Ethiopia - Modjo-Hawassa Highway Project (Phase I) - Appraisal ...

AFRICAN DEVELOPMENT FUND

PROJECT: MODJO – HAWASSA HIGHWAY PROJECT (PHASE I)

COUNTRY: ETHIOPIA

PROJECT APPRAISAL REPORT

OITC DEPARTMENT

October 2013

TABLE OF CONTENTS

I – STRATEGIC THRUST & RATIONALE ............................................................................ 1

1.1 Project linkages with country strategy and objectives ..................................................... 1

1.2 Rationale for Bank’s involvement ................................................................................... 2

1.3 Donor coordination .......................................................................................................... 3

II – PROJECT DESCRIPTION ................................................................................................. 3

2.1 Sector Goal and Project Objective ................................................................................... 3

2.2 Project components .......................................................................................................... 3

2.3 Technical solution retained and other alternatives explored ............................................ 5

2.4 Project type ...................................................................................................................... 5

2.5 Project cost and financing arrangements ......................................................................... 5

2.6 Project's target area and population………………… ..................................................... 7

2.7 Participatory process for project identification, design, implementation ........................ 7

2.8 Bank Group experience, lessons reflected in project design ........................................... 8

2.9 Key performance indicators ........................................................................................... 8

III – PROJECT FEASIBILITY ................................................................................................. 8

3.1 Economic and Financial Performance ............................................................................. 8

3.2 Environmental and Social impacts ................................................................................... 9

IV – IMPLEMENTATION ...................................................................................................... 11

4.1 Implementation arrangements ........................................................................................ 11

4.2 Monitoring ..................................................................................................................... 13

4.3 Governance .................................................................................................................... 13

4.4 Sustainability................................................................................................................ 14

4.5 Risk management ........................................................................................................... 14

4.6 Knowledge building ....................................................................................................... 15

V – LEGAL INSTRUMENTS AND AUTHORITY............................................................... 15

5.1 Legal instrument ............................................................................................................ 15

5.2 Conditions associated with Bank’s intervention ............................................................ 15

5.3 Compliance with Bank Policies ..................................................................................... 16

VI – RECOMMENDATION ................................................................................................... 16

Appendix I: Ethiopia’s comparative socio-economic indicators

Appendix II: Ethiopia’s Portfolio 2013

Appendix III: Key related projects funded by Bank and other DPs

Appendix IV: Map of Project

Currency Equivalents As of 7 June 2013

1 Unit of Account = ETB 27.91022

1 Unit of Account = USD 1.49877

1 USD = ETB 18.62209

Fiscal Year

8 July- 7 July

Weights and Measures

1metric tonne = 2204 pounds (lbs)

1 kilogramme (kg) = 2.200 lbs

1 metre (m) = 3.28 feet (ft)

1 millimetre (mm) = 0.03937 inch (“)

1 kilometre (km) = 0.62 mile

1 hectare (ha) = 2.471 acres

Acronyms and Abbreviations

AC

AdC

Asphalt Concrete

Advanced Contracting

HIV

IDA

Human Immunodeficiency Virus

International Development Association

AfDB

ADF

AADT

African Development Bank

African Development Fund

Average Annual Daily Traffic

ICB

IP/DO

International Competitive Bidding

Implementation Progress /

Development Outcome

ADT

AIDS

Average Daily Traffic Acquired Immune Deficiency Syndrome

JICA Japan International Cooperation

Agency

BADEA Arab Bank for Economic Development

for Africa

KfW

LTS

Germany Development Bank

Long Term Strategy

BPR

CSP

Business Process Re-Engineering

Country Strategy Paper

LC

LCS

Local Cost

Least Costs Selection

DBST

DfID

DP

ESW

Double Bitumen Surface Treatment

Dept.for International Development

Development Partners

Economic Sector Work

MTP

MDG

NEPAD

Medium Term Plan

Millennium Development Goals

New Partnership for Africa

Development

EIRR

EDCF

Economic Internal Rate of Return

Economic Development Cooperation

Fund

NGO

NPV

Non-governmental Organization

Net Present Value

ESIA Environmental and Social Impact

Assessment

OPEC

Organization of Petroleum Exporting

Countries

ESMP

EA

Envi. and social Management Plan

Executing Agency

OFAG

PAP

Office of Federal Auditor General

Project Affected Persons

ERA

ETB

Ethiopian Roads Authority Ethiopian

Birr (Currency)

PIDA Program for Infrastructure

Development for Africa

ERF

EU

Ethiopian Roads Fund

European Union

PCR

PFM

Project Completion Report

Public Financial Management

FC

GNP

Foreign Currency

Gross National Product

QCBS

RFP

Quality and Cost Bases Selection

Request for Proposals

GOE Government of Ethiopia RSDP Road Sector Development Program

GPN

GTP

General Procurement Notice

Growth and Transformation Plan

SPN

STI

Specific Procurement Notice

Sexually Transmitted Infection

GTZ German Company for International

Cooperation TSWG

VOC

Transport Sector Working Group

Vehicle Operating Costs

HDM Highway Design and Maintenance

Standard Model

ii

Loan and Grant Information

Client’s information

BORROWER: THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

EXECUTING AGENCY: ETHIOPIAN ROADS AUTHORITY

Financing plan Source Amount (UA) Instrument

AFRICAN DEVELOPMENT FUND 84,080,000 LOAN

AFRICAN DEVELOPMENT FUND 1,630,000 GRANT

GOVERNMENT OF ETHIOPIA 66,120,000 OWN CONTRIBUTION

TOTAL COST OF LOT 1 151,830,000

KOREA EXIM BANK (PARALLEL

FINANCING) 66,720,000 LOAN

GOVERNMENT OF ETHIOPIA 14,650,000 OWN CONTRIBUTION

TOTAL COST OF LOT 2 81,370,000

GRAND TOTAL COST 233,200,000

ADB’s key financing information

Loan currency Units of account

Interest type* Not Applicable

Interest rate spread* Not Applicable

Commitment fee* 0.5% per annum on the un-disbursed loan balance

Service Charge 0.75% on the amount disbursed and outstanding

Other fees* Not Applicable

Tenor 50 years

Grace period 10 years

EIRR, NPV (base case) 14.5%, USD 17.1 m

EIRR (base case) Not applicable

*if applicable

Timeframe - Main Milestones (expected)

Identification mission January 2013

Preparation mission February 2013

Project Concept Note (PCN) approval May 16, 2013

Appraisal mission June 2013

Country Team meeting September 12, 2013

Project approval November 6, 2013

Effectiveness March 2014

Last Disbursement December 2020

Completion December, 2019

Last repayment March, 2080

iii

Project Summary

Project Overview The Modjo – Hawassa Highway Project (209km) will be implemented in two phases. Phase I

consists of the construction of 93 km of a new asphalt surfaced 4-lane dual carriageway road

between Modjo and Zeway towns. The Modjo – Hawassa Highway Project (Phase I), costing

UA 233.20 m, will be divided into two lots and will be funded by the African Development

Fund (ADF), the Korea Exim Bank (Economic Development Cooperation Fund, EDCF) and

the Government of Ethiopia. The Modjo – Meki section (56km) will cost UA 151.83 and an

ADF loan of UA 84.08 m will fund part of the construction costs and an ADF grant of UA

1.63 m will fund capacity building for Ethiopia Roads Authority. An EDCF loan of UA 66.72

m will, in parallel, fund the construction of the Meki – Zeway section (37km), with

government contribution of UA 14.65m. The project will be implemented in 5 years.

The Modjo- Hawassa highway lies mostly in Oromia Region and is part of the major

Mombasa- Nairobi-Addis Ababa highway. Oromia (pop 31.2 m, 2011) covers 290,000 sq.

km of land and agriculture is the backbone of its economy. The road will therefore serve the

local agri-business and international trade. The direct beneficiaries will include transporters,

travelers, traders, agro-businesses, and others who will benefit from an improved road

connection to Addis Ababa. Local communities (especially youth and women), will for the

short-term, benefit from supplying labor, food and accommodation for immigrant workers,

including improved environmental and economic conditions, and access to health and

education facilities.

Needs Assessment The current Modjo – Hawassa road is a dilapidated single 2-lane carriageway that has already

served its design life and requires upgrading. The road section forms a link within the Cape

Town to Cairo road corridor connecting southern, eastern and northern Africa. The current

capacity is insufficient to cater for the growing traffic demands, including international heavy

traffic. Furthermore, Ethiopia currently depends on the Djibouti port, and Mombasa port is

the best alternative. In this respect, the Bank has already invested in the construction of

1,000km sections of the Mombasa–Nairobi-Addis Ababa Road Corridor in both Kenya and

Ethiopia. The Modjo – Hawassa highway project is therefore a logical continuation of this

transport expansion program and when completed in 2019, it will provide a wide range of

socio-economic benefits, supporting national and regional trade.

Bank’s Added Value The Road Sector Development Program (RSDP) IV is an ambitious program intended to

enhance road transport service throughout the country. While the government has mobilized

its own resources (estimated to cover about 75% of the total cost), it is depending on the

financial assistance from Development Partners (DP) to close the 25% funding gap. In this

respect, the Bank, being the fourth largest DP in the sector and a leading financier of regional

infrastructures, is well positioned to continue making strategic contributions as well as

leveraging considerable amount of resources from EDCF to augment its own funds.

Knowledge Management The knowledge generated during project preparation and implementation will be analyzed to

improve future project design particularly in the use of Design-and-Build concept.

