through its regional training centers for Members. 25 3. Meteorological observations began in the port of Aden in 1870 during the colonial administration. A Department of Meteorology was established with the opening of the Airport in Aden in 1945. In 1967, Meteorological services became the responsibility of Yemenis and thereafter in southern Yemen there was further expansion of the observing networks. In 1969, the southern Yemen Meteorological Service joined the World Meteorological Organization (WMO). The Meteorological Services in the North of Yemen joined the WMO in 1971. After reunification in 1990, the two services merged in the General Authority for Civil Aviation and Meteorology. Further investment followed improving the observation network; forecasting and communication systems, as well as developing climate applications; establishing calibration facilities and workshops; increasing capacity to use remote-sensing and telecommunications through the WMO’s Global Telecommunication System (GTS) and locally to support aviation, public weather services as well as provide climate summaries for governmental agencies and research institutions. By the beginning of the current century, the Government recognized the need for further expansion of the role YMS in areas such a marine monitoring, air pollution and climate. There was a need, at the same time, to reduce the fragmentation of the services, consolidating functions to create a more streamlined organization that could use advances in fields of computers, communications, satellite technology and meteorology to improve forecasts and warnings as well as link the various meteorological offices with YMS headquarters more effectively. This led to investments in an integrated observing, forecasting and climate system, which is currently in use today. This existing system is a good foundation, but does not adequately cover the needs of all sectors and population. Coverage is inadequate and an expanded modern observing system is needed, including new capabilities to adequately monitor and forecast extreme hydrometeorological events for the entire population. Yemen Meteorological Service (YMS) 4. The YMS provides services to aviation, the public, agriculture, health, transport and in support of energy research and applications; and it issues annual climate reports and supports integrated studies of climate and climate change in Yemen. Based on legislation, the YMS is financed entirely through CAMA, which currently supports all of the operational costs of CAMA/YMS and the modernization and development of services from aviation and airport revenues. 5. The administrative structure consists of a central headquarters in Sana’a, which also includes observations, meteorological center, forecasting and instruments, research and renewable energy, climate departments and finance and administration. Services are managed from headquarters central office in the capital. CAMA/YMS has six regional meteorological offices at the airports located in Seiyuon, Al Mukallah, Hodeidah, Ta’iz, Aden and Sana’a. Each of these  offices is responsible for components of the observing network in their region and local weather briefing for pilots. 6. A telecommunication system links the observations sites with the regional offices and the central processing and analysis system at YMS. This system uses several technologies including dial up modems, WAN, SSB radio, satellite, VPN, internet and fax. 7. The central processing and analysis system at YMS headquarters in Sana’a includes the National Meteorological Center, Forecasting Office, Observations server, future TV studio links to Pilot Briefing Offices at six airports – Seiyun, Al Mukallah, Hodeidah, Ta’iz, Aden and Sana’a. 26 Image 1: Examples of CAMA/YMS regional offices (Source: CAMA/YMS; 2013) 8. The network includes 22 synoptic meteorological observation stations at Sa’dah, Hodeidah, Sana’a, Marib, Dhamar, Hajjah, Ibb, Ta’iz, Aden, Sahareeg, Ataq, Seiyuon, Al Mukallah, Ghaidah, Kood (Abian), Amran, Towahi (Minaa), Anad, Al Mahweet, Al Mokha, and Socotra reporting hourly according to WMO standards of measurements of temperature, wet bulb temperature, wind speed and direction, soil temperature, evaporation, sunshine duration, global radiation, rainfall, pressure, as well as other visual weather phenomena. 9. Integrated Automated Airport Weather Observing Systems (AWOS) are located at each of the five airports – Hodeidah, Ta’iz, Seiyuon, Riyan, Aden, and Sana’a. These AWOS, installed in 2008 by Micro-Step Company, continue to operate. Image 2: Site of the proposed Doppler radar installation at the existing Dhamar meteorological station (SOURCE: CAMA/YMS; 2013) Weather and Climate Alert System 10. The weather and climate alert system is centrally located in YMS headquarters in Sana’a. It includes the GTS, Forecasting System (Vision), Media System, Climate Data Base (CLDB) System, Pilot Weather Briefing System (AERO), Meteosat Second Generation (MSG), the Satellite Distributions (SADIS) system (2nd Generation), Unified Data Collection System (UDCS), which 27 provides WAFS and OPMET data for aviation, servers for automatic weather observing system and connection with six forecasting offices at the airports. GTS transmission and reception is via a link to the WMO Jeddah Regional Meteorological Center. The telecommunication system is based on COROBOR Systèmes MESSIR-Comm (YMS-COMM1 and YMS-COMM2) installed in 2002 and upgraded in late 2008. This system is the heart of the meteorological center, which includes the WMO Information System / Global Telecommunication System (WIS/GTS) message switching and real-time meteorological data processing. The telecommunication system could be upgraded to include MESSIR-AFTN (YMS-AFTN), the Aviation Fixed Telecommunication Network for exchanging messages for air navigation, including pilot briefings, NOTAMS, and meteorological messages according to ICAO standards. MESSIR-Sat (YMS-MSG) provides access to MSG, EUMETCast and GEOS products providing a comprehensive set of satellite products as well as access to global network of airborne, satellite and in situ data sets distributed via satellite. 11. The forecasting system is also based COROBOR Systèmes MESSIR products. They include MESSIR-Vision (YMS-Vision), which is a forecaster workstation; MESSIR-Aero, which is a pilot briefing (YMS-Aero) that accesses and visualizes WFAS and OPMET products from SADIS; and MESSIR-Media (YMS-Media), which is a dedicated system for the production of complete weather shows for television broadcast. MESSIR-Clim (YMS-Clim) is a climatological database and workstation that produces an extensive set of graphs, diagrams and tables products for a wide range of clients and applications. CAMA/YMS Staffing 12. CAMA/YMS has a total of 308 staff (291 male; 17 female). Most of the staff are professionally qualified including many staff with advanced degrees and international training. Seventy-four staff are located at Headquarters and rest in the field offices. Over one-third of the staff work in operations. Recruitment is less of a problem in CAMA/YMS than other government agencies and it is able to meet its requirements, although well-qualified staff are always targets for recruitment by other agencies or the private sector, nationally and internationally. CAMA/YMS Budget CAMA/YMS budget is currently provided by non-governmental sources through civil aviation and airport charges, as is the norm for aviation meteorological services. Operations and maintenance support for expanded services, not directly applicable to the aviation sector will require additional budget approved by the Ministry of Finance. The project plans to convert the existing aviation meteorological service in a more comprehensive, full scale NMS. b. Ministry of Agriculture and Irrigation Agrometeorological Observations and Services 13. Overall, the system of agrometeorological observations and services is inadequate, it needs significant strengthening and sustained financial support by the Government. The Central Water Monitoring Unit (CWMU) of the MAI Irrigation Department, established in 1995, is responsible for monitoring water use for the agricultural sector in Yemen. This was originally established as a part of the IDA credit funded Land and Water Conservation Project (LWCP) with technical assistance from the Food and Agriculture Organization (FAO). Following the completion of the LWCP, the CWMU continued to operate through Government support to implement and sustain the monitoring activities. In 2004, the Groundwater and Soil Conservation Project (GSCP) began to support field units in the Governorates supervised by the CWMU with the financial support of GSCP. In 2012, the World Bank financed Water Sector Support Program (WSSP) facilitated the merging of the GSCP with the National 28 Irrigation Program (NIP) to ensure both the sustainability of the GSCP and to sustain the infrastructure of the GSCP. 14. Water distribution from spate irrigation structures is controlled by the MAI through its offices in the Governorates or through the regional development authorities, which also support part of the agrometeorological and hydrometeorological observing networks. One of the oldest regional authorities is the Tehama Development Authority (TDA), which has collected agrometeorological data since 1969 in the seven main flood-prone wadis located in the western coastal areas. A flood warning system would link CAMA/YMS with the headquarters of MAI and the TDA Headquarters and three branch offices. Other development authorities include the Northern Highland Development Authority (NHDA) and the Eastern Regional Development Authority (ERDA). Overall approximately 560 people are engaged technically in irrigation activities throughout Yemen. The project aims to increase the capacity to produce flood warnings, seasonal outlooks, agricultural water bulletins, and long-term high quality meteorological and hydrological records. MAI Observing Network 15. The status and conditions of current MAI observing network are not clear. Prior to 2010, the system supported by the CWMU consisted of 13 meteorological observations using manual weather stations, 90 automatic and 13 manual rainfall stations, and 30 automatic water flow stations. Additionally, water monitoring in wells included 50 automatic and 50 manual water level and 15 water quality measurements and 606 water abstraction monitors. After 2010 the regular data collection has basically collapsed and there is no systematic inventory of current conditions of instruments and sites at the observation stations. There are reasons to believe that many stations have to be rehabilitated including installation of equipment. MAI CWMU Staffing 16. The CWMU has about six technical staff in the On-Farm Irrigation Directorate and Management Information System/Geographical Information System (MIS/GIS) Unit of the MAI and approximately 25 specialists and technicians in field units in the Governorates. MAI CWMU Budget 17. The current budget of the CWMU is 3.8 million Yemeni Rials (YER) or US$ 17,800. The budget allocated to TDA for monitoring activities and O&M costs are 8.6 million YER or about US$ 40,000. Even though the staff costs involved in O&M are covered by different budget item available O&M budget is insufficient to maintain the current data collection requirements. Additional budget is required to cover the new O&M requirements as well as meet existing commitments. c. National Water Resources Authority Hydrological Observations and Services 18. The National Water Resources Authority (NWRA), established in 1996, is the sole authority for water resources management and enforcement of water-related laws in Yemen. Since 2003, NWRA has operated under the MWE, which includes most but not all water related agencies in Yemen. NWRA is still developing capacity with branches in some water basins in addition its headquarters in Sana’a. Monitoring is one of the most essential activities of NWRA. The General Department of Monitoring Network (GDMN) / Hydrological Department includes the measurement of rainfall, temperature, humidity, wind speed and direction, solar insolation, surface water, flooding and water quality. Significant issues for NWRA include having insufficient operations and maintenance budget to maintain the observing network; maintaining an effective water resources information system; and 29 fulfilling the mandate to establish a flood forecasting system. Extensive training is also needed to build capacity in hydrology, statistics and flood forecasting systems. NWRA Observing Network 19. The total number of stations that existed in the NWRA network in 2010 is 354, which includes meteorological and wadi flow measurements. Currently, only 196 of these stations are considered operational; however, it is unclear exactly how many of these stations are actually working in part due to the recent conflict and in part due to lack of funding to maintain manual data collection. NWRA Staffing 20. The total number of NWRA staff is 324 (133 permanent staff) out of which 34% are in Sana’a headquarters and the others are distributed in the seven NWRA branch offices and 5 operational units. Thirty-two staff work in the Hydrological Department. Twenty-seven junior specialists and technicians conduct field monitoring including data collection. NWRA Budget 21. In 2010 NWRA budget for operations and maintenance of its hydrological network was 14 million YER (US$ 65,000), in 2011-2012 the O&M budget allocations were zero and projected budget for 2013 is 15 million YER (US$70,000). Clearly NWRA has insufficient resources to sustain its existing observational commitments and will require addition O&M to cover both existing needs as well as the proposed expanded network. C. Project Components 22. The project would consist of the following four components: o Component A: Institutional Strengthening and Capacity Building o Component B: Modernization and Expansion of the National Hydrometeorological and Monitoring Networks o Component C: Enhancement of Service Delivery System o Component D: PPCR Program Management and Knowledge Sharing 23. Component A. Institutional Strengthening and Capacity Building (US$3.45 million, including contingencies): This component aims to improve climate resilience in Yemen through provision of weather, climate and water services that meet stakeholders’ needs by creating the conditions that ensure institutional, staffing and financial sustainability of the key providers. The activities of this component will be provided in the form of consulting and non-consulting services. There are three subcomponents: (i) Subcomponent A.1 – Institutional Strengthening and Development of a legal and regulatory framework (US$250,000), which includes: (1.1) CAMA/YMS institutional development and strategic planning for weather and climate services; and (1.2) Developing meteorological law and regulatory framework of CAMA/YMS, MAI and NWRA as appropriate, development and implementation of Standard Operating Procedures (SOPs). (ii) Subcomponent A.2 – Capacity Building and Training (US$900,000), which includes: (2.1) Developing and implementing a capacity training program for CAMA/YMS, MAI and NWRA staff as well as users of weather and climate services, including a) personnel training and retraining, and b) education at universities and short courses in WMO regional training centers including but not limited to climate services, public weather services, agricultural meteorology, flood forecasting, hydrology, severe weather forecasting, renewable solar and wind energy; (2.2) 30 Implementing training activities – workshops and round table discussions for major users from sectors such as: disaster risk management, agriculture, water resources, energy, heath and civil aviation – linked to a national framework for climate services. (iii) Subcomponent A.3 Detailed design and technical implementation support of the project (US$2.30 million), which includes: (3.1) design and implementation of modern weather and climate observing system – both software and hardware, and detailed assessment of staffing and resource allocation (O&M) for a modernized national system using a General Consultant/Systems Integrator. 24. Subcomponent A.1 will enable CAMA/YMS to revise and update its strategy for future institutional development taking into account the new requirements for climate services and expanded observing and forecasting capabilities. CAMA/YMS has already developed a draft revised legal framework. With respect to the issuing of warnings and response to hydrometeorological hazards, CAMA/YMS, MAI, NWRA, EPA and Civil Defense should codify their responsibilities and assist other organizations to do the same to help ensure more timely and effective responses to mitigate weather-related disasters. If needed there are a number of legal and regulatory frameworks that have been developed by WMO Members (e.g., Australia, China, Germany, USA). Attention must be paid to ensure all relevant international commitments are supported. SOPs enable the various organizations codify how alerts and warnings are issued. They also enable stakeholders to define their responses to the various levels of alerts and warnings thereby improving the response to hydrometeorological hazards. SOPs should be constructed to align with WMO and global good practices. 25. Subcomponent A.2 will build capacity through training and take advantage of cooperation with other WMO Members to improve the sustainability of the modernization program. The effectiveness of each of the agencies involved in the project depends on continuous access to new skills, opportunities to evaluate and refresh existing staff skills, provision of short courses and on-the-job training. In the first instance, every effort should be made to use the WMO Regional Training Centers and WMO training programs, which have been set up for this purpose to provide training in all aspects of meteorological, climate services, agricultural meteorology, hydrology and related fields. Each of the institutions is familiar with the various degree programs that exist nationally and internationally and should take advantage of these as required to maintain a high level of expertise. Since CAMA/YMS has the primary expertise in meteorological observations and use of meteorological data, this expertise should be shared formally with MAI, NWRA, EPA and others involved in field measurements to ensure quality of the data collected. Education and training is also needed within the user community to improve the capacity and capabilities of various sectors to utilize weather, climate and water-related data and information. This will also help these sectors act as effective translators of CAMA/YMS, MAI, NWRA, EPA products and services to ensure that those who need the information can use it effectively. 