Republic of Armenia: Seismic Safety Improvement …...Seismic Safety Improvement Program (RRP ARM 49078) I. PROGRAM DESCRIPTION 1. The program will support the implementation of the

Project Number: 49078 Loan Number(s): August 2015

Republic of Armenia: Seismic Safety Improvement Program

Program Implementation Document

CONTENTS Page

I. Program Description 1

II. Results and Disbursement 2

A. The RBL Program’s Overall Results 2 B. Disbursement-Linked Indicators 3 C. Disbursement-Linked Indicator Verification Protocols 4 D. Disbursement Allocation 4

III. Expenditure Framework and Financing 18

A. Expenditure Framework 18 B. Program Financing 19

IV. Program Systems and Implementation Arrangements 19

A. Monitoring and Evaluation System 19 B. Fiduciary Systems 20 C. Satisfying Procurement Member Country Eligibility Restrictions 22 D. Safeguard Systems 22 E. Gender and Social Dimensions 23 F. Communication and Information Disclosure Arrangements 24 G. Development Coordination 24

V. Integrated Risks and Mitigating Measures 24

A. Key Risks and Mitigating Measures 24

VI. Program Action Plan 27

A. Status of Program Action Plan 27

VII. Technical Assistance 31

A. Summary 31 B. Consulting Service Requirement 31

VIII. Monitoring of Key Program Covenants 31

IX. Summary of Key Outstanding Issues 31

X. Accountability Mechanism 32

XI. Changes in Program Scope and Implementation Arrangements 32 XII. Program Organizational Structure and Focal Staff 32

A. Organizational Structure 32 B. Program Officers and Focal Persons 33

PURPOSE OF THE PROGRAM IMPLEMENTATION DOCUMENT

1. The Government of Armenia (the government) is wholly responsible for implementing the program

supported by results-based lending (RBL). The Asian Development Bank (ADB) staff support the results based lending program design and implementation.

The program implementation document (PID) consolidates the essential program implementation information. The PID is a management tool which supports effective program implementation, monitoring, and reporting. It is developed throughout the program processing, and should be discussed with the government at Loan Negotiations. It is a living document that should be refined and kept up to date during program implementation.

Abbreviations

ADB – Asian Development Bank

ASIF – Armenian Social Investment Fund

ATDF – Armenian Territorial Development Fund

CSO – civil society organization

DLIs – disbursement-linked indicators

GRM – grievance redress mechanism

M&E – monitoring and evaluation

MOTAES – Ministry of Territorial Administration and Emergency Situations

NCB – national competitive bidding

PID – program implementation document

PAP – program action plan

RBL – results-based lending

SSRP – school strengthening and renovation program

Seismic Safety Improvement Program (RRP ARM 49078)

I. PROGRAM DESCRIPTION 1. The program will support the implementation of the National Strategy for Disaster Risk Reduction1 by (i) improving school seismic safety to reduce casualties and damages in schools during earthquakes, and (ii) enabling better use of school buildings as shelters for the general public and as focal points for emergency response after earthquakes. The program echoes the key focus areas advocated by the National Disaster Risk Reduction Strategy and is in line with the four priorities identified in the Sendai Framework for Disaster Risk Reduction, 2015–2030,2 (i) understanding disaster risk; (ii) strengthening disaster risk governance to manage disaster risk; (iii) investing in disaster risk reduction for resilience; and (iv) enhancing disaster preparedness for effective response, and building back better in recovery, rehabilitation, and reconstruction. 2. The program supports the objective of equitable and sustainable urban development under the results framework of ADB’s country partnership strategy for Armenia, 2014–2018.3 It is aligned with the Urban Operational Plan, 2012–2020 in terms of planning and investing in infrastructure and services for sustainable urban systems and promoting an improved environment and resilience. The program is aligned with ADB’s Operational Plan for Integrated Disaster Risk Management, 2014-2020.4 ADB has significant global experience in disaster recovery including supporting recovery from major earthquakes in the People’s Republic of China, India, Pakistan and the Philippines and improving school seismic safety in Bhutan and Nepal . ADB also has gained considerable experience in satisfactorily implementing projects in Armenia since the country became an ADB member in 2005.

3. Results-based lending (RBL) is a suitable modality for the program because (i) the government has formulated the School Strengthening and Renovation Program (SSRP) in which the RBL program can be anchored; (ii) the government has gained and demonstrated reasonable capacity through implementing investments in school seismic strengthening and renovation using its own systems in the past and through implementing projects funded by development partners ; (iii) using the government’s systems will provide incentives and open opportunities for the government to further improve their systems and enhance its already strong ownership in implementing the program; (iv) it will provide a platform for the government to effectively coordinate the support of various donors, fostering development coordination and harmonization for maximum development impact; and (v) the modality enables ADB to disburse for results related not only to seismic strengthening of schools and but also institutional strengthening and capacity development. 4. The RBL program will support a portion of the government’s SSRP 5 covering the activities from 2015 to 2020. The government’s program scope and that of the RBL program are in Table 1.

1 Government of Republic of Armenia. 2012. National Strategy for Disaster Risk Reduction. Yerevan.

2 Third World Conference on Disaster Risk Reduction. 2015. Sendai Framework for Disaster Risk Reduction, 2015-

2030. Sendai. 3 ADB. 2015.Country Partnership Strategy: Armenia, 2014–2018. Manila.

4 ADB. 2014. Operational Plan for Integrated Disaster Risk Management, 2014-2020. Manila.

5 Government of Republic of Armenia. 2015. The 2015-2030 Program for the Improvement of the Seismic Safety of

State Comprehensive Schools. Yerevan.

http://adb.org/Documents/RRPs/?id=49078-001-3

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Table 1: Program Scope

As of 15 July 2015

Item Broader Government Programa

Results-Based Lending Program

Outcome

Improved coverage of seismically safe school buildings

Same as the government’s program

Key outputs

(i) increased seismic resilience of school buildings; (ii) strengthened seismic disaster preparedness and response capacity; (iii) improved supportive policies and systems for seismic disaster risk management and reduction; and (iv) enhanced national capacity in executing and implementing the SSIP


Program expenditure $617 million $107.0 million

Main financiers and the respective financing amounts

Government: $110.0 million Development Institutions: $507.0 million

Government: $18.5 million ADB: $88.5 million

Geographic coverage Nationwide Same as the government’s program

Executing agency Ministry of Territorial Administration and Emergency Situations


Implementation period 2015-2035b 2015-2020

ADB = Asian Development Bank. a School Strengthening and Renovation Program.

b Subject to debt sustainability. Sources: Ministry of Territorial Administration and Emergency Situations, and ADB.

II. RESULTS AND DISBURSEMENT A. The RBL Program’s Overall Results 5. The RBL program’s impact is aligned with the National Strategy for Disaster Risk Reduction of establishing a resilient country, increasing the safety of individuals and society, and contributing to the sustainable development of the country. The outcome will be improved coverage of seismically safe school buildings (disbursement-linked indicator [DLI] 1). The key results areas and outputs are summarized in points (i)-(iv) below. The outcome and output indicators have been developed and presented in Table 2.

(i) Results area 1: Increasing seismic resilience of school buildings. The program will support the strengthening or reconstruction of at least 46 priority school buildings identified under the government’s SSRP (DLI 2 and program action plan [PAP] 2-7), in accordance with the updated building codes and the guidelines for school building retrofitting (DLI 4 and PAPs 12 and 13). The strengthened or reconstructed school buildings will meet the internationally accepted seismic safety standards for an earthquake of Medvedev–Sponheuer–Karnik (MSK) scale IX. The strengthened or reconstructed school buildings will also meet the government’s requirements on energy efficiency,6 with wheelchair accessible access and sex-segregated toilets for students to enable better use of the school buildings as shelters for injured or disabled persons after earthquakes.

6 Government of Armenia. 2014. Raising Energy Efficiency in Buildings Constructed, Reconstructed, or Renovated

Through State Funds. Yerevan.

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(ii) Results area 2: Strengthening seismic disaster preparedness and response capacity. An emergency response action plan will be developed for each school with building/s strengthened or reconstructed under the program, supplementing the existing curriculum on disaster risk education and reduction to further raise the students’ and teachers’ awareness on seismic risks and to guide them in properly responding and evacuating in the event of earthquakes. Earthquake drill exercises will be conducted regularly in these schools in accordance with the emergency response action plan. Awareness campaigns will be conducted for at least 46 communities in the same neighborhood as these schools (DLI 3 and PAP 10). Vocational training will be provided to at least 100 construction managers and workers to improve their seismic strengthening construction technology knowledge, techniques and skills. In addition, equipment will be provided to modernize 15 seismic observation stations. At least 45 staff in the seismic observation stations will be trained to improve their seismic monitoring and projection capacity.