Furthermore, as envisaged in the current CSP, the Bank is conducting a transport sector

economic study to analyze sector policy and institutional issues, including the performance of

Bank funded projects, and focusing on the future transport needs.

iv

Result-based Logical Framework

Country and project name: ETHIOPIA: MODJO – HAWASSA HIGHWAY PROJECT (PHASE I) Purpose of the project : To improve the road transport connectivity between Modjo and Hawassa by increasing traffic carrying capacity of the road

RESULTS CHAIN

PERFORMANCE INDICATORS MEANS OF

VERIFICATION RISKS/MITIGATION MEASURES Indicator

(including CSI) Baseline :

2012 Target :

2020

IMP

AC

T 1: Increased welfare

2: Increased agricultural

productivity

3: Increased trade

Total pop. below poverty

Cereal Productivity

Trade volume between

Ethiopia and Kenya

29.6%

1.700 T per

ha

USD 45.5

mln

22% *

2.200 T per ha*

USD 60 million

Central Statistics

Agency

Risk: Increased general economic growth assumes strict

implementation of the Government’s 5 year plan (GTP).

Mitigation: The GoE has demonstrated political commitment

to implement the GTP.

OU

TC

OM

ES

1. improved connectivity

2. Reduced travel costs

3. Reduced travel times (increased

travel speeds)

4. Improved supervision of projects

by ERA

Traffic

Composite VOC per veh-km

Average vehicle journey time

(Average vehicle speeds)

Timely contract

implementation

3,610 vpd

USD 0.52

1.30 hrs

(70km/h)

Min. 2 year

delay

47,500 vpd **

USD 0.34

0.8 hrs (110 km/h)

No delay / project

completion on time

Ethiopian Roads

Authority

(EA)Statistics

Department,

Monitoring &

Evaluation

Risk: The road will have negative social impact on the local

population (road accidents, HIV/AIDS, deforestation).

Mitigation: Awareness program and tree planting provided.

Risk: Climate change- excessive flooding occurring on flat

plains

Mitigation: Adequate drainages have been provided for and

project will use climate- proofed materials. Afforestation

component will increase CO2 intake

OU

TP

UT

S

1: Constructed of dual carriageway

road

2: Implement ESMP

2.1: Workers / PAP socially

sensitized

2.2: Afforestation

2.3: PAP compensated /r resettled

3. Improved ERA capacity

Specification and condition

of road

No. sensitization programs

(participants: men &

women)

No. of trees

Execution of the ESMP and

RAP

Monthly Site Progress

meetings plus number of

ERA Engineers trained.

No road

No action on

sensitization

Nil trees

planted

No ESMP

implemented

No regular

meetings

and no

training.

.New 93 km 4 lane

dual c/way road***

All men & women in

affected areas

1 mln trees planted

All PAPS resettled

/compensated

Regular monthly

meetings plus 200

(80% of ERA)

Engineers trained.

Quarterly Progress

reports by EA and

the Project

Completion Report

Risk: Delays in compensation of PAP in design/build project

regime, leading to cost increases.

Mitigation: Preparation of resettlement already underway.

Price contingencies are built into Project cost

Risk: ERA’s limited experience on design & build projects

(D&B)

Mitigation: D&B directorate established in 2010 to implement

D&B. Also, capacity building component provided in the

project

Risk: Govt unable to make counterpart contributions.

Mitigation: Govt to show budget line every financial year

v

KE

Y A

CT

IVIT

IES

COMPONENTS INPUTS

1. Construction of dual carriageway

1.1: Civil works

1.2: Supervision services

1.3: Capacity building

1.4: Audit services

2. Implementation of ESMP

2.1: Sensitization on social issues (gender/HIV, road safety)***

2.2: Plant/care for 1 million trees

2.3: Compensation and resettlement of PAPs

Costs - UA million :

Civil Works**** 159.85

Supervision Services 5.58

Audit consultancy service 0.27

Base Cost 165.70 Physical Contingencies 20.80

Price contingencies 9.02

Capacity building 1.63

Afforestation

0.33

Costs - UA million (Cont.):

Project cost 197.49

Taxes 27.74

Compensation of PAP 7.97

Grand Total Cost 233.20

Sources of financing (UA million) ADF Loan 84.08

ADF Grant 1.63

EDCF loan 66.72

GOE 80.76

Total 233.20

NOTES: 1. *National economic projections up to 2015 based on the Growth & Transformation Plan of the Government of Ethiopia (2011-2015), 2. ** 47,500 vpd projected in 2038. 3. ***40% local jobs created, 30% for women; Nine communities, sensitized on road safety, gender, HIV/AIDS. 4. ****100,000 UA cost of sensitization included in the costs of works

vi

Project Timeframe: Modjo-Hawassa Highway Project (Phase I)

YEAR

MONTH 7 8 9 10 11 12 1 2 5 6 7 8 9 10 11 12

Start Finish

1-Jul-13 15-Dec-14

Construction period (4 years) 1-Jan-15 31-Dec-18

Defects Liability/Warranty Period (1+3 yrs) 1-Jan-19 31-Dec-22

Bank Board approval of Project funding 6-Nov-13

DETAILS OF PROCUREMENT

Bank no-objection of Procurement document 1-Jul-13 31-Oct-13

Publication of Specific Procurement Notice 30-Nov-13

Prequalification 1-Nov-13 31-Jan-14

No-objection to Prequalification and Report 1-Feb-14 28-Feb-14

Bidding 15-Mar-14 15-Jul-14

Evaluation of Bids Report 1-Aug-14 30-Aug-14

No-objection of the Bank 1-Sep-14 30-Sep-14

Negotiation and award of Contracts 15-Oct-14 30-Oct-14

Preparation to start work

20222013

Task Name

Civil works and services procurement

PHASE I

MODJO - HAWASSA HIGHWAY PROJECT2017 2018 2019 2020 2021

20142015 2016

3 4

1

REPORT AND RECOMMENDATION OF THE MANAGEMENT

ON A PROPOSED LOAN TO ETHIOPIA FOR THE MODJO – HAWASSA HIGHWAY

PROJECT (PHASE I)

Management submits the following Report and Recommendation on a proposed ADF loan of

UA 84.08 million (UA 75.61 million from ADF-12 PBA and UA 8.74 million from loan

cancellations) to finance Ethiopia’s Modjo – Hawassa Highway Project (Phase I) consisting

of the section between Modjo and Zeway, and Grant amounting to UA 1.63 million (from

grant cancellations) to fund capacity building for Ethiopia Roads Authority.

I – STRATEGIC THRUST & RATIONALE

1.1. Project linkages with country strategy and objectives

1.1.1. The Road Sector Development Program (1997 - 2012)

The transport sector is critical to the economic and social development of Ethiopia and this

has been recognized in the current national development plan, namely the Growth and

Transformation Plan (GTP, 2011-15). Road transport is the dominant mode of transportation

in the country and accounts for more than 95% of freight and passenger movements.

By the end of 2012, Ethiopia had 63,000 km road network of roads. Although it has expanded

tremendously from 26,550km in 1997, this network is still limited and is hampering the

country’s development. It is for this reason that, since 1997, the government has been

implementing the Road Sector Development Program (RSDP) that has directed the sub sector

development since then, with considerable support from the development partners. The

objective of the RSDP is to expand the road transport infrastructure and improve the existing

network through upgrading and road maintenance as well as build domestic contracting

capacity.

The RSDP phases I, II and III from 1997 to 2010 were focused on expansion of the trunk

road network and is estimated to have cost USD 5.5 billion (2009, USD 1.0 = ETB 10.995).

The funds were used to construct over 23,450km of roads including 2,450 km of new and

upgraded asphalt roads. The Government was the highest contributor at 71%. The RSDP I-

III achieved most of its objectives.

The new RSDP IV (2011-15), which includes a major contribution to universal rural access,

is a 5 year USD 7 billion program, and the government plans to construct, amongst others,

over 15,000 km of trunk roads plus 70,000km of rural access / feeder roads which will

increase road density of classified road network from 44.4km/1000 sq.km to 124. Already,

13,000km of trunk and rural access roads have been constructed within 2011 and 2012. All

interventions in the road sub sector within the current GTP will be contribution to this

program and the Modjo – Meki -Zeway- Hawassa road project is the continuation of Bank’s

intervention in the RSDP program. An expanded review of the sector is included in Technical

Annex A.

1.1.2. Strategic link between the project and Ethiopia’s development objectives

The Modjo – Hawassa Highway Project is in line with Ethiopia’s 5 year development plan

(GTP, 2011-15) and the Bank’s Country Strategy Paper (CSP, 2011-2015), as well as the

Bank’s Long Term Strategy (LTS, 2013-2022). The GTP has seven pillars and key among

these are: (i) infrastructure development, (ii) agricultural development and (iii) creation of

favorable conditions for industrial development. The first pillar of the current CSP (2011-

2015) is enhancing access to infrastructure, including regional infrastructure. The

implementation of the project will contribute to the country’s development objectives by

2

improving the quality and quantity of infrastructure which will service the agricultural, trade

and industrial sectors.

1.1.3. Sector Challenges

The road subsector is experiencing challenges in terms of capacity of human capital and

financial resources. To implement the RSDP requires a lot of human capital and with

increased workload in the road subsector in the recent past, coupled with internal inability to

retain experienced engineers, there are indications that the road sector capacity to plan and

implement projects is strained. Experienced engineers have in the last 7 or so years been

leaving the public service to join the private sector organizations which offer better

employment terms, within and outside the country. The impact has been inadequate project

supervision and contract management at the level of executing agency, leading to delays in

completion of projects.

