Original: French APPRAISAL REPORT

Transcription

1 AFRICAN DEVELOPMENT FUND Language: English Original: French MALI DRINKING WATER SUPPLY AND SANITATION PROJECT IN GAO, KOULIKORO AND SEGOU REGIONS APPRAISAL REPORT WATER AND SANITATION DEPARTMENT (OWAS) December 2007

2 TABLE OF CONTENTS Page PROJECT INFORMATION SHEET, CURRENCY EQUIVALENTS, WEIGHTS AND MEASURES, LIST OF TABLES, LIST OF ANNEXES, LIST OF ABBREVIATIONS, BASIC DATA, PROJECT LOGIAL FRAMEWORK, EXECUTIVE SUMMARY i-viii 1. ORIGIN AND BAKGROUND THE WATER AND SANITATION SECTOR Characteristics of the Sector Organization of the Sector Sector Development Policy and Strategy PROSEA Opportunities and Constraints Financing of the Sector Lessons learnt from Donor Intervention THE RURAL DWSS SUB-SECTOR Organization Gender Issues and Socio- Economic Development Bank Group Strategy THE PROJECT Design and Rationale Project Objectives Project Priority Areas and Target Populations Strategic Context Project Description Project Cost Sources of Finance and Expenditure Schedule PROJECT IMPLEMENTATION Executing Agency Steering Organs Implementation and Supervision Schedules Procurement Arrangements Disbursement Arrangements Financial and Audit Reports Partnerships Project Sustainability and Risks PROJECT IMPACTS ANALYSIS Economic Impact Analysis Sensitivity Analysis Social Impact Analysis Analysis of Impact on Women Analysis of Environmental Impacts CONCLUSION AND RECOMMENDATIONS Conclusion Recommendations and Conditions... 19

3 iv LIST OF TABLES Page Table 4.6 : Summary Project Cost Estimates by Component 11 Table 4.7 : Sources of Finance 12 Table 5.1 : Procurement Arrangements 14 LIST OF ANNEXES No. of pages Annex 1 : Map of Project Area 1 Annex 2 : List of Bank Operations in Mali 2 Annex 3 : Project Implementation Schedule 1 Annex 4 : Detailed Cost of Project Components 5 Annex 5 : Summary of ESMP 4 Annex 6 : Assumptions and Table of Financial Flows 2 Annex 7 : Table of Costs by Expenditure Category 1 Annex 8 : Detailed Presentation of Procurements 4 Annex 9 : Note on Implementation Status of First Sub-program 4 This report has been prepared by K. BA (Financial Analyst, OWAS.1), S. BARA (Gender Expert, OWAS.1), D. SOUWEYE (Procurements Assistant, MLFO), A. M. TANDINA (Infrastructure Specialist, MLFO), and two consultants (OWAS.1). Further inquiries may be obtained from Messrs. A. RAKOTOBE (Director, OWAS), S. WASSEL (Acting Division Manager, OWAS.1), M. ENNAHLI (Resident Representative of the Bank in Mali) or the writers of the report.

4 AFRICAN DEVELOPMENT FUND BP Tunis Belvédère Tel.: PROJECT INFORMATION SHEET Date: December 2007 The information given below is intended to provide some guidance to prospective suppliers, contractors, consultants and all persons interested in the procurement of goods and services for projects approved by the Boards of Directors of the Bank Group. More details should be obtained from the Executing Agency of the Borrower. 1. COUNTRY : Mali 2. PROJECT NAME : Drinking water supply and sanitation project in Gao, Koulikoro and Ségou regions 3. LOCATION : 18 districts, in the three targeted regions (Gao, Koulikoro and Ségou) 4. BORROWER : Mali 5. EXECUTING AGENCY : Ministry of Mines, Energy and Water B.P 1909 Bamako-Mali. Tel.: (223) mines@afribone.net.ml 6. PROJECT DESCRIPTION : The key components of the project are: (A) Development of basic DWSS infrastructures; (B) Support for structures involved in the project; (C) Project coordination and management. 7. PROJECT COST : UA million Foreign exchange : UA million Local currency : UA million

5 ii 8. BANK GROUP FINANCING : UA million ADF Loan : UA million RWSSI Grant : UA million 9. OTHER SOURCES OF FINANCE : UA 4.39 million Beneficiary populations : UA 0.50 million Government : UA 3.89 million 10. DATE OFAPPROVAL : June PROBABLE STARTING DATE AND DURATION : Sept 2008 and 40 months. 12. PROCUREMENT OF GOODS AND WORKS: (1) Work contracts for: (i) rehabilitation of boreholes; (ii) catchment wells and tank-wells; (iii) public sanitation works will be procured through national competitive bidding using national procedures. New drilling, drinking water supply and provision of DWS and IVWSS will be procured through International competitive bidding using Bank procedures. (2) All goods contracts will be procured through local shopping 13. REQUIRED CONSULTANCY SERVICES ENVIRONMENTAL CATEGORY : Required for the supervision and inspection of the construction of drinking water supply and sanitation systems, for IEC campaigns, studies as well as the audit. These services will be procured on through competitive bidding on the basis of a short list. : II

6 iii CURRENCY EQUIVALENTS UA 1 = CFAF (December 2007) WEIGHTS AND MEASURES m = metre m² = square metre ml = linear metre m 3 = cubic metre km = kilometre Mm 3 = Million cubic metre km² = square kilometre m 3 /h = Cubic metre per hour l/s = litre per second l/d/inhab.= litre per day per inhabitant FISCAL YEAR 1 January 31 December LIST OF ABBREVIATIONS ADB : African Development Bank ADF : African Development Fund AFD : French Development Agency BOAD : West African Development Bank CAFO : Coordination of Women s Associations and NGOs CDI : Documentation and Computer Centre CNP : National Steering Committee CREPA : Regional Centre for Low-cost Drinking Water and Sanitation CV : Curriculum vitae CVD : Village Development Council DANIDA : Danish Cooperation DNACPN : National Directorate of Sanitation, and Pollution and Nuisance Control DNH : National Directorate of Water Resources DNSP : National Directorate of Public Health DRACPN : Regional Directorate of Sanitation, and Pollution and Nuisance Control DRHE : Regional Directorate of Water Resources and Energy DRSP : Regional Directorate of Public Health DWS : Drinking Water Supply DWSS : Drinking Water Supply and Sanitation EDM : Energie du Mali ERR : Economic Rate of Return ESMP : Environmental and Social Management Plan EU : European Union FFI/RWSSI : Trust Fund of the Rural Water Supply and Sanitation Initiative IWRM : Integrated Water Resources Management GPRSP : Growth and Poverty Reduction Strategy Paper GVT : Government HOP : Hand-Operated Pump ICB : International Competitive Bidding IEC : Information, Education and Communication MDG : Millennium Development Goals

7 iv ME : Ministry of Education MEA : Ministry of the Environment and Sanitation MEF : Ministry of the Economy MFB : Ministry of Finance and the Budget MMEE : Ministry of Mines, Energy and Water MPFEF : Ministry for the Promotion of Women, Children and the Family MS : Ministry of Health MTEF : Medium Term Expenditure Framework MWP : Modern Water Point NGO : Non-Governmental Organization NIC : National Competitive Bidding PADEC : Community Development Support Project PAGIRE : Integrated Water Resources Management Action Plan PASEPARE : Drinking Water, Sanitation and Water Resources Sector Support Programme PB : Programme Budget PBO : Programme Budget by Objective PDSEC : Communal Social, Economic and Cultural Development Plans PNAEP : National Drinking Water Access Plan PRODEC : Education Support Programme PROSEA : Water and Sanitation Sector Programme PRP : Poverty Reduction Project PRSP : Poverty Reduction Strategy Paper RBCSP : Results-Based Country Strategy Paper SHVA : Improved Village Water Supply System SP : Standpipe SWS : Simplified Water Supply TFP Technical and Financial Partners TOR : Terms of Reference UA : Unit of Account VIP : Ventilated Improved Pit WHO : World Health Organization WUA : Water Users Association