26. Subcomponent A.3 will support the technical design and implementation of the modernization program. Although CAMA/YMS has extensive experience with modernization programs, a General Consultant/Systems Integrator is recommended to assist in the developing and implementing the modernization program across all of the agencies involved. The General Consultant/Systems Integrator will ensure that the new components can be integrated with the current system used by CAMA/YMS and that there is connectivity and interoperability both within CAMA/YMS and among the other agencies. Since there is limited national experience in Yemen, the General Consultant will be selected through international competition to assist CAMA/YMS in the development of the technical design of the systems and prepare the training program. General Consultant/Systems Integrator will also provide assistance in developing a training strategy, programs and make recommendations for specific training facilities. 31 27. Component B. Modernization of the National Hydrometeorological and Monitoring Networks (US$7.75 million, including contingencies): This component aims to upgrade and expand the meteorological observations networks for meteorology, agro-meteorology and hydro-meteorology, ensuring that these networks are well functioning and interoperable between CAMA/YMS, MAI, NWRA and the development authorities (e.g., TDA, NHDA, ERDA) to ensure the efficient and timely transmission of information that is essential for management of disaster risks, agriculture and water resources. Collection and timely communication of high-quality data is the foundation of producing reliable weather forecasts and warnings as well as monthly and longer-term climate outlooks. This component will also contribute to the development of a pilot environmental monitoring system. The bulk of the activities in this component include procurement and installation of goods such as monitoring equipment and ICT. There are three subcomponents: (i) Subcomponent B.1 – Technical modernization of the observing networks, which includes (US$5.35 million): (1.1) Rehabilitation and extension of the MAI agro-meteorological observing network; (1.2) Extending and upgrading the weather and climate surface observing network (to form the National Observing Network NON) for CAMA/YMS; (1.3) Replacement, rehabilitation and expansion of NWRA hydrometeorological network; (1.4) Delivery and installation of a Doppler weather radar to improve the monitoring and forecasting of high impact events associated with heavy precipitation and other weather related hazards including a) equipment and b) civil works; (1.5) Installing up to three upper air stations measuring profiles of temperature, humidity and wind speed and direction including a) equipment and b) works; (1.6) Upgrading of the CAMA/YMS calibration facilities including a) stationary laboratory for the use of all network operators and b) mobile calibration laboratory mostly supporting the operation of the CAMA/YMS weather and climate observing network; and (1.7) Installing three marine observing stations in locations to be identified by CAMA/YMS. (ii) Subcomponent B.2 – Modernization of the communication and ICT system (US$1.90 Million), which includes: (2.1) Updating communication equipment of all observing networks (CAMA/YMS, MAI, NWRA and EPA); (2.2) Assessing and strengthening the national data management system, including archiving and data rescue; and (2.3) Upgrading operational satellite receiving systems for forecasting and mapping applications. (iii) Subcomponent B.3 Design and pilot operation of an environmental monitoring system (US$500,000), which includes. (3.1) Developing a needs assessment and design of air quality monitoring networks; and (3.2) Piloting an operational air quality monitoring network to be integrated to the NON. 28. Subcomponent B.1 will support the technical modernization of the networks. Extensive consultation with CAMA/YMS, MAI and NWRA was undertaken to determine the current status of the meteorological, agrometeorological and hydrometeorological networks, monitoring methods, transmission of observations, data processing, data archiving and delivery of services. Overall the CAMA/YMS network is in good shape for its primary mission to support civil aviation and there are very few issues with data transmission and communication. However, this network needs to be expanded to cover the entire country and to provide services to all sectors and the population. In contrast, the operational status of MAI and NWRA networks is much less clear in part because the overall irrigation and water management system is fragmented making it difficult for organizations to maintain central control over their networks, part of which are implemented by the regional development authorities. Many of the stations listed as operational by MAI and NWRA are in fact not reporting data and the status of the equipment is uncertain. 32 29. Providing warnings of flash floods and creating a high-resolution climatology of precipitation requires the introduction of technologies such as radar, which are now in routine use by many National Meteorological Services (NMSs). Support for one Doppler radar is proposed, which will require it to be located optimally to provide nowcasting support for extreme rainfall events in high-risk areas as well as support routine forecasting services covering populated areas. CAMA/YMS has identified Dhamar Meteorological Station as the intended site for the radar. Coverage of the entire country would require more radar and this should be considered in future programs. CAMA/YMS has initiated discussions with the National Meteorological Services of Oman and Saudi Arabia to share and exchange radar data, effectively increasing the capacity of the Yemen national system. The radar specifications will be determined during the initial phase of the program in consultation with the General Consultant/Systems Integrator and other radar experts as required. In general, S band has the bigger range coverage both in reflectivity (460km) and velocity (230 km). The radar should be a complete, fully coherent, Doppler weather radar consisting of a transmitter, receiver, antenna and servo system, signal processor, radar monitoring system, product generation and display system, power system and accessories. The system should integrate into the existing CAMA/YMS forecasting and warning system. 30. Hydrologic applications are the main goal of the radars, thus specific robust and mature algorithms that have proven skills over complex terrain are needed. The radars algorithms should provide derived products for severe weather, automatic alert, rainfall accumulation for 1h, 3h, 24h. Detection and analysis of weak signals is necessary for outflows, boundaries and other structures in the layers near the surface and superior clutter suppression ability is needed for intensive rainfall episodes. High frequency stability is needed for detection of large rainstorms, cyclones and strong convective precipitation while also detecting the weak dispersion signals from low level wind shear and dry downbursts in clear air-mode is necessary for aviation purposes. 31. The radar should give the forecaster the possibility to adjust the volume coverage patterns to the current type of weather, to cover the observation volume effectively and overcome the range/ velocity ambiguity problems. It should ensure high data accuracy and reliability through the use of accurate on-line calibration, built-in test and monitoring functions, and data quality control algorithms. 32. Upper air measurements (vertical profiles of temperature, humidity and wind) are essential to initialize models at global scales and to support the forecasters analysis particularly for aviation operations. By providing upper air data on through the WMO GTS, global numerical weather prediction models on which CAMA/YMS depend for their operational forecasts will improve over the Southern Arabian Peninsula. 33. CAMA/YMS calibration facility is sufficient for its current needs, but will need to be expanded to include the capability to provide support to all of the meteorological and hydrological stations in the future CAMA/YMS, MAI, NWRA’s network of networks. Mobile facilities are required to calibrate sensors in the field to minimize disruption of the network. 34. CAMA/YMS is mandated to provide marine observations. The program will refurbish existing stations. 35. Subcomponent B.2 focuses on the modernization of the communication and ICT systems. CAMA/YMS systems are adequate for current needs; the upgrade will speed up data transfers enabling higher resolution products and more information to be available to forecasters. The system will also improve communication among CAMA/YMS, MAI NWRA and other partners including Civil Defense and regional development authorities. 36. The amount of data that will need to be ingested into the meteorological and hydrological operational chain together with the enhanced need for climatological information requires advanced 33 archiving and data base management. Data recovery from paper records is an essential first step to development of a complete database. Part of the database would be publically accessible, managed initially through the YMS with access through the MAI, NWRA and PCU. 37. Also required is an upgrade to the capacity to receive and use satellite data by all of the agencies involved. This will involve greater cooperation with the existing GIS units to maximize the use of satellite data in various applications – mapping, forecasting, analysis, etc. 38. Subcomponent B.3 establishes a pilot environmental monitoring network for air quality in the EPA. Taking into account the complexity of the issue and limited resources, the project will undertake a needs assessment, a preliminary evaluation of air quality, and design an air quality monitoring network for possible future investment. The pilot program will be undertaken to measure air quality at a limited number of stations located in urban centers. They will be equipped to measure PM10, SOx, NOx, Ozone, possibly black carbon, UV, and other parameters. 39. Component C. Enhancement of Service Delivery System (US$4.20 million, including contingencies): This component aims to enhance the delivery of services. This is a key program component that provides for the implementation of a systematic upgrade of the weather, climate and water-related end-to-end services provided to all agencies, communities and individuals (See below). Goods and consulting services will be procured under this component. There are four subcomponents: (i) Subcomponent C.1 – Enhancement of Public Weather Service for agriculture, water resources and irrigation, DRM, media, civil aviation, health, and renewable energy (US$1.35 million), which includes: (1.1) Upgrading CAMA/YMS forecaster workstations, hardware and software to integrate all available observations and numerical weather prediction products to increase efficiency in the preparation and delivery of weather forecasts and warnings; (1.2) Introducing specialized communication instruments, including TV, radio, SMS, Internet to improve the dissemination of forecasts and warnings in line with WMO recommendations; and (1.3) Enhancing the capability to assess the impact of forecasts and warning on end-users utilizing survey tools that provide capability to differentiate the impact of the forecast on by gender, age and other demographic indicators based on WMO guidelines41. (ii) Subcomponent C.2 – Support of Disaster Risk Management operations for all DRM stakeholders (US$1.10 million). Given the importance of flash floods to Yemen, a complete end-to-end pilot for two regions (Dhamar and Hadramout, in the range of 10-20,000 km2 each) is proposed. In this case end-to-end means an early warning system with the capacity to provide guidance, alert appropriate authorities and provide subsequent guidance to individuals and communities through various channels including for example NGOs, CBOs and CSOs which includes: (2.1) Developing Standard Operating Procedures, guidelines, warning protocols and signals developed together by CAMA/YMS, MAI, NWRA and Civil Defense and agreed with all stakeholders including communities; (2.2) Introducing forecaster workstations, communication systems and developing software for a multi hazard warning and information delivery system that connects all of the responsible agencies CAMA/YMS, MAI, NWRA, and Civil Defense, and includes implementation of the international standard WMO Flash Flood Forecasting Guidance System initially using global/regional forecast models and available in situ and satellite data - later to include a nowcasting component that utilizes the Doppler radar; and (2.3) Providing operational training and drills with government stakeholders and communities. 41 Information on the development and use of survey methods based on WMO guidelines can be found at http://www.wmo.int/pages/prog/amp/pwsp/surveys.htm 34 (iii) Subcomponent C.3 – Improvement of Service Delivery to Sectorial, communities and individuals differentiated by gender, age, and other demographic indicators (US$850,000), which includes: (3.1) Improving quality and utility of weather and climate information for water resources through NWRA and expanding the existing National Water Information System (NWIS); (3.2) Development of a prototype Agricultural Information Management System (AMIS) through MAI; and (3.3) Improving quality and utility of weather and climate information for public health and marine sectors through CAMA/YMS. (iv) Subcomponent C.4 – Creation of the National Climate Service within CAMA/YMS (US$900,000), which includes: (4.1) Introducing computer systems to access climate information from national sources, WMO and other regional centers; (4.2) Implementing a National Framework for Climate Services, as proposed in the WMO Global Framework for Climate Services (GFCS), and support to sectoral working groups, such as a Climate and Health Working Group or Climate and Agriculture Working Group, which would provide local training and knowledge transfer to e.g. communities, CSOs and CBOs; (4.3) Developing a digital library of climate-relevant information from all sectors for Yemen, including software to downscale climate forecasts; and (4.4) Translating and delivering climate information in a form that can be easily understood and utilized by end-users. Figure 1: Weather, Climate, and Water Services Data/Information Flow 40. Subcomponent C.1 upgrades and expands the CAMA/YMS Public Weather Service capabilities. The Public Weather Service (PWS), as defined by WMO, is the primary means by which a National Meteorological Service forecasts and communicates weather information and warnings to 35 the general public. The service should be permanent and available 24 hours a day, 7 days per week at full capacity each day of the year with enhanced capacity during emergency situations. This service should cover the entire country. During emergency situations, the PWS should ensure enough dedicated personnel to communicate with relevant authorities. The PWS is responsible for liaising with the public, media and weather, climate and water-sensitive sectors. It is the principal interface between the technical provider of products and the users. It should be responsible for the development and implementation of Standard Operating Procedures (SOPs) developed in partnership with authorities such as MAI, NWRA and Civil Defense as a part of service quality management. This ensures that warning information is consistent and applicable, permitting clear decisions and timely action. Information provided by CAMA/YMS should enable other sectors to issue their own specific watches and warnings for their own users (e.g., health warnings, transportation advisories, air quality alerts). The PWS produces, interprets and translates meteorological technical forecasts into socially and economically relevant and understandable information and provides this to all actors. An understanding of social and economic applications and benefits of weather, climate and water providers is needed to improve services. These stakeholders normally play an active role in the development and implementation of SOPs and decision-support systems in partnership with CAMA/YMS, with special attention to warnings and watches. 41. The operational system connects the forecasters with staff dedicated to interpreting the forecast in a form that is useful to users – a TV bulletin, information for pilots, information for farmers, and information for emergency managers. Usually this requires the addition of information – flood risk maps and demographic information in case of flash flood advisories to identify who is most at risk and where. This is then communicated to the responding agencies, which will be responsible for issuing flood alerts and evacuation notices. Here SOPs are essential to ensure that the information flows smoothly, especially if decisions must be made at highest levels of government before actions are taken. 42. The quality and utility of the forecasting services needs to be measured frequently. This is common and standard practice. Forecast verification is done using methods approved by the WMO. The utility of the services should be examined annually through surveys of users including the general public and target groups receiving special products. These surveys also follow standard WMO practices. WMO guidance may be sought in the development of survey tools that take into account different information requirements based on gender, education, exposure and other demographic information specific to Yemen. This is common practice elsewhere in both developing and developed countries. 