Document of The World Bank FOR OFFICIAL USE ONLY€¦ · Guidelines, unless the Project...

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 67555-EG

EMERGENCY PROJECT PAPER

ON A

PROPOSED LOAN

IN THE AMOUNT OF US$200 MILLION

TO THE

ARAB REPUBLIC OF EGYPT

FOR AN

EMERGENCY LABOR INTENSIVE INVESTMENT PROJECT

June 13, 2012

Human Development Sector

Middle East and North Africa Region

This document has a restricted distribution and may be used by recipients only in the

performance of their official duties. Its contents may not otherwise be disclosed without World

Bank authorization.

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ii

CURRENCY EQUIVALENTS

(Exchange Rate Effective June 13, 2012)

Currency Unit = Egyptian Pound (EGP)

EGP 1 = US$0.17

US$1 = EGP 6.044

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

ADB African Development Bank

CAS Country Assistance Strategy

CCT Conditional Cash Transfer

CDA Community Development Association

CPAR Country Procurement Assessment Report

DANIDA Danish International Development Agency

EEAA Egypt Environmental Affairs Agency

EC European Commission

EGP Egyptian Pound

ELIIP Emergency Labor Intensive Investment Project

ESSAF Environmental and Social Screening and Assessment Framework

EU European Union

FDI Foreign Direct Investment

FI Financial Intermediary

GDP Gross Domestic Product

GoE Government of Egypt

GTZ German Agency for Technical Cooperation

HCD SFD‟s Human and Community Development Department

IA Intermediary Agencies

IAD SFD‟s Internal Audit Department

IBRD International Bank for Reconstruction and Development

ICB International Competitive Bidding

IDA International Development Association

ILO International Labor Organization

ISN Interim Strategy Note

KfW Kreditanstalt für Wiederaufbau Development Bank

MIS Management Information System

MOHP Ministry of Health and Population

M&E Monitoring and Evaluation

MFI Microfinance Institution

iii

MSE Micro and Small Enterprises

NCB National Competitive Bidding

NGO Non-Governmental Organization

OM Operations Manual

O&M Operation and Maintenance

PFM Public Financial Management

PIU Project Implementation Unit

PWP Public Works Programs

SA Sponsoring Agencies

SFD Social Fund for Development

SIL Specific Investment Loan

SME Small and Medium Enterprise

SRFP Standard Request for Proposal

TA Technical Assistance

TOR Terms of Reference

UNDP United Nations Development Program

Vice President: Inger Andersen

Country Director: A. David Craig

Sector Manager: Yasser El-Gammal

Task Team Leader: Alaa Mahmoud Hamed Abdel Hamid

iv

Arab Republic of Egypt

Labor Intensive Investment Project

CONTENTS

Page

A. Introduction ...................................................................................................................... viii

B. Emergency Challenge: Country Context, Recovery Strategy and Rationale for Proposed

Bank Emergency Project............................................................................................................. 2

C. Bank Response: The Project ............................................................................................... 6

D. Appraisal of Project Activities ............................................................................................ 8

E. Implementation Arrangements and Financing Plan .......................................................... 14

F. Key Risks and Mitigating Measures ................................................................................. 17

G. Terms and Conditions for Project Financing .................................................................... 17

Annex 1: Detailed Description of Project Components ........................................................... 18

Annex 2: Results Framework and Monitoring ........................................................................ 20

Annex 3: Summary of Estimated Project Costs ....................................................................... 23

Annex 4: Operational Risk Assessment Framework (ORAF) ................................................ 24

Annex 5: Financial Management and Disbursement Arrangements ..................................... 27

Annex 6: Procurement Arrangements ...................................................................................... 38

Annex 7: Implementation and Monitoring Arrangements ..................................................... 43

Annex 8: Project Preparation and Appraisal Team Members ............................................... 50

Annex 9: Environmental and Social Safeguards Framework ................................................ 51

Annex 10: Economic and Financial Analysis ........................................................................... 67

Annex 11: Documents in Project Files ...................................................................................... 71

Annex 12: Statement of Loans and Credits .............................................................................. 72

Annex 13: Country at a Glance ................................................................................................. 73

Annex 14: Maps........................................................................................................................... 75

v

EGYPT

EMERGENCY LABOR INTENSIVE INVESTMENT PROJECT

PROJECT PAPER

MIDDLE EAST AND NORTH AFRICA

MNSHD

Basic Information

Country Director: A. David Craig

Sector Manager/Director: Yasser El

Gammal/ Steen Lau Jorgensen

Team Leader: Alaa Mahmoud Hamed

Abdel Hamid

Project ID: P126339

Expected Effectiveness Date : October

12, 2012

Lending Instrument: ERL

Sectors: Other Social Services

Themes: Human Development

Environmental category: B

Expected Closing Date: December 31,

2015

Joint IFC: N/A

Joint Level: N/A

Project Financing Data

[ X] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other:

Proposed terms: The loan is a Variable Spread Loan with a 29-year maturity and seven (7)

year grace period with commitment linked level repayment pattern.

Financing Plan (US$m)

Source Total Amount (US $m)

Total Project Cost:

Cofinancing:

Borrower:

Total Bank Financing:

IBRD

IDA

New

Recommitted

200

Client Information

Recipient: Arab Republic of Egypt

Responsible Agency: The Social Fund for Development

Contact Person: Ms. Ghada Waly

Telephone No.:

Fax No.: (202) 2391-2815

Email:

Estimated disbursements (Bank FY/US$m)

FY FY13 FY14 FY15 FY16

Annual 10 55 60 75

Cumulative 10 65 125 200

vi

Project Development Objective and Description

Project development objective:

The objectives of the Project are: (i) to create short-term employment opportunities for

unemployed unskilled and semi-skilled workers; and (ii) to provide access to basic

infrastructure services to the target population in poor areas in the Borrower‟s territory.

Project description:

Component 1: Employment-Intensive Sub-projects

This component will include provision of grants to sponsoring agencies by governorates

and local authorities, for sub-projects consisting of small-scale infrastructure works

including, but not limited to: canal cleaning and protection, and rehabilitation of schools,

housing, and rural roads.

The sub-projects will be contracted out to private contractors.

This component will also include provision of grants to sponsoring agencies, by

governorates and local authorities, for sub-projects consisting of community services

including, but not limited to, early childhood education services, outreach for maternal and

child health, nutrition, population services, solid waste collection, and youth employment

in rural and urban settings.

The sub-project implementation will be contracted out to NGOs.

Component 2: Implementation Support

This component will include provision of project implementation support, including

project management, audits, public information and communication, technical verification

and quality assurance, monitoring and evaluation, and social accountability mechanisms.

Safeguard and Exception to Policies

Safeguard policies triggered:

Environmental Assessment (OP/BP 4.01)

Natural Habitats (OP/BP 4.04)

Forests (OP/BP 4.36)

Pest Management (OP 4.09)

Physical Cultural Resources (OP/BP 4.11)

Indigenous Peoples (OP/BP 4.10)

Involuntary Resettlement (OP/BP 4.12)

Safety of Dams (OP/BP 4.37)

Projects on International Waterways (OP/BP 7.50)

Projects in Disputed Areas (OP/BP 7.60)

[ X]Yes [ ] No

[ ]Yes [ X ] No

[ ]Yes [ X ] No

[ ]Yes [ X] No

[ ]Yes [ X ] No

[ ]Yes [ X ] No

[ ]Yes [ X ] No

[ ]Yes [ X ] No

[ ]Yes [ X ] No

[ ]Yes [ X ] No

Does the project require any exceptions from Bank policies?

Have these been approved by Bank management?

[ ]Yes [ X ] No

[ ]Yes [ ] No

Conditions and Legal Covenants:

Agreements References Description of

Condition/Covenant

Date Due

vii

(Project Agreement) Schedule

Section IA, Paragraph 3

For the purposes of proper

implementation of the Project,

the Borrower shall cause the

Project Implementing Entity, not

later than six months after the

Effective Date, to appoint for the

duration of Project

implementation, and on terms

and conditions acceptable to the

Bank, an Independent

Verification Expert (IVE) to

assess and verify that: (i) Project

outcomes have been met; (ii) the

quality of works undertaken in

carrying out Sub-projects; and

(iii) whether Sub-projects are

implemented and maintained in

accordance with the

requirements of the Maintenance

Manuals, the ESSAF and the

Operations Manual.

Not later than 6 months

after Effective Date

(Project Agreement) Schedule,

Section IA, Paragraph 4

The Borrower, through the

Project Implementing Entity,

shall update its existing

automated accounting system to

record and report on the new

project activities

Not later than one month

after the Effective Date

(Project Agreement) Schedule,

Section IC, Paragraph 1

To facilitate the carrying out of

Part A of the Project, the

Borrower shall ensure that the

Project Implementing Entity

shall make Sponsoring Agency

Grants to Sponsoring Agencies

in accordance with eligibility

criteria and procedures mutually

acceptable to the Bank and the

Borrower.

viii

(Loan Agreement) Schedule 2,

Section IV, B1

Notwithstanding the provisions

of Part A of this Section, no

withdrawal shall be made:

(a) for payments made prior to

the date of this Agreement; or

(b) under Category (2) unless a

procurement advisor has been

appointed on terms and

conditions mutually acceptable

to the Bank and the Borrower; or

(c) under Category (1) in the

event that the ESSAF requires

the preparation of a Sector-

specific EIA/EMP, and/or

Environmental Safeguard

Guidelines, unless the Project

Implementing Entity has

accordingly prepared, disclosed

and held consultations on the

aforementioned Sector-specific

EIA/EMP, and, where required

under the ESSAF, has prepared

Environmental Safeguard

Guidelines for the particular Sub-

project for which the application

for withdrawal is required.

A. Introduction

1. This Project Paper seeks the approval of the Executive Directors to provide a loan in an

amount of US$200 million to the Arab Republic of Egypt for an Emergency Labor Intensive

Investment Project (ELIIP). Fundamental political changes in Egypt have followed the collapse

of President Mubarak‟s regime in February 2011. Parliamentary elections were conducted in

March 2012. A 100-person assembly is being formed to draft a new constitution, which in turn

will be subject to a popular referendum. At the time of the EPP, presidential elections are

ongoing with two final candidates running for presidency. The transitional Government in place

has requested Bank support for employment creation in poorer areas of Egypt in the short-term

to maintain social stability during this period of transition. The employment and poverty

situations in Egypt are critical. Unemployment is high (more than 13 percent), with an increase

of 3.5 percentage points over the last year, and over 90 percent of all unemployed are youth. In

addition, Egypt faces enormous fiscal challenges as the fiscal deficit widened to 9.5 percent of

GDP in FY11, a substantial increase compared with the 8.1 percent deficit in FY10 and 7.9

percent originally budgeted for that year. Poverty rates also increased to 25 percent, from 21

percent in 2009. The growing financing needs of the Government have built up pressure in

domestic financial markets, where yields on one year T-Bills increased to 13.6 percent in

September 2011. Limited fiscal space and political uncertainty, combined with rising

unemployment, poverty and regional disparities, could derail the transition process.

2. The proposed Project will address the following priorities (as defined in Paragraph 4 of

World Bank Guidelines for OP 8.00): (a) establishing and/or preserving human, institutional,

and/or social capital; (b) assisting with the crucial initial stages of building capacity for risk

reduction; and (c) supporting measures to mitigate or avert the potential effects of imminent

emergencies or future emergencies or crises in countries at high risk. On February 29, 2012, the

World Bank Regional Vice President approved the processing of this operation on an emergency

basis for OP 8.00.

3. The objectives of the Project are: (i) to create short-term employment opportunities for

unemployed unskilled and semi-skilled workers; and (ii) to provide access to basic infrastructure

services to the target population in poor areas in the Borrower‟s territory. This will be carried

out through the construction/maintenance of community level infrastructure using labor-

intensive techniques and the provision of community services.

4. Specifically, the proposed operation will focus on two main components. The first

component, Employment-Intensive Sub-projects (US$198.0 million), will support two types of

labor intensive sub-projects: (i) small-scale local infrastructure public works sub-projects: canal

cleaning and protection, rehabilitation of schools, housing, and rural roads; and (ii) community

service sub-projects. The second component, Implementation Support (US$2.0 million), will

finance support to project management; audits, public information and communication; technical

verification and quality assurance; monitoring and evaluation; auditing; and social

accountability.

5. The project will be financed through an Emergency Recovery Loan (ERL). The EU is

considering co-financing the proposed project with an amount of Euro 75.00 million. The Danish

International Development Agency (DANIDA) is considering providing parallel financing in the

2

amount of US$ 3.0 million to this project. In addition, parallel financing will be provided by the

International Labor Organization (ILO) through technical assistance to the Government to

support capacity building in use of labor-intensive approaches and techniques. UNDP will also

provide parallel financing in the form of a project that will pilot innovative approaches for public

works. Furthermore, the World Bank, through the Japanese Social Development Fund (JSDF), is

planning to provide grant support (US$2.85 million) to a project aimed at minimizing the risks of

chronic and/or unsafe unemployment among marginalized youth by facilitating their access to

pertinent opportunities for job readiness and job placement.

B. Emergency Challenge: Country Context, Recovery Strategy and Rationale for

Proposed Bank Emergency Project

Country Context

6. The deteriorating security situation and uncertainty following the January 25, 2011

Revolution has slowed down economic activity, and increased poverty and unemployment. On

February 11, 2011, President Hosni Mubarak resigned from the Presidency of Egypt as a result

of a people‟s revolution that erupted on January 25, 2011. As Egypt is going through a

transitional stage of political and economic uncertainty, there have been significant increases in

unemployment rates, from 9.6 percent before the revolution to about 13 percent in December

2011,1 and poverty rates also increased from 21 percent

2 to 25 percent during the same period.

3

In addition, the long-standing deprivation in the poorer parts of Egypt is threatening to derail the

political transition and lead to a surge in extremism. Unskilled and semi-skilled workers,

especially those who are already unemployed, will be more vulnerable as they are among the

poorest segments of society. This may add to the complexity of the transition and could be a

trigger for continuing social unrest, hence the urgency of addressing this important issue.

7. This effect is compounded by the return to Egypt of migrants who were working and living

in Libya. These migrants who remain in Egypt account for an increase in unemployment by an

additional 0.6 percent. This situation has been aggravated as more migrants return to Egypt as a

result of the unrest that is occurring in other Middle Eastern countries.

8. The implications for the Egyptian economy of the crisis in Libya are significant. Libya is the

top destination within the region for Egyptian youth, with 38 percent of youth migrants going to

Libya, followed by 29.4 percent to Saudi Arabia. The estimated 330,000 Egyptians in Libya

remitted up to US$33 million per annum. Official figures state that by March 22, 2011, about

147,900 Egyptians had returned to Egypt from Libya. The profile of returning migrants is as

follows: (i) most come from rural areas (85 percent); and (ii) they tend to have only a basic level

of education, with 25 percent being illiterate, and another 24 percent with a vocational education.

Only fifteen percent have a general secondary high school or university background.4

1 CAPMAS, Labor Force Survey, July-September 2011

2 The World Bank. Poverty in Egypt 2008-09: Withstanding the Global Economic Crisis. January 2011

3 CAPMAS, Household Expenditure Survey, 2012

4 International Organization for Migration (IOM) Cairo 2011

.

3

9. The expected increase in unemployment and underemployment adds to the complexity of

an already existing problem of high unemployment, increasing poverty rates and regional

disparities. Loss of employment is the most prominent cause of households falling into

poverty. The sudden economic slowdown in the context of accelerating inflation in 2008/2009

reversed the gains in poverty reduction achieved during the period of rapid growth before

2008/2009.5 At the same time, the incidence of extreme poverty (the inability to meet basic food

needs) increased by about 20 percent, as high inflation and rising food prices eroded the

purchasing power of the population. This has created an additional strain on the economy‟s

demand for labor. As a result, extreme and absolute poverty actually increased: as many as 5.1

million Egyptians were severely food deprived in 2008/09 (double the number in 2004/05), and

absolute poverty increased from 19.6 percent to 22 percent. During the period 2008/09, 31

million Egyptians (around 40 percent of the population) were poor or near poor. The 2008/09

period was also characterized by a dramatic reduction in opportunities to get out of poverty. The

population‟s vulnerability to sudden employment losses during this period was due to the

absence of any targeted social safety net mechanisms to protect the poor, who typically work in

the informal sector in low-earning occupations. This situation has recently been aggravated as

the Central Agency for Public Mobilization and Statistics (CAPMAS) announced that the

poverty prevalence rate further increased, reaching 25 percent.

10. In the short-run, the events since January 2011 have impacted the Egyptian economy

through many channels, including the following:

(a) Direct Economic losses. Economic losses occurred following serious disruptions in

production, stock market turbulence and capital flight. CAPMAS estimated that the

economic losses were US$1.7 billion (US$650 million in manufacturing, US$150 million

in tourism and US$130 million in construction, with the remainder spread across other

sectors). The Ministry of Finance indicated that the losses during the 18 days of

demonstrations amounted to US$310 million per day. It is expected that economic

growth for the current year could drop to a mere 1.2 percent from over 5 percent prior to

the revolution.

(b) Decrease in exports. Exports in January 2012 declined from EGP 8.2 billion to EGP 7.7

billion and continue to decrease.

(c) Reduction in tourism. Tourist resorts, hotels and tourism companies in Red Sea

governorates forced 90 percent of workers into open-ended periods of leave without pay

after tourism sharply declined. Other tourist resorts decided to keep security and

gardening laborers without paying bonuses. The number of workers in the Red Sea hotel

sector is estimated at 400,000 and most of them come from governorates in south Egypt.

Since a number of foreign airlines closed their branches at Hurghada Airport, workers

were given open-ended periods of leave until the resumption of tourist flights. Occupancy

rates at hotels and tourist resorts at Hurghada, Marsa Alam and Al-Qoseir failed to

surpass 15 percent in 80 percent of the resorts, the lowest rate recorded in recent years. In

addition, over 250,000 tourists cancelled their flights to the Red Sea in the days following

the revolution. The tourism sector has not yet rebounded. Hotels in Luxor and Aswan

report occupancy rates of less than 10 percent. All major tourist sites in Cairo lack

5 The World Bank. Poverty in Egypt 2008-09: Withstanding the Global Economic Crisis. January 2011.

4

visitors and companies declared that pre-booking for the 2011-12 winter seasons was the

lowest witnessed for a winter season in the whole of the previous decade.

(d) Migration. Migration is observed in two directions: Egyptians emigrating (minimal effect

due to general situation in the region) and returnees coming back from Libya (see above).

(e) Withdrawal of Foreign Direct Investment (FDI). Mainly for security reasons, FDI was

practically non-existent in 2011.

(f) Inflationary pressure. It is expected that inflation has increased as a result of the

shortage of food during the unrest, as well as high oil prices. Food prices have reportedly

not returned to their pre-revolution levels.

11. Public works programs, which have been suitable in similar crises, are not part of Egypt’s

safety net system. In general, programs that have been launched in response to a crisis in other

countries fall into two broad groups: (a) programs aimed at providing immediate short-term

employment opportunities (i.e., some variant of public workfare programs), and (b) transfer

programs, cash or in-kind, conditional or unconditional, mainly to maintain a critical minimum

consumption level of vulnerable households to prevent irreversible damage to the accumulation

of human capital. In Egypt, the role of workfare has diminished over time as the public works

program, implemented by the Social Fund for Development (SFD) for the last 20 years, has been

starved of funding.