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9 LOGICAL FRAMEWORK NAME : Mali: DWSS Project in Gao, Koulikoro and Ségou regions STARTING DATE : December 2007 COMPLETION DATE : February 2012 HIERARCHY OF OBJECTIVES PROGRAMME PURPOSE Sustainably provide rural and semi-rural water supply and sanitation to improve the living conditions of the populations. PROJECT GOAL - Improve drinking water supply services in the 3 regions targeted by the project (Gao, Koulikoro and Ségou) ; - Improve household sanitation services and public sanitation in the 3 regions targeted by the project EXPECTED OUTCOMES LONG-TERM RESULTS By ) Attainment of the MDGs for water : access rate raised to 82% ; 2) Attainment of the MDGs for sanitation : access rate raised to 20% (by 2010) ; 3) The infant/child mortality rate is reduced to 96 per thousand ; 4) The poverty index in rural areas is reduced to less than 50%. MEDIUM-TERM RESULTS By ) The rate of access to drinking water of the targeted populations is 71%, 50.5% and 57% respectively in the 3 regions (Gao, Koulikoro and Ségou) ; 2) The rate of access to sanitation is 11%, 6% and 8% respectively in the 3 regions (Gao, Koulikoro and Ségou) ; 3) The average rate of prevalence of water-borne diseases and fecal peril is 10% in the 3 regions. SCOPE (Beneficiaries) More people are provided with access (4.2 million persons to drinking water and 1.04 million to sanitation) Additional populations served in the 3 regions targeted by the project 442,000 people for drinking water, 108,000 persons for household sanitation and 16,500 for public sanitation) vi PERFORMANCE INDICATORS 1) Attainment of the MDGs for water and sanitation in 2015 ; 2) Mortality rate of children aged below 5 years. 3) Poverty index in rural areas; Sources : Statistics and Reports : DNH, DNACPN, DRHE, DRACPN, MATCT, MEF and DNS, Human Development report 1) Rate of access to drinking water; 2) Rate of access to sanitation; 3) Average rate of prevalence of waterborne diseases and fecal peril is 10% in the 3 priority regions of the project ; 4) Rise in the level of average consumption of water per inhabitant and per day. Sources: DNH, DRACPN, DNS, MATCT, MEF, MS and DNSI. OBJECTI VE INDICATORS AND DEADLINES By (a) Increase in drinking water access rate from 67% (at present) to 82% (+ 22%); 1. (b) Increase in sanitation access rate from 5% (at present) to 20% (+ 300%); (2) Reduction of the infant/ child mortality rate from 196 per thousand (at present) to 96 per thousand (- 51%); 3) Reduction of incidence of poverty in rural areas from 72% (at present) to less than 50% (- 22%). By ) Increase in average rate of access to drinking water in rural areas in the 3 regions targeted by the project from 49% (at present) to 56% (+14%) ; 2) Increase in average rate of access to sanitation in the 3 regions targeted by the project from 5% (at present) to 7.4% (+ 48%); 3) Reduction of the average rate of prevalence of water-borne diseases from 20% (at present) to 10% in the 3 regions (-50%); 4) Increase in the average consumption of water from 13l/day/inhab. for HOPs and 4l/day/inhab. for DWSS (at present) to 20l/day/inhab. for all the facilities. ASSUMPTIONS/ RISKS - Stable macroeconomic framework; - Institutional capacities of national and regional structures enhanced ; - Stable macroeconomic framework; - Institutional capacities of national and regional structures strengthened; - Funding for the national programme provided ACTIVITIES / INPUTS - DWSS infrastructure provided or rehabilitated in the three 3 regions of the project (Gao, Koulikoro and Ségou) ; - Family and public sanitation facilities provided in the 3 regions of the project ; - Reinforcement of national and regional project coordination and management structures; - Recruitment of consultants and auditors for works supervision, outreach/sensitization and auditing ; - Recruitment of contractors to carry out the works FINANCIAL RESOURCES ADF Loan : UA TFI Grant : UA Government: UA Beneficiaries : UA TOTAL : UA SHORT-TER M OUTPUTS By 2011 (end of project) 1) Provision of 522 new boreholes, 108 wells, rehabilitation of 220 boreholes, and 85 piezometers; 2) Provision of 5 new DWS systems, 8 SDWS, and 49 IVWSS ; 3) Establishment of 410 HOPs ; 4) Recruitment and training of 57 WUAs and 15 DWS and SDWS managers; 5) 9,810 household latrines provided; 6) 9,900 wash tubs with cesspools; 7) 115 public latrines provided ; 8) 200 small-scale bricklayers trained; 9) 200 school teachers trained ; 10) 400 health sensitization agents recruited and trained. Entire population of the 3 regions targeted by the project (3.1 million persons) Contractors, consulting firms, NGOs, etc. Village infrastructures public Structures concerned (DNH and DNACPN,) 1) Number of modern DWS facilities and water points provided; 2) Number of household and public sanitation facilities provided; 3) Number of sensitization campaigns carried out for beneficiary populations of the facilities. 4) Number of persons trained in intervention structures and village associations managing the facilities. Sources: Statistics and activity reports from DNH, DNACPN, DRHE, DRACPN, MATCT, MEF and DNS. By 2011 (end of project) 1) Rate of completion of boreholes (100%); 2) Rate of completion of wells (100%); 3) Rate of completion of new DWS systems, SDWS and IVWSS (100%); 4) Rate of rehabilitation of boreholes with HOPs and piezometers (100%); 5) Rate of establishment of HOPs (100%); 6) Rate of recruitment and training of WUAs and DWS and SDWS managers; (100%); 7) Rate of completion of household sanitation facilities (100%); 8) 200 small-scale bricklayers trained; 400 health and hygiene sensitization agents recruited. -Institutional capacities of decentralized structures (DRHE and DRACPN) and regional and local authorities enhanced ; - Contributions from the populations mobilized in time.

10 vii EXECUTIVE SUMMARY 1. INTRODUCTION 1.1 The water and sanitation sector is one of the priority sectors in Mali within the Growth and Poverty Reduction Strategic Framework (GPRSF) for the period. To meet the sector s development needs, the Authorities in September 2006 prepared a Drinking Water and Sanitation Sector Programme (PROSEA) for 2015, including access to both drinking water and sanitation. 1.2 The present project is a component of PROSEA. It is the Bank s second operation in the sector since the establishment of the Bank s Rural Drinking Water Supply and Sanitation Initiative. It was identified from the study on a drinking water supply and sanitation systems rehabilitation and development programme for Ségou region, financed by the Bank in PURPOSE OF THE FINANCIAL CONTRIBUTION The project will be financed through an ADF loan of UA 22 million and a grant from the Trust Fund of the Rural DWSS Initiative of an amount of EUR million (UA 10 million). This contribution will help to finance the construction and rehabilitation of water and sanitation infrastructures in three regions of the country. It will also provide institutional support to the project management structures at the national and regional levels. 3 OBJECTIVES The sector goal of the project is to contribute to the improvement of the socioeconomic and health conditions of the Malian population. Its specific priority objective is to improve drinking water supply and sanitation services in the three targeted regions (Gao, Koulikoro and Ségou). The provision of DWS structures will help to increase: (i) the average access rate to drinking water in 2012 from 49% to 56% for the targeted populations; and (ii) the average access rate to sanitation from 5% to 7%. 4. COSTS The estimated project cost, net of taxes, is UA million, comprising UA million in foreign exchange (62%) and UA million in local currency (38%). It also includes provision for physical contingencies (10%), as well as annual price escalation of 2% for foreign exchange and 2.4% for local currency. 6. SOURCES OF FINANCE The project will be financed by: (i) an ADF loan of UA million (or 60.45% of the total project cost); (ii) a grant from the Trust Fund of the DWSS Initiative of EUR million (UA 10 million or 27.49%); (iii) the contribution of the Government of Mali of UA 3.89 million (10.69%) and (iv) the contribution of the beneficiary populations of UA 0.5 million (1.37%).