43. Subcomponent C.2 focuses on developing end-to-end early warning systems for two regions. End-to-end implies the capability to both forecast and respond to a hazard. Since floods are the primary hydrometeorological hazard, the pilots will focus on flood early warning, especially flash floods. Forecasting flash floods is challenging because these floods occur within six hours or less of heavy rain events. They are typically associated with small fast responding basins and can occur in normally dry areas with no visible stream channel, including urban areas. WMO has for a number of years been involved in an initiative to improve flash flood warnings. The so-called WMO Flash Flood Guidance System uses a satellite-based hydro-estimator for rainfall. Weather and hydrological information are combined in real-time to give an indication which small river basin is in danger of flooding in the next 0-6 hours. The hydrologic system calculates the Flash Flood Guidance value for each small basin based on soil moisture and run-off modeling using the latest rainfall estimates. The meteorological system consists of forecasters who continuously monitor the weather, assess the Flash Flood Guidance and if needed adapt rain products, and produce warnings for the appropriate authorities. The system requires digital elevation makes to delineate small catchments of 200 Km2, 36 satellite based GIS information on vegetation, soil properties, land-use, and climate information on temperature and rainfall for evapotranspiration. Every six hours new soil moisture and Flash Flood Guidance is calculated using latest rainfall and temperature information. Mean Ariel precipitation is calculated from satellite information with biases in satellite rainfall estimates corrected using in situ gauges. This can be used to estimate how much rainfall over a specific time is needed in a small basin to initiate flooding on small streams. This requires a high degree of cooperation between CAM/YMS, NWRA and MAI to provide the data and calculate the hydrological and meteorological components of the systems. It essential that this information is integrated into the disaster management system to ensure access to the appropriate products. The service delivery component of the warning system should be integrated into the offices of the Civil Defense and other first responders such as local authorities. 44. Subcomponent C.3 builds on existing developments in information systems in MAI and NWRA to enhance their capacity to tailor data and products and provide weather, climate and water information services to their sectorial users. The improvement in timely access to quality assured agrometeorological and hydrological data will enable value-added products to be developed that meet the specific needs of the agencies and their stakeholders. For example, more reliable information of rainfall will improve the management of surface water essential for irrigation in Yemen. As the principal source of climate information, CAMA/YMS will play a key role in supporting all sectors that are climate sensitive and do not have their own climate specialists. For example, many diseases are sensitive to changes in temperature and humidity. Map of disease prevalence, exposed population, combined with climate outlooks can be used to identify seasonal and longer-term vulnerabilities to specific climate-sensitive diseases in partnership with the health sector. 45. Subcomponent C.4 expands the role of CAMA/YMS as the National Climate Service. A particularly important enhancement of the mission of any NMS is the addition of a dedicated climate service, which should be viewed as an equal to the traditional weather forecasting and hydrological service missions. A National Climate Service (NCS) transforms the traditional climatological role of an NMS, which focuses on the collection and mapping of meteorological data to a full user-oriented service, which can be provided as an integral part of the services delivered by the NMS. It will require computers to access climate information from global and region centers. It will also provide training in the use of climate information for users, which should be identified within the context of a National Framework for Climate Services (NFCS), which would be a component of the WMO led Global Framework for Climate Services (GFCS), to ensure capacity building within, and broad stakeholder engagement from, all climate-sensitive sectors. 46. Climate information is needed for planning and construction of buildings and facilities, and for the assessment of the impact of climate variations and change on the Yemen economy and to provide a sound scientific basis for adaptation. The NCS will be responsible for developing a digital library of climate-relevant information from all sectors for Yemen, including software development to downscale climate forecasts. The new in situ observations, combined with satellite data, can within the lifetime of the project establish a comprehensive, spatially coherent climatological database for the entire country42. This database would be a foundation to increase awareness and improve decision making with a longer vision of adaptability by enabling assessments of the most vulnerable areas in the country. 47. Climate change risk reduction is a priority for development and therefore particularly important in developing and transitional economies. This requires adequate monitoring and dissemination 42 The methodology is outlined in the following article: Dinku, T, K. Asefa, K. Hilemariam, D. Grimes and S. Connor, 2011 Improving availability, access and use of climate information. WMO Bulletin, 60(2) 37 programs at the national level to assess risks, and the institutional capacity to develop the national capability to transform climate data, which will enable the government to include climate information in economic development programs. In general, the NCS function of the NMS should include key users, who have responsibility for the application of climate information within their specific sector. This will help to establish the appropriate roles and responsibilities of the NMS versus other organizations that have responsibility for climate change policy. As in other countries, climate change policy-makers should rely on the NMS for the provision of climate data and information relevant to their decisions. The NCS would have primary responsibility for services to climate-sensitive sectors, although both weather and climate information are required by most. These sectors include development, finance, energy, water resource management, agriculture, urban planning and health, amongst others. Many of these sectors overlap and interact. For example, public health includes food security, access to clean water and sanitation – each dependent on the climate and weather extremes. The NCS will organize frequent stakeholder meetings to determine user requirements for climate information. It would also be linked to the knowledge sharing subcomponent of Component D through the establishment of sector specific Working Groups43 that would be charged with the responsibility for the engaging communities to identify requirements for climate information and provide the means for knowledge transfer to communities and other users. 48. Component D: PPCR Program Management and Knowledge Sharing (US$3.60 million, including contingencies). This component will carry out the oversight of the PPCR implementation, including synthesizing the main results achieved by the investments under the SPCR44, monitoring gender sensitive approaches to project implementation, knowledge management, information sharing, public education and outreach activities geared towards improving information access and awareness rising of the challenges caused by climate change. It will support the purchase of equipment, software, and technologies and will provide consultancy services to support investment and incremental operational costs of program management including that of consulting staff and training housed in the PPCR-PCU established in the EPA. There are three subcomponents mostly based on provision of consulting services: 49. Subcomponent D.1 (US$950,000) supports the oversight of the PPCR implementation. This would be led by EPA, which already maintains a PCU for Phase I of the PPCR (P118304) and provides overall guidance for the PPCR implementation. It will support consolidating main results achieved by the PPCR activities for presentation to the Technical Committee of the IMCCC, the IMCCC and to inform decision making, carry out M&E, monitor gender sensitive approach to implementation of all of the PPCR investments and ensure the effective integration of information from each of the investments into a coherent database that would underpin the capability of each of the investment to share knowledge (Subcomponent D.3 of this project). The PPCR-PCU would be strengthened by the recruitment of an IT Specialist, PR specialist and an M&E Specialist. The sub- component will also develop analytical notes summarizing the implementation issues and the lessons learnt in implementation of the PPCR Program. 50. Subcomponent D.2 (US$950,000) supports the management of PPCR investment I. The capacity of the existing PPCR-PCU is not sufficient to handle new procurement activities for 43 An example of an effective working group in Ethiopia can be found in Ghebreyesus, T.A., Z. Tadese, D. Jima, E. Bekele, A. Mihretie, Y.Y. Yihdego, T. Dinku, S.J. Connor and D.P. Rogers, 2008: Public Health and Weather Services – Climate Information for the Health Sector. WMO Bulletin 57(4) 44 The Yemen PPCR investments are: I) Climate Information System and PPCR Program Coordination (this Project); II) Pilot Scheme to Improve the Resilience of Rural Communities to Climate Change in Yemen (IRRCCC); and III) Climate- Resilient Integrated Coastal Zone Management. 38 Investment I. The PPCR-PCU would be strengthened with the recruitment of a PCU Director to manage this project and oversee Phase I. The Project Manager of Phase I will remain until Phase 1 project completion in 2014. A Procurement Manager would be recruited while the existing Financial Manager of the Phase I is retained. An Accountant and a Procurement Assistant would assist them. The PPCR-PCU would also be strengthened by the recruitment of a part-time Environmental Advisor, a part-time Social Advisor, and a part-time Gender Specialist. In line with the Government’s efforts to increase female participation in the specialist workforce, the PPCR-PCU would aim to hire a minimum of 30% women for these positions. In addition, the PPCR-PCU will be supported by a minimum of 2 female specialists seconded from the participating organizations to receive specialized training. The PCU would report to the IC. 51. Subcomponent D.3 (US$1.70 million) focuses on knowledge sharing across all of the Yemen PPCR investments to increase public awareness of climate variability and change and its impact on day-to-day activities in Yemen. A climate database management system will be developed with procedures implemented to ensure open access to climate information by all users. The EPA, with the support of the IC, would lead this subcomponent. Public education and outreach activities and materials will be developed and used to increase the knowledge and capacity of communities which need to take preparatory action to mitigate adverse consequences of the climate and hydrometeorological hazards – improving community response to flood warnings, improving management of surface water resources, improving food security, improving health outcomes, improving climate-resilient coastal zone management, and improving rural livelihoods. Knowledge sharing will utilize various forms of communication, mobile, Internet, radio, and community outreach. These activities will be closely aligned with the climate services activities described in Component C and with the knowledge sharing activities of each of the other Yemen PPCR investments. A set of publications, booklets, visual materials and other media products will be developed and tailored for different groups of population for broader dissemination of knowledge products on weather and climate risks and potential mitigation approaches. 39 Annex 3: Implementation Arrangements Yemen, Republic: Climate Information System and PPCR Coordination (P132116) Project Institutional and Implementation Arrangements Project administration mechanisms 1. The EPA is the Government of Yemen (GOY)’s agency responsible for implementing Climate Information System and PPCR Coordination Project (PPCR-Investment I) with the support of: (i) the strengthened PPCR-PCU already established under PPCR Phase I, responsible for all fiduciary management of the project; and (ii) CAMA/YMS, in close cooperation with MAI and NWRA and assisted by the General Consultant/Integrator, responsible for technical implementation of Components A, B and C. A Memorandum of Understanding (MOU) on cooperation and data exchange between CAMA/YMS, MAI and NWRA was signed by MAI, MOT and MWE on January 28, 2013. 2. Project Oversight. Oversight of the project would be entrusted to the Inter-Ministerial Committee for Climate Change (IMCCC), which is chaired by the Minister of Planning and International Cooperation (MOPIC), and comprised of Ministers all of line-ministries. The IMCCC is assisted by a Technical Secretariat, which is supported by the EPA and by a Technical Committee (TC), which is as an advisory body to the IMCCC. An Implementation Committee (IC) has been established, comprised of the Project Partners – CAMA/YMS, MAI, and NWRA, and the MOPIC and MOF and ex officio the PPCR-PCU Director, to execute the Project. 3. The IMCCC will meet at least twice a year. The meeting will be chaired by the Minister of Planning and International Cooperation, and will be responsible for: (i) reviewing and approving the annual updated implementation plans; (ii) monitoring progress under the project; and (iii) advising on resolution of major implementation issues arising during project implementation. 4. At the national level, the IC would be responsible for supervising and monitoring the execution of all project activities. The detailed functions of IMCCC, IC, CAMA/YMS, EPA, MAI, NWRA are elaborated in the Project Operating Manual. The IMCCC would delegate the responsibility for supervising and monitoring the execution of all project activities to IC and for implementation, coordination and fiduciary management of the Project to the PPCR-PCU. 5. Project Coordination and management. The PPCR-PCU would be responsible for the overall project coordination, implementation of project activities and fiduciary management thus would be significantly strengthened as follows: (a) a PCU Director would be recruited to manage Investment I and oversee Phase I. The PCU Director would report to the IC. The Project Manager of Phase I would be maintained until the closing of Phase I in 2014. A Procurement Manager would be recruited under the project, while the Financial Manager will be retained from Phase 1. They will be assisted by an accountant and a procurement assistant. The PPCR-PCU would also be strengthened by the recruitment of an M&E Specialist, an IT Specialist, a part-time Environmental Advisor, a part-time Social Advisor and a part-time Gender Specialist. To support the Government’s efforts to increase the participation of women in the specialist workforce, the aim would be to recruit women for a minimum of 30% of the above outlined positions. In addition the PPCR-PCU will be supported by a minimum of 2 female specialists seconded by the participation entities; reference is made to the “Gender Smart Management Framework” outlined below. Operating cost for the PPCR-PCU will be provided by the Government in the amount of US$100,000 to US$155,000 annually based on clear plans and reasonable costs, and will include rent and maintenance for the office of the PCU, incentives for local staff, transportation cost for local staff, Implementation Committee Secretary, administrative costs, fuel for the generator, incentives for the two female seconded specialists, travel and per diem to 40 support the meetings of the Implementation Committee and other relevant costs, which are not financed by the grant. 6. Gender Smart Management Framework. While respecting the cultural setting, the PPCR- PCU will be staffed by 2 female specialists seconded by the participating entities allowing for hands-on specialist training. TORs of the PPCR-PCU Director will be enhanced by making specific reference to ensure that a thorough inclusion of female colleagues as well as ensuring targeted training aimed at female colleagues are carried out. 7. Fiduciary Responsibility of the PPCR-PCU. The PPCR-PCU will facilitate the implementation of project activities through financial management (FM), procurement of goods and services with the technical assistance of the General Consultant/Integrator and in accordance with IDA regulations and procedures elaborated in the POM. The PPCR-PCU has acquired some experience in the implementation and supervision of IDA-financed projects through the management of PPCR Phase I. However the scope and complexity of PPCR Investment I require the current staffing of the PPCR- PCU be significantly augmented as described above. The PPCR-PCU will: (i) monitor outcome and output indicators; (ii) support the IC and the individual implementing agencies CAMA/YMS, EPA, MAI and NWRA in executing the Implementation Plan; (iii) ensure compliance with the signed MOU; (iv) resolve implementation issues; (v) prepare and submit bi-annual progress reports to the IMCCC and the Bank, including the baseline and values of specific implementation indicators by component; and (vi) submit quarterly Interim Financial Reports and the annual Audit Reports to the Bank in a timely manner. Figure 1: Overall SPCR Management Structure 41 Figure 2: Set-Up of PPCR-PCU 8. Reporting. The PPCR- PCU will be responsible for submission of regular bi-annual progress reports and the required audit reports to the World Bank in a timely manner. The PPCR-PCU will fully participate in the joint implementation support missions and will communicate with IDA on all implementation matters. 