IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA IDA-H4200 TF-54230) CREDIT IN THE AMOUNT OF SDR 27.1 MILLION (US$40.0 MILLION EQUIVALENT) And

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1 Public Disclosure Authorized Document of The World Bank Report No: ICR2516 Public Disclosure Authorized Public Disclosure Authorized IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA IDA-H4200 TF-54230) ON CREDIT IN THE AMOUNT OF SDR 27.1 MILLION (US$40.0 MILLION EQUIVALENT) And GRANT IN THE AMOUT OF SDR 9.2 MILLION (US$15.0 MILLION EQUIVALENT) And TRUST FUND IN THE AMOUNT OF US$1.078 MILLION TO THE Public Disclosure Authorized REPUBLIC OF YEMEN FOR A GROUNDWATER AND SOIL CONSERVATION PROJECT December 20, 2012 Sustainable Development Department Middle East and North Africa Region

2 CURRENCY EQUIVALENTS (Exchange Rate Effective November 12, 2012) Currency Unit = Yemeni Rial (YR) YR 1.00 = US$ US$ 1.00 = YR SDR 1 = US$ FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS BIA CAS CACB COCA CWMU CWMP CWRAS DCA DF EFA EMP ERR ET FM FM FRR FU GDI GOY GSCP IAS ICR IDA LWCP MAI MCM M&E MIS MTR MWE NIP NPV beneficiary impact assessment Country Assistance Strategy Cooperative and Agriculture Credit Bank Central Organization for Control and Auditing Central Water Monitoring Unit Community-based Water Management Project Country Water Resources Assistance Strategy Development Credit Agreement demonstration farm Environmental Field Analysis Environment Management Plan Economic Rate of Return Evapo-transpiration Financial Management flow meter Financial Rate of Return Field Unit General Directorate of Irrigation of MAI Government of Yemen Groundwater and Soil Conservation Project Irrigation Advisory Service Implementation Completion Results International Development Association Land and Water Conservation Project Ministry of Agriculture and Irrigation million cubic meters monitoring and evaluation management information system Mid-Term Review Ministry of Water Resources and Environment National Irrigation Program Net Present Value

3 NWRA National Water Resources Agency NWSSIP National Water Sector Strategy and Investment Program O&M Operation and Maintenance PAD Project Appraisal Document PCU Project Coordination Unit PDO Project Development Objective PRSP Poverty Reduction Strategy PVC Polyvinyl Chloride QALP Quality Assessment of Lending Portfolio QAE7 Quality at Entry for FY SWAp Sector Wide Approach WSSP Water Sector Support Project WUA Water User Association WUG Water User Group Vice President: Inger Andersen Country Director: Hartwig Schafer Sector Manager: Caroline van den Berg Project Team Leader: Yoshiharu Kobayashi ICR Team Leader: Yoshiharu Kobayashi

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5 REPUBLIC OF YEMEN Groundwater and Soil Conservation Project CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design Key Factors Affecting Implementation and Outcomes Assessment of Outcomes Assessment of Risk to Development Outcome Assessment of Bank and Borrower Performance Lessons Learned Comments on Issues Raised by Borrower/Implementing Agencies/Partners Annex 1. Project Costs and Financing Annex 2. Outputs by Component Annex 3. Economic and Financial Analysis Annex 4. Bank Lending and Implementation Support/Supervision Processes Annex 5. Beneficiary Survey Results Annex 6. Stakeholder Workshop Report and Results Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Annex 9. Community Water Management Project JSDF Annex 10. List of Supporting Documents MAP

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7 A. Basic Information Country: Yemen, Republic of Project Name: Project ID: P L/C/TF Number(s): ICR Date: 12/18/2012 ICR Type: Core ICR Groundwater and Soil Conservation Project IDA-38600,IDA ,IDA-H4200,TF Lending Instrument: SIL Borrower: REPUBLIC OF YEMEN Original Total Commitment: Revised Amount: XDR 35.21M Environmental Category: B Implementing Agencies: Ministry of Agriculture and Irrigation Cofinanciers and Other External Partners: Japan Social Development Fund (JSDF) B. Key Dates XDR 27.10M Disbursed Amount: XDR 35.21M Process Date Process Original Date Revised / Actual Date(s) Concept Review: 02/27/2002 Effectiveness: 08/17/ /17/2004 Appraisal: 12/29/2003 Restructuring(s): 01/13/ /14/2011 Approval: 02/26/2004 Mid-term Review: 02/17/ /21/2007 Closing: 10/31/ /30/2012 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Moderately Satisfactory Substantial Satisfactory Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Moderately Satisfactory Quality of Supervision: Satisfactory Implementing Agency/Agencies: Satisfactory Overall Bank Performance: Satisfactory Overall Borrower Performance: Satisfactory i