11 viii 7. IMPLEMENTATION The Project Executing Agency will be the Ministry of Mines, Energy and Water (MMEE). The technical implementation of the project will be undertaken by the DNH and DNACPN for the drinking water and sanitation" components respectively. The DNH will be responsible for coordinating the implementation of the project. Lastly, the Steering Committee already established under the Drinking Water, Sanitation and Water Resources Sector Support Program (PASEPARE), financed by the Danish Co-operation, will be extended to this project to ensure the involvement of all stakeholders of the sector, as well as consideration of the other sector strategies. 8. CONCLUSIONS AND RECOMMENDATIONS 8.1 This project is consistent with the strategies of both the Government and the Bank aimed particularly at reducing poverty and increasing social facilities in rural and semi-rural areas. A concerted approach with the key donors of the sector prevailed throughout the project preparation and appraisal process. The project will make it possible to directly meet the needs of approximately people as regards access to drinking water, about people as concerns access to household sanitation, and people as concerns access to public sanitation. 8.2 For the implementation of this project, it is recommended that an ADF loan and a grant from the Trust Fund of the Initiative not exceeding UA 22 million and EUR million (UA 10 million) respectively be extended to the Government of Mali, subject to fulfillment of the conditions that will be specified in the loan agreement and the grant protocol of agreement.

12 1. ORIGIN AND BACKGROUND 1.1 In Mali, the average access rates to drinking water and sanitation are currently estimated at 67% and 5% respectively. Considering these low levels and the country s determination to achieve the Millennium Development Goals (MDGs), the Government s targets for drinking water and sanitation service rates are 82% and 20% respectively in Water and sanitation are also among its top priorities within the Growth and Poverty Reduction Strategic Framework (GPRSF) for the period. 1.2 Accordingly, the Government adopted a National Plan for Access to Drinking Water (PNAEP) by the year 2015, which was used in September 2006 as basis for the design of a Water and Sanitation Sector Programme (PROSEA) comprising three components, namely access to drinking water, access to sanitation, and integrated water resources management (IWRM). 1.3 Earlier on, in December 2004, the Government had submitted to the Bank a request for the financing of a programme for the construction, rehabilitation and development of DWSS systems in Ségou region, identified and prepared following Bank-financed studies. The present project is a component of the said program. It is consistent with the actions proposed and adopted in the first phase of PROSEA ( ). It will be the Bank s second operation in the sector since launching the Rural Drinking Water and Sanitation Initiative. 1.4 Two preparation and appraisal missions were undertaken in November 2006 and July 2007 respectively. A third mission to update the project was undertaken in December The components were defined in consultation with all donors of the sector. The present appraisal report is the result of the field trips and consultations organized with the beneficiaries, the Malian authorities, and development partners during these missions. 2. THE WATER AND SANITATION SECTOR 2.1 Characteristics of the Sector Water Resources: Mali has a high potential of water resources, consisting of perennial surface water, non-perennial surface water, and groundwater. Groundwater is the main source of drinking water supply for the populations. Its static reserves are estimated at billion m 3 with an annual renewal capacity of 66 billion m 3 of water, which is equivalent to less than 2.5%. On the whole, its water resources far exceed the requirements which, in the long term, could be satisfied. However, they are not sufficiently harnessed, are unevenly distributed, and sometimes poorly located in terms of utilization sites Access to drinking water: On the basis of one modern water point per 400 inhabitants and availability of 20 l/d/inhbt., the effective drinking water coverage rate, set on the basis of inventory carried out in 2003, shows that, except for Bamako District, (i) the basic water needs of 27% of the Malian population are covered on a permanent basis by modern water points; (ii) nearly two-thirds of the population do not have sufficient or steadily functioning water facilities to satisfy all their needs; and (iii) 9% of the population do not have access to drinking water. For Bamako District, the rate of satisfaction of drinking water needs is currently 60% on the basis of 43 l/day/person.

13 Access to sanitation services: In Mali, sanitation services are not developed. Sanitation facilities are insufficient and poorly maintained due to constraints relating to inadequate human, technical and financial resources Paying for drinking water in semi-urban and rural areas: In rural areas, the operating expenses of drinking water services are shared between the Government (expenses relating to the renewal of boreholes, reservoirs or water towers and the main drains) and users (expenses relating to fuels and lubricants, personnel, maintenance, servicing and repair of all the equipment, renewal of the pumping system, and branch lines). Two tariff systems are currently used for drinking water cost recovery borne by users: "flat-rate contributions and sale of water according to container capacity. Historically, the first system used was the flat-rate system or rates tailored to needs, and it remains the only means of selling water at boreholes with no water meters. The monthly flat-rate contribution varies from CFAF 150 to CFAF 500 per household. Water is sold in terms of quantity as follows: per m³ for private connections or in terms of quantity at the rate of CFAF 5 per bucket of 10 litres or CFAF 10 per can of 20 litres, representing a selling price of CFAF 500/m 3 far higher than the tariff of the social bracket in urban areas, which is CFAF 122 /m 3 This tariffing method is applied systematically to new projects that construct small-scale drinking water supply systems The field trips made during project appraisal revealed that: (i) there is a clear willingness to pay for the water service among users of boreholes and those of small-scale water supply systems, as the populations are aware of the importance of drinking water to health; (ii) however, the capacity to pay remains limited on account of the modest incomes in rural areas, leading to consumption not exceeding 10 l/d/inhab., with use of other water sources, where they exist, to satisfy other water needs. 2.2 Organization of the Sector Defining the overall policy of the water sector is the responsibility of the Ministry of Mines, Energy and Water (MMEE), through the National Directorate for Water Supply (DNH). The Ministry of the Environment and Sanitation (MEA) is responsible for developing and implementing hygiene and sanitation measures through the National Directorate of Sanitation and Pollution and Nuisance Control (DNACPN) Other Ministries intervene in the water and sanitation sector, particularly the Ministries responsible for Local Authorities, Health, Education, Agriculture, Planning and Finance, and Regional planning. Similarly, according to the January 1995 Law on the Local Authorities Code, municipal councils are lead actors in the management of public water and sanitation services Furthermore, the role of the private sector should grow as it assumes responsibility for services still provided by the Government, and for the design, construction and operation of water works. NGOs, which are many in the sector, are increasingly participating actively in financing, establishment of infrastructures, and sensitization of the populations Taking into account the multiplicity of the stakeholders and for purposes of integrated management of the sector, specific structures were put in place to play a consultative, coordinative, harmonizing and guidance role. These were: (i) the National Water Board and the Regional and Local Water Boards, set up by the law on the Water Code