(iii) Results area 3: Improving supportive policies and systems for seismic disaster risk management and reduction. The program will support (a) the review and update of the country’s building codes for schools so they are harmonized with international standards for seismic safety (DLI 4 and PAP 12), (b) development of guidelines for school building strengthening and retrofitting in line with international best practices (DLI 4 and PAP 13), (c) consolidate and update of the SSRP (DLI 4 and PAP 14), and (d) update of the probabilistic seismic hazard map and undertaking a seismic risk assessment (DLI 4 and PAP 15 and 16). A financing strategy for seismic safety improvement and management of public infrastructure will be developed to guide the financing of the huge investment needs for the seismic risk management and reduction in the country.

(iv) Results area 4: Enhancing national capacity in executing and implementing the seismic safety investment programs. The program will strengthen the Armenian Territorial Development Fund (ATDF) for effective implementation of the program, including provision of additional staff to ATDF (DLI 5, PAP 19), updating of the ATDF operations manual, and development or enhancement of necessary systems and reports for the program implementation and management (DLI 5, PAP 21-33). At least 30 staff working on program implementation and management, with at least 40% women, will be trained in the areas of project implementation and management, financial management and reporting, procurement, environment safeguard, social and gender development, and monitoring and evaluation (DLI 5, PAP 20).

B. Disbursement-Linked Indicators 6. The outcome indicator and some output indicators, selected based on their significance to achieving the program outcome and impact, have been further developed and consolidated into the program DLIs (Table 3). The largest DLI allocations are for DLI 1 and DLI 2 based on their importance to achieving the program impact and outcome and resource requirements in achieving these results. Partial disbursement will be provided for DLI 1, DLI 2, DLI 3, DLI 4, and DLI 5. 7. The primary direct beneficiaries of the program will be approximately 58,700 students, teachers, and other school staff. The program will directly benefit about 18,000 students and 3,100 teachers and other school staff upon its completion in 2020 and an additional 37,600

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expected new entrants during 2022–2040 by providing them with better protection against seismic disasters and making them aware of the seismic risks and proper responses during seismic emergencies. In addition, the strengthened and reconstructed school buildings will benefit about 87,500 residents near the schools, by providing temporary shelters for them during seismic events and emergencies as well as through the awareness programs which will enable them to make their houses safer and react better during a disaster. The updated building code, improved design, construction and oversight and strengthened government policies for environmental safeguards and social and gender development will benefit the whole nation. The wheelchair accessing trails constructed for retrofitted schools will enable the schools to serve better the disabled and injured people in its functions as shelters, temporary hospitals, and dormitories after earthquakes. C. Disbursement-Linked Indicator Verification Protocols 8. To avoid confusion about whether a DLI has been met, verification protocols have been agreed with the government and are presented in Table 4. D. Disbursement Allocation 9. Expected disbursement allocation and schedule are presented in Table 5. Financing under the ADB loan will be disbursed over 5 years, subject to the achievement and verification of the agreed annual DLIs. The government will ensure that the total program expenditures7 are equal to, or exceed, the total amount of the loan withdrawn. Prior to submitting the first application to ADB for withdrawal from the loan account, the borrower will nominate a dedicated account for the program at the Central Bank of Republic of Armenia into which all loan account withdrawals will be deposited. Financing for prior results and advance financing is allowed to address related financing requirements. The government will refund any advance financing amount outstanding within 6 months of program completion, if DLIs are not achieved on or before program completion.8 Financing of prior results achieved before loan effectiveness but within 12 months before loan signing will be allowed to support the government in initiating actions required to achieve year 1 DLIs. Prior to the disbursement of loan proceeds, the Ministry of Finance will submit a withdrawal application, along with evidence verifying achievement of the DLIs in accordance with the verification protocols. Partial disbursements are allowed for all DLIs. Disbursements can be deferred or take place ahead of the planned schedule depending on the achievements of the DLIs.

7 Excluding local taxes and duties, expenditures for procurement of works, goods, and services from non-ADB

member countries or for any prohibited investment activities provided in Appendix 5 of SPS. 8 Ceilings are 25% for advance financing and 20% for financing for prior results. The combined ceiling is 30%.

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Table 2: RBL Program Results Framework (As of 15 July 2015)

Results Indicators DLI

(Yes/No) Baseline

Value Baseline

Year

Target Values of Results Indicators

Prior Results (2015) 2016 2017 2018 2019

2020

Outcome: Coverage of seismically safe school buildings increased

1 Percentage of students studying in school buildings meeting the safety standards for MSK 9(IX) scale earthquakes

Yes/ DLI 1

13.4% (F=6.5%, M=6.9%)*

2014 increased by 1.0 percentage points from the baseline

increased by 2.1 percentage points from the baseline




Outputs

2 Guidelines for quality control process, procedures, and standards for school building strengthening and reconstruction have been approved

No No 2015

Yes Yes Yes Yes Yes

3 Number of schools with school buildings strengthened or reconstructed meeting the government's seismic safety standards, which have incorporated updated specifications at par with international practices, as well as requirements for energy efficiency, with wheelchair accessibility and sex-disaggregated toilets

Yes/ DLI 2

288* 2014 Detailed designs for strengthening and reconstruction of school buildings of 8 priority schools completed and approved

increased by 9 from the baseline





4 Number of school seismic emergency response action plans developed and implemented, including the regular drill exercises

No 0 2015 8 17 26 36 46

5 Number of communities which have received public awareness campaigns on seismic risk and response

Yes/ DLI 3

0 2015 8 17 26 36 46

6


(Yes/No) Baseline

Value Baseline

Year


Prior Results (2015) 2016 2017 2018 2019

2020

under the Program in accordance with the seismic emergency response plans

6 Number of construction managers and workers trained on updated design and seismic safety technologies, techniques and skills

No 0 2015 35 70 100 100 100

7 Number of National Seismic Observation Stations received the equipment and training under the program

No 0 2015 10 15 15 15 15

8 School strengthening and renovation program is consolidated, with input from development partners and approved by the government

Yes/DLI 4

various investment programs prepared by the government agencies and development partners

2014 Yes Yes Yes Yes Yes Yes

9 Guidelines in line with international best practices for school building seismic strengthening and retrofitting is approved

Yes/ DLI 4

No 2014 Yes Yes Yes Yes Yes

10 The building codes for school buildings are updated, harmonized with international standard, and approved

Yes/ DLI 4


11 National seismic hazard probabilistic map is updated and approved

Yes/ DLI 4

No 2014 Yes Yes Yes

12 A financing strategy for seismic safety improvement and

No

No 2015 Yes

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(Yes/No) Baseline

Value Baseline

Year


Prior Results (2015) 2016 2017 2018 2019

2020

management of public infrastructure is developed and approved

13 The program monitoring and evaluation system is strengthened, capable to report the results achieved under the Program

No No 2014 Yes Yes Yes Yes Yes

14 ATDF operations manual is expanded and updated to cover the program management, implementation, and monitoring and evaluation

Yes/ DLI 5


15 Number of the staff in ATDF is increased, in accordance with the agreed resource requirements

Yes/ DLI 5

25 2014 At least 11 additional staff are recruited and deployed by ATDF

36 36 36 36 36

16 Number of ATDF staff involved in the program management, implementation, and monitoring are trained and licensed, when necessary

Yes/ DLI 5

0 2014 10, including 4 women

20, including 8 women

30, including 12 women

17 Three year rolling investment plan is developed and updated by the ATDF based on the consolidated school strengthening and renovation program.

No No 2014

Yes Yes Yes Yes Yes

18 Template bidding documents are prepared in accordance with strengthened procurement methodology, which include a pass or fail standard for non-conforming bids, evaluation criteria, and

Yes/ DLI 5

The ATDF follows World Bank procurement system and procedures

2014 Template procurement bidding documents developed

Template procurement bidding documents updated in accordance with the updated building

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(Yes/No) Baseline

Value Baseline

Year


Prior Results (2015) 2016 2017 2018 2019

2020

conditions of contract and reflect the requirements for proper design, specifications/updated code requirements and related update in the unit price index

codes and guidelines for school strengthening and reconstruction

19 Compliance with the agreed procurement procedures is reported in the semi-annual program performance report

No The ATDF follows world bank procurement system and procedures

2014 Compliance with the agreed procurement procedures met

Compliance with the agreed procurement procedures met




20 EARF, including GRM system, for construction work and environmental screening based on government legislative requirements and meeting ADB safeguard standards is approved and put in place

No ATDF follows World Bank's requirements and procedures

2014 Yes Yes Yes Yes Yes Yes

21 Grievance redress mechanism to address environmental, social, gender and construction related issues established

No


ATDF = Armenian Territorial Development Fund, DLI = disbursement-linked indicator, EARF = environmental assessment review framework, GRM = grievance redress mechanism, MSK = Medvedev–Sponheuer–Karnik. * The existing government seismic safety standards do not meet the international seismic safety standards for MSK 9 (IX) scale earthquake. Source: Asian Development Bank.