12. Currently, Egypt’s safety net system is dominated by subsidies on food and energy.

Increases in budget allocations during the last few years have focused on expanding the food

subsidy program.

13. To mitigate social stress associated with the 2008/2009 food crisis, public spending

increased through FY08-09, further distorting the safety net towards subsidies. In spite of

several rounds of reforms to energy subsidies, which are available for all consumers and

producers, subsidies still represent the largest burden on the budget (around 6 percent of GDP).

The food subsidy program consists of two parts: (a) Baladi bread; and (b) ration cards. Bread

subsidies, available for purchase by all Egyptians, are the second largest item in Egypt‟s safety

net (accounting for around 1.5 percent of GDP). Spending on ration card subsidies, provided

only to registered households, comprises only about 0.5 percent of GDP and a recent study

revealed serious flaws in this program. In contrast, spending on cash transfers, which benefit

mostly the poor and vulnerable, amounts to a very small 0.1 percent of GDP, while spending on

public works has decreased to insignificant figures.

14. This Project will complement existing safety nets in Egypt by building up the public works

pillar while addressing the emergency situation. While this Project is designed to meet the

needs of the emergency situation, it should also help build the institutional capacity for PWPs in

Egypt, a tool that is likely to be used frequently in the medium term. The inclusion of PWPs as

an essential part of Egypt‟s safety net was recommended by the Bank as early as 2005, to be

scaled up and down quickly to respond to shocks based on the country‟s situation.

5

Government Response

15. The Government of Egypt (GoE) is planning to implement a PWP for Egypt that would

adopt labor-based methods to address Egypt‟s short-term needs on an emergency basis to

generate job opportunities. The proposed Project supports this strategy.

16. The proposed Project will be implemented by the Social Fund for Development (SFD). The

SFD is a legally autonomous, well-established development organization with a 20-year track

record of providing support to needy and underserved communities. Established in 1991, the

SFD‟s initial key objective was to help mitigate the negative effects of Egypt's structural

adjustment programs. In 1999, the SFD obtained a permanent mandate to focus on job creation.

The SFD has managed considerable amounts of donor resources through grants and loans from

more than 20 multilateral and bilateral donors. The World Bank has been a lead agency in

developing and supporting the SFD and has granted three IDA credits to the SFD, totaling

US$310 million during the period 1992-2005. In addition, the SFD, with the Ministry of Health

and Population (MOHP), jointly implemented the IDA-financed Population Project (Cr. 2830,

closed in 2005). The SFD also is the implementing entity for the Enhancing Access to Finance

for Micro and Small Enterprises Project (Loan 7850-EG, approved March 25, 2010).

17. The SFD is well-placed to implement this Project, as a well-established institution with

significant experience in interventions that provide services and employment to the poor, and

with an increasing focus on community participation, cooperation with NGOs, and

decentralization. Since 1992, about EGP 1.8 billion worth of projects have been implemented by

SFD in infrastructure under its Community and Human Development Department. In the area of

public works, the SFD currently implements two projects, one financed by the EC and another

by the Kreditanstalt für Wiederaufbau (KfW) Development Bank. Over the years, the most

common sub-projects implemented were water supply and sanitation projects, pavement of

roads, cleaning of canals, buildings and riverbank protection.

18. The results of an independent impact evaluation of SFD activities in the areas of public

works and community development for the period 2000-2004 provided a number of insights

which are still relevant today. The evaluation concluded that, regardless of the type of

intervention, communities considered almost all interventions (an average 99.4 percent) to have

been community priorities. Participating communities generally observed a high beneficial

impact of SFD interventions (between 80 and 90 percent of communities with interventions in

education, potable water, road pavement, and environmental projects observed high impacts).

Most communities attributed the positive impact of SFD interventions to improvements in health

and living standards. The evaluation report also concluded that the allocation of PWP funds has

been progressively targeted toward the poorer governorates.

Rationale for Bank Involvement

19. The GoE has requested the Bank‟s technical and financial support in the design and

implementation of a PWP for Egypt. The program will adopt labor-based methods in order to

address Egypt‟s short-term needs by generating short-term job opportunities for income support

to unemployed unskilled and semi-skilled workers. A secondary objective will be the creation

and/or maintenance of infrastructure and community assets.

6

20. The Bank has the technical knowledge and long term experience in supporting PWPs as an

important component of the overall safety net package in many IBRD and IDA countries,

including Egypt. Other donors are considering support for the Government‟s program,

leveraging this proposed Project.

C. Bank Response: The Project

21. The proposed Loan, at US$200 million, will help to finance the costs associated with creating

short-term employment opportunities for the unemployed unskilled and semi-skilled workers in

poor locations in Egypt.

22. The Project will adopt a gradual and phased approach in improving the original design of the

PWP implemented by the SFD in the previous three IDA-financed projects. There are three

important improvements to the model: (i) increasing the percentage of labor intensity;6,7

(ii)

using geographic, community, and self targeting of the poor;8 and (iii) including labor-intensive

community service sub-projects.

Project Development Objectives



services to the target population in poor areas in the Borrower‟s territory.

Summary of Project Components

Project description:

Component 1: Employment-Intensive Sub-projects (US$198 million)

24. This component will include provision of grants to sponsoring agencies, by governorates and

local authorities, for sub-projects consisting of small-scale infrastructure works including, but

not limited to: canal cleaning and protection, rehabilitation of schools, housing, and rural roads.

The sub-projects will be contracted out to private contractors.

25. This component will also include provision of grants to sponsoring agencies, by local

communities, for sub-projects consisting of community services including, but not limited to,

early childhood education services, outreach for maternal and child health, nutrition, population

services, solid waste collection, and youth employment in rural and urban settings. The sub-

project implementation will be contracted out to NGOs.

6 Labor cost ranging between 50-70 percent of total cost is advised by international literature. The multiplier of a

labor-intensive approach is at least 1.5 compared to only 0.7 for equipment-intensive construction techniques. 7 Current labor intensity applied by SFD average percentage ranges between 22-36%.

8 Geographic targeting will be guided by the Egypt Poverty Map and SFD Poverty targeting toolkit.

7

26. These grants will enable the SFD to also target more skilled unemployed youth in the

provision of social services and could also target more urban settings where skilled

unemployment is a greater concern. UNDP and ILO are working with SFD to expand the menu

of options specifically targeting youth, and if such proposals fit the overall criteria as laid out in

the Operations Manual, they could also be included.

Component 2: Implementation Support (US$2 million)

27. This component will include provision of project implementation support, including project

management, audits, public information and communication, technical verification and quality

assurance, monitoring and evaluation, and social accountability mechanisms.

Eligibility for Processing under OP/BP 8.00

28. The proposed Project is fully consistent with the Bank‟s Rapid Response Guidelines (OP

8.00) criteria. It complies with the guiding principles of the Bank‟s policy on rapid response to

crises and emergencies as it will address the major adverse economic and social impacts

resulting from the effects of economic slowdown since the January 25th revolution and the return

of Egyptian migrants from neighboring countries, especially Libya, in the wake of the uprisings

in the region. The Project will provide a rapid response to the GoE‟s request for urgent assistance

for the above-mentioned emergency.

Consistency with Country Strategy (CAS or ISN)

29. The proposed Project directly supports the second pillar of support (job creation, through

direct emergency lending) of the draft Interim Strategy Note (ISN). The ISN is expected to be

presented to the Board at the same time as the proposed Project. The proposed Project also

supports the draft ISN‟s objective of “creating opportunities for short-term productive job-

creation and initiating steps to improve the environment for longer-term private sector job

creation”.

Expected Outcomes

30. The main outcome indicator will be the number of job opportunities created under the

Project.

31. The intermediate outcome indicators will include: the percentage of labor intensity, the

number of person/days created, and the amount of wages paid. In terms of outputs, these

indicators will include: the number of kilometers of canals cleaned, the number of kilometers of

River Nile banks protected, the number of houses of the poor refurbished, the number of

kilometers of rural roads paved or maintained, and the number of schools maintained.

8

D. Appraisal of Project Activities

Economic Analysis

32. The estimated cost-benefit ratios for the proposed Project (under different scenarios) are

presented in Annex 10 and compare favorably with other successful public works programs

implemented in other areas of the world.

Technical Analysis

33. Global experience indicates that a PWP can be an important component of a safety net in

response to a rapidly deteriorating employment and poverty situation. As discussed above, the

Project will fill this gap in the current safety net system in Egypt.

34. Experience has shown that for the same level of investment in local infrastructure, the use of

labor-based methods can create between two and four times more employment (mostly

unskilled), drop foreign exchange requirements by 50 to 60 percent, decrease overall costs by 10

to 30 percent, and reduce environmental impacts. Further, there is a labor component in the

materials themselves as they are all produced locally (pipes, cement, aggregates, etc.). The

employment multiplier effect of such projects is at least 1.5 because of the injection of money

into the local economy (use of local materials and other inputs, salaries mainly spent on basic

needs).

35. Many PWPs are now being established with a long-term vision of being an integral part of

the country‟s social safety net (scalable PWPs that can be extended during crises). In addition to

infrastructure, social services and restoration of the natural resource base can be added to the

classic menu of public/community works. Key features of a successful PWP would include:

(a) A wage rate lower than the prevailing market wage for comparable (skilled and semi-

skilled) labor, wherever feasible;

(b) A high labor intensity;

(c) A combination of supply-driven sub-projects (sponsored by the Central Government)

and demand-driven sub-projects (sponsored by local authorities and communities); and

(d) Significant communication efforts that enabled potential participants to register

themselves at notified places for public works activity of their choice (totally unskilled,

low-skilled, semi-skilled, skilled, etc).

36. Allocation of funds. Given that a significant part of the public works program benefits accrue

from the infrastructure created, the location of the infrastructure becomes important for

allocation of funds. To increase the chances that the sub-projects will improve living conditions

for those least able to protect themselves against the economic shocks, the locations for the

works were selected using Egypt‟s poverty map taking into consideration the readiness for

implementation and the intensity of labor of the proposed sub-projects.

37. Private Contracting. In Egypt, it is common practice to use contractors to execute public

works programs. The Project will introduce one or more new methods to use contractors such

as: (i) defining the share of labor in each specific contract during the tendering process, and

9

enforcing it; (ii) providing a list of laborers in each locality whom contractors could hire for any

specific activity, with the possibility of directly paying them; and (iii) asking contractors to

specify percent of labor cost in each sub-project that they plan to execute, with the provision that

one of the selection criteria would be the share of labor in total cost, and subsequently picking

the one that promises to meet quality standards and use the highest labor share in total cost.

Alternative ways to allow the Government to fix the wage level for contractors to abide by will

be explored. Again, contractors will be asked to use at least 50 percent of the available local

labor, and only if such local labor is unavailable, will they be permitted to use outside labor.

38. Flexibility and Quick Scale-Up. The team examined the suggested design features that would

enable flexibility and quick scaling up of workfare programs during periods of economic

hardship. The most important opportunity for the team is to enable the Project to support the

move toward greater efficiency, targeting accuracy, and labor intensity. This will then be

evaluated, in the case of a need to scale-up so that the SFD, as a potential organization to

implement this safety net approach, would be in a position to respond quickly. Given its

implementation track record, existing regional offices and name recognition, scaling up would

not be a challenge.

39. Technical viability of SFD. Technical viability has been demonstrated by over 20 years of

successful public works, community and local development activity in Egypt. Investment cost

estimates, physical contingencies, prices and estimates of inputs and outputs are based on actual

historical data under the three previous IDA financed projects, as well as other donor financed

projects. For public works, the SFD uses standardized designs which have been approved by the

relevant line ministries. These standardized designs include engineering, technical, financial, and

economic feasibility aspects, O&M, simple environmental guidelines and cost parameters. Field

evidence demonstrates that these simple, practical standards have enhanced sub-project quality,

sustainability and cost-effectiveness. All sub-projects will be screened by SFD staff and

intermediary agencies. The sponsoring agency will be able to contract technical assistance to

help in the design and implementation of sub-projects, as needed. Training programs are also

being offered to develop the capacity of the implementing partners to prepare, implement,

operate, and maintain sub-projects as well as to acquaint them with the Egypt Environmental

Affairs Agency (EEAA) environmental regulations.

Fiduciary

40. Financial Management. SFD will be responsible for financial management and reporting,

using systems and procedures acceptable to IBRD. Project records will be kept according to

generally accepted accounting principles. They will be audited annually, following international

standards on auditing, by qualified independent external auditors acceptable to the Bank. The

Bank expects the Borrower to submit terms of reference for the project external audit for the

Bank‟s prior review and approval within 3 months of effectiveness. Audit reports will be

submitted to the Bank within six months from the end of each fiscal year (January 1st to

December 31st). There are no outstanding reports or IFRs under projects implemented by the

SFD.

10

41. Procurement. For labor intensive sub-projects, procurement is the responsibility of the

Sponsoring Agencies (SA), which are ministries, governorates, or NGOs; and the Intermediary

Agencies (IA), which are the technical directorates of the governorates and Community

Development Associations (CDAs). These procurement activities will be under the shopping

thresholds for works, US$350,000, and goods, US$100,000. The Procurement Department of the

SFD and its officers in the regional offices will ensure conformity of implementation according

to PM regulations and procedures. For that purpose, they will conduct ex-post reviews, assess

the capacity of the intermediary agencies, and conduct capacity building activities using as a

basis the SFD Procurement Manual for the Labor Intensive Sub-projects. The SFD will sign

Framework Agreements (also known as “Sponsoring Agency Grant Agreements”) with the

SA/NGO which describe the guidelines to be followed and each party‟s role in the

implementation of the sub-project. The SA/NGO then could sub-contract the work with a

contractor and/or supplier. Where activities will be undertaken by an IA, the SA will enter into a

further agreement with the IA, known as an Intermediary Agency Grant Agreement which will

govern the use of the funds.

42. The SFD will have primary responsibility for monitoring physical and financial progress of

the works undertaken by the SA/NGO. Procurement under the proposed Project will include

small value contracts that constitute weed reduction, River Nile bank protection, upgrading of

rural housing conditions, pavement of rural roads, school rehabilitation, solid waste collection

and disposal, etc. The maximum financing for a Labor Intensive Framework Agreement will be

around US$2,000,000 that includes small works in dispersed communities, estimated not to

exceed US$350,000. Large contracts would not arise at the SA/NGOs level due to the nature of

the works involved, and therefore, ICB is not foreseen.

43. All consulting service contracts under Component 2 will be procured at the SFD central

level. The SFD Headquarters Office will be supported by a qualified procurement adviser who

has experience with World Bank procurement procedures.

44. A summary of the procurement capacity assessment and project procurement arrangements

are provided in Annex 6. Risks have been identified and the overall procurement risk is assessed

as high. The main mitigation measures are updating of the procurement manual (a condition of

negotiation which has been completed) and hiring of a qualified procurement adviser, a condition

of disbursement whereby no withdrawal of funds shall be made from the services, non-

consulting services and incremental costs category of the withdrawal schedule unless a

procurement advisor on terms mutually acceptable to the Bank and Borrower.

45. To enhance project readiness for implementation, SFD will distribute the procurement

manual and its annexes to stakeholders after a “validation workshop” once the manual is

finalized and agreed with the Bank. Subsequently, the Procurement Department will train the

procurement officers of the regional offices and the sponsoring and intermediary agencies

concerning the appropriate use of the procurement manual and its annexes.

11

Social

46. From a social perspective, the Project‟s impact is likely to be positive. With the emphasis on

rural areas with priority targeting to Upper Egypt and the targeting of villages in the lowest 20

percent of the poverty map, the poorest and most vulnerable groups are likely to see an increase

in employment, social and economic opportunities. The youth are likely to be the primary

beneficiaries of employment opportunities, as they have higher unemployment rates. Females

also will be targeted through supporting community services sub-projects.

47. Gender. The impact on women will be positive, especially from the social services sub-

projects, where women would be more likely to be among beneficiaries of the services, as well

as more likely to be employed to deliver the services. The gender differentiated impacts will be

monitored by the monitoring and evaluation framework and will be a special focus of the social

accountability measures to allow for adjustment during implementation to improve the impact on

women. Given that male under- and unemployment, combined with discrimination within the

areas where the Project will be located was part of what drove the revolution in Egypt, it is

appropriate to target males in the project areas through infrastructure works.

48. Targeting. Under this program, special emphasis is being given to the poorest communities

and vulnerable groups. A well targeted program is one that reaches the people affected by a

country shock. Targeting beneficiaries of public works programs poses special challenges. The

targeting methods that will be used will depend on the nature of sub-projects as follows:

a. For community infrastructure sub-projects using private contractors, the methods that

were mentioned to improve the contracting procedures will be applied given the

undesirable market distortions by setting wages to less than the market rates.

b. For community social services, community targeting will be used combined with a Proxy

Means testing, wherever it is applicable and as determined by the Ministry of Social

Affairs.

49. Social Accountability. This will be taken into consideration through different mechanisms

as follows: (i) a grievance and transparency mechanism that allows citizens to provide feedback

to the SFD about project implementation and allows potential beneficiaries who were not

included in the program to seek redress; (ii) public information on the availability of employment

opportunities created by the project at relevant levels of implementation; (iii) client satisfaction

surveys, especially for community social services sub-projects; (iv) quality assurance surveys,

especially for community infrastructure services using regional universities; and (v) independent

verification of results of sub-project implementation using NGOs.

Environment

50. The proposed environmental category is “B” and OP/BP 4.01 is triggered. The Task Team

has prepared an Environmental and Social Screening and Assessment Framework (ESSAF),

attached in Annex 9, to address, in a sound environmental manner and in line with the World

Bank safeguards policies, any likely negative environmental impacts potentially resulting from

12

the sub-project activities. The ESSAF was disclosed in-country on March 27, 2012, and also in

the Bank‟s Infoshop on April 2, 2012.

51. The sub-projects of the proposed Project are likely to result in a number of positive

environmental and socio-economic impacts. All of the sub-projects are expected to generate

employment opportunities and improve income generation for many individuals as well as

improving living conditions and livelihoods, especially for those representing the low or poorest

segments of society in targeted areas and communities. This includes the improvement of

housing conditions and solid waste collection for the poor which will lead to positive health and

environmental impacts. However, despite the substantial positive environmental impacts that will

result from the implementation of the sub-projects, there may still be some negative

environmental impacts, though potentially minor and not significant.

52. Consistent with the World Bank OP/BP 8.00, an ESSAF has been developed to ensure

compliance with the Bank‟s safeguard policies during project implementation. The ESSAF

provides general policies, guidelines, codes of practice and procedures to be integrated into

project implementation. The ESSAF also identifies the types of environmental assessment

instruments that are suitable for each sub-project after initial approval. The ESSAF has been

developed specifically to ensure environmental due diligence for all the sub-projects funded by

this Project. It is intended to ensure that, for all activities financed by the proposed Project, all

efforts are made to avoid and minimize environmental and social impacts; and where they cannot

be avoided, that these impacts are identified and the necessary mitigation measures are

developed and implemented following the relevant Egyptian laws as well as the World Bank

policies. In addition, the ESSAF is to assist the SFD in screening all the sub-projects for their

likely environmental impacts, identifying documentation and preparation requirements.