14 3 and which are consultative bodies comprising all water sector stakeholders at the national, regional and local levels, (ii) the Coordinating Committee of the Water and Sanitation Sector (CCSEA) set up by Decree No /PM-RM of 27 December 1995, which provides a framework for the coordination of water and sanitation policies of public stakeholders in the water sector; (iii) the basin and sub-basin committees responsible for ensuring concerted management of the resources at the basin and sub-basin levels; and (iv) the Water and Electricity Regulatory Board (CREE) responsible for regulating the electricity sector and public drinking water supply in urban and semi-urban areas. 2.3 Sector Development Policy and Strategy The national water policy, adopted in February 2006, is based on the major guidelines defined in Law No of 31 January 2002 on the Water Code. This law establishes the principle of water as public property and its priority uses, the foremost being the satisfaction of the drinking water needs of the populations. It specifies the terms and conditions for the management and protection of water resources by determining the rights and obligations of the Government, the Local authorities and the Users. The national water policy defines the sector approach based on Integrated Water Resources Management (IWRM) and the strategic guidelines for the development of the sector In March 2000, the Government adopted a national drinking water supply and sanitation development strategy, which aims at implementing appropriate approaches, principles and concepts with respect to the financing, construction, operation and management of DWSS infrastructures. In 2006, the Bank supported the Government for the review of the strategy, so as to improve access to water for the most disadvantaged. The new strategy, which was validated by sector stakeholders in March 2007, is being approved by the Government. A national water resources monitoring and evaluation strategy is also being adopted As regards sanitation, the DNACPN is currently preparing, with support from the Danish Cooperation and the German Co-operation, the national sanitation policy and the national strategies for liquid wastes, solid wastes, special wastes and storm water. Regional and national workshops for the validation of these documents have already been organized. Evidence of their adoption no later than 31 July 2009 will be a condition for the loan and the grant. 2.4 PROSEA The Water and Sanitation Sector Programme (PROSEA) is the only instrument that Mali intends to use in achieving the MDGs for the DWSS sector. It is being prepared under the aegis of MMEE, through the DNH, with donor support. Over and above the policies and strategies, PROSEA is based on the three major action plans, namely the National Programme for Access to Drinking Water, the National Sanitation Strategy and Plan, and the Action plan for Integrated Water Resources Management (PAGIRE) Besides putting in place a unified and comprehensive national programming and budgetary framework, one of the major objectives of PROSEA is to develop sustainable access to drinking water and sanitation by improving consistency between the two subsectors with respect to the objectives to be achieved under PRSP II and the MDGs. These objectives, for the water sector, should translate, into: (i) increased coverage rate from the

15 4 current 67% to 82% in 2015; and (ii) for the sanitation sector, increased coverage rate from the current 5% to 20% in In rural and semi-urban areas, the expected outcome is the provision of drinking water access to 4.2 million more people. 2.5 Opportunities and Constraints The water and sanitation sector enjoys major advantages, including: (i) a clear definition of the decentralization options, specifying the transfer of powers to local authorities over drinking water and sanitation; (ii) the existence of dynamic women s cooperatives and associations for the education and sensitization of households on hygiene and sanitation; (iii) a clear understanding by the populations of the need to pay for water despite poverty; and (iv) the existence of low-cost technologies, as well as the easy transfer of contractorship to local bricklayers, thus facilitating rapid coverage of rural areas However, the sector faces certain physical and institutional constraints. Indeed, the high water resources potential is dropping and deteriorating increasingly on account of the degradation of Mali s physical environment over the past forty years. Moreover, the existing mechanisms for determining and monitoring these resources, their protection where necessary, and their integrated management are inadequate and inoperative. There are only 210 points of measurement (88 boreholes and 122 wells) for all the water tables in the country. In this regard, the project envisages the rehabilitation of 85 piezometers At the institutional level, the key constraints on the development of the sector are: (i) the overlapping of roles and responsibilities between various institutions, notably for sanitation (MMEE, MEA and the Ministry of Health); (ii) weak institutional capacity of the structure in charge of sanitation; (iii) the lack of a sanitation policy; and (iv) weak capacity of the private sector. 2.6 Financing of the Sector Since 1993, all the budgets allocated to the sector total approximately CFAF billion, of which external financing is estimated at 90%. However, it is difficult to determine the exact amount allocated to the sanitation sub-sector, which does not always feature under the Special Investment Budget. In any case, this sub-sector remains insufficiently resourced considering its substantial requirements The total cost of the rural drinking water program by 2015 is estimated, according to the PNAEP, at CFAF 394 billion (UA 538 million). The cost of the first phase of PROSEA in rural and semi-urban areas ( ), under which this project falls, is estimated: (i) for drinking water, at CFAF 98.1 billion (UA 134 million), of which the amount of CFAF billion (UA 63 million) is already secured under ongoing projects and programmes, (ii) for sanitation, at CFAF billion (UA 46 million), of which CFAF 6.75 billion (UA 9 million) is already secured under ongoing projects and programmes. The financing requirements for the 1 st phase of PROSEA ( ) are estimated at CFAF billion (UA 180 million). The amount of financing secured is CFAF 53 billion (UA 72 million), leaving a financing gap of CFAF billion (UA 109 million). The Bank s financing will thus cover 30% of the deficit.

16 The outcomes of the Bank s operations in the country are positive on the whole. Since starting its activities in Mali, the Bank has financed several operations in the sector for a cumulative amount of UA million. This amount does not take into account the village water supply component contained in several agricultural sector projects. Two operations are currently ongoing, notably the first Rural Drinking Water Supply and Sanitation Sub-programme in Gao and Kidal regions, and the studies on the liquid waste sanitation master plan for Bamako District. Annex 10 gives the detailed implementation status of the first DWSS sub-programme which, as at 14 April 2008, showed a physical implementation rate of 60% and should be completed in March The studies on the Bamako liquid sanitation master plan are ongoing, and are used in preparing an essential planning tool for the implementation of an appropriate sanitation programme by Lessons learnt from Donor Operations An assessment of the programmes and projects carried out in the sector often reveals that lack of participation and ownership by the populations. This is due to the limited human and financial resources devoted to this activity, the weak capacities and sometimes the lack of experience of the field workers used by the technical services, NGOs and consulting firms On the whole, the key lessons learnt from the projects carried out in the country concern: (i) the need to streamline the loan conditions as much as possible, so as to avoid delays in the implementation schedule of projects; (ii) the importance of conducting IEC campaigns before, during and after the implementation of the project; (iii) the need to provide for resources to support the financing of latrines; and (iv) the weak capacities of national contractors. These observations were taken into account in the design and formulation of this project Lastly, the actions of the sector donors were not sufficiently coordinated to produce a more significant impact. The establishment of a consultation framework for the MMEE and TFPs operating in the sector, as well as the signing of a memorandum of understanding between the TFPs in June 2007 laid the groundwork for better coordination in the sector. 3. THE RURAL DWSS SUB-SECTOR 3.1 Organization The semi-urban and rural water sector falls under the National Directorate for Water supply (DNH) of MMEE, whose role is to develop national water supply policy tools, coordinate and conduct technical control of regional, sub-regional and attached services which contribute to the implementation of the said policy. This structure has solid experience in monitoring the implementation of projects and programmes with seasoned technical staff (about 36 engineers). The DNH comprises decentralized structures in the regions of the country, notably the Regional Directorates and Sub-regional Water Supply and Energy Services (DRHE and SSRHE). They are responsible mainly for assisting, coordinating and controlling the various stakeholders and their activities in the water and energy sectors, and providing support and advisory services to local authorities in the formulation, search for financing and implementation of their water and energy infrastructure programmes.