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Table 3: Disbursement-Linked Indicators (As of 15 July 2015)

DLIs Baseline and Year

Prior Results (2015)

2016 2017 2018 2019 2020

DLI 1: Coverage of seismically safe school buildings increased

In 2014, the percentage of school students studying in school buildings meeting the existing government seismic safety standards was 13.4% (female=6.5%,

male=6.9%)a

The percentage of school students studying in school buildings meeting the safety standards for MSK 9 (IX) scale earthquake increased by at least 2.1 percentage points from the baseline (partial disbursement allowed)



DLI 2: Seismic resilience of school buildings increased

In 2014, number of schools with school buildings strengthened and reconstructed based on existing government seismic safety standards was 288

a

Detailed design for strengthening and reconstruction of school buildings of eight priority schools completed and approved

Number of schools with school buildings meeting the safety standards for MSK 9 (IX) scale earthquake increased by nine from the baseline (partial disbursement allowed)

Number of schools with school buildings meeting the safety standards for MSK 9 (IX) scale earthquake increased by 27 from the baseline (partial disbursement allowed)

Number of schools with school buildings meeting the safety standards for MSK 9 (IX) scale earthquake increased by 46 from the baseline. (partial disbursement allowed)

DLI 3: Seismic disaster preparedness and response capacity strengthened

No baseline At least 8 communities received public awareness campaigns with at least 50% women participating in the onsite meetings on seismic risk and response in

At least 26 communities received public awareness campaigns with at least 50% women participating in

At least 46 communities received public awareness campaigns with at least 50% women participating in

10 DLIs Baseline and

Year Prior Results

(2015) 2016 2017 2018 2019 2020

accordance with the seismic emergency response plans (partial disbursement allowed)

the onsite meetings on seismic risk and response in accordance with the seismic emergency response plans (cumulative) (partial disbursement allowed)

the onsite meetings on seismic risk and response in accordance with the seismic emergency response plans (cumulative) (partial disbursement allowed)

DLI 4: Supportive policies, systems, and structures for seismic disaster risk management and reduction improved

No baseline Updated and consolidated School Strengthening and Renovation Program approved.

The updated building codes for school buildings, harmonized with international standard, approved Guidelines in line with international best practices for school seismic strengthening and retrofitting approved (partial disbursement allowed)

National seismic hazard probabilistic map, updated based on the seismic risk assessment, approved

DLI 5: Capacity in executing and implementing the seismic safety investment program enhanced

No baseline At least 11 additional staff for program implementation recruited and deployed by ATDF

Template bidding documents are prepared in accordance with internationally accepted procurement procedures ATDF operations manual expanded and updated in accordance with the

At least 30 staff working for program implementation, with at least 40% women, are trained

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DLIs Baseline and Year

Prior Results (2015)

2016 2017 2018 2019 2020

program requirements Program monitoring and evaluation system established (partial disbursement allowed)

ADB = Asian Development Bank, ATDF = Armenian Territorial Development Fund , DLI = disbursement-linked indicator, MSK = Medvedev–Sponheuer–Karnik. aThe existing government seismic safety standards do not meet the international seismic safety.

Source: Asian Development Bank.

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Table 4: Disbursement-Linked Indicator Verification Protocols (As of as of 15 July 2015)

DLIs Definition and Description of Achievement and Verification Information Source and Reporting Time Frame

Verification Agency and Procedure

DLI 1: Coverage of seismically safe school buildings increased

2017: The percentage of school students studying in school buildings meeting the safety standards for MSK 9 (IX) scale earthquake increased by at least 2.1 percentage points from the baseline. 2019: The percentage of school students studying in school buildings meeting the safety standards for MSK 9 (IX) scale earthquake increased by at least 3.9 percentage points from the baseline. 2020: The percentage of school students studying in school buildings meeting the safety standards for MSK 9 (IX) scale earthquake increased by at least 5.3 percentage points from the baseline

Definitions: Percentage is obtained by dividing the number of students studying in school buildings meeting the safety standards for MSK 9(IX) scale earthquake (numerator) by the total student number in primary, secondary, and high schools (denominator). School buildings mean classrooms, dormitories, libraries, gymnasiums, canteens, and washrooms in the primary, secondary and high schools. Meeting the safety standards means that the structural strength and safety features of a building meet or exceed the requirements for standing against the shock of an earthquake of the targeted scale. A MSK 9 (IX) scale earthquake means an earthquake scaled at level 9 (IX) in Medvedev-Sponheuer-Karnik scale, which is a macro seismic intensity scale used to evaluate the severity of ground shaking on the basis of observed effects in an area of the earthquake occurrence. [Partial DLI disbursement will be made on a pro-rata basis as per following formula: Partial DLI disbursement = Planned DLI disbursement for the period * (actual achievement of the current period-targeted achievement of the previous period)/(targeted achievement of the current period – targeted achievement of the previous period) If the actual achievement of the current period is less than the targeted achievement of the previous period, no disbursement will be made.]

Information source: NCET database and ATDF’s semi-annual program performance reports Time Frame: November

1. ATDF prepares an attestation that DLI is met and attaches the M&E reports and construction completion reports validated by an internationally accredited third party in terms of its compliance with the MSK 9 (IX) scale earthquake safety requirements 2. Within 1 month from receipt of ATDF report, ADB will review the report and confirm if the DLI target is met

DLI 2: Seismic resilience of school buildings increased

Prior results (2015): Detailed design for strengthening and reconstruction of school buildings of eight priority schools completed and approved

Definitions: Detailed design means design drawings, specifications, bills of quantity, and contract documents, with cost estimates. School buildings mean classrooms, dormitories, libraries, gymnasiums, canteens, and washrooms in the primary, secondary and high schools. Approved means approval of the MOUD after adequacy of the detailed design is validated by an international accredited seismic expert and necessary reviews and clearance by relevant authorizes according to the government's regulations.

Information sources: MOUD approval documents Time frame: November

1. ATDF prepares an attestation that DLI is met and attaches MOUD approval documents 2. ADB will review the report and confirm if the DLI target is met

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2016: Number of schools with school buildings meeting the safety standards for MSK 9 (IX) scale earthquake increased by 9 from the baseline 2018: Number of schools with school buildings meeting the safety standards for MSK 9 (IX) scale earthquake increased by 27 from the baseline. 2020: Number of schools with school buildings meeting the safety standards for MSK 9 (IX) scale earthquake increased by 46 from the baseline

Definitions: School buildings mean classrooms, dormitories, libraries, gymnasiums, canteens, and washrooms in the primary, secondary and high schools. Meeting the safety standards means that the structural strength and safety features of a building meet or exceed the requirements for standing against the shock of an earthquake of the targeted scale as validated by an internationally accredited party. A MSK 9 (IX) scale earthquake means an earthquake scaled at level 9 (IX) in Medvedev-Sponheuer-Karnik scale, which is a macro seismic intensity scale used to evaluate the severity of ground shaking on the basis of observed effects in an area of the earthquake occurrence. [Partial DLI disbursement will be made on a pro-rata basis as per the following formula: Partial DLI disbursement = Planned DLI disbursement for the period * (actual achievement of the current period-targeted achievement of the previous period)/(targeted achievement of the current period –targeted achievement of the previous period) If the actual achievement of the current period is less than the targeted achievement of the previous period, no disbursement will be made.]

Information sources: ATDF’s semi annual program performance reports and construction completion reports Time Frame: November

1. ATDF prepares an attestation that DLI is met and attaches construction completion report validated by an internationally accredited third party in terms of its compliance with the MSK 9 (IX) scale earthquake safety requirements 2. Within 1 month from receipt of ATDF report, ADB will review the report and confirm if the DLI target is met

DLI 3: Seismic disaster preparedness and response capacity strengthened

2016: At least 8 communities received public awareness campaigns with at least 50% women participating in the on-site meetings on seismic risk and response in accordance with the seismic emergency response plans 2018: At least 26 communities received public awareness campaigns with at least 50% women participating in the on-site meetings on seismic risk and response in accordance with the seismic emergency response plans

Definitions: Communities means a local community in the neighborhood in which a school strengthened or reconstructed under the program is located. Public awareness campaigns means activities to raise the knowledge base of the population via information dissemination on seismic risk through on-site meetings and any of the information outlets including media, printed documents and educational events. Seismic emergency response plans are localized plans that (i) adapt the national strategies for seismic risk to the specific conditions of the communities, and (ii) are social and gender sensitive. A seismic emergency response plan is deemed to be social and gender-sensitive, if it considers the specific vulnerabilities of women, children, the elderly, and persons with disabilities, when designing specific courses of actions that local government bodies and community members should take during seismic and other disaster situations. [Partial DLI disbursement will be made on a pro-rata basis as per following formula: Partial DLI disbursement = Planned DLI disbursement for the period * (actual achievement of the current period-targeted achievement of

Information sources: ATDF’s semiannual program performance reports Reports from community leaders, principals of schools and NGOs Time frame: December

1. ATDF prepares an attestation that DLI is met and attaches the M&E reports and relevant supporting reports from the community leaders, principals of schools or NGOs 2. Within 1 month from receipt of ATDF report, ADB will review the report and confirm if the DLI target is met

14 DLIs Definition and Description of Achievement and Verification Information Source and

Reporting Time Frame Verification Agency

and Procedure

2020: at least 46 communities received public awareness campaigns with at least 50% women participating in the on-site meetings on seismic risk and response in accordance with the seismic emergency response plans

the previous period)/(targeted achievement of the current period –targeted achievement of the previous period) If the actual achievement of the current period is less than the targeted achievement of the previous period, no disbursement will be made.]

