AFRICAN DEVELOPMENT BANK GROUP
PROJECT:
NAMIBIA WATER SECTOR SUPPORT PROGRAM
COUNTRY: NAMIBIA
PROJECT APPRAISAL REPORT
September 2019
Appraisal Team
Team Leader: Mecuria Assefaw, Chief Financial Analyst, RDGS.2
Co-Task Manager: Herbert Chinokoro, Senior Water & Sanitation Engineer, RDGS2 Task Team : Linet Miriti, Principal Gender Expert, RDGS4
Annah Muja, Principal Social Safeguard Officer, RDGS4
Maurice Wanyama, Senior Financial Management Specialist, RDGS.4 Natan Jere, Principal Procurement Expert, SNFI.1
Benson Nkhoma, Country Program Officer, RDGS
Ousmane S. Diallo, Water Supply & Sanitation Consultant, AHWS.1 Musole M. Musumali, Climate Change and Green Growth Officer
Sector Manager: Osward Chanda, Manager AHWS.2
Neeraj Vij, Manager RDGS.2
Sector Director: Wambui Gichuri, AHWS
Regional Director: Josephine Ngure, Acting Director General, RGDS
Peer Reviewers
Eskendir Alemseged Demissie, Principal Water and Sanitation Engineer, RDGS.2 Nana Beth, Kgosidintsi, Principal Health/Nutrition Expert, RDGS.2
Olet Emanuel, Principal Sanitation Expert, AHWS.2 Aaron Mwila, Principal Transport Expert, RDGS.1
AFRICAN DEVELOPMENT BANK GROUP
NAMIBIA
NAMIBIA WATER SECTOR SUPPORT PROGRAM
PROJECTAPPRAISALREPORT
RDGS/AHWS February 2020
TABLE OF CONTENTS
Currency Equivalents ... i
Fiscal Year ... i
Weights and Measures ... i
ACRONYMS AND ABBREVIATIONS ...ii
Program Summary ... v I STRATEGIC THRUST AND RATIONALE ... I 1.1 Program linkages with country strategy and objectives ... I 1.2 Rationale for Bank’s involvement ... I 1.3 Donor Coordination ... III II PROGRAM DESCRIPTION ... IV 2.1 Program Components ... IV 2.3 Program Type ... VI 2.4 Program Cost and Financing Arrangements ... VI 2.5 Program’s target area and population ... VIII 2.6 Participatory process for program identification, design and implementation ... VIII 2.7 Bank Group experience and lessons reflected in program design ... IX 2.8 Program’s performance indicators ... IX III PROGRAM FEASIBILITY ... X 3.1 Economic performance ... X 3.2 Environmental and Social Impacts ... XI IV PROGRAM IMPLEMENTATION ... XIII 4.1 Implementation Arrangements ... XIII 4.2 Monitoring ... XV 4.3 Governance... XVI 4.4 Sustainability ... XVII 4.5 Risk management ... XVIII 4.6 Knowledge building ... XVIII V LEGAL INSTRUMENTS AND AUTHORITY ... XVIII 5.1 Legal instrument ... XVIII 5.2 Conditions associated with Bank’s intervention ... XIX 5.3 Compliance with Bank Policies ... XIX VI RECOMMENDATION ... XIX
i
Currency Equivalents
As of September 2019 1 UA = USD 1.36834 1 USD = N$ 15.24 1 UA = N$ 20.8538Fiscal Year
April 1st – March 31stWeights and Measures
1 metric tonne (t) = 2,205 lbs.
1 kilogramme (kg) = 2.205 lbs.
1 metre (m) = 3.281 ft.
1 kilometre (km) = 0.621 mile
1 square kilometre (km2) = 0.386 square mile
ii
ACRONYMS AND ABBREVIATIONS
ADB African Development Bank
ARAP Abridged Resettlement Action Plan
CBO Community Based Organisation
CLTS Community Led Total Sanitation
COW City of Windhoek
CSO Civil Society Organisation
CSP Country Strategy Paper
DWSSC Department of Water Supply and Sanitation Coordination
EA Executing Agency
ESMF Environmental Social Management Framework
GRN Government of the Republic of Namibia
HH Households
HPP Harambee Prosperity Plan
ISS Integrated Safeguards Systems
IWRM Integrated Water Resources Management
IQFR Interim Quarterly Financial Report
MIC Middle Income Country
MTR Mid-term review
MAWF Ministry of Agriculture, Water and Forestry
MURD Ministry of Urban and Rural Development
NDP National Development Plan
NAMWATER Namibia Water Corporation
NPC National Planning Commission
OAG Office of the Auditor General
PIT Program Implementation Team
RoW Right of Way
RWSSI Rural Water Supply and Sanitation Initiative
SEA Strategic Environmental Assessment
SESA Strategic Environmental Social Assessment
SM Sanitation Marketing
TCE Technical Committee of Experts
UFW Unaccounted for Water
WSSMIS Water Supply and Sanitation Management Information System
WTP Water Treatment Plant
iii
Loan and Grant Information
Client’s InformationBORROWER/RECIPIENT: Republic of Namibia
EXECUTING AGENCY: Ministry of Agriculture, Water and Forestry (MAWF)
IMPLEMENTING AGENCIES: Namibia Water Corporation (NamWater)
City of Windhoek
Directorate of Water Supply and Sanitation Coordination (DWSSC) within MAWF
Financing Plan
Source Amount (ZAR) % age Instrument
AfDB 1,893.02 million 57.1% ADB Loan RWSSI TF * 50.46 million 1.5% RWSSI TF Grant GRN 1,373.03 million 41.4% Counterpart Contribution
TOTAL FINANCIING
3,316.51 million 100% RWSSI TF Grant of Euro 3 million, equivalent to ZAR 50.46 million Important Financial Information
ADB key financing information
Loan Currency South African Rand (ZAR) Loan Type Fully Flexible Loan
Tenor Up to 25 years inclusive of Grace Period Grace period Up to 8 years
Average Loan Maturity* TBD (function of the amortization profile) Repayments TBD
Interest Rate Base Rate +Funding Cost Margin+ Lending Margin + Maturity Premium This Interest Rate will be floored to zero
Base Rate Floating Base Rate (3-month JIBAR reset each 1st February, 1st May, 1st August and
1st November)
A free option to fix the Base Rate is available
Funding Cost Margin The Bank funding cost margin as determined each 1st January and 1st July and
applied to the Base Rate each 1st February, 1st May, 1st august and 1st November
Lending Margin 80 basis points (0.8%) Maturity Premium
TBD:
- 0% if Average Loan Maturity <= 12.75 years - 0,10% if 12.75< Average Loan Maturity <=15 - 0,20% if Average Loan Maturity >15 years
Front-end fees 0.25% of the loan amount payable at latest at signature of the loan agreement Commitment fees 0.25% of the undisbursed amount. Commitment fees start accruing 60 days after
signature of the loan agreement and are payable on Payment dates Option to convert the Base
Rate**
In addition to the free option to fix the floating Base Rate, the borrower may reconvert the fix rate to floating or refix it on part or full disbursed amount. Transaction fees are payable
Option to cap or collar the Base Rate**
The borrower may cap or set both cap and floor on the Base Rate to be applied on part or full disbursed amount
iv
EIRR, NPV (Base Case) 18.2%, NPV ZAR 1,218 million (at 12%)
RWSSI Grant key financing information
Currency Euro
Interest rate spread NR
Commitment fee NR
Service charge NR
Timeframe - Main Milestones (expected)
Concept Note approval August 2019 Program approval March 2020 Effectiveness May 2020 Mid Term Review June 2022 Completion December 2024 Last Disbursement Deadline December 2025 Last repayment
Option to convert loan currency**
The borrower may convert the loan currency for both undisbursed or disbursed amounts in full or part to another approved lending currency of the Bank Transaction fees are payable
v
Program Summary
1. Program Overview: The Namibia Water Sector Support Program (NWSSP) aims to increase access, quality, security and sustainability of water supply and sanitation services in Namibia in view of water scarcity continuing to be a serious constraint in achieving economic, environmental and social development agenda of Namibia.