17 However, the current texts organizing the DNH does not take into account the new responsibilities defined by the Water Code adopted in 2002, or those required to govern the implementation of the policy on decentralization and support and advisory services for the local authorities, or the new concepts of integrated management of water resources. Thus, to have an efficient structure, an organizational study on the DNH will be conducted to adapt it to the new institutional context Concerning the National Directorate for Sanitation, and Pollution and Nuisance Control (DNACPN) of MEA, its role is to prepare national policy tools as regards sanitation and the control of pollution and nuisances, and to ensure their implementation. It also comprises decentralized structures in the regions of the country. However, this structure has major weaknesses at the institutional level. Indeed, the DNACPN has inadequate human resources in quantity and quality, which prevents it from fully playing its role. Moreover, in view of its relatively recent creation, it is yet to acquire experience in the implementation of projects and programmes. That is why considerable logistic support is envisaged in this project for the Directorate Since the implementation of the law on the Local Authorities Code and the adoption by the Government of the bill on the Water Code, the regional and local authorities are responsible for the implementation of semi-urban and rural DWSS projects, with the technical support of Government services. 3.2 Gender and Socio-economic Development Issues Women represent 51.7% of the population, of which 80% live in rural areas. They constitute the population group with the highest rate of illiteracy. Indeed, according to EDS III 2001, 80% of Malian women have no level of education (this rate is around 98% in rural areas). They represent 11.3% at the primary education level, 4.9 % in secondary education, and 3.8% in higher education, with a high drop-out rate due to socio-cultural constraints (early marriages) and their full involvement in various household chores, including fetching drinking water and farming. Having too much to do, they have little or no access to information and extension services. These deficiencies affect their socio-political status (difficulties of expressing their views, poor representation in decision-making organs, etc.). This applies to the water and sanitation committees, as well as the water users associations in which women s representation is almost nil. All these social shortcomings keep them in a vicious circle of poverty. In Mali, 64.2% of women live below the poverty line, according to EDS III As regards the gender mainstreaming strategy in the water and sanitation sector, more efforts still need to be made. Collaboration between the Ministry responsible for women s affairs and the other partners, notably the Ministries and civil society organizations, remains insufficient. Concerning the water and sanitation sector where women are essential stakeholders, it is therefore vital to develop an action plan with the following key objectives: (i) ensure equitable participation of men and women in the resolution of water and sanitation problems (design, procurement, management and use), and (ii) develop a strategy for training and informing women on water and sanitation sector trades. The study, whose TOR should be finalized by the DNH in collaboration with the Department for Women s Promotion, will be conducted under this project. Lastly, the project intends to: (i) assign to women all the posts of water well drillers that will be created; (ii) entrust the management of public latrines to women s associations; and (iii) provide logistic support to a coordination of women s associations and NGOs in order to strengthen its action capacity.

18 7 3.3 Bank Group Strategy The Bank s medium-term intervention strategy in Mali, defined in the Country Strategy Paper (CSP) proposes, for the period, a strategy of accelerated growth centered on the development of the private sector and building of the capacities of vulnerable groups. In particular, the CSP is based on two pillars, which are a synthesis of the strategic actions of the PRSP, namely: (i) improvement of the private sector s competitiveness and environment; and, (i) strengthening of the capacities and participation of the poor in growth. To this end, the Bank will concentrate its interventions on grassroots communities and occupational groups organized through private sector support operations and sector investment plans in the rural development, public utilities and social sectors. Furthermore, this project falls within the framework of the rural DWSS Initiative of the Bank, which aims at contributing to poverty reduction among the rural populations. 4. THE PROJECT 4.1 Design and Rationale This project is a component of PROSEA. It was formulated in accordance with the current policy and strategies in the sector, namely the national water policy, the national policy on decentralization, the national strategy for rural and semi-urban drinking water supply and sanitation, and the Water Code. The key principles of these documents are: (i) support to the central and decentralized technical structures intervening in the sector, the local authorities and beneficiaries; (ii) systematic inclusion of the promotion of individual hygiene and sanitation, and adoption of an approach to sanitation in a broad sense in semi-urban areas; (iii) systematic gender mainstreaming in the activities; and the (iv) outsourcing of works and services to the national private sector, and professionalization of the operation and maintenance of drinking water supply infrastructures. The project will adopt the principle of the council ownership of projects. With this principle, the councils will play a key role in the following activities: (i) providing information on the project to the communities, (ii) outreach activities and sensitization of the populations in the project areas; and (iii) selection of requests for water supply structures, and assessment and approval of the community files The design of the project is based on: (i) the basic schedule prepared at the national level for the preparation of the PBO and MTEF; and (ii) programming of works on the basis of Council Social, Economic, and Cultural Development Plans (PDSEC) which implies the participation, and requests from users and local elected officers. Standard technical solutions for household drinking water supply and sanitation are adopted and adapted to the geological and hydro-geological context of each region. Some small collective sanitation structures will be designed to facilitate use by handicapped persons. To that end, the project will draw from standard plans being developed by the DNACPN with support from the Danish Co-operation. The "logistic support" and "technical assistance" components of the project have been defined in consultation with the other development partners to take into account actions concerning the implementation of PROSEA Hence, the project falls within the institutional framework and national strategy for the sector, provide for key actors to be the Government and its decentralized services, the municipal councils, the private sector, and civil society stakeholders (water users associations and NGOs). It closely links health education activities with the construction of water points and sanitation systems. It envisages capacity building for the decentralized

19 8 services of the Government to enable them to assist the local authorities in providing infrastructures. In accordance with the national policy for the sub-sector, the management of future water supply systems will be entrusted to private operators. Furthermore, the project fits into the national structures and reforms centered on the programme budget approach. The project coordination, financial management and procurements are entirely entrusted to Government structures, without the creation of a parallel management structure. The project is also gender-sensitive, notably in terms of building the managerial capacities of women in the sector and improving their socio-economic status The project outputs concern primarily Ségou and Gao regions which, taking into account the ongoing projects, would by 2011 have access rates below the national average of 73.2%. As regards the choice of Koulikoro region, it was dictated by the need to support, through the construction of water points, the Community Development Support Project (PADEC), intended to be the second phase of the Poverty Reduction Project (PRP), financed by the Bank and completed in Project Objectives The sector goal of the project is to contribute to the improvement of the socioeconomic and health conditions of the rural and semi-rural populations. Its specific priority objective is to improve rural and semi-rural drinking water and sanitation services in the three targeted regions (Gao, Koulikoro and Ségou) The provision of DWS facilities will contribute to increase the average access rate to drinking water for the targeted rural populations from 49% to 56% in Regarding sanitation, the average access rate in the three regions is estimated at 5%, and the implementation of the project will contribute to raise this rate to 7%. 4.3 Priority Project Areas and Target Populations The project area covers Gao, Koulikoro and Ségou regions. These zones were chosen for two main reasons: (i) in 2006, Gao, Koulikoro and Ségou regions had drinking water access rates that were among the lowest in the country with 70%, 50% and 44% respectively, as against a national average rate estimated at 67.3%; as regards sanitation, the overall situation of the project area is characterized by an individual sanitation coverage rate of almost nil; and (ii) the need to consolidate the actions already undertaken by the Bank in Gao region with the first DWSS sub-program project and in Koulikoro region with the Community Development Support Project (PADEC), which is intended to be the second phase of the Poverty Reduction Project (PRP), financed by the Bank and completed in Poverty profile in the area: The poverty indices of the project regions are 78.7% for Gao region, 59.5% for Koulikoro region, and 68.2% for Ségou region, as against a national average of 59.2%. The health situation of these regions, where malaria and diarrhoeal diseases are endemic, is precarious. For instance, from 1995 to 2005, Ségou, Gao and Koulikoro regions recorded cholera prevalence rates of 10.10%, 7.87% and 4.06 % respectively. For diarrhoea, Ségou region has the second highest prevalence rate in the country with 19.24%.