DLI 4: Supportive policies, systems, and structures for seismic disaster risk management and reduction improved

Prior Results (2015): Updated and consolidated School Strengthening and Renovation Program approved.

School Strengthening and Renovation Program refers to the government's program for school strengthening and renovation, which prioritizes all schools of high seismic risks (with assessment scores equal or higher than 40) in the country based on the United Nations Children’s Fund's prioritization criteria with cost estimates for each school strengthening (or reconstruction) and renovation. Approved means approval of the MOTAES after necessary reviews and clearance by relevant authorities according to the government's regulations.

Information source: MOTAES’s approval document Time Frame: November

1. ATDF prepares an attestation that DLI is met and attaches the MOTAES approval document 2. Within 2 weeks from receipt of ATDF report, ADB will review the report and confirm if the DLI target is met

2016: The updated building codes for school buildings, harmonized with international standard, approved Guidelines in line with international best practices for school seismic strengthening and retrofitting approved

Harmonized means Armenian standards adapted to international standards. International standards mean accredited standards accepted by the United Nations, the World Bank and other international development agencies. International best practices mean best practices adopted, demonstrated and proven widely by countries and international organizations. Approved means approval of the MOUD after necessary reviews and clearance by (i) an international accredited third party, and (ii) relevant authorities according to the government's regulations. [Partial DLI disbursement will be made on a pro-rata basis: one targets achieved-50%, two targets achieved - 100%]

Information sources: MOUD approval documents Time Frame: December

1. ATDF prepares an attestation that DLI is met and attaches the MOUD approval documents 2. Within 2 weeks from receipt of ATDF report, ADB will review the report and confirm if the DLI target is met

2018: National seismic hazard probabilistic map, updated based on the seismic risk assessment, approved

National seismic hazard probabilistic map is a map showing the seismic risks and hazard levels in different locations of Armenia in case of earthquakes. The seismic risk assessment is an assessment of seismic risk which is essential to identify areas of needed interventions and specific actions items with maximum risk reduction effects. The map will include all cities with population of more than 2000, other geographical features such as

Information source: Approval documents of MOTAES Time Frame: December

1. ATDF prepares an attestation that DLI is met and attaches the MOTAES approval documents 2. Within 2 weeks from receipt of ATDF report,

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rivers, as well as all schools in Armenia. Approved means approval of the MOTAES after necessary reviews and clearance by relevant authorities according to the government's regulations.

ADB will review the report and confirm if the DLI target is met

DLI 5: Capacity in executing and implementing the seismic safety investment program enhanced

Prior Results (2015): At least 11 additional staff for program implementation recruited and deployed by ATDF

11 additional staff include 1 deputy director, 3 seismic engineers, 2 procurement specialists, 1 contract management specialist, 1 financial specialist, 1 accountant, 1 environment specialist, 1 social, poverty, and gender development specialist, and 1 M&E specialist

Information sources: ATDF Reports Time Frame: November

1. ATDF prepares an attestation that DLI is met and specific positions and filling time 2. Within 2 weeks from receipt of ATDF report, ADB will review the report and confirm if the DLI target is met

2016: Template bidding documents developed ATDF operations manual expanded and updated in accordance with the program requirements Program monitoring and evaluation system established

Template bidding documents means a set of documents to be used as standards during the bidding process, including bids for different procurement methods, evaluation criteria, and conditions of contracts. ATDF operations manual means the manual specifying the processes and procedures for ATDF operations. The program requirements mean the processes and procedures required by the program, which are not covered by the existing ATDF operations manual. Program M&E system means the improved management and information, tools of analysis and indicators for M&E, to be implemented by trained specialists to monitor the program implementation progress, quality control, and achievements of outputs and results under the program, including those for social, environment, gender and poverty targets. [Partial DLI disbursement will be made on a pro-rata basis: one targets achieved-33.3%, two targets achieved - 66.7%, three targets achieved - 100%]

Information sources: ATDF’s semiannual program performance reports Time frame: December

1. ATDF prepares an attestation that DLI is met and attaches the relevant sample bidding documents, operations manual, and M&E system manual 2. Within 1 month from receipt of ATDF report, ADB will review the report and confirm if the DLI target is met

2017: At least 30 staff working for program implementation, with at least 40% women, are trained in the areas of project implementation and management, financial

Trained means a person has gone through a training process and has passed the necessary exams or tests, if required by the training process. Training means teaching, or developing in oneself or others, any skills and knowledge that relate to specific useful competencies in any areas of project implementation and management, financial management and reporting, procurement, environmental safeguards, social and gender development, and M&E

Information sources: ATDF’s semiannual program performance reports Time Frame: December

1. ATDF prepares an attestation that DLI is met and attaches the training records 2. Within 2 weeks from receipt of ATDF report,

16 DLIs Definition and Description of Achievement and Verification Information Source and

Reporting Time Frame Verification Agency

and Procedure

management and reporting, procurement, environmental safeguards, social and gender development, and evaluation&E

ADB will review the report and confirm if the DLI target is met

ADB = Asian Development Bank, ATDF = Armenian Territorial Development Fund, , DLI = disbursement-linked indicator, M&E = monitoring and evaluation, MIS = management information system, MSK = Medvedev–Sponheuer–Karnik, MOTAES = Ministry of Territorial Administration and Emergency Situations, MOUD = Ministry of Urban Development, NCET = National Center for Education Technology, NGO = nongovernment organization. Source: Asian Development Bank.

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1. Disbursement Principles

10. Allocation. The disbursement amount allocated to each DLI depends on its importance. While the cost of achieving the DLI may be a factor for consideration, there is no one-to-one relationship between the allocation of disbursement and the costs required to achieve the results. 11. Advance financing. ADB can provide up to 25% of its financing (i.e., $22 million) as advance disbursement. Advances can be considered for initial and subsequent DLIs during the implementation period. The amount of advances will be recovered from subsequent disbursements when DLIs are achieved. Additional advances can be made once an earlier advance has been recovered or partially recovered. The recovered advance is then available, as needed, for additional advances (“revolving advances”), but the outstanding advance should not at any time exceed the ceiling of 25% of ADB financing. The government will refund any advances (or portions of advances) if the DLIs have not been met or fully met by program completion no later than 6 months after program completion.

12. Financing prior results. Some results may need to be achieved before an RBL operation is approved. In such cases, ADB will be able to finance and disburse based on the DLIs achieved before the effectiveness of the results-based lending program. The total amount for such financing should not exceed 20% of the ADB financing (i.e., $17.7 million). Financing of prior results achieved before loan effectiveness but within 12 months before loan signing will be allowed to support the government in initiating actions required to achieve year 1 DLIs. Prior results have been agreed with the government, and the DLIs against which the amount of prior results financing will be made have been identified during program preparation. The program team is of the view that such results are within the scope of the program supported by RBL and are subject to the agreed verification protocols.

13. Ceilings for advance financing and financing for prior results. Ceilings are (i) advance financing (25%), and (ii) financing for prior results (20%). The combined ceiling for both is 30%. Additional detail is available in the program implementation document.

14. Partial disbursements. Partial disbursements are allowed for DLI 1, 2, 3, 4 and 5 and the formulas for partial disbursement for those DLIs are detailed in these protocols.

2. Disbursement Procedures

(a) ATDF will collect all reports and information necessary to verify accomplishment of the DLI and prepare a draft DLI achievement report. Achievement reports refer to the month and year of the DLI achievement indicated in the DLI table.

(b) ATDF board or designee will assess the achievement of the DLIs and authorize the DLI achievement report to be shared with the Ministry of Finance and ADB.

(c) The DLI achievement report will be discussed and confirmed with ADB. In case ADB identifies issues with the DLI achievement, it will relay its concerns to ATDF within 3 months of its receipt of the achievement report.

(d) Once ADB has confirmed the achievement of a DLI, ATDF through Ministry of Finance submits the withdrawal application to ADB accompanied by the evidence of DLI achievement.

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(e) The withdrawal application can be submitted in the same year the DLI is achieved or any subsequent year depending upon the government’s financial needs.

(f) Except as otherwise agreed by ADB, the Borrower shall not make more than one application for withdrawal from the Loan Account in each quarter of a fiscal year.