8 C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments (if Indicators Performance any) Potential Problem Project at any time (Yes/No): No Problem Project at any time Yes (Yes/No): DO rating before Closing/Inactive status: Satisfactory Quality at Entry (QEA): Quality of Supervision (QSA): Satisfactory Rating Moderately Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration Irrigation and drainage Sub-national government administration Theme Code (as % of total Bank financing) Participation and civic engagement Rural policies and institutions Water resource management E. Bank Staff Positions At ICR At Approval Vice President: Inger Andersen Christiaan J. Poortman Country Director: Hartwig Schafer Mahmood A. Ayub Sector Manager: Caroline van den Berg Narasimham Vijay Jagannathan Project Team Leader: Yoshiharu Kobayashi Satoru Ueda ICR Team Leader: Yoshiharu Kobayashi ICR Primary Author: Juan Bautista Morelli Bryan Burns F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) To assist GOY in promoting groundwater conservation in farming areas and increasing surface and groundwater availability through: (i) improving irrigation water use efficiency, increasing farmer returns to water and creating the conditions to allow them to reduce groundwater pumping from aquifers towards sustainable levels; (ii) improving recharge and protection of watersheds in order to increase surface and groundwater availability through the improvement of small to medium spate irrigation schemes, bank protection works, terrace and other water ii

9 harvesting structures; and (iii) supporting the groundwater management framework and institutions that will have the incentive and capacity to manage local water resources in a sustainable manner. Revised Project Development Objectives (as approved by original approving authority) Not revised. (a) PDO Indicator(s) Indicator Baseline Value Original Target Values (from approval documents) iii Formally Revised Target Values Actual Value Achieved at Completion or Target Years Indicator 1 : Evidence of water savings during conveyance and application Value quantitative or 0 47 MCM 76 MCM 82.8 MCM Qualitative) Date achieved 08/17/ /31/ /31/ /30/2012 Comments Original target for water savings surpassed by 76% and revised target at (incl. % restructuring/additional financing surpassed by 9%. achievement) Indicator 2 : Areas where farmers have adopted efficient on-farm water management practices Value quantitative or 0 27,000 ha 44,500 ha 50,868 ha Qualitative) Date achieved 08/18/ /31/ /31/ /30/2012 Comments (incl. % achievement) Original target surpassed by 88% and revised target at restructuring/additional financing surpassed by 14%. As a result of demo effect there is a huge demand for expanding support for neighboring farmers. Indicator 3 : Evidence that irrigated area was not expanded where farmers contracted not to do so. Value quantitative or Qualitative) IAS surveys indicate horizontal expansion reached only 3% cases Date achieved 08/17/ /31/ /31/ /30/2012 Comments (incl. % achievement) Adherence to the tripartite agreement of non-expansion is more than 97% of beneficiaries. Satellite imagery follow-up study indicates little horizontal expansion or vertical intensification. Indicator 4 : Evidence of the increased area of the watershed protection and recharge enhancement in the project area. Value quantitative or Qualitative) 0 4,621 ha equivalent 5,641 ha equivalent 4,939 ha protected & under recharge Date achieved 08/17/ /31/ /31/ /30/2012 Comments (incl. % Original PAD target was achieved, reaching 88% of the revised target. achievement)

10 Indicator 5 : Evidence of farmers' participation in community-based water management. Value 2,582 WUGs quantitative or 0 WUGs 1,520 WUGs 2,080 WUGs 39,058 farmers Qualitative) Date achieved 08/17/ /31/ /31/ /30/2012 Comments (incl. % achievement) Participation in WUGs has improved awareness of groundwater depletion. Some communities have acted to enforce well spacing and report illegal well drilling, but effective, sustainable community-based water management not yet established. Indicator 6 : Establishment of water monitoring programs: demo farms (DF) and flow meters (FM) in farmers wells Value quantitative or Qualitative) 0 77 DF 1,000 FM iv 105 DF 606 FM 100 DF 551 FM Date achieved 06/30/ /31/ /31/ /30/2012 Comments (incl. % achievement) Groundwater data have been collected and sent to CWMU but not fully processed/ used. Demo farm flow meters were used for estimating water savings as compared with water pumped in control areas. (b) Intermediate Outcome Indicator(s) Indicator Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Indicator 1 : Area covered and number of farms with improved conveyance of groundwater irrigation Value 27,000 ha 44,500 ha 50,868 ha (quantitative 0 7,000 farms 11,700 farms 12,003 farms or Qualitative) Date achieved 06/30/ /31/ /31/ /30/2012 Comments (incl. % achievement) Original target achieved and surpassed by 88% in terms of area covered and 2.3% in terms of farms. Revised target surpassed by 14.3 %. The project developed awareness of benefits of improvements and demand surpassed available project funds. Indicator 2 : Area under on-farm pressurized modernized irrigation Value (quantitative 0 1,440 ha 2,440 ha 2,238 ha or Qualitative) Date achieved 06/30/ /31/ /31/ /30/2012 Comments Original target surpassed by 55% while the target set with the Additional Financing was (incl. % achieved at 92%. achievement) Indicator 3 : Increased agricultural productivity per drop of water Value (quantitative US$0.24 n/a n/a US$0.35 or Qualitative) Date achieved 06/30/ /31/ /31/ /30/2012 Comments (incl. % achievement) Benefited farmers increased production by 20% using 16% less water which resulted in a 45% increase in water productivity (net value of production per m3 of water pumped from aquifers).