In response the government has provided for a massive training programme for transport

engineers and technicians in local universities and other tertiary institutions. However, it

takes about 3-5 years to produce a graduate and the intervening period is critical for the

delivery of the road sector program. In order to address the issue, the World Bank is

providing Ethiopia Roads Authority (ERA) with a USD 10 million capacity building

program. Furthermore, the government has recently acknowledged the need to ramp up the

employment terms of the institution. To augment these efforts and to ensure its successful

implement, this project provides a 4-year capacity building component in supervision of road

works and management of contracts and on-job and short-term training for ERA engineers.

The GTP, within which the road sector plans are embedded, is ambitious, requiring huge

financial resources. The Road sector Development Program (RSDP) started in 1997 is one of

the key program receiving the highest government funding. In the overall, out of ETB 108

billion expended in the last 15 years of the RSDP, the government has contributed 75%.

There are concerns about the sustainability of this levels of expenditure in the medium-to-

long term. However, and specifically, as far as the current project is concerned, the

government has shown capacity to fund major project and has demonstrated commitment to

implement the first phase of the project and the subsequent second phase.

In order to have a long term perspective on the transport sector and its challenges, the Bank,

working within the framework of Transport Sector Working Group (TSWG), the grouping of

all government and development partners working in the sector, is funding a transport sector

analytical work whose objective is to evaluate the sector performance, analyze the challenges

and design strategic response to the future sector needs.

1.2. Rationale for Bank’s involvement

The objective of the Bank’s Long Term Strategy (2013-22) is to support Africa’s efforts in

building integrated economy through investment in, amongst others, selected key regional

integration infrastructure that have impact on agricultural production and trade. Modjo-

Zeway-Hawassa project, being part of the Cape-to-Cairo road corridor, is aligned with above

strategy. The Bank is funding projects in Ethiopia, Kenya and Tanzania to close the missing-

links on this PIDA/NEPAD key route corridor. Furthermore, the project includes an

afforestation program which will promote good climate and, by its implementation using a

work-for-pay platform of grass-root organizations, the project will enhance inclusive growth

agenda at local level.

The RSDP IV is an ambitious program intended to enhance road transport service throughout

the country. While the government has mobilized its own resources (projected to cover about

75% of the cost), it is depending on the financial assistance from development partners to

3

close the 25% gap in funding. In this respect, the Bank, being the fourth largest development

partner in the sector and a leading financier of eastern Africa regional infrastructures, is well

positioned to continue making strategic contributions. This is particularly so in southern

Ethiopia where it has successfully funded other transport and energy projects.

1.3. Donor coordination Aid coordination in the transport sector is carried out through the Transport Sector Working

Group (TSWG) of which the Bank is a member. The TSWG meets quarterly and is currently

co-chaired by the Ministry of Transport and the EU. The joint financing under the RSDP has

facilitated the complementarities of the development partners’ efforts and internal donor co-

ordination. The World Bank, EU, AfDB and China have contributed 86.5% of all donor

support over the last 15 years. A the end of 2012, the total donor support towards the road

sector stood at ETB 26.7 billion, making up 25% of all expenditure on the sector, which

amounts to ETB 108.5 billion. The World Bank is the largest donor, contributing 9.2% of the

total disbursements, followed by EU (6.2%), China (3.9%) and then the AfDB (2.0%)1. A

further analysis of donor interventions is given in Technical Annex A, para A4.

Table 1.1: Donor Coordination

Players - Public Annual Expenditure (15 year average) 1997-2012**

Government Donors

ETB 5.453 billion ETB 1.780 billion

[75%] [25%]

(Total ETB 81.8 billion)

(Total 26.7 billion)

Level of Donor Coordination

Existence of Thematic Working Groups [Yes]

Existence of SWAPs or Integrated Sector Approaches [Yes]

ADB's Involvement in donors coordination** [Member]

II – PROJECT DESCRIPTION

2.1. Sector Goal and Project Objective The transport sector goal is to contribute to Ethiopia’s social and economic development and

poverty reduction efforts by providing an efficient and effective transport system whose

results include increased internal and regional trade and integration, improved agricultural

production and marketing, a better access to social and economic facilities, increased

economic exploitation of the natural resources, and an improved welfare of the people. The

project objective is to improve road transport connectivity between Modjo and Hawassa by

increasing the traffic-carrying capacity of the road. The outcomes include improved road

transport, reduced travel times and costs, afforestation, creation of inclusive green economy

at grass root, and improved road safety, gender and HIV/AIDS sensitization.

2.2. Project components

A. Construction of the road works

1 Source: Ethiopia: On-Going Efforts in Roads Development and Future Plans, Ethiopian Roads Authority (Feb,

2013)

IDA 9.2%

EU 6.2%

China 3.9%

AfDB 2.0%

Japan 1.0%

Others 2.3%

4

I. Modjo - Zeway section (93km)

The works component will include (i) detailed design and construction of 93 km of a new

asphalt paved 4-lane dual carriageway highway (2x2x3.65m wide carriageway with 2m wide

paved shoulders and 1.5 m median) between Modjo, Meki and Zeway, including link roads to

three main towns, and (ii) Implementation of ESMP (road safety, gender sanitization and

HIV/AIDS awareness).

II. Supervision Consultancy Services

Consultancy services for the supervision of roads work will include reviewing and approving

detailed engineering design, administering the works contract, quality and quantity control of

all works, including the control and monitoring of the day to day activities of the contractor,

reporting to the EA on all matters of project progress, advising EA on payment, claims and

all matters pertaining to technical and financial aspects of the contract, amongst others. The

services will include the supervision of the full implementation of the ESMP and

compensation/resettlement of PAPs. The consultant will also collect designated baseline and

first year impact data.

III. Capacity building of the Executing Agency

This component will include consultancy services to enhance capacity of ERA in form of 2

individual consultant engineers who will support ERA by coordinating the implementation of

this and all other Bank funded transport projects. The consultants will ensure that the

contractual monthly progress meetings between the contractor, supervision consultant and

ERA are held regularly. In addition, 200 ERA engineers (making up about 80% of the

engineering staff) will receive further short-term and on-the-job training in project related

skills, including skills transfer from the 2 individual consultants.

IV. Project audit consultancy services

Consultancy services for audit will include annual independent audit of the financial and

technical aspects of the project implementation.

B. Implementation of the Environmental and Social Management Plan

I. Afforestation program will consist of production, planting and caring for one million

trees along the road reserve. The work will be implemented by specialist organizations.

II. Sensitization on social issues includes consultancy services for Road Safety campaign,

HIV/AIDS awareness and gender sensitization. The cost is included in the works.

III. Compensation and Resettlement of PAP includes the implementation of the

Resettlement Action Plan and compensation of project affected persons.

Table 2.1 : Project components for Modjo-Hawassa Highway Project (Phase I)

Sub-

Component

Est. cost

UA

million

Sub-Component description

A.I Modjo- Zeway

road works

188.61 Construct new 93 km of 4-lane dual carriageway road to

asphalt concrete surface standard.

Implementation of the ESMP

A.II Supervision

Consultancy

Services

6.59 Supervise the works contractors and execution of ESMP

Review and approve detailed design

Advice the EA on quality, quantity and cost of works

Collect baseline data and first year impact data

A.III Capacity

building

1.63 2 individual consultant engineers to coordinate project.

Provide further training to ERA counterpart engineers

A. IV Audit 0.32 Financial and technical audit during implementation

B.I Afforestation 0.33 Plant 1,000,000 trees on road corridor

5

B.II Sensitization (0.10)* Awareness on road safety, gender, HIV/AIDS etc

B.III Compensation

of PAP

7.97 Identify the PAPs in the ROW

Assess assets, compensate and / or resettle the PAPs

* Sensitization costs included in A.1 (works)

NB: 1. Figures include contingencies. 2. Costs of taxes estimated at UA 27.73 million not included.

2.3 Technical solution retained and other alternatives explored Alternative considered: Three alternatives were considered: (a) a new tolled 6-lane

expressway with split-level interchanges, (b) upgrading the existing 2-lane single

carriageway to 4-lane dual carriageway (c) constructing a new 4 lane dual carriageway

highway. Option (a) was expensive and uneconomic. Option (b) would disrupt too many

people settled along the road and it did not provide the desired unrestricted flow of traffic.

Solutions: On the basis of economic, environmental and social evaluation, option (c) was

found viable and affordable. The new alignment is through virgin land and this affords the

opportunity to plant 1 million trees on the road reserve, enhancing the aesthetics as well as

increasing forest cover. The afforestation program will initiate a socially inclusive grass-root

economy. The engineering design considered total life cycle costs and provides a pavement

which will require limited maintenance. The main structural elements include 50mm thick

asphalt concrete sitting on 100mm layer of dense bitumen macadam and 150 - 300 mm of

graded crushed stone base. This structural design is in conformity with the national and

international standards and is similar to the on-going Addis Ababa–Modjo-Adama

expressway project.

2.4. Project type The Modjo – Hawassa Highway Project (Phase I) is designed as a standalone operation to be

parallel co-financed with Korea Exim Bank. The project is within multi-donor supported

activities whose objective is to connect Ethiopia with Kenya as well as improve the local road

network. In addition, this project is within the broad five-year RSDP-IV (2011-15) program

which the government anticipates scaled up support from DPs. All other DPs are using stand-

alone operations in the transport sector. The exception here is the European Union which is

using sector budget support mechanism. In order to move towards full sector budget support,

the Bank is planning to undertake a broad audit of the country’s experience and readiness for

efficient use of sector wide support.