Table 5: Expected Disbursement Schedule

($ million)

(As of 15 July 2015)

Indicator

Total ADB Financing Allocation

ADB Financing

(%)

Financing for Prior Results 2016 2017 2018 2019 2020

DLI1 Coverage of seismically safe school buildings increased

25.9 29.3 9.5 9.4 7.0

DLI2 Seismic resilience of school buildings increased

48.1 54.4 3.0 18.5

18.8 7.8

DLI3 Seismic disaster preparedness and response capacity strengthened

3.6 4.1 1.5 1.4 0.7

DLI4 Supportive policies, systems, and structures for seismic disaster risk management and reduction improved

3.4 3.8 0.9 0.9 0.9 0.7

DLI5 National capacity in executing and implementing the seismic safety investment program enhanced

2.6 2.9 0.5 0.9 1.2

Subtotal 83.6 94.5 4.4 21.8 10.7 21.1 9.4 16.2

Interest during program implementation

4.9 5.5

Total 88.5 100.0

ADB = Asian Development Bank, DLI = disbursement-linked indicator. Source: ADB

III. EXPENDITURE FRAMEWORK AND FINANCING A. Expenditure Framework 15. Program expenditures. The SSIP expenditures are estimated to be $107.0 million from 2015 to 2020 as summarized in Table 6.

Table 6: Summary of Program Expenditure Framework, 2015-2020 (As of 15 July 2015)

Item Amount

($ million)

Share of Total

(%)

1. Recurrent expenditure 2.9 2.7 2. Capital expenditure

Equipment 7.5 7.0 Civil works 89.1 83.3

3. Training and capacity development 7.5 7.0 Total 107.0 100.0

Sources: Ministry of Territorial Administration and Emergency Situations and Asian Development Bank.

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B. Program Financing 16. The government will finance as counterpart contribution $18.5 million (17.3%) of the $107.0 million cost of implementing the program during 2015–2020 period to cover (i) taxes and

duties which may take the form of exemption; and (ii) other required program costs including recurrent cost. The government has requested a loan in various currencies equivalent to $88.5 million (SDR63,259,000) from ADB’s Special Funds resources to help finance the RBL program. The ADB loan will have a term of 25 years, including a grace period of 5 years, and an interest charge of 2% per annum during the grace period and thereafter. The financing plan is summarized in Table 7.

Table 7: Program Financing Plan (As of 15 July 2015)

Source Amount ($ million) Share of Total (%)

Government 18.5 17.3 Development partners

Asian Development Bank

Special Funds resources (loan) 88.5 82.7

Total 107.0 100.0

Source: Asian Development Bank.

IV. PROGRAM SYSTEMS AND IMPLEMENTATION ARRANGEMENTS

17. The RBL program will be implemented from November 2015 to November 2020. The Ministry of Territorial Administration and Emergency Situations (MOTAES) will be the executing agency and the ATDF under the MOTAES, with necessary strengthening, will serve as the program implementing agency. 18. ATDF was transformed from the Armenian Social Investment Fund (ASIF) on 1 April 2015 with an expanded mandate. ASIF commenced operations in 1996 with World Bank’s support. Its main focus was originally infrastructure rehabilitation aimed at enhancing the livelihood of the poorest segment of Armenian society. ASIF was established by the Armenian government as a mechanism to strengthen local government capacities to manage and promote community development. Since 2000, its operational activities have diversified to include micro projects covering social infrastructure and services, furniture and equipment provision to schools, and projects catered to vulnerable groups. Community participation in the selection and implementation of micro projects remained a cornerstone of ATDF’s activities. In recent years, it has gained experience in building and retrofitting small schools and also outsourcing seismic safety assessments of schools. The ATDF Board will serve as the program steering committee to oversee the program implementation. It will set the policy guidelines and strategic direction for the program. A focal unit for the program will be established in ATDF to monitor and report on progress in attaining DLIs. A. Monitoring and Evaluation System

1. Summary of Monitoring and Evaluation (M&E) System and Actions 19. The M&E system assessment undertaken for the program indicated that responsibility for M&E is fragmented and dispersed among a number of institutions. Most of the systems have been developed in the context of donor funded projects, mainly projects supported by the World Bank . Institutions such as the National Centre of Education Technologies, the Centre for Education Project, the ATDF, and the Ministry of Urban Development have reasonably well

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developed systems with the database and management information systems (MISs) largely focused on inputs and outputs although there is awareness of the need to move forward further to capture information on outcomes and impact. The ATDF’s MIS and M&E unit needs to be modestly restructured and expanded to cater to the new program elements. In this regard, the following actions have been included in the program action plan with results incorporated in the program result framework, including selected DLIs: (i) increase staff strength and improve their capabilities through training, capacity development and consultancy support; (ii) provide technical support to strengthen the ATDF’s MIS to incorporate program specific indicators, including social and gender indicators, and (iii) develop capacity to assess quality, verify design and building standards and validate technical and social assessments made by supporting ministries, other government agencies, and private entities. 20. ATDF, with support from its M&E unit, will monitor the SSIP and be responsible for preparing all reports on the SSIP. In repairing the program reports, ATDF will coordinate the inputs form its various units as well as other government agencies and civil society organizations (CSOs) when required. The SSIP monitoring reports will be disclosed to the program steering committee and ADB.

21. Within 12 months of loan closing of the program, MOTAES, supported by ATDF, will produce a program completion report which will be shared with ADB. B. Fiduciary Systems

1. Financial Management System 22. The country’s public financial management system was assessed to determine the degree to which they will be able to manage fiduciary risks and provide assurance that the program funds will be used for the intended purposes, with due consideration for economy and efficiency. Strong performance was found for policy based budgeting and budget execution, but weak in internal control, quality of annual financial statements, internal and external audit. The government’s annual budget execution reports are prepared according to a consistent format, guided by Soviet-era accounting instructions. However, this format is not consistent with International Public Sector Accounting Standards. Audit is not fully consistent with International Organization of Supreme Audit Institutions standards, and audit opinion does not fully reveal the accounting standards used by the government, neither the standards used by the audit. There would be significant financial reporting and auditing risks in using country public financial management in the short and medium term. To mitigate these risks, a dedicated program account is required to ring-fence the implementation of the program, applying international standards on accounting, reporting, and auditing. 23. Accounting, Financial Reporting and Auditing. ATDF will maintain separate accounts and records for the program; (ii) prepare annual financial statements for the program in accordance with accounting principles acceptable to ADB for each fiscal year commencing on the program effectiveness date; (iii) have such financial statements audited annually by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB, in accordance with international standards for auditing or the national equivalent acceptable to ADB; (iv) as part of each such audit, have the auditors prepare a report (which includes the auditors’ opinion on the financial statements) and a management letter (which sets out the deficiencies in the internal control of the program that were identified in the course of the audit, if any); and (v) furnish to ADB, no later than 6 months after the end of each related fiscal year, copies of such audited financial statements, audit report and management letter, all in the English language, and such other information concerning these documents and the audit

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thereof as ADB shall from time to time reasonably request. ADB reserves the right to require a change in the auditor (in a manner consistent with the laws and regulation of the Republic of Armenia), or require additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed.

24. Public Disclosure. ADB will disclose the annual audited financial statements for the program and the opinion of the auditors on the financial statements within 30 days of the date of their receipt by posting them on ADB’s website in accordance with ADB’s Public Communications Policy (2011).9

2. Procurement System 25. Armenia’s public procurement legislative and regulatory framework, including Public Procurement Law is generally consistent with international standards including EU procurement directives and Armenia is now a member of the Government Procurement Agreement of the World Trade Organization. Electronic government procurement has been in place since 2014. Several development partners are supporting the government in improving the quality of electronic government procurement. The main aspects of the public procurement system needing improvement and revision are: (i) application of proper bid evaluation criteria to assess bidders qualification based on pass or fail mechanism (the current practice is to use the lowest price as the major criteria) and to focus on technically conforming bids; (ii) usage of non-competitive methods need to be changed; and (iii) procurement capacity needs to be developed in all the levels of the procurement system. ATDF has been implementing projects funded by the World Bank following national competitive bidding (NCB) procedures adjusted for World Bank guidelines. To ensure the smooth implementation of the program, the ATDF needs to engage additional procurement staff, comply with the recommended procedures, develop standard bidding documents packages, strengthen its capacity for technical bid evaluation including a pass or fail standard for non-conforming bids, set up a proper approval process, update its operations manual to reflect the arrangements for the program and submit an annual procurement monitoring reports to the ATDF board. For schools to be covered under the program, the majority of the procurement will be done using NCB method for civil works. average cost of each contract is estimated to be $1.5 million–$2.0 million. 26. The following actions are recommended to ensure the successful implementation of the SSIP.

(i) Additional procurement staff. ATDF need to recruit two procurement staff to support existing specialists in procurement and contract management operations. Additional advisory support is needed to further strengthen ATDF’s procurement systems and operations.