20 Target populations: The total rural population of the zones concerned was estimated at inhabitants in 2007, distributed as follows: Gao ( ), Ségou ( ) and Koulikoro ( ). The population growth rate is high, with 2.2% for Gao, 2.1% for Ségou, and 2.5 % for Koulikoro. The implementation of the project will meet the needs of approximately inhabitants for drinking water, persons for access to household sanitation, and persons for access to public sanitation. 4.4 Strategic Context The project will be implemented under the poverty Reduction Strategy Framework (PRSF) and PROSEA. One of the major strategic actions of the PRSP concerns human resources development and improvement of access to basic social services. In addition, the project is consistent with the strategic guidelines of the Results- Based Country Strategy Paper (RBCSP) of the Bank, which defines water and sanitation as a priority intervention sector in Mali. 4.5 Project Description The project is consists of the following components: (A) Development of basic DWSS infrastructures; (B) Institutional support to structures intervening in the project; and (C) Project Coordination and Management. Component A: Development of Basic DWSS Infrastructures Drinking water supply in the rural areas of the project: This activity concerns: (i) the provision of 522 new positive boreholes; (ii) the provision of 24 heavy-flow boreholes for drinking water supply networks, 45 catchment wells and 63 tank wells; (iii) the rehabilitation of 220 positive boreholes equipped with hand-operated pumps (HOPs); (iv) the installation of 410 hand-operated pumps (HOPs); (v) the rehabilitation of 85 boreholes equipped with piezometers; (vi) the construction of 8 new simplified drinking water supply systems (SDWSS); (vii) the construction of 5 new drinking water supply networks; (viii) the construction of 49 improved village water supply systems (IVWSS); (ix) the creation and training of 57 water users associations (WUAs); (x) the training of 15 DWS and WSS managers and 285 councillors; and (xi) the conduct of IEC campaigns in villages Household and public sanitation in rural areas : The project will: (i) construct 9,810 new family latrines; (ii) construct 9,900 washtubs with household cesspools; (iii) construct 115 new multi-compartment ventilated public latrines, equipped with wash-stands in schools, village health centres, and markets; (iv) train 200 small bricklayers; (v) train 200 school teachers to sensitize the population on hygiene; and (vi) the recruitment of approximately 400 health and hygiene sensitization agents for village sanitation structures Control and supervision of project works and IEC campaigns: These activities concern the recruitment of consulting firms and NGOs for: (i) the control and supervision of construction works; and (ii) community training, sensitization and outreach. The IEC, sensitization and outreach campaigns will be conducted on themes such as hygiene and maintenance of latrines and water points, water chlorination, malaria prevention, compost production, fruit-tree seedlings production, the fight against deforestation, and the prevention of STI/HIV/AIDS.

21 10 Component B: Institutional support for structures involved in the project Building the capacities of Government structures concerned with the sector: This support will consist in: (i) procurement of vehicles and office and computer equipment for the DNH, the DNACPN and their entities for field monitoring and supervision missions in the three regions of the project; (ii) procurement of technical field equipment (water analysis kits, GPS equipment, and piezometric probes) for the DNH and the three DRHEs, and (iii) procurement of field water analysis comparators for the three regional health directorates concerned with the project Putting in place and building of the capacities of WUAs, Councils and Private Operators: Support will be provided for the setting up of 57 WUAs and training of 15 DWS and DWS managers in the three regions. The local stakeholder capacity building activities envisaged are: (i) briefings in each District for members of the councils and water point management boards; (ii) training of WUA leaders; and (iii) training of private operators in DWS management. The project will also provide logistic support for the coordination of women s associations and NGOs of Mali (CAFO). The councillors, management boards, WUAs and women s associations and NGOs will receive training on gender, advocacy, decentralization and good governance Support for the implementation of PROSEA : The project will finance: (i) the study on the joint financing mechanism, whose ToR will be finalized in collaboration with the other TFPs; and (ii) the institutional study on the DNH, whose ToR are being validated by the TFPs. Component C: Project Management and Coordination This concerns: (i) general coordination of the project; and (ii) auditing of project accounts. The project will finance the allowances, perdiems and vehicle operating costs. An external audit firm will be also recruited. 4.6 Project Costs The estimated project cost, net of taxes, stands at UA million, comprising UA million in foreign currency (62%) and UA million in local currency (38%). It also includes provisions for physical contingencies of 10% and annual price escalation of 2% for foreign currency and 2.4% for local currency. Table 4.6 below gives a summary of the project costs by component.

22 11 Table 4.6 Summary of Project Cost Estimates by Component Components CFAF Million UA Million % of FC LC Total FC LC Total total A. Basic infrastructure Rehabilitation of boreholes and piezometers % New boreholes for HOPs. IVWSS & new boreholes for DWS networks % Catchment wells, tank wells % Drinking water supply (DWS) including networks % SDW & IVWSS including networks % Pumping equipment (HOPs+ superstructures) % Household latrines % Public latrines % Environmental monitoring % IEC campaigns DWS and sanitation works % Supervision and inspection of DWS works % 21 Sub- total of basic infrastructure % B. Institutional support Vehicles DNH+DNACP(including regional directorates) % Office and computer equipment DNH+DNACPN % Technical field equipment % Support to local stakeholder capacity building % Technical assistance and studies Fund % Sub- total of institutional support % C. Project coordination and management Personnel % Operating expenses % Annual audit of project accounts % Sub-total of project coordination and management % 23 Total basic cost % Physical contingencies % Provisions for inflation % TOTAL PROJECT COST % 4.7 Sources of Finance and Expenditure Schedule The financing plan of the project is given in Table 4.7 below. The table of sources of finance by component, as well as the expenditure schedule by source of finance, are given in Annex 7.

23 12 Table 4.7 Sources of Finance UA Million Expenditure Category FC LC Total % of Total ADF RWSSI BENEFICIARIES GOVERNMENT TOTAL PROJECT COST PROJECT IMPLEMENTATION 5.1 Executing Agency The DNH of the Ministry for Mines, Energy and Water will be the executing agency of the project, and will be responsible for its general coordination. The technical implementation will be carried out, at the national level, by the DNH and DNACPN for the water and sanitation components respectively In terms of coordination, the DNH will perform the following tasks: (i) ensure that the Government commitments, as specified in the Bank s loan and grant agreement, are honoured; (ii) prepare documents for the Government s fulfillment of the loan and grant conditions; (iii) prepare project progress reports, in collaboration with the DNACPN; (iv) manage the competitive bidding procedures, except for those relating to the construction of sanitation facilities; (v) prepare the budgets of counterpart funds and ensure their provision according to schedule; and (vi) carry out the financial management of the project For the implementation of the two components, the DNH and DNACPN will be responsible, each in its own sub-sector, for: (i) supporting the technical divisions (rural water supply, urban water supply and sanitation) in the implementation of their components, particularly the IEC and monitoring and evaluation activities; (ii) ensuring that the regional directorates prepare the operating plans (procurements. disbursements) and monitor them; (vii) supporting the regional directorates in the processing of requests for works initiated by the populations, the selection of contractors, as well as the monitoring and inspection of works; (iii) ensuring compliance with the implementation schedule of studies and works under the regional directorates The DNH will be reinforced by an accountant placed at its disposal by the Borrower. Furthermore, the current head of the national unit of the "Drinking Water" component of the first sub-programme will be the focal point of this project for monitoring the day-to-day coordination tasks. Given its more serious institutional weaknesses, the DNACPN will be reinforced by four resource persons placed at its disposal by the Borrower: an accounting and financial officer, a procurement expert, a sanitary engineer and a Socio economist. The CVs of these four officers will be submitted beforehand to the Bank for its opinion. Evidence of provision by the Government of the abovementioned personnel will be a condition for the loan and grant.