2.5. Project cost and financing arrangements

2.5.1 Project Costs As shown on Table 2.2 below, the cost of the Modjo - Hawassa Highway Project (Phase I) is

UA 233.20 million, including road works, consultancy services, capacity building,

afforestation, local taxes and implementation of ESMP. The project is divided into two lots.

Table 2.2: Project cost estimates by component [amounts in UA million]

Component FC costs LC costs Total Cost

Construction works for 93km 111.90 47.96 159.85 Supervision services 5.58 - 5.58 Audit consultancy services 0.27 - 0.27

Base Cost 117.75 47.96 165.70 Physical contingency 11.96 5.13 17.09 Financial contingency 8.91 3.82 12.73 Capacity building 1.63 - 1.63 Afforestation - 0.33 0.33

Project Cost 140.25 57.24 197.49

6

RAP - 7.97 7.97 Local Taxes - 27.67 27.67 EDCF service charge 0.07 - 0.07

Grand Project Cost 140.32 92.88 233.20

Foreign exchange (7/06/2013): UA 1 = ETB 27.9102, USD 1= ETB 18.6221, UA 1 = USD 1.49877

The cost of Lot 1: Modjo-Meki Section (56 km) is UA 151.83 million and the costs of Lot 2:

Meki – Zeway section (37km) is UA 81.37 million; See Table 2.3 below:

The project costs are based on engineering design done by a consulting firm using funds

provided by the government. At the time of appraisal, the cost estimates were found to

compare well with the current market rates of similar standard of road cost.

Table 2.4: Project cost by category of expenditure [amounts in million UA equivalents]

Category

Lot 1 & Lot 2:Modjo - Zeway

% of FC FC LC Total

A. Works 111.90 47.96 159.85 70%

B. Services 5.85 - 5.85 100%

Base cost 117.75 47.96 165.70 71%

Financial contingencies 11.96 5.13 17.09 70%

Physical contingencies 8.91 3.82 12.73 70%

C. Capacity building 1.63 - 1.63 100%

D. Afforestation - 0.33 0.33 0%

Project cost 140.25 57.24 197.49 71%

E. RAP - 7.97 7.97 0%

F. Taxes / EDCF service charge 0.07 27.67 27.73 0%

Grand Project Cost 140.32 92.88 233.20 61.0%

Tables in Technical Annex B.4 provides further details on costs.

2.5.2 Sources of finance It is proposed that the Bank provide an ADF loan amounting to UA 84.08 million (USD

126.02 million) to fund part of the construction costs of Lot 1: Modjo-Meki section (56 km)

Table 2.3: Costs estimates by component and by section

Component

Lot 1 : Modjo –

Meki section

Lot 2: Meki –

Zeway section

Lt 1&2: Modjo-

Zeway Highway

USD UA USD UA USD UA

Construction works 160.10 106.82 79.48 53.03 239.58 159.85

Supervision services 3.60 2.40 4.77 3.18 8.37 5.58

Audit consult services 0.40 0.27 - 0.40 0.27

Base Cost 164.10 109.49 84.25 56.21 248.35 165.70

Physical contingency 16.41 10.95 9.21 6.14 25.62 17.09

Financial contingency 12.64 8.43 6.44 4.30 19.08 12.73

Capacity building 2.44 1.63 - - 2.44 1.63

Afforestation 0.50 0.33 - - 0.50 0.33

Project Cost 196.09 130.83 99.90 66.65 295.99 197.49

RAP 6.85 4.57 5.10 3.40 11.95 7.97

Local Taxes 24.62 16.42 16.85 11.24 41.47 27.67

EDCF service charge - - 0.10 0.07 0.10 0.07

Grand Project Cost 227.56 151.83 121.95 81.37 349.51 233.20

7

and an ADF grant of UA 1.63 million (USD 2.44 million) to fund capacity building of ERA.

The government will contribute the balance of UA 66.12 million (USD 99.10 million) to fund

part of costs, local taxes and compensation / resettlement costs. See Table 2.5 below.

The proposed Korea Exim Bank (EDCF) loan of UA 66.72 million (USD 100 million) and

government contribution of UA 14.65 million will fund the construction of Lot 2: Meki –

Zeway section (37km).

Table 2.5: Sources of financing [amounts in UA million]

Source of Funding FC costs LC costs Total costs Percent

ADF Loan / Lot 1 84.08 - 84.08 36%

ADF Grant / Capacity Building 1.63 - 1.63 1%

EDCF Loan / Lot 2 47.68 19.04 66.72 29%

GOE / Lot 1 6.93 59.19 66.12 28%

GoE / Lot 2 - 14.65 14.65 6%

140.32 92.88 233.20 100%

Table 2.6: Expenditure schedule by component for Lot 1: Modjo – Meki section [amounts in

million UA equivalents]

Year of implementation

Annual Disbursements in UA Millions

Total 2015 2016 2017 2018 2019

Works 25.21 12.61 37.82 37.82 12.61 126.06

Services

0.95

0.48

1.43 1.43 0.48 4.77

Project Cost 26.17 13.08 39.25 39.25 13.08 130.83

NB: The figures exclude costs of compensation and taxes.

2.6. Project’s target area and population

The project highway is located in the Eastern Shewa Zone of Oromiya Region and traverses

2-5 km away from and parallel to the existing road. The population in affected woredas is

483,000 (49% women) out of which the majority (292,000 of which 48% are women) reside

in the rural areas. More than 60% of the population is made up of those below the age of 24.

The direct project beneficiaries will include international and regional traders, transporters,

farmers and those in the agro-business who will benefit from an improved road connection to

Addis Ababa and the resultant reduction in travel time and costs. The communities along the

existing road will benefit from increased forest cover, reduced noise, air pollution and road

accidents because major heavy traffic will use new road. Most of the micro businesses are

run by women and as such will benefit from increased trade due access to larger markets.

2.7. Participatory process for project identification, design, implementation

The project is part of the Mombasa-Nairobi-Addis Ababa road which was identified by the

two countries as a priority project for funding. In addition to consultation conducted at

national level, local stakeholders in the four woredas traversed by the road were consulted

during the preparation of the ESIA and RAP through PAP group discussions, town hall and

office meetings. Stakeholders included municipalities, federal and regional government

officials, women and youth associations, religious leaders, business people and the Project

Affected People (PAP). During Bank preparation missions in February 2013, further half day

public consultations were conducted in three towns within the project route. Key issues raised

during all the consultations included eligibility criteria for compensation; confirmation of

available land for the displaced persons; and roles of stakeholders in the implementation and

monitoring of the RAP. The concerns, experiences and recommendations of stakeholders

8

regarding the various environmental and social issues have been integrated into the project

design. A summary of issues and recommendations has been provided in Technical Annex B

paras B.2 and B.3. Environmental stakeholders will be involved in the monitoring of the

ESMP implementation and PAPs, will take part through Resettlement Committees. Local

youth groups through environmental clubs will be involved in the afforestation component.

2.8. Bank Group experience, lessons reflected in project design

2.8.1 Bank Activities: Since 2001, the Bank has approved six loans and two grant towards

the road transport sector amounting to UA 360 million (15% from the Regional Resources) to

fund the rehabilitation of 1,200 km of roads in Ethiopia. Out of this, 550km are complete

including 190 km Butajira-Hossana-Sodo road (PCR done) and 175 km Wacha-Maji road

(PCR ongoing). Brief description of the performance of these projects is given in Technical

Annex B para B.1. Some of these older projects have experienced delays at effectiveness,

commencement of works and during implementation. Based on recommendations of the

Country Portfolio Performance Review (CPPR), including intense dialogue with government,

measures were taken in the design Bedele-Metu road and Mombasa-Nairobi-Addis Ababa

phase III projects, both approved 2011 and no such delays occurred in these 2 projects -

works have commenced 14 months since approval of the loans.

2.8.2 Lessons learnt from ongoing / completed projects and from CPPR have been applied

in design of 93km Modjo – Zeway road project and include: (a) to avoid delays in project

start up, design-and-build concepts should be adopted which saves 2-3 years of project up

stream activities. Modjo – Zeway – Hawassa is a design-and build project. (b) Use of

advanced contracting procurement procedures that saves up to 1 year in procurement. The

Bank has approved government request to use this procedure. (c) Delays at project

effectiveness have been reduced by early engagement of the authorities in charge of ratifying

the loan and application of Readiness Filter which tracks project preparedness.

2.9. Key performance indicators

The key performance indicators are shown in the results-based logframe and for purposes of

measuring the outputs and outcomes, they include (i) number of motorized traffic (ii)

Composite Vehicle Operating Costs (iii) Travel time and average vehicle speeds and (iv)

capacity of ERA. Road accidents data will be developed and used. These indicators are part

of an elaborate system developed by the government to measure the performance of the road

sector, particularly the sub sectors contribution to achieving MDGs as captured in the GTP.

The performance evaluation mechanisms include Transport Poverty Observatory study which

is ongoing and which is evaluating the social, economic and environmental impact of road

transport investments on four corridors, to establish the relationship between transport

investment and poverty alleviation.

III – PROJECT FEASIBILITY

3.1 Economic and Financial Performance

3.1.1. The methodology for the economic analysis is based on cost benefit analysis which

compares the “with” and “without project” scenarios over a period of 20 years, using the

Highway Development and Management Model (HDM-4). The economic costs consist of the

capital investment and routine and periodic maintenance costs. The road has an estimated

annual average daily traffic (AADT) of 3,610 vehicles; the traffic projection is discussed in

Technical Annex B para B2. As a result of the new dual carriageway, the road user benefits

consist of savings in vehicle operating costs, travel time for passengers and cargo, reduced

accidents and road maintenance costs. The measures of project worth used are the EIRR and

9

NPV at 10.23% discount rate, which is the opportunity cost of capital in Ethiopia.