2. The main program outcomes include: (i) increased and sustained access to improved water supply, (ii) increased access to improved sanitation in rural areas and (iii) improved institutional capacity, sustainable management and utilization of water resources. At output level, activities encompass construction and rehabilitation of bulk water infrastructure and associated appurtenances, studies for the construction of a Direct Potable Reclamation Plant, construction of water supply schemes and climate resilient inclusive sanitation facilities including Community Led Total Sanitation (CLTS), Sanitation Marketing, nutrition smart Sanitation and Hygiene interventions, and Institutional capacity building initiatives. The program is to be implemented over 60 months beginning in January 2020 at a cost of ZAR 3.3 billion.
At completion in 2024, interventions will have overall benefits Country-wide with improved water
security, water supply and sanitation to about 1 million direct beneficiaries and 250,000 indirect beneficiaries, majority (> 50%) of whom are women. The program will benefit mainly the urban and rural populations of Namibia in Ohangwena, Kavango West, Kavango East, Oshikoto, Zambezi, Khomas, Oshana, Omaheke, Omusati regions and other areas requiring urgent attention, particularly those facing the worst effects of droughts and floods. Rural residents will gain better health from improved environmental and sanitary conditions. Special focus will be given to vulnerable households within the program areas for improved sanitation facilities. There will also be benefits from employment/livelihood opportunities generated by the program, empowerment of women and youth groups for possible business along the water and sanitation value chain i.e artisans trained to construct sanitation facilities. This will contribute towards improving the quality of lives of the beneficiary population, and avail water for agriculture (meeting Bank’s High Five).
3. Needs Assessment: The past few years have seen Namibia struggle with a national water crisis where the country is experiencing one of the worst droughts in 50 years. The 2018/19 rainy season, being one of the driest since 1981 in central and western parts of the region and the majority of the country only received 50% or less of average seasonal rainfall which affected both rural and urban communities. Protracted drought conditions in a country that already suffers from water scarcity have put security of water supply in Namibia in a crisis. This has put pressure on water production/ delivery systems. Increasing temperatures coupled with low rainfall continue to strain the bulk water supply system in the country. This limited availability of bulk water supply has now become a key constraint. The total storage contents for all dams in the Country was the lowest compared to last 5 years end of April 2019 at 30.9% compared to 62.6% in 2014 affecting availability of water for not only industry, but for human consumption as well. The Program will address the needs of a critical sector that contributes to economic and social growth.
4. Namibia’s sanitation coverage at 42% is the lowest in Southern Africa and has seen little improvement since 2006. Furthermore, sanitation and hygiene awareness has not been communicated adequately amongst the public. As a result, the 2013 Demographic and Health Survey found that 72% of rural people and 21% of urban residents practice open defecation. The practice of open defecation is harmful to health especially the health of children and has a causative relationship with cholera, typhoid, hepatitis, diarrhea, worm infestation, reduced physical growth in children, impaired cognitive function and malnutrition. The World Health Organization (WHO) estimates that as much as 50% of childhood under nutrition is associated with poor WASH. Thus in Namibia, 17% of children under 5 suffer from repeated episodes of diarrhea which is believed to contribute to the country’s high level of stunting.
vi
Despite this growing body of evidence, in Namibia, two development imperatives, optimal child feeding and ending open defecation have not seen sufficient progress over the last three decades. Currently: i) 1 in 4 Namibian children is stunted, ii) 87% of infants and young children are not appropriately fed, and iii) nearly 3 out of 4 people practice open defecation in rural areas. The Program will therefore support development of an approach to improving child nutrition outcomes through reduced environmental contamination supported by increased access to safe means of excreta disposal.
5. The Banks’ added value: The Bank will use its extensive experience in the country from ongoing operations in Agriculture, Transport and Social sectors to further strengthen and consolidate engagement for this first major investment program in Namibia’s water sector. The operation will complement Bank’s current support in the sector (the ongoing study) and consolidate Bank’s strong partnership with the Country. Based on its experience in the region, the Bank’s value addition will be by focusing on supporting the underserved population to increase access to equitable, sustainable water security, water supply and improved sanitation. The program is aligned with the Bank’s Country Strategy Paper (2020-2024) supporting the infrastructure pillar and also supports social and economic inclusion ensuring that the program contributes to the Bank’s 2013-23 TYS and its operational priorities, with special emphasis on the Hi5 priorities, by ensuring that marginal and vulnerable groups, including the disabled, have access to improved water and sanitation facilities and women have access to not only the WSS services but also to employment opportunities in the sector. The program contributes to attain Sustainable Development Goals # 6 (SDG 6) by improving water, sanitation and hygiene which are essential for health, welfare and livelihoods. This in turn will lead to disease prevention, improved education outcomes and improved economic productivity. In addition to physical infrastructure, the Bank will support policy, institutional and regulatory reforms to enhance efficiency and sustainability of investments.
6. Knowledge management:The program shall enhance Bank’s knowledge in the sector by capturing vital knowledge in addressing water securing issues and overall sector coordination. This will be done through: i) bulk water production and transfer, (ii) support to development of the Water and Sanitation Information Management System to provide up-to-date data for overall sector planning, tracking investment programs, monitoring sustainability and continuity of services, and (iii) systematic documentation of the implementation progress and results. The program will contribute to improving the health, food and nutritional status of communities, reducing poverty and improved social well-being. These impacts, which exist but are poorly documented in general, will be monitored and documented appropriately to improve knowledge of the contribution of the water and sanitation sector to other development sectors.
vii
Results Based Logical Framework
Country and Project Name: Namibia :Water Sector Support Program
Project Purpose: To improve the access, quality and sustainability of water resources, water supply and sanitation services in both urban and rural areas of Namibia.
