Document of
The World Bank
Report No: 84660-AF
AFGHANISTAN RECONSTRUCTION TRUST FUND
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED GRANT
IN THE AMOUNT OF MILLION
US$40 MILLION EQUIVALENT
TO THE
The Islamic Republic of Afghanistan
FOR A
CASA-COMMUNITY SUPPORT PROJECT
March 4, 2014
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
CURRENCY EQUIVALENTS
(Exchange Rate Effective {Date})
Currency Unit / == / US$1
US$ / = / SDR 1
FISCAL YEAR
January 1 / – / December 31ABBREVIATIONS AND ACRONYMS
Afn / Afghanis / JSDF / Japanese Social Development FundANDS / Afghanistan National Development Strategy / LCS / Least Cost Selection
MoEW / Ministry of Energy and Water
ARTF / Afghanistan Reconstruction Trust Fund / MRRD / Ministry of Rural Rehabilitation and Development
BGU / Block Grant Unit / MDG / Millennium Development Goals
CARD / Comprehensive Agriculture Rural Development / M&E / Monitoring and Evaluation
CASA-1000 / Central Asia South Asia electricity Transmission and Trade Project / MIS / Management Information Systems
CDC / Community Development Council / MoF / Ministry of Finance
CDP / Community Development Plan / NSP / National Solidarity Program
CHU / Complaints Handling Unit / OFU / Operations Fund Unit
CPM / Community Participatory Monitoring / OM / Operational Manual
COI / Corridor of Influence / PCD / Public Communications Department
DA / Designated Account / PD / Procurement Department
DAB / Da Afghanistan Bank (i.e. the Central Bank of Afghanistan) / PFM / Public Financial Management
DABS / Da Afghanistan Breshna Sherkat / PFU / Program Fund Unit
ED / Engineering Department / PIM / Post Implementation Monitoring
ESMF / Environmental and Social Management Framework / PMO / Program Management Office
FBS / Fixed Budget Selection / PMU / Provincial Management Unit
FD / Finance Department / PPA / Public Procurement Agent
FMA / Financial Management Agent / PPP / Purchasing Power Parity
FP / Facilitating Partner / QBS / Quality Based Selection
FPMD / Facilitating Partner Management Department / QCBS / Quality and Cost Based Selection
GoIRA / Government of Islamic Republic of Afghanistan / RF / Results Framework
HQ / Headquarters / SNGP / Subnational Governance Policy
HRAS / High Risk Areas Strategy / SSS / Single Source Selection
IDA / International Development Association / STP / Short Technical Proposal
IDLG / Independent Directorate of Local Governance / SY / Solar Year (Afghan calendar and fiscal year)
IM / Implementation Monitoring
Regional Vice President: / Philippe H. Le Houerou
Country Director: / Robert J. Saum
Sector Director: / John H. Stein
Sector Manager: / Shobha Shetty
Task Team Leader: / Naila Ahmed
AFGHANISTAN
CASA-Community Support Project (CASA-CSP)
TABLE OF Contents
Page
I. STRATEGIC CONTEXT 1
A. Country Context 1
B. Sectoral and Institutional Context 2
C. Higher Level Objectives to which the Project Contributes 4
II. PROJECT DEVELOPMENT OBJECTIVES 4
A. PDO 4
B. Project Beneficiaries 4
C. PDO Level Results Indicators 4
III. PROJECT DESCRIPTION 5
A. Project Component 5
B. Project Financing 7
Lending Instrument 7
Project Cost and Financing 7
C. Lessons Learned and Reflected in the Project Design 7
IV. IMPLEMENTATION 8
A. Institutional and Implementation Arrangements 8
B. Sustainability 9
V. KEY RISKS AND MITIGATION MEASURES 9
A. Risk Ratings Summary Table 9
B. Overall Risk Rating Explanation 9
VI. APPRAISAL SUMMARY 10
A. Economic and Financial Analyses 10
B. Technical 11
C. Financial Management 12
D. Procurement 13
E. Social (including Safeguards) 14
F. Environment (including Safeguards) 15
G. Other Safeguards Policies Triggered (if required) 15
Annex 1: Results Monitoring Framework 16
Annex 2: Detailed Project Description 19
Annex 3: Implementation Arrangements 34
Annex 4 Implementation Support Plan 62
Annex 5 Project Maps 70
PAD DATA SHEETAfghanistan
CASA-COMMUNITY SUPPORT PROJECT
PROJECT APPRAISAL DOCUMENT
.
SAR
SASDL
.
Basic Information
Date: / Sectors: / Livelihoods & Rural Development
Country Director: / Robert J. Saum / Themes: / Transmission and Distribution of Electricity (70%);
Irrigation and drainage (10%);Other social services
(10%); Water supply (10%)
Sector Manager/Director: / Shobha Shetty/John H. Stein / EA Category: B
Project ID: / P149410
Lending Instrument: / Investment Project Financing
Team Leader(s): / Naila Ahmed
Joint IFC: NO
.