11 Indicator 4 : Number of small/medium spate (SMS), bank protection (BP) and canal control (CC). Value (quantitative or Qualitative) 0 55 SMS 105 BP 126 CC 55 SMS 130 BP 146 CC 62 SMS 172 BP 141 CC Date achieved 06/30/ /31/ /31/ /30/2012 Comments (incl. % achievement) Spate irrigation coverage achieved 115% of the PAD target and 113% of the revised target. Groundwater tables downstream of conservation structures are maintained or increased. Most water storage tanks expanded by community contributions. Indicator 5 : Length of terraces rehabilitated. Value (quantitative or Qualitative) km terraces v km terraces 356 km terraces Date achieved 06/30/ /31/ /31/ /30/2012 Comments Original target achieved and surpassed by more than three fold. Revised target (incl. % surpassed by more than twice. achievement) Cost of institutional strengthening of water institutions: IAS/FUs programs for WUAs; Indicator 6 : CWMU program for on-farm water monitoring; and NWRA program for basin water monitoring Value (quantitative or Qualitative) 0 US$16.39 million US$17 million US$14.26 million Date achieved 06/30/ /31/ /31/ /30/2012 Comments (incl. % achievement) The expected targets of institutional strengthening program for IAS and FUs had been fully achieved, but the CWMU and NWRA programs were completed partially, that caused the costs target for this subcomponent achieved only at 87% PAD & 84% revised target. G. Ratings of Project Performance in ISRs No. Date ISR Actual Disbursements DO IP Archived (USD millions) 1 04/30/2004 Satisfactory Satisfactory /29/2004 Satisfactory Satisfactory /10/2005 Satisfactory Moderately Satisfactory /23/2005 Satisfactory Satisfactory /19/2005 Satisfactory Satisfactory /26/2006 Satisfactory Satisfactory /20/2006 Satisfactory Satisfactory /25/2007 Satisfactory Satisfactory /05/2007 Satisfactory Satisfactory /09/2008 Satisfactory Satisfactory /02/2008 Satisfactory Satisfactory /30/2008 Satisfactory Satisfactory /15/2009 Satisfactory Satisfactory /30/2009 Satisfactory Satisfactory /18/2010 Satisfactory Satisfactory 41.51

12 16 11/28/2010 Satisfactory Satisfactory /29/2011 Satisfactory Moderately Satisfactory /10/2011 Moderately Satisfactory Moderately Unsatisfactory /19/2012 Satisfactory Moderately Satisfactory H. Restructuring (if any) Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO Amount Disbursed at Restructuring in USD millions 01/13/2009 S S /14/2011 S MS I. Disbursement Profile IP Reason for Restructuring & Key Changes Made On January 13, 2009 the Bank agreed to extend the closing date of the project by two years until October 31, 2011 to ensure that the Additional Financing scale-up targets could be achieved. A new level two project restructuring was approved on July 14, 2011 for extending the closing date by eight months until June 30, 2012 due to the stoppage of most of the project activities as a result of the deteriorated political and security environment in the country. This last extension allowed completion of the ongoing contracts, which was necessary to attain the PDO. vi

13 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. Yemen is a predominantly rural country with 68% of its total population of 24.1 million living in rural areas where irrigated agriculture remains the main economic activity, source of income and employment. Yemen is a water-scarce country and groundwater resources are declining rapidly. The depletion of groundwater directly impacts poverty, employment and social order. 1 Hence, the conservation of the groundwater resources, improvement of surface spate irrigation systems, and support for the watershed areas is a national top priority. The Groundwater and Soil Conservation Project (GSCP) was designed to test innovative solutions to the critical groundwater and surface water problems in Yemen. The problem of unsustainable groundwater extraction has been caused by the rapid increase in groundwater irrigation, compounded by dwindling rates of recharge due to degradation of watersheds. The root cause is a weak management framework ill-adapted to ensuring sustainable extraction levels, efficient water use, and watershed protection. 2. To address this issue, the Government of Yemen (GOY) made determined efforts in improving water resources and irrigation management in a coordinated manner. The GOY legislated the Water Law in 2002 and approved the National Water Strategy and Investment Program (NWSSIP) in 2005 to define the principal policies and action plans for water resources management. The Poverty Reduction Strategy Paper (PRSP) of GOY identified the rural population as the poorest and most vulnerable segment of society and highlighted the growing water shortage as a principal challenge to be met if poverty is to be reduced. The PRSP underlined the fact that the alarming rate of groundwater mining in the country is creating a high risk of impoverishment of rural communities and an acceleration of rural-urban migration. 3. The Bank s Country Assistance Strategy (CAS) of 2002 targeted environmental sustainability and underlined the vital role that water resources play in keeping Yemen s economy profitable and sustainable. Improvement of water resources management was a CAS priority. The CAS points to the needs for urgent action on water resources management in rural areas and, in particular, investments in order to reduce aquifer depletion and improve watershed management, with a focus on the most stressed agricultural areas. In respond to this, the Bank prepared its Country Water Resources Assistance Strategy (CWRAS) in 2005 to produce an operational plan for Bank involvement in the water sector. 1.2 Original Project Development Objectives (PDO) and Key Indicators 4. The objective of the project was to assist the GOY in promoting groundwater conservation in farming areas and increasing surface and groundwater availability through: (i) improving irrigation water use efficiency, thus increasing farmer returns to water and creating the conditions that would allow them to reduce groundwater pumping from aquifers towards sustainable levels; (ii) improving recharge and protection of watersheds in order to increase surface and groundwater availability through the improvement of small to medium spate irrigation schemes, bank protection works, terraces and other water harvesting structures; and 1 Per capita availability of water in Yemen is 115 m 3 per year. In the MENA region, its availability is 1,250 m 3, while for the world, the average is 7,500 m 3. This already low availability of water will gradually be reduced to 65 m 3 per year by 2031, which may create an unsustainable situation. 1