RESULTS CHAIN PERFORMANCE INDICATORS MEANS OF VERIFICATION RISKS/MITIGATION MEASURES
Indicator (including CSI) Baseline
(2018) Target
IM
P
AC
T Impact: Improved health, nutrition and livelihoods of the population through use of safe water and sanitation services National Census, living condition survey 1. Access to improved water supply services (%)
2. Access to improved sanitation services (%)
91 (2017) 42% (2016)
100% (2030) 100% (2030)
3 Under-five stunting rate in Namibia (%) 24 (2017) 10 (2030)
OU T C OM E S
Outcome 1: Increased and sustained access to improved Water
Security and Supply in urban areas
1.1 Percentage of people accessing to safe drinking water in urban areas (+50%
women)
1.2 Average daily hours of supply (in urban areas)
98% (2017) 15 hrs (2017) 100% (2025) 24 hrs (2025) National Census, Living Conditions Monitoring Survey and Sector Reports
Risk #1: Inadequate Sector strategies and policies Mitigation #1: Program will support enhancement of existing policies/ strategies, and formulate coherent strategies and operationalize these, to address sector deficits and shortcomings.
Outcome 2: Increased access to improved water and sanitation
among rural residents
2.1 Percentage of people accessing to safe drinking water in rural areas (+50% women)
2.1 Percentage reduction of rural households practicing open defecation 2.2 Percentage of people accessing improved sanitation (+50% women)
85% (2017) 72% (2017) 54% (2017) 95% (2025) 55%(2025) 63.5% (2025) National Census, Living Conditions Monitoring Survey and Sector Reports
Outcome 3: Improved institutional capacity for effective
development and management of water resources leading to adequate, transparent and efficient allocation of resources
3.1 Proportion of water basins with management plans 3.2. Joint WATSAN Coordination and Review Committee operational
63% (2019) 0 (2019) 88% (2025) 1 (2022) Sector Reports, quarterly and annual reports OU T P U T
S Component 1- Bulk Water Development sector reports,
NAMWATER, City of Windhoek quarterly progress reports
Risk #2: High Value complex project implemented over wide area
Mitigation #2: Each Sector agency will have a Sub-PIT to be for activities pertaining to the agency in question. Three (3) TA experts will assist in project Coordination and management
Risk #3: Implementation delays
Mitigation. Regular and close follow up by the TCE, MWAF and Bank supervision 1.1 Construction/ Rehabilitation of bulk water supply Infrastructure
and associated appurtenances
1.1.1 Water supply networks upgraded, augmented and extended (KMs) 1.1.2 Additional Water produced (m3/day)
1.2.3 Water Treatment Plants constructed/ rehabilitated 1.2.4 Design/Study on Direct Potable Reclamation 1.2.5 Non Revenue Water reduction in production losses (%)
0 0 0 0 15 350 (2024) 122,000 (2024) 4 (2024) 1 (2021) 7 (2024) Component 2 - Rural Water Supply and Sanitation
2.1 Construction of Water Supply Schemes
2.2 Delivery of inclusive sanitation including Community Led Total Sanitation (CLTS) & Sanitation Marketing
2.3 WaSH actions inclusive of measures for food and nutrition security
2.1.1 # of rural water supply schemes
2.2.1 # of gender sensitive and disabled able friendly sanitation and
hygiene facilities constructed including schools, public places & health centres 2.2.2 No of rural villages/communities ODF
2.3.1 # of people sensitized through integrated nutrition and hygiene promotion initiatives 0 0 0 (2019) 0 (2013) 7 (2024) 2750 (2024) 100 (2024) 150,000 (2023) Quarterly and Annual Progress Reports National Census, Living Conditions Monitoring Survey and Sector Reports Component 3- Institutional Strengthening, Capacity Building and Program Management
viii
3.1 Updating Integrated Water Resources Management Plan 3.2 Upgrade the sector M&E and Information system 3.3 Review and implementation of the Community Based Management (CBM) Manual
3.4 Strengthened Water Sector Regulatory Framework 3.5 Empower women & youth at community level
3.6 Strengthened sector agencies to manage water and sanitation services, including scaling-up WASH interventions to improve nutrition
3.1.1 Updated Climate Smart Integrated Water Resources Management Plan 3.2.1 Upgraded and operationalized the WaSH sector M&E and Information system
3.3.1 Reviewed CBM Manual operational
3.4.1 Water sector regulatory framework (water pricing model in place) 3.5.1 No. of women and youth trained (Skills training) (+50% women) 3.6.1 No of Sector Agency staff trained/supported
0 0 0 0 0 0 1 (2022) 1 (2023) 1 (2024) 1 (2024) 150 (2024) 200 (2024) Quarterly and Annual Progress Reports
missions. Use of Advance contracting.
Risk #4: Poor Performance of some local Civil Works Contractors.
Mitigation #4: Implementing agencies to (i) adopt best practice in procurement and contract management, and (ii) strictly follow-up contract execution.
Risk #5. Delayed ESMP implementation
Mitigation # 5: Budgetary allocation for timely
implementation and
Government to include in budgets for this.
K EY A C TI V ITI ES Activities INPUTS
Bulk Water Infrastructure Development: Rehabilitation/ construction of bulk water facilities, reservoirs, water networks, boreholes, water points, pump stations,
Rural Water Supply and Sanitation : Construct water supply schemes, purification plants, water points, reservoirs, delivery of sanitation, nutrition, environmental and hygiene education, community led total sanitation initiatives; construction of climate resilient household/institutional/public sanitation facilities
Institutional Strengthening, Capacities Building and Program management: Training, development of social inclusion and gender framework, ESMP implementation, building and strengthen capacities , strengthen regulatory frameworks, inter-sector coordination, especially between line sectors, support for M&E, information systems and accountability frameworks to track progress., development of Water Resources Master Plan , updating Integrated Water Resources Management Plan, upgrading Core hydro-metrological system Program Auditing; Technical Assistance; Office Equipment; vehicles; Feasibility Studies and Mid Term Review of the program.
Total Program Cost: 3.3 Billion N$ (ZAR) ADB loan: 1.9 billion N$ (ZAR) RWSSI Grant : Euro 3 million (Eq. 48 mill. ZAR)
ix Program Timeframe Board Approval Publication of GPN Signing Effectiveness Launch Mission
Engineering Services Consultancy
Bank approval EOI&RFP RfP/bidding & contract award
Design review, Tender Doc prep and Tendering Works Supervison
Bulk Works, Rural Water & Sanitation
Bidding & contract award Commencement of main works Taking over works
Defect Liability Period
Institutional Strengthening
WASHE activites incl. CLTS, Nutrition & food security Enhance capacity of sector insitutions incl. Training and Capacity Building activities
Program Management
Mid Term Review ◊
Financial Audit (siubmission) ◊ ◊ ◊ ◊ ◊
Program Completion ◊ 6 8 10 12 6 8 10 12 2 4 6 8 10 12 2 4 6 8 10 12 2 4 6 8 10 12 2 4 6 8 10 12 2 4
NAMIBIA WATER SECTOR SUPPORT PROGRAM IMPLEMENTATION SCHEDULE
1
REPORT AND RECOMMENDATION OF THE MANAGEMENT TO THE BOARD OF DIRECTORS ON A PROPOSED LOAN AND GRANT TO FINANCE THE NAMIBIA WATER SECTOR SUPPORT PROGRAM
Management submits the following Report and Recommendation for a proposed Loan of ZAR 1,893.02 million on ADB terms, and Euro 3 million RWSSI Grant to the Republic of Namibia to finance the Water Sector Support Program.