Borrower: Islamic Republic of Afghanistan
Responsible Agency: Ministry of Rural Rehabilitation and Development (MRRD)
Contact: Mamoon Khawar / Title: Coordinator
Telephone No.: +93 (0) 700 202 372 / Email:
.
Project Implementation Period: / Start Date: May 1, 2014 / End Date: May 30, 2017
Expected Effectiveness Date: May 1, 2014
Expected Closing Date: May 30, 2017
if.
Project Financing Data(US$M)
[ ] / Loan / [ X ] / Grant / [ ] / Other
[ ] / Credit / [ ] / Guarantee
For Loans/Credits/Others
Total Project Cost : US$40 million / Total Bank Financing : US$40 million
Total Co-financing : NA / Financing Gap : US$0.0 million
.
Financing Source / Amount(US$M)
BORROWER/RECIPIENT / 0.00
IBRD / 0.00
AFGHANISTAN RECONSTRUCTION TRUST FUND / 40.00
Financing Gap US$0.0 / 0.00
Total / 40.00
.
Expected Disbursements (in USD Million)
Fiscal Year / 2014 / 2015 / 2016 / 2017
Annual / US$5 / US$10 / US$15 / US$10
Cumulative / US$5 / US$15 / US$30 / US$40
.
Project Development Objective(s): The proposed Project Development Objective is to provide access to electricity or other social and economic infrastructure services to communities in the project area in order to strengthen community support for CASA-1000 transmission line.
.
Components
Component Name / Cost (USD Millions)
1. Community Grants for sub-projects / ($18.9 million)
2 Community mobilization / ($7.7 million)
3. Project Implementation Support / (US$ 4.7 million)
4. Communications & Outreach / (US$930,000)
E. Unallocated / (US$7.7 million)
.
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 / [ X ] / No / [ ]
Is approval for any policy waiver sought from the Board? / Yes / [ ] / No / [ X ]
Does the project meet the Regional criteria for readiness for implementation? / Yes / [ X ] / No / [ ]
.
Safeguard Policies Triggered by the Project / Yes / No
Environmental Assessment OP/BP 4.01 / X
Natural Habitats OP/BP 4.04 / X
Forests OP/BP 4.36 / X
Pest Management OP 4.09 / X
Physical Cultural Resources OP/BP 4.11 / X
Indigenous Peoples OP/BP 4.10 / X
Involuntary Resettlement OP/BP 4.12 / X
Safety of Dams OP/BP 4.37 / X
Projects on International Waterways OP/BP 7.50 / X
Projects in Disputed Areas OP/BP 7.60 / X
.
Legal Covenants
Name / Recurrent / Due Date / Frequency
Description of Covenant
.
Team Composition
Bank Staff
Name / Title / Specialization / Unit / UPI
Naila Ahmed / Task Team Leader / Rural Development Specialist / SASDL / 268662
Asta Oelsen / Sr. Social Development Specialist / Social / SASDE
Abdul Hameed Quraishi / Operations officer / Energy / SASDE
Asif Ali / Senior Procurement Specialist / Procurement / SARPS / 264532
Asha Naryana / Sr. Financial Management Specialist / Financial Management / SARFM
Kishor Uprety / Sr. Counsel / Legal / LEGES
Abdul Muhammad Durani / Social Development Specialist
Obaidullah Hidayat / Environmental Specialist / Environment / SASDI / 355381
Heather B. Worley / Senior Communications Officer / Communications / ECSEG / 193646
Raouf Zia / Communications / Communications
Jalaluddin Kasaat / Communications / Communications
Juan Carlos Alvarez / Sr. Counsel / Legal / LEGES / 203490
Chau-Ching Shen / Sr. Finance Officer / Finance / CTRLN / 186455
Zabiullah Ahrary / Program Assistant / Administration / SASDO / 268507
Non-Bank Staff
Name / Title / Office Phone / City
Zahid Shakeel / Consultant – Engineering / Islamabad
Rebecca Haines / Consultant – Gender/ ORAF / Kabul
.
Locations
Country / City / Location / Planned / Actual / Comments
Afghanistan / Parvan / Parwan / X
Afghanistan / Nangarhar / Nangarhar / X
Afghanistan / Laghman / Wilayat-e Laghman / X
Afghanistan / Kunduz / Kunduz / X
Afghanistan / Kabul / Wilayat-e Kabul / X
Afghanistan / Wilayat-e Baghlan / Wilayat-e Baghlan / X
.
viii
I. STRATEGIC CONTEXT[1]
A. Country Context
1. Afghanistan is a landlocked state falling within both Central Asia and South Asia (and to some extent Western Asia). It is bordered by Turkmenistan, Uzbekistan and Tajikistan in the north, Iran in the west, Pakistan in the south and east, and China in the far northeast. It has a population of approximately 30 million, and after decades of war is highly under-developed and one of the poorest countries in the world.