3.1.2. Assumptions taken and the Economic Analysis Results: The project construction is

assumed to commence in January 2015. With a construction period of 48 months, the first

year of opening the road to traffic will be 2019 and the analysis period goes up to 2038. The

maintenance strategies that have been considered in the analysis are (a) the “without project”

do minimum, and (b) “with-project” improved road. Residual values are assumed as 20 % of

the initial capital investment and credited to the project in the final evaluation year of 2038.

The economic costs taken into account are the road agency costs in the “with” and “without”

project scenarios, which include both the maintenance and the investment cost of building the

new 4-lane 93km long dual carriage. The economic capital investment cost of the road is

ETB 5,602 million (ETB 60.2 million per 4-lane km). The wide socio-economic impacts

linked to free access of the new highway, while significant, have not been computed in order

to maintain conservative assumptions for the appraisal. The summary of the economic

analysis result is presented in Table 3.1. The detail economic analysis results are presented

Technical Annex B para B.2.

Table 3.1 : Summary of the Economic Analysis

Parameter Quantum FIRR, NPV (base case) (Not Applicable)

Economic Internal Rate of Return(EIRR) 25.7 %

Net Present Value (NPV) in ETB ETB 5,269 million

Sensitivity of EIRR of concurrently 20% increase in cost and 20% decrease in

traffic

16.4%

3.2. Environmental and Social impacts

The project is classified as Category 1 in accordance with the Bank’s Environmental and Social

Assessment Procedures (ESAP) since it exceeds the threshold of 50km and will lead to

displacement of more than 200 persons. Accordingly a full ESIA was carried out in view of the

requirements of the Bank’s ESAP. In addition an ESMP and the RAP have been developed. The

ESIA and RAP summary were posted on the Bank website and distributed to the Board under

Ref. ADF/BD/IF/2013/118 according to the Bank’s disclosure requirements.

3.2.1 Environment: The major adverse environmental impacts anticipated stem from

opening and construction of a new road carriageway. The impacts include: (i) Permanent loss of

productive agricultural land; (ii) Soil compaction/ impairment due to use of access and detour

roads, operation of equipment in adjacent farmlands resulting in temporary reduction of

agricultural outputs; (iii) Soil erosion and land degradation especially in rugged terrain due to cut

and fill, quarry and construction material sourcing; (iv) Clearance of vegetation that include

woodland and scattered trees.

Other impacts include: dust, noise and emissions / oil pollution from construction equipment.

The social impacts include: (i) relocation of houses; (ii) relocation of utilities; (iii) demolition of

fences; and (iv) felling of community owned trees. Adequate measures for mitigating the

negative impacts have been identified and have been described in the ESMP.

The environmental mitigation measures proposed include: (i) rehabilitation and landscaping of

disturbed grounds; (ii) replacement of trees cut and by planting one million trees; (iii)

compensation packages for project affected persons; (iv) inclusion of the necessary

environmental and social clauses in the project tender & construction contract document so as to

ensure the implementation of the ESMP; (vii) ensure independent environmental supervision

during construction phase. The total ESMP implementation cost is ETB 29.49 m (USD 1.6m).

10

The positive impacts expected from this project include: (i) provision of a faster corridor of

travel leading to a reduction in travel time, reduced risks of accidents and reduced cost of

transport; (ii) Significant improvement to local, regional and national economy; (iii) Reduction

in air pollution from traffic congestion; (iii) Creation of employment opportunities, especially

during the project construction phase; (iv) improved environment due to increased forestation.

3.2.2 Climate Change: The climate change projection for Ethiopia reveals that the mean

annual temperature will increase in the range of 0.9 – 1.1oC by 2030; in the range of 1.7 – 2.1

oC

by 2050 and in the range of 2.7oC – 3.4

oC by 2080 compared to the 1961 – 1990 temperatures.

The projection indicates that an increase in annual precipitation will also be expected. In this

context, impacts and hazards related to climate change have manifested in Ethiopia through

flooding, heavy rains, strong winds, and high temperature. The engineering design has provided

for a climate resilient project. The road corridor passes through a rolling-to-flat terrain prone to

flash floods and its soil structure is loose loamy type which loses its load carrying capacity when

saturated with water. In this respect, the road pavement is to be built on a high embankment to

protect the expensive road structure from damage as well as to ensure passage of traffic all the

time. Furthermore, numerous culverts have been provided for drainage of surface runoff to

protect the embankment from damming effect. The embankment will be covered by indigenous

grass in order to prevent soil erosion. The road corridor immediately beyond the road prism will

be planted with approximately one million trees to provide stability to the road structure and

prevent soil erosion in the micro-catchment. The tree planting program is expected to contribute

to the regional and national effort of combating global warming and climate change as the

planted trees will serve as CO2 sink.

3.2.3 Gender: The project will benefit both men and women during implementation and

operation through direct employment and enhanced economic activities due to an improved

road transport system. The project will mainstream gender and ensure equal opportunities

between men and women in planning, implementation and the enjoyment of benefits. As a

mechanism of gender mainstreaming, ERA will ensure that more women are employed in the

works and services. ERA will monitor the effectiveness of this initiative through regular

quarterly reports to the Bank. As part of women’s economic empowerment, the project has a

quota of at least 30% of semi-skilled and non-skilled jobs to be filled by women. Effort will

also be made to have 30% women representation in the community and wereda RAP

Committees. It is expected that increased demand for services including accommodation,

food-stalls and cleaning at the site camp will economically benefit women. The project will

provide adequate accommodation including ablution facilities for female and male workers at

the camp. Female headed households among the project affected communities are identified

as vulnerable due to the disproportionate impact of involuntary resettlement on them and as

such will be provided with special support in the compensation and resettlement process. The

presence of construction workers earning above average incomes and often coming without

their families may contribute to the spread of HIV/AIDS/STI, whose impact is higher on

women than men. Thus, the project will provide HIV/AIDS/STI prevention and awareness

campaigns and activities targeted at women and girls.

3.2.4 Social: The road project will bring wealth and improve household incomes of local

communities during both implementation and operation. The project construction is estimated

to take about 4 years and approximately 1000 jobs will be created during implementation.

Equal opportunities for men and women from local communities and the extra income from

the job opportunities will decrease the vulnerability of the PAPs in particular female headed

households. Above all the project road once completed will facilitate faster movement of

agricultural produce especially cut-flowers and horticultural produce which are grown in the

area to markets. Reduced travel-time will in turn encourage farmers to grow more with better

11

quality. The project will improve access to health and education facilitates as well as increase

business opportunities to micro enterprises. The project road will also improve the wellbeing

of the populations living in the area through improved road safety measures that have been

incorporated in the project design; created parking bays; separated motorized and non-

motorized traffic by providing 2 m of sealed shoulders on either side and road safety

campaigns. The design has also included the construction of 16 underpasses which will

ensure safe passage for pedestrians and livestock.

Among the adverse social impacts of the project will be the land take and disruption to

livelihoods of affected persons and to utilities. The RAP will be implemented in accordance

with the Bank policy to offset these impacts. Another social concern is associated with the

potential increase in communicable diseases such as the increased exposure to HIV/AIDS

resulting from the influx of large number of mobile workers. The area has a relatively low

HIV/AIDS prevalence rate of 1% and hence must be protected and improved to even lower

rate. The project includes a comprehensive HIV/AIDS prevention program, coordinated with

local government and NGOs, targeting both workers and communities.

Specific baseline data (with gender disaggregation) will be collected at the commencement of

the project to enable ERA track the implementation and impact of the new road, and be able

to make certain midstream adjustments to the project, if necessary. Data will include

transport costs and travel time, accident data, agricultural activities, jobs created by project,

gender awareness levels and HIV/AIDS prevalence and access to social services.

3.2.5 Involuntary resettlement: The project road is on a new route and entails acquisition of

land for the right of way, and for access to and excavation of construction materials. These

activities will result in involuntary resettlement of people, destruction of assets and disruption

to utilities. Approximately 16,280 people will be affected in the process, out of which 51.3%

are male. In response, a full Resettlement Action Plan (RAP) has been prepared and a

provision has been made to cover the full cost of RAP estimated at USD 11.95 million. The

implementation of the RAP shall provide special attention to the vulnerable groups that

include the elderly, female and child headed households and the people with disability.

IV – IMPLEMENTATION

4.1. Implementation arrangements

4.1.1 Project oversight: The Executing Agency will be the Ethiopian Roads Authority

(ERA). ERA is an autonomous government agency responsible for the planning and

implementation of all trunk road projects in the country. ERA has a long history of successful

implementation of donor funded road project and is capable of managing the implementation

of all aspects of this project. Within the past 15 years, ERA has successfully planned,

executed and monitored USD 5.5 billion RSDP phases I, II and III that have provided the

institution with considerable wealth of experience, not to mention the various institutional

capacity building programs that were implemented. ERA recently in 2010 implemented a

Business Process Re-Engineering (BPR) and has decentralized its operations in order to

increase its efficiency of delivering the latest RSDP IV program. ERA has also separated the

operations department that undertakes actual road maintenance and construction which has

been reformed into a government –owned enterprise. Implementation of the ESMP will be

the responsibility of the Contractor while that of implementing the RAP will be ERA’s Right

of Way Branch. The rest of the organization will play management and oversight roles only.

The new ERA has a compliment of 250 engineers in charge of regulating, supervising and

directing the road sub sector, and additional support staff looking after human resources and

finance issues.