I STRATEGIC THRUST AND RATIONALE
1.1 Program linkages with country strategy and objectives
1.1.1 The Namibia Water Sector Support Program (NWSSP) will contribute to the goals of the
Government’s Vision 2030, National Development Plan 5 (NDP5) and its Harambee Prosperity Plan (HPP 2016- 2020). The Government of Namibia’s Vision 2030 and its NDP 5 (2017-2022) focus on improving the quality of life of the people of Namibia to the level of their counterparts in the developed world. Aligned to Vision 2030, the NDP5 identifies key policy actions, reforms, and programs that will enable Namibia to achieve an inclusive, sustainable and Equitable Economic Growth, ensure sustainable environment, and enhance resilience. The HPP, which is a targeted action plan to accelerate development, clearly defines priority areas and identifies water security as a priority goal and outcome. The Plan, which complements the NDP’s and Vision 2030, identifies the need to increase access to safe portable water for human consumption from 91 % to 100 % of the population by 2020 and ensure that there are sufficient water reserves for industrialization and land servicing and housing. As a priority, the Government also aims to increase access to sanitation services in the major urban centers and expanding access to the poor and unserved people in underserved areas, including informal settlements, and strengthening sector institutions. The NDP5 and HPP pillars, desired outcomes and goals show a strong alignment to the Bank’s Country Strategy Paper for Namibia by responding to the need to improve the quality of lives and ensure inclusive growth for all Namibians’.
1.1.2 The proposed program is aligned with the Bank’s Country Strategy (2020-2024). The CSP for Namibia has two strategic pillars: (i) Support for Economic Governance for Improved Business Environment to improve Namibia’s business and regulatory environment to stimulate private investment towards economic diversification and value addition for job creation, (ii) Support for Infrastructure Development and Promoting Value Addition - focusing on key enablers of competitiveness, particularly infrastructure, while supporting investment in value addition activities. The NWSSP supports the second pillar by addressing the scarcity of water and ensuring reliability of water supply systems, which are a constraint for both industrial and agricultural activities, and causes hardship to the population, which has been exacerbated by persistent droughts. Bank support will aim to improve water security and thereby contribute toward enhancing the competitiveness of industries and agriculture, creating a favorable environment for business growth and industries while improving living conditions of the population in Namibia. The Program also supports strengthening sector institutions to enhance governance and accountability in the water and sanitation sector. The NWSSP is included in the Namibia CSP (2020-2024).
1.2 Rationale for Bank’s involvement
1.2.1 The GRN has implemented policy and institutional reforms since independence in 1990 and significant efforts have been made to address the need to improve access to potable water supplies and sanitation in the country. Government has prioritized investments in key water and sanitation infrastructure and improving the sector governance and the sector has progressed well, with 91% of the population has access to safe drinking water for both domestic and industrial consumption from a baseline of 85.5% in 2013. Access to improved sanitation is 42% from 34% in 2013. For water, it is a significant improvement especially that at the time the country got independence in 1990, levels of access where 70% for safe drinking water and 24% for adequate sanitation. Despite this progress,
2
inequities in access to improved sanitation facilities still exists between rural and urban areas. Sanitation access (29.9%) in rural areas still lags behind that of urban areas (78%) and open defecation remains a challenge with 72% of rural household’s still practicing it1. The country has one of the lowest levels of sanitation coverage in southern Africa, a situation that has not improved since 2006. With the low levels of access in sanitation, there has been a change in policy direction that has placed emphasis on the provision of potable water and proper sanitation to peri-urban, informal and rural settlements. The current level of achievement for sector outcomes indicates that more resources need to be mobilized, both public and private if significant gains are to be realized to attain national and global goals for sanitation.
1.2.2 The past few years have seen Namibia face one of the worst droughts in 50 years worsening the national water crisis with the 2018/19 rainy season, being one of the driest since 1981 in Central and Western regions and the majority of the country receiving only 50% or less of average seasonal rainfall affecting both rural and urban communities. Protracted drought conditions in a country that already suffers from water scarcity have put security of water supply in Namibia in a crisis. This has put pressure on water production/ delivery systems, with total crop failure in some of the regions, reduced forage, loss of livestock and insufficient water availability as water is a key enabler for socio- economic development scaling up water access, increased agricultural productivity, industrial development and permeates all other sectors of the economy. Increasing temperatures coupled with low rainfall continue to strain the bulk water supply system in the country. The total storage contents for all dams in the Country was the lowest compared to last 5 years end of April 2019 at 30.9% compared to 62.6% in 2014, affecting availability of water for not only industry, but also affecting water for human consumption. This limited availability of bulk water supply has now become a key constraint. The impact of a “run-dry situation” in the Central Area of Namibia in the event that shortfalls as recently modelled extend to six months, which can occur in any year in the period up to 2024, the potential financial losses could total N$ 3,843 million per event (based on 2013/14 figures). Climate change is a threat to the already water stressed situation of Namibia and evidence (NDC 2015; 3rd National Communication to UNFCCC 2015) supports need for adaptation and mitigation to be streamlined in the policies, strategies and development plans. It is envisaged that accelerated development of climate resilient water resources infrastructure will mitigate against the effects of floods and droughts.
1.2.3 Other key water sector challenges are (i) inadequate service provision to peri urban and informal settlements with sanitation in particular, (ii) aged and inadequate bulk water infrastructure, aged distribution networks in municipalities, (iii) sparsely populated settlement patterns in rural areas making service provision more challenging in terms of unit cost and affordability, (iv) limited human resource capacity in the sector institutions to effectively manage water resources and sanitation and (v) rural- urban migration placing a high demand for water and sanitation services.
1.2.4 The WSSP is designed to cover critical, urgent water supply infrastructure development and sanitation activities prioritised from various studies2 by the Technical Committee of Experts
(TCE) supporting the Cabinet Committee on water established by Presidential order. The proposed program will address major infrastructure bottlenecks in the water sector. The WSSP will support attainment of HPP/NDP goals and outcomes # 12 (in the water sector) which are to (i) increase access to water services from about 92% (85% for rural) to 100 percent of the population by 2023; (ii) ensure sufficient water reserves for industrialization and land servicing and housing development purposes, and (iii) enhance resilience to climate change in alignment with NDP5 Goal 3 on environmental sustainability and resilience. The planned interventions to be carried out in the program are supported by various existing strategies and plans such as the Water Policy for Namibia (2008), National Sanitation and Hygiene Strategy (2019-2024), Water Resources Management Act (2013) and the Integrated Water
1NDP4 terminal report 2017, NDP5 Annual Report March 2018, HPP Progress Report April 2019
2 Pre-feasibility study Augmentation of water supply to the Central Area of Namibia and Cuvelai, 2016, water supply infrastructure development and capital replacement master water plan for the central north water supply area, 2009
3
Resource Management Plan (2010) to ensure water security, management, protection and conservative use of water resources.