9. Responsibility of the CAMA/YMS. In addition to membership in the IC, CAMA/YMS will be responsible for the technical implementation of Components A, B, and C, in close coordination with EPA, MAI and NWRA and with the assistance of the General Consultant/Integrator. More specifically, CAMA/YMS will be in charge of: (i) preparing the main tasks/TORs for and controlling performance of the General Consultant/Integrator; (ii) preparing with support of the General Consultant/Integrator, and in consultation with EPA, MAI and NWRA detailed technical specifications and bidding documents for equipment procured under components A, B and C of the Project; (iii) jointly with General Consultant/Integrator, providing guidance on installation, operation and maintenance of the equipment; (iv) developing new information formats and products for analyzing weather and climate information; (v) maintaining a publically accessible climate database; and (v) strengthening partnerships with end-users to ensure the uptake of new weather, climate and water services. 10. General Consultant/Systems Integrator reporting. The Integrator will submit its implementation and monitoring reports to the CAMA/YMS and the PPCR/PCU as agreed in its contract. The recruitment of the Integrator has already started with the preparation of draft TORs to allow the selection process to be carried out on time to sign the contract right after project effectiveness. 11. Project Operating Manual. All eligible activities included in PPCR Investment I will be implemented according to the overall Project Operating Manual (POM) approved by the GOY and deemed acceptable to the Bank. The POM describes decision making processes, roles and responsibilities of implementing organizations and PCU staff, detailed administrative, procurement, financial management and disbursement aspects of the project, safeguards arrangements, reporting and evaluation procedures. The POM also includes the terms of reference for PCU staff. 42 Financial Management, Disbursements, and Procurement Financial Management 12. An assessment of the FM arrangements for the proposed Project was undertaken in November 2012 to assess the capacity of the implementing entities of the project and assist in determining the required FM arrangements for the implementation of the project. A detailed FM assessment was conducted at Project Appraisal. The financial management unit in the PPCR-PCU is staffed with a qualified and experienced financial manager whose salary is financed by PPCR Phase I. This arrangement will be strengthened by recruiting an Accountant while the Financial Manager will continue at the PCU and to be financed by the PPCR – Investment I after the closing of Phase I. 13. The option of using country systems, i.e., EPA45 systems to implement the fiduciary arrangements of the proposed project has been considered and due to current weaknesses in the financial management system, the country system requires further enhancements in order to be fully reliable for Bank-financed projects. The ongoing Bank-financed Public Finance Modernization Project is building the capacity of the Government to be able to carry out the fiduciary functions in the future. There are remaining challenges for the country’s fiduciary system such as low civil servant salaries which do not provide sufficient incentives for the civil servants working on donor-funded projects. In connection with the efforts to develop the country systems, the proposed project will continue building the FM capacity of EPA, which has been started in Phase I of the PPCR and will keep its accountants involved in the project’s management of the financial transactions to receive both on job training and formal training. 14. The PPCR-PCU will manage all financial management and disbursement aspects of the proposed project’s activities (e.g., accounting recording and reporting through the use of an automated accounting system, maintaining adequate internal control procedures based on an acceptable FM manual of procedures, and management of the disbursement process including administration of the Designated Account and Grant disbursements for all activities). Operation and Maintenance costs of the existing hydromet equipment operated by MAI, NWRA and CAMA/YMS, and for new equipment procured under the project would be allocated by the GOY to finance such expenditures though yearly recurrent budget to the respective agencies based on disbursement plans and detailed work programs prepared by CAMA/YMS, NWRA, MAI and EPA. It was discussed with MOF that timely budget requests are the responsibility of the agencies and should be based on detailed inventory of equipment and list of staff assigned to their operation. 15. The PPCR-PCU has acceptable automated accounting system following cash basis accounting and capable of adding new projects whereas the proposed Project has been added to record/report on all financial transactions. The system is also capable of generating required reports such as the quarterly IFRs and annual financial statements. The IFRs generated from the system report the sources, uses of funds by category and activity, cash withdrawal, cash forecasts for the following two quarters, and Designated Account Statements. The IFR for the PPCR – Investment I is already prepared. 16. The PPCR-PCU has a Financial Management (FM) Manual for the PPCR Phase I and it has been revised to reflect the complexity of the PPCR – Investment I. The FM manual, as an integrated part of the Project Operatiing Manual, includes the FM procedures that will be followed during the project implementation and agreed by all agencies involved in the Project implementation, cooperation and coordination (e.g. agree on procedures to accept services, goods, etc.). The FM manual documents an adequate internal controls system and covers the following aspects: (i) flow of funds; (ii) financial and accounting policies; (iii) accounting system and internal control mechanisms; (iv) Chart of 45 EPA: Environment Protection Authority 43 Accounts; (v) financial reporting; (vi) auditing arrangements; (vii) budgeting; and (viii) organization and staffing for financial management functions. The FM manual will be periodically updated and improved based on implementation experience. 17. The PPCR-PCU will maintain an acceptable fixed assets register for the assets financed by IDA. Reconciliation of assets registries and actual locations/usage of these assets will be conducted annually including spot checks, and accordingly an annual report is issued that provides the assets from various sources of financing. This will be subject to the external auditor’s verification. The fixed assets registries will be enhanced by ensuring that all the fixed assets of the project are permanently branded (tagged) and all related data of the assets are updated in the registries. This will be done within 2 months from project effectiveness. Financial Reporting 18. In line with the IDA guidelines, the following reports will be required under this project: (i) Quarterly: In the proposed project, the PPCR-PCU will be required to generate quarterly Interim Financial Reports (IFRs), to be reviewed by the External Auditor, and will submit these IFRs to IDA as part of the progress report or separately. The PPCR-PCU will reflect in the IFR the statement of sources and uses of funds by category of expenditure; statement of uses of funds by component, indicating funds received, quarterly cash forecast, an expenditure report comparing actual and planned expenditures by activity, and DA’s reconciliation statement. These reports will be generated through the accounting system and should be remitted to IDA within 45 days from the end of the quarter. (ii) Annually: The proposed Project Financial Statements (PFS) will be prepared annually following the cash basis of accounting with disclosure of the unpaid commitments at the report date, and will be subject to external audit and the audited PFS will be submitted to the Bank within six months from year-end. The PFS will include: (i) statement of sources and uses of funds, indicating sources of funds received and project expenditures by category of expenditure; (ii) appropriate schedules classifying project expenditures by component, showing yearly and cumulative balances; (iii) Designated Accounts (DA) reconciliation statement reconciling opening and year-end balances; (iii) Monthly Commitment Tracking Sheet: The PPCR-PCU will be required to prepare and submit to IDA on monthly basis the statements of project’s commitments that will consist of the following: contracts listing that will include listing of all contracts showing amounts committed and disbursed under each category as of date of the report. Auditing 19. The proposed project’s financial statements will be audited annually by an independent private sector external auditor, who will also review the IFRs quarterly. The external auditor should be acceptable to the Bank and Central Organisation for Controlling and Auditing (COCA); and the TOR will be prepared and submitted for the Bank’s no objection at the beginning of the proposed project. The external auditor report (in English and Arabic) shall encompass all the project components and activities under the Financing Agreement and shall be in accordance with internationally accepted auditing standards, e.g., International Standards on Auditing (ISA). The audit report and opinion will cover the proposed project’s financial statements, reconciliation and use of the DA, and use of direct payments. In addition, the auditor is required to prepare a “management letter” identifying any observations, comments and deficiencies in the system and controls that the auditor considers pertinent, and shall provide recommendations for their improvements. 44 Flow of Funds 20. The proceeds of the Grant would be disbursed in accordance with the traditional disbursement procedures of the Bank and will be used to finance project activities through the disbursement procedures currently used: i.e. Direct Payment, Advances, Reimbursement and Special Commitment. Replenishment and Reimbursement Withdrawal Applications will be accompanied by Statement of Expenditures (SOEs) in accordance with the procedures described in the Disbursement Letter and the Bank's "Disbursement Guidelines". Interim Unaudited Financial Reports and Annual Financial Statements will be used as a financial reporting mechanism and not for disbursement purposes. The minimum application size for direct payment and reimbursement will be the equivalent of 20% of the Advance ceiling amount. The Bank will honor eligible expenditures completed, services rendered and delivered by the Project closing date. A four months' grace period will be granted to allow for the payment of any eligible expenditure incurred before the Grant Closing Date. 21. The following table specifies the categories of eligible expenditures that will be financed out of the Grant proceeds: Please refer to Schedule 2 - Section IV of the Grant Agreement. Category Amount of the Grant Percentage of Expenditures to be Allocated (expressed in USD) Financed (inclusive of Taxes) (1) Consultants’ services and 100% Training under Part A. of the Project 3,450,000 (2) Goods, works, non-consulting 100% services, and consultants’ services 7,750,000 under Part B. of the Project (3) Goods, non-consulting services, 100% consultants’ services and Training 4,200,000 under Part C of the Project (4) Goods consultants’ services, 100% Training and Operating Costs under 3,600,000 Part D. of the Project TOTAL AMOUNT 19,000,000 Statement of expenditures (SOE) 22. During implementation, necessary supporting documents will be sent to the Bank in connection with contract that are above the prior review threshold, except for expenditures under Contracts with an estimated value of: (a) US$500,000 or less for works and goods (b) US$100,000 or less for Consulting Firms; (c) US$50,000 or less for Individual Consultants, training, and operating costs which will be claimed on the basis of SOEs. The documentation supporting expenditures will be retained at Project Coordination Unit and will be readily accessible for review by the external auditors and periods of Bank supervision missions. 23. Designated account (DA). PPCR-PCU will open a segregated Designated Account at the Central Bank of Yemen (CBY) in US Dollars to cover Grant' shares of eligible project expenditures. The Ceiling of the Designated Accounts would be US$2,000,000. PPCR-PCU will be responsible for submitting monthly replenishment applications with appropriate supporting documentation. Authorized signatories, names, and corresponding specimens of their signatures will be submitted to the Bank prior to the receipt of the first Withdrawal Application. 24. Sub Account: The Project will also maintain a bank account in local currency (Yemen Riyals). Provided it is within the agreed ceiling. The advance to the sub-account will be reported by PPCR- PCU on a monthly basis, before additional transfers are made. The advance to the sub-account will be fully accounted prior to the Closing Date. The Recipient is responsible for bearing all risks associated 45 with foreign exchange fluctuations when making transfers from the Designated Account which is denominated in US Dollars to the sub-account denominated in Yemen Riyals. At the end of the Project, any unused balances in the sub-account should be deposited to the Designated Account, including any balance in Yemen Riyals. 25. e–Disbursement: The World Bank has introduced the e-Disbursement for all its supported projects. Under e-Disbursement, all transactions will be conducted and associated supporting documents scanned and transmitted on line through the Bank’s Client Connection system. The e- Disbursement will considerably speed up disbursements and facilitate project implementation. It is for mandatory application for all World Bank financed projects starting January, 2013. The e- Disbursement functionality would (i) expedite World Bank processing of disbursement requests; (i) prevent common mistakes in filling out Withdrawal Applications - WAs (Form 2380); and (iii) reduce the time and cost of sending paper WAs and supporting documentation to the Bank. The e- Disbursement would not require any changes to the Project current internal procedures and controls for preparing and submitting WAs. Charts A & B in Figure 3 below summarize the flow of funds from IDA to the Designated Account then to the sub-account at CBY. 46 Figure 3: Flow of funds Governance 26. Weak governance may affect the proposed project resources. The above fiduciary arrangements including ring-fencing combined with the strengthening of the capacity of the EPA’s financial management and tailored external audit arrangements are designed to mitigate these risks. The mitigating measures are designed to address the different risks associated with the nature of the components. For example, eligible activities under the project, such has subcomponent A.2 include training program and workshop for capacity building. These activities will be implemented according to the respective Project Operating Manual including the FM manual which will be developed under PPCR – Investment I. In addition, the PPCR-PCU will contract with an independent external auditor with a TOR acceptable to the Bank. The TOR will include an expanded scope to audit the compliance of the internal controls process associated with these activities. For subcomponent B.1, which includes installing up to three upper air stations measuring profiles of temperature, humidity and wind speed and direction including a) equipment and b) works, a Third Party Monitoring Agent (TPMA) will be used to supervise on-site monitoring of infrastructure works, delivery of goods and services and 47 reconcile the physical inspections with the financial reports. The team will identify the needs of TPMA during appraisal and request support accordingly if foreseen to be required during project implementation. Bank Supervision 27. The financial management of the proposed project will be supervised by the Bank in conjunction with its overall supervision of the proposed project and missions will be conducted at least twice a year. FM Action Plan 28. The following FM action plan was agreed upon with the Recipient: No. Action Completed by date Responsibility The accounting software to be prepared for the proposed project 1 Done PPCR-PCU and a draft of the IFR to be submitted to IDA by negotiations. An acceptable internal controls system based on documented 2 Done PPCR-PCU procedures will be for the PPCR Investment I The FM staffing will be strengthened through recruiting an 2 months from 3 PPCR-PCU accountant financed by the Grant of PPCR – Investment I effectiveness The PPCR-PCU will introduce a fixed assets system utilizing tag 2 months from 4 PPCR-PCU numbers for all assets. effectiveness Procurement 29. The PCU will be responsible for overall administrative work concerning procurement process. EPA PPCR-PCU will be responsible for consultant TORs and technical specifications for equipment for component D. CAMA /YMS, in coordination with NWRA, MAI, and EPA, will be responsible for the preparation of detailed technical specifications for equipment, detailed design for works, preparation of consultant TORs for Component A, B, and C with the support of the General Consultant/Systems Integrator. CAMA/YMS will also participate in the bid evaluation for the meteorological equipment concerning and related works. EPA, supported by PPCR-PCU, would prepare a rolling annual procurement plan, showing the contracting to be undertaken during the project. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 30. Procurement activities under the project would be carried out in accordance with the “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 January 2011 (“Anti-Corruption Guidelines”). Procurement of goods, works and non-consultant services would be carried out in accordance with the IDA’s “Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011, consultant firms and individuals will be selected in accordance with the IDA’s “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers” dated January 2011,and the provisions stipulated in the Legal Agreement. For each contract being financed by the Grant, the different procurement or consultant selection methods, estimated costs, time frames, and prior review requirements, were agreed between the Recipient and IDA and included in the Procurement Plan. The Procurement Plan (dated June 10, 2013) will be updated at least annually or as required to reflect the actual implementation needs and improvements in institutional capacity. 31. Procurement of Works and Goods: Works contracts under the project would be limited small infrastructure in Dhamar to support the Doppler radar. Small works activities valued at less than 10% 48 of the cost of equipment would be included in the goods contracts. Goods would include but will not be limited to: provision and installation of hydrometeorological stations, information and telecommunication equipment, Doppler radar, calibration equipment, office technology and software under multiple contracts with total estimated cost US$11,280,000. All goods and works under the four components of the project will be procured using the Bank’s Standard Bidding Documents (SBD) for all ICB, and NCB agreed with and or satisfactory to the Bank. Goods contracts valued above US$500,000 equivalent and works contracts valued above US$5,000,000 would be awarded through ICB procedures. Goods estimated to cost less than US$500,000 and works contracts estimated to cost less than US$5,000,000 equivalent may be awarded following NCB procedures. Goods and works contracts valued below the equivalent of US$50,000 and US$150,000 respectively may be procured through shopping procedures by soliciting at least three responsive quotations. All goods contracts valued above US$500,000 equivalent and works contracts valued above US$5,000,000 equivalent would be subject to prior review and approval by IDA. The following methods direct contracting may also be used for procurement of goods and works for those packages which are specified in the Procurement Plan and which the Bank agrees meet the requirements set forth in Procurement Guidelines for their use. 32. For works, goods and non- consultancy services contracts below the threshold for international procurement, financed by the World Bank, national competitive bidding (NCB) method shall use the procedures set forth in Law No. 23 of 2007, concerning government tenders, auctions and stores, and related regulations, subject to the following additional provisions: (1) a Recipient-owned enterprise in the Republic of Yemen shall be eligible to bid only if it can establish that it is legally and financially autonomous, operates under commercial law, and is not a dependent agency of the Recipient; (2) bidding (or pre-qualification, if required) shall not be restricted to any particular class of contractors or suppliers, and non-registered contractors and suppliers shall also be eligible to participate; (3) the modified national standard bidding documents approved by the Association shall be used; (4) registration shall not be used to assess bidders’ qualifications; qualification criteria (in case pre-qualification was not carried out) and the method of evaluating the qualification of each bidder shall be stated in the bidding documents, and before contract award the bidder having submitted the lowest evaluated responsive bid shall be subject to post-qualification; (5) a foreign bidder shall not be required to register or to appoint an agent as a condition for submitting its bid and, if determined to be the lowest evaluated responsive bidder, shall be given reasonable opportunity to register, without let or hindrance; the registration process shall not be applicable to sub-contractors; (6) no bidder shall be requested or permitted to modify its bid after the bid closing date shall have elapsed and bids submitted after the deadline for submission of bids shall be returned to the bidder unopened; (7) post-bidding negotiations with the lowest or any other bidder shall not be permitted; (8) under exceptional circumstances, the procuring entity may, before the expiration of bid validity, request all bidders in writing to extend the validity of their bids, in which case bidders shall not be requested nor permitted to amend the price or any other condition of their bids; a bidder shall have the right to refuse to grant such an extension without 49 forfeiting its bid security, but any bidder granting such extension shall be required to provide a corresponding extension of its bid security; (9) price adjustment provisions may be included in contracts for works with a duration of more than eighteen (18) months; (10) rejection of all bids is justified when there is lack of effective competition, or bids are not substantially responsive, however, lack of competition shall not be determined solely on the basis of the number of bidders; and (11) each contract financed from the proceeds of the Grant shall provide that the contractor or supplier shall permit the Association, at its request, to inspect their accounts and records relating to the performance of the contract and to have such accounts and records audited by auditors appointed by the Association. 33. Selection of Consultants: consultancy services procured under this project would be provided by firms and individuals, and include, but not limited to the following: 1) selection of consulting services (general consulting services/Integrator for detailed technical design, preparation of bidding documents, procurement assistance, supervision & quality assurance, training support) for hydrometeorological, agrometeorological equipment, Doppler radar, telecommunication equipment, 2) selection of universities to implement part of the training program designed by the General Consultant/Systems Integrator; and 3) selection of consultants for strengthening PPCR/PCU. WMO Regional Centers will implement part of the training program under Sole Source contracting procedures in accordance with clause 3.9 of consultant guidelines. 34. Consultant firms and individuals will be selected in accordance with IDA Guidelines for selection and Employment of Consultants (dated January 2011). For firms, all contracts above US$300,000 would be procured using Quality and Cost Based Selection method (QCBS). Least Cost- Based Selection (LCS), Single source selection (SSS) and selection based on consultant qualification (QBS) procedures would be used for small contracts of standard or routine nature estimated to cost less than US$300,000 or equivalent. Shortlist of consulting firms for services estimated to cost less than US$300,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. All individual consulting assignments would be selected on the basis of comparison of CVs in accordance with Section V of the Guidelines for Selection of Consultants. Training activities 35. Training activities would include but will not be limited to workshops, study tours, professional training, and approved training courses in institution such as universities and colleges. Each request for Bank approval for training will include a clear proposal, staff names and position, and explanation of the relevance of the requested training. Goods and Works and Non- consultancy 36. Prior Review Threshold: Procurement decisions subject to prior review by the Bank as stated in Appendix 1 to the Procurement Guidelines will be determined by the Procurement Specialist /Procurement Accredited Staff based on the assessment of the implementing agency’s capacity. 37. Thresholds for applicable procurement methods (not limited to the list below) 50 Procurement Contract Value Prior Review US$ Method Threshold 1. ICB and LIB >= 500,000 and first contract irrespective of (Goods) > 500,000 US$ value 2. NCB (Goods) < 500,000 US$ 3. Shopping (Goods) < 50,000 US$ 4. ICB (Works) > 5,000,000 US$ >= 5,000,000 and first contract irrespective 5. NCB (Works) < 5,000,000 US$ of value 6. Shopping (Works) < 150,000 US$ 7. Direct contract All Selection of consultants 38. Prior Review Threshold: Selection decisions subject to Prior Review by IDA as stated in Appendix 1 to the Guidelines: Selection and Employment of Consultants: Selection Method Prior Review Comment : Threshold 1. First two contracts will subject Consulting Firms (Competitive) >US$200,000 to prior review 2. Consulting Firms (Sole Source) All contracts 3. Individual Consultants First two contracts will subject (Competitive) > US$50,000 to prior review 4. Individual Consultants (Sole Source) All contacts 39. Short list comprising entirely of national consultants: Short list of consultants for services, estimated to cost less than US$300,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 40. Prequalification: Bidders for US$10,000,000 shall be prequalified in accordance with the provisions of paragraphs 2.9 and 2.10 of the Guidelines. 41. All procurement supervision is an important part of procurement arrangements and is likely to be limited due to the security situation in Yemen. Alternative arrangements may become necessary, possibly through a third party review and/or procurement audit if the Yemen situation does not improve during implementation of this project. Procurement Plan 42. The World Bank prior review thresholds and the procurement methods for each category are specified in the procurement plan. The procurement plan was prepared by the PPCR-PCU and finalized and agreed during appraisal. 43. A procurement plan for the first 18 months of the project was prepared. 44. Summary of the planned procurement packages for the first 18 months after project effectiveness: 51 Ref Description Estimated Procurement Review by Comments cost US$ method Bank(prior/post) 1. Summary of the ICB 10,140,000 ICB Prior All contracts (Goods) packages (multiple contracts) 2. Summary of the NCB 560, 000 NCB Prior All contract (Works) packages (multiple contracts) 3. Summary of the Local 35,000 NS Post First two Shopping (Goods) contracts will packages ( multiple be prior contracts) reviewed 4. Summary of the 2,350, 000 QCBS Prior consultancy services (single design and supervision contracts) 5. Summary of consultancy 1,250,000 CQS Prior first two services (multiple contract will training program design be prior and implementation) reviewed 6. Summary of consultancy 795,000 IC Post Prior review services IC ( multiple for the first contracts) two contracts Procurement capacity assessment 45. A preliminary review of the procurement capacity of the existing PPCR-PCU in the EPA identified that the existing PPCR-PCU is staffed by a PCU manager, a financial manager, a part-time IT specialist and a procurement officer. This procurement arrangement is not sufficient to handle new procurement activities for Investment I and the PPCR-PCU in its current staffing capacity would not be able to handle additional activities for Investment I. 46. In terms of the procurement risk assessment, the risk is considered ‘High’ and the following key actions are proposed. 47. Key Action Proposed: a. Staffing - the existing PPCR-PCU in the EPA should be strengthened with a Procurement Manager, Procurement Assistant and Accountant which will be responsible for handling all procurement activities under Investment I. b. Preparation of Procurement Manual – a manual should be prepared and should include agreed upon procurement arrangements, methods, reviews by IDA, record keeping, complaint handling, dispute resolution, information disclosure, etc., as envisaged in IDA Guidelines. The manual – which is a part of the Project Operating Manual - should be approved by the GOY and deemed acceptable to the Bank prior to the project effectiveness. c. Post Review & Procurement Supervision - IDA will undertake post procurement reviews once a year for no less than 20% of the contracts. The Project will be supervised twice a year from the field by IDA. 52 Environmental and Social (including safeguards) 48. An Environmental and Social Management Plan (ESMP) and site selection criteria was prepared along with the project preparation. Based on the findings during preparation, appropriate measures and monitoring procedure were developed in the ESMP. A part-time Environmental Advisor and a part-time Social Advisor will be hired to supervise the implementation of the ESMP and they will be responsible for ensuring the compliance of the ESMP and summarizing the implementation status to be included in the regular progress report. Monitoring & Evaluation 49. The project Results Framework in Annex 1 will be used for monitoring and evaluation of the project. The PDO indicators are monitored through Government official data and intermediate outcome indicators are measured through the PPCR-PCU progress reports. 50. The PPCR-PCU will submit the progress reports to the Bank when requested and will ensure that a technical summary of these reports will be included in its bi-annual implementation progress reports to the IMCCC and Bank. 53 Annex 4: Operational Risk Assessment Framework (ORAF) Yemen, Republic: Climate Information System and PPCR Coordination (P132116) . . Project Stakeholder Risks Stakeholder Risk Rating Substantial Description: Risk Management: Maintain the strong communication channel and involvement of all the stakeholders Since climate resilience is multi sectoral by nature, failing which has been developed during the consultation process for the preparation of the to involve appropriate stakeholders could affect the results Strategic Program for Climate Resilience (SPCR). Consequently, the project of the project. Lack of communication and sharing of interventions, both at preparation and implementation stages, will be continued to be information amongst the stakeholders were raised as discussed with stakeholders to incorporate their feedback, including NGOs, CBOs and issues during identification mission. Although the team CSOs. Furthermore, a PPCR webpage has been established during Phase I of the PPCR has no specific reason to think that the project would lead [P122687] which will be maintained as an outreach mechanism. In addition outreach to any adverse reaction from any stakeholders, there may and awareness rising are a key element of Component D of the project and will take be two potential risks: (i) commitment of stakeholders and place during implementation to ensure effectiveness of project interventions and their willingness to share information; and (ii) limited sustainability. outreach to various stakeholders. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Both Yearly Risk Management: EPA has an agreement with the local media to cover all the upcoming progress related to the PPCR. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client Completed Both 31-Jan-2013 Risk Management: A Memorandum of Understanding (MoU) between EPA, CAMA/YMS, MAI and the Ministry of Planning and International Cooperation (MOPIC) was signed to ensure equal data access and flow of information. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client Completed Implementation 31-Jan-2013 54 Risk Management: Team will continue consultations on PDOs, indicators and design during preparation. Strong training and capacity building of users and service providers of the hydromet system will take place during implementation to ensure effectiveness of project interventions and sustainability of service delivery (Component A). Resp: Status: Stage: Recurrent: Due Date: Frequency: Client Not Yet Due Both 31-Aug-2018 Implementing Agency (IA) Risks (including Fiduciary Risks) Capacity Rating High Description: Risk Management: Bank staff in Washington DC and in the Country Office will support, besides planning a The project should be implemented under the leadership suitable number of missions adequately spread over the project lifetime. If needed, a of the Environment Protection Authority (EPA), which training plan could be put in place for the design of appropriate fiduciary support already maintains a Project Coordination Unit (PPCR- systems/training for M&E. PCU) for Phase I of the PPCR, and provides overall guidance for the PPCR implementation. EPA will have the Resp: Status: Stage: Recurrent: Due Date: Frequency: overall responsibility for the project implementation Bank In Progress Both Yearly including, reporting, monitoring and evaluation, procurement control, financial management, audit and Risk Management: disbursements, compliance with the environmental and Expedite implementation of PPCR Phase I to promote capacity building and develop social management plan, as well as coordination with the synergies. World Bank. There is a risk of slow disbursement and implementation due to the capacity of the PPCR-PCU. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Preparation 30-Jun-2014 Components A, B and C are about the design and implementation of a comprehensive, integrated national Risk Management: meteorological system. CAMA/YMS in coordination with Risk Management (FM): NWRA, MAI, and EPA, will be responsible for the The EPA has an established Project Coordination Unit (PCU), including an experienced preparation of detailed technical specifications for financial management staff and will be strengthened by recruiting an accountant while equipment, detailed design for works, preparation of maintaining the FM Manager already in place for Phase 1. FM supervision will be consultant TORs for these Components. CAMA/YMA provided on an on-going basis through the World Bank’s field FM Specialist. The will also participate in the bid evaluation for the PPCR-PCU has an acceptable automated accounting system which follows cash basis meteorological equipment and related works while the accounting and capable of adding new projects whereas the proposed Project will be PCU will be responsible for overall administrative work added to record/report on all financial transactions, generating required reports such as concerning FM and procurement. the quarterly IFRs, and annual financial statements. The PPCR-PCU has an adequate 55 internal controls system based on an acceptable FM manual which defines the FM Procurement: PPCR-PCU capacity is quite weak and policies and procedures to be followed during project implementation. CAMA/YMS shall need support in preparing technical Resp: Status: Stage: Recurrent: Due Date: Frequency: specifications and TORs for Components A, B and C as per World Bank Guidelines. Bank In Progress Both 31-Dec-2013 FM: The EPA’s FM capacity requires the implementation Risk Management: of mitigating measures. E.g. Need to retain qualified staff In terms of safeguards, the Bank team will provide the EPA with the necessary capacity to manage the FM activities of the project, need to have support. EPA has qualified staff who are experienced in reviewing environmental automated accounting system for recording and generating assessment reports so they should be able to learn quickly and successfully apply all required reports and need to have documented internal relevant safeguard policies. controls comprehensive accounting policies and Resp: Status: Stage: Recurrent: Due Date: Frequency: procedures. Bank In Progress Both 31-Dec-2015 Safeguards: The EPA has little previous experience in implementing Bank safeguards. Risk Management: Risk Management (Procurement): The existing PPCR-PCU in the EPA should be strengthened with a qualified Procurement Manager who will be responsible for handling all procurement activities under this project. A manual should be prepared and should include agreed upon procurement arrangements, methods, reviews by IDA, record keeping, complaint handling, dispute resolution, information disclosure, etc., as envisaged in IDA Guidelines. The manual – which is a part of the Project Operating Manual - should be approved by the GoY and the Bank prior to the project effectiveness. The World Bank will undertake post procurement reviews once a year for no less than 20% of the contracts during implementation. Resp: Status: Stage: Recurrent: Due Date: Frequency: Bank In Progress Implementation Yearly Governance Rating Substantial Description: Risk Management: The Project is being prepared by the EPA, with support from the Bank and consultants, The project will be led by EPA as they play a major role at the IMCCC which will be responsible for overall through studies and task teams, and includes representatives from CAMA, MAI, NWRA and AREA under the guidance of the IMCCC chaired by the Minister of Planning and oversight of the project. Therefore, there is a risk of lack International Cooperation. In addition, the Task Team has witnessed ownership from of accountability and oversight if EPA leadership changes. and collaboration among the large delegation of EPA, CAMA, MAI, NWRA, AREA Competition and weak coordination among EPA, CAMA, and MoPIC staff met throughout the project preparation. Furthermore, the IMCCC is 56 MAI, AREA and NWRA for components A-C. very committed to the proposed Project. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Both Yearly Risk Management: During preparation, the Task Team will carry out an assessment of the EPA and CAMA's oversight function, specifically the internal audit function. Resp: Status: Stage: Recurrent: Due Date: Frequency: Bank Completed Preparation 28-Feb-2013 Risk Management: The EPA will introduce a fixed assets system utilizing tag numbers for all assets, as well as more frequent inventory of assets. In addition, there will be frequent reporting on the use of operating costs and training activities, as well as "value for money" audits. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client Not Yet Due Implementation Quarterly Risk Management: External financial and technical external audits would be carried out on a yearly basis. Also, a technical external audit would be carried out yearly. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client Not Yet Due Implementation Yearly Project Risks Design Rating Moderate Description: Risk Management: CAMA/YMS has extensive technical capability in meteorological observations and Although the technical design is expected to be forecasting. CAMA/YMS should take the technical lead in the development of the straightforward, the limitation to conduct site visits due to climate monitoring system, and related project components, in close cooperation with the current security situation will be a constraint in order EPA, MAI, AREA, NWRA and other national stakeholders. This will ensure to assess the actual status of the monitoring stations. implementation of appropriate standards so that the different networks can meet the separate needs of individual agencies as well as the common requirement for improved Development of technical specs and bid documents, bid weather and climate forecasts, and high quality climate data. evaluation, delivery and installation of hydromet 57 equipment and technologies are critical and these should Furthermore, local consultants and standardized WMO surveys will be used to assess the be fully consistent with the high technical standards in situation in the field. accordance to WMO and interoperability requirements Resp: Status: Stage: Recurrent: Due Date: Frequency: required by the system. Both In Progress Both Yearly Risk Management: CAMA/YMS would be assisted by the proposed "general consulting services" and the Technical Committee of the IMCCC. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both Not Yet Due Both 30-Nov-2013 Social and Environmental Rating Low Description: Risk Management: Environment: This project would contribute to building An Environmental and Social Management Plan (ESMP) was prepared although works resilience for communities toward climate change, are expected to be small with relatively minor environmental impacts. The ESMP therefore deliver positive impacts on the society and confirmed that the expected impacts are minor and those potential impacts can be environment. However, modernization of the observation readily mitigated with standard environmental mitigation and monitoring procedures. system under Component B such as monitoring stations Installation of Doppler radar and upgrading marine monitoring stations will be would involve although small works and may have an conducted in Dhamar, Al Mokha, Mukalla, and Aden. Site visit was conducted by a impact on the environment if it is not managed properly. consultant who prepared the ESMP and it was confirmed those lands are existing government owned lands. The unknown sites are for hydromet stations which only involve simple assembly of monitoring equipment and require only a piece of land which can be easily shifted. Site selection criteria has been prepared as part of ESMP and the final locations will be approved in order to ensure those stations will not be installed in sensitive areas. It was reconfirmed in the ESMP that none of the social safeguards policies are triggered. The Team has also obtained a letter from the Government ensuring that the project locations will be on public land only. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client Completed Preparation 15-Mar-2013 Program and Donor Rating Moderate Description: Risk Management: 58 The PPCR Sub-Committee composed of donors Both the client and the Bank task team will keep development partners updated representative has fully endorsed this investment utilizing throughout the preparation. the grants in the amount of US$19 million. All Resp: Status: Stage: Recurrent: Due Date: Frequency: development partners in Yemen were fully consulted during the preparation of the Strategic Program for Both In Progress Preparation Yearly Climate Resilience (SPCR). Thus no specific risk has been identified as there has been strong donor coordination in the preparation of the SPCR and follow on projects linked to it. This is expected to continue during preparation and implementation of the proposed project. Delivery Monitoring and Sustainability Rating Substantial Description: Risk Management: A brief assessment of economic benefits of investment in climate information system Set up and operation of numerous hydromet stations will be conducted as a foundation of any risk reduction measure for sustainability. across the country can pose challenges in terms of data collection, transmission, and use and eventually influence Resp: Status: Stage: Recurrent: Due Date: Frequency: the accuracy of weather and flood warning forecasts. Both Completed Preparation 28-Feb-2013 Sustainability: Climate information network developed by Risk Management: this project may not be sustained due to lack of capacity, Strong oversight role will be played by the IMCCC. funds, and/or ownership. - A strong emphasis on M&E will be placed on project implementation, particularly through use of WMO, and international third party specialists. - Communities are an important stakeholder of this project as they will depend on this data for flood protection and agricultural purposes. They will therefore play an important role in monitoring and sustainability. Also, community members are likely to have a role in the operation of the new equipment. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client Not Yet Due Implementation 31-Aug-2018 Risk Management: Involve the Ministry of Finance at early stage of the project preparation and make sure that each sector also commits to increase the budget in climate information services in order to have sustainability beyond PPCR funding. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client Not Yet Due Both 01-Jun-2015 59 Other Security Rating Substantial Description: Risk Management: If the security situation persists, the capacity of the Bank Local consultants will be used for site supervision and annual technical audits will be to supervise the project may be affected. Also, one of the built into project implementation. To minimize risk of vandalism and theft of hydromet problems with the maintenance of the hydromet observation equipment, priority would be given to existing government owned sites and observation equipment is that it is prone to theft and efforts will be made to promote ownership by involving local communities which will vandalism. be beneficiaries of data collected by the monitoring stations. Resp: Status: Stage: Recurrent: Due Date: Frequency: Bank Not Yet Due Implementation 31-Aug-2018 Overall Risk Overall Implementation Risk: Rating Substantial Risk Description: Overall risk is “Substantial” for implementation because of country context, as well as capacity and governance issues. Sustainability is a risk in the current situation in Yemen, and the potential inability for Bank staff to conduct sufficient project supervision in the country. Mitigation measures have been adopted for the project. 60 Annex 5: Implementation Support Plan Yemen, Republic: Climate Information System and PPCR Coordination (P132116) Strategy and Approach for Implementation Support 1. The implementation support plan for the project has been developed based on the specific nature of the project activities, lessons learned from past operations in the country and sector, and the project’s risk profile in accordance with the Operational Risk Assessment Framework (ORAF). Along with regular implementation support described below, there will be continuous interaction with the implementation agency to provide support and guidance on issues and challenges that may arise during implementation. 2. Strategy and approach for implementation support. The implementation support strategy was developed based on the current context in Yemen where the Bank presence remains very limited with the presence of a core team of about nine staff led by the Country Manager. While the situation in Yemen is relatively under control, the levels of unpredictability and insecurity are still high. However, ensuring a close monitoring and follow-up of project activities on the ground will be critical to identify implementation issues and address them in a timely fashion. To achieve this, the Bank is currently using a TPMA, as is done in other fragile states. A monitoring agent, reporting directly to the Bank, will be recruited to ensure regular visits to project sites, conduct physical checks and obtain feedback from stakeholders in the field. The team will identify the needs of TPMA during appraisal and request support accordingly if foreseen to be required during project implementation. 3. Development of technical specs and bid documents, bid evaluation, delivery and installation of hydromet equipment and technologies under the Component A, B and C are critical and these should be fully consistent with the high technical standards in accordance to WMO and interoperability requirements required by the system. CAMA/YMS would be assisted by General Services Consultant/Integrator that would be responsible for preparation of detailed technical design and specifications, handling of the technical aspects of the procurement process, and technical supervision of implementation with oversight provided by CAMA/YMS and the members of the Technical Committee to the IMCCC. 4. The FM and procurement specialists as well as the operations officer who are currently based in the field will play a vital role in successful implementation support. These Bank specialists, in collaboration with the Task Team Leader and team, are expected to provide timely, effective, and intensive support to the client. Implementation Support Plan 5. The project will have semi-annual implementation support missions which will take place in Sana’a - or in the field - if security allows. Alternatively field visits will be conducted using TPMA who will regularly report to the Bank team. The team will identify the needs of TPMA during appraisal and request support accordingly if foreseen to be required during project implementation. 6. The semi-annual missions will focus on review of project performance against the results framework and progress towards agreement on planned actions. The scope of the implementation support missions will also include monitoring the EPA’s compliance with stipulated FM, procurement, and safeguards guidelines. One month prior to the implementation support mission, the PPCR-PCU, in coordination with CAMA/YMS, NWRA, and MAI, will provide to the Bank a comprehensive progress report on project activities. To ensure high quality and comprehensive support in light of the project design, the Bank team will be comprised of specialists in climate change, disaster risk management, economics, FM, procurement, safeguards, and project implementation with the specific team composition for each mission determined based on the requirements at that time. 61 Annex 6: Economic and Financial Analysis Yemen, Republic: Climate Information System and PPCR Coordination (P132116) Introduction 1. Investment in hydromet services is rapidly becoming a priority “low regret” climate adaptation investment46, particularly in countries like Yemen that are climate vulnerable. While methodologies to assess the economic benefits of hydromet investments are still evolving, the literature suggests that such activities can be extremely beneficial in terms of averting losses associated with climate hazards and enhancing the productivity of climate-dependent sectors such as agriculture, water resources management, hydropower and transport. 2. At the global level Hallegatte (2012)47 estimates the potential benefits of upgrading all developing country hydro-meteorological information production and early warning capacities to developed-country standards to be between US$ 4 and 36 billion per year. Benefit/cost ratios developed in support of a number of specific national hydromet investments are reported generally greater than 2 and in some cases greater than 10. Conservative Approach 3. Cost-benefit analysis for disaster and climate risk management in a developing country context is generally challenged by lack of data and information. Further, as reported in the IPCC’s SREX (2012), there are several complexities and uncertainties inherent in quantifying disaster risk management that are further compounded by climate change, and cost-benefit analysis is also challenged in handling intangibles and discounting of future impacts, which is particularly important for extreme events. 4. In order to therefore build confidence and robustness of a cost-benefit analysis of disaster risk management, a transparent and conservative approach is warranted48. All assumptions and their supporting analysis are here reported. Further, where a range of potential analysis inputs is generated, the most “conservative” values are taken, meaning that for a range of potential benefits the lowest value is used. This results in the analyzed net present value and benefit/cost ratio representing the lowest threshold of expected economic effectiveness; most likely the truly realized economic efficiency will be greater than what is herein reported. 5. From the outset three key conservative assumptions must thus be noted: a. Only reductions in the short-term direct impacts of weather and climate-related disasters are considered; long-term indirect impacts (such as health) are not included. b. The analysis does not consider future population growth and development that will be protected by this investment; the economy at risk is considered the same as the baseline (2011). c. Disaster risk is based on past experience to 2011 and therefore not adjusted for potential climate change impacts. 6. These assumptions all contribute to a conservative estimate of the investment’s economic effectiveness. 46 IPCC (2012): Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation. Special Report, WG I & II, Intergovernmental Panel on Climate Change, Cambridge University Press, Cambridge, UK, and New York, NY, USA, 582 pp. 47 Hallegatte, S. (2012). A Cost Effective Solution to Reduce Disaster Losses in Developing Countries: Hydro-Meteorological Services, Early Warning and Evacuation. World Bank Policy Research Paper #6058, Washington. 