14 (iii) supporting the groundwater management framework and institutions that will have the incentive and capacity to manage local water resources in a sustainable manner. 5. Key indicators were: (i) evidence of water savings during conveyance and application; (ii) areas where farmers have adopted efficient on-farm water management practices as those advised by the Irrigation Advisory Service (IAS); (iii) evidence that the irrigated area has not expanded where farmers have contracted not to expand it; (iv) evidence of the increased area of the watershed protection and recharge enhancement in the project area; (v) evidence of farmers participation in community-based water management; and (vi) establishment of water monitoring programs. 1.3 Revised PDO and Key Indicators, and reasons/justification 6. The PDO and key indicators were not changed. 1.4 Main Beneficiaries 7. The GSCP targeted all levels of farmers utilizing groundwater for irrigation in rural communities where critical groundwater depletion was occurring and where there was an urgent national priority to mitigate this adverse tendency. It was envisaged that some 7,000 farm families would benefit from improved conveyance of water, and an additional 700 families from localized on-farm irrigation systems. The project targeted irrigation modernization based not only on the economic conditions and needs of the farmers, but also on prospects for making a difference in improving irrigation efficiency and reducing overdraft of groundwater resources, and the local population s willingness to participate. 2 In addition, 5,746 families would benefit from spate irrigation improvements, 8,350 from water harvesting works, and 17,000 from rehabilitation and construction of on-farm water storage tanks. 8. The non-quantifiable benefits of the project are environmental and institutional. The environmental benefits include those arising from reducing the pace with which the aquifers have been being depleted. The institutional benefits would derive from strengthening key institutions in the irrigation sector. One significant benefit would consist of strengthening community groups abilities to sustainably manage water. Among public institutions, the project would: (i) strengthen on-farm water monitoring capacities of the Ministry of Agriculture and Irrigation (MAI) field units (FUs); (ii) create the IAS which would represent a permanent extension and monitoring service within the MAI s FUs; (iii) strengthen the General Directorate of Irrigation (GDI, today the Water Sector of MAI) and the Central Water Monitoring Unit (CWMU) for irrigation policy formulation, and monitoring and evaluation (M&E) capacity; and (iv) strengthen the National Water Resources Authority (NWRA) s field presence, and the Ministry of Water and Environment (MWE) s policy formulation capacity. 2 Incremental production benefits are expected from improved conveyance and on-farm irrigation systems, and from improved on-farm soil, water and crop management. This, in addition to increasing crop yields per cubic meter of water, would reduce pumping and labor costs. There would also be incremental production from the water harvesting structures, spate irrigation and terrace rehabilitation, which in turn shall improve agricultural production and enhance soil conservation and groundwater recharge. 2

15 1.5 Original Components 9. The GSCP comprised the following three components: 10. Component 1: Modernization and Improvement of Groundwater Irrigation Systems (Base cost US$15.47 million) to provide for the supply and installation of buried polyvinyl chloride (PVC) and over-ground galvanized iron pipes to improve water conveyance and distribution efficiency, reducing losses from existing tubewells to and on farms. It would also provide localized on-farm irrigation systems (drip, bubbler or sprinkler) for a part of the project area to further reduce on-farm water losses. Improved irrigation conveyance would cover about 27,000 ha and modernization and improvement of localized on-farm irrigation equipment on about 1,440 ha. Farmland leveling would be done on a pilot basis. 11. Component 2: Improvement of Spate Irrigation, Water Harvesting and Soil Conservation (Base cost US$12.02 million) would provide gabion baskets and other materials for the selective improvement of traditional small and medium spate schemes within identified wadis to improve conveyance, diversion efficiency, and groundwater recharge, associated with wadi bank protection for villages. It would also include rehabilitation of terraces to conserve soils from erosion and water harvesting structures, and to divert run-off water for irrigation and recharge the groundwater. This would involve: (a) small and medium-scale spate irrigation improvement and rehabilitation in the wadis through the rehabilitation and construction of small and medium spate systems, and wadi bank protection structures. Canal structures would also be constructed or rehabilitated; and (b) Improving water harvesting and soil conservation in the uplands through the construction and/or rehabilitation of terrace walls and water harvesting structures, erosion control structures, wadi bank protection including vegetative measures, and improving water storage and groundwater recharge through the construction or rehabilitation of on-farm water storage tanks, open pits and underground cisterns to collect rainwater for human and animal consumption, irrigation and recharge. 12. Component 3: Institutional Strengthening of Water Institutions (Base cost US$16.39 million) to provide implementation support, M&E activities, and capacity building through training and facilities to institutions involved in the GSCP including: (a) Capacity building (equipment, vehicles, materials, office buildings, technical assistance, training, project management and incremental operating costs) for: (i) the project coordination unit (PCU) within the MAI and Cooperative and Agriculture Credit Bank (CACB) for project coordination, and FUs within 10 MAI provincial offices for implementation of physical works and coordination with stakeholders; (ii) the MAI and GDI including its CWMU to improve irrigation water use monitoring and other irrigation-related technical aspects; (iii) NWRA for carrying out water resources assessment, monitoring and management, and public information and awareness campaigns on groundwater management and conservation; and (iv) MWE for enhancing water policy formulation. (b) Capacity building and technical assistance for local communities in project areas including: (i) establishment of the IAS within the FUs (the IAS would provide advice on on-farm water, soil and crop management as well as to communicating lessons learned from farmers); and (ii) strengthening the capacity of water user group (WUGs) to raise awareness about groundwater saving and to assist the FUs in monitoring and managing the irrigated areas and groundwater use. 3