24 The project will also rely on the decentralized structures of the DNH and DNACPN. The Regional Directorates will be responsible for monitoring the activities and ensuring their technical quality in their areas of operation, with the assistance of national directorates. Each regional directorate will be reinforced by an accountant provided by the Borrower An administrative, financial and accounting procedures manual will be prepared. It will present, in particular, the methods of managing the separate accounts which will be opened, and of implementing the community works carried out under the project (construction of household latrines). A consultant will be recruited for this purpose, and will be financed by the resources of the ongoing project. 5.2 Steering Organs The Steering Committee of the project, already established with Danish financing and which will be extended to this project, will coordinate the project activities and ensure their coherence with the current sector policies. The committee will be responsible for: (i) approving the planning and budgeting documents; (ii) ensuring that the approved annual budgets are consolidated and included each year in the Finance Law; and (iii) monitoring the overall progress of the project on the basis of progress reports At the regional level, the project will use existing regional consultation frameworks, which will ensure close cooperation between the various partners at the regional level in order to avoid overlapping. 5.3 Implementation and Supervision Schedule The project implementation will cover a 40-month period, as from September Work will start in April 2009, and will span 28 months, excluding the rainy season. The Bank will undertake: (i) a launching mission; (ii) regular supervision missions; and (iii) a mid-term review mission in September The indicative implementation schedule of the project, given in detail in Annex 3, is summarized below. Activity Responsible Date /Period Approval of the loan ADF June 2008 Effectiveness ADF/GVT Sept 2008 Invitation of bids DNH/ADF Sept 2008 to Dec 2008 Bid evaluation and contract awards DNH/ADF Nov to Feb 2009 Signing of contracts GVT Feb March 2009 Mobilization of inspection firms GVT March 2009 Works GVT/Contractors April 2009 Nov 2011 End of Project GVT Feb Procurement Arrangements The procurement of goods and works through competitive bidding or local shopping will be conducted in accordance with the national procurement procedures defined in the Public Procurement Code of Mali and the decrees and implementing orders already considered acceptable by the Bank and already used successfully in the first sub-programme. Knowledge of these procedures by all the stakeholders involved in this project made it possible to achieve reasonable procurement time-frames in the first sub-programme.

25 14 Furthermore, the presence of experts in the Country Office in Mali is likely to improve the procurement process. For international competitive bidding and recruitment of consultants, the rules of procedure of the Bank will be applied. The table below, as well as Annex 8, give details of procurements under the project: Table 5.1 Procurement Arrangements (UA million) DESCRIPTION ICB NCB Short- list Others Total A. WORKS (24.58) Rehabilitation of boreholes and piezometers (1.01) (1.01) New boreholes for HOPs, IVWSS & new boreholes for DWS networks (4.94 ) (4.94) Catchment wells, tank wells and rehabilitation of wells (1.80) (0.85) (2.65) Drinking water supply (DWS), including networks (7.27) (7.27) DWS & IVWSS including networks (2.48) (2.48) Pumping equipment (HOPs+ superstructures) (0.95) (0.95) Household latrines (4.64) (4.64) Public latrines (0.62) (0.62) B. GOODS 0.44 (0.44) Rolling stock DNH+DNACP(including regional directorates) (0.27) (0.27) Technical field equipment (0.02) (0.02) Office and computer equipment DNH+DNACPN (0.15) (0.15) C. SERVICES 6.68 (6.50) Support for local stakeholder capacity building (0.77 ) (0.77) Technical Assistance Fund (0.32 ) (0.32) (0.64) Supervision and inspection of DWS works (2.56) (2.56) IEC campaigns DWS and sanitation structures (2.03) (2.03) Monitoring and evaluation, and environmental monitoring (0.42) (0.42) Audit (0.08 ) (0.08) D. MISCELLANEOUS 1.47 (0.50) Coordination (salaries ) Operating expenses (Per diem. maintenance of equipment, supplies, telephone, electricity etc.) (0.48 ) (0.48) Total (16.49) (3.43) (6.28) (5.88) (32.00)

26 15 - The amounts in brackets are Bank Group contributions; - Others refers to local shopping, direct negotiation, award of contracts under projects with community participation, support to the technical services involved, and payment of allowances. 5.5 Disbursement Arrangements The disbursements will be made through the following three methods: separate account, direct payment and reimbursement, if need be. The direct payment method will be used for payments concerning contracts for: (i) drilling of boreholes, wells, rehabilitation of boreholes and piezometers, construction of structures and networks of DWS, SDW and IVWSS, supply and installation of pumping equipment and construction of public latrines; (ii) the procurement of rolling stock, technical field equipment, computer and office automation equipment; and (iii) work inspection and monitoring services. As concerns the auditing of accounts, IEC, operating expenditure and support to structures, the Bank will use the separate account method for disbursements below UA This method will also be used for household sanitation Two separate accounts will be opened in commercial banks acceptable to the Fund, to receive the loan and grant resources respectively. The accounts will be funded by an initial payment on the basis of an expenditure programme not exceeding six (6) months of activities approved beforehand by the Bank. They will be replenished periodically on presentation of a disbursement request and after satisfactory justification of the use of at least 50% of the preceding transfer and of all previous advances. Evidence of the opening of the two separate accounts will be a condition for the disbursement of the loan and grant resources. 5.6 Financial and Audit Reports Every three months, the DNACPN and DNH will report on progress of their respective components. The DNH will then produce a quarterly consolidated report on the progress of the project to be transmitted to the Bank within no more than one month of the end of the quarter concerned. These quarterly reports will give the implementation status of all the project components An audit firm will be recruited to carry out the annual audit of project accounts. The annual audit reports will be sent to the Bank within no more than six months from the end of the fiscal year concerned. 5.7 Partnerships One of the objectives of PROSEA is to establish an operational coordination framework with all the partners, and consultation frameworks with water and sanitation sector stakeholders. Since 2004, consultation meetings between the technical and financial partners represented in Mali and the Government are organized periodically. The partnership framework between the Government and the technical and financial partners of the water and liquid sanitation sector was signed on 2 June 2007 to contribute to stakeholder consultation in the preparation of PROSEA. The preparation process of this programme has so far been participatory, given that at each stage (Water Initiative, PNAEP, PROSEPA and PROSEA) there has been constant consultation between the Government and the partners.

27 Project Sustainability and Risks Expenses relating to the management and maintenance of structures The estimates of recurrent costs and annual receipts of a WUA were made on the basis of data from the field. For the HOPs, three cases were studied (villages of 400, 700 and 1500 inhabitants) on the basis of consumption of 20l/day/inhabitant and a water selling price of CFAF 500/m 3 Furthermore, the actual rate of service of the population is estimated at 56%. On this assumption, the estimated operation will generate a positive income of between CFAF (village of 400 inhabitants) and CFAF (village of 1500 inhabitants) In the case of a WUA being supplied by a DWS, a SDW or an IVWSS, three cases were also studied: one case corresponding to a system whose flow is equal to 5 m 3 h and two other cases corresponding to systems with higher flows (7 and 10 m 3 / h respectively). On this assumption, the estimated operation will generate positive annual income of between CFAF (5 m 3 /h) and CFAF (10 m 3 / h). These standard estimated operating accounts show that the operation of the project structures is an activity that generates a positive operating income. Sustainability In accordance with the national strategy, the HOPs will be managed by a water point management board at the village level. The management method for DWS systems will constitute a special challenge for the project in that it needs to contribute to the professionalization of the management of these facilities and to abandon the community management system. Such professionalization could take various forms: recruitment by the WUA/project owner of professional personnel, delegation of the operation and maintenance to a private operator, or use of a leasing system. The DRHE, in agreement with the DNH, will thus have to develop methods of management and remuneration capable of satisfying the beneficiaries and at the same time attracting the private sector for which water supply system management represents a new business activity. The Council will be responsible for approving the water tariffs applied in each case For the HOPs, there is an adequate network of well-trained repairmen to meet the needs throughout the country. Moreover, women s involvement in mobilizing and sensitizing households will facilitate ownership of the household hygiene and sanitation structures. Monitoring and Evaluation Pending the establishment of a sector monitoring and evaluation system which is envisaged under PROSEA, the monitoring and evaluation system will comprise: (a) surveys (including qualitative surveys) at the start-up, mid-term and end of the program, (b) participatory preparation of the monitoring indicators; (c) recruitment of experts charged with monitoring and evaluation, and (d) training of the various stakeholders workers to collect and monitor information relating to their respective activities. Local firms will be recruited to undertake annual monitoring and evaluation missions to assess project impacts. The results of these missions should be included in the periodic reports sent to the Bank. They will also serve as basis for the supervision missions of the Bank or other donors. The DNH and DNACPN will be responsible for this exercise. Under this project, a mid-term review will be