1.2.5 The Program supports achievement of the Bank’s Ten Year Strategy (2013-2022) with focus on the core operational priority of infrastructure development to help manage growth and develop sustainable infrastructure systems, particularly water, sanitation and waste management. The program will also target improving basic services in informal and rural settlements for adequate, equitable sanitation and hygiene contributing to achievement of the Bank’s twin goals of inclusive growth and gradual transition to green growth. The program places special emphasis on the Hi5 priority to improve the quality of lives of the population in the Country especially those worst affected by drought (556,000 people at risk) through provision of not only improved water supply and sanitation, but also providing water for productive use through construction of climate resilient water resources infrastructure where water acts as catalyst for local development and economic activity. Bringing secure, higher quantities and more reliable water to households coupled with sustainable access to sanitation facilities and good hygiene practices enhances their quality of life by (a) reducing the time and effort especially of women and children to collect water; (b) reducing the incidents of waterborne diseases caused by contact with contaminated water thereby improving child growth and nutrition; and (c) diminishing absenteeism from work and school and the costs associated with these, including lost income and opportunities. The program is well aligned to the Bank’s Integrated Water Resources Management Policy (2000) and the Urban Development Strategy (2011); and seeks to help manage urban growth and develop sustainable climate resilient infrastructure systems (Pillar 2 of the Bank’s second Climate Change Action Plan 2016-2020). The proposed program also in line with the Bank’s Gender Strategy (2014-2018 as it will support Government develop strategies to create economic opportunities for women and youth in keeping with the Jobs for Youth in Africa (2016-2025) strategy. Through improved access to safe drinking water, sanitation and good hygiene practices, the program supports the implementation of the Bank's 2018-2025 Multisectoral Nutrition Action Plan. The program is also in line with the Sustainable Development Goals (SDGs) specifically SDG 6 targets 6.1.,6.2, 6.4, 6.5 and 6.6 as water is an enabler, indeed a requirement, for achieving all the SDGs being able to penetrate every interstice of life and to support all sectors of economic growth related to poverty, health, industry/ resilient infrastructure, quality education, sustainable cities & communities, climate action and gender equality.
1.2.5 The program will seek to leverage development impacts of ongoing Bank programs and projects especially in agriculture. The program will complement Bank’s current support in the sector (the ongoing Windhoek master plan study) and consolidate Bank’s strong partnership with the Country. Based on its experience in the region, the Bank’s value addition through this program is focusing on supporting the unserved and underserved population to increase access to equitable, sustainable water security, water supply and improved sanitation. The Bank’s strength in this program is by supporting social inclusion, ensuring that marginal and vulnerable groups, including the disabled, have access to improved water and sanitation facilities and women have access to not only the WSS services but also to employment opportunities in the sector.
1.3 Donor Coordination
1.3.1 Development Partner coordination in Namibia is adhoc and not strong. Efforts to improve coordination have now progressed under the leadership of the United Nations Resident Coordinator’s office in collaboration with the National Planning Commission to enhance cooperation, coordination of policies, strategies and approaches in support of development and effective communication with the GRN. The Bank will use the existing donor platform to harmonize it’s support in particular with those partners operating within the Bank’s proposed water and sanitation sector focus area. In this context, the WSSP will support the transformation of the WATSAN Forum into a Joint WATSAN National Committee with its regional branches to improve inter-sectoral coordination and joint portfolio sector review of WASH projects and programs. German Development Bank (KFW) has a considerable footprint and long engagement in the sector, the proposed program will complement the Wastewater
4
treatment and reclamation project where KFW is to finance the upgrading of the Gammams Wastewater Treat Plant and the study for the Direct Potable Reuse Plant will be captured under the subject program. UNICEF is active in the sanitation and nutrition subsectors and the Bank discussed and agreed to partner and seek synergies to roll out Community Led Total Sanitation and Nutrition smart WASH activities with UNICEF, JICA and Ministry of Health and Social Services. In developing the sanitation-nutrition nexus, the Program will support expanding CLTS and Childcare.
II PROGRAM DESCRIPTION
2.1 Program Components
2.1.1 The Program Development Objective is to have sustainable production and transfer of water resources resulting in improved access, quality and security to safe drinking water for human consumption and for industrial use in the urban and rural centres in the Central, Northern Central Area and Eastern Areas of the country. This will be achieved by investing in water and sanitation infrastructure, which will lead to improved health and livelihoods of the population of Namibia. The program components are described in Table 2.1 below, with details provided in Annex B.2.
Table 2.1: Program Components and Outputs for Phase 1 [cost in million N$]*
S/No Component
name
Base Cost Component description
1 Bulk Water Development
2196 (1186)
Upgrading/ new construction and expansion of critical and urgent major climate resilient water bulk water infrastructure.
- Extend the Rundu water scheme from 336.2m3/hr to 677.9m3/hr - Extend Oshakati Purification Plant by 40,556 m3/day
- Abenab borehole development (12 Mm3/a) and linkage to Eastern National Water Carrier to provide water to the Central Area of Namibia
- Development of the Ohangwena aquifer (maximum sustainable yield of 600-1200m3/hr) with associated pipelines and conveyance systems.
- Consultancy services for design review and supervision
- Preparation of Design study for Direct Potable Reclamation in City of Windhoek of 17,000m3/ day capacity. 2 Rural Water Supply and Sanitation 1006 (710)
Sub-component 2.1: Rural Water Supply
Upgrading of purification plants (Olushandja water treatment plant 4000m3/day, Katima Mulilo Treatment Plant 3560m3/day, construction of 150 km transmissions mains, solar pumping installations, construction of 50 elevated, 200km distribution lines with manifolds and water points. Water for production will be provided at dedicated water points for livestock watering (50 in number). Construction of Ground and Surface Water Supply Schemes (i) Katima-Kongola, (ii) Ruacana South, (iii) King Kauluma-Omutsegonime, (iv) Iitapa- Okeeholongo, (v) Katima mulilo-Ngoma and (vi) Otjombinde.
Sub-component 2.2: Rural Sanitation and Hygiene
- Construction of climate smart/ resilient School Gender-segregated child-friendly facilities (1850), Health centre facilities (300), Other public institutions facilities and needy families (600)
- Strengthen WASHE service delivery through advocacy, sensitization, promotion of decentralized sanitation & hygiene education, development of gender responsive training and promotional material, HIV/AIDS, integration of the Leave No-one Behind” (LNOB) in the rural areas
- Community Led Total Sanitation (CLTS) & Sanitation Marketing and eliminating Open defecation practices
Sub-component 2.3: Nutrition smart WASH
- Support to water-sanitation nutrition nexus (promoting handwashing with soap at critical times); engaging communities to develop and implement sanitation safety planning to safely manage, dispose of and utilize excreta; water quantity and quality, Targeting WASH programs in areas of high nutritional need
- Development and implementation of a new model for CLTS and childcare.