(ii) Procurement methods. For SSIP, ATDF shall use NCB for civil works and goods procurement. For reference use, ADB’s NCB Annex for Armenia will be incorporated in ATDF’s operations manual. Civil works for several schools can be grouped into one contract with due consideration of ADB’s thresholds established for NCB in Armenia.

(iii) Consultancy selection methods. As ATDF is familiar with consultants qualifications selection under the World Bank project, for SSIP, ATDF shall use the same method as well to assure the selection of qualified consulting companies. ATDF shall develop sample documents for consultants’ recruitment and management.

9 ADB. 2011. Public Communications Policy. Manila.

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(iv) Standard bidding documents. Until ATDF builds its full capacity to operate in line with the country system, ATDF will largely follow the template used for ADB’s NCB documents which will be incorporated in the operations manual as a reference.

(v) Approval process. ATDF shall setup a proper approval process for SSIP, involving relevant government entities.

(vi) Other arrangements. ATDF shall update its operations manual to incorporate the recommendations of the procurement systems assessment.

3. Anticorruption System 27. During the past decade, the government of Armenia has initiated a number of anticorruption measures. Two anticorruption strategies were adopted, mainstreams of public policy were defined, certain legislations were fine-tuned, the institutional set-up of anticorruption structures was created, and an independent Ombudsman was appointed. 28. Corruption risks related to the SSIP are mainly on procurement. To reduce the risks, two additional procurement staff will be provided to ATDF to support the procurement and contract management under the program and advisory support will be provided under the capacity development technical assistance to further strengthen ATDF’s procurement systems and operations. ATDF will post all procurement-related information on its website, including contract awards data, winning bidders, complaints received, if any, and their status, and conduct regular procurement audits to incrementally reduced weaknesses. Strengthening ATDF’s internal audit functions with internationally accepted reporting structure will go a long way to mitigate such risks. Having representatives from CSOs in the Board of Trustees of ATDF will also help to manage the corruption risks under the program. 29. The Guidelines to Prevent or Mitigate Fraud, Corruption, and Other Prohibited Activities in Results-Based Lending for Programs (Anti-Corruption Guidelines, Appendix 2) were explained to and discussed with the government and ATDF.10 The government plans to work with Integrity Action to engage local communities to monitor and evaluate the SSIP. This will help ensure that quality standards in construction and material inputs are met, and will also improve citizens’ engagement and ownership of the SSIP.

C. Satisfying Procurement Member Country Eligibility Restrictions 30. ADB member country procurement eligibility restrictions have been discussed with the government. D. Safeguard Systems 31. The environmental safeguard system assessment identified the following gaps between the national environmental system and the principles applied by ADB’s Safeguard Policy Statement (SPS) 2009: (i) no environment assessment is required by the national legislation for schools buildings less than 1,500 square meters; (ii) inadequate enforcement for the environment assessment and management for buildings larger than 1,500 square meters; and (iii) no environmental assessment review framework with grievance redress mechanism (GRM). The program will trigger an environmental assessment to mitigate moderate adverse environmental impacts which are typical for reconstruction and rehabilitation of small to

10

Asian Development Bank. 2013. Piloting Results-Based Lending for Programs. Manila.

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medium-size buildings. The actions and measures to address these gaps have been included in the PAP and results framework, including strengthening of the ATDF to implement environment safeguard actions in line with the SPS principles for environment category B projects. No involuntary resettlement or indigenous people impact are envisaged under the program, as strengthening or reconstruction of school buildings will be at their existing locations and Armenia is fairly homogeneous in ethnic composition. A screening checklist has been developed to ensure that any program activities which may fall under category A in environment or involve any involuntary resettlement as defined in SPS 2009 will be excluded. 32. When retrofitting existing structures, and in particular given the intention for upgraded school buildings to be used “as shelters for general public and focal points for emergency response”, attention needs to be paid to increasing the resilience of these structures and critical systems (power, water) to many types of disaster, including following measures when applicable:

(i) elevation of critical equipment to reduce exposure to floodwaters; (ii) dry flood-proofing buildings with watertight windows and doors; (iii) making pumps submersible and protecting electrical equipment with watertight

casings; (iv) constructing external flood barriers; and providing backup power generation; (v) protecting critical points such as wellheads from contamination from floodwater;

and (vi) relocating critical system components (generators, pumps) away from areas

most susceptible to flooding.

E. Gender and Social Dimensions 33. The social and gender assessment reveals that while the Department of Family, Women and Children’s Issues of the Ministry of Labor and Social Affairs is the key agency for developing state programs that address gender issues across all sectors, its role is limited to coordinating different ministries in their implementation of social and gender programs within their own sectors. Specific to disaster risk management, the MOTAES is responsible for the implementation of the National Strategy for Disaster Risk Reduction, which provides for, among others, the consideration of the different but equal needs of women and men in disaster risk management and encouraging women’s participation in decision-making processes. It also provides for raising public awareness on disaster risk and building a culture of safety and resilience among the population. The country’s Gender Policy Strategic Action Plan also calls for gender assessment and monitoring in emergency situations and the provision of mechanisms and resources to mainstream gender at the national, regional and community levels in the management of emergency situations. The social and gender assessment of the program reveals the following gaps and risks: (i) limited participation of women in agencies involved in disaster risk management; (ii) limited awareness of students and community members, especially of housewives often left at home with young children and elderly, on seismic and disaster risks; (iii) limited collection of sex-disaggregated data in disaster management; and (iv) lack of systematic emergency response plans both at the school and local community settings. The SSIP is categorized as effective gender mainstreaming and has incorporated social and gender indicators and actions in the design monitoring framework, DLIs, PAP to address these issues. While the ATDF has a social and gender focal person, a more systematic gender training is needed for the ATDF technical staff to incorporate a gender perspective in the implementation of the program.

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F. Communication and Information Disclosure Arrangements

34. In preparing the SSIP, MOTAES and ATDF have engaged in extensive consultations with stakeholders, including research organizations working on seismic safety and assessments, CSOs focusing on children’s welfare especially in distant communities, women’s organizations, parents and teachers associations, and other community members. This policy of open communication will be sustained. Information sharing, consultation, collaboration, and partnership with CSOs and communities will continue during program implementation. A GRM will be established and included in ATDF operations manual to address social and environmental related issues. Financial, procurement, safeguard and program progress related information will be disclosed electronically by ATDF through its website. ADB’s Public Communication Policy 11 has been shared and ADB disclosure requirements have been discussed with the government. The communication and disclosure actions under the program will include consultation meetings, public awareness raising campaigns, media, and websites.

35. ATDF’s supervisory board will serve as the program steering committee to oversee the program implementation and set the policy guidelines and strategic direction for the program. The board has representatives from four CSOs to ensure the feedback and recommendations of CSOs will continue to be incorporated during the program implementation.

G. Development Coordination

36. The SSIP promotes a shift towards a more comprehensive approach that focuses on sector-wide reforms and achievement of results. It includes a set of common and complementary disbursement-linked indicators developed in close consultation with the government and other stakeholders, reinforcing the motivation to focus on results. The SSIP provides a framework to coordinate development efforts and harmonize development approaches by various development partners. It enables a more systematic and progressive approach for the government to meet its strategic goals for seismic risk reduction and management through (i) financing the priority school seismic strengthening and renovation and improving seismic disaster preparedness and response capacity; (ii) addressing the urgent issues in supportive policy and systems; (iii) using the DLIs tied to the government targets; and (iv) strengthening, using and demonstrating the country systems for project implementation, management, and monitoring.

37. Given the intensive support by the development partners and CSOs in seismic safety in Armenia, the SSIP seeks to maximize the use of their strengths and resources and to avoid duplication through cooperation and partnerships with the development partners and CSOs—it is expected that several memorandums of understanding for cooperation will be entered with development partners and CSOs under SSIP, including UNICEF, KfW, UNDP, and the Armenian National Platform for Disaster Risk Reduction. The MOTAES, supported by ATDF, will ensure coordination and collaboration among development partners and alignment of their disaster risk reduction activities with the disaster risk reduction sector’s results framework.

V. Integrated Risks and Mitigating Measures A. Key Risks and Mitigating Measures

38. Major risks and mitigating measures are summarized in Table 8. The overall benefits and impacts are expected to outweigh the risks and costs.

11

ADB. 2011. Public Communication Policy. Manila.

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Table 8: Status of Integrated Risk Assessments and Mitigating Measures

(As of 15 July 2015)

Risks

Rating Without

Mitigating Measures

Key Mitigating Measures

Results

Inadequate building codes and absence of internationally equivalent guidelines for seismic strengthening and reconstruction of buildings may result in inadequate strengthening and reconstruction of buildings.

Substantial

Updating of the building codes for school buildings and development of guidelines for building seismic strengthening and reconstruction in line with international best practices will be supported by the SSIP. The results are linked with disbursements in 2016 (DLI 4). Special arrangements, including the technical support to and validation of the detailed designs of school buildings to be strengthened under the SSIP, have been put in place to ensure the adequacy and efficiency of the detailed designs in meeting the targeted seismic safety standards before the updated building codes and guidelines are developed and approved.