48 Kull, D., Mechler R. and Hochrainer, S. (2013). “Probabilistic Cost-Benefit Analysis of Disaster Risk Management in the Context of Development Assistance.” Disasters, 37(3):XX-XX (accepted for publishing). 62 Benefits from Reduced Disaster Losses 7. Considering the stochastic nature of disasters, common practice for cost-benefit analysis of disaster risk management is to determine the average annual losses due to disasters. This represents the averaging of all potential losses over time to quantify the expected economic burden per year. When sufficient data is available, the average annual loss is calculated as the area under a loss frequency curve, which is a common metric indicating the exceedance probability of the full potential range of losses per year (for example from the yearly flood to the 100- or 200-year flood). All reported figures have been inflation adjusted to represent end of 2011 values. Flood 8. The term “damage” is hereon used in alignment with the standard Post Disaster Needs Assessment (PDNA) terminology, representing direct or economic stock damage. Indirect longer-term impacts (“losses” in PDNA lingo, representing economic flow losses) are not included in the base analysis, in adherence with the conservative approach described at the outset. 9. Analysis of flood damage is based on a combination of detailed data from the major 2008 49 event (hereon referred to as “2008 PDNA”) and a broader probabilistic assessment50 (hereon referred to as the “RMSI study”). The results of the PDNA are show in the following table, inflation adjusted to 2011. Table 1. PDNA Results Impacts % of Total Impacts Ownership (US$ million) (US$ million) Damag Loss Total Damag Loss Total Public Private e e Productive Sectors 578.6 714.4 1,293.0 64% 90% 76% 0.0 1,293.0 Agriculture, livestock, fisheries 570.6 505.1 1,075.7 63% 64% 63% 204.5 871.2 Industry, commerce & tourism 7.9 209.3 217.3 1% 26% 13% 0.0 217.3 Social Sectors 207.5 28.7 236.3 23% 4% 14% 66.7 169.6 Housing 167.4 16.8 184.2 18% 2% 11% 14.6 169.6 Education 18.0 0.2 18.1 2% 0% 1% 18.1 0.0 Health 22.2 11.7 33.9 2% 1% 2% 33.9 0.0 Infrastructure 117.0 33.8 150.8 13% 4% 9% 127.6 23.2 Electricity 20.8 6.2 27.1 2% 1% 2% 27.1 0.0 Water and Sanitation 31.3 3.5 34.8 3% 0% 2% 34.8 0.0 Transport 62.3 22.5 84.7 7% 3% 5% 62.0 22.8 Communications 2.5 1.6 4.1 0% 0% 0% 3.7 0.5 Cross Sectoral 5.1 15.1 20.1 1% 2% 1% 18.9 1.2 Environment 0.2 15.1 15.3 0% 2% 1% 15.3 0.0 Public Buildings 4.9 0.0 4.9 1% 0% 0% 3.7 1.2 Total 908.2 792.0 1,700.2 100% 100% 100% 213.2 1,487.0 10. The RMSI study estimated the total national damages expected from 5, 10, 25, 50 and 100 year floods due to residential and non-residential structural and building contents damages, based on hydrologic modeling calibrated with observed events. These however represent only part of the total 49 Government of Yemen (2009). Damage, Loss and Needs Assessment, October 2008 Tropical Storm and Floods, Hadramout and Al- Mahara, Republic of Yemen. Joint Assessment of the Government of Yemen, World Bank, UNISDR and IFRC, supported by GFDRR. 50 RMSI (2011). Yemen National Probabilistic Risk Assessment, Probabilistic Loss Modeling and Analysis. Prepared for the World Bank with GFDRR support. 63 possible damages; for example in 2008 about two-thirds of all damage was in the agricultural sector, which is not captured in the RMSI study. 11. By comparing the structural damage reported in the 2008 PDNA with that modeled in the RMSI study, the 2008 event, which caused losses roughly equivalent to 6% of GDP, can be classified as a 50-100 year flood event. It should be noted that this frequency (translating into 1-2% probability per year) is associated with damages at the national level; the frequency of measured rainfall and river flows at specific locations are in fact independent of this national economic damage frequency. 12. Using the detailed 2008 PDNA data, the RMSI study’s flood damage frequency curve was scaled up to represent total expected damages for specific return periods (in 2011 values). The results are shown in the following table. It should be noted that these figures do not attempt to monetize lives lost, which are reviewed in a later section of this annex. Table 2. Total Expected Damages by Return Period Return Period (years) 5 10 25 50 100 Total damages (US$ mn) 186 290 557 864 1212 13. The expected annual average flood damage based on these figures is US$ 74 million/year. Storm Surge 14. The rains causing the major floods of 2008 were in fact delivered by tropical cyclone 3B, which did not cause significant storm surge. While tropical cyclones in the Arabian Sea are relatively unusual (according to the RMSI study – quoting Unisys - during 1945-2010 only 16 storms made landfall on the Arabian Peninsula, and only one of these affected Yemen), they are intensifying51 and could also become more frequent. According to the WMO Regional/Specialized Meteorological Center (RSMC) Tropical Cyclones New Delhi, operated by India Meteorological Department – IMD, since 1891 only two severe cyclonic storms have affected Yemen, in 1960 and 196352. 15. RMSI developed a set of 4 hypothetical storm tracks (scenarios) based on these past events and computed damages from the potential surge caused by storms of differing intensities (Categories 1-3 of the Saffir-Simpson scale) along these tracks. As with RMSI’s flood analysis, damages were computed only for buildings and contents, so for the purposes of the current analysis these were scaled up to represent full potential damages in 2011 (US$). 16. The classification of cyclonic disturbances for the Indian Ocean indicates that the two “severe” storms recorded in 1960 and 1963 had wind speeds in the range of 48-63 knots, which is in fact lower than a Category 1 cyclone53. The historical record provided by RSMC New Delhi indicates an average annual probability of a cyclone hitting Yemen of about 1.7%. Although a Category 1 or above storm has at least since 1891 never hit Yemen, they are still to a very limited degree possible. It is therefore assumed that of all future storms to hit Yemen 50% will be below Cat 1, 40% will be Category 1, 8% Category 2 and 1% Category 3. These assumptions result in the annual average probabilities and damages shown in the following table. Table 3. Annual Average Probabilities and Damages Storm intensity Cat 1 Cat 2 Cat 3 Total Annual probability 0.62% 0.12% 0.02% 0.75% Annual average surge damages (US$ mn) 0.68 0.26 0.06 1.00 Landslides 51 Wang, B., Xu, S., Wu, L. (2012). “Intensified Arabian Sea tropical storms.” Nature: 489, E1–E2. 52 Personal communication 53 According to the Saffir-Simpson scale a Category 1 hurricane entails winds of 64-82 knots. 64 17. The international disaster database EM-DAT54 indicates that landslides hit populated areas of Yemen at least once every four years. As landslides tend to affect only small areas in Yemen (less than 1000 m2, according to the RMSI Study), their economic impacts, while intense for the directly affected areas, are minimal at the national scale. RSMI analyzed three landslide scenarios resulting in computed damages ranging from US$ 5,500 to 43,500 (2011 values), with an average damage of US$ 19,300. Combining the above hazard frequency and loss information results in a national average annual damage of about US$ 5,000. It must be noted that this figure only considers structural and building contents damages; due to the very small areas affected, it is assumed there are only negligible impacts on national economic activities including agriculture. Landslides do however lead to substantial death tolls (for example the 2009 event resulted in 65 deaths, according to EM-DAT). Tsunami 18. As CAMA/YMS is responsible for operational marine forecasting including maintaining marine observatories, institutional modernization will also lead to better early warning for tsunamis. Based on the RMSI Study and the NOAA National Geophysical Data Center, since 1883 Yemen has experienced 3 tsunamis of note, resulting in an annual probability of 2.3%. RMSI analyzed potential damages for tsunami wave run-up heights ranging from 1-4 meters. Recognizing that past events have never exceeded run-ups in Yemen of 1.7 m (this being recorded during the 2004 Indian Ocean extreme event), probabilities heavily weighted to lower wave run-ups have been assumed. RMSI computed potential tsunami damage only for buildings, so for the purposes of the current analysis these were scaled up to represent full potential damage in 2011 (US$). The applied probabilities and resultant average annual damages are summarized in the table below. Table 4. Average Annual Damages Tsunami run-up height (m) 1 1.5 2 2.5 3 4 Total Annual probability 1.86% 0.23% 0.12% 0.07% 0.03% 0.01% 2.33% Average annual damage (US$ mn) 0.30 0.10 0.10 0.13 0.12 0.09 0.83 Dust Storms 19. Yemen experiences on average 1 to 5 dust storms with visibility of less than 1 km per year55. Impacts include erosion of farm land (removing organic matter and nutrient-rich light particles); reduced visibility and high winds disrupting air and land transport, construction, tourism and trade; abrasion of surfaces; and health impacts such as respiratory and cardiovascular diseases56. At the same time dust storms can have positive benefits including fertilization of ocean primary productivity areas, neutralization of acid rain, absorption of radiant heat and prevention of photochemical smog57. 20. As one of the few available quantitative references Ai and Polenske’s (2008) economic analysis of the year 2000 yellow-dust storm in Beijing estimates a loss of over 2.9% of Beijing’s GDP, with 25% of impacts occurring immediately (damages during the event) through interruptions to trade, construction and transportation, and the remaining 75% of losses occurring over the year following the event primarily in agriculture and manufacturing58. Longer-term impacts on health, which could well be considerable, could not be estimated. It was found that any potential positive impacts of the dust storm would only manifest over the long-term and were minimal in comparison to negative effects. 54 EM-DAT: The OFDA/CRED International Disaster Database – www.emdat.be, Université Catholique de Louvain, Brussels (Belgium). 55 Middleton, N. J. (1986). A Geography of Dust Storms in South-West Asia. Journal of Climatology, 6: 183–196. 56 Prof. William Sprigg, personal communication 57 Ai, N., Polenske, K. (2008). Socioeconomic Impact Analysis of Yellow-dust Storms: An Approach and Case Study for Beijing. Economic Systems Research: Vol. 20, No. 2, 187-203. 58 ibid 65 Economic impacts are caused by both supply and demand impacts (for example lessened demand by households as people stay inside)59. 21. In line with a conservative approach, only direct dust storm impacts in Yemen are estimated. Assuming the average dust storm affects a region producing 1% of Yemen’s GDP (some will affect major production centers while others will not), that these will cause a 2% GDP loss in the area affected (on average less than Beijing 2000 which was an extreme event) and that 25% of these losses are immediate damages, the average three dust storms per year result in an average annual damage of US$ 5.08 million. Drought 22. All regions of Yemen suffer from the risk of lengthy droughts even though only 2.6% of the country is arable. A serious drought occurred during 1962–1970 and had lasting social and economic consequences. More recently a severe drought was reported to have caused displacement of thousands of residents in Al Mahwit Governorate, some 113 km northwest of the capital Sana’a60. 23. Increased climate variability may induce heavy economic losses and spikes in food security and hunger (for example it is estimated that the 2008 flood caused an immediate 15% increase in food insecurity of affected farmers61). The long-term effects of climate change are also projected to decrease household welfare by US$ 314-404 million by 2020, US$ 1.3-1.8 billion by 2030 and US$ 5.7-9.2 billion by 205062. As Yemen exhibits a high level of food import dependency, much of this reduction in household welfare is due to projected global food price increases resulting from global climate impacts. However local yields will also be affected, although this could be a mix of increases and decreases depending on the region and crop. 24. In recognition of the complexity of the issue and considering the slow onset and long duration of droughts in Yemen, for this analysis benefits in drought management due to improved hydromet services are not considered as reductions in disaster damages, but rather as improvements in production. This is summarized in a subsequent section. Benefit Analysis 25. Table 4 in Subbiah et al (2009)63 provides guidance on the level of damage reduction for different sectors that can be achieved through early warning. These figures were applied to the specific damages reported in the 2008 flood PDNA to estimate an overall potential reduction due to early warning of 3.6% of total damages. Global experience indicates a conservative overall range of 5-8% (compared to for example 8.5% in Russia 64 and 10% for floods in southeastern Europe65), with the 2008 PDNA likely underestimating potential early warning savings due to its focus on officially surveyed and reported damages, omitting those emanating from the informal sector. It does however point to the use of the lower end of the range of global experience (5%), also in line with the conservative approach set out for this analysis. This same potential damage reduction is applied to storm surge, landslide and tsunami hazards, as their impacts and early warning responses are similar to 59 Akbari, S. (2011). Dust Storms, Sources in the Middle East and Economic Model for Survey Its Impacts. Australian Journal of Basic and Applied Sciences: vol. 5, no. 12, 227-233. 60 Government of Yemen (2011). Yemen Strategic Program for Climate Resilience. Prepared under the PPCR. 61 IFPRI (2011). Climate Change and Floods in Yemen: Impacts on Food Security and Options for Adaptation. IFPRI Discussion Paper 01139, Development Strategy and Governance Division. 62 ibid 63 Subbiah, A.R., Bildan, L., Narasimhan, R. (2009). Background Paper on Assessment of the Economics of Early Warning Systems for Disaster Risk Reduction. World Bank-UN Project on the Economics of Disaster Risk Reduction, GFDRR, Washington. 64 World Bank (2005). Russian Federation Hydromet Modernization Project. Project Appraisal Document, Report No. 3 1465-RU, Washington, D.C. 65 World Bank, UNISDR, WMO & FMI (2008). Strengthening the Hydrometeorological Services in South Eastern Europe. South Eastern Europe Disaster Risk Mitigation and Adaptation Programme. 66 floods. For dust storms a lower loss reduction is assumed (2%), for while some immediate damages can be mitigated, impacts on economic demand and transportation will be difficult to reduce only through early warning. 26. The table below summarizes the total estimated annual benefits due to natural hazard early warning provided by a modernized CAMA/YMS. Out of total annual damages of US$ 80.7 million, improved forecasting and early warning can potentially eliminate some US$ 3.9 million. Table 5. Estimated Annual Benefit of Early Warning Loss reduction Hazard Annual Damage (US$ mn) % US$ mn Flood 74 5% 3.69 Storm surge 1.0 5% 0.05 Landslide 0.005 5% 0.0002 Tsunami 0.83 5% 0.04 Dust storm 5.08 2.0% 0.1 Total 80.7 3.88 Verification 27. Considering the limited data availability forcing the adoption of a host of assumptions to quantify the benefits from reduced disaster damages, a benchmarking methodology is here employed to verify the results. This methodology follows Hallegatte (2012) and is based on a country’s GDP. Hallegatte found that well-functioning, modern early warning systems reduce disaster-related asset damages by between 0.003% and 0.017% of GDP. He concludes that the potential benefit of an investment in early warning systems is therefore the difference between the current protection provided by existing systems in a country, and the potential reduction in asset damages if the system were modernized. 28. Under this benchmarking methodology Yemen would be considered a low-income country with a weak system, and would therefore be assumed to currently capture only 10% of the potential damage reduction benefits of hydromet early warning. Potential benefits would thus be calculated as the difference between the potential reduced losses (0.003% and 0.017% of GDP, assuming Yemen corresponds to the global benchmark) and the actual reduced losses which in this case would be 10% of that value. 29. With Yemen’s 2011 GDP of US$ 33.76 billion the methodology proposed by Hallegatte results in potential benefits of US$ 0.9-5.2 million per year, verifying the magnitude of the above more detailed analysis of minimum benefits of US$ 3.9 million per year. Additionally, in countries with weak safety nets like Yemen natural disasters have long lasting, indirect consequences when assets are lost or health is undermined leaving households and/or communities significantly disadvantaged. In these cases, better forecasting and warning systems could also reduce indirect losses, and amplify benefits. We can thus be very confident that global benchmarks provide a conservative estimate for Yemen. Saving Lives 30. This analysis does not attempt to assign a value to the lives potentially saved by this project (sometimes referred to as “intangibles” and/or “non-monetizable”). It is clear, however, that the project has significant potential to save lives. Recent weather and climate-related disasters have resulted in a heavy burden of fatalities in Yemen, as summarized in the table below66,67. The on average 49 annual 66 EM-DAT 67 fatalities due to floods and landslides since 1991 would through proper end-to-end early warning are preventable. Table 6. Fatalities from Climate Related Disasters Year Event Fatalities 2010 Urban floods 9 2009 Landslide 65 2008 Floods 75 2007 Floods 93 2006 Floods 31 2005 Landslide & floods 22 2003 Floods 15 2002 Floods 53 1999 Floods 36 1998 Floods 70 1996 Floods 345 1993 Floods 50 1991 Floods 65 Annual Average 49 Benefits from Increased Production 31. In addition to diminishing disaster losses, modernized hydromet systems can significantly enhance economic productivity. Due to lack of information, a benchmarking approach is herein used to estimate potential benefits to economic productivity from modernized hydromet services in Yemen. 