28 17 conducted in September 2010, on the basis of the mid-term monitoring indicators given below. Furthermore, a gender and socio-economic impact study will be conducted at the end of the project in order to provide the DNH with an effective tool for monitoring DWSS projects. Mid-term project review indicators at end -September 2010 Number of boreholes with HOPs rehabilitated : 135 Number of piezometers rehabilitated : 40 Number of new boreholes constructed : 175 Number of wells constructed : 45 Number of DWS and IVWSS constructed : 21 Number of drinking water supply systems created : 2 Number of HOPs installed : 100 Number of appropriate sanitation systems constructed: 2990 Number of small bricklayers trained : 200 Number of WUA put in place : 20 Number of DWSS / DWS operators put in place and trained : 7 Number of health agents put in place for sensitization to public hygiene : 400 Project performance indicators in terms of impact on development at mid-term Reduction in the average prevalence rate of water-borne diseases : from 20% (at present) to 10% Reduction in the infant mortality rate : from 196 per thousand (at present) to 163 per thousand Project Risks The institutional weakness of the central structures is the major risk of the project. To cope with this problem, the human resources of these structures, mainly the DNACPN, will be reinforced. Furthermore, the project will enhance their material, technical and financial resources. Lastly, the project will co-finance the study on the DNH structure which, on the basis of a critical analysis of its current organization and operation (central and regional level), will suggest scenarios for a new organization in line with the new legislation and strategies of the sector. The other stakeholders (NGOs, women s associations, craftsmen and bricklayers, etc.) will benefit from the training activities financed under the project The second risk of the project is poor sensitization of the populations on the relationship between poor hygiene practices and the prevalence of the most widespread diseases. This situation is reflected by the relative reluctance of the populations to pay their contributions to household latrines. To mitigate this risk, the project plans to finance major IEC campaigns before, during, and after project activities. 6. ANALYSIS OF PROJECT IMPACTS 6.1 Economic Impact Analysis The assessment criterion adopted is the internal economic rate of return (IERR). The assumptions used for calculating the IERR are given in Annex 6. On the basis of the adopted assumptions, the DWS component of the project will generate an IERR of %. This rate is quite satisfactory for a project of this nature.

29 Sensitivity Analysis The sensitivity analysis of the project ERR is based on the following three assumptions: (i) a 10% increase in operating costs; (ii) a 10% reduction of water sales; and (iii) a 10% combined increase of operating costs and capital costs. Under the first assumption, the ERR drops from 12.67% to 12.59%, while under the second and third assumptions, it drops to 10.59% and 10.21% respectively. This sensitivity analysis shows that the selling price of water has a significant impact on the economic and financial performance of the project. 6.3 Social Impact Analysis The project benefits will come primarily from the additional jobs created for the works. Furthermore, the recruitment and capacity building for bricklayers, repairmen and water point and network managers will generate new jobs and increase financial incomes The improved rates of access to drinking water and adequate sanitation, coupled with constant health education campaigns will bring about: (i) more hygienic water supply conditions; (ii) improved domestic hygiene and cleanliness of public utilities; (iii) reduction of pollution of the streets, public places and the water table thanks to the good quality latrines and public lavatories; (iv) training on the use and maintenance of household latrines, public places and schools; (v) acquisition of the habit of using water and soap after nature's call and in housework; and (vi) healthier food for the populations, and particularly children under who are severely threatened by diarrheal diseases. The impact of the decline in water-borne diseases on the reduction of health expenses will also be significant in terms of household monetary benefits. 6.4 Analysis of Impact on Women In a country where 40% of rural households live more than 1 km away from a modern water point, fetching drinking water is indeed demanding in terms of time and effort on women and girls. As a result, there is significant girls absenteeism or even drop-out from schools, one of the causes being the daily water collection chores. The project will help to alleviate the water collection chore and boost incomes as the time spent fetching water for household consumption and production (market gardening, livestock, and handicraft) can be devoted to income-generating activities and education. The project will also reinforce the girls education policy, initiated by the authorities in 2007, which adopted as an incentive measure, the systematic construction of separate water points and latrines for boys and girls in the new schools The project will have positive impacts on the day-to-day personal and social wellbeing of women and girls (privacy, user-friendliness, proximity and safety). Women s involvement in the management of public standpipes and latrines will help to empower them economically and in decision-making. The project will also provide an opportunity for advocacy among the authorities for further gender mainstreaming in the sector. 6.5 Analysis of Environmental Impacts At the environmental level, the project is classified in category II. It provides many environmental benefits, and its negative impacts will be easily controlled through the

30 19 implementation of appropriate mitigation measures. An assessment indicates that the environmental impacts of the project will be significantly positive for the beneficiary populations. The summary of the ESMP is given in Annex 5. 7 CONCLUSION AND RECOMMENDATIONS 7.1 Conclusion The project is based on the Bank s strategy for Mali, as defined by the RBCSP, which considers the water and sanitation sector as a top priority. It is a logical follow-up to the Bank s first DWSS operation in the country, and is consistent with the Government s Growth and Poverty Reduction Strategy Paper. It is technically feasible, financially and economically viable, and socially justified. 7.2 Recommendations and Conditions It is recommended that an ADF loan and a grant from the Trust Fund of the Initiative, not exceeding UA 22 million and Euros million respectively, be granted to Mali to carry out this project subject to fulfilment of the following conditions: A. Conditions precedent to effectiveness of the loan and grant The effectiveness of the loan agreement shall be subject to fulfilment, by the Borrower, of the conditions specified in Section of the General Conditions. The Memorandum of Understanding of the grant shall be effective upon signature. B Conditions precedent to the first disbursement of the loan and grant The Fund will release the first disbursement of the resources of the loan and the grant only if the Borrower, in addition to the effectiveness of the loan Agreement and the Memorandum of Understanding of the grant, has fulfilled to the satisfaction of the Fund, the following commitments and conditions: Conditions precedent to the first disbursement (i) (ii) (iii) Provide the Fund with evidence of the opening of two special accounts by the Borrower for each national directorate to receive the resources from the ADF and the Trust Fund of the Initiative respectively intended for community works, institutional support and coordination (paragraph 5.6.2); Provide evidence of assignment to the DNACPN of a sanitary engineer, a procurement expert, an accounting and financial officer, and a socioeconomist, whose respective CVs shall be submitted to the ADF for prior approval (paragraph and 5.9.6); Provide evidence of assignment of an accountant to the DNH and to each Regional Water Supply and Sanitation Directorate concerned with the project (paragraphs and 5.1.5).

31 20 Other Conditions (i) Provide the Fund with evidence of the adoption of the national sanitation policy and strategy documents not later than 31 July 2009 (paragraph 2.3.3).

32 ANNEX 1 DWSS Project in Gao, Koulikoro and Ségou Regions: Map of the Project Area This map was prepared by staff of the African Development Bank for use exclusively by readers of the report to which it is attached. The names used and the borders shown do not imply on the part of the Bank and its members any judgement concerning the legal status of a territory nor any approval or acceptance of these borders.

33 ANNEX 2 Page 1 of 2

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35 ANNEX 3 Page 1 of 1

36 ANNEX 4 Page 1 of 5

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40 ANNEX 4 Page 5 of 5