12

4.1.2 Capacity building of ERA: this project provides a capacity building component

through which 2 individual consultant engineers with experience in supervision of design &

build road works and management of contracts will be hired as Project Coordinators to

coordinate the implementation activities in the field, acting as liaison between the supervision

consultants and the ERA project engineers. Furthermore, the capacity building program will

include on-the-job and short-term training for ERA engineers.

4.1.3 Project Procurement: All procurement of works and acquisition of consulting services

financed by the Bank will be in accordance with the Bank's Rules and Procedures for

Procurement of Goods and Works, May 2008 revised July 2012 edition or, as appropriate,

Rules and Procedures for the Use of Consultants, May 2008 revised July 2012 edition and

the provisions stipulated in the Financing Agreement, using the relevant Bank Standard

Bidding or Request for Proposal Documents. ERA will be responsible for the procurement.

The capacity of procurement directorate at ERA was assessed and found adequate to carry

out procurement. Details of the procurement arrangements are summarized in Technical

Annex CI.

4.1.4 Project Disbursement: The loan and grant will be disbursed in line with the

Disbursement Rules and Procedures of the Bank and as stipulated in the Disbursement

Handbook. The project may use any of the four disbursement methods of the Bank.

However, the direct payment method will be used for disbursement covering civil works and

payment to the supervising consultant. Capacity building services will be paid through the

special account. The Bank will issue a disbursement letter to specify and highlight the

disbursement arrangements for the loan and the grant 4.1.5 Financial management and External Audit Arrangements

a-The Financial Management System of Ethiopian Roads Authority (ERA) is adequate and

capable of recording accurate and complete transactions and delivering financial reports

timely. The Authority uses an automated financial reporting system, ACCPAC, which is

specifically designed to meet the needs of its operations. ERA has adequate and qualified

staff to carry out the financial management responsibilities of the Project. In line with the

Paris Declaration on Aid Effectiveness and Accra Agenda for Action, the Project will make

use of the Country Financial Management Systems. The day-to-day management will be as

per the financial management policies and systems of the Authority, as has been the case for

previous projects implemented by ERA and financed by the Bank. The Authority will set up

new account codes to record and report the financial transactions of the Project within its

accounting system. Bank financed projects executed by ERA so far had demonstrated timely

preparation of financial statements with annual audit reports submitted to the Bank within the

expected period of time. The Authority has a well-functioning Internal Audit Directorate that

reports directly to the Director General of the Authority. This Directorate has been further

strengthened with employment of some 8 additional staff members since 2010. The Internal

audit Directorate will also cover the project in addition to the entity auditing the project.

b-ERA will designate an accountant specifically to handle project financial transactions of

the Project. The accountant will continue to work within ERA Finance Directorate and will

functionally report to the Finance Director. The project financial statements will be audited

by a competent firm of auditors appointed by the Federal Auditor General and agreed with

the Bank based on the Bank’s audit terms of reference. The audit report complete with a

management letter will be submitted to the Bank within six months of the end of the ERA

fiscal year. The FM assessment concludes that the Financial Management risk rating for the

project is moderate. Further, the proposed financial management arrangements put in place

13

meet the Bank’s minimum requirements as per its project financial management policies and

guidelines and therefore adequate to provide, with reasonable assurance, accurate and timely

information on the status of the project required by ADF. For the detailed FM assessment

refer to Technical Annex C2.

4.2. Monitoring

4.2.1. The supervision consultant will be responsible for the day-to-day monitoring and

evaluation of the project progress including the implementation of permanent and temporary

works. The contractor and supervisor will have qualified environmental and social experts to

ensure full implementation of ESMP. In addition, ERA and the Bank will provide oversight at

several layers. ERA’s project manager, an individual to be nominated by the ERA on the

basis of wealth of experience and backed by the project coordinators (part of the capacity

building component), will provide the second layer oversight, linking the project with the

government and the Bank. Monitoring of the ESMP and RAP implementation will be carried

out by an independent consulting firm hired by ERA; ERA’s Environmental and Social

Management Team and selectively, Environmental Protection Agency (EPA). The project

coordinator and project manager will make frequent visits to the site of works to consult with

the contractor and consultant and issue guidance wherever necessary.

4.2.2. To make monitoring and evaluation more effective and efficient, the individual

consultant engineers will spend most of the time in the field coordinating and ensuring

quality work is done. The t coordinators will perform bi-annual technical audit of the

performance of the contractor, supervisor and the EA with a view to identifying any

bottlenecks and providing necessary guidance. The Bank will monitor the project through

semi-annual supervision missions. In addition, ERA will provide the Bank with quarterly

project progress reports including the implementation of the environmental and social action

plan in accordance with Bank format. At about 85% completion of project, the Bank will

organize a joint Project Completion Reporting. This being a design-and build project, the

contractor will provide performance guarantee covering the period of construction plus one

year during the Defects Liability Period (DLP). Since this is a design and build project, as a

risk mitigation measure, an additional 3-year warranty will be required beyond the DLP,

during which period the engineering performance of the highway will be monitored

Table 4.1 : Implementation Monitoring Timeframe

Timeframe Milestone Monitoring process / feedback loop Q1 - 2014 Project Launching Supervision and Progress Report

Q4 - 2014 Procurement of Civil Works Completed Procurement Plan/Progress Report

Q2 - 2017 50% of Civil Works completed mid-term review Midterm Review & Progress Report

Q4– 2018 Substantial completion of civil works Supervision and Progress Report Bank’s Project Completion Report

Q4 – 2019 End of Defects Liability period (1 year) Supervision and Progress Report

Q4 – 2022 End of warranty period (3 years) ERA’s Project Completion Report

4.3. Governance Ethiopia has greatly improved its governance structures and is a considered a low risk

environment. However, to ensure that the project funds are safe, the project has included in

its design specific governance risk mitigation measures such as (i) the appointment of

external and independent financial / technical audit firm to ensure that funds are used

efficiently and for the intended purposes; and (ii) Bank’s prior review and approval of all

project procurement activities.

14

4.4. Sustainability

4.4.1 Project sustainability will depend on the quality of works executed. It will also largely

depend on the Governments’ capacity to plan, finance and carry out routine and periodic

maintenances on a timely basis. Furthermore, it will also depend on the implementation of

effective axle-load-control programs to prevent overloaded trucks from using the road assets.

The road maintenance is done based on plans under the Road Sector Development Program

(RSDP), implemented by ERA. To strengthen the maintenance planning capacity, the on-

going Bank funded phase III of Mombasa–Nairobi-Addis Ababa road corridor project

includes consultancy services in asset management. The consultant will diagnose the current

maintenance programming of ERA and assistance in the preparation of annual and five year

maintenance plan, review road network stock and determine its value, propose improvement

to existing, and/or design new maintenance planning approach.

4.3.2 Detailed maintenance strategies have been devised for the project and have been

incorporated into the HDM model. For the options “with project”, two strategies have been

defined. The first one is applicable to the period before the project is completed (years 2014-

2018), whereas the second one is applied after completion of works. This strategy aims at

conserving the asset value of the project road after rehabilitation.

The recurrent costs after project completion include the routine maintenance expenditure of

the road undertaken annually and the periodic maintenance. Those are based on programmed

interventions as responsive to a set of technical criterions aimed at maintaining the wearing

course in acceptable condition. For the new Modjo – Hawassa road savings in road

maintenance expenditures are estimated at USD 59 million.

4.4.3 In Ethiopia, the resources for road maintenance are administered through the Ethiopian

Road Fund (ERF). Its revenues consist of fuel levies, transit fees and interest income. Those

resources at the starting year of the Road Fund, i.e. 1997-98, were ETB 0.33 billion and has

increased to ETB 1.29 billion in 2011-12, which is 94% of routine maintenance needs.

Considering the expected increase in the road network, ERF has identified annual vehicle

license fees, mass distance charges, heavy vehicle charges, overloading fines and road tolls as

potential sources. Ethiopia is also implementing policy measures with respect to axle- load-

control on their respective road networks with technical assistance funded by Development

Partners. These measures include the introduction of improved axle configurations, the

construction of additional weighbridge stations, and more efficient enforcement. ERA is

enforcing axle load control using twelve stationary and three mobile weighbridges.

4.5. Risk management

The major risks and mitigation measures are described below.

4.5.1. Negative social impact on the local population include road accidents, HIV/AIDS.

The concentration of male construction workers in the project area for up to 5 years during

the project construction may increase incidences of sexually transmitted diseases. In

mitigation, the project has provided for sensitization against these negative social behaviors

including HIV/AIDS awareness.

4.5.2. Project Design risks include possible negative impacts on the environment, delays in

implementation and costs increases due poor engineering and project design. In mitigation

the engineering design has taken due consideration of flat/rolling terrain with loose top soil

prone to erosion in case of flash floods. The design has provided sufficient drainage facilities

and raised the level of road embankment all throughout the alignment. Furthermore, the

afforestation component will improve climate and reduce soil degradation by increasing

forest cover. In order to avoid delays due to protracted procurement, ERA is using advanced

15

contracting procedures and has also applied the design-and-build concept in project delivery.

This will eventually save up to 2-3 years in between project conception and completion.

4.5.3. Implementation risks include risks due to RAP and management of the construction

works. The design & build concept requires that compensation be done after the contractor

has started preparatory work but before any construction works can start. Delays in RAP

could slow down progress of project implementation, risking cost increases. In mitigation the

government has already started preparations to compensate PAPs. Additionally, the

implementation of RAP is one of the Other Loan Conditions. ERA has limited experience in

design/build projects. In mitigation, ERA in March 2010 established the Design and Build

Directorate to learn and implement these kinds of projects. In addition, a capacity building

component is provided consisting of 2 experienced individual consultants who will assist in

project management and further short-term and on-the-job training of ERA engineers.