16 (c) Communication material and information-sharing program for community sensitization activities, including women and children. 1.6 Revised Components 13. Components were not changed. 1.7 Other Significant Changes 14. A grant of US$1.078 million from the Japan Social Development Fund (JSDF) was approved for the Community Water Management Project (CWMP) in June The JSDF grant was to assist the recipient in developing replaceable models or sustainable selfmanagement of local water resources by poor farming families in areas where groundwater is becoming increasingly scarce. The CWMP was implemented in parallel with the GSCP and provided valuable experience in organizing WUAs for local water resources management. 15. Additional IDA financing of US$15 million was approved on September 11, 2008 The additional financing was originally approved on July 1, 2008 as a credit amounting to US$15 million, which was immediately cancelled, and an IDA grant of US$15 million was approved on September 11, 2008 as Yemen had been included in the IDA grant financing countries. The grant would co-finance the scaling up of the GSCP successful activities which would cost US$21.15 million for: (i) increasing the project intervention areas under improved conveyance systems from 27,000 ha to about 44,500 ha, and under localized on-farm irrigation system modernization by 1,000 ha (from 1,440 ha to 2,440 ha) under the Component 1 (US$14.65 million); (ii) improvement of spate irrigation, water harvesting and soil conservation under Component 2 (US$3.38 million); and (iii) institutional strengthening of public water institutions and WUGs under Component 3 (US$0.62 million). In addition, US$0.5 million was budgeted for contingencies and US$2 million for recurrent budget support to be financed entirely by the GOY. 16. As part of water harvesting works, the construction of new on-farm water storage tanks and rehabilitation of the existing tanks for supplementary irrigation have provided drinking water for more than 34,000 families, which was not originally intended. 17. On January 13, 2009 the Bank agreed to extend the closing date of the project by two years until October 31, A revised implementation schedule was agreed and incorporated in the Memorandum of Understanding of the Bank s supervision mission in November During the last implementation year, as a result of the political turmoil in the country in 2011, most of the project activities were halted for an extended period of time. Since a number of contracts (works and goods) amounting to US$6.6 million needed additional time to be completed, on July 13, 2011 the project was restructured for extending the closing date from October 31, 2011 to June 30, Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 18. In May 2005 a Quality at Entry (QAE7) Panel analyzed GSCP design rating it as Satisfactory with a comment that the project strategically aimed at the proper, somewhat unglamorous goal, but was facing high risks of failure nonetheless. This was mainly due to complexity of overcoming such an urgent threat within Yemen's loose social and political context. The panel rated Satisfactory six of the eight assessment dimensions and the Bank Inputs and Processes. However, it rated Environmental Aspects and Implementation 4