2. With a GNI per capita of $570, Afghanistan is the lowest income country in South Asia and emerging from over three decades of conflict. It remains an extremely fragile state and faces enormous development challenges, including high levels of poverty (36 percent) and unemployment. Despite the ongoing conflict and insecurity, there have been some significant advances in institutional strengthening and rapid economic growth of 9 percent per year in 2000-2010, driven in large measure by huge foreign aid flows of close to $16 billion per annum. With foreign aid set to decline from 2014 with the withdrawal of international forces and the labor force expanding by about 300,000 per year, the Afghan economy urgently needs to find ways to sustainably accelerate broad-based growth in the medium term - implying, inter alia, adequate and stable electricity supply to meet expanding demand. Even under reasonably optimistic scenarios, growth in Afghanistan is projected to fall from a 10-year average of over 9 percent to between 5 and 6 percent over 2011–18. Additionally, unemployment, already at 8 percent in 2009–10, is projected to rise further, with potentially destabilizing effects. In this context, Afghanistan is actively seeking ways to accelerate growth through increased private and public investment, with a particular focus on addressing the country’s severe infrastructure bottlenecks.
5. The Central Asia-South Asia Electricity Transmission and Trade Project (CASA-1000) aims to facilitate electricity trade between hydropower surplus countries in Central Asia and electricity deficient countries in South Asia by putting in place the commercial and institutional arrangements and the transmission infrastructure required for this trade. The four countries participating in the project – Afghanistan, Kyrgyz Republic, Pakistan and Tajikistan – are of considerable geostrategic importance by virtue of their location at the crossroads of China, India, Russia and the Middle East. Sustained efforts to promote institutional development and socio-economic prosperity in the CASA-1000 countries are therefore a very high priority, not only for the countries themselves, but also for the stability of the Central and South Asia regions more broadly. The CASA-1000 countries vary significantly in terms of population numbers, economic size and development trajectories, but also share several key characteristics and have complementary development needs and goals, especially in the energy sector.
3. The Afghanistan portion of CASA-1000 is a 560 km DC transmission line that will extend from the Tajikistan border to the border with Pakistan near Peshawar. Afghanistan’s share of the electricity will be delivered at Kabul through a DC-AC Converter. The total cost of the CASA 1000 project is currently estimated at US$ 953 million. The Afghanistan share that will be financed with a World Bank grant to Afghanistan is estimated to be US$ 309 million including the 562 km portion of the DC transmission line located in Afghanistan and a DC-AC converter station in located in or near Kabul.
B. Sectoral and Institutional Context
Access to power in rural Afghanistan
4. The percentage of the population with access to electricity in Afghanistan is among the lowest in the world. The Ministry of Energy and Water (MoEW) estimates that about 30 percent of Afghans have access to electricity from grid-based power, micro-hydro, or solar panel stations. Rural areas, where more than 77 percent of Afghan population lives, remain practically unconnected to the grid or other affordable, sustainable power supply options. Some estimates put rural access to electricity at a mere 9 percent of the total Afghanistan population. The situation has improved significantly in the major urban population centers along the critical North East corridor between Mazar-e-Sharif and Kabul, following the import of power from Uzbekistan and the rehabilitation of three hydro plants (Mahipar and Sarobi completed, and Naghlu ongoing). Increasing parts of some urban centers, for example Kabul, Herat, Mazar-e-Sharif, and Pul-e-Khumri, now have a 24-hour power supply for the first time in decades.
5. Overall, across the four countries the line will have a transmission capacity of 1,300 MW in either direction. About 560 km of the line will be in Afghanistan, which will cost an estimated US$395 million and will generate 300 MW. The financial benefits of the project include the incremental revenues from the sale of imported power in Afghanistan and Pakistan. Afghanistan will have the possibility of buying up to 300 MW from CASA-1000 or can re-export the electricity to Pakistan. The additional 300MW brought by CASA-1000 would also help Afghanistan meet its growing demand.
6. Based on the current routing of the CASA-1000 Afghanistan section, the transmission line is expected to pass through approximately 700 communities spread over 23 districts in 6 provinces, with a total of 152,000 families along the 4 kilometer[2] corridor of influence (COI). Overall in the six Provinces namely – Parwan, Kunduz, Baghlan, Laghman, Nangarhar and Kabul only 33% of communities along the COI have access to power either through connection to the electricity grid, micro-hydro power, solar or other power sources. However the coverage ranges from 0 – 100% between the 23 districts. For on-grid connections in three provinces (Kunduz, Baghlan and Parwan) 10%-30% of the population has connection to the electricity grid, while less than 10% of the population in two provinces (Laghman and Nangarhar) is connected to the grid. The range of connection to the grid for the Kabul population was estimated to be around 50 percent. It is important to note that the communities along the corridor of influence (COI) cannot be directly supplied with electricity from the CASA 1000 transmission line, being of a very high voltage.