Furthermore, the supervision consultant will have specific skills in design & build projects.

The contractor will also be required to provide a warranty to cover for the project engineering

performance for 3 years beyond project defects liability period.

4.5.4. Government counterpart funds: Although the government is committed to

implement this project and the rest of RSDP, the counterpart funds are considerable (UA 80

m, about 34% of project cost) and the government could face delays in meeting their

obligations. In mitigation, the government has undertaken to report at start of every fiscal

year during project implementation that required counterpart funds have been set aside.

4.6. Knowledge building

This will be the first design & build project the Bank has implemented in Ethiopia and

therefore knowledge gained will be useful in improving design and implementation of similar

future projects. Project coordinator will perform technical audit functions that will form basis

for building a reliable source of knowledge to be applied in subsequent projects. The

supervision consultant will collect additional baseline and monitoring data during project

implementation which will be used to evaluate the performance of the project and analyzed to

improve future projects. The data will become part of the national M&E system that ERA has

developed over the years to track the impact of road development in alleviating poverty and

its contribution to the attainment of MDGs. Furthermore, as recommended in the CSP, the

Bank is undertaking a transport ESW to analyze all the issues pertaining to the sector,

focusing on the future transport needs in view of the RSDP IV and the GTP. The outputs of

the study, to be shared amongst all stakeholders, will contribute to knowledge and will be

used in the development of future projects.

V – LEGAL INSTRUMENTS AND AUTHORITY

5.1. Legal instrument

The Bank instrument to finance this operation is an ADF loan amounting to UA 84.08 million

(UA 75.61 million from ADF XII PBA and UA 8.74 million from loan cancellations) and an

ADF grant amounting to UA 1.63 million from grant cancellations.

5.2. Conditions associated with Bank’s intervention

A: Conditions Precedent to the Entry into Force of the Loan and Grant Agreements:

i. The entry into force of the Loan Agreement shall be subject to the fulfillment by the

Borrower of the provisions of Section 12.01 of the General Conditions Applicable to

Loan Agreements and Guarantee Agreements of the Fund.

16

ii. The entry into Force of the Protocol for Grant Agreement shall be subject to the

fulfillment by the Recipient of the provisions of Section 10.01 of the General

conditions Applicable to Protocol of Agreements for Grants of the African

Development Fund.

B: Conditions Precedent to First Disbursements of the Loan/ Grant: The obligation of

the Fund to make the first disbursements of the Loan/Grant shall be conditional upon the

entry into force of the Loan/Grant Agreement, and submission by the Borrower/ Recipient of

evidence, in form and substance satisfactory to the Fund, of the fulfillment of the following

conditions:

1. Loan Agreement: The Borrower shall have:

i. Procured and signed a contract with a works contractor, upon terms acceptable to the

Fund, to undertake the civil works. The procurement of the works contract will be

subject to prior review by the Fund; and

ii. Secured financing from Korea Exim Bank, for the parallel financing of the Project.

2. Grant Agreement: The Recipient shall have:

i. Opened a Special Account in a bank acceptable to the Fund for the deposit of part of

the proceeds of the Grant to finance eligible expenses for the capacity building for the

Ethiopian Roads Authority; and

ii. Secured financing from Korea Exim Bank, for the parallel financing of the Project.

C: Other Conditions for the Loan and Grant Agreements: The Borrower/ Recipient shall

have:

i. Developed and submitted to the Fund a Resettlement Action Plan (the, “RAP”)

together with a Works and Compensation Schedule detailing, inter alia, (i) the

sections into which each lot of the civil works will be divided; and (ii) a timeframe for

the compensation of the Project Affected Persons with respect to all such sections;

and

ii. Prior to commencement of construction on any section of civil works, all Project

Affected Persons have been compensated and/or resettled with respect to the relevant

section in accordance with the RAP and any updates to the RAP, as well as the Works

and Compensation Schedule.

D: Undertakings for the Loan and Grant Agreements: The Borrower/ Recipient

undertakes to:

i. Implement and report on the implementation of the Environmental and Social Impact

Assessment, the Environment and Social Management Plan and the RAP on a semi-

annual basis in form acceptable to the Fund;

ii. Report on a semi-annual basis, no later than 30 days, in a form acceptable to the Fund

on the measures adopted and progress on HIV/AIDS and STD prevention; and

iii. Report at the start of every fiscal year, for the duration of the Project that the

counterpart funds required have been set aside.

5.3. Compliance with Bank Policies

This project complies with all applicable Bank policies.

VI – RECOMMENDATION

17

Management recommends that the ADF Board of Directors approve the proposed ADF Loan

of UA 84.08 million and the proposed ADF grant of UA 1.63 million to the Federal

Democratic Republic of Ethiopia for the purpose of financing the Modjo – Hawassa Highway

Project (Phase I), subject to the conditions stipulated in this report.

Appendix I: Ethiopia’s comparative socio-economic indicators

Year Ethiopia Africa

Develo-

ping

Countries

Develo-

ped

Countries

Basic Indicators

Area ( '000 Km²) 2011 1,104 30,323 98,458 35,811Total Population (millions) 2012 86.5 1,070.1 5,807.6 1,244.6Urban Population (% of Total) 2012 17.0 40.8 46.0 75.7Population Density (per Km²) 2012 76.7 34.5 70.0 23.4GNI per Capita (US $) 2011 400 1 609 3 304 38 657Labor Force Participation - Total (%) 2012 48.4 37.8 68.7 71.7Labor Force Participation - Female (%) 2012 47.7 42.5 39.1 43.9Gender -Related Dev elopment Index Value 2007-2011 0.403 0.502 0.694 0.911Human Dev elop. Index (Rank among 186 countries) 2012 173 ... ... ...Popul. Liv ing Below $ 1.25 a Day (% of Population)2005-2011 39.0 40.0 22.4 ...

Demographic Indicators

Population Grow th Rate - Total (%) 2012 2.1 2.3 1.3 0.3Population Grow th Rate - Urban (%) 2012 3.3 3.4 2.3 0.7Population < 15 y ears (%) 2012 40.2 40.0 28.5 16.6Population >= 65 y ears (%) 2012 3.4 3.6 6.0 16.5Dependency Ratio (%) 2012 77.3 77.3 52.5 49.3Sex Ratio (per 100 female) 2012 99.1 100.0 103.4 94.7Female Population 15-49 y ears (% of total population) 2012 24.7 49.8 53.2 45.5Life Ex pectancy at Birth - Total (y ears) 2012 59.7 58.1 67.3 77.9Life Ex pectancy at Birth - Female (y ears) 2012 61.4 59.1 69.2 81.2Crude Birth Rate (per 1,000) 2012 30.2 33.3 20.9 11.4Crude Death Rate (per 1,000) 2012 9.2 10.9 7.8 10.1Infant Mortality Rate (per 1,000) 2012 63.6 71.4 46.4 6.0Child Mortality Rate (per 1,000) 2012 97.5 111.3 66.7 7.8Total Fertility Rate (per w oman) 2012 3.9 4.2 2.6 1.7Maternal Mortality Rate (per 100,000) 2010 350.0 417.8 230.0 13.7Women Using Contraception (%) 2012 30.6 31.6 62.4 71.4

Health & Nutrition Indicators

Phy sicians (per 100,000 people) 2004-2010 2.2 49.2 112.2 276.2Nurses (per 100,000 people)* 2004-2009 23.6 134.7 187.6 730.7Births attended by Trained Health Personnel (%) 2005-2010 5.7 53.7 65.4 ...Access to Safe Water (% of Population) 2010 44.0 67.3 86.4 99.5Access to Health Serv ices (% of Population) 2000 55.0 65.2 80.0 100.0Access to Sanitation (% of Population) 2010 21.0 39.8 56.2 99.9Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2011 1.4 4.6 0.9 0.4Incidence of Tuberculosis (per 100,000) 2011 258.0 234.6 146.0 14.0Child Immunization Against Tuberculosis (%) 2011 69.0 81.6 83.9 95.4Child Immunization Against Measles (%) 2011 57.0 76.5 83.7 93.0Underw eight Children (% of children under 5 y ears) 2011 29.2 19.8 17.4 1.7Daily Calorie Supply per Capita 2009 2 097 2 481 2 675 3 285Public Ex penditure on Health (as % of GDP) 2010 5.7 5.9 2.9 8.2

Education Indicators

Gross Enrolment Ratio (%)

Primary School - Total 2010-2012 105.6 101.9 103.1 106.6 Primary School - Female 2010-2012 100.5 98.4 105.1 102.8 Secondary School - Total 2010-2012 37.6 42.3 66.3 101.5 Secondary School - Female 2010-2012 34.9 38.5 65.0 101.4Primary School Female Teaching Staff (% of Total) 2011 37.2 43.2 58.6 80.0Adult literacy Rate - Total (%) 2007-2010 39.0 67.0 80.8 98.3Adult literacy Rate - Male (%) 2007-2010 49.1 75.8 86.4 98.7Adult literacy Rate - Female (%) 2007-2010 28.9 58.4 75.5 97.9Percentage of GDP Spent on Education 2008-2010 4.7 5.3 3.9 5.2

Environmental Indicators

Land Use (Arable Land as % of Total Land Area) 2011 14.6 7.6 10.7 10.8Annual Rate of Deforestation (%) 2000-2009 0.8 0.6 0.4 -0.2Forest (As % of Land Area) 2011 12.2 23.0 28.7 40.4Per Capita CO2 Emissions (metric tons) 2009 0.1 1.2 3.1 11.4

Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update :

UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports.