17 Arrangements dimensions as Moderately Satisfactory. The report also noted that the GSCP appears to be a case where a hands-on sector management, a competent and committed project team, and a country unit willing to make a concrete physical factor impending water shortage a central pivot of the country strategy, have come together. Whether even with all this focus on this threat, the problem can be solved, is another question. The country and project teams lacked the normal instruments with which a society may react to scarcity, such as incentives in terms of higher prices on the scarce goods, and compulsion in terms either of enforced public law, or through community ownership, allocation, and rationing of the resource. 19. Since the political capacity was not present in Yemeni society to enforce such disciplines through national laws, the project team chose to rely mainly on the attractiveness of modern irrigation methods, which also happen to be strongly water-saving, and on the appeal of water user groups (WUGs) and associations, which could rest on tribal traditions, to compensate for the lack of other tools, such as appropriate pricing of diesel fuel and a strong regulatory environment. Complementing the approach, the project design introduced the tripartite agreement (among beneficiary farmers, project field units, and local or village associations), whereby beneficiary farmers committed not to increase irrigated area with the saved water. However, the risk of other farmers, non-project free riders, stepping in to use up the local water savings, undermined the ultimate goal to minimize aquifer depletion. The PAD also included a full account of lessons learned from the previous project, the Land and Water Conservation Project (LWCP). 2.2 Implementation 20. Expansion of modern irrigation systems among conservative farmers in rural Yemen required significant efforts during the early stage of the project implementation. Explaining the benefits of piped conveyance and localized on-farm irrigation systems at the demonstration farm by IAS 3 teams together with agriculture extension specialist from the department of agriculture in the governorate. JSDF supported Community-based Water Management Project also contributed to expand the knowledge of irrigation modernization and groundwater resources management among Yemeni farmers. The demonstration farms proved significant saving of pumping hours (groundwater abstraction), fuel, and labor, and an increase of crop yields. As a result, demand for irrigation modernization increased abruptly and the implementation of Component 1 made great progress in 2007, which resulted in the approval of the additional financing for this project in During the implementation, the project faced significant delays in designing of 35 spate diversion weirs by an international consulting firm under Component 2. Despite repeated followup, the consultant failed to deliver the required design on time by October The consultant 3 The IAS has been effectively developed and farmers request for even more support from IAS. Almost all participating farmers have honored their commitment not to expand their irrigated area. The project provided a good demonstration effect of sustainable improvement of irrigation systems which are being replicated by nonproject farmers. Subsidies and demonstrations of the new irrigation technologies for piped conveyance and localized irrigation generated substantial demand, exceeding what the project could provide. Involvement of farmers in WUAs has facilitated project implementation and improved awareness of the dangers of groundwater depletion. 5

18 finally submitted 34 schemes (1 dropped) by mid The 20 diversion schemes were completed by the end of the project, 13 schemes have been transferred to the Water Sector Support Project (WSSP) for implementation and 1 scheme was found economically not feasible. 22. Political unrest from February 2011 to February 2012 disrupted project activities. Stockpiles of pipes and other materials were looted and burned, and in a few places, vehicles and office furniture were destroyed and stolen. One soil testing laboratory was burned. Total losses were estimated at just over one million dollars. The Bank suspended disbursements for all activities in Yemen from July 28, 2011 to January 20, Lack of payment led to the withdrawal of some civil works contractors Capable management of the PCU and FUs contributed greatly to effective project implementation. While the Bank policies did not allow payment of incentives from loan or grant funds, arrangements were made to pay incentives, field allowances, out of the Revolving Fund created from the farmers share of costs. This took some time, but it did make it possible to recruit, motivate and retain capable staff, which would have been difficult or impossible otherwise. 24. Beneficiary participation in the implementation and quality of results was improved by amending the Development Credit Agreement to allow implementation of small works costing less than US$10,000 through Community Contracts. The land leveling activity was dropped because the cost of equipment was too high and the Government was reluctant to carry it out, as the demand from farmers was lacking. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 25. M&E Design. Overall M&E system was well designed with selected adequate indicators to track project outputs and outcomes. Given that the PDO was conceived in conventional terms of irrigation efficiency, and given the monitoring technology available when the project was designed, measurement of reduced pumping by farmers and increased productivity in relation to the amounts pumped were adequate indicators for Component 1, as were area coverage and groundwater levels affected by recharge for Component 2. The indicators for Component 3 of farmer participation and establishment of water monitoring programs were well designed to show the project progress toward the goal of establishing local water management system, although not adequate to show the sustainability of the results in terms of stabilization of groundwater levels over time. 26. M&E Implementation. The M&E activities were carried out satisfactorily in general, especially under Components 1 and 2, despite difficult security situations in the country throughout project implementation. Implementation units were established with adequate staffing, training and supervision. Beginning with farmer requests, a database tracked information about farmers taking part in Component 1. Detailed data was collected on water pumping at 100 demonstration farms, and flow meters installed on another five hundred wells. Separate monitoring wells were also established near project sites, with data collected and put into a database. Considerable attention was paid to data quality. Information was collected on the number of WUGs and WUAs formed. The satellite monitoring technology and ET measurement 4 During the unrest, shortage and high prices of diesel led to less pumping and loss of access to markets in some areas, reducing farmer incomes by over 50% in four FUs: Northern, Dhamar, Taiz, and Lahej. 6