The quality control process adopted by ATDF needs to be further strengthened to ensure the quality of the school buildings strengthened meets the targeted seismic safety standards.

Moderate

Linking the quality of school buildings at completion with disbursement (DLIs 1 and 2) will further strengthen the government’s commitment and ownership of the quality control. The program and the capacity development technical assistance (CDTA) will support further strengthening of ATDF’s quality control process, including detailed design review, procurement, environment safeguards, construction supervision, and quality validation of completed buildings.

Potential disputes regarding the assessment of the quality of school buildings strengthened in meeting the targeted seismic safety standards by different stakeholders.

Moderate

The SSIP will have an internationally accredited third party to validate the quality of school buildings at completion in meeting the targeted seismic safety standards.

Expenditures and financing

Government not including the program expenditures in the current MTEF for the period from 2016 to 2018.

Low

The government agreed to include the program expenditures in their current MTEF covering the period from 2015 to 2018, which has been incorporated into the program action plan.

Government not including the O&M for maintaining the newly built and strengthened school buildings by the program beyond the implementation period of the program from 2020 and onwards.

Low The government agreed to allocate adequate budget beyond the program implementation period to maintain the newly built and strengthened schools. This will be covenanted in the loan agreement.

Fiduciary

Annual budget execution reports are prepared according to a consistent format but are not consistent with IPSAS. Public entities are guided by Soviet-era accounting instructions and the accounting standards are not disclosed. Due to the absence of modern accounting standards, the government is unable to prepare auditable annual financial statements. The process of audit planning and presenting

Substantial

Substantial

A program account will be set up to ring-fence implementation of the program applying international standards on accounting, reporting, and auditing. Supported by the program and the CDTA, the financial management specialists in ATDF will develop financial reporting formats which are consistent with IPSAS for use of the program. Trainings on financial reporting and auditing will be provided to ATDF staff. The SSIP expenditure and financial statements will

26

Risks

Rating Without

Mitigating Measures


an opinion on the quality of the budget execution report needs to be improved, as it is not fully consistent with INTOSAI standards. The Chamber of Control’s opinion does not fully reveal the standards used by the government in preparing its budget execution reports and does not reveal the standards used to audit these reports.

be audited annually by independent auditors with qualifications, experience and terms of reference in accordance with international standards for auditing.

Safeguards.

The program is categorized as B for environment. Due to current uneven compliance with Armenia’s environment regulations, there is a risk that the environment impact of the program activities might not be assessed and managed adequately. Poor grievance redress mechanism and capacity in addressing the concerns of affected people during program implementation. Insufficient environmental focused supervision and monitoring of the program

Substantial

Moderate

Moderate

The environmental assessment and review framework developed in accordance with Armenia’s environment regulations and international practices will be incorporated into ATDF’s operations manual. Environment Management Plan will be developed for each school to be strengthened under the program. Environment unit of the ATDF will be strengthened with additional staff and trainings and advisory support will be provided to strengthen the environment management and monitoring capacity of ATDF. Establish and include in ATDF operations manual a Grievance Redress Mechanism and appoint a responsible person in ATDF to address environmental related issues in accordance with guidance provided in EARF. As part of the quality control strengthening process, the role of technical supervision will be expanded to embrace environment, health and safety focused day-to-day supervision of civil works and the frequency of site visits and inspection by the ATDF will be increased. Additional support to ATDF in monitoring, reporting and final environmental audit will be provided under the CDTA.

Procurement.

Inadequate capacity to manage procurement for scaled up activities. Qualification criteria used in standard bidding documents are not aligned to international procurement practices.

High

ATDF’s operations manual will be updated to address the risk factors and used for day to day transactions. Its Procurement Unit will be strengthened by adding two procurement specialists. Advisory support will be provided to ATDF on procurement under the CDTA. Relevant staffs of ATDF will participate in periodic workshops on procurement organized by ADB. Pre-qualification shall not be used. Pass-fail qualification criteria will be specified in the Invitation for Bids and bidding documents.

Operating environment.

ATDF is new to the results-based lending operations. Its current capacity is inadequate to implement the program, which has a large investment component with several new initiatives and reform agenda.

Substantial

Strengthening the ATDF with additional staff resources and trainings, updating its operations manual, and enhancing its operations and monitoring and evaluation systems are linked with disbursement in years 1 and 2. (DLI 5). A CDTA accompanying SSIP will provide support to ATDF during program implementation.

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Risks

Rating Without

Mitigating Measures


Difficulty in recruiting and retaining qualified staff for ATDF may affect program implementation

Moderate

ADB and development partners are working with the government to ensure the qualified staff are recruited and retained by program implementation agencies, include ATDF.

Complex and prolonged government approval procedures may delay program implementation.

Moderate

The ATDF Board, chaired by the Prime Minister and consisting of the ministers of relevant ministries, will serve as the program steering committee and coordinate the program implementation. ADB will continue to work with the government to streamline its approval procedures.

Inadequate participation of women in program activities, particularly the awareness campaigns will compromise the program outcome and impact.

Moderate Participation of women in the program activities will be encouraged and monitored under the SSIP. Relevant gender indicators, including one DLI (DLI 2), are included in the program results framework. ATDF’s social and gender unit will be further strengthened to promote women’s participation in the program activities.

Overall RBL program risk Substantial

ADB = Asian Development Bank, ATDF = Armenian Territorial Development Fund, CDTA = capacity development technical assistance. DLI = disbursement-linked indicator, INTOSAI = International Organization of Supreme Audit Institutions, IPSAS = International Public Sector Accounting Standards, MTEF = medium-term expenditure framework, O&M = operation and maintenance, RBL = results-based lending, SSIP = Seismic Safety Improvement Program. Source: Asian Development Bank.

VI. PROGRAM ACTION PLAN

A. Status of Program Action Plan 39. The PAP is set out in Table 9. The actions included in the PAP will be reflected in ATDF’s semi-annual performance reports.

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Table 9: Status of Program Action Plan (As of 15 July 2015)

No. Results Areas and Actions Responsible Agencies Time Frame Areas

Outcome: Coverage of seismically safe school buildings increased

1 Monitor and report (a) school buildings strengthened and reconstructed meeting the safety standards for MSK 9 (IX) scale earthquakes, and (b) percentage of students, male and female, studying in school buildings meeting the safety standards for MSK 9 (IX) scale earthquakes (DLI 1, DLI 2 and DLI 5)

ATDF (Prime) and MOES

2015-2016 Technical

Output 1: Seismic resilience of school buildings increased

2 Formulate and implement 3 year rolling investment plans for school building seismic strengthening and reconstruction and include the program expenditures in MOTAES’s medium-term expenditure framework

ATDF (Prime) and MOTAES

From 2015 Technical, Financial Management, Monitoring and Evaluation

3 Recruit services for and developing the guidelines for quality control process, procedures, and standards for school building strengthening and reconstruction, including implementation and supervision of site-specific environment management plans.

ATDF (Prime), MOTAES, and MOUD

2015-2016 Procurement, Technical and Safeguards

4 Recruit services for the detailed designs and construction supervision for school building strengthening and reconstruction, including preparation and supervision of site-specific environment management plans; prepare cost estimates following the updated code and unit price index, specifications and contract documents. Procure contractors. Advise all interested contractors of the updated specifications and unit price index in the tender documents and at pre-bid meetings (DLI 2)

ATDF 2015-2019 Procurement, Technical, Financial Management

5 Implement the strengthening and reconstruction of school buildings (DLI 2)

ATDF 2016-2020 Technical, Procurement, Financial Management, Safeguards,

Monitoring and Evaluation, Social and Gender Equity

6 Develop detailed quality control testing, site inspection and reporting program. Carry out bi-weekly site inspections, including the implementation and supervision of the environment management plans.

ATDF (Prime), MOTAES and MOUD

2015-2020 Technical, Safeguard and Monitoring and Evaluation

7 Have the completed buildings validated by an internationally accredited third party in terms of its ability to meet the MSK IX earthquake safety standards

ATDF (Prime), MOTAES and MOUD

2016-2020 Technical, Monitoring and Evaluation

Output 2: Seismic disaster preparedness and response capacity strengthened

8 Procure and provide equipment to the National Seismic Observation Network. Provide and coordinate trainings for National Seismic Observation Network staff


2016-2018 Technical, Procurement

9 Recruit services for and developing and implementing gender sensitive seismic emergency response action plans for schools with school buildings strengthened and reconstructed.