- Development and implementation of a nationwide behavior change communication campaign on hygienic feeding.
- Strengthen coordination agencies for food and nutrition with specific focus on scaling-up WASH interventions to improve nutrition.
3 Institutional Strengthenin
116 (57)
Sector development to promote overall sector and utility policies, water regulations, water pricing mechanisms, building and strengthen capacities of sector institutions at
5
S/No Component
name
Base Cost Component description
g, Capacity Building initiatives and Program Management
local, regional and national levels to be better able to deliver and manage services. - Support for M&E, information systems and accountability frameworks to track sector
results, as well as support to enhance sector regulatory frameworks.
- Updating the IWRM plan, Development of Countrywide climate smart Water Resources Master Plan and climate resilient water basin management plans
- Skills training and empowerment of women and youth
- Community sensitization, mobilization, formation and training water committees and review and operationalize the Community Based Management (CBM) Manual. - Mainstreaming Gender, Environment, Climate Change and Cross Cuttings Issues. - Program management activities, training in water demand management, M&E and
water saving technologies, support toMAWF (staff at national and regional levels) in coordinating and implementing program activities at the national and local levels. Provision of technical assistance for program management, ESMP reports; program completion report
Total 3317 (1943)
* Figures in bracket represent Bank Group’s contribution.
2.2 Technical solution retained and other alternatives explored
2.2.1 The designs of the water supply and wastewater systems3 under the program will be similar to those already being implemented in Namibia by the MAWF and Namwater, the Regional/ Local Authorities in rural and urban areas. The retained technical solutions are based on experiences in previous and ongoing interventions and in line with sector strategies outlined in the Water Supply and Sanitation Policy. In the North Central part of Namibia, where the target water schemes will be rehabilitated and constructed, the option of ground water utilization was considered but ground water sources are saline and therefore not palatable. There is high mineral concentration and dissolved solids; and in some areas, salt content is three times that of seawater rendering it unfit both for human and livestock consumption. Though the water can be treated as has been done in Amarika and Akutsima villages in Omusati constituency through the use of solar powered desalination plants, operations and maintenance of the plants have proved challenging due to technical problems as local caretakers have little expertise to manage and operate the plants, hence frequent down time. The plants require skilled manpower to run sustainably. In some of the sub-project areas there is relatively low groundwater potential to meet specific community demands (Katima, Otjombinde) resulting in low rate of successful boreholes, which are also dependent on rainfall and seasonality, thus not offering reliability of supply. Therefore, supply to the schemes in the North Central region will be from treated surface water (existing WTPs will be rehabilitated and expanded) from the Kavango and Kunene rivers to guarantee reliability and sustainability of supply. For sanitation, sewerage systems will not be an option as homesteads/ villages in the sub-project areas are sparsely dispersed and these systems have very high capital cost and therefore not feasible. Focus will be on households having decentralized sanitation systems comprising on-site sanitation facilities, while focusing on utilizing hygiene promotion, Sanitation Marketing (SM) and support enforcement of bylaws on onsite sanitation. The SM will promote household-centered choice of latrine type.
Table 2.2: Alternatives considered and reasons for non-consideration
Alternative Brief Description Reasons for rejection
Treated Groundwater Supply from boreholes (Desalination)
Wellfields to supply water to growth points and villages
Poor water quality due to salinity and high operation costs to treat water to portable standard
Full sewerage system in all target towns
Provision of a full water borne sewerage system in growth centres
Unit costs are considerable high for a sewerage system to cover sparsely populated areas and issue of affordability arises.
32015 Evaluation of Water treatment Plants in Cuvelai Water Supply Area, 2015 Evaluation of Oshakati Water treatment Plant,
Pre-feasibility study Augmentation of water supply to the Central Area of Namibia and Cuvelai, 2016, water supply infrastructure development and capital replacement master water plan for the central north water supply area, 2009
6
2.2.2 Based on sanitation survey findings and the recently concluded national sanitation stakeholder’s forum of December 2018, the program will support public water borne toilets for public institutions including Markets, Health centres and Schools. There is significant potential for increasing access to climate resilient sanitation through introduction of ecological sanitation technologies for decentralized sanitation systems, on-site systems and lined latrines in rural areas, which will not have waterborne sewer systems. Capacity building activities will be carried out for ministries/national agencies, sensitization of communities in building sanitation facilities during the roll out of the CLTS approach and supporting Regional Authorities in the program areas for enforcement of sanitation bylaws. 2.3 Program Type
2.3.1 The proposed operation is not a stand-alone project. This is a program of activities with several sub-projects, which are an integral part of concerted efforts by the Government to support implementation of activities that focus on increasing access to water/sanitation and achieving sustainable water security throughout Namibia. The Program also supports strengthening sector institutions to enhance governance and accountability in the water sector. In view of the level of preparation and readiness of the various sub-projects and taking into account the emergency and urgent measures to address the impact of the drought and secure long-term water security, the program will be implemented in two phases. (refer to section 4.1.3)
2.4 Program Cost and Financing Arrangements
2.4.1 The total cost of the Program (both Phase 1 and Phase 2) is estimated at more than N$ 6 billion. However, taking into account status of readiness of some of the activities and need to prepare others, the subject appraisal focuses on Phase 1 of the program addressing subprojects ready for implementation. The total cost of the program covering the period 2020 to 2024 is estimated at ZAR 3317 million, net of taxes and duties. These cost estimates are based on information from Technical Experts Reports and relevant studies of sub-projects of the program obtained from NamWater, City of Windhoek and DWSSC based on recent estimates for similar activities currently ongoing in the sector in the country as well as from experience in the region. A physical contingency of 10% and a price contingency of 3.7% per annum have been taken into consideration in these estimates. A summary of the program cost estimates by components and expenditure accounts is shown in Tables 2.4 (a) to (d) below, while details are provided in the Annex B.2
Table 2.4 (a): Program cost estimates by component
2.4.2 The Program will be financed by ADB loan, RWSSI TF grant and GRN as shown in the Financing Plan summarized in table 2.4 below. The AfDB contribution will be a loan of N$ (ZAR) 1,943 million and grants from RWSSI TF of Euro 3 million (equivalent to (N$ 50.46 million), which represents 58.6% of the total Program cost. GRN and the relevant implementing agencies will finance the balance of N$ (ZAR) 1.373 billion, covering 41.4% of the total Program Cost. GRN and relevant implementing agencies contribution shall also include contributions in kind and taxes and duties for the program. The Government/beneficiary’s total contribution of ZAR 1.373 billion represents about 41.4% of the total
Component FC LC Total FC LC Total %
1) Bulk Water System 1,089,079 740,075 1,829,154 52,225 35,489 87,713 65% 2) Rural Water Supply and Sanitation 476,450 377,550 854,000 22,847 18,105 40,952 31% 3) Institutional Capacity Building and PM 2,340 114,299 116,639 112 5,481 5,593 4%
Total Base Cost 1,567,869 1,231,924 2,799,793 75,184 59,074 134,258 100%
Physical Contingency (10%) 156,787 123,192 279,979 7,518 5,907 13,426 Price Contingency (3.7% annually) 132,573 104,167 236,740 6,357 4,995 11,352
Total 1,857,230 1,459,283 3,316,513 89,060 69,977 159,036
7
Program Cost which is less than the recommended 50% minimum counterpart contribution as per the Bank’s “Policy on Expenditure Eligible for Bank Group Financing”. The policy further stipulates that the ADB may finance more than 50% of the total program costs on a case-by-case basis and up to a limit that does not exceed 100%. The justifications for the reduced Government contribution is based on (i) Government’s budget situation and debt level, (ii) country’s Financing Allocation to the Water Sector, and (iii) Government’s commitment to implement other development programs. Details are in Appendix 5. In view of this, there is a case for the Bank to reduce the Government’s counterpart funding of WSSP to 41.4%.