53. Most of the proposed sub-projects are likely to focus on canal weed reduction and protection

of river banks, rehabilitation of rural housing, maintenance of rural roads, school rehabilitation,

and solid waste collection. Individual sub-projects will be screened and assigned the appropriate

environmental category and environmental due diligence will be conducted in accordance with

OP 4.01.

54. Considering the nature and magnitude of potential environmental impacts from the relatively

limited scale and magnitude of reconstruction works, only sub-projects classified as “B” or “C”

will be financed by the Project. Any sub-projects classified as category „A‟ will not be eligible

for funding under this operation.

55. While ensuring due diligence in managing potential environmental risks, one has to

recognize the emergency nature of the proposed Project which aims to provide assistance

towards creating or maintaining infrastructure using labor-intensive techniques. Given that, the

ESSAF is based on the following principles:

The proposed operation will support multiple sub-projects, the detailed designs of which

may not be known at appraisal. To ensure effective application of the World Bank‟s

safeguard policies, the ESSAF provides guidance on the approach to be taken during

implementation for the selection and design of sub-projects and the planning of

mitigation measures;

13

The proposed Project supports only environmental category “B” or “C” sub-projects as

per the World Bank classification for safeguards;

No sub-projects entailing resettlement will be eligible for funding under the Project;

No sub-projects that involve the use or pollution of international waterways will be

financed under this Project;

Sub-projects entailing weeding activities shall be manual weeding (i.e., by hand) and will

not involve the use of pesticides. As a result, World Bank OP 4.09 is not triggered; and

Consultation and disclosure requirements will be simplified to meet the special needs of

these operations. The ESSAF was shared with and disclosed in the SFD and relevant

governorates in Egypt as well as in the World Bank InfoShop.

Lessons learned from previous country experience and/or from Bank-wide experience with

emergency response operations

56. The lessons learned which are summarized below have emerged as relevant to this Project.

This summary places a strong emphasis on lessons learned during the first three phases of Bank

support to the SFD, lessons learned from related projects in Egypt, and lessons learned from best

practice programs around the world.

57. It is critically important to select the program for an emergency operation that could have

some degree of success in mitigating the adverse impacts of the crisis on the poor. If countries

already have well-functioning safety nets, the response to the crisis could be relatively quick.

However, in the absence of a strong functioning safety net, the response is often to expand

whatever program existed before the crisis regardless of its capacity to reach the poorest, or to

launch a new program in haste that may run the risk of poor implementation and lead to

governance issues.

58. Based on Egypt’s context, the PWP as an emergency response to a systemic shock,

supporting short-term, well-targeted, labor-intensive infrastructure sub-projects, can help the

transient poor over the short-term. On the other hand, energy subsidies, poverty, inequality,

unemployment, food security and agriculture are continuing challenges and require key reforms

within a medium-term framework.

59. Targeted interventions can have a strong impact on local area well-being and help poor

communities. Egypt uses contractors to implement infrastructure sub-projects, therefore the

dependence on “self-selection” or self-targeting as the key method of targeting is not feasible. A

combined targeting mechanism will be used to target project interventions, including geographic

targeting, community targeting, selection of sub-projects of high labor intensity, and tendering

contracts in small sizes to allow selection of local labor.

60. Specifically, poverty targeting mechanisms that are kept simple, verifiable, and based on

objective criteria can foster transparency, minimize political interference in resource

allocation and ensure that project resources reach the poorest areas. While it is expected that

there will be issues of political economy that might weigh in on the targeting process, this will be

14

addressed through the use of Egypt‟s Poverty Map which is an objective assessment of priority

poor areas.

61. Investments in monitoring and evaluation systems facilitate the sub-project evaluation

process, provide feedback and necessary information to improve targeting and efficiency, and

are an essential management and planning tool. In order to address the weaknesses in M&E

experienced under previous projects, SFD‟s MIS system has been upgraded (with EU support)

and enables users to receive real time monitoring of the entire sub-project cycle.

62. Continued emphasis on technical quality, including environmental screening processes,

enhances impact and sustainability. Standardization of technical designs and unit costs

simplifies the sub-project preparation and evaluation process, improves the quality of sub-

projects, facilitates the procurement of goods and works, prevents over-design, and enables

participation of poorer communities. The environmental screening checklist has been updated

under the previously completed Bank-financed Social Fund III Project to optimize the criteria

and procedures (and their application) for evaluating the environmental impact of sub-projects.

63. Operations and maintenance procedures need to be defined and agreed upon with

beneficiaries and other stakeholders during the sub-project design phase. Operations and

maintenance of public infrastructure and services is a systemic problem in Egypt.

Recommendations from SFD‟s operation and maintenance pilots in the Sharqiya and Fayoum

Governorates conclude that feasibility studies for labor intensive sub-projects should include an

assessment of whether recurrent and operations and maintenance costs will be made available.

64. There are no policy exceptions and the Project is ready for implementation.

E. Implementation Arrangements and Financing Plan

Project Costs

65. The total estimated costs for the proposed Project amount to US$200 million, including about

0.7 percent physical and price contingencies.

Project Cost Summary

(US$ million)

Components

Cost

Including

Contingencies

% of

Total

IBRD

Financing

%

Financing

Comp-1: Labor Intensive Sub-projects 198

99.0

198

100.0

Comp-2: Implementation Support 2

1.0

2

100.0

Total PROJECT COSTS 200

100.0

200

Other cost tables are presented in Annex 3: Summary Cost Tables.

15

Implementation Arrangements

66. The SFD will be the implementing agency for the proposed Project. The SFD will be

responsible for the overall program, using its own fiduciary management systems that are in

compliance with World Bank regulations and procedures, with institutional arrangements and

procedures in place as a result of the previous three phases of World Bank support to the SFD.

The SFD will rely on its Human and Community Development Central Sector (HCD) and the

capacities of the Financial Management Department, the Internal Audit Department, the

Environmental Safeguards Department, and the Planning, Monitoring, and Evaluation

Department in implementing this Project. There will be no separate Project Implementation Unit

established for the SFD Headquarters. On the other hand, Project Implementation Units (PIUs)

will be established in the Sponsoring Agencies.

67. The SFD will work in close partnership with the governorates, sectoral ministries at the

governorate level, local authorities, NGOs, and CDAs. The SFD will be responsible for

implementing and coordinating the activities of this project with the support of its 27 regional

offices which monitor project progress and reporting structures.

Main Partners:

The SFD will select the intervention areas guided by Egypt‟s poverty map and will fund

eligible sub-projects based on criteria defined in its Operations Manual. SFD‟s regional

offices will oversee the implementation of sub-projects and provide assistance as may be

required to sponsoring agencies (Central Ministry9/Local government offices/ or NGOs

with an established track record of successful intervention and a demonstrated capacity to

implement the proposed sub-project) and IAs (Technical Sectoral Departments). Small

local private contractors/NGOs/ CDAs will be contracted for execution of contracts.

Line Ministries/ Governorates will endorse the proposed sub-projects and facilitate

implementation at the local level. Technical directorates within the Governorates will

provide guidance on sectoral issues and ensure that budgetary allocations are made for

proper operation and maintenance of completed sub-projects. These technical directorates

will also be responsible (as IAs) for implementing infrastructure sub-projects.

NGOs/ Community Development Associations (CDAs). NGOs are registered, large,

experienced development associations with a track record in implementing community

driven development projects. (CDAs) are groups of citizens from the community with a

common interest, which organize into legally constituted civil associations. Both NGOs

and CDAs will identify, prepare, implement, supervise, operate and maintain their sub-

projects, assisted by technical specialists.

68. Project Oversight: The Board of Directors of the SFD is responsible for project oversight.

The Board is chaired by the Prime Minister and includes ministers, experts in development,

private sector representatives, and academia. SFD‟s Managing Director will be responsible for

general project coordination and implementation, and the General Manager of the Human and

Community Development Group will be responsible for day-to-day project management.

9 This will be applied only for central level ministerial sub-projects that would involve technical or geographical

coverage requirements to be implemented at that level.

16

69. SFD Roles and Responsibilities: Key SFD duties will include: (a) preparing the sub-project

pipeline in accordance with guidelines and eligibility criteria defined in the Operations Manual;

(b) assessing the degree of labor intensity of the proposed sub-projects, (c) assessing the degree

of community participation in identifying and executing sub-projects and the quality of the skills

upgrading activities proposed; (d) supervising the activities of the SAs and the IAs; (e)

overseeing the procurement arrangements to ensure that implementing partners are adhering to

the agreed procedures; (f) ensuring that SAs are actually carrying out the capacity building

activities for the implementing partners (including training on sub-project implementation,

contracting, operation and maintenance, and financial management); (g) monitoring performance

through the Management Information System (MIS) and reporting quarterly on progress; and (h)

developing an impact evaluation process to provide information on project outcomes.

Alternatives Considered and Reasons for Rejection

70. The Bank was asked to consider the use of a Development Policy Loan (DPL). A DPL

would be more appropriate for an operation that aims to support the adoption of appropriate

policy reforms having a medium- to long-term impact on the unemployment problem in Egypt.

The proposed Project, on the other hand, is designed to deliver support urgently to improve

short-term employment opportunities that would be responsive to the immediate needs of the

Government.

71. The Bank was also asked to consider small and medium enterprise programs. The Bank is

already undertaking such support through the Enhancing Access to Finance for Micro- and

Small-Enterprises (MSEs) Project (US$300 million), which is being implemented by SFD. The

objective of the project is to contribute to a sustainable improvement in inclusive (region and

gender) access to finance for MSEs on a commercial basis. There are two components to the

project, the first component being a line of credit for microfinance channeled through banks,

Non-Governmental Organizations (NGOs) and potential Microfinance Institutions (MFIs).

Finally, this support would not be in compliance with the request from the Government to

prepare a project under the Bank‟s guidelines for “Rapid Response to Crises and Emergency

Operations.”

72. Support to design a broader safety net assistance program. One option considered was

having a project design which addresses different aspects of the safety net, including reform of

subsidies, cash transfers under the Ministry of Social Affairs, and public workfare and

community development under the SFD. This would not be feasible within the context of an

emergency operation, because such a project would be more complex in design and therefore

would take longer to prepare and would involve several agencies. The proposed Project will

make an important contribution to the Government‟s safety net reform by strengthening one of

the key safety net instruments, the SFD, and making it more efficient and effective. The subsidy

issue will continue to be pursued through macroeconomic policy dialogue

73. Support for labor-intensive public works implemented by line ministries. While such

programs could be implemented relatively quickly, they were rejected for the following reasons:

(i) any short term response to the crisis should be consistent with the longer term vision for

17

Egypt, and given that in the long run the private sector has to be the engine of employment

generation, hiring more people into an already too large public sector would be inconsistent with

the vision, so an approach using private contractors and NGOs is better; (ii) the labor intensity of

ministry-run programs is too low; and (iii) ministry programs do not correspond as well to local

needs as programs with a more demand-driven approach.

74. Due to the emergency nature of the proposed Project, supervision will be carried out on a

regular basis from the Bank‟s field office in Cairo. In addition, procurement and financial

management specialists will carry out a minimum of two missions per year. An environmental

specialist will be included in the project supervision team. The Project will be supported by

operations staff in World Bank Headquarters.

75. The proposed Project is expected to close on December 31, 2015. It will be implemented

over three years.

F. Key Risks and Mitigating Measures

76. The overall risk rating for the Project is Substantial. The Project has been prepared and will

be implemented in a country and political environment that is still in transition. The Country,

Governance, Fraud and Corruption risks are rated „Substantial‟. Mitigating measures to address

these risks include, inter alia: (i) a project design that focuses on poor areas where the risk of

major disruptions to project activities is lower; (ii) selection of the SFD as Implementing

Agency. The SFD has considerable prior experience with implementing Bank-financed projects,

and is familiar with Bank policies and procedures; and (iii) fiduciary safeguards in place for the

Project to ensure effective oversight of the flow of funds and procurement procedures. The

Procurement Risk Rating is „High‟ because of gaps in capacity to carry out procurement,

especially at the local levels. Mitigating measures in place under the Project include: (i) hiring

an experienced Procurement Advisor to help build procurement capacity and monitor conformity

with procedures used for selection of consulting services; and (ii) updating the SFD Procurement

Manual to ensure clear definitions of roles and responsibilities and consistent application of

procedures. The project risks, their ratings, and mitigating measures are detailed in the

Operational Risk Assessment Framework in Annex 4.

G. Terms and Conditions for Project Financing

77. The amount of the loan is US$200 million. The Borrower completed the Loan Choice

Worksheet during negotiations and the parties agreed on an IBRD Variable Spread Loan with a

29 year maturity and a 7 year grace period with commitment linked level repayment pattern.

Conditions for sub-project financing are detailed in the Schedule to the Project Agreement.

18

Annex 1: Detailed Description of Project Components


Emergency Labor Intensive Investment Project

I. Proposed Development Objective(s)



services to the target population in poor areas in the Borrower‟s territory.

II. Preliminary Description

2. The Project will be three years in length, and will be financed by a US$200 million loan. It

will be implemented by SFD following World Bank policies and procedures.

Component 1: Employment-Intensive Sub-projects (US$198.0 million)

3. This component will support two types of sub-projects: (i) small-scale local infrastructure

works sub-projects; and (ii) community-level labor-intensive sub-projects for provision of social

services.

4. Labor Intensity. The component will support employment-intensive sub-projects that will

apply a labor intensity percentage of an overall average of 40 percent, higher than that currently

being achieved in Egypt.

5. Small Scale Local Infrastructure Public Works Sub-projects. Eligible sub-projects could

include, but are not limited to: canal weed reduction, Nile River bank protection, upgrading the

conditions of rural housing, pavement of rural roads, and school rehabilitation. These sub-

projects could be demand-driven, requested by the local government at the governorate level, or

supply driven, requested by a central ministry based on needs.

6. Demand Driven Community Service Sub-projects. These would support the provision of

demand driven community services. Social service sub-projects tend to employ unemployed

females, so this type of sub-project would increase the percentage of targeting of women under

the Project. Sub-projects could include labor intensive interventions such as community services,

early childhood education services, employment intensive population services, outreach for

health and nutrition services, solid waste collection, and youth engagement sub-projects, mainly

in rural and urban areas.

7. Youth Employment. In addition to those specific sub-projects that will be targeted for youth

employment in rural and urban settings, it is anticipated that the youth beneficiaries of the sub-

projects funded under this component would be high, reaching 60 percent as projected by project

estimates.

19

Component 2: Implementation Support (US$2.0 million)

8. This component will finance the following:

9. Public Information, Communication, and Social Accountability. The component will

support the design and implementation of a communication and social mobilization strategy and

detailed action plan. The objective of the communication strategy will be to: (i) promote the

benefits of labor intensive projects; (ii) raise public awareness about the availability of the

potential employment opportunities that would be created by the Project; (iii) address areas of

concern raised as the project is implemented; and (iv) create channels for feedback from the

beneficiaries and civil society that would improve implementation. The communication strategy

and plan will be prepared during the first year of project implementation. The strategy will

propose key messages to be disseminated through communication/media channels, and training.

10. In addition, the component will support the design and implementation of a grievance and

transparency mechanism that would allow citizens to provide feedback to the SFD about project

implementation and allow potential beneficiaries who have not been included in the program to

seek redress.

11. Technical Verification, Quality Assurance, and Audits. Periodic technical verification will

be carried out on a semi-annual basis during the life of the Project, using an Independent

Verification Expert (IVE) and NGOs. The IVE will verify: (i) the intermediate sectoral

outcomes; and (ii) the output indicators. Quality assurance firms will assess: (i) the quality of

the works; (ii) whether sub-projects are operated and maintained in accordance with SFD‟s

maintenance manuals; (iii) compliance with the Operations Manual; and (iv) compliance with

environmental and social safeguards for community infrastructure sub-projects as well as client

satisfaction rates for community social services sub-projects.

12. Project Management. The Project will be implemented by the SFD using fiduciary

management systems that will be in compliance with World Bank regulations and procedures.

13. Project Monitoring & Evaluation. Monitoring will be carried out by the SFD‟s internal

monitoring system using the SFD management information system (MIS). The Project will

finance support to conduct mid-term, end-of-project, and impact evaluations that will assist the

Government of Egypt in its potential for scale-up as an essential part of Egypt‟s social safety net

program. Evaluations will be carried out through independent consulting firms.

20

Annex 2: Results Framework and Monitoring

EGYPT: Emergency Labor Intensive Investment Project

Results Framework Project Development Objective (PDO): (i) To create short-term employment opportunities for unemployed unskilled and semi-skilled workers; and (ii) to provide access to basic

infrastructure services to the target population, in poor areas in the Borrower’s territory.

PDO Level Results Indicators

Co

re

Unit of

Measure Baseline

Cumulative Target Values Frequency

Data Source/

Methodology

Responsibility

for Data

Collection

Description

(indicator

definition etc.) YR 1 YR 2 YR3 YR 4 YR5

Indicator One:

No. of direct job opportunities

created through the project.

Number

0

50,000

120,000

194,800

Every 6

months

SFD MIS

SFD

Number of job

opportunities

calculated a 4

month cycle per

job created

based on

number

person/days

employment

created

Indicator Two:

No. of indirect job opportunities

created through the project.

Number

0

17,000

40,000

64,000

Every 6

months

SFD MIS

SFD

This is an

average factor of

1.5 times of

direct job

opportunities

calculated for

community

infrastructure

subprojects at

any given time

Indicator Three:

Percentage of direct job

opportunities created through the

project, gender disaggregated

Number

0

25% of

direct job

opportuniti

es for

females

25% of

direct job

opportuniti

es for

females

25% of

direct job

opportunit

ies for

females

Every 6

months

SFD MIS

SFD

Extent of female

participation in

jobs created

Indicator Four:

Percentage of direct job

opportunities created through the

project, age disaggregated

Number

0

50% of

direct job

opportuniti

es for youth

55% of

direct job

opportuniti

es for youth

60% of

direct job

opportunit

ies for

youth

Every 6

months

SFD MIS

SFD

Extend of youth

below age of 30

participation in

jobs created

21

INTERMEDIATE RESULTS

Intermediate Results

Intermediate Result indicator

One:

A- Percentage of Quality

subprojects completed

as measured by– Client

Satisfaction

Percent

0

65

70

75

MTR and

End of

Project

Evaluation

Through

client

satisfaction

surveys by an

independent

agency

Independent

agency/SFD

Percentage of

client satisfaction rates of services

provided at

subproject level


One:

B- Percentage of

subprojects completed

with high– Technical

Quality

Percent

0

60

70

75

MTR and

End of

Project

Evaluation

Through

technical

surveys by an

independent

agency

Independent

agency/SFD

Percentage of

infrastructure

subprojects

achieving satisfactory levels

of quality


Two:

Labor intensity of subprojects

Percent

22-36

30

35

40

Every 6

months

SFD MIS

SFD

Percentage of

wages paid from total subprojects

costs.


Three:

Number of person/days of

employment created

Number

0

5 million

12 million

19.48

million

Every 6

months

SFD MIS

SFD

No. of working

days of employment

created by the

subprojects


Four:

Wages paid to workers

(disaggregated by gender)

Number

20 million 40 million 79.2

million

Every 6

months

SFD MIS

SFD

Amount paid in

USD to workers in

subprojects


Four:

Kilometers of canals cleaned

Number

0

0

10,200

10,200

Every 6

months

SFD MIS

SFD

The same number of 10,200 km will

be cleaned each

year.


Five:

Kilometers of River Nile bank

protected

Number

0

11

30

47

Every 6

months

SFD MIS

SFD

No Kilometers

of River Nile

bank protected

cumulative

Intermediate Result indicator Six:

Number of houses of the poor

rehabilitated

Number

0

2,400

4,960

7,591

Every 6

months

SFD MIS

SFD

Number of

houses of the

poor

rehabilitated

cumulative


Seven:

Number

0

66.5

88.5

122

Every 6

SFD MIS

SFD

Number of

Kilometers of

22

Kilometers of rural roads

upgraded

months rural roads

upgraded

cumulative


Eight:

Number of classrooms in schools

and kindergartens rehabilitated

Number

0

2,000

5,000

12,000

classroom

s in 710

schools

and 500

KGs

Every 6

months

SFD MIS

SFD

Number of

classrooms in

schools and

kindergartens

rehabilitated

cumulative

23

Annex 3: Summary of Estimated Project Costs



Components Cost Summary

(US$ million)

%

Foreign

Exchange

% Total

Base

Costs

Local

Components

Foreign

Total

Comp-1: Labor Intensive Sub-

projects 196.57

196.57

0

98.3

Comp-2: Implementation

Support 1.25

0.75

2.0

40

1.0

Total BASELINE COSTS

Physical Contingencies

0.79

0.79

100

0.4

Price Contingencies

0.64

0.64

100

0.3

Total PROJECT COSTS 197.82

2.18

200.0

1.1

Expenditure Accounts Cost Summary

(US$ million)

%

Foreign

Exchange

Expenditure Accounts

Local

Foreign

Total

A. Sub-projects to SFD

196.57

196.57

0

B. Consultants‟ Services,

Training, Audit

1.25

0.75

2.0

40

Total BASELINE COSTS

Physical Contingencies

0.79

0.79

100

Price Contingencies

0.64

0.64

100

Total PROJECT COSTS

197.82

2.18

200

1.1

24

Annex 4: Operational Risk Assessment Framework (ORAF)



Project Stakeholder Risks Rating M

Description: SFD as an institution is supported by the

government and the donor community, and is known as an

effective poverty reduction instrument. Job creation is the top

priority. Local government is the focal point for identification of

sub-projects, and there may be the possibility of bias in

targeting.

Risk Management: The project will follow standard mechanisms for targeting, combining

geographic targeting, self-targeting, and community targeting.

Resp: SFD/ Human &

Community

Development Sector

Stage: Implementation Due Date : By

Effectiveness Status: Ongoing

At the local level, there may be bias in the identification of sub-

projects to be funded.

Risk Management: The majority of sub-projects were identified during project preparation to

avoid bias in sub-projects identification.

Resp: SFD/ Human &

Community

Development Sector

Stage: Appraisal Due Date : April 13,

2012

Status:

Completed

Implementing Agency Risks (including fiduciary)

Capacity Rating: S

Description: Lack of sufficient capacity for project

management, given that SFD has not been managing PWP for

many years. Insufficient procurement and FM capacity,

including a challenging public financial management

environment, and insufficient levels of transparency at the

country and sector levels. Lack of implementing capacity at the

local levels. SFD did at one time have an active public works

program, which the WB supported, but the program closed in

the 1990s due to diminished demand. The staffing, procedures

and other arrangements used during that period may no longer

be in place. However, capacity under the ongoing WB

microcredit project indicates that project management and

fiduciary capacity are adequate.

Risk Management: Support from the project, under Component 2, in the form of TA to build

project management capacity, including in the areas of project management, procurement and

financial management.

Resp: SFD/ Human &

Community

Development Sector


2012

Status:

Completed

Procurement risk is considered „High‟ because: (i) there are

gaps in procurement capacity, especially at the local level; and

(ii) all procurement for goods will be carried out using

Shopping procedures.

Financial Management risk is considered “Substantial” because:

(i) the project is complex with decentralized implementation

arrangements with the SAs and NGOs at the governorate level

Risk Management: Procurement: Mitigation measures include: (i) hire experienced Procurement

Advisor; (ii) update Procurement Manual with complete annexes to ensure clear definitions of roles

and responsibilities, and consistent application of procedures; (iii) reinforce capacity of regional

offices through Procurement Advisor to monitor conformity with procedures used by SAs and IAs;

and (iv) provide capacity building on development of Procurement Manual and Annexes.

Financial Management: Mitigation measures include: (i) the Operations Manual clarifies the

roles/responsibilities of the different implementation layers; (ii) per the framework agreements with

the Sponsoring Agencies (SAs), the PIUs in the ministries, governorates or NGOs will be

25

managing the funds; (ii) there is weak capacity and oversight at

the decentralized level; and (iii) the PFM diagnostics on Egypt

during the past year have indicated that the PFM risk in Egypt is

Substantial, with stagnant PFM reform agenda..

responsible for sending monthly technical and financial reports to the SFD ROs in order to be

entitled to request future tranches; (iii) SFD procedures have been amended to capture the FM

arrangements and disbursement requirements of the project; (iv) the SFD Internal Audit

Department has established a risk based audit strategy which is acceptable to the Bank; (v) the SFD

will track continuously the amounts actually disbursed, through the SFD Finance Department, and

not only the amounts transferred to the SA.

Resp: SFD/ Financial

Management and

Procurement

Departments

Stage: Implementation

Due Date : Three

months after

effectiveness

Status: Ongoing

Risk Management: The project will support the establishment of a web-based grievance system

with text messaging capability to allow reporting of irregularities, complainants, and feedback.

Resp: SFD/ Human &

Community

Development Sector


Due Date: Within six

months of project

signing

Status: Ongoing

Governance Rating S

Description: Project implementation will involve multiple

agencies at different levels, and this could complicate the

implementation process, especially since the project is a Rapid

Response operation.

Roles and responsibilities of the different agencies and levels

(central, Governorate, municipality) may not be sufficiently

clear.

Lags in decision-making.

Too few qualified staff at local level to implement a large PWP.

SFD has a long and positive history of implementing similar

projects.

Risk Management: TA support under the project could be used to help build up the capacity at the

local level. Also, the Project Operations Manual will detail the roles and responsibilities of all the

players.

Resp: SFD/ Human &

Community

Development Sector

Stage: Implementation Due Date : Six months

after effectiveness Status: Ongoing

Project Risks

Design Rating: S

Description: The project is complex in nature, with weak

capacity of the implementing partners, including Community

Development Associations (CDAs) and NGOs.

While envisaged PWP activities are straight forward, the project

would provide support for the adoption of several targeting

mechanisms, some of which are new. Inequitable or skewed

targeting of the poor for participation in the public works sub-

Risk Management: The project includes funding to build and strengthen capacity of the SFD and

the implementing partners, including fiduciary functions. For example, all CDAs and NGOs will

be required to have a Project Implementation Unit (PIU) which includes a full time project

manager, an accountant and a procurement specialist.

The project includes funding to build capacity of the SFD to use available and tested targeting

mechanisms.

26

projects. Egypt does not have a scalable targeted social

protection system to adequately protect the poor if a crisis

emerges. Enhanced targeting measures are needed.

Resp: SFD/ Human

& Community

Development Sector

Stage: Effectiveness Due Date : By

Effectiveness Status: Ongoing

Social & Environmental Rating: L

Description: Social – Social risks are minimal or non-existent.

This project would directly benefit unskilled, impoverished and

largely rural population.

Environmental - there may be some negative environmental

impacts resulting from implementing some sub-projects though

potentially minor and not significant. SFD has experience in

implementing EMP as per World Bank policies and guidelines.

It also has environmental focal points and qualified

environmental consultants.

Risk Management: An Environmental and Social Screening and Assessment Framework

(ESSAF) has been developed to ensure environmental due diligence for all the sub-projects funded

by this project. It is intended to ensure that, for all activities financed by the project, all efforts are

made to avoid and minimize environmental and social impacts.

Resp: SFD/ Human &

Community

Development Sector


2012 Status: Done

Delivery Monitoring & Sustainability Rating: M

Description: The M&E system currently in place may not be

adequate to effectively measure project results, including

outputs and outcomes. This risk is considered Moderate as the

SFD has developed M&E systems to monitor previous WB-

financed projects.

There is a risk to sustainability if the Government will not

provide sufficient funding for O&M costs related to the public

works activities after the project closes, even though covering

these O&M costs is a requirement as part of the initial sub-

project agreement with the local government authorities.

Risk Management: The SFD MIS system has been upgraded (with EU support) and enables users

to receive real time monitoring of the entire subproject cycle. The MIS was also modified to

enable it to collect and report on project specific outputs and outcomes in disaggregated manner.

The proposed project will also include support to continue strengthening the SFD M&E function

for project monitoring.

As the project is addressing country shocks, it is not meant to be financially sustainable. However,

capacity development of the SFD as an institution that will be capable of implementing this

program in a scalable manner is an essential element of the program‟s sustainability and resources

are devoted under the project towards that end.

Resp: SFD/ Financial

Department


Due Date : By six

months from project

signing

Status: Ongoing

Overall Risk Following Review

Implementation Risk Rating: S

Comments: Given that the overall risk is rated as S, the project team will intensify

its supervision efforts during implementation including planning additional

missions during the first year of implementation, and including sectoral and

fiduciary Bank team members to ensure the compliance of the SFD to the

application of the mitigation measures outlined above.

27

Annex 5: Financial Management and Disbursement Arrangements



A. Executive Summary and Conclusions:

1. An assessment of the Financial Management (FM) arrangements for the proposed Project

was undertaken in March 2012 to assess the capacity of the Project‟s implementing entity and

assist in determining the required FM arrangements for project implementation. A detailed FM

capacity assessment of the SFD was conducted and its outcome is found to be satisfactory to the

Bank.

2. The Project‟s implementation arrangements were discussed at length with an evaluation

of all FM options to be applied during implementation and their impact on the various

stakeholders under the Project. The project activities will be implemented by the SFD which has

the overall responsibility for project oversight, coordination, and implementation. While

Component 2 of the Project will finance project implementation support disbursed directly by the

SFD, Component 1of the Project will provide grants to Sponsoring Agencies (SAs) for the

carrying out of sub-projects consisting of small-scale infrastructure public works and community

services. To facilitate the carrying out of Component 1of the Project, the SFD will sign Grant

Agreements with the SAs in accordance with eligibility criteria and procedures acceptable to the

Bank, for sub-projects selected, implemented and evaluated in accordance with the principles

and procedures of the Project‟s Operations Manual.

3. At the country level, the FM risk is considered as substantial due to the stagnant Public

Financial Management (PFM) reform agenda for several years. The main challenges affecting

the FM risk at the country level, as assessed by the 2009 PEFA report and the 2008 CFAA, are:

(a) weak intricate internal control system, (b) absence of a Government Financial Management

Information System (GFMIS); (c) lack of transparency; and (d) weak regulatory framework and

capacity of the Egyptian Supreme Audit Institute. The current political and post revolution

changes in the country represent an opportunity for tackling the PFM reform agenda provided

that the Government becomes more engaged in the PFM reform.

4. At the project level, the FM risk is considered substantial before mitigating measures due

to the complex implementation and oversight arrangements and the capacity at the decentralized

level.

5. To mitigate the FM risks, the following mitigating measures have been agreed upon:

(i) The SFD will benefit from its experience with World Bank-financed projects and most

recently the Enhancing Access to Finance for Micro and Small Enterprises Project during

the preparation of which the Bank worked closely with the SFD team to improve the

SFD‟s internal control procedures, including updating the FM Manual and the Internal

Audit risk-based approach strategy.

(ii) The Operations Manual has been revised to clarify the relations/responsibilities of the

different layers of implementation.

28

(iii)The SFD‟s Internal Audit Department (IAD) will play a major role in assessing the

capacity of decentralized implementing agencies before advancing the project funds.

(iv) The SFD has an acceptable automated accounting system which is Oracle based. The

SFD will create a new unique code for this project and this action is expected to be

concluded within one month from project effectiveness.

(v) The SFD will contract with an IVE, based on terms of reference (TOR) acceptable to the

Bank, to assess and verify that: (i) project outcomes have been met; (ii) the quality of

works undertaken in carrying out sub-projects is acceptable; and (iii) sub-projects are

implemented and maintained in accordance with the requirements of the Maintenance

Manuals, the ESSAF and the Operations Manual.

(vi) The SFD will contract with an independent external auditor based on TORs acceptable to

the Bank, for the purpose of carrying out an external audit of the Project‟s financial

statements which will include an extended scope to audit the SA implementation of sub-

projects and their compliance with the agreed FM system and internal control procedures.

6. The SFD has prior experience with Bank-financed projects. The most recent project, SFD

III, closed in February 2006 with satisfactory FM performance and audit compliance rate. The

SFD is currently implementing the Enhancing Access to Finance for Micro and Small

Enterprises Project, a US$300 million operation with satisfactory FM performance.

FM Arrangements:

Roles and Responsibilities

7. The SFD: The SFD will be responsible for maintaining the project‟s FM arrangements,

including providing oversight of sub-projects implementation and monitoring the SAs‟

compliance with the Operations Manual, including financial and internal control procedures. The

SFD will be responsible for budgeting, recording and reporting financial activities under the

umbrella of the Project, requesting transfer of funds from the World Bank and transferring funds

to the PIU/NGO. The SFD will contract with an independent external auditor based on TORs

acceptable to the Bank, for the purpose of carrying out an external audit of the Project‟s

Financial Statements.

8. The SFD Internal Audit (IAD): As per the existing IAD risk-based strategy, the IAD

will be responsible for evaluating all PIUs and NGOs interested in implementing sub-projects

under this Project. The IAD has representatives stationed in their Regional Offices (ROs) who

will be responsible for carrying out the detailed assessments. The Bank reviewed the IAD‟s

strategy, including their process of assessing the capacity of PIUs/NGOs to implement sub-

projects and found the IAD strategy and the IAD capacity assessment process to be acceptable.

Subsequent to the IAD‟s assessment and approval, the SFD will sign a Grant Agreement with the

SA. The IAD, through conducting field visits, will follow up on the project implementation

throughout the project‟s life.

9. The Sponsoring Agencies (SA) (PIUs/NGOs): The SA, in coordination with the IA, is

responsible for implementation of sub-grants including the issuance of bidding documents, the

selection process, supervision of implementation, the verification of technical acceptability of

29

implemented activities, and the issuance of payments to beneficiaries. Each SA will open and

manage a separate bank account denominated in Egyptian Pounds, at an acceptable bank, for the

sole purpose of managing the sub-grants received from the SFD under this Project. Each SA will

follow acceptable FM systems and control procedures as agreed upon and as per the Operations

Manual. The SAs will prepare monthly bank reconciliation and submit monthly financial and

technical packages to the SFD office. The PIUs under the Ministries and Governorates are

subject to the Central Accountancy Office (CAO) regular audit and the NGOs are legally

required to have their annual financial statements audited by an independent external auditor. In

addition, SAs will be subject to the annual external audits and regular audits by the SFD‟s IA

Department.

Staffing:

10. The SFD Finance Department‟s structure is considered to be adequate in terms of

staffing, capacity and previous experience in conducting project financial transactions. The staff

capacity is considered to be adequate to carry out the additional workload of the Project. There

are 100 employees in the Finance and Administration Group, both at the main office and the

SFD‟s regional offices. SFD has prior experience with Bank-financed projects, has achieved

satisfactory FM performance and has received unqualified audit reports in the past.10

Accounting, Recording and Reporting:

11. The SFD will record all project-related transactions using accrual basis and will maintain

the accounting records. Original supporting documents for sub-projects will be kept at the SA

level.

12. The SFD bookkeeping is automated through the Oracle accounting system, which is

centralized in the SFD‟s Main Office. The regional offices have the ability to access the SFD

MIS for the purposes of recording and reporting activities. The SFD accounting system is

considered acceptable and SFD staff members are familiar with World Bank requirements,

having been engaged previously with several Bank-financed projects. While the system was

found to be generally acceptable by the Bank, it was agreed that the SFD‟s IT team will establish

a separate module/code in the Oracle system for the sole purpose of recording and reporting on

all project related transactions. The SFD‟s accounting system is capable of generating quarterly

Interim Financial Reports (IFRs) and annual Project Financial Statements (PFS) which are

required under the Loan Agreement. The format and content of the project reports has been

discussed and agreed with the SFD Finance and IT Departments during project appraisal.

13. The Grant Agreement with the SA will obligate the PIUs to report on technical and

financial progress on a monthly basis to the SFD. With regard to contracting with PIUs to

implement sub-grants, the PIUs will be given access to SFD‟s MIS system to execute the

recording and reporting activities. When contracting with NGOs, the SFD‟s regional offices will

be responsible for the recording and reporting on the SFD system on behalf of the NGOs. Each

sub-project agreement between the SFD and the SA is given a unique code in the SFD automated

accounting system against the financing donor (i.e., The World Bank).

10

Please refer to Annex 2 for the SFD Finance Department organizational structure

30

14. Contracts will be kept at the SFD Headquarters while supporting documents for the sub-

projects will be kept at the PIU/NGO level where the supporting documents will also be required

to be scanned and sent to the SFD‟s regional offices as part of the disbursement process. The

Grant Agreement with the PIUs will state that the SFD IA Department and the independent

external auditor will be granted access to examine the original project documents supporting

actual disbursements.

15. The SFD will keep track of the amounts actually disbursed and not only the amounts

transferred to the PIUs/NGOs. The amounts actually disbursed to the contractors/suppliers

should represent the basis for documentation of expenditures and requesting future advances.

Flow of Funds and Internal Controls:

16. To facilitate the flow of funds (provided the advancing of loan proceeds to a Designated

Account is permitted by the Bank), a segregated USD Designated Account (DA) will be opened

and managed by the SFD for the sole purpose of managing the project funds. The project‟s

design allows SFD to request advances to the DA for an amount equal to two quarters (6 months)

of the Project‟s cash forecast as presented in the quarterly unaudited IFRs (i.e., IFR based

disbursement). Other disbursement methods such as reimbursement, direct payment and special

commitments will be available.

17. A monthly bank reconciliation of the DA will be prepared by the SFD Financial Internal

Control Department and will be prepared by Financial Officer and reviewed by the Internal

Control Department Senior Manager.

18. In addition, each SA will open and manage a separate bank account denominated in

Egyptian Pounds, at an acceptable bank, for the sole purpose of managing the sub-grants

received from the SFD under this Project. Each SA will issue a disbursement request to the SFD

regional office based on a 6-month disbursement forecast requesting the advance payment and

later subsequently advanced after documenting initial advances.

19. The SFD‟s regional office will forward the requests for funds to the Human and

Community Development Department (HCD). The HCD will fill out a disbursement form with

all project information (i.e., code, name, responsible department, sub-project start date, sub-

project duration, sub-project developmental objective, financing source, project value, total

number of tranches according to the contract, previous tranches and their respective amount,

remaining amount, SA bank name, bank account number). The form is signed by the responsible

sub-project officer, and approved by the HCD Head of the Department and HCD Sector Head.

The form is then reviewed and signed by the Monitoring and Evaluation Department. The form

is forwarded to the Finance Department where it is reviewed, approved and authorized for

payment. The form is signed by the Internal Control Department representative and the Head of

Operations. The Finance Department issues a letter to the bank to transfer the requested and

approved advance or replenishment to the SA from the SFD DA opened for the World Bank

31

project to the SA bank account. The letter is signed by the Internal Control Manager and the

Internal Control Senior Manager.11

20. The same procedures apply for subsequent tranches. The following documents are

attached with the disbursement request from the SA to the SFD‟s regional office:

- The sub-project‟s disbursements to date.

- Technical report on the sub-project‟s achievements to date.

- Sub-project‟s cash forecast and planned activities.

21. The project disbursement plan and the budgetary process, which is conducted by the SFD

Finance Department, is based on the signed contracts with the PIUs, and accordingly, the project

disbursements forecast is registered on the system, will be updated periodically and will be used

to reflect the variances upon IFRs submission. It is necessary that variance analysis be prepared

with each IFR submission explaining variances that exceed 15 percent between actual and

planned figures of the previous six months/quarter. Also, the IFR package will include DA

Reconciliation Statement, Sources and Uses of Funds by Component and by Category, a List of

Payments against contracts subject to the Bank‟s prior review, and a List of Payments against

contracts not subject to the Bank‟s prior review.

22. The Borrower is responsible to bear all risks associated with foreign exchange

fluctuations when making transfers from the DA which is denominated in US Dollars to the sub-

accounts denominated in Egyptian Pounds. At the end of the Project, any unused balance in

Egyptian Pounds should be converted to US Dollars and deposited in the DA.

Report-Based Disbursement

23. Under the report-based disbursement method, a forecast of expenditures will be agreed

between the SFD and the Bank, covering up to two calendar quarters. Thereafter, aggregate

disbursement requests not exceeding this forecast amount are transferred by the Bank into the

Designated Account upon demand by the SFD. Disbursements will be made against Withdrawal

Applications supported by IFRs. The Designated Account would be used in accordance with the

Bank‟s Disbursement Guidelines. The SFD will be responsible for administration of the

Designated Account and all disbursement related transactions.

24. Under Component 2 of this project, the capacity of the SFD staff in the regional offices

will be enhanced through workshops conducted by external consultants. In order to ensure proper

controls are applied over disbursements pertaining to the workshops, the workshop agendas, list

of participants, venues, costs, etc., will be reviewed by the TTL and given a No Objection prior

to taking place.

25. The following is an illustration of the flow of funds cycle:

11

On the SFD automated system, the related Journal Voucher is prepared by the Finance Officer, reviewed by the

Finance Manager and approved by the Internal Control Department Senior Manager and the Sector Director,

Finance and Operation.

32

26. SFD‟s Operations Manual was amended to capture the financial management

arrangements and disbursement requirements of the Project which were found acceptable to the

Bank. This entailed updating the SFD FM Manual to reflect activities under the envisaged

Project, and included new disbursement voucher forms as annexes to the existing FM manual.

The FM manual was reviewed by the Bank and found acceptable. The FM manual is now dated

March 15, 2012. As per the IAD strategy, all SFD Departments should notify the IAD of any

changes made to their respective policies and procedures prior to implementation to provide

opportunity for the IAD to review and advise on whether such changes might weaken the system

of internal controls.

Internal Audit Arrangements:

27. The SFD IAD. The SFD‟s IAD includes over 40 internal auditors at the HQ and

governorate levels or regional offices. The IAD, with its current capacity, is responsible for

conducting audit field work and related reporting for all SFD projects throughout Egypt.

IBRD

SFD HQ DA

Sponsoring Agencies (PIU or

NGOs)

Suppliers

Contractors

Service Providers/

Consultants

Delivery of Sub-projects and Services to Beneficiaries and

Responsible Authorities

33

28. The SFD IAD has established a risk based audit strategy which was reviewed, and found

acceptable, by the Bank. The audit strategy covers the IAD and the independent external auditor

involvement in evaluating the grant recipient and follow up on activities being implemented. It

was agreed with the Head of the IA that a capacity assessment of each PIU/NGO would be

carried out before signing the SA grant agreement by the IAD representative stationed in the

SFD regional office. Upon the IA clearance, the agreement will be signed accordingly and the

IAD will update its annual audit plan to include the approved PIU/NGO in their work program.

29. The IAD audit plan is prepared annually and revised on a quarterly basis. The planned

number of IAD visits and the associated scope of supervision is based on the results of the field

work of the Internal Auditor and the noted observations on the PIU/NGO performance. The IAD

plan establishes proper segregation of duties between the teams responsible for capacity

assessment of PIU/NGO and those responsible for follow up on implementation activities.

30. Following the transfer of the first tranche, the IA representative from HQ visits the PIU to

ensure that all of the financial arrangements stipulated in the SA grant agreement are followed.

Any noted observations are reported in the IAD report and followed up on by the IAD until

resolution. The final tranche is not transferred to the PIU until all IAD noted observations are

resolved.

31. The SFD IAD and the Project‟s External Auditor will be granted access to examine the

original supporting documentation. Meanwhile, the SA will send monthly reports to the SFD

regional office. As per the existing SFD IAD strategy and Program, the IAD will conduct regular

field visits by using the IAD‟s representatives stationed in the SFD‟s regional office throughout

the project life. The IAD staff will be responsible for documenting the outcome of the visits by

preparing and submitting to the Head of the Internal Audit a report documenting each visit. Also,

for NGOs, the two latest audited financial statements will be obtained to ensure that there is an

unqualified (clean) opinion on the NGO financial statements.

Transparency:

32. Allocation of funds under the umbrella of the Project was based on Egypt‟s geographical

poverty map which was prepared by the GoE and applied by the World Bank in the project

design in determining the targeted geographical areas. Signs and bulletin boards will be placed in

the field demonstrating that the Project is financed by the World Bank in collaboration with the

SFD.

33. Under the umbrella of the Project, a call for proposal will be announced in the local

newspaper and on the announcement board in the Governorates and the Intermediary Agencies.

The call for proposal will include the evaluation criteria, which address the eligibility of the

applicant, and the associated scoring sheet, which determines the ceiling of the granted funds.

Also, as is the common practice in all SFD projects, this information will be posted on the SFD

website (in Arabic).

34

34. The website provides comprehensive information about the SFD and its role, how to

obtain services under different programs offered by the SFD, and the SFD development partners.

HQ and RO contact information.

Complaints Handling and Grievances System:

35. At present, a limited grievance system is in place. The system is not web-based and does

not allow anonymous reporting of complaints. Rejected applicants can file a complaint with the

Head of the SFD regional office who investigates the complaint with the HCD representative in

the regional office. A formal justification for rejection must be provided and, if a resolution is

not reached. The matter is escalated to the SFD HQ. Alternatively, the complaint form can be

obtained from the SFD website.

36. The project design includes: (i) support for client satisfaction surveys, and (ii) a sub-

component which allow NGOs to conduct independent verification of sub-project

implementation. The Project aims to establish an effective web-based grievances system with

text messaging capability (SMS) to allow reporting of irregularities and complaints and

feedback.

External Audit Arrangements:

37. The SFD is subject to annual external audits by: (i) the Central Accountancy Office

(CAO) and (ii) independent external audit firms (currently KPMG). In addition, the SFD will

contract with an independent external auditor based on TORs acceptable to the Bank, for the

purpose of carrying out an external audit of the Project‟s Financial Statements. The SFD‟s

Entity and Project audit reports will be submitted to the Bank within six months from the end of

each calendar year.

38. The SFD will hire the Project‟s external auditor within three months after project

effectiveness. The Bank expects the Borrower to submit terms of reference for the project

external audit for the Bank‟s prior review and approval within 3 months of effectiveness. The

external auditor will conduct quarterly reviews on the project IFRs before submission to the

Bank.

39. The external audit report shall encompass all project activities and shall be in accordance

with internationally accepted auditing standards, e.g., International Standards on Auditing (ISA).

The annual audit report of the Project Accounts shall include a separate opinion as to whether the

IFRs submitted during such fiscal year, together with the procedures of internal controls involved

in their preparation, can be relied upon to support related Withdrawal Applications. Also, the

audit report shall include a separate opinion on the Fund Accountability Statement (i.e.,

Statement of Sources and Uses of Funds), Withdrawals from the World Bank Loan,

Disbursements Forecast and the DA Reconciliation Statement. In addition, the auditor will

provide a separate opinion on compliance with the Operations Manual and effectiveness of the

internal control system. In addition to the audit reports, the auditor will 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 improvement. The

35

Project‟s external auditor TOR will be subject to the Bank‟s review, tailored to include the

auditing of sub-projects. The project auditor will use the SFD internal audit reports and other

external audit reports furnished to SFD to determine whether to use using the risk-based

approach as per SFD Audit Strategy. There are no overdue Audit Reports for projects previously

implemented (or currently implemented) by the SFD.

40. The table below summarizes the financial reporting arrangements required under the

Project.

Report Due Date Responsibility Sent

to:

Language Scope

Interim financial

Reports

45 days from end

of quarter

External Auditor Bank Arabic/English Review

Annual Project

financial

statements

6 months from end

of the fiscal year

External Auditor Bank Arabic/English Audit

Annual Entity

financial

Statements (SFD)

6 months from end

of the fiscal year

External Auditor Bank Arabic/English Audit

Supervision Plan:

41. After effectiveness, the Bank FMS will participate in Bank supervision missions. The

Bank supervision will follow a risk based approach. At least two supervision missions will be

carried out annually in addition to follow up visits as deemed necessary. The review and audit

reports of the interim and annual financial statements respectively, in addition to the

management letter, will be reviewed on a regular basis by the Bank FMS, and the results or any

issues which emerge will be pursued during supervision missions. Also, during the Bank's

supervision missions, the Project's financial management and disbursement arrangements will be

reviewed to ensure compliance with the Bank's requirements and to develop the financial

management rating for the Implementation Status Report (ISR).

Next actions:

Action Required By Whom When Status

Amend the existing automated

accounting system to record and report

on the new project activities

SFD IT

Department One month from

effectiveness

Pending

Amend the SFD Financial Manual to be

reflective of the envisaged project

financial activities and ensure consistent

implementation of control procedures.

SFD Finance

Department

March 15, 2012

Completed

Agree on the terms of reference for the

project‟s external auditor.

SFD Within 3 months

after effectiveness

Pending

36

Appendix 1

37

Appendix 2

38

Annex 6: Procurement Arrangements



General

1. The Country Procurement Assessment Report (CPAR) of 2003 concluded that Egypt‟s

Procurement Law (Law No. 89) and the Executive Statutes provide important concepts for public

procurement in Egypt and generally contain sound principles. However, the broad nature of their

principles and the absence of written guidelines for their application leave considerable room for

extensive discretionary power which can result in inconsistent decisions and loss of

transparency.

2. In addition, a follow-on sector specific assessment to the CPAR, an institutional procurement

capacity assessment in the water sector, was carried out in 2005 as part of the Public Expenditure

Review also issued at about the same time in early 2006. The assessment emphasized the

importance of developing the National Procurement Guidelines to avoid conflicting

interpretations of the above mentioned Law 89. The proposed guidelines should explain all steps

necessary for the efficient procurement of goods and works, as well as provide guidelines for the

selection of consultants (currently non-existent) based on qualitative criteria, as well as

guidelines on thresholds.

3. More recently, upon the request of the General Authority for Government Services, the Bank

has provided support through a legal Technical Assistance (TA) to modernize the Executive

Regulations in line with UNCITRAL Model Law to the extent that Law 89 allows. The revisions

are expected to be endorsed by the GoE shortly and rolled out nationally to all procuring

agencies in the country.

4. Procurement for the proposed Project will be carried out in accordance with the World

Bank‟s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated January 2011;

“Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated

January 2011; the World Bank‟s Anti Corruption Guidelines (“Guidelines on Preventing and

Combating Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants), and

the provisions stipulated in the Legal Agreement. The various items under different expenditure

categories are described in general below. For each contract to be financed by the Loan, the

different procurement methods or consultant selection methods, the need for pre-qualification,

estimated costs, prior review requirements, and time frame are agreed between the Borrower and

the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as

required to reflect the actual project implementation needs and improvements in institutional

capacity.

5. Procurement of Works: Works procured under this Project will include: small value

contracts implemented by the SA, the beneficiary of SFD finance in the form of a Labor

Intensive (LI) Sponsoring Agency Grant Agreement. Civil works contracts will include canal

weed reduction and protection of river bank, rehabilitation of rural housing, upgrading of rural

roads, school rehabilitation, and solid waste collection. The maximum financing for a LI SA

39

Grant Agreement will be around US$2,000,000 and include small works in dispersed

communities, estimated to not exceed US$350,000. Large contracts will not arise at the SA/NGO

level due to the nature of the works involved and, therefore, ICB and NCB are not foreseen. Civil

works with an estimated contract value below US$500,000 would be awarded through local

shopping (small works procedures) as explained and agreed upon in the updated Operations

Manual. The Operations Manual will also include standard evaluation forms related to these

types of procurements.

6. Civil works with an estimated contract value more than US$500,000 will be procured at the

SFD central level through National Competitive Bidding (NCB) using the modified World Bank

standard bidding document in Arabic language which is currently being used by other World

Bank financed projects in the water sector in Egypt, with advertisement in two national

newspapers. NCB procedures shall comply with the requirements stipulated in the Financing

Agreement under Provisions for NCB.

7. Procurement of Goods: Goods procured under this Project will include: small value

contracts valued around US$100,000 or less implemented by the Sponsoring Agency SA/ NGOs,

the beneficiary of SFD finance in the form of a LI SA Grant Agreement. The procurement will

be done using the SFD updated procurement manual agreed upon with the Bank; this manual

includes in its annexes simplified local shopping procedures for contracts estimated less than

US$250,000 or equivalent. The manual also includes standard evaluation forms related to these

types of procurements.

8. Procurement of non-consulting services: Procurement of non consulting services under the

project may include printing services, translation services, transportation service, catering

services, hotel services, etc.

9. Selection of Consultants: All consulting service contracts under Component 2 for firms

would be procured at the SFD central level following the World Bank‟s procurement procedures

by using the Bank‟s Standard Request for Proposal (SRFP). Consulting services contracts would

mainly comprise hiring of an Independent Verification Expert, Evaluation, Communication,

Quality Assurance, Capacity Development, and Audits. Consulting service contracts above

US$500,000 will use QCBS and QBS.

10. Consulting service contracts below US$500,000 for selection of firms or NGOs may be

procured using selection based on Consultants‟ Qualification, Fixed Budget Selection, and Least

Cost Selection. Single Source Selection could be used in exceptional cases subject to approval by

the Bank. The SFD updated procurement manual will include annexes of standard simplified

RFP and contract forms as well as standard evaluation forms. Short lists of consultants 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 will be selected on the basis of

comparison of qualifications in accordance with Section V of the Guidelines for Selection of

Consultants.

40

11. Capacity building activities to be financed by the Loan include workshops to train

beneficiaries on environmental and other aspects related to implementation of the LI sub-

projects. The procurement will be done in the form of a budget covering the expenses of the

workshops. This will include trainee travel expenses, their accommodation if necessary, rental

of space, consumables and remuneration for private facilitators.

Assessment of the Agency’s Capacity to Implement Procurement

12. The SFD has its main headquarters in Cairo, and is supported by 20 regional and 7 satellite

offices. The SFD Headquarters Office will be supported by a qualified procurement adviser who

has experience in World Bank procurement procedures. The regional and satellite offices are the

main point of contact between requesting agencies and the SFD: they provide advice to

communities, NGOs, and regional government on SFD procedures; receive completed

application forms; coordinate sub-project appraisal committees; and conduct field appraisals and

launch workshops through the SFD's Programs. The regional and satellite offices are linked to

the national offices through telephones, facsimiles, and internet connections.

13. The SFD is supported by the following units: (a) Management Information Systems (MIS);

(b) Credit Unit responsible for determining the credit worthiness of projects involving

intermediary agencies and/or beneficiaries for both the Community Development and Enterprise

Development Programs; (c) Projects and Planning Office (includes a monitoring targeting

evaluation and studies unit), with requisite skills to plan and review SFD activities, as well as

appraise and evaluate projects; (d) Legal mandated to prepare framework agreements and handle

related legal matters; (e) International Cooperation Affairs and Information for Public Relations

Department charged with managing and organizing marketing campaigns involving information

dissemination on the role of SFD as well as handling problems arising from poor

communication; and (f) IAD which reports directly to the Managing Director and the Board of

Directors. The SFD would have primary responsibility for monitoring physical and financial

progress of the works undertaken by the SA/NGO. The Governorate beneficiaries submit a

proposal outlining the works to be undertaken and to be considered for financing by the SFD.

The SFD reviews and approves the proposal for which an appraisal document is prepared

(detailing the scope of work, feasibility, sustainability, timetable, disbursement schedule, etc.).

Through the SFD's Programs, a Framework Agreement is signed with the SA/NGO which

describes the guidelines to be followed and each party‟s role in the implementation of the sub-

project. The SA/NGO then sub-contracts the work with a contractor and/or supplier. The SFD

will oversee and guide the SA/NGO based on the processes outlined in the SFD‟s updated

Program Operations Manual. The updated Operations Manual will form the cornerstone of the

Project launch workshop and subsequent activities. This Manual will provide consistent

procurement procedures for all project beneficiaries, and will be disseminated to all project

entities.

14. An updated assessment of the methodology and the applied procurement procedures of Egypt

SFD to implement and monitor procurement actions for the project were carried out by the Bank

following the simplified procedures, OP 8.00 Rapid Response for Crises, which is applicable to

this Project. The assessment reviewed the organizational structure, the applied procedures and

the matrix of responsibility for implementing the Project.

41

15. The key issues and risks concerning procurement for implementation of the Project have

been identified and include:

BD inconsistent with Bank‟s Guidelines.

Inconsistent application of rules and procedures by the different implementing

agencies;

Quality of selection process for NGOs yet to be improved.

Lack of standard BD, RFP, contract forms and evaluation forms;

Practice of pre/post award negotiations;

Unjustified re-bidding which may result in unnecessary delays in implementation;

Civil servants are paid out of the project proceeds.

A general practice across the country of negotiating prices with bidders or

accepting discount after bids opening.

16. The overall project risk for procurement is high.

17. The corrective measures which have been agreed are: (i) hiring of an experienced

procurement adviser for consulting services (disbursement condition); (ii) updating of the

procurement manual with complete annexes to ensure clear definitions of rules and

responsibilities and enable consistent application of these rules (completed March 2012); (iii)

reinforcement of the capacity of the regional offices by the procurement adviser to monitor

conform compliance to the application of procurement procedures by the SAs and IAs; and (v)

carrying out of appropriate capacity building for the procurement manual and annexes.

Prior Review:

18. For the first consulting services contracts related to the selection of NGOs per sector and all

consulting services contracts above US$200,000 under Component 1, and all consulting services

contracts under Component 2 and the first contract for works and goods regardless of their

values and their geographical location are subject to the Bank‟s prior review. The SFD regional

office would review the first three contracts for each governorate and issue a formal no-objection

letter to be documented for the Bank‟s post review. In addition, the SFD regional office would

randomly carry out post review for contracts implemented by all different IAs/NGOs on a

quarterly basis and send its findings and recommendations to the Bank. Rejection of all bids for

rebidding purposes is subject to the Bank‟s prior review.

42

Table 1

Procurement Plan

19. The Borrower, at appraisal, developed a procurement plan for project implementation which

provides the basis for the procurement methods. This plan was agreed upon between the

Borrower and the Project Team before negotiation. The Procurement Plan will be updated in

agreement with the Project Team annually or as required to reflect the actual project

implementation needs and improvements in institutional capacity.

20. The Programs of the SFD (CDP and PWP) being financed under the proposed Project have

no procurement unit. The Programs are responsible for preparing a Project Appraisal Document,

which is based on requests received from the Governorates/NGOs, and which outlines the scope

of works (the project and its subprojects), feasibility, sustainability terms and conditions

(criteria), project cost, disbursement schedule, and schedule of completion.

Frequency of Procurement Supervision

21. In addition to the prior review supervision to be carried out from the Bank office, the

capacity assessment of the IA has recommended two supervision missions to visit the field to

carry out post-review of procurement actions.

Prior Review

Thresholds

Proposed (USD

million)

Procurement Method Thresholds Proposed (USD million)

ICB NCB Shopping QCBS QBS CQS

Least

Cost SSS

Goods 0.1 ≥0.5 <0.25 <0.25

Works 0.35 ≥5 >0.5 <0. 5

Consulting

Services

Firms ≥ 0.2

Individual ≥ 0.1

default TBD <0.5 TBD TBD

Rebidding All

43

Annex 7: Implementation and Monitoring Arrangements



A. Project Implementation. The project implementation period is three years.

1. The Project will be implemented by the SFD. The SFD is a legally autonomous, permanent

and well established development organization with a long track record of providing support to

needy and underserved communities. The SFD has been implementing the public works program

for the last 20 years to provide immediate short-term employment opportunities.

2. The SFD has significant experience in interventions that provide services and employment to

the poor, and with an increasing focus on community participation, cooperation with NGOs, and

decentralization. Since 1992, about EGP 1.8 billion worth of projects have been implemented by

SFD in infrastructure under its HCD. Over the years, the most common sub-projects

implemented were water supply and sanitation projects, pavement of roads, cleaning of canals,

public buildings, and riverbank protection.

3. Project Oversight. The Board of Directors of the SFD, which is chaired by the Prime

Minister and includes the Ministers of Finance, Manpower and Migration, Information, Foreign

Trade and Industry, Transportation, the Chairman of the Public Authority for Investment and

Free Zones, SFD‟s Managing Director, and the Financial and Legal Advisor, is responsible for

project oversight. SFD‟s Managing Director will be responsible for general project coordination

and implementation and the General Manager of the Human and Community Development

Sector will be responsible for day-to-day project management responsibilities.

4. Project Management. The SFD will be the implementing agency for the proposed Project.

The SFD central office, based in Cairo with the support of its 27 regional offices (one in each

Governorate), will coordinate project activities with the various stakeholders.

5. SFD’s Roles and Responsibilities. Key SFD duties will include: (a) preparing the sub-

projects pipeline in accordance with guidelines and eligibility criteria defined in the Operations

Manual; (b) assessing the degree of labor intensity of the proposed sub-project, (c) assessing the

degree of community participation in identifying and executing sub-projects and the quality of

the skills upgrading activities proposed; (d) supervising the activities of the sponsoring agencies

and the intermediary agencies; (e) overseeing the procurement arrangements to ensure that

implementing partners are adhering to the agreed procedures; (f) ensuring that sponsoring

agencies are actually carrying out the capacity building activities for the implementing partners

(including training on sub-project implementation, contracting, operations and maintenance, and

financial management); (g) monitoring performance through the MIS and reporting quarterly on

progress; and (h) developing an impact evaluation process to provide information on project

outcomes.

44

Main Sub-project Partners

6. Line Ministries/Governorates and their technical directorates. Line Ministries are the

sectoral ministries at the national level that identify the types of technical subsectors to be funded

under this operation. Below the national level, the 27 governorates are the main focal points of

government development efforts. Associated with line ministries/governorates are technical

directorates (mudiriat) which represent line ministries within a particular governorate. Technical

directorates are responsible for the technical aspects of their sectors throughout the governorate.

Governorates and their technical directorates also assume the technical and financial

responsibility for operation and maintenance of most infrastructure investments.

7. NGOs/ Community Development Associations (CDAs). NGOs are registered large

experienced community development associations with a track record in implementing

community driven development projects. NGOs support the formation, capacity development,

and expansion of grass-roots CDAs at the village level. CDAs are groups of citizens from the

community with a common interest, who organize into legally constituted civil associations.

Both NGOs/CDAs will identify, prepare, implement, supervise, operate and maintain their sub-

projects, assisted both by technical specialists whom they contract directly and by technical

assistance and training made available through the Project.

B. Sub-project Cycle:

Priority setting for allocation of funds

8. Egypt poverty map information was used to prioritize allocation of funds for sub-projects

geographical areas.

Sub-project implementation

9. Community Infrastructure Sub-projects.

Identification of sub-projects

The sub-projects pipeline is identified by SFD regional offices in

collaboration with sectoral line ministries, technical directorates at the

governorate level, local authorities, and in consultation with the local

community.

Approvals by SFD

Once a group of sub-projects under a single framework agreement has been

identified, it is sent to the standing SFD appraisal committee at headquarters

for appraisal. Upon approval, the funds are allocated.

Signing of framework agreements (also known as Sponsoring Agencies

Grant Agreements)

A framework agreement is signed between SFD and the governorate or line

ministries (SA). Framework agreements define the scope of the sub-project,

45

preliminary sub-project list, and reporting requirements, in addition to the

roles and responsibilities of the technical directorates as IA (mudiriat). The

IA will represent line ministries within a particular governorate and will also

assume the technical and financial responsibility for operations and

maintenance of infrastructure investments.

Setting up a Project Implementation Unit (PIU) within the SA

Based on an assessment of the strengths of the SA, a PIU will be set up

within the SA. Personnel will include a full time project manager, an

accountant, and a procurement specialist.

Signing of sub-grant agreements between SA and IA (also known as

Intermediary Grant Agreements)

A sub-grant agreement is signed between the governorate/line ministries

(SA) and their technical directorates at the governorate level (mudiriat) (IA).

The sub-grant agreement defines the roles and responsibilities of the

technical directorates, contracting conditions, and procurement procedures.

Setting up required bank accounts

A bank account for the sub-project will be set up in the name of the

sponsoring agency, with signatory delegated to the PIU and other details

declared. Similarly, every intermediary agency (technical directorate) which

is expected to execute sub-projects will also set up bank accounts.

Preparing detailed designs and tender documents by IA

The IA is responsible for preparing the detailed designs, bills of quantities,

tender documents, and technical daily supervision.

Physical execution of sub-projects

Sub-projects will be implemented through contracting local private civil

works contractors in accordance with SFD‟s procurement manual and in

compliance with SFD‟s financial management manual.

Reporting on sub-project progress

Implementation progress of sub-projects is reported by the SA as per

reporting requirements defined in SFD‟s Operations Manual.

10. Community Subprojects.

Signing of Protocol with governorates

A memorandum of understanding (Protocol) is signed between SFD and the

governorates that will define the key sectors and activities to be funded. The

protocol will ensure the coordination between the governorate and the

NGOs/CDAs that will be selected for sub-project implementation.

Selection of NGOs/CDAs

46

NGOs/CDAs will be selected based on the qualifications of the organization,

past experience, and implementation and fund management capacity. A long

list of NGOs/CDAs will be identified per sector for each governorate. The

SFD has already a long list of qualified NGOs/CDA, which will be updated

during project implementation.

Identification of sub-projects

Qualified NGOs/CDAs per sector per geographic area will develop the

subprojects pipeline in partnership with SFD regional offices and in

collaboration and consultation with the local authorities.

Approvals by SFD

Grant agreements for sub-projects are identified and sent to the standing SFD

appraisal committee at headquarters for appraisal. Upon approval, the funds

are allocated to the NGO/CDA.

Signing of grant agreements for sub-project implementation (also known as

Sponsoring Agencies Grant Agreements)

An agreement is signed between SFD and the implementing NGO/CDA that

will define the scope of the sub-project, the roles and responsibilities of

NGO/CDA where applicable, reporting requirements, contracting conditions,

and procurement procedures.

Setting up a Project Implementation Unit (PIU) within the NGO/CDA

Based on an assessment of the strengths of the NGO/CDA, a PIU will be set

up within the SA. Personnel needed for the PIU will include a full time

project manager, an accountant, and a procurement specialist.

Setting up required bank accounts for the grant agreement

A bank account for the sub-project will be set up in the name of the

NGO/CDA, with signatory delegated to the PIU and other details declared.

Physical execution of sub-projects

Sub-projects will be implemented by the NGO/CDA through contracting

suppliers and consultants in accordance with SFD‟s procurement manual and

in compliance with SFD‟s financial management manual.

Reporting on sub-project progress

Implementation progress of the sub-projects is reported by the NGO/CDA as

per reporting requirements defined in SFD‟s Operations Manual.

The project will be managed in accordance with SFD’s Operations Manual which at all times

will need to be acceptable to the Bank.

47

Monitoring & Evaluation

11. Monitoring. The SFD will monitor the progress of the implementation of sub-projects using

its MIS which has been adapted to ensure that it will be able to respond to the reporting

requirements of the Bank and the Results Framework of the Project.

12. Reporting. The SFD will submit to the Bank semi-annual progress reports that provide

updates on the status of the project outcome, intermediate outcome, and output indicators. In

addition, the SFD will submit to the Bank a Mid Term Review Report and a Project Completion

Report.

13. Verification. The SFD, using the expertise of an IVE, will conduct community level

verification of the results of implementation of sub-projects, using NGOs to ensure social

accountability.

14. Evaluation. The SFD will conduct two evaluations, one at mid-term and another at the end

of the Project, using independent consultants who will provide inputs to the SFD Mid Term

Review and Completion Reports. Also, the SFD will plan to conduct an impact evaluation for

the project.

15. Quality Assurance. The SFD, through use of quality assurance firms or regional

universities, will conduct quality assurance activities that assess the technical quality of assets

maintained under the community infrastructure sub-projects as well as measuring the rate of

client satisfaction with the community social services sub-projects.

48

Project Cost Table

ACTIVITY

Total

US$ M

Implementation

Component 1 US$198.00 million

1 Rehabilitation of 7,500 poorest household units (45 sq m rural house) 47.50

2 Canal weed reduction (10,200 km < 2m width) 30.00

3 River Nile Bank Protection for 47km 22.00

4 Maintenance and pavement of Rural Roads between villages (6m width) 11.00

5 Rehabilitation of 16,000 classrooms in 710 Schools 35.00

6 Rehabilitation of 1,000 KG classrooms in 500 KGs 2.50

7 Employment Intensive Population Services 19.50

8 Community Solid Waste Collection 13.00

9 Youth Employment in rural areas 4.50

10 Youth Employment in urban areas 12.00

11 Technical Verification using Independent NGOs 1.00

Component 2 US$2.00 million

1 Communication and public information 0.50

2 Mid-Term Review and End of Project Evaluations 0.25

3 Financial audit of the project 0.15

4 Quality assurance & Independent Verification 0.50

5 Project Management operating cost, equipment, software, and supplies. 0.25

6 Individual consulting services 0.35

TOTAL 200.00

49

Project Pipeline

Project Type Geographic

Location

Project

Cost

(USD)

Million

Project

Cost (LE)

Million

Direct

Jobs

Direct Jobs for

Youth

Direct Jobs for

Females

Total No.

Man/Day

Total

Wages

(LE)

Million

Labor

Intensit

y %

Output

Unit

Total

Outpu

ts

Responsible

Agency

No. No. % No. %

1

Rehabilitation of 7,500

poorest household

units (45 sq m rural

house)

Poorest villages in

6 governorates

Ministry of

Housing 47.5 285.0 8,159 4,079 50.0% 0 0.0% 815,851

110.00 38.6% House 7591

2

Canal Weed Reduction

(10,200 km less than

2m width for 3 years)

Nationwide Ministry of

Irrigation 30.0 180.0 31,500 15,750 50.0% 0 0.0% 3,150,000

126.00 70.0% KM 10200

3 River Nile Bank

Protection for 47km Upper Egypt

Ministry of

Irrigation 22.0 131.9 13,464 6,732 50.0% 0 0.0% 1,346,400

62.83 47.6% KM 47

4 Rural Roads between

villages (6m width) 13 governorates

Local

Government 11.0 66.0 3,950 1,975 50.0% 0 0.0% 395,000

16.43 24.9% KM 100

5

Rehabilitation of

16,000 classrooms in

710 Schools

11 governorates Ministry of

Education 35.0 210.0 14,400 7,200 50.0% 0 0.0% 1,440,000

77.76 37.0%

Classro

om 16000

6

Rehabilitation of 1,000

KG classrooms in 250

KGs

11 governorates NGOs 1.3 7.8 530 265 50.0% 0 0.0% 53,000

2.86 36.7%

Classro

om 1000

7

Early Child Education

of 1,000 KG

classrooms in 250 KGs

11 governorates NGOs 1.2 7.2 4,000 2,400 60.0% 4,000 100.0

% 400,000

6.20 86.1%

Classro

om 1000

8 Employment Intensive

Population Services 16 governorates NGOs 19.5 117.0 47,736 28,642 60.0% 47,736

100.0

% 4,773,600

97.30 83.2% NGO 117

9 Solid Waste Collection 16 governorates NGOs 13.0 78.0 34,632 20,779 60.0% 0 0.0% 3,463,200

62.90 80.6% NGO 78

1

0

Youth Employment in

rural areas 15 governorates NGOs 4.5 27.0 10,287 10,287 100.0% 514 5.0% 1,028,700

19.50 72.2% NGO 27

1

1

Youth Emplyment in

urban areas

Urban

governorates NGOs 12.0 72.0 22,000 22,000 100.0% 1,100 5.0% 2,200,000

50.40 70.0% NGO 60

1

2

Technical Verification

using Independent

NGOs

All project

governorates NGOs 1.0 6.0 2,000 1,000 50.0% 100 5.0% 200,000

4.20 70.0% NGO 27

TOTAL

198

1,188

192,658

121,109 62.9%

53,450 27.7%

19,265,751

636.38 53.6%

50

Annex 8: Project Preparation and Appraisal Team Members



Name Title Unit

Alaa Mahmoud Hamed Abdel Hamid Sr. Health Specialist/Task Team Leader MNSHH

Hany Al-Saadni Sr. Water Resources Specialist MNSWA

Mahmoud Gamal El-Din Sr. Operations Officer MNSHE

Nehad Kamel Infrastructure Specialist MNSHD

Marc Van Imshoot Sr. Infrastructure Specialist ILO

Amal Mwafy Sr. Program Officer ILO

Dorothia Schmidt Sr. Employment Specialist ILO

Akram El-Shorbagi Sr. Financial Management Specialist MNAFM

Jamal Abdulla Abdulaziz Sr. Procurement Specialist MNAPR

Alaa Ahmed Sarhan Sr. Environmental Specialist MNSEN

Rebekka Grun Sr. Economist MNSSP

Wael Ahmed Elshabrawy Financial Management Analyst MNAFM

Adrien Andre Pinelli Operations Officer MNCO3

Mira Hong Operations Officer MNSSP

Amy Champion Operations Analyst MNSHH

Virginia Jackson Operations Advisor SASHD

Claudine Kader Senior Program Assistant MNSHD

Brigitte Franklin Program Assistant MNSHD

Emma Paulette Etori Program Assistant MNSHD

Mariam William Guirguis Team Assistant MNCO3

Raghada Abdel Hamid Team Assistant MNCO3

51

Annex 9: Environmental and Social Safeguards Framework



ENVIRONMENTAL AND SOCIAL SCREENING AND ASSESSMENT FRAMEWORK (ESSAF)

I. OBJECTIVES

1. The main objective of the Environmental and Social Screening and Assessment

Framework (ESSAF) is to provide general policies, guidelines, and procedures to be integrated

into the implementation of the World Bank-supported ELIIP which will be implemented by the

SFD. This Framework has been developed to identify the environmental requirements needed to

ensure that all sub-projects are in compliance with the national environmental protection laws,

regulations and guidelines in Egypt, and the World Bank‟s safeguards policies more specifically.

Furthermore, the ESSAF will provide clear guidance which will ascertain that all environmental

and social impacts are being addressed effectively for the successful appraisal, design, and

implementation of the sub-projects. More specifically, the ESSAF will:

a. Provide a standardized safeguard screening and assessment process that enables the SFD

to quickly and effectively assess the likely environmental impacts associated with any of

the sub-projects.

b. Provide some examples of the necessary mitigation measures (in line with best practices)

to counter such impacts.

c. Include the monitoring and evaluation indicators that are necessary for implementing the

ESSAF.

d. Provide guidance on the approach to be taken during consultation and disclosure

requirements.

II. GENERAL PRINCIPLES

2. While ensuring due diligence in managing potential environmental and social risks, one

has to recognize the emergency nature of the proposed Project which aims to provide assistance

towards creating or maintaining infrastructure using labor-intensive techniques. Given that, the

ESSAF is based on the following principles:

The proposed operation will support multiple sub-projects, the detailed designs of which

were not necessarily known at appraisal. To ensure effective application of the World

Bank‟s safeguard policies, the ESSAF provides guidance on the approach to be taken

during implementation for the selection and design of sub-projects and the planning of

mitigation measures;

The proposed Project supports only environmental category “B” or “C” sub-projects as

per the World Bank classification for safeguards;

52

No sub-projects will be eligible for funding that trigger OP 4.12. In particular, all works,

even if there are design changes, will be done on public land and will not result in

relocation or loss of shelter, loss of assets or access to assets, or loss of income sources or

means of livelihoods; and

No sub-projects that involve the use or pollution of international waterways will be

financed under this Project;

Sub-projects entailing weeding activities shall be manual weeding (i.e., by hand) and will

not involve the use of pesticides. As a result, the World Bank OP 4.09 is not triggered;

and

Consultation and disclosure requirements will be simplified to meet the special needs of

these operations. This ESSAF will be shared with and disclosed in the SFD and relevant

governorates in Egypt as well as in the World Bank InfoShop.

III. PROJECT DESCRIPTION



services to the target population in poor areas in the Borrower‟s territory. The Project comprises

the following components:

Component 1: Employment-Intensive Sub-projects (US$198 million)

This component will include provision of grants to sponsoring agencies to carry out, by

governorate and local authorities, sub-projects consisting of small-scale infrastructure public

works including, but not limited to, the following activities: canal cleaning and protection,

rehabilitation of schools, housing, and rural roads.

This component will also include provision of grants to NGOs to carry out, by communities, sub-

projects consisting of community services including, but not limited to, solid waste collection,

early childhood education services, outreach for maternal and child health, nutrition, population

services and youth employment in rural and urban settings.

Component 2: Implementation Support (US$2 million)

This component will include provision of project implementation support, including project

management, audits, public information and communication, technical verification and quality

assurance, monitoring and evaluation, and social accountability.

IV. POTENTIAL ENVIRONMENTAL IMPACTS

4. The sub-projects of the proposed Project are likely to result in a number of positive

environmental and socio-economic impacts. That is, all of the sub-projects are expected to

generate employment opportunities and improve income generation for many individuals as well

as improve the living conditions and livelihoods, especially for those representing the low- or

poorest segments of society in targeted areas and communities. For example, the improvement

53

of housing conditions and solid waste collection for the poor will lead to positive health and

environmental impacts.

5. However, despite the substantial positive environmental impacts that will result from the

implementation of the sub-projects, there may still be some negative environmental impacts,

though potentially minor and not significant.

V. APPLICABLE WORLD BANK SAFEGUARD POLICIES

6. This ESSAF has been developed specifically to ensure environmental and social due

diligence for all the sub-projects funded by this Project. It is intended to ensure that, for all

activities financed by the Project, all efforts are made to avoid and minimize environmental and

social impacts; and where they cannot be avoided, that these impacts are identified and the

necessary mitigation measures are developed and implemented following the relevant Egyptian

laws as well as the World Bank policies.

7. In addition, this Framework is to assist the SFD in screening all the sub-projects for their

likely environmental impacts, identifying documentation and preparation requirements.

8. World Bank BP/OP 4.01 Environmental Assessment. Most of the proposed sub-

projects are likely to focus on canal weed reduction and protection of river banks, rehabilitation

of rural housing, maintenance of rural roads, school rehabilitation, and solid waste collection.

Given the nature of the proposed sub-projects, this policy will be triggered. Individual sub-

projects will be screened and assigned the appropriate environmental categorization and

environmental due diligence will be conducted in accordance with OP 4.01.

9. Considering the nature and magnitude of potential environmental impacts from the

relatively limited scale and magnitude of reconstruction works, sub-projects classified as “B” or

“C” will be financed by the Project. Any sub-projects classified as category “A” will not be

eligible for funding under this operation.

VI. Approach to Address Environmental Safeguard Issues

10. In accordance with World Bank policy OP/BP 8.00, the ESSAF will guide the

environment social safeguard planning and compliance during implementation of sub-projects.

As sub-projects will be identified and proposed for financing in a continuous manner during the

project implementation period, screening for potential environmental and social impacts will be

conducted and mitigation and management measures will be developed in line with the agreed

ESSAF.

11. Environmental and social impact screening, mitigation and management measures

development and implementation will be carried out as per the following:

First: Screening for potential environmental and social safeguard impacts and determination

of safeguards Category according to Egyptian laws and regulations, and World Bank

policies;

Second: Review of safeguards screening by World Bank;

54

Third: Preparation of safeguards documents, consultation and disclosure;

Fourth: Review and clearance of the safeguard documents within the Government or/and by the

Bank; and

Fifth: Implementation of agreed actions; and supervision, monitoring, and evaluation

A. Screening for Potential Environmental and Social Safeguard Impacts and

Determination of Safeguards Category for Each Sub-project

12. Once sub-projects have been identified, the environmental safeguard specialists at SFD

will concurrently screen each sub-project to determine the applicable Egyptian laws and

regulations, the World Bank safeguards policies and guidelines and the corresponding safeguard

instruments (i.e., EIA, EMP) which need to be prepared and implemented. Annex 1 provides a

proposed checklist of the likely environmental impacts to be filled out for each sub-project or

group of sub-projects.

13. The results of the screening exercise will determine the categorization for each sub-

project.

Environmental Safeguards Screening

14. With respect to environmental screening of sub-projects, the Egyptian national

regulations and World Bank policies and guidelines are considered on the whole to be closely

related; both are impact-based and will require the SFD to identify and assess potential impacts

to environmental components such as water, air, land and natural habitats and biodiversity.

15. For specific screening according to World Bank policies, the SFD will use the screening

tool in Annex 1 to propose an environmental classification for each sub-project as follows:

Category B: A proposed sub-project may have some adverse environmental impacts, but

less adverse than those of Category A projects. These impacts are typically site-specific;

few if any of them are irreversible; and in most cases, mitigation measures can be readily

designed. The great majority of sub-projects for rehabilitation and reconstruction works

are likely to fall into this category.

Category C: A proposed sub-project is likely to have minimal or no adverse

environmental impacts.

Determination of Environmental Safeguards Documents for Sub-projects

16. The environmental safeguards documentation requirements for each sub-project will be

determined based on the screening procedures, as follows:

Category B: Sub-projects will require an EIA or simplified EIA (as required under the

Egyptian laws and regulations) and or an EMP (as per the World Bank policy) consisting,

at a minimum, of standard environmental codes of practices supplemented, if necessary,

with additional analysis. The sub-project specific EMP and/or standard environmental

55

codes of practices, including chance-finds of physical cultural resources, will be included

in all construction contracts/bidding documents.

Category C: Sub-projects that are rated Category C do not require environmental

safeguards documents, but will comply with the Egyptian regulatory requirements.

B. Review of Safeguards Screening by the World Bank

17. The SFD will prepare a safeguards screening summary for each sub-project in a format

specified in the Operations Manual. This will summarize: (a) the recommended categorization

according to World Bank policies; and (b) the proposed environmental safeguards

documentation requirements for the sub-project. The safeguards screening summary will be part

of the sub-project identification package that will be submitted to the Bank by the SFD.

18. The World Bank will review the screening of sub-projects on a selective basis to verify

that the screening tools and choice of documents are being applied appropriately and

consistently.

C. Preparation of Safeguards Documents, Consultation and Disclosure

19. This ESSAF will be shared with the SFD and will be disclosed in-country in both Arabic

and English by them in Egypt. The ESSAF will also be shared with the relevant ministries and

governorates (i.e., local authorities) that are implementing the sub-projects. Disclosure will also

be carried out through the World Bank‟s InfoShop. The other relevant specific safeguard

documents/mitigation plans prepared for the sub-projects will also be subsequently disclosed.

20. For Category B12

sub-projects, the SFD will consult the stakeholders and/or the project-

affected groups and local non-governmental organizations on the project's environmental and

social aspects, and will take their views into account. The SFD will initiate these consultations

as early as possible, and for meaningful consultations, will provide relevant material in a timely

manner prior to consultation, in Arabic and in a form that is comprehensible and accessible to the

groups being consulted.

21. Once the screening and documentation requirements are agreed by the Bank and

confirmed by the SFD, the SFD will develop the relevant safeguard documents and impact

mitigation measures.

22. The SFD are encouraged to liaise closely with the Bank if any issues arise that may

require clarification from the Bank on the application of World Bank policies.

23. Safeguards documents will be subject to consultation and disclosure in an accessible

place, in a timely manner, and in a form and language understandable to key stakeholders, prior

to the finalization of the said documents. Particular attention will be given to ensure that the

project stakeholders receive adequate time and ready access to draft documents before

consultation is carried out. This is essentially to ensure that the project stakeholders participate

12

As defined in World Bank Operational Policy 4.01, Environmental Assessment.

56

in and contribute to the sub-project planning and implementation, and thereby help minimize any

sub-project impacts while maximizing the benefits.

D. Review and Clearance of Safeguards Documents

24. Review and clearance of the environmental and social safeguards documents according to

national regulations is the responsibility of the SFD.

25. The requirements for review and clearance of the environmental documents by the World

Bank are as follows:

Category B: The Simplified EA (or EIA) and EMP for Category B sub-projects will not

be subject to World Bank review and clearance prior to approval of the sub-project.

However, these documents will be post-reviewed on a selective basis during supervision

missions.

Category C: No review required by the World Bank.

E. Implementation of Agreed Actions and Supervision, Monitoring and Evaluation

Implementation

26. Implementation of the safeguards measures during sub-project implementation is the

responsibility of sub-project field office staff.

Supervision

27. The SFD will supervise the implementation of the EMP. The World Bank task team will

regularly visit the sub-project areas throughout project implementation in order to:

Provide guidance and assist in the preparation of safeguards instruments;

Review the screening results, due diligence review report, and safeguard documents of

proposed sub-projects;

Supervise the implementation of the safeguards instruments to ensure they are

implemented in compliance with the Bank policy requirements.

Monitoring and Evaluation

28. The SFD will engage qualified and experienced consultants to carry out the monitoring

program to provide information on key environmental and social aspects of the sub-projects and

the effectiveness of the planned mitigation measures. This will enable the Government and the

Bank to evaluate the performance of the environmental program and allow corrective action to

be taken as needed. Annex 2 provides a checklist for environmental monitoring indicators for

typical sub-projects.

57

VII. RESPONSIBILITIES FOR SAFEGUARDS SCREENING AND MITIGATION

29. In the environmental and social mitigation planning process described above, the various

institutional roles and responsibilities are:

Environmental and social impact screening: the SFD, through its specialized staff comprising

the 32 Environmental Focal Points from regional offices and headquarters and/or qualified

consultants, will undertake environmental screening of each proposed sub-project, the findings

of which will be post-reviewed by the World Bank on a sample basis. The Environmental Focal

Points will also undertake social safeguards training.

Preparation of safeguards documents: individual sub-project proponents are responsible for

planning, design and implementation of individual sub-projects, including environmental and

social safeguard documents and mitigation measures, and will engage qualified consultants as

needed.

Supervision: the SFD with the assistance of its specialized staff comprising the 32

Environmental Focal Points and/or qualified consultants will guide, supervise and manage the

process of safeguard planning and implementation work.

Overall responsibility: the SFD will assume the overall responsibility for the planning and

implementation of safeguards documents under the Project. The World Bank will support the

process through periodic supervision and training.

Review and clearance of the safeguard documents: safeguards documents will be reviewed and

cleared as per the provisions of the Law No. 4 for 1994 and its Executive Regulations and also

its amendment, Law No. 9 for 2009.

World Bank review and clearance of the safeguards documents: the World Bank will carry out

sample post-reviews during supervision missions.

Safeguards documents implementation: the sub-project proponents will be responsible for the

implementation of the safeguard documents, under the direction and supervision of the SFD.

Supervision, monitoring and evaluation: the SFD through its environmental focal points and/or

qualified consultants will assume the overall responsibility for the supervision, monitoring, and

evaluation of the safeguard document implementation.

Environmental Safeguards Guidelines: For all sub-projects that are determined to be “Category

B” sub-projects according to the terms of the ESSAF, the SFD will develop Environmental

Safeguards Guidelines which will guide the specific regional office in the implementation of the

ESSAF. No “Category B” sub-projects should be carried out before such Environmental

Safeguards Guidelines are prepared. Category B sub-projects will be selectively post-reviewed.

In addition, the Bank will review the Environmental Safeguard Guidelines to ensure consistency

with the ESSAF.

58

VIII. CAPACITY-BUILDING AND MONITORING OF SAFEGUARDS FRAMEWORK

IMPLEMENTATION

30. As part of the capacity-building to be provided for implementation of the proposed

operation, the Environmental/Safeguards Focal Points at the SFD as well as the relevant staff of

the concerned governorates, NGOs, and other project stakeholders, will also receive training in

ESSAF‟s application.

59

Appendix 1

CHECKLIST OF LIKELY ENVIRONMENTAL AND SOCIAL IMPACTS OF SUB-PROJECTS

This Form is to be used by the Safeguards Focal Point at the SFD in screening Sub-project

Applications.

Note: One copy of this form and accompanying documentation to be kept in the SFD and one

copy to be sent to the task team leader of the World Bank.

Name of Sub-project:

Number of Sub-project:

Proposing Agency:

Sub-project Location:

Sub-project Objective:

Infrastructure to be rehabilitated:

Estimated Cost:

Proposed Date of Commencement of Work:

Technical Drawing/Specifications Reviewed (circle answer): Yes __ No __

No ISSUES

Yes

No

A.

Zoning and Land Use Planning

1. Will the sub-project affect land use zoning and planning or

conflict with prevalent land use patterns?

2. Will the sub-project involve significant land disturbance or site

clearance?

3. Will the sub-project land be subject to potential encroachment

by urban or industrial use or located in an area intended for

urban or industrial development?

B. Utilities and Facilities

4. Will the sub-project require the setting up of ancillary

production facilities?

5. Will the sub-project make significant demands on utilities and

services?

6. Will the sub-project require significant levels of accommodation

or service amenities to support the workforce during

construction (e.g., contractor will need more than 20 workers)?

60

C Water and Soil Contamination

7. Will the sub-project require large amounts of raw materials or

construction materials?

8. Will the sub-project generate large amounts of residual waste,

construction material waste or cause soil erosion?

9. Will the sub-project result in potential soil or water

contamination (e.g., from oil, grease and fuel from equipment

yards)?

10. Will the sub-project lead to contamination of ground and surface

waters by herbicides for vegetation control and chemicals (e.g.,

calcium chloride) for dust control?

11. Will the sub-project lead to an increase in suspended sediments

in streams affected by road cut erosion, decline in water quality

and increased sedimentation downstream?

12. Will the sub-project involve the use of chemicals or solvents?

13. Will the sub-project lead to the destruction of vegetation and

soil in the right-of-way, borrow pits, waste dumps, and

equipment yards?

14. Will the sub-project lead to the creation of stagnant water bodies

in borrow pits, quarries, etc., encouraging for mosquito breeding

and other disease vectors?

D.

Noise and Air Pollution Hazardous Substances

15. Will the sub-project increase the levels of harmful air

emissions?

16. Will the sub-project increase ambient noise levels?

17. Will the sub-project involve the storage, handling or transport of

hazardous substances?

E.

Fauna and Flora

18. Will the sub-project involve the disturbance or modification of

existing drainage channels (rivers, canals) or surface water

bodies (wetlands, marshes)?

19. Will the sub-project lead to the destruction or damage of

terrestrial or aquatic ecosystems or endangered species directly

or by induced development?

20. Will the sub-project lead to the disruption/destruction of wildlife

through interruption of migratory routes, disturbance of wildlife

habitats, and noise-related problems?

F.

Destruction/Disruption of Land and Vegetation

21. Will the sub-project lead to unplanned use of the infrastructure

being developed?

22. Will the sub-project lead to long-term or semi-permanent

destruction of soils in cleared areas not suited for agriculture?

23. Will the sub-project lead to the interruption of subsoil and

overland drainage patterns (in areas of cuts and fills)?

24. Will the sub-project lead to landslides, slumps, slips and other

mass movements in road cuts?

25. Will the sub-project lead to erosion of lands below the roadbed

receiving concentrated outflow carried by covered or open

drains?

26. Will the sub-project lead to long-term or semi-permanent

destruction of soils in cleared areas not suited for agriculture?

61

27. Will the sub-project lead to health hazards and interference of

plant growth adjacent to roads by dust raised and blown by

vehicles?

G.

International Waterways Issues

28 Does the sub-project use or otherwise affect an international or

trans-boundary waterway?

H.

Land Acquisition and Resettlement

29 Does the sub-project require land acquisition?

30 If so, will this land acquisition be involuntary?

31 If so, will this involuntary land acquisition lead to relocation or

loss of shelter?

32 If so, will this involuntary land acquisition lead to loss of assets

or access to assets?

If so, will this involuntary land acquisition lead to loss of

income sources or means of livelihood (whether or not the

affected persons must move to another location)?

33 Will the sub-project lead to the involuntary restriction of access

to legally designated parks and protected areas resulting in

adverse impacts on the livelihoods of the displaced persons?

Screening Tool Completed and Reviewed by:

Signed by Environmental Specialist in PMO:

Name: ______________________________________

Title and Date: ______________________________________

62

Appendix 2

CHECKLIST FOR ENVIRONMENTAL MONITORING INDICATORS FOR TYPICAL SUB-PROJECTS

School Sub-project:

Environmental Impact Monitoring Indicator Monitoring

Frequency

Air Pollution Noise

Odors

Dust

Smoke

Pollutants (i.e.CO, NOx. And SO2)

Asbestos

Paint containing lead

Annually

Water Pollution Electrical Conductivity

BOD – COD

E-Coli

Nitrates

Annually

Soil Pollution Oil

Wastewater

Solid Waste

Annually

Road Sub-project:

Environmental Impact Monitoring Indicator Monitoring Frequency

Air Pollution Increase in traffic

Noise

Odors

Dust

Smoke

Pollutants (i.e.CO, NOx. And SO2)

Asbestos

Paint containing lead

VOC

Annually

Different Forms of Visual

Pollution

Solid Waste

Construction Waste

Green Areas

Sewage System

Archeological Sites / Artifacts

Annually

Water Pollution EC

BOD-COD

E-Coli

Nitrates

Annually

Reduction or Migration of

Water Sources

Productivity of water source

Annually

Obstruction of Water

Collection

Obstruction of canals on the road

Dispersion of natural canals

Road erosion

Annually

63

Landslide, Erosion, and

Structural Instability of

Slopes

Falling rocks, soil, and debris on the road

Change in road width Annually

Population Emigration Census Annually

Tourism Support Determination of incoming tourists Semi-Annually

64

Appendix 3: Examples of Negative Environmental Impacts that may be associated with Sub-projects13

13

The table provides a summary of some of the negative environmental impacts that may be associated with the sub-projects different components though it is not intended to

provide an exhaustive list of all types of the sub-projects, their impacts, and their mitigation measures that shall be funded by the Project, rather, the table highlights the typical

impacts that can be expected in the types of sub-projects that shall be financed by the Project.

Sub-project Type

Potential Environmental and

Social Negative Impacts

During Project Construction

Best Management Practices and

Mitigation Measures

Potential Environmental and

Social Negative Impacts

During Project Operation

Best Management Practices and

Mitigation Measures

Water Supply and

Networks

Road, and

Irrigation Canals

Mismanagement of

construction and demolition /

rehabilitation waste

Disruption to biodiversity

(changes to fauna, flora, and

aquatic life)

Cut down of trees or

destruction of green areas

Increased air pollutant

emissions

Foul odors

Effluents to public water

systems

Alteration of current alignment

of streams

Obstruction of irrigation

intakes

Obstruction of flood water

course

Alteration of surface water

quality or quantity

Interference with existing

drainage networks

Alteration of direction / quality

of groundwater

Changes in soil (erosion /

fertility / salinity / pollution)

Gas emissions

Dust pollution

Change in local climate

Accidents may occur leading

to fire or personal injury

Monitoring of water

Regional water use plans

Proper drainage near wells and

pumping stations

Erosion control during

construction

Construction during dry season

Include odor-control technology

in design

Provide appropriate sized bins to

collect construction waste and

arrange for periodic pick up and

disposal

Restrict activities to areas where

biodiversity is not adversely

affected

Avoid cutting trees and

destruction of green areas, and if

necessary, re-vegetation should

be arranged and included in the

project

Control construction by fencing

site and spraying water over

working area to control dust

emissions

Consider project siting during the

design phase

Collect liquid effluents during

construction and avoid disposal

of untreated effluents into public

water systems

Careful design and appropriate


(changes to fauna, flora,

and aquatic life)

Increased air pollutant

emissions

Foul odors



Gas emissions

Change in local climate

Accidents may occur

leading to fire or personal

injury

Quality; operation, and

maintenance plan

Avoid harmful effects to

biodiversity during operation

Monitoring of water

Regional water use plans

Erosion control during

operation

Include odor-control technology

in operation

Use protective clothing and

masks for workers as

appropriate.

Train workers on health care

waste segregation and

occupational safety measures

65

selection of irrigation systems



appropriate.




Waste

Management

None perceived

None

The garbage streams contain

all types of household and

other wastes, some of which

are hazardous.

Collection vehicles are not

covered during transport

leads to littering.

Collection workers usually

have no special training or

protection for handling these

wastes

Human scavengers at

dumping area may be

sorting through the waste.

Waste accumulating in

dumping areas may burn

spontaneously or by

individuals resulting in air

quality degradation from

smoke and dust.

Contamination of ground

water resources is of

concern at dumping areas.

Avoiding contamination of

close by water bodies through

random waste dumping.

Sound selection and siting of

dumping areas, studies are

crucial for this type of project

Train workers on waste

management and occupational

safety measures



appropriate

Vehicles must be covered

during transport.

Waste generated should be

collected frequently and storage

prohibited in streets.

Waste accumulated in dumping

areas should be covered to

avoid scavenging and

spontaneous burning

Health Care

Related

Mismanagement of demolition

/ rehabilitation waste


(changes to fauna, flora, and

aquatic life)

Cut down of trees or

destruction of green areas


Adequate sanitation and disposal

system for waste

Avoid cutting trees and

destruction of green areas, and if

necessary, re-vegetation should

be arranged and included in the

project

Restrict noisy activities to certain

Indoor air pollution

Infectious waste may be

disposed of in mixed form

with municipal waste

Incinerators, if used, may

not be properly sited,

operated or maintained

leading to air pollution and

Control sources of indoor

pollution at source.

Provide for appropriate in door

ventilation either naturally by

using larger windows or

mechanically by using air

circulation fans and vents

Use different bags for

66


Dust pollution

Accidents may occur leading

to fire or personal injury

Transportation and traffic

circulation

Increase traffic hazards to

motorists and pedestrians

Introduction of new diseases

Excessive exposure to existing

diseases

Attraction of pests and rodents

Generation of excess solid

wastes and litter

Transport, storage or disposal

of regulated hazardous wastes

Reduced aesthetic values /

visual pollution

Risk of impact on historical,

archaeological, touristic,

religious, or protected areas

and sites

Risk of impact on recreational

activities

Increased noise levels / noise

pollution

hours during the day to avoid

disturbance

Control construction by fencing

site and spraying water over

working area to control dust

emissions

Provide appropriate sized bins to

collect construction waste and

arrange for periodic pick up and

disposal

Consider project siting during the

design phase

Restrict activities to areas where

biodiversity is not adversely

affected



appropriate.




Education in proper sanitation

and health practices

Careful management of

pesticides

Integrated pest management

programs

Provide glowing traffic signs and

build artificial humps near

construction area

Strict avoidance of construction

near archeological, historical, or

religious areas. If any potential

artifacts are discovered during

construction, work will be

temporarily halted in this area

Restrict noisy activities to certain

hours during the day to avoid

disturbance

hazardous working

conditions.

Accidents may occur

leading to fire or personal

injury

Disruption / congestion of

transportation and traffic

circulation

Increase traffic hazards to

motorists and pedestrians

Introduction of new diseases

Excessive exposure to

existing diseases

Attraction of pests and

rodents

Generation of excess solid

wastes and litter

Transport, storage or

disposal of regulated

hazardous wastes

Reduced aesthetic values /

visual pollution

Risk of impact on historical,

archaeological, touristic, or

protected areas and sites

Risk of impact on

recreational activities

municipal waste (black bags)

and infectious waste (red bags).

Get approval on incinerator

location before installation.

Maintain incinerator

periodically.



appropriate.




Consultation with affected

communities

Employ local citizens in sub-

project area in sub-project

operation

Education in proper sanitation

and health practices

Avoidance of stagnant waters

Careful management of

pesticides

Integrated pest management

programs

Provide glowing traffic signs

and build artificial humps near

construction area

67

Annex 10: Economic and Financial Analysis


Emergency Labor Investment Project

Rationale for public intervention

1. There is a strong rationale for government intervention to insure social risks, including

poverty, through safety nets such as the present workfare program.

2. First, the private market in this area usually fails, for three reasons:

(i) Information asymmetry. An individual will always know more about his/her own

inherent risk of poverty (hidden knowledge) and about actions that might increase that

risk (hidden action). A private insurer has little possibility to get this information and will

therefore try to „cream-skim‟ the market, i.e., select people with the „best‟ risks and leave

out those with „bad‟ risks. However, this is socially inefficient because of two other

market failures:

(ii) Coordination failure. Individual risks of poverty are different: one person may be hit

during the summer season, and another in the winter season; and they do not know of

each other, and neither does an individual insurer. If they pool their risks, insuring them

jointly will be more efficient. In fact, the more people with different risks who participate

in the insurance scheme, the more efficient it is – also if some are „bad‟ risks. This is

called risk-pooling.

(iii)Externality/ returns to scale. If risks are spread across a large number of people, the cost

of risk-bearing (risk-premium) can be nearly eliminated. For example, if two people share

the costs and benefits of an undertaking, both the costs and the benefits are halved, and

therefore the distance and variation between them are smaller (because costs are negative

benefits). This is called risk-spreading.

3. Second, workfare is a safety net for poverty and unemployment of the neediest and thereby

an instrument to promote greater equity.

Appraisal of costs and benefits of the program

Framework

4. Based on the methodology by Martin Ravallion14,

we estimate the share of the Government‟s

outlay which benefits the poor, i.e.

where

NW is the net wage to beneficiaries (gross wage W minus any costs of participating),

IB are the indirect benefits of the assets (infrastructure etc) created, and

14

Ravallion, M :”Appraising Workfare Programs”, World Bank Policy Research Working Paper 1955, 1998

68

G is the Government‟s budget for the program.

The above ratio can be decomposed as follows:

where

C is private co-financing;

W is the gross wage;

L are leakages of salaries to the non-poor.

Poor people‟s share of the social benefits of the assets created is denoted as

.

Calculations with real parameters

Targeting performance

5. If the workfare wage is low enough, it will self-select participants who do not have better

labor market options. The Egyptian official minimum wage is only EGP 35 (unchanged for 26

years) and therefore not a benchmark. A recent 2011 field trip recorded formal salaries for the

unskilled of EGP 700/month in cities and EGP 600 in rural areas. Most of these can be assumed

to come from the poorest quintile (20%) of the population. Labor Force Survey data from 2006

reports average salaries for the illiterate of EGP 540 and for illiterate informal sector workers of

EGP 420 in 2006. NGO-managed activities (2011) in rural areas pay EGP 350 for unskilled

workers and the Ministry of Water Resources and Irrigation pays maintenance workers only EGP

300 per month, probably on arrangements with a similar motivation as the ELIIP. – We therefore

assume EGP 350 as the outside wage option for the beneficiaries of the ELIIP, which will be

mainly unskilled workers from the poorest 20% in targeted rural areas. If the ELIIP pays EGP

300 or below, it is unlikely to be attractive to currently employed poor workers. For the

following calculations, we therefore assume a LIWP wage of EGP 300.

6. In addition, the LIWP is strictly targeted to very poor regions, namely Luxor, Aswan, Qena,

Sohag, Assiut, Fayoum, Al Sharqia, Kafr Al-Sheikh, Suez, and Beheira. Also, the positive list of

project types eligible under the LIWP will by their nature likely not appeal to people with access

to other work.

7. In conclusion, we assume that the LIWP will suffer no leakages to the non-target

population. L=0.

Net wage to beneficiaries

8. The net wage NW is the gross wage W minus the costs of participation. The costs of

participation include any foregone wage opportunities. Let us assume conservatively that a

beneficiary from the program‟s target population (i.e., an unskilled worker from the poorest

20%) will have a probability of finding work of 78%15

if he is not on the program. With the

NGO wage in rural areas at EGP 350, his expected foregone wage is EGP 273, i.e., a bit lower

than the set wage for the program.

15

Unemployment rate in most affected governorate, Luxor, 22%, ILO 2008.

69

9. The above are average calculations, concealing a distribution around the reservation wage

and employment rate with poorer as well as better expectations. Comparing the options, we can

presume it likely that many workers with less than average probability of finding a job and a

lower expected wage join the program. We also assume that the probability of finding a job does

not change through the time spent on the program, i.e. there will be enough spare time to look for

another job. Let‟s assume the actual LIWP participants face a 30% higher unemployment rate

than the average of the Luxor governorate (22%), i.e., 30%. With this in mind, the Costs C of

participation are 70% * EGP350 = EGP245. And the net wage NW is EGP 300 – EGP 245,

i.e., EGP 55.

Cost-effectiveness of the LIWP

10. The cost-effectiveness ratio is

as explained above. Let us start to fill it with data one

by one.

11. It is likely that the bulk of the indirect benefits IB will accrue in the future and will be zero as

a current value. So IB=0 for now.

12. From a previous similar program, the Social Fund for Development, we know that the wage

share of the overall costs

varies between 22% and 36% for de-centrally implemented, and

between 40% and 70% for centrally implemented activities. The pipeline of projects lined up for

the LIWP achieves a minimum of 50% wage share. We therefore assume for the purposes of this

calculation an intermediate wage share of 50%.

13. We also expect L to be =0 as explained above.

14. Scenario 1: Participants in the LIWP can find work outside the program with the

probability of the current employment rate of Luxor and an NGO wage

With W/G=50% and the NW=EGP 55, the current cost-effectiveness ratio will be

15. This means, under the LIWP it takes EGP 11 to transfer EGP 1 to the beneficiaries

today. This performance can be improved with a higher labor intensity (i.e., going above

50%). The B/G estimate is about 1/2 of Egypt‟s overall poverty rate of 22% (2009, post crisis).

The latter percentage would also be the share of the poor in a uniform, untargeted allocation of

the same budget across the population. So the LIWP unfortunately provides less current

immediate benefit to the poor than this alternative policy. The reason is the relatively low

unemployment rate (22% in the most affected governorate according to our latest information),

suggesting that beneficiaries would face relatively good chances of finding some work outside

LIWP.

16. As the unemployment figures available to us probably do not reflect the reality of the poor

unskilled, we also provide the results of a scenario assuming that workers cannot find work

outside the LIWP.

70

17. Scenario 2: participants in the LIWP cannot find work outside the program

In this case, NW=W and NW/W=1. W/G=50% as before. Then, the current cost-

effectiveness ratio will be

In this case, it only takes EGP 2 to transfer EGP 1 to the beneficiaries today.

18. The B/G estimate is now about 2 times Egypt‟s overall poverty rate of 22% (2009, post

crisis). We can see that under this scenario, the LIWP would provide more current immediate

benefit to the poor than a uniform, untargeted allocation of the same budget across the

population.

Adding in future indirect benefits (IB) to the poor

19. If we add in future IB, we have to examine the extent to which poor people will benefit from

the assets created under LIWP. Given that Upper Egypt will be targeted, we calculate two

scenarios, one for urban, one for rural Upper Egypt, whose poverty rates are 22% and 46%,

respectively.16

Scenario 1: Rural Upper Egypt

20. The poverty rate also implies that the ratio IB/SB is 46%. If all people use a new road

(100%), 46% of these people are poor, and this is the share of the benefit that goes to them.

21. In addition, if we assume that the projects under LIWP generate social benefits sufficient to

cover their costs, then SB/(G+C)=1.

22. Combining the above figures, and conservatively setting C=0, we obtain

23. In concrete terms, it takes EGP 1.04 to increase the incomes of the poor by EGP 1 in the

long term (EGP 1.8 if we use Scenario 1 of the net wage analysis). This is a very efficient

result and compares very positively to the Argentinean Trabajar workfare program, where

it cost EGP 2.5 to improve incomes by EGP 1.

24. Scenario 2: Urban Upper Egypt

Analogously to the above calculations, under this scenario

.

It takes EGP 1.4 to increase the incomes of the poor by EGP 1 in the long term (EGP 3.2 if

we use Scenario 1 of the net wage analysis). This ratio still compares favorably with the

Trabajar program.

16

Source: Staff estimates based on HIECS 2008/09. Number of poor includes extreme poor.

71

Annex 11: Documents in Project Files



International Organization for Migration (IOM) Cairo. Egyptian Migration to Libya. March

2011.

The World Bank. Social and Economic Development Group. Middle East and North Africa.

EGYPT - Poverty in Egypt 2008-09: Withstanding the Global Economic Crisis. January

2011.


EGYPT - EGYPT‟S FOOD SUBSIDIES: BENEFIT INCIDENCE AND LEAKAGES, July

2010.

The World Bank. Social Protection. Macro Crises and Safety Net Responses Experience of

Argentina, Mexico, Korea and Thailand and Lessons for East and Central Asia countries.

The World Bank. Social Protection Discussion Papers. Making Public Works Work. The

Design and Implementation of Public Works Programs. A Toolkit for Practitioners. April

2010.


EGYPT - UPPER EGYPT: PATHWAYS TO SHARED GROWTH. October 2009.

Ministry of Labor. International labor Organization. Egypt Youth Employment. National

Action Plan - 2010-2015. May 2009.


EGYPT - TOWARD A MORE EFFECTIVE SOCIAL POLICY: SUBSIDIES AND

SOCIAL SAFETY NET. December 2005.

International Labor Organization. Livelihood and Employment Creation. Labour-based

Infrastructure Projects. 2005

International labor Organization. Mitigating a Job Crisis. Innovations in Public Works

Programmes. Case Study. The Mahatma Ghandi National Rural Employment Guarantee Act

(NERGA), India.

International labor Organization. Employment-Intensive Infrastructure Programmes:

Capacity Building for Contracting in the Construction Sector. 1999

International labor Organization. Employment-Intensive Infrastructure Programmes: Labour

Policies and Practices. 1998

72

Annex 12: Statement of Loans and Credits



Original Amount in US$ Millions

Difference between

expected and actual

disbursements

Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev‟d

P120161 2011 EG-Integrated Sanitation & Sew. Infra. 2 200.00 0.00 0.00 0.00 0.00 200.00 0.00 0.00

P117745 2011 EG-Farm-level Irrigation Modernization 100.00 0.00 0.00 0.00 0.00 100.00 10.50 0.00

P101201 2010 EG-Cairo Airport Development Project-TB2

280.00 0.00 0.00 0.00 0.00 258.31 58.31 0.00

P112346 2010 EG-Affordable Mortgage Finance DPL 300.00 0.00 0.00 0.00 0.00 100.00 0.75 0.00

P113416 2010 EG-Wind Power Development 70.00 0.00 0.00 0.00 0.00 70.00 32.33 0.00

P116011 2010 EG-Enhancing Access to Finance for

SMEs

300.00 0.00 0.00 0.00 0.00 136.21 -63.87 0.00

P116194 2010 EG-Giza North Power Project 840.00 0.00 0.00 0.00 0.00 809.80 84.80 5.91 P080228 2010 EG-Health Insurance Systems

Development

75.00 0.00 0.00 0.00 0.00 75.00 13.83 0.00

P101103 2009 EGYPT-Railways Restructuring 600.00 0.00 0.00 0.00 0.00 591.64 181.80 3.38 P100047 2009 EG-Ain Sokhna Power 600.00 0.00 0.00 0.00 0.00 479.66 53.00 0.00

P095392 2008 EG-Natural Gas Connections Project 75.00 0.00 0.00 0.00 0.00 6.93 -12.07 0.00

P094311 2008 EG INTEGRATED SANITATION & SEWERAGE INFR

120.00 0.00 0.00 0.00 0.00 106.86 61.91 0.65

P090073 2006 EG-Second Pollution Abatement 20.00 0.00 0.00 0.00 0.00 8.73 8.73 1.58

P082952 2005 EG-Early Childhood Education Enhancement

20.00 0.00 0.00 0.00 0.00 8.65 -3.40 -0.02

P073977 2005 EG-INTEGRATED IRRIGATION IMPR.

& MGT

120.00 0.00 0.00 0.00 0.00 77.62 70.12 17.27

P045499 2000 EG-NATIONAL DRAINAGE II 80.00 0.00 0.00 0.00 0.00 28.43 -1.50 1.67

P050484 1999 EG Secondary Education Enhancement

Proj

0.00 50.00 0.00 0.00 0.00 7.79 3.87 4.50

Total: 3,800.00 50.00 0.00 0.00 0.00 3,065.63 499.11 34.94

Egypt, Arab Republic of

STATEMENT OF IFC‟s

Held and Disbursed Portfolio

In Millions of US Dollars

Committed Disbursed

IFC IFC

FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.

Total portfolio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic.

Total pending commitment: 0.00 0.00 0.00 0.00

73

Annex 13: Country at a Glance



W e s t e r n

D e s e r t

L i b y a n P l a t e a u

Li

by

an

D

es

er

t

QattaraDepression

Ea

st e

rn

De

se

rt

A L WA D IA L J A D I D

MARSA MATRUH

ASWAN

QENA

SOHAG

ASSIUT

SOUTHERNSINAI

NORTHERNSINAI

SUEZ

EL FAYOUM

BENI SUEF

AL MINYA

AL BAHR

AL AHMAR

Luxor

Kom Ombo

Halaib

Siwa

Qara

Mut.

Ras Gharib

Taba

Abu Zenima

Qena

Suez

Aswan

Sohag

Assiut

Benha

Tanta

Damietta

El Tur

Zagizig

Al Minya

Ismailia

Damanhur

El-Kharga

Beni Suef

El Fayoum

El Mansura

Shibin el Kom

Kafr elSheikh

CAIRO

LakeNasser

Nile

River

G I Z A

Giza

1

89

1011

1213

2

3

4

5

6 7

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Luxor

Kom Ombo

Halaib

Marsa 'Alam

Salum

Siwa

Qara

Mut.

Quseir.

Bir Seiyala

Ras Gharib

Taba

Abu Zenima

Giza

Marsa Matruh

Qena

Suez

Helwan

Aswan

Sohag

Assiut

Benha

Tanta

Damietta

El Tur

Zagizig

Al Minya

Ismailia

Damanhur

El'Arish

El-Kharga

Beni Suef

El Fayoum

Port SaidEl Mansura

Alexandria

Al Ghurdaqah

Shibin el Kom

Kafr elSheikh

CAIRO

A L WA D IA L J A D I D

MARSA MATRUH

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SOUTHERNSINAI

NORTHERNSINAI

SUEZ

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EL FAYOUM

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SOHAG

1

89

1011

1213

2

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5

6 7

S U D A N

SAUDIARABIA

JORDANISRAEL

LIBYA

WEST BANKAND GAZA

Aswan Dam

Nile

River

LakeNasser

Gulf of Suez

Gul

f of

A

qaba

Red

Sea

M e d i t e r r a n e a n S e a To Tel Aviv

To Port SudanTo

BerberTo

Dongola

To Jalu

To Darnah

W e s t e r n

D e s e r t

L i b y a n P l a t e a u

Li

by

an

D

es

er

t

QattaraDepression

Ea

st e

rn

De

se

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25°E 30°E

30°N

25°N

20°N

30°N

25°N

20°N

35°E

25°E 30°E 35°E

ARAB REPUBLICOF EGYPT

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

0 50 100 150

0 50 100 150 Miles

200 Kilometers

IBRD 33400R

MAY 2010

ARAB REPUBLIC OF EGYPTSELECTED CITIES AND TOWNS

GOVERNORATE CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

GOVERNORATE BOUNDARIES

INTERNATIONAL BOUNDARIES

GOVERNORATES IN NILE DELTA:

1234567

KAFR EL SHEIKHDAMIETTAPORT SAIDALEXANDRIABEHEIRAGHARBIYADAGAHLIYA

MENOUFIYASHARGIYAHQALIUBIYAISMAILIACAIROGIZA

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