ATDF (Prime), MOTAES, and concerned schools

2016-2020 Procurement Social and Gender Equity,

Technical

10 Recruit services for and conducting awareness campaigns on seismic risks and responses for communities adjacent to schools that have been strengthened and reconstructed with differentiated approach for women


2016-2020 Procurement Social and Gender Equity

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and disadvantaged groups (DLI 3)

11 Review, update and implement the vocational trainings for construction managers and works to include seismic safety improvement technologies, techniques, and skills

ATDF (Prime), MOTAES, MOUD and MOE

2016-2020 Technical

Output 3: Supportive policies, systems, and structures for seismic disaster risk management, emergency response strengthened

12 Recruit services for reviewing and updating building codes and regulations for school buildings to harmonize them with international standards and reconcile old and new codes and regulations (DLI 4)

MOUD (Prime) and ATDF 2015-2016 Procurement Technical

13 Recruit services for and developing guidelines for school seismic strengthening and reconstruction (DLI 4)

MOUD (Prime) and ATDF 2015-2016 Procurement Technical

14 Endorse and update the School Strengthening and Renovation Program MOTAES (Prime), MOUD, MOE and ATDF

2015-2020 Technical

15 Recruit services for and updating the national seismic hazard probabilistic map (DLI 4)

MOTAES (Prime) and ATDF

2017-2018 Procurement Technical

16 Recruit services for and updating the seismic risk assessment for schools MOTAES (Prime) and ATDF

2017-2018 Procurement, Technical, Social and Gender Equity

17 Update the Midterm Expenditure Framework to include the program expenditures

MOTAES (Prime), MOF and ATDF

2015-2020 Financial Management

18 Recruit services for and developing a financing strategy for seismic safety improvement and management of public infrastructure

MOF (Prime) and ATDF 2016-2020 Procurement Financial Management

Output 4: Capacity in executing and implementing the seismic safety investment program enhanced

19 Recruit the required staff and consultants (1 deputy director, 3 seismic engineers, 2 procurement specialists, 1 financial management specialist, 1 accountant, 1 environment specialist, 1 social and gender development specialist, and 1 monitoring specialist) for program management, implementation, monitoring and evaluation (DLI 5)


2015 Technical, Procurement, Financial Management, Safeguards,


20 Train the key staff involved in program management, implementation, monitoring and evaluation to ensure relevant qualification and licenses are obtained



21 Strengthen ATDF’s management information systems to incorporate program specific indicators, including environmental monitoring compliance and social and gender indicators with gender-disaggregated data. Update ATDF’s MIS reporting forms and prepare annual M&E plan.

ATDF 2015 Monitoring and Evaluation Social and Gender Equity

22 Appoint a deputy executive director as the head of ATDF’s monitoring and evaluation department to improve its status and leverage to strengthen quality control.

ATDF 2015 Monitoring and Evaluation

23 Establish an inter-ministerial coordinating mechanism to coordinate the monitoring and evaluation activities related to the program by relevant agencies.

MOTAES (Prime), MOUD, MOES and ATDF

2016 Monitoring and Evaluation

30


24 Establish procedures for environmental and involuntary resettlement screening against the government legislative requirements. Establish a Grievance Redress Mechanism and appoint a focal person to address environmental related issues in accordance with EARF developed for the program.

ATDF 2015 Safeguards

25 Disclose contact information, grievance redress mechanism, preliminary action reports, and environmental management plans on ATDF’s website.

ATDF

2015 - 2020 Safeguards

26 Supervise the implementation of the environment management plans and report contractors' compliance with the environment management plan in the technical supervision reports and program semi-annual performance reports

ATDF

2015 - 2020 Safeguards, Monitoring and Evaluation

27 Develop the guidelines for checking the qualification of design institutes, construction and supervision contractors (DLI 5)

ATDF 2015-2016 Technical

28 Develop and update template bidding documents in accordance with strengthened procurement methodology, which include a pass or fail standard for non-conforming bids, evaluation criteria, and conditions of contract and reflect the requirements for proper design, specifications/updated code requirements and adjustment in the unit price index for procuring detailed design services, contractors and construction supervision (DLI 5)

ATDF 2015-2016 Procurement

29 Review and update the approval process for bid evaluation and contract awards


2015 Procurement

30 Follow up and report resolution of external audit recommendations ATDF 2016-2020 Financial Management, Monitoring and Evaluation

31 Monitor and report the procurement performance under the program (DLI 5)

ATDF 2016-2020 Procurement, Monitoring and Evaluation

32 Update the ATDF operations manual (DLI 5) ATDF 2015-2016 Technical, Procurement, Financial Management, Safeguards,


33 Prepare and submit to ATDF Supervisory Board and ADB the semi-annual program performance report.



ADB = Asian Development Bank, ATDF = Armenian Territorial Development Fund, DLI = disbursement-linked indicator, EARF = environmental assessment review framework, M&E = monitoring and evaluation, MIS = management information systems, MOES = Ministry of Education and Science, MOF= Ministry of Finance, MOTAES = Ministry of Territorial Administration and Emergency Situations, MOUD = Ministry of Urban Development, MSK = Medvedev–Sponheuer–Karnik. Source: Asian Development Bank.

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VII. TECHNICAL ASSISTANCE A. Summary

40. A capacity development TA of $800,000 to be financed on a grant basis will be provided to support the program implementation and guide the delivery of the outputs under the results areas 3 and 4 of the program. The government will support the TA in the form of counterpart staff, office accommodation and supplies, and other in-kind contributions.

B. Consulting Service Requirement

41. An international consulting firm will be engaged to provide 82 person-months of inputs (16 months of international and 66 months of national) as outlined in Table 10. The outline terms of reference for the consultants are accessible from the list of linked documents in the report and recommendation of the President.

Table 10: Summary of Consulting Services Area of Expertise Duration (person-months)

A. International 1. Civil and structural engineer (team leader) 6.5 2. Seismic geotechnical engineer 4.0 3. Financial management specialist 2.0 4. Monitoring and evaluation specialist 3.5

Subtotal 16.0 B. National 1. Civil and structural engineer (deputy team leader) 12.0 2. Seismic geotechnical engineer 8.0 3. Quality control engineer 8.0 4. Procurement specialist 8.0 5. Project management specialist 6.0 6. Financial management and auditing specialist 6.0 7. Environmental safeguards specialist 6.0 8. Gender and social development specialist 6.0 9. Monitoring and evaluations specialists 6.0

Subtotal 66.0 Total 82.0 Source: Asian Development Bank.

VIII. MONITORING OF KEY PROGRAM COVENANTS

42. To be completed and updated during program implementation.

IX. SUMMARY OF KEY OUTSTANDING ISSUES

43. The key outstanding issues and actions during program implementation and corrective actions taken are summarized in Table 11.

Table 11: Key Outstanding Issues and Actions (As of August 2015)

Number Key

Issues Status in Addressing

the Issues Next Steps

Responsible Agencies and People

Time frame for Implementation

Source: Armenian Territorial Development Fund and Asian Development Bank.

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X. ACCOUNTABILITY MECHANISM

44. In addition to the GRM established and included in ATDF operations manual to address social and environmental related issues under the program, people who are or may in the future be adversely affected by the SSIP may submit complaints through ADB’s Accountability Mechanism (2012).12

XI. CHANGES IN PROGRAM SCOPE AND IMPLEMENTATION ARRANGEMENTS

45. Changes in scope and implementation arrangements during the course of program implementation are recorded in Table 12 to provide a chronological history of these changes.

Table 12: Changes in Scope and Implementation Arrangements (As of August 2015)

Number Changes and Key reasons Date Names of Documents

1

Sources: Armenian Territorial Development Fund and Asian Development Bank.

XII. PROGRAM ORGANIZATIONAL STRUCTURE AND FOCAL STAFF

A. Organizational Structure

46. Figure 1 illustrates the organizational structure for SSIP implementation as of June 2015. The organizational structure will be updated during program implementation in accordance with the organizational adjustments made during program implementation, including strengthening of the ATDF’s structure.

Figure 1: SSIP Organizational Structure

ATDF = Armenian Territorial Development Fund, MOTAES = Ministry of Territorial Administration and Emergency Situations, MOUD = Ministry of Urban Development, TA = Technical Assistance. Source: Armenian Territorial Development Fund.

12

ADB. 2012. Review of the Accountability Mechanism Policy. Manila.

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B. Program Officers and Focal Persons

1. Initial Arrangements

Table 13: Program Officers and Focal Persons (As of August 2015)

Number Key Government Staff and Positions Key ADB Staff and Positions

1

Vache Terteryan, Deputy Minister, Ministry of Territorial Administration and Emergency Situations

Anand Chiplunkar, Director, Urban Development and Water Division (CWUW), Central and West Asia Department (CWRD)

2 Ashot Kirakosyan, Executive Director, Armenian Territorial Development Fund

Yong Ye, Principal Urban Development Specialist, CWUW, CWRD

3 Jennifer Ngai, Counsel, Office of the General Counsel (OGC)

4 Ma. Rosario Romasanta, Senior Project Officer, CWUW, CWRD

2. Changes during Implementation

Table 14: Changes in Key Executing Agency Staff and ADB Mission Leader (As of August 2015)

Number Changes Date Reasons for the Change

1

Sources: Asian Development Bank and Ministry of Territorial Administration and Emergency Situations.