Table 2.4 (b): Sources of financing
Includes contribution by Namwater.
Table 2.4 (c): Program cost by category of expenditure [‘000 ZAR and UA]
Table 2.4 (d): Expenditure schedule by component [‘000 USD]
2.4.3 Table 2.4 (e) below shows the disbursement plan during the program implementation period.
Table 2.4 (e): Expenditure schedule by category of expenditure [‘000 USD]
Source of Finance N$ (ZAR) '000 UA '000 %
ADB 1,893,024 90,776 57.1%
RWSSI TF 50,457 2,420 1.5%
GRN* 1,373,032 65,841 41.4%
Total 3,316,513 159,036 100.0%
Category of Expenditure FC LC Total FC LC Total %
1 Works 1,465,814 1,004,710 2,470,524 70,290 48,179 118,469 88% 2 Goods 1,740 15 1,755 83 1 84 0% 3 Services 73,915 90,849 164,764 3,544 4,356 7,901 6% 4 Miscellaneous 26,400 136,350 162,750 1,266 6,538 7,804 6%
Total Base Cost 1,567,869 1,231,924 2,799,793 75,184 59,074 134,258 100%
Physical Contingency 156,787 123,192 279,979 7,518 5,907 13,426 Price Contingency 132,573 104,167 236,740 6,357 4,995 11,352
Total Cost 1,857,230 1,459,283 3,316,513 89,060 69,977 159,036
(N$) ZAR '000 UA '000
Component 2020 2021 2022 2023 Total
1) Bulk Water System 35,652 367,831 712,836 712,836 1,829,154 2) Rural Water Supply and Sanitation 67,125 247,525 301,825 237,525 854,000 3) Institutional Capacity Building and PM 30,476 28,721 28,721 28,721 116,639
Total Base Cost 133,253 644,077 1,043,382 979,082 2,799,793
Physical Contingency (10%) 13,325 64,408 104,338 97,908 279,979 Price Contingency (3.7% annually) - 26,214 86,502 124,024 236,740
Total 146,578 734,699 1,234,222 1,201,013 3,316,513
(N$) ZAR '000
Category of Expenditure 2020 2021 2022 2023 Total
1 Works 20,625 562,530 975,835 911,535 2,470,524
2 Goods 1,755 - - - 1,755
3 Services 70,186 40,860 26,860 26,860 164,764
4 Miscellaneous 40,687 40,687 40,687 40,687 162,750
Total Base Cost 133,253 644,077 1,043,382 979,082 2,799,793
Physical Contingency 13,325 64,408 104,338 97,908 279,979 Price Contingency - 26,214 86,502 124,024 236,740
Total Cost 146,578 734,699 1,234,222 1,201,013 3,316,513 (N$) ZAR '000
8
2.5 Program’s target area and population
2.5.1 The Program will address a critical sector that contributes to economic and social growth in Namibia. The program will benefit mainly the urban and rural populations of Ohangwena, Kavango West, Kavango East, Oshikoto, Zambezi, Khomas, Oshana, Omaheke and Omusati regions of Namibia, particularly those underserved, facing the worst effects of droughts and floods. The population in the program area is estimated at 1.56 million people. The interventions will have overall benefits to all 14 regions in Namibia with improved water security, water supply and sanitation to about 1 million direct beneficiaries and 250,000 indirect beneficiaries, majority of whom are women. The targeted towns and settlements are Oshakati, Ondangwa, Olushandja, Katima Mulilo, Ruacana, Katima-Kongola, King Kauluma-Omutsegonime, Itaapa/ Okeeholongo and Otjombinde. The additional population to be considered includes those currently unserved population in order to meet the NDP5 and HPP coverage targets. Residents will gain better health from increased access to safe drinking water and improved sanitation. Women and school going children, who bear the majority of the burden due to inadequate water supply through queuing for long hours and transporting water over long distances, will benefit particularly from utilisation of time earlier spent on collecting water for other income generating activities as well as improved school enrolment and retention for the girls. Special focus will be given to vulnerable households within the sub-project areas for improved sanitation facilities. Government institutions, private businesses, Schools and Health centres in the targeted regions will also benefit from the program as direct beneficiaries through improved service provision. The program is expected to create part-time skilled and unskilled jobs in masonry, pipe laying, steel fixing and construction, which will benefit both men, women and youths (approximately 2,000 indirect jobs). This in turn will contribute to poverty reduction and improving the quality of lives of people from incomes gained. The expected impact of these interventions are reduction of water related diseases and associate health care cost, reduction of school-dropout rates, particularly among girls and reduced stunting. In areas where the program will also support water for production, there will be improved agriculture production to contribute to Namibia to reach zero hungry, food security and nutrition. All these benefits will contribute towards meeting Hi5 #5: improving the quality of lives of the beneficiary population.
2.6 Participatory process for program identification, design and implementation
2.6.1 The program has benefitted from a wholly participatory approach at the various stages which include program conception, design, preparation and appraisal. It is intended that the participatory approach shall be adopted through the program implementation. The program sub-projects were conceived, at a strategic level, by the TCE with a view to improve reliability of water supply by developing and augmenting bulk water infrastructure and enhancing drinking water supply and sanitation services especially in the Central Northern Areas of Namibia were the majority of the population resides.
2.6.2 The program development process entailed extensive consultations with relevant stakeholders including the line ministry (MAWF), Ministry of Finance, Ministry of Health and Social Services, Ministry of Gender and Child Welfare, Ministry of Tourism and Environment, Ministry of Urban and Rural Development, Ministry of Education, Arts and Culture, Namwater, City of Windhoek, Regional Authorities, Development Partners and beneficiaries. Systematic consultations were conducted as part of the pre-feasibility studies, with persons directly affected by the program from a cross section of the communities and other key stakeholders. Field visits were undertaken and discussions with communities held identifying challenges with water and sanitation accessibility, current applicable technologies, levels’ of disease burden, relevant interventions, roles, capacities and gaps of the various stakeholders. The community meetings highlighted concerns on the benefits and possible impacts of the proposed program, and community involvement in program activities. It was noted that the selection of sites and infrastructure was in agreement with the desires of the beneficiaries who also indicated their willingness to fully participate in all program activities during implementation. Beneficiaries, in sub-project areas
9
expressed their preference for surface water supply to borehole water supply as they had suffered over the last decades with poor quality water. All stakeholders acknowledged that inadequate water supply and sanitation is affecting the social wellbeing, posing serious risks to public health and livelihoods of the people. These issues have been appropriately addressed in the program design.