19 were introduced to the project M&E to monitor the real water saving, and additional satellite data on water consumption was collected and analyzed under GSCP grant. 27. M&E Utilization. Periodic M&E reports were produced and consolidated at the central project management level. The baseline survey was carried out and regularly updated, and reliable information was generated and put to use. Estimates of water saved by farmers were used to monitor progress towards the PDO, including the decision about Additional Financing to achieve higher targets. Significant efforts were made in collecting water saving data from demonstration farms as well as monitoring wells; analysis of the data was done mainly for the deduced amount of groundwater abstraction, although not much on stabilization of groundwater tables. The results of water saving data were explained to beneficiary farmers on Field Days in the demonstration farms. 28. Methodological Soundness of M&E. The project carefully monitored information on participating farmers in Component 1 and on implementation progress generally. Monitoring of pumping provides a valid source of information to confirm reduced ground water abstraction by project farmers. Monitoring focused on cooperating farmers, and there was no monitoring of changes in water use by neighboring farmers. There are important methodological challenges in trying to assess trends in groundwater depletion, and its relationship to changes in water use by farmers. The 2011 Report Groundwater Monitoring in Yemen-Data Analysis prepared by NWRA contains some useful analysis, but was not consistently followed up to analyze trends in more depth over a longer period of time. Satellite image analysis confirmed that there was almost no expansion of irrigation areas by the project farmers. 29. M&E Sustainability. Various arrangements for continuing monitoring are in place or are under consideration. As a Bank s follow-on project of the GSCP, the WSSP will continually support the CWMU s M&E operation, including analysis and utilization of water monitoring systems. It was also confirmed that the issue that had prevented NWRA from accessing WSSP funds have been resolved. At ICR, CWMU and NWRA were considering how to continue the systematic analysis of groundwater levels data collected under the GSCP, especially conduct a cumulative and comparative analysis 5 (which was not carried out due to lack of the government budget), that would take advantage of the longer time series in the CWMU database, the dedicated monitoring wells installed and monitoring equipment provided by the GSCP, together with the data from NWRA, and would be possibly taken over by the follow-up WSSP project if approved, and the Government would eventually fund such activities from its national budget to make them sustainable. 2.4 Safeguard and Fiduciary Compliance 30. The environmental category of the project is B (partial assessment). The project was expected to have significant positive environmental impacts in terms of water and soil conservation. However, some potential negative impacts were expected under Components 1 and 5 It should be noted that the dispersed location of GSCP activities and small scale relative to overall water abstraction, as well as the complexity of aquifer systems and multiple factors affecting depletion, make establishing causal relationships between project interventions and changes in groundwater levels a challenge. 7

20 2 requiring the Environmental Assessment and Integrated Pest Management. The Environmental Management Plan (EMP) was prepared in January 2003 and disclosed both in country and in the Infoshop on March The EMP included: (i) the prevention of general construction impacts through the insertion of environmental clauses in the tender documents, and (ii) the prevention of site-specific impacts through the use of simplified impact analysis at the design stage to develop site-specific environmental actions. 31. Environmental Assessment (OP/BP 4.01): An environmental field analysis (EFA) was to be carried out for construction of medium spate diversion structures and canals and pit excavations for water retention under Component 2. The findings of the EFAs were: (i) no adverse impacts are likely to be found on the physical, biological, and social environments as a consequence of the construction of medium spate diversion works, canals, and pit excavations for water retention; (ii) no negative impact has been observed during or after implementation of works; (iii) positive impacts are observed in terms of groundwater recharge, desertification control and improvement in vegetative cover; and (iv) a decrease of stagnant water can be observed as a results of the construction. 32. Pest Management (OP 4.09): The project carried out an integrated pest management (IPM) action plan including (i) training of trainers; (ii) IPM demonstrations; (iii) public awareness campaign; and (iv) groundwater quality analysis. Adequate resources and staff were put in place for IPM training and implementation. As a result, the project has trained a total of 1,251 farmers, and five IPM Plans were adopted in four Governorates (Hadramaut, Hodeidah, Dhamar and Lahej). 33. Physical Cultural Resources (OP 4.11): The EMP recommended precautionary measures to prevent any damage to cultural objects. It was reported that only one cultural site discovered in Haksar, in the Dhamar governorate. According to the EMP, it was promptly notified the General Authority for Antiquities, Museums, and Manuscripts and appropriate measures were taken to avoid any disturbance of the cultural property. No further discovery was made thereafter. 34. Procurement - Works and goods were procured in accordance with the respective procedures approved by the Bank. The Procurement Plan was revised and updated from time to time and Bank s approval was provided as necessary. Principal items procured under the project were civil works (buildings and storage hangers); equipment (vehicles, heavy equipment, office and technical equipment); material (PVC/polyethylene/ galvanized iron pipes and fittings and localized on-farm irrigation systems); and services (technical assistance and training). 35. To ensure a greater involvement of the communities, the concept of "community contracts" was adopted under the GSCP in September 2005 as an implementation procedure for small works under spate improvement and water harvesting works. This procedure allowed for contracts with a value not exceeding US$10,000 per contract using fixed unit rates approved by IDA and valid for one year. These rates were revised annually. In some cases, when some communities/wugs were not willing to implement works costing less than US$10,000 on this basis, the FU Director resorted to a competitive bidding procedure for implementing such works by calling quotations. 36. In general, the GSCP has sustained adequate capacity at the PCU level throughout the life of the project. The PCU had conducted the procurement activities according to the agreed procedures without any major noncompliance issue. During the implementation period, a total of 3,394 contracts for procurement of Goods, Consultancy Services and Training, and Works were 8