32. Hallegatte (2012)68 finds that about 25% of world GDP is generated in climate sensitive sectors, i.e., agriculture, mining and energy, construction and transport. Modernized hydromet and warning systems can benefit these sectors in many ways – from immediate warnings, to seasonal advisories, to infrastructure design and spatial planning. A conservative global benchmark is that modern forecasts add value of 0.1% to 1% in weather-sensitive sectors, which would translate into gains of approximately 0.025% and 0.25% of global GDP. 33. In Yemen, climate sensitive sectors represent about 40% of the economy, with agriculture contributing 7.9% of GDP69, transportation about 10%, construction about 4.5%, water and energy about 0.7% and mining about 19%70. Considering some of these figures are likely a few years out of date, potential benefits to mining which represents almost half of the climate sensitive GDP are more limited, and taking a conservative approach, the 25% global estimate found by Hallegatte is used, also applying Hallegatte’s 0.1-1% estimate for increased production, resulting in annual benefits in production of US$ 8.4-84.4 million per year. Considering the frequency of long-term drought, the lower bound of this analysis must be considered extremely conservative. Cost-Benefit Analysis 34. By comparing the costs and benefits of the project over time an understanding of the relative value of the planned investments can be generated. While cost-benefit analysis provides a useful 67 IFPRI (2011). Climate Change and Floods in Yemen: Impacts on Food Security and Options for Adaptation. IFPRI Discussion Paper 01139, Development Strategy and Governance Division. 68 ibid 69 www.worldbank.org/data 70 Central Statistical Organization (2010). 2009: Yemen in Figures. Republic of Yemen, Ministry of Planning and International Cooperation, Sana’a. 68 process and resultant metrics to help steer investment decision-making, it should however not be the only factor considered. 35. While the implementation phase of the project is 5 years, for this analysis it is assumed that the project impact is 15 years. Based on the disbursement experiences of previous hydromet investments, 25% of total project investments are assumed to be incurred during the first 2 years with the remaining 75% occurring during the next 3 years, while operations and maintenance (O&M) costs are assumed at 15% of project investments. O&M costs thus increase linearly over the first 5 years as cumulative project investments are made, reaching a constant 15% of total capital costs during years 5-15. Benefits in terms of reduced disaster damages and increased production are assumed to increase linearly starting to be realized from year 2, reaching a constant maximum for years 6-15. These cost and benefit flows are shown in the figure below. Table 7. Cost-benefit Flows 36. Cost-benefit analysis utilizes a discount rate to represent societal preference for consuming in the present as opposed to saving and consuming in the future. A discount rate of 0% indicates no preference between now and in the future, while a discount rate of 10% represents a higher preference for spending now. In this analysis a discount rate of 3% is applied, representing an understanding that future costs and benefits are relatively important in comparison to the current situation – concurrent with concerns regarding climate change. However 0% and 10% discount rates are also applied for sensitivity analysis; the previous figure shows the computed values with a 0% discount rate. The resulting cost-benefit metrics are summarized in the following table: a. Present costs: all years’ project and O&M costs discounted to present values and summed (in case of 0% discount rate then there is no discounting). b. Present benefits: all years’ benefits discounted to present values and summed (in case of 0% discount rate then there is no discounting). c. Net present value (NPV): present benefits minus present costs (if the NPV is greater than 0 then the investment is considered economically effective). d. Benefit/cost ratio: present benefits divided by present costs (if the benefit/cost ratio is greater than 1.0 then the investment is considered economically effective) 69 Table 8. Cost-benefit Metric (#1 conservative) Discount Rate Metric 0% 3% 10% Present costs (project and O&M) $55.0 million $46.2 million $33.0 million Present benefits $147.9 million $116.0 million $70.3 million Net present value (NPV) $92.9 million $69.8 million $37.4 million Benefit/cost ratio 2.7 2.5 2.1 37. Benefits are always greater than costs, indicating that the project is cost effective and because under different discount rates the benefits remain greater than costs, a certain degree of confidence can be placed in the broad economic effectiveness conclusion. 38. Important to note in the previous figure is that the net present value switches from negative to positive in year 5; in fact for the range of assumptions of discount rates this threshold is always crossed in years 5-6. This reflects the need for sufficient O&M to ensure that project investments are leveraged to produce benefits over the long term. While O&M is a significant cost item, it also one of the most important prerequisites of project benefits. Experience shows that without adequate O&M, benefits may only be realized for a few years at most and the overall project result will be negative. 39. As the most conservative estimates of benefits were applied, the analysis can be considered quite robust. To illustrate a more optimistic outcome of the project, for benefits for which a range of guiding quantifiable parameters were available, instead of using the lowest (most conservative) estimates, the analysis was also performed with the following assumptions: a. Based on the 2008 PDNA, for floods both the reduction of direct damages and indirect losses were this time considered. For example it is estimated that during the 4 years following the 2008 flood, real income loss represented 180% of regional agricultural value-added71. Based on the PDNA analysis, the average annual flood reduction benefits thus increases from US$ 3.69 million to 6.91 million. b. Additional benefits from reducing the indirect impacts (losses) of other weather and climate hazards are not considered due to data limitations and the recognition that their overall benefits as compared to those of floods are not highly significant. c. Hallegatte provides a range of estimated increases in climate sensitive sector production due to improved hydromet services with an average of 0.55% of sector GDP, as opposed to the minimum 0.1% used in the base analysis. This increases the annual benefits from increased productivity from US$ 8.4 million to US$ 46.4 million. 40. The resultant more optimistic but still realistic analysis is shown in the following table. Table 9. Cost-benefit Metric (#2 optimistic/realistic) Discount Rate Metric 0% 3% 10% Present costs (project and O&M) $55.0 million $46.2 million $33.0 million Present benefits $642.3 million $503.7 million $305.4 million Net present value (NPV) $587.3 million $457.5 million $272.5 million Benefit/cost ratio 11.7 10.9 9.3 71 IFPRI (2011). Climate Change and Floods in Yemen: Impacts on Food Security and Options for Adaptation. IFPRI Discussion Paper 01139, Development Strategy and Governance Division. 70 Indirect and Long-Term Considerations 41. As weather and climate impacts increase, the net present value and benefit/cost ratio of this investment will also increase. This is because early warning provides benefits that are not limited by thresholds; whether a flood is a 25-year or a 50-year event early warning still reduces impacts similarly (as opposed for example to levees, whose design thresholds are at some point exceeded). 42. At the same time as the Yemeni population and economic productivity grows, early warning will continue to provide benefits. New developments will also benefit from improved forecasting and early warning, as opposed to again the example of structural flood control, where new levees may need to be built to protect new developments. 43. The fact that these two factors (climate change and population/economic growth) were not incorporated in the analysis again points to an under-estimation of the actual project benefits. Conclusions 44. The following broad conclusions can be drawn from the economic analysis: a. The proposed project is a cost effective investment, exhibiting potential benefit/cost ratios of at least 2, with a more optimistic but realistic estimate of about 10. b. However to fully realize the potential benefits of this investment, sufficient operations and maintenance financing must be guaranteed during and for years after the project. c. Floods have the highest economic impacts on Yemen, such that investments in early warning for disaster reduction should first and foremost concentrate on floods. d. Longer-term impacts of weather and climate events are not well understood, especially the health impacts of dust storms, therefore warranting better research and management. e. Projected climate change, demographic and development impacts indicate increased negative impacts of weather and climate in the future. Investments like this project are needed to manage these risks. 71 Annex 7: Team Composition Yemen, Republic: Climate Information System and PPCR Coordination (P132116) Name Title Specialization Unit Salenna W. Prince Operations Officer Operations MNSEN Vladimir V. Tsirkunov Senior Environmental Hydromet GFDRR Engineer Abdoul-Wahab Seyni Senior Social Development Social Safeguards MNSSD Specialist Edith Ruguru Mwenda Senior Counsel Country Lawyer LEGAM Javier Zuleta Senior Water Resources Peer Reviewer LCSEN Management Specialist Andrea Zanon Senior Disaster Risk Peer Reviewer MNSUR Management Specialist Moad M. Alrubaidi Financial Management Financial Management MNAFM Specialist Suiko Yoshijima Environmental Specialist Environmental MNSEN Safeguards Specialist and Gender Focal Point Mark Njore Program Assistant Administration MNSSD Lia Carol Sieghart Senior Environmental Task Team Leader MNSEN Specialist Saleh Qasem Al-Manary Financial Management Analyst Financial Management MNAFM Samira Al-Harithi Procurement Analyst Procurement MNAPC Naif Abu-Lohom Senior Water Resources Water Resources MNSWA Specialist Management Sahar Safaie E T Consultant Disaster Risk MNSUR Management Jolanta Kryspin-Watson Senior Disaster Risk Peer Reviewer ECSUW Management Specialist Daniel Werner Kull Senior Disaster Risk Economic Assessment GFDRR Management Specialist Angela Walker Garry Operations Officer Quality Control MNSSD Marie How Yew Kin Language Program Assistant Transaction MNSSD Nabila Ali Al-Mutawakel Program Assistant Administration MNCYE Jean Francois Barres Senior Operations Specialist Consultant MNSSD David Rogers Lead Technical Specialist Consultant MNSSD Shivendra Kumar Senior Procurement Specialsit Consultant SASDT Hassine Hedda Financial Officer Financial Officer CTRLA Matthieu Bonvoisin Legal Associate Legal Associate LEGAM 72 Annex 8: Memorandum of Understanding MEMORA!'IDUM OF UI'IJ>E~TAl'IDli'IG AMONG THE PARTICIPATING ENTITIES OF THE YEMEN PILOT PROGRAM FOR CLIMATE RESILIENCE (PPCR) INVESTMENT l: "CLIMATE JNFORMATfON SYSTEM AND PPCR COORDINATION, (Pl32116)"- THE MINJSTRY OF AGRICULTURE AND IRRIGATION, THE MINISTRY OF TRANSPORT, and THE MINISTRY OF WATER AND ENVffiONMENT Premise This Memorandum of Understanding ("the Memorandum") sets forth the framework for a collaborative alliance among Lhe Ministry of Agriculture and Irrigation (on behalf of the Irrigation and Land Reclamation Sector. ILS; and the Agricultural Research and Extension Authority, AREA), the Ministry of Transport (on behalf of Civil Aviation and Meteorological Authority, CAMA/YMS), and the Ministry of Water and Envirorunent (on behalf of Envirorunent Protection Authority, EPA: and National Water Resources Authority, NWRA), .The Ministry of Agriculture and Irrigation, the Ministry of Transport, and the Ministry of Water and Environment are collectively hereinafter referred to"' "the Parties". The objective of the Memorandum is to provide a framework within which hydro rueteorological and climate data and information are shared and collaborative activities arc to be undertaken within the Yemen Pilot Program for Climate Resilience (PPCR) Investment 1 "Climate Information System and PPCR Coordination''. Each party (CAMAIYMS, EPA, NWRA, and MAl/AREA) will be responsible for data collection within the mandates of their own organizations. 1. Objectives The purpose of the collaboration is to: a. Share data, which are based on the hydro meteorological, climate, and environmental observing netWorks operaled by the Parties. More specifically, all data collected and/or information developed within the scope of Investment I should be made available to the Parties. Specific agreements on the ways of dala transmission, types and formats of data will be developed between the Parties one year after effectiveness of this Project. b. Share agendas of common interests in the areas of Weather l'oreeasting, Climate Change. Agriculture, Irrigation, Water Resources and Energy, Disaster rusk Mitigation and Adaptation. Protection of Envirorunent, improving of national and regional Early Warning Systems and strengthening the institutional capacities of the Parties, within the respective mandates of ancl responsibilities of the Parties. c. Share knowledge and promote the cooperation and integration of activities among the Parties. 73 2. Framework for collaboration a. The framework of cooperation among the Parties is expected to include the tollowing: i. Exchange of information of Yemen PPCR Investment I "Climate Information System and PPCR Coordination" in planning and implementation phases to promote the beuer coordination for present and future actions. ii. Exchange of hydro meteorological, climate, and environmental data, fliUillced by the PPCR Investment I "Climate Information System and PPCR Coordination", among the Parties \vithout restriction. b. The Parties hereby formally acknowledge their agreement to the above-mentioned framework of cooperation. 3. Intellectual Property The Parties recognize the importance of protecting and respecting intellectual property rights. This Me-morandum does not grant the right U> use materials belonging to, or created by, any other Party. The Parties shall agree in writing on the ownership and possible right of use of any intellectual property rights that may arise in any work to be created by the collaborative activities to be undertaken pursuant to this Memorandum, at the time of agreeing on the work plan for such activities. 4. Names and Emblems No Party will use the name or emblem of any other Party, or any abbreviation thereof, without the prior written approval of such other Party in each case. S.Limits to Agreement This Memorandum does not constitute a commitment by any Party to provide support or financing for any individual activity or project not specified in their work programs that could be annexed to this Memorandum during its period of validity. Any sharing of information between the Parties shall be subject to the government policies on the disclosure of information. 6. Disputes, Controversies, and Claims a. In case of a dispute, controversy, or claim between the Parties arising out of or relating to this Memornndum or an agreement for any activity or project undertaken pursuant thereto, the Parties shall anempt to reach an amicable resolution in good faith. 74 b. In lbe event an attempt to n:acb an amicable rt'solution prove,; unsuccessful within thirty days after the first Party bas formally notified the dispU1e, controversy, or claim to the other Parties in writing, any such dispute, controversy, or claim shall proceed to arbitration. Arbitration shall be conduct ' With best regards. ;: \\ c t. \' ·C.- ·. Dr. Mohammed Saed Al-sadi ·\~\: 0 • .:::::=~~i=-~i=< ·.·.. ''";,. Minister of Planning & International Cooperation , 0 ) • ~lA ( '\ w - I - "0 • ' 'A ) ~ -lal.. ( IV 0 ) ~...H c1J..W.. ( '\ w - I - "0 • , I • I P.O.Box: ( 175) Sana'a -Tel : ( 967- 1-250118 )-Fax: ( 967 - 1 -250665) www.mpic- yemen.org 77 Annex 10: Letter Confirming the Appointment of Two Female Staff Ministry of Water and Environment Environment Protection Authority .f2J.\-. No/Rtf: ·····- ····G-7. o_.fE- - ···- ··- ···· Date: _...::Z::Z.- .JI.- ..~.;-··-····-···-···- No.or Poge.<:---·-····- ······--·····-····· -··· -..·--· To: Lht Carol Sleghart Team Leader Pilot Programme for Climate Reslllenceo World Bank Subject: Two Females Seconded for the PPCR Investment I • Climate Information System and PPCR Coordination Project To support the Governmenfs efforts to increase the participation of women [n the specialist workforce, we woold like to Inform you that the PPCR- PCU will be staffed by two female specialists seconded by tile participating entitles partiCipating tn the Climate Information System and PPCR Coordinabon Project lmplementabon. The two female specialists seconded Nominated by the Implementation Committee are as following: 1. Ms Gamalat Hassan Al-Aghbari EnVII'onmentallnformation Special;st Information Department Environment Protection Authortty, EPA 2 Angela Saleh AJ-Nono MIS -GIS Specialist On-Farm lrrigabon Department Mintsby of Agnculture and Irrigation, MAl Please take the necessary action and arrangements. Thank you and besi regards. epa-yemen@yemen.net. ye , .;J~! ~ Y• v n v • .....-.~ . Y• v • ' v, ...;.:ll• - ( "v ' \ J , .,....,. - .u.o... Sana'a · I'.O.Bo:x: ( 19719 ) ·Tel.: (207817} ·Fax: (207327) • EmaU: epa-yemen@yemen.net.ye www.yemeneovironment.ore. ~>'• ,.lt-o11 78