2.6.3 There was concurrence with stakeholders on the relevance and implementation arrangements of the various program components, target groups and geographical locations. Efforts were made to ensure gender and social inclusiveness, women and youth empowerment and sustainability mechanisms in these consultations. The feedback from the consultations has been used to formulate the capacity development aspect of component three of the program. Consultations with users will be an on-going and will continue throughout implementation of the program. As community based water management is at the heart of management of rural water systems, water committees will be resuscitated and formed in sub-project areas to facilitate the process and ensure inclusiveness, facilitate participation during implementation and enhance sustainability. Participation of national stakeholders, Civil Society Organizations (CSOs), Community Based Organizations (CBOs) and representatives of beneficiary groups in the program will be through the water and sanitation national committee, which will have oversight responsibility, oversee program compliance with sector national policies and strategies and guide implementation. Therefore, a stakeholder engagement plan will be included as part of institutional strengthening, which together with a structured communication strategy should keep the various stakeholders engaged in the program, during implementation.
2.7 Bank Group experience and lessons reflected in program design
2.7.1 The Bank group’s active portfolio in Namibia as of October 2019 comprised 12 operations with one operation (MIC grant) approved in March 2019, with a total commitment of UA 870,4 million including one operation in the sector; African Water Facility funded Windhoek Integrated Water and Wastewater Sanitation Master Plan and Project Preparation approved in 2018. The 2019 Country Portfolio Performance Review assessed the overall portfolio as satisfactory and continues to improve. The combined rating from Implementation Progress and Resource Reporting (IPR) and SAP was 3.1. The number of programs at risk is 0%. Overall portfolio disbursement ratio is 74% as at 10 October 2019 with an average portfolio age of 2.75 years. There is no Project Completion Report (PCR) backlogs and all conditions precedent to first disbursements for previously approved loan/grant agreements of the Bank in the sector have been satisfied by the Borrower.
2.7.2 Lessons learned from the Bank’s past and current projects are described in Annex B1. The main lessons applied to the WSSP are: (i) learning from the Bank funded Transport project, need for flexible approach in ensuring the inclusion of local content to enable participation of suitable qualified national firms/contractors/suppliers in Bank financed projects. This program will subject to the level of risks of procured packages, set aside contracts to be procured under the Borrower Procurement System. ii) Learning from the Bank funded Agriculture project, need to strengthen Program Management and Coordination. The program will support a program implementation team to improve implementation as previous projects implemented with ministerial personnel have suffered implementation delays due to capacity constraints, iii) strengthen sector institutions at the national and local levels by improving ability and capacities to better deliver WASHE services and sustainability of program outcomes, iv) optimize benefits from water supply and sanitation interventions by concurrently addressing water supply, sanitation, nutrition and targeted hygiene behaviour change and (v) design of integrated and inclusive consultative processes with local communities which could help to incorporate indigenous technologies and traditional know-how into implementation of selected WASH technologies.
2.8 Program’s performance indicators
2.8.1 Achievement of the expected program results will be demonstrated by the key performance indicators described in the results-based logical framework and process indicators in annex B9. They include increase in proportion of residents accessing improved water supply and sanitation and increased
10
hours of water supply due to improved reliability of water production and supply systems. The rate of physical and financial implementation of planned activities, including development of infrastructure, will measure the trend towards the achievement of the Program’s objective. The key output indicators include: (i) length of climate resilient water networks constructed, rehabilitated, (ii) water production and treatment facilities constructed and rehabilitated, (iii) training of women and youth in artisan skills, (iv) training of sector agency staff to better deliver services, (v) community members trained in sanitation and hygiene, (vi) preparation of a climate smart water resources master plan and updating of the climate resilient IWRM plan and (v) construction of public sanitation facilities.
2.8.2 Progress towards achieving program outcomes and outputs will be measured and monitored through bi-annual Bank supervision missions, IPR, annual technical and financial audit reports. The program outputs will feed into the WSSMIS, which will aggregate all the data for national reporting on water sector outcomes the MAWF will report to the Bank on a quarterly basis. The M&E officer in the MAWF/PIT will be responsible for the M&E framework and data collection, including baseline, impact and other relevant studies to be carried out as required to inform the program progress. The M&E framework will be implemented in collaboration with stakeholders, especially MOH, MURD, Namwater, City of Windhoek and Development Partners. Internal monitoring systems of the MAWF and Namwater will be strengthened to facilitate post-program implementation monitoring.
III PROGRAM FEASIBILITY
3.1 Economic performance Table 3.1: Key Economic Figures
EIRR and NPV N$ million (at 12% base case) 18.2% (NPV N$ 1,218 million)
NB: detailed calculations are available in Annex B7
3.1.1 The economic analysis of the program has been undertaken by comparing “with” and “without program” of the various costs and benefits that will accrue to the beneficiaries of improved water supply and sanitation services for the residents in the urban areas of central and northern region and both urban and rural population of northern Namibia. The program will improve access to reliable and clean water supply and sanitation services which will promote good environmental health. These will result in reduced water borne diseases for the populations living in program areas. This will enhance the quality of livelihoods and well-being of the beneficiary population, and boost economic activities. The economic returns are measured in terms of benefits which accrue to residents in the form of clean, regular and adequate drinking water supply, improved sanitation services, improved health and living conditions of the beneficiary population.
3.1.2 The main assumptions are: Improved water supply which would contribute to generate incremental water revenues. Another major benefit is health benefit which accounts for the reduction in water borne diseases of populations living in rural areas, which results in savings in health expenditure and reducing stunting of child under 5. Furthermore, improved sanitation will result in improved school enrolment, especially for the girl child. The costs side includes capital investments, periodic replacement costs, and incremental operating and maintenance costs. All costs and benefits are considered net of duties and taxes. In addition, the economic life of the investment is estimated 25 years. The program’s economic rate of return is estimated at 18.17%. The value is higher than the opportunity cost of capital of 12% and thus the program is considered economically viable. Sensitivity analysis to test the robustness of the EIRR was carried out to determine the impact of adverse variations. The EIRR changes to 16.0% assuming that investment cost increases by 15%, and changes to 15% when the benefits of the program are decreased by 15%. For the worst case scenario, assuming that investment cost increases by 15%, and the benefits of the program are decreased by 15%, the EIRR drops to 13.1%. The analysis shows that the program is economically viable and socially beneficial for Namibia. Annex B.7 shows the assumptions and the calculations of the EIRR.