21 signed. However, there were some problems during the implementation of contracts that are not related to procurement but had a direct impact on its process. Some contracts were not completed or cancelled due to different reasons such as site disputes, poor design and lack of capacity in contract management. 6 The last batch of additional pipes was not delivered before the closing date of the IDA grant due to security problem in the country, which was eventually paid from the Revolving Fund, instead of IDA grant. 37. Financial Management (FM) The PCU maintained FM arrangements adequately during most of the project life. The FM staff was qualified enough to carry out the FM tasks appropriately and implement adequate internal control procedures complying with the acceptable FM Manual. The GSCP has a well-functioning automated accounting system following the cash basis of accounting and connected with FUs in the governorates. The system was transferred to National Irrigation Program 7 (NIP) which can benefit from such success and utilize the system in those FUs. During the project life, all withdrawal applications were smoothly processed except during the political and security crisis that affected Yemen in 2011 and led the Bank to suspend the disbursements across the Yemen portfolio from July 28, 2011 to January 20, All audit reports were timely submitted to the Bank with unqualified (clean) opinion. In the management letters, none of the issues flagged by the external auditors was so material and no accountability issues have been identified. 2.5 Post-completion Operation/Next Phase 38. In order to smooth the arrangements for the project s operational phase, the GSCP was merged with the NIP after closure. However, a significant number of GSCP staff (293) are without any position under NIP at the time of ICR preparation. Since NIP was designed to cover the whole country, it is necessary to establish several more FUs in governorates without these units, besides the three priority basins where the WSSP started working. It is not clear how the Government is going to maintain the function of the 11 FUs established under the GSCP. Since NIP is planning to carry out a large number of community contract works requiring intensive supervision, it is crucial to maintain qualified FU staff in all governorates. 39. Since mobilizing FUs staff trained under the GSCP is crucial for reconstructing the country after the political turmoil in 2011/2012, the MAI agreed to use the revolving fund (US$1 million) established under the GSCP and its Agriculture and Fisheries Production Promotion Fund (AFPPF YR500 million) for expanding irrigation modernization to be carried out by FUs (other than Dhamar, Sana a and Amran basins covered by the WSSP). The Government might also seek additional financing for the WSSP (after making substantial progress in WSSP disbursement) and possible co-financing from Saudi Fund (which announced a financial support for Yemen in late May 2012 amounting to $3.25 billion). 40. There is no major sustainability issue expected with regard to the modern irrigation systems developed under Component 1 since they belong to private farmers who carefully operate and maintain their own systems. However, there are clear indications that the beneficiaries consider the Government to be responsible for operation and maintenance (O&M) 6 There were significant delays in implementation of civil works, particularly spate diversion works awarded to local contractors with inadequate survey and designs, beneficiaries non-cooperation to facilitate access of contracts to sites, and shortage of diesel. 7 The NIP is an irrigation agency under the MAI and one of the implementing agencies of the WSSP. The Government considers NIP as an official successor of the GSCP. 9

22 of project interventions under Component 2. O&M of spate irrigation schemes is supposed to be carried out by WUAs. While beneficiaries of the small spate irrigation schemes contributed their share to the project in kind during implementation, those of medium spate irrigation schemes did not contribute any but local councils advanced such cash contribution with an agreement that the beneficiary would pay back with installments. So far, no beneficiaries are following this agreement, which manifest a lack of ownership of these medium spate irrigation schemes and poses an issue of sustainability for these schemes. This issue needs to be followed up under the WSSP. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 41. The project development objective (PDO): to assist the Government in promoting groundwater conservation in farming areas and increasing surface water and groundwater availability is still a highly relevant priority in Yemen in terms of mitigating the rapidly emerging freshwater shortage. The PDO is in line with the Government s National Water Sector Strategy and Investment Program Update ( ) to improve the Yemeni population s sustainable and economically efficient use of the nation s scarce water resources. It is also in line with the Bank s Country Assistance Strategy for Yemen (April, 2009) for the period of FY in terms of its strategic objectives (iv) help manage natural resources scarcity and natural risks, especially to slow down the depletion of water resources. The project design and implementation were consistent with the PDO, including investments to increase irrigation efficiency, agreements with individual farmers to restrict horizontal expansion of their irrigated areas, and efforts to establish an institutional framework for community groundwater management. 3.2 Achievement of Project Development Objectives 42. The project has attained the first sub-objective of the PDO promoting groundwater conservation in farming areas through improving irrigation water use efficiency, increasing farmer returns to water, and creating the conditions to allow them to reduce groundwater pumping from aquifers towards sustainable level. The amount of water saved by the project interventions is estimated at 82.8 million cubic meters (MCM) against the target of 76 MCM (PDO Indicator 1) and 50,868 ha of farmlands are equipped with modern irrigation systems against the target of 44,500 ha (PDO Indicator 2). Farmers saved money and labor, while getting higher yields and productivity per unit of groundwater abstracted increased substantially (See Annex 3) but did not expand irrigation area (PDO Indicator 3) in accordance with the tripartite agreement. Although the groundwater pumping from aquifers has been reduced by project farmers, some of the aquifers are being depleted. This is because the project interventions are scattered over 15 governorates and too small to have tangible impacts on aquifer depletion (See Table 1 below). 43. The second objective of the PDO increasing surface and groundwater availability through improving recharge and protection of watersheds and supporting the groundwater management framework and institutions that will have the incentive and capacity to manage local water resources in a sustainable manner has also been mostly attained with delay. The improvement of small and medium spate irrigation schemes took significant time to complete them while bank protection works, terraces and other water harvesting structures were carried out on schedule as a result of introduction of community contract arrangements. The areas 10