Note : n.a. : Not Applicable ; … : Data Not Available.

COMPARATIVE SOCIO-ECONOMIC INDICATORS

Ethiopia

May 2013

0

10

20

30

40

50

60

70

80

90

2004

2005

2006

2007

2008

2009

2010

2011

2012

Infant Mortality Rate( Per 1000 )

Ethiopia Africa

0

200

400

600

800

1000

1200

1400

1600

180020

03

2004

2005

2006

2007

2008

2009

2010

2011

GNI Per Capita US $

Ethiopia Africa

1.9

2.0

2.1

2.2

2.3

2.4

2.5

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Population Growth Rate (%)

Ethiopia Africa

1

11

21

31

41

51

61

71

2004

2005

2006

2007

2008

2009

2010

2011

2012

Life Expectancy at Birth (years)

Ethiopia Africa

Appendix II : Ethiopia’s Portfolio 2013

Ser.

No.Project/Study Loan/Grant No. Source

Approval

Date

Date

Signed

Effective

Date

Initial

Closing

Date

Revised

Closing

Date_1st

Revised

Closing

Date_2nd

Net Loan/Grant

Amount

Cum. Disb.

Amount

(31,Aug.

2013)

Cumulative

Disb. Ratio

Undisbursed

balance (UA)

1Agriculture Sector

Support Project2100150007227 LOAN 5-Nov-03 12-Feb-04 21-Mar-05 31-Dec-10 31-Dec,-13 30-Jun-13 21,240,000 15,340,879 72.23% 5,899,121

>> " " 2100155002019 GRANT 5-Nov-03 12-Feb-04 21-Mar-05 31-Dec-10 31-Dec,-13 30-Jun-13 17,761,200 14,282,109 80.41% 3,479,091

2

Creation of

Sustainable Tse tse

and Trypanosomiasis-

free areas in Ethiopia

2100150009198 LOAN 8-Dec-04 16-May-05 23-Jan-07 31-Dec-11 31-Dec-12 15-Dec-13 9,550,000 8,703,289 91.13% 846,711

LOAN 30,790,000 24,044,168 78.09% 6,745,832

GRANT 17,761,200 14,282,109 80.41% 3,479,091

Sub-total48,551,200 38,326,278 78.94% 10,224,922

3Jimma-Mizan Road

Upgrading2100150013218 LOAN 13-Dec-06 12-Jan-07 3-Oct-07 31-Dec-12 31-Dec-12 31-Dec-14 65,000,000 44,077,626 67.81% 20,922,374

4Bedele-Metu Road

Upgrading2100150025495 LOAN 30-Nov-11 2-Feb-12 1-Apr-12 31-Dec-16 41,060,000 7,612,163.27 18.54% 33,447,837

LOAN 106,060,000 51,689,790 48.74% 54,370,210

GRANT - - 0.00% -

Sub-total 106,060,000 51,689,790 48.74% 54,370,210

5Rural Electrif ication II

Project2100150013644 LOAN 20-Dec-06 12-Jan-07 2-Nov-08 31-Dec-13 87,200,000 60,574,941 69.47% 26,625,059

6

Electric Transmission

Systems Improvement

Projet

2100150023451 LOAN 6-Dec-10 20-Dec-10 19-Aug-11 31-Dec-15 93,750,000 60,068,370 64.07% 33,681,630

>>

Electricity Transmission

Systems Improvement

Projet

2100155019269 GRANT 6-Dec-10 20-Dec-10 19-Aug-11 31-Dec-15 58,000,000 38,814,049 66.92% 19,185,951

7Rural Water Supply and

Sanitation Project2100155006269 GRANT 21-Dec-05 25-Feb-06 1-Sep-06 31-Dec-10 30-Jun-12 31-Dec-13 43,610,000 43,592,478 99.96% 17,522

LOAN 180,950,000 120,643,312 66.67% 60,306,688

GRANT 101,610,000 82,406,527 81.10% 19,203,473

Sub-total 282,560,000 203,049,838 71.86% 79,510,162

PBS III 2100150027194 LOAN 18-Jul-12 24-Aug-12 18-Dec-12 31-Jul-15 166,000,000 111,000,000 66.87% 55,000,000

Sub total loan 166,000,000 111,000,000 66.87% 55,000,000

Total Country Allocations:-

LOAN 483,800,000 307,377,270 63.53% 176,422,730

GRANT 119,371,200 96,688,636 81.00% 22,682,564

TOTAL 603,171,200 404,065,906 66.99% 199,105,294

8

Creation of Sustainable

Tse tse and

Trypanosomiasis-Free

Areas in East and West

Africa: PATTEC-AU

COMPONENT

2100155003922 GRANT 8-Dec-04 16-Mar-05 14-Oct-05 31-Dec-11 30-Jun-12 1,500,000 1,371,028 91.40% 128,972

>>

Creation of

Sustainable Tse tse

and Trypanosomiasis-

Free Areas in East and

West Africa: -

ETHIOPIA

COMPONENT

2100155003921 GRANT 8-Dec-04 16-May-05 23-Jan-07 31-Dec-11 31-Dec-13 15-Dec-13 240,000 218,084 90.87% 21,916

9

Mombassa-Nairobi-Addis

Ababa Road Corridor -

Ageremariam -Yabelo-

Mega Road Project

2100150020743 LOAN 1-Jul-09 15-Jan-10 6-Apr-11 31-Dec-15 85,000,000 29,338,380 34.52% 55,661,620

11

Mombassa-Nairobi-

Addis Ababa Road

Corridor-Hawassa-

Ageremariam Road

Project ( Phase III)

2100150025545 LOAN 30-Nov-11 2-Feb-12 1-Apr-12 31-Oct-17 105,000,000 17,096,477.38 16.28% 87,903,523

LOAN 190,000,000 46,434,857 24.44% 143,565,143

GRANT 1,740,000 1,589,112 91.33% 150,888

TOTAL 191,740,000 48,023,970 74.95% 143,716,030

GRAND TOTAL (National and Multinational) :-

LOAN 673,800,000 353,812,127 52.51% 319,987,873

GRANT 121,111,200 98,277,748 81.15% 22,833,452

TOTAL 794,911,200 452,089,875 56.87% 342,821,325

ETHIOPIA - ADB ON-GOING OPERATIONS IN 2012/2013( AS AT 31, August 2013)CUMULATIVE DISBURSEMENTS AS AT 31 August 2013

AGRICULTURE SECTOR

TRANSPORT SECTOR

PUBLIC UTILITY

MULT_SECTOR

Multi-National Operations

TOTAL Multi National:

Appendix III: Key related projects funded by Bank and other DPs

On-going Donor Financed Projects

Contract Name Donor

Road

Length Amount

African Development Bank projects AfDB 1019 UA 318.77 mWacha - Maji road AfDB 175 UA 22.71 m

Jima - Mizan road AfDB 232 UA 65.00 m

Mombasa-Nairobi -Addis Ababa Phase II AfDB 303 UA 85.00 m

Mombasa-Nairobi -Addis Ababa Phase III AfDB 197 UA 105.00 m

Bedele - Metu road AfDB 112 UA 41.06 m

APL II World Bank 887 USD 372.80 m

Assela - Dodola - Junction World Bank 100

Dodola Junction - Goba World Bank 130

Adiabun-Shire World Bank 92

Nekempte - Mekenajo World Bank 127

GobGob - Gashana World Bank 86

Gashana - Woldia World Bank 106

Magna - Mechara World Bank 120

Assosa - Blue Nile - Guba World Bank 126

APL III World Bank 579 235.80 million USD

Gondar-Debark World Bank 107

Gedo - Nekmepte World Bank 134

Aposto Irbamoda World Bank 94

Irbamoda - Wadera World Bank 109

Wadera - Negele World Bank 65

Yalo - Nehile World Bank 70

APL IV World Bank 395 263.30 million USD

Mekenajo - Dembi Dolo World Bank 181

Welkite - Hossaina World Bank 125

Ankober - Awash Arba World Bank 89

RSDP4 World Bank 435 415.0 million USD

Ambo - Weliso World Bank 64

Debre Birhan - Ankober World Bank 42

Kombolcha - Bati - Mille World Bank 130

Mizan - Dima World Bank 92

Konso - Yabelo World Bank 107

Dembi - Bedele BADEA 62 9.20 million USD

Metu - Gore OPEC Fund 26 4.80 million USD

BADEA 13.00 million USD

OPEC Fund 15.00 million USD

BADEA 13.00 millionUSD

OFID 15.00 million USD

SAUDI Fund 18.00 million USD


SAUDI Fund 6.50 million USD Road Sector Development Support Program

Phase II-Project NDF FS / DD 10.00 million EURO

Kuwait Fund 7.00 million Kuwait Dinar


OFID 15.00 million USD

Wukro - Zalambessa Kuwait Fund 100 7.00 million Kuwait Dinar

Dejen - Lumame Japan 29 4,158,000,000 Yen

Gedo - Menebegna Saudi 25.00 million USD

Abu Dhabi 10.00 million USD


Dessie - Kutaber Kuwait Fund 67.5 8.00 million Kuwait Dinar

80.5

Azezo - Gint - Metema

Assosa - Kurmuk

Nekempte - Bedele 96

100

184

145Gore - Gambella

Appendix IV